EXHIBIT (10)(ii)(B)1
GENERAL PURCHASE AGREEMENT
BETWEEN
AT&T CORP.
AND
LUCENT TECHNOLOGIES INC.
GENERAL PURCHASE AGREEMENT
Table of Contents
PART I -- COMMON TERMS AND CONDITIONS...... 1
ARTICLE I -- DEFINITIONS.............................. 1
1.1 Acceptance....................................... 1
1.2 Acceptance Date............................... 2
1.3 Acceptance Test................................2
1.4 Acceptance Test Period.................... 2
1.5 Action..............................................2
1.6 Active Licensed Software Product....2
1.7 Additional Work.............................. 2
1.8 Affiliate........................................... 2
1.9 Agreement...................................... 2
1.10 Agreement Documents................... 2
1.11 Application for Payment................. 2
1.12 Applicable Deadline........................3
1.13 Application Software......................3
1.14 AR................................................. 3
1.15 Arbitration Act............................... 3
1.16 Arbitration Demand Date............... 3
1.17 Arbitration Demand Notice............. 3
1.18 ARM............................................. 3
1.19 AT&T.......................................... 3
1.20 AT&T EH&S Practices.................. 3
1.21 Beneficial Occupancy.................... 3
1.22 Bill of Materials............................ 3
1.23 Call Receipt................................... 3
1.24 Change Order................................ 4
1.25 Completion Date........................... 4
1.26 Completion Schedule.................... 4
1.27 Consultation Support.................... 4
1.28 Construction Delay....................... 4
1.29 CPR............................................. 4
1.30 Customer Software..................... 4
1.31 Customer Connectivity................. 4
1.32 Demobilization............................ 4
1.33 Designated Processor.................. 4
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1.34 Differing Site Conditions.............................4
1.35 Discontinued Availability.......................... 4
1.36 Drawings.................................................. 5
1.37 Effective Date...........................................5
1.38 Engineer...................................................5
1.39 Enhancements.......................................... 5
1.40 Export.................................................... 5
1.41 Field Order............................................. 5
1.42 Final Acceptance..................................... 5
1.43 Firmware................................................ 5
1.44 First Field Application............................ 5
1.45 Fit............................................. 5
1.46 Force Majeure........................................ 6
1.47 Form...................................................... 6
1.48 Function................................................. 6
1.49 Governmental Authority......................... 6
1.50 Hardware Deployment............................ 6
1.51 Information............................................. 6
1.52 Initial Response Time.............................. 6
1.53 Installation Complete Date...................... 6
1.54 Intellectual Property Agreements............ 6
1.55 Licensed Materials.................................. 6
1.56 Lump Sum Price..................................... 7
1.57 Major Holidays....................................... 7
1.58 Make Ready Coordination...................... 7
1.59 Mature Software Product....................... 7
1.60 Management Notification........................ 7
1.61 Method of Procedure.............................. 7
1.62 Modifications......................................... 7
1.63 NCR...................................................... 8
1.64 New Software Product........................... 8
1.65 NS-Lucent........................................ .......8
1.66 Object Code........................................... 8
1.67 On-Site Assistance...................................8
1.68 On-Site Work Force.............................. 8
1.69 Order.................................................... 8
1.70 Ordering Company.................................. 8
1.71 Ordering Company's Information............ 8
1.72 Ordering Company Notification Bulletin. 9
1.73 Ordering Company Representative......... 9
1.74 Others.................................................... 9
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1.75 Performance Metrics....................... 9
1.76 Price............................................... 9
1.77 Problem Management..................... 9
1.78 Problem Resolution........................ 9
1.79 Product.......................................... 9
1.80 Proposal.........................................9
1.81 Related Documentation..................9
1.82 Remobilization.............................. 10
1.83 Resolve........................................ 10
1.84 Resolve Time.................................10
1.85 Respond....................................... 10
1.86 Restore.......................................... 10
1.87 Scope of Work.............................. 10
1.88 Service.......................................... 10
1.89 Service Performance Reports......... 11
1.90 Service Restoration Time............... 11
1.91 Severity Level................................ 11
1.92 Severity Level One..........................11
1.93 Severity Level Two........................ 11
1.94 Severity Level Three...................... 11
1.95 Severity Level Four........................ 11
1.96 Site............................................... 11
1.97 Software....................................... 11
1.98 Software Product............................11
1.99 Software Product Defect................12
1.100 Software Product Updates.............12
1.101 Source Code.............................. ..12
1.102 Special Conditions...................... 12
1.103 Specifications.............................. 12
1.104 Specifications or Standards......... 12
1.105 Start Date................................... 12
1.106 Subcontractor..............................12
1.107 Supplemental Agreement.............12
1.108 Supplementary Specifications.......13
1.109 Supplier...................................... 13
1.110 Supplier's Information................ 13
1.111 Supplier's Manufactured Product. 13
1.112 Support Services......................... 13
1.113 System....................................... 13
1.114 Unit Adjusting Price.................. 13
1.115 Unit Price................................. 13
1.116 United States............................. 13
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1.117 Use....................... 13
1.118 Vendor Item..........14
1.119 Warranty Period... 14
1.120 Work................... 14
1.121 Work Order.......... 14
ARTICLE IA -- NATURE OF AGREEMENT......... 14
1A.1 Purpose and Scope of this Agreement 14
1A.2 Statement of Aspirations.................... 15
1A.3 Volume of Commitment..................... 15
1A.4 Governing Terms............................... 16
1A.5 Term of Agreement............................ 17
1A.6 Transition Period..................................18
1A.7 Purchases by AT&T's Affiliates........... 18
1A.8 Additional Technology Rights............ 18
ARTICLE II -- ORDERING AND DELIVERY.........19
2.1 Orders.................................................. 19
2.2 Order Acceptance................................ 20
2.3 Changes in Ordering Company's Orders...20
2.4 Changes in Products by Supplier.............20
2.5 Order Cancellation and Holds................ 21
2.6 Shipping, Packing and Delivery............22
2.7 Title and Risk of Loss......................... 23
ARTICLE III -- PRICES AND PAYMENTS........... 23
3.1 Prices.............................................. 23
3.2 Invoices and Terms of Payment......... 24
3.3 Taxes.............................................26
ARTICLE IV -- INTELLECTUAL PROPERTY RIGHTS.27
4.1 Use of Information................................. 27
4.2 Infringement and Misappropriations....... 28
4.3 No Patent Licenses.................................29
4.4 Trademarks.............................................29
4.5 Proprietary Notice................................ 30
ARTICLE V -- RISK MANAGEMENT..................... 30
5.1 Ordering Companies' Remedies..............30
5.2 Supplier Performance............................32
5.3 Insurance............................................ 32
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ARTICLE VA -- ARBITRATION;
DISPUTE RESOLUTION ..33
5A.1 Agreement to Arbitrate........................ 33
5A.2 Escalation............................................ 33
5A.3 Demand for Arbitration........................ 34
5A.4 Arbitrators............................................35
5A.5 Hearings............................................. 35
5A.6 Discovery and Certain Other Matters....36
5A.7 Certain Additional Matters................. 37
5A.8 Limited Court Actions........................ 38
5A.9 Continuity of Service and Performance.... 39
5A.10 Law Governing Arbitration Procedures....39
ARTICLE VI -- MISCELLANEOUS...........................39
6.1 Export Control.................................... 39
6.2 Publication of Agreement....................... 39
6.3 Notices................................................. 39
6.4 Ordering Company's Responsibility......... 40
6.5 Supplier's Responsibility.......................... 40
6.6 Each Party's Responsibility...................... 41
6.7 Assurance of Supply................................ 41
6.8 Publicity........................................... 41
6.9 Right of Access/Permits and Approvals.... 42
6.10 Force Majeure........................................ 42
6.11 Independent Contractor..........................42
6.12 Releases Void........................................ 43
6.13 Survival of Obligations........................... 43
6.14 Government Contract Provisions............ 43
6.15 Quality System Audit............................. 43
6.16 ISO 9000............................................ 44
6.17 Utilization of Minority- and Women-Owned
Business Enterprises. 44
6.18 Assignability............................... 45
6.19 Governing Law........................... 45
6.20 Compliance with Law.................... 45
6.21 Record Retention......................... 45
6.22 Non-Waivers............................... 46
6.23 Third Party Beneficiaries............... 46
6.24 Severability................................. 46
6.25 Headings.................................... 46
6.26 Counterparts................................ 46
6.27 Amendments................................ 46
6.28 Interpretation............................... 47
6.29 Entire Agreement......................... 47
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ARTICLE VII -- PURPOSE AND ORGANIZATION OF PART II...47
7.1 Purposes and Scopes of Pa...................47
7.2 Organization of Part II..................... 47
ARTICLE VIII -- PURCHASE OF PRODUCTS..... 48
8.1 General.............................................. 48
8.2 Product Warranty................................. 48
8.3 Continuing Product Support - Parts and
Services....51
8.4 Technical Support of Products..............52
8.5 Documentation.................................... 53
8.6 Specification.........................................53
8.7 Equipment Testing.............................. 54
8.8 Environmental/Reliability Testing.....................54
8.9 Failure Mode Analysis of Failed Components...54
8.10 Floor Plan Data Sheets....................................55
8.11 Monthly Order and Shipment Reports......... 55
8.12 Radiation Assistance...................55
8.13 Marking......................................55
8.14 Periodic Product Qualification Reviews.......55
8.15 Maintenance/Post Warranty.........................56
8.16 Planning Information for Orders
for Commercially Available Products...... 56
ARTICLE IX -- SOFTWARE........................... 57
9.1 General....................................... 57
9.2 License....................................... 57
9.3 Software..................................... 58
9.4 Access to Source Code................ 58
9.5 Restrictions and Confidentiality.... 58
9.6 Installation of Software.............. . 59
9.7 Optional Software Features......... 59
9.8 Centralized Maintenance.............. 59
9.9 Enhancements.............................. 60
9.10 Intellectual Property Rights......... 60
9.11 Training and Technical Services.. 60
9.12 Modifications............................. 60
9.13 Redesignation or Transfer of Designated
Site or Computer.. 61
9.14 Software Acceptance.................. 61
9.15 Software Warranty..................... 62
9.16 Cancellation of License............... 64
9.17 Related Documentation................64
9.18 Additional Rights in Licensed Material.. 64
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9.19 Software Maintenance Service.............. 65
9.20 Notification of Discontinued Availability
of Software..... 65
ARTICLE X -- ENGINEERING, INSTALLATION,
MAINTENANCE AND OTHER
MISCELLANEOUS SERVICES... 66
10.1 General............................................. 66
10.2 Warranty of Services Other Than
Maintenance Services........................66
A. ENGINEERING SERVICES......................... 67
10.3 Ordering.............................................. 67
10.4 Standards for Engineering Services.......67
10.5 Standards for Central Office Record Services..67
10.6 Engineering Intellectual Property....................67
B. INSTALLATION SERVICES.................................. 67
10.7 Conditions of Installation and Other Services
Performed on Ordering Company's Site..... 67
10.8 Acceptance of Installation............................ 72
C. MAINTENANCE SERVICES............................. .73
10.9 General Service Description................... 73
10.10 Eligibility for Maintenance Service........ 77
10.11 Orders for Maintenance Service.......... 77
10.12 Prices.......................................... 77
10.13 Periods of Maintenance Service...... 77
10.14 Maintenance Service Exclusions....... 77
10.15 Ordering Company Responsibilities..... 79
10.16 Maintenance of Relocated Software..... 81
10.17 Software Product Update Services.......... 81
10.18 Maintenance Services Warranty............... 82
D. MISCELLANEOUS SERVICES .................... 83
10.19 Training................................................ 83
10.20 Installation/Cutover Assistance................ 83
ARTICLE XI -- OUTSIDE PLANT SERVICES............ 83
11.1 Purpose and Scope of This Article........... 83
11.2 Work; Supplier Materials; Permits; Railroads;
Security............................... 83
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11.3 Ordering Company Furnished Materials...... 84
11.4 Ordering Company Obligations.................. 85
11.5 Work Order; Changes................................ 86
11.6 Plant Protection; Underground Facilities.....86
11.7 Protection of Public and Public Property.....87
11.8 Local Conditions; Differing Site Conditions.87
11.9 Outside Plant Services Scheduling...............88
11.10 Inspection and Correction of Defects;
Acceptance...................................... 88
11.11 Supervision; Control of Work...............89
11.12 Warranty...............................................89
11.13 Safety; Emergency................................90
11.14 Engineer's Drawings and Specification...91
11.15 Reference Standards ........................ 91
11.16 Records................................................ 91
11.17 Unfavorable Construction Conditions... 92
11.18 Archaeological Sites; Environmental
Protection.........................................92
11.19 Reporting Defects............................... 93
11.20 Construction Delay.............................. 94
11.21 Notice of Labor Disputes..................... 95
11.22 Performance and Payment Bond........... 95
11.23 Application for Payment; Terms of Payment....96
11.24 Liens ................................................ 96
ARTICLE XII -- CONSULTING SERVICES........... 96
12.1 General................................................ 96
12.2 Statement of Work.............................. 96
12.3 Ownership of Information.................... 97
12.4 Equipment Supplier..............................97
12.5 Ordering Company's Responsibility...... 97
12.6 Warranty.............................................. 98
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GENERAL PURCHASE AGREEMENT
THIS GENERAL PURCHASE AGREEMENT (this "General Agreement" or
"Agreement"), dated as of February 1, 1996, is by and between Lucent
Technologies Inc. and AT&T on behalf of itself and Ordering Companies.
Capitalized terms used herein and not otherwise defined shall have the
respective meanings assigned to them in Article I hereof.
WHEREAS, the Board of Directors of AT&T has determined that it is in
the best interests of AT&T and its shareholders to separate AT&T's existing
businesses into three independent businesses; and
WHEREAS, AT&T desires to purchase and license telecommunications
equipment, systems and services and Supplier is in the business of engineering,
furnishing and installing telecommunications systems and equipment, constructing
telecommunications networks, providing premises equipment, and providing
consulting and other services; and
WHEREAS, Lucent and AT&T wish to establish the fundamental terms and
conditions pursuant to which AT&T shall order, and Lucent shall provide, such
telecommunications equipment, systems and services.
NOW, THEREFORE, the parties intending to be legally bound, agree as
follows:
PART 1
COMMON TERMS AND CONDITIONS
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following definitions shall
apply:
1.1 ACCEPTANCE means Ordering Company's acknowledgment that
Products and Services provided or installed by Supplier have met the Acceptance
Test. It is agreed that both parties will respond to their obligations
regarding completion of Acceptance in a prompt and expeditious manner. Unless
Supplier receives written notification indicating otherwise from Ordering
Company, Acceptance will be deemed to have occurred thirty (30) days after
Supplier's notice of its completion, unless a longer Acceptance Test Period has
been agreed to. Acceptance of a particular release of Software in the ITN or in
the First Field Application shall constitute Acceptance of all copies of such
Software to be provided Ordering Company, regardless of when each such copy of
such Software is installed on its Designated Processor.
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1.2 ACCEPTANCE DATE means the date on which Supplier's Product or
Software successfully completes the applicable Acceptance Test, or, unless
Supplier receives written notice indicating otherwise from Ordering Company,
thirty (30) days after Supplier's notice of completion, whichever occurs sooner.
1.3 ACCEPTANCE TEST means the test upon Supplier's Product or
Software agreed upon by the parties, which may be performed by or on behalf of
Ordering Company during the Acceptance Test Period to determine whether the
Product or Software meets the applicable Specifications.
1.4 ACCEPTANCE TEST PERIOD means the period of time in days,
agreed upon by the parties and specified in the applicable Order or Supplemental
Agreement, during which the Acceptance Test shall be completed. In the absence
of such agreement, the Acceptance Test Period shall conclude thirty (30) days
from delivery of the Product or Licensed Materials to Ordering Company.
1.5 ACTION as used in Section 5A.1(a), AGREEMENT TO ARBITRATE,
means any demand, action, suit, countersuit, arbitration, inquiry, proceeding or
investigation by or before any federal, state, local, foreign or international
Governmental Authority or any arbitration or mediation tribunal.
1.6 ACTIVE LICENSED SOFTWARE PRODUCT means an Application Software
Product that is actively embedded at Ordering Company sites and has been the
subject of some Product sales activity with any Ordering Company in the previous
three (3) years.
1.7 ADDITIONAL WORK means Work covered by a Change Order.
1.8 AFFILIATE of a party means a United States company or other
entity which is under common control with, controls, or is controlled by,
such party to this Agreement, as long as such control exists, where "control"
is defined as ownership greater than fifty percent (50%) of the equity or
beneficial interest of such entity or the right to elect or to appoint a
majority of the board of directors or other governing body of such entity.
1.9 AGREEMENT means this Agreement and any Work Orders or Change
Orders issued pursuant thereto.
1.10 AGREEMENT DOCUMENTS, as referred to in Article 11 means this
Agreement, any Special Conditions, Drawings, Specifications, Supplementary
Specifications which have been or will be mutually agreed upon.
1.11 APPLICATION FOR PAYMENT means a pro forma completed work
summary with supporting documentation from Supplier to Ordering Company.
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1.12 APPLICABLE DEADLINE has the meaning set forth in Section
5A.3(b), DEMAND FOR ARBITRATION.
1.13 APPLICATION SOFTWARE means Software that operates on a
generally available computer system and serves a function other than controlling
the fundamental operation of the computer system on which it is loaded (i.e.,
does not serve as a computer operating system). Application Software excludes
all Software that is utilized by the 5ESS(R) Switch.
1.14 AR means Assistance Request. Defect AR is an Ordering Company
Assistance Request due to a failure of the Product to perform to Specifications
and requires a design change to resolve. Service AR is an Ordering Company
Assistance Request due to a non-defect system problem or to answer a technical
question.
1.15 ARBITRATION ACT means the United States Arbitration Act,
9 U.S.C.Sections 1-14, as the same may be amended from time to time.
1.16 ARBITRATION DEMAND DATE has the meaning set forth in Section
5A.3(a), DEMAND FOR ARBITRATION.
1.17 ARBITRATION DEMAND NOTICE has the meaning set forth in Section
5A.3(a), DEMAND FOR ARBITRATION.
1.18 ARM means Assistance Request Management.
1.19 AT&T means AT&T Corp., a New York corporation.
1.20 AT&T EH&S PRACTICES as referenced in Article 11 means
environmental, health and safety practices that AT&T promulgates for use in its
own domestic operations and which it has provided to Supplier in the manner by
which notices are provided.
1.21 BENEFICIAL OCCUPANCY means the utilization by Ordering Company
of Work constructed by Supplier before Final Acceptance.
1.22 BILL OF MATERIALS means the list of major material items by
quantity to be ordered for a Work Order, which is taken from the Drawings after
the Work Order is engineered.
1.23 CALL RECEIPT means the process of ensuring that the Ordering
Company Assistance Request is referred to the appropriate Supplier technical
support group responsible for resolution. This task involves answering the
telephone (or electronic inquiry), gathering pertinent Ordering Company and
technical data, determining the destination of the request for analysis to
ascertain if and how to bill Ordering Company for the Service being provided.
3
1.24 CHANGE ORDER as referred to in Article 11 means a written
Order by Ordering Company on its Change Order Form requesting a change to the
Work, as approved by Supplier, e.g., to approve variations in quantity or method
of Work.
1.25 COMPLETION DATE means the date by which Supplier and Ordering
Company agree in writing that the Work is to be completed.
1.26 COMPLETION SCHEDULE means the schedule for completion of the
Work contained in a Work Order or another writing signed by the parties.
1.27 CONSULTATION SUPPORT means technical assistance delivered by
telephone, electronic mail and/or telefax from Supplier's location via the Call
Receipt function.
1.28 CONSTRUCTION DELAY is defined in Section 11.21, NOTICE OF
LABOR DISPUTES, below.
1.29 CPR, as used in Article 5A, means the Center for Public
Resources.
1.30 CUSTOM SOFTWARE as referred to in Article 9 means the Source
Code, Object Code and Related Documentation developed by Supplier solely on
behalf of Ordering Company and in which Ordering Company has an ownership
interest (up to 100%) as specified in a Supplemental Agreement.
1.31 CUSTOMER CONNECTIVITY means the project in which Supplier,
pursuant to a Supplemental Agreement, is building a Network for AT&T in various
states of the United States to provide local telephone service.
1.32 DEMOBILIZATION as referred to in Article 11 means compensation
to Supplier for labor, equipment and load associated with ceasing an operation
due to Construction Delay and moving to another site.
1.33 DESIGNATED PROCESSOR means the Product for which licenses to
Use Licensed Materials are initially granted.
1.34 DIFFERING SITE CONDITIONS means (1) subsurface or latent
physical conditions at the Site differing materially from those indicated in the
Agreement Documents, or (2) unknown physical conditions at the Site, differing
materially from those ordinarily encountered and generally recognized as
inherent in Work of the character provided for in Article 11, or (3) conditions
differing materially from those indicated in the Agreement Documents and found
to be archaeologically, historically or culturally sensitive.
1.35 DISCONTINUED AVAILABILITY (DA) means a Supplier-issued
Discontinued Availability announcement, which is written notice to Ordering
Company that Supplier will cease
4
production of a specific Product or technology. This notice will also specify
the last date that Supplier will accept an equipment order (EO) from Ordering
Company and a timeline for how long Supplier will continue maintenance support
for the specific Product or technology.
1.36 DRAWINGS means the approved plans, profiles, working drawings,
and supplemental drawings, or exact reproductions thereof, which show the
location, character, dimensions, and details of the Work to be done, except for
shop drawings provided by Supplier.
1.37 EFFECTIVE DATE means January 1, 1996.
1.38 ENGINEER as referred to in Article 10 means a designation
reserved for a person or organization working for Ordering Company assigned
and/or identified to perform engineering services, including but not limited
to: development of project requirements; creation of product design; preparation
of drawings, Specifications and bidding requirements; and provision of Services
during the construction phase of the project.
1.39 ENHANCEMENTS as referred to in Article 9 means new releases of
Software, Software improvements and Software upgrades.
1.40 EXPORT means, without limitation, physical shipment;
transmittal by any means (including electronic); or oral, written, or visual
disclosure, either inside or outside the United States to a non-United States
national.
1.41 FIELD ORDER as referred to in Article 11 means a verbal
direction, confirmed by a Change Order, within the Scope of Work issued to
Supplier which interprets the Agreement Documents, excluding Article 11, or
authorizes minor variation in the Work from the requirements of the Agreement
Documents which Supplier agrees does not increase the unit prices but may change
the units that make up affected work.
1.42 FINAL ACCEPTANCE means a written Acceptance of the Work signed
by an authorized Ordering Company representative issued when all the Work is
acceptably completed and all items on the Punch List have been completed. Punch
List means the list of deficiencies to be corrected or completed as a result of
the final inspection of the Work.
1.43 FIRMWARE means a combination of (1) hardware and (2) Software
represented by a pattern of bits contained in such hardware.
1.44 FIRST FIELD APPLICATION shall mean the first installation of
Software in AT&T's live network.
1.45 FIT means physical size or mounting arrangement (e.g.,
electrical or mechanical connections).
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1.46 FORCE MAJEURE means fires, strikes, riots, embargoes,
explosions, earthquakes, floods, wars, water, the elements, labor disputes,
shortages of or inability to secure materials and/or transportation facilities,
non-regulatory acts or omissions of government carriers, suppliers or other
third parties, or other causes beyond a party's control whether or not similar
to the foregoing.
1.47 FORM means physical shape.
1.48 FUNCTION means product features.
1.49 GOVERNMENTAL AUTHORITY as used in Article 5A shall mean any
federal, state, local, foreign or international court, government, department,
commission, board, bureau, agency, official or other regulatory, administrative
or governmental authority.
1.50 HARDWARE DEPLOYMENT means the hardware fix, as the result of a
Product change notice, which is deployed pursuant to an Order or Supplemental
Agreement.
1.51 INFORMATION means information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including studies, reports, records, books,
contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, Specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.
1.52 INITIAL RESPONSE TIME means the time it takes for Ordering
Company to reach a Subject Matter Expert once Ordering Company contacts Supplier
Call Receipt group.
1.53 INSTALLATION COMPLETE DATE means the date on which a Product
or Software or System is installed by Supplier at the desired location and, for
Licensed Materials, is ready for Use by an Ordering Company.
1.54 INTELLECTUAL PROPERTY AGREEMENTS means the Patent License
Agreement, Patent Assignments, Patent Defensive Protection Agreements, Patent
Joint Ownership Agreement, Technology License Agreement, Technology Assignment
and Joint Ownership Agreement (in each case, as defined in the Separation and
Distribution Agreement dated as of the date hereof by and among AT&T, NCR and
Supplier (the "Separation and Distribution Agreement")).
1.55 LICENSED MATERIALS means the Object Code and Related
Documentation wherein the parties may mutually agree to special terms and
conditions, such as field use
6
restrictions, restrictions on use by third parties and the like as specified in
a Supplemental Agreement. In addition, Licensed Materials may include Source
Code but only if so specified in a Supplemental Agreement.
1.56 LUMP SUM PRICE means a price other than a Unit Price agreed
upon in writing by the parties for a specific item of Work prior to scheduling
of the item of Work.
1.57 MAJOR HOLIDAYS (or Company-designated day of observance)
New Years Day
President's Day (Massachusetts)
Patriot's Day (Massachusetts)
Memorial Day
Independence Day
Labor Day
Columbus Day (Massachusetts)
Thanksgiving Day
Day Following Thanksgiving
Christmas Eve (Massachusetts)
Christmas Day
1.58 MAKE READY COORDINATION as referred to in Article 10 means
additional assistance offered by Supplier for compensation at agreed upon rates.
1.59 MATURE SOFTWARE PRODUCT means an Application Software Product
that has not been the subject of any Product sales activity with any Ordering
Company within three (3) years.
1.60 MANAGEMENT NOTIFICATION means the internal Supplier process
that sets the minimum standards by which Supplier management will become aware
of a problem. The intent of escalating a problem is (a) to bring additional
resources together to resolve it, (b) to apprise management of the situation, or
(c) to acknowledge notification by contacting Ordering Company.
1.61 METHOD OF PROCEDURE (MOP) means a detailed, documented
methodology, as referenced in AT&T Practice 790-100-421AC, developed by the
OSWF (defined in 1.68), and its support departments, listing the Work to be
performed and the procedures to be followed for any construction, Software
Product Update, or maintenance activity near an AT&T plant.
1.62 MODIFICATIONS as referred to in Article 9 means Ordering
Company additions to, deletions from or mergers of Software with one or more
programs owned or licensed by Ordering Company that results in an updated or
otherwise modified software.
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1.63 NCR means NCR Corporation (formerly named AT&T Global
Information Solutions Company), a Maryland corporation.
1.64 NEW SOFTWARE PRODUCT as referred to in Article 10 means an
Application Software Product initially licensed to Ordering Company after
execution of this Agreement.
1.65 Lucent means Lucent Technologies Inc., a Delaware corporation.
1.66 OBJECT CODE means the fully compiled or assembled series of
instructions, written in machine language, ready to be loaded into the computer,
that guides the operation of the computer.
1.67 ON-SITE ASSISTANCE means technical assistance provided by a
Supplier's engineer at Ordering Company's site at Ordering Company's request,
and as agreed to by Supplier.
1.68 ON-SITE WORK FORCE (OSWF) means local Ordering Company
personnel responsible for the operation, maintenance, and protection of
operating plant.
1.69 ORDER means any written or electronic request, other than a
Supplemental Agreement, that is presented to Supplier by an Ordering Company in
accordance with the terms of this Agreement to purchase Products or Services or
to license Licensed Materials from Supplier.
1.70 ORDERING COMPANY means any one of (a) AT&T; (b) an Affiliate
of AT&T; (c) a United States entity at least twenty-five percent (25%) of the
ownership interest of which is owned directly or indirectly by AT&T; or (d) a
non-United States entity at least twenty-five percent (25%) of the ownership
interest of which is owned directly or indirectly by AT&T and in which the other
party (or parties) in the non-United States entity is not a telecommunications
services provider(s). An Ordering Company must be designated in writing by
AT&T. Orders or Supplemental Agreements will be contractual relationships
between Ordering Company and Supplier and only Ordering Company and Supplier
shall have the respective rights and duties of buyer and seller thereunder.
1.71 ORDERING COMPANY'S INFORMATION means certain material and
technical and business information, owned or controlled by Ordering Company or
any of its Affiliates, relating to the operation of Ordering Company's business
operations. The term also means and includes any associated information
developed prior to the effective date of this Agreement by the AT&T business
units and other organizations which compose Ordering Company, regardless of
whether such information was originally disclosed to Supplier in written or
other tangible form.
8
1.72 ORDERING COMPANY NOTIFICATION BULLETINS mean the
written notices transmitted to Ordering Company that alert Ordering Company of
potential Product conditions or configurations which could have a negative
effect on Ordering Company operations.
1.73 ORDERING COMPANY REPRESENTATIVE means the person
representing Ordering Company responsible for overall coordination and
management of the project activities as designated in the Agreement. The
Ordering Company Representative is an employee of Ordering Company.
1.74 OTHERS means an entity other than Supplier that has
been contracted by Ordering Company to perform a portion of Work on a
project.
1.75 PERFORMANCE METRICS as referred to in Article 10 means
Supplier's performance objectives regarding the manner in which it Responds,
Restores, and Resolves Ordering Company's request for Ordering Company Technical
Support called in through Supplier's Call Receipt function. Ordering Company
requests that do not go through Supplier's Call Receipt function are excluded
from the Performance Metrics.
1.76 PRICE means the price for the Work to be performed by
Supplier as set forth in the Work Order, Change Order, Supplemental Agreement or
other document(s) signed by the parties.
1.77 PROBLEM MANAGEMENT means the procedures and actions
performed or required to be performed by Supplier upon written or oral request
of Ordering Company to investigate and manage the resolution of a reported
condition in a manner that provides Ordering Company with a single interface.
1.78 PROBLEM RESOLUTION means the analysis of the technical
data to determine, at minimum, a short term resolution. Depending upon the
analysis results, the response to Ordering Company may be in the form of
technical advice, a procedure performed by Supplier support personnel, or a
software product update. Technical questions or inquiries regarding the
operation or use of the Product are also handled under this task.
1.79 PRODUCT means systems, equipment and parts thereof, but
the term does not mean Software whether or not such Software is part of
Firmware.
1.80 PROPOSAL means the proposal or bid prepared by
Supplier, making reference to this Agreement.
1.81 RELATED DOCUMENTATION as referred to in Article 9 and
in this Article 1 means materials useful in connection with Software, such as,
but not limited to, flow charts, logic diagrams, program descriptions, and
Specifications. No Source Code versions of Software are included in Related
Documentation.
9
1.82 REMOBILIZATION as referred to in Article 11 means
compensation to Supplier for labor, equipment and load associated with returning
to an operation that was demobilized. See "Demobilization".
1.83 RESOLVE means that a permanent solution to the problem
has been provided. For service ARs, Resolution means that the question has been
answered to Ordering Company's satisfaction. For defect ARs, Resolution means
either that a final correction to the defect has been released to Ordering
Company or that Supplier has notified Ordering Company that the defect will not
be repaired.
1.84 RESOLVE TIME means elapsed time between the time
Ordering Company contacts Supplier through Supplier's Call Receipt function and
the time Ordering Company is supplied a permanent solution.
1.85 RESPOND means an engineer has contacted Ordering
Company regarding a particular Assistance Request.
1.86 RESTORE means that the Product or major feature of the
Product is temporarily operative, but a permanent resolution has not yet been
provided. Restore may mean that a software patch has been provided to
temporarily correct the problem, or a workaround has been implemented.
1.87 SCOPE OF WORK means the agreed upon scope of work set
forth in an executed Supplemental Agreement (e.g., for Customer Connectivity) or
Work Order. The Scope of Work may include: field and building surveys, route
planning, Make Ready Coordination, design engineering, material logistics, civil
construction, placing, splicing, Acceptance Testing, work print, as-built and
OSP records generation, and project management.
1.88 SERVICE means the services provided by Supplier with
respect to or independent from Supplier's Products and Software and the
operation of Ordering Company's business including, but not limited to, any type
of: (1) professional services including architecture planning or design,
consulting, program management, system integration and testing/verification; (2)
network engineering services including preparation of equipment Specifications,
preparation and updating of office records, and data creation/data management
services; (3) installation and equipment removal; (4) outside plant
engineering/construction services and cable mining; (5) maintenance, repair,
exchange/replacement, customer technical support, help desk, and diagnostic
services; (6) software development; (7) initial site/new start, migration,
trials, provisioning, retrofitting and update/upgrade services; (8) training in
any form; (9) logistics (transportation, warehousing staging, etc.); and (10)
such other services as Supplier may offer and Ordering Company may purchase from
time to time.
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1.89 SERVICE PERFORMANCE REPORTS (SPR) means reports that
validate the agreed to Respond, Restore, and Resolve Ordering Company's request
for Ordering Company Technical Support.
1.90 SERVICE RESTORATION TIME means the elapsed time between
the time Ordering Company contacts Supplier through Supplier's Call Receipt
function and the time the system is restored to service.
1.91 SEVERITY LEVEL means the condition of the system when
Ordering Company makes an Assistance Request.
1.92 SEVERITY LEVEL ONE means the condition which exists
when the system is inoperative and Ordering Company's inability to use the
Product has a critical effect on Ordering Company's operations. The condition is
generally characterized by complete system failure and requires immediate
resolution or correction.
1.93 SEVERITY LEVEL TWO means the condition which exists
when the system is partially inoperative, but the system is still usable by
Ordering Company. The inoperative portion of the Product severely restricts
Ordering Company's operations but has a less critical effect than a Severity
Level One condition.
1.94 SEVERITY LEVEL THREE means the condition which exists
when the system is usable by Ordering Company, but with limited functions. The
condition is not critical to overall Ordering Company operations and does not
severely restrict such operations.
1.95 SEVERITY LEVEL FOUR means the condition which exists
when the system is usable and a means of circumventing the condition has been
found. This condition does not materially affect Ordering Company's operations.
1.96 SITE means all Work areas where any Work is required to
be performed as set forth in the Agreement Documents, excluding permanent
locations of Supplier and its suppliers and subcontractors.
1.97 SOFTWARE means a computer program consisting of a set
of logical instructions and tables of information which guide the functioning of
a central processing unit; such program may be contained in any medium
whatsoever, including hardware containing a pattern of bits representing such
program, but the term "Software" does not mean or include such medium.
1.98 SOFTWARE PRODUCT means the Software that Ordering
Company has been granted a license to use by Supplier.
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1.99 SOFTWARE PRODUCT DEFECT means an error condition that
causes the Software Product to fail to operate in compliance with Supplier's
documented Specifications available at time of Licensed Software Product sale.
1.100 SOFTWARE PRODUCT UPDATES means changes to the original
licensed Software Product and third party Software to correct defects or provide
accommodations not originally included in Supplier's documented Specifications
available at the time of the Software sale. Software Product Updates include
both corrections and accommodations requested by customers as well as
corrections and accommodations requested by other Ordering Companies. Software
Product Updates may be distributed through point issue releases on magnetic
media or Broadcast Warning Messages (BWM's), Software Updates (SU's), or other
on-line delivery mechanism.
1.101 SOURCE CODE means any version of Software incorporating
high-level or assembly language that generally is not directly executable by a
processor.
1.102 SPECIAL CONDITIONS means detailed provisions in the
Specifications referred to under Section 11.23, Application for Payment; Terms
of Payment, pursuant to which Supplier can petition AT&T for additional
compensation.
1.103 SPECIFICATIONS means the technical specifications for
particular Products, Software and Services of Supplier or its vendor furnished
hereunder.
1.104 SPECIFICATIONS OR STANDARDS as referred to in Article
11 means the Specifications for outside plant construction as agreed upon by the
parties for each project, Work Order, or Supplemental Agreement. (For Customer
Connectivity, the August 1992 Lightguide Cable Systems Outside Plant Standards
Handbook and the Specifications set forth in AT&T's standard construction
Specifications, each as amended and agreed by parties.) All projects, Work
Orders and Supplemental Agreements are subject in addition to the work practices
set forth in Section 11.18, ARCHAEOLOGICAL SITES; ENVIRONMENTAL PROTECTION.
1.105 START DATE means the date on which Supplier and AT&T
agree in a Work Order or in some other writing that the Work is due to begin.
1.106 SUBCONTRACTOR means a person or organization who has a
direct contract with Supplier.
1.107 SUPPLEMENTAL AGREEMENT means a contemporaneous or
subsequent purchase agreement between an Ordering Company and Supplier which
incorporates all of the terms of this Agreement.
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1.108 SUPPLEMENTARY SPECIFICATIONS means mutually agreed upon
Specifications which, by modifying or supplementing the Specifications, describe
conditions unique to a particular project.
1.109 SUPPLIER means Lucent.
1.110 SUPPLIER'S INFORMATION means certain material and
technical or business information, owned or controlled by Supplier or any of its
Affiliates, relating to the operation of Products or Software, materials used in
the provision or manufacture of Products and Software, or relating to Supplier's
Services. The term also means and includes any part, component and associated
information developed prior to the effective date of this Agreement by the
business units and other organizations which compose Supplier, regardless of
whether such information was originally disclosed to AT&T or an Ordering Company
in written or other tangible form.
1.111 SUPPLIER'S MANUFACTURED PRODUCT means a Product
manufactured by Supplier or manufactured by an original equipment manufacturer
to Supplier's Specifications. Supplier's Manufactured Product includes Vendor
Items that are embedded in Products manufactured by Supplier.
1.112 SUPPORT SERVICES means Supplier's assistance at
Supplier's location analyzing the applicable Software or Hardware/Firmware
problem (as defined in the Order), remedying defects, and handling service calls
reported by Ordering Company through the Call Receipt function. Support Services
may be purchased by Ordering Company pursuant to the provisions set forth in
this Agreement.
1.113 SYSTEM means the integrated Products and Software as
described in associated Specifications.
1.114 UNIT ADJUSTING PRICE means a Price in the Work Order,
Change Order or Supplemental Agreement that compensates Supplier on a unit basis
for deviations from the defined scope of Work. The number of adjusting units
will subsequently be determined from the engineered Drawings or actual
occurrences as accepted by the Engineer.
1.115 UNIT PRICE means a Price in the Work Order or
Supplemental Agreement for a defined scope of Work on a unit basis. The number
of units will subsequently be determined from the engineered Drawings.
1.116 UNITED STATES means the fifty (50) states, District of
Columbia, Puerto Rico and the United States territories.
1.117 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.
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1.118 VENDOR ITEM means a Product or partial assembly of
products furnished by Supplier, but not manufactured by Supplier but supplied
pursuant to its procurement specifications. An item ceases to be a Vendor Item
when it becomes embedded in a Supplier's Manufactured Product.
1.119 WARRANTY PERIOD means the period of time listed in the
respective Warranty clauses herein for Products, Licensed Materials or Services
which, unless otherwise stated, commences for Products and Licensed Materials on
the earlier of the date of shipment, or, if installed by Supplier, on the
Acceptance Date, and for Services, commences on the Acceptance Date of the
Service.
1.120 WORK is defined in Section 11.2, WORK;
SUPPLIER; MATERIALS; PERMITS; RAILROADS; SECURITY, below.
1.121 WORK ORDER means the specific Outside Plant Services
requested by Ordering Company pursuant to this Agreement. Work Order shall
contain the information set forth in Section 11.5, WORK ORDERS; CHANGES, below.
ARTICLE IA
NATURE OF AGREEMENT
1A.1 PURPOSE AND SCOPE OF THIS AGREEMENT. The purpose of
this Agreement is to permit Supplier to provide and Ordering Company to receive
Supplier's Products, Licensed Materials, and Services. This Agreement shall
govern all transactions pursuant to which Supplier provides Products, Licensed
Materials and Services to AT&T and Ordering Companies. AT&T and Supplier will
develop a template no later than June 30, 1996 for use when AT&T or Ordering
Company is ordering Products, Licensed Materials and Services from Supplier
pursuant to this Agreement for use outside the United States. This template
will be used as the starting point for Supplemental Agreements to address such
purchases and will address the additional country and customer-specific terms
and requirements with the particular transaction. This Agreement shall govern
Supplier's sale and licensing to Ordering Companies of Supplier's Products,
Licensed Materials and Services for Ordering Companies' internal business uses
only, and does not permit AT&T to resell or sublicense any Products, Licensed
Materials or Services provided hereunder as a distributor of same. However,
this Agreement, including any restrictions on use, resale and transfer is not
intended to prohibit Ordering Company from reselling or transferring Products
and Licensed Materials no longer needed for the operation of its business,
provided, that, in the case of Software, such transfers are made in accordance
with the provisions of Article 9. All terms and conditions governing resale or
sublicensing of Supplier's Products, Licensed Materials and Services as a
distributor shall be addressed in a separate agreement.
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This Agreement is organized in the following manner: Part 1 sets forth the
common terms and conditions that apply to all sales and licenses executed
pursuant to this Agreement, unless otherwise stated in Part 2. Part 2 sets
forth the additional terms and conditions which govern Supplier's provision of
network infrastructure Products, Licensed Materials and Services, other than
such items currently provided by Supplier's Global Business Communications
Systems business unit. Part 3, to be negotiated and executed not later than
March 31, 1996, shall set forth the additional terms and conditions which
govern Supplier's provision of Products, Licensed Materials and Services
provided by Supplier's Global Business Communications System Unit.
1A.2 STATEMENT OF ASPIRATIONS. In an effort to ensure that
the parties remain fully focused upon their shared objectives and aspirations,
the parties agree that the following principles shall govern their work together
during the term of this Agreement:
(a) Both parties want Lucent to provide AT&T with
Products, Licensed Materials and Services that confer significant offer
differentiation, premium value and operating cost reduction consistent with
AT&T's brand equity, and shall work together so that Lucent may assist AT&T in
this manner;
(b) The parties recognize that Lucent's pricing of
Products, Licensed Materials and Services must balance two fundamental
requirements: AT&T's requirement for the lowest possible operating costs and
Lucent's requirement for adequate return on and recovery of investment;
(c) The parties shall at all times take care to conduct
themselves with the highest integrity, to respect all individuals, and to obtain
the maximum benefits of a shared end user customer focus, effective teamwork and
the parties' innovativeness; and
(d) The parties desire to maintain a relationship that is
warm, open and mutually profitable.
1A.3 VOLUME COMMITMENT. (a) AT&T commits that the
aggregate amount paid by Ordering Companies (including AT&T Wireless Services
Inc.) to Supplier during the calendar years 1996, 1997, and 1998 for Products,
Licensed Materials, and Services, pursuant to this Agreement, any Supplemental
Agreement, any other agreement or otherwise, between an Ordering Company and
Supplier for Supplier's provision of Products, Licensed Materials or Services
to an Ordering Company, will total at least three billion dollars
($3,000,000,000). If that commitment is not fulfilled by December 31, 1998,
Supplier shall, in January 1999, bill AT&T a carrying charge equal to the
shortfall at December 31, 1998, multiplied by the Prime Rate (as defined in the
Separation and Distribution Agreement) plus two percent (2%). Thereafter,
Supplier shall, each month, bill AT&T a carrying charge equal to the shortfall,
if any, at the end of the preceding month, multiplied by 1/12 multiplied by the
Prime Rate plus two percent (2%). Such billing shall continue until the three
billion dollar ($3,000,000,000) commitment is fulfilled. AT&T will pay these
bills as set forth in Section 3.2, INVOICES AND TERMS OF PAYMENT. The remedy
in this Section 1A.3, VOLUME COMMITMENT, is
15
Supplier's exclusive remedy for AT&T's failure to fulfill the three billion
dollar ($3,000,000,000) volume commitment.
(b) AT&T expects, but does not commit, that Products,
Licensed Materials and Services in the amount of one billion three hundred
million dollars ($1,300,000,000), out of the three billion dollar
($3,000,000,000) total volume commitment, will be ordered in 1996. Therefore,
the shortfall billing and payment arrangement set forth in subparagraph
(a) above does not apply to failure to meet this expectation by the end of 1996.
(c) Prior to the Closing Date (as defined in the
Separation and Distribution Agreement), AT&T shall deliver to Supplier as
advance payment for purchases of Products, Services, Software, or Licensed
Materials an amount equal to five hundred million dollars ($500,000,000).
Commencing on January 1, 1997, Supplier shall apply a portion of such amount as
a credit against any undisputed invoiced amounts due and payable to Supplier
from AT&T or, if AT&T shall so specify at any time, from any other Ordering
Company, on or after January 1, 1997, in full satisfaction of all obligations of
AT&T or any such Ordering Company then due in connection therewith. Supplier
shall continue to so apply such advance payment as a credit against such
undisputed invoices until fully applied.
1A.4 GOVERNING TERMS. (a) Current Order Performance: On
the Effective Date of this Agreement, Supplier shall be in the process of
performing several Ordering Company orders, some of which have not been the
subject of written Orders and purchase agreements. In addition, Supplier shall
be following many existing engineering, installation and maintenance practices
and procedures that have been developed mutually by Supplier and Ordering
Company but have not been completely documented. The parties intend that
Supplier shall continue to provide the same Products, Services and Licensed
Materials which Supplier is providing or has agreed to provide each Ordering
Company (hereinafter "Pending Orders") subject to the availability of third
party components and provided that Ordering Company shall retroactively
compensate Supplier for any Products, Licensed Materials and Services provided
by Supplier without compensation at the prices and rates set forth in any mutual
agreements entered into. Exhibit 1A-1 lists the Services, identified thus far,
intended for coverage under this clause and also the Services covered under
other Supplemental Agreements or commercial agreements. Services to be excluded
include, but are not limited to, real estate and motor vehicles. The parties
agree to use their best efforts to formalize the Services listed in Exhibit 1A-1
in a commercially reasonable manner (including pricing) that is consistent with
the terms and conditions contained herein no later than March 31, 1996. Such
retroactive compensation shall begin no earlier than the Effective Date and
shall be capped at twenty million dollars ($20,000,000) per month. Supplier
shall not be liable for any injury to Ordering Company that results from
Supplier's employees and/or contractors failure to be aware of practices and
procedures that had not, at the time of Supplier's actions, been reduced to
writing. Supplier and Ordering Company recognize that the existing practices
and procedures will need to be reevaluated in light of the restructure of AT&T.
As part of this reevaluation, Supplier and
16
Ordering Company may decide to continue existing practices and procedures or one
party may notify the other that it wishes to change or eliminate certain
practices or procedures.
The parties agree to use their best efforts to identify any other Products,
Licensed Materials and Services provided by Supplier to Ordering Company that
require commercialization and to formalize such undocumented arrangements in a
commercially reasonable manner that is consistent with the terms and conditions
contained herein no later than March 31, 1996. The parties acknowledge that
such formalization and modification of those arrangements may result in changes
in the terms and conditions pursuant to which such items are provided. All
agreements will be reduced to writing which will govern transactions between
Supplier and all Ordering Companies, unless otherwise agreed to. If the parties
are unable to negotiate a satisfactory resolution, the dispute resolution
provisions of Article 5A herein shall apply. Services not currently performed
by Supplier are not covered under this Section 1A.4, GOVERNING TERMS, and will
be covered under separate Supplemental Agreements.
With respect to Pending Orders, this Agreement is incorporated by reference,
however, in the event of conflict between the terms and conditions of this
Agreement and the terms and conditions of Pending Orders, the terms and
conditions of Pending Orders shall prevail over the terms and conditions of this
Agreement until such time that the Pending Orders are formalized, terminated or
expired.
(b) Future Procurements: All future Orders and
Supplemental Agreements pursuant to which Supplier provides Products, Licensed
Materials and Services to AT&T Company shall be deemed to incorporate and be
subject to the terms and conditions of this Agreement, regardless of whether any
such Order or Supplemental Agreement expressly incorporates this Agreement by
reference, unless such Order or Supplemental Agreement expressly provides that
it is not subject to this Agreement. To the extent that any exhibit to this
Agreement or any document other than a Supplemental Agreement conflicts with the
body of this Agreement, the body of this Agreement shall prevail over such
exhibit or other document. To the extent that a Supplemental Agreement
conflicts with this General Purchase Agreement, the Supplemental Agreement shall
prevail over the body of this Agreement. To the extent that the Supplemental
General Purchase Agreement, No. LC3757D, conflicts with either or both of this
Agreement and a Supplemental Agreement, the Supplemental General Purchase
Agreement shall prevail over those other agreements.
1A.5 TERM OF AGREEMENT. This Agreement shall become
effective on the Effective Date and shall continue in effect for a period of
five (5) years. The term of this Agreement shall thereafter be automatically
extended for additional one (1) year periods unless either party provides the
other party one (1) year's prior written notice of its desire to permit this
Agreement to expire without further extension of its term, in which event this
Agreement shall expire on the day before this Agreement would otherwise be
automatically extended. The amendment or termination of this Agreement shall
not affect the obligations of an Ordering
17
Company or Supplier under any then existing Order or Supplemental Agreement
issued under this Agreement.
1A.6 TRANSITION PERIOD. Although all terms of this
Agreement are effective on the Effective Date, the parties recognize that
complete implementation of certain terms depends upon the development and
deployment of necessary practices and systems. Those terms include, but are not
limited to:
- Section 2.1 - Orders
- Section 2.2 - Order Acceptance
- Section 2.6 - Order Cancellation and Holds
- Section 3.1 - Pricing
- Section 3.2 - Invoices and Terms of Payment
- Section 5.1 - Ordering Companies Remedies
- Section 5.2 - Supplier Performance
- Section 6.21 - Record Retention
- Section 8.16 - Planning Information for Orders for
Commercially Available Products
Both parties agree to use their reasonable best efforts to develop and deploy
those practices and systems underlying these and other terms as promptly as
possible, but not later than March 29, 1997. The inability of either party to
comply with any of these terms as a result of not having developed and deployed
such practices and systems prior to March 29, 1997, will not be construed a
breach of contract, provided, however, that if such Supplier's delay in
developing and deploying necessary practices and systems delays affording
Ordering Company the benefits of the Pricing Agreement, Supplier shall afford
those benefits to Ordering Company, as promptly as possible, retroactive to the
Effective Date.
1A.7 PURCHASES BY AT&T'S AFFILIATES. This Agreement shall
govern purchases from Supplier by AT&T, its Affiliates and Ordering Companies,
but shall not govern purchases by other entities.
1A.8 ADDITIONAL TECHNOLOGY RIGHTS. Supplemental Agreements
may provide, on a case-by-case basis, for Ordering Company's ownership (up to
and including 100% ownership) of specified intellectual property rights in
technology newly developed by Supplier solely on behalf of Ordering Company. In
the event technology is licensed by Supplier to Ordering Company, Supplier may
agree to grant Ordering Company (a) the right to make, have made, use, sell,
modify, offer for sale or import specified Products and provide specified
Services and (b) the title and intellectual property rights to certain
modifications and resulting derivative works made by Ordering Company.
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ARTICLE II
ORDERING AND DELIVERY
2.1 ORDERS. (a) All Orders, including electronic Orders,
shall contain the information necessary for Supplier to fill the Order. Such
information shall include, but not be limited to:
(i) Ordering Company's requested ship date or
requested complete date;
(ii) The date of the Order;
(iii) A reference to this Agreement, including its
contract number and any applicable firm price quote, Supplemental
Agreement, or other Supplier pricing information;
(iv) The Price of the item being purchased or
licensed or the means by which the Price is derived;
(v) A complete list of the Products, Licensed
Materials and Services requested, specifying, as applicable, quantity,
Supplier's model number, the type and periods of any maintenance or
consulting Service ordered (including Service Start Date, a description
of the Services to be provided and, if applicable, the items to be
maintained), Supplier's Specification number (by issue or generic
number), Telephone Equipment Order ("TEO") or other agreed upon
Specification or other Supplier identification;
(vi) The address or location to which Products or
Licensed Materials are to be delivered or the location where Services are
to be performed including a description, the serial number (if available)
and the location of any Designated Processor for which Licensed Materials
are being furnished; and
(vii) The address to which Supplier's invoice is to
be sent electronically.
(b) Unless otherwise agreed in writing, the planning
intervals for engineering, delivery and installation for commercially available
Products to be provided by Supplier shall be as set forth in Exhibit 2-1, which
will be updated quarterly by mutual agreement of the parties. These intervals
are for planning purposes only; Supplier's scheduled delivery and performance
dates set forth in (i) an accepted Order for Products; or (ii) Licensed
Material, or an accepted Order or the appropriate Supplemental Agreement are
firm commitments and shall govern the parties' performance. Unless agreed
otherwise in writing, no provision, term or condition, or data on any Order or
contained in any document attached to or referenced in any Order, Supplemental
19
Agreement, or any other subordinate document (such as a shipping release) shall
be binding, except data necessary for Supplier to fill the Order. Electronic
Orders shall be binding on Ordering Company notwithstanding the absence of a
signature. All schedules and requested dates are subject to Supplier's
concurrence.
(c) For construction Services, Ordering Company shall
place Orders at an agreed upon time period prior to the applicable construction
start date. In the event that Ordering Company is not ready to receive shipment
on the scheduled delivery date, Ordering Company shall reimburse Supplier for
any reasonable warehousing, handling, hoisting and idle time costs sustained
during the delay period.
2.2 ORDER ACCEPTANCE. All Orders are subject to
acceptance by Supplier. Supplier shall have twenty-one (21) business days in
1996 and thereafter ten (10) business days after the receipt of the Order in
which to notify Ordering Company of those aspects of Ordering Company's Order
which Supplier is unable to accept and to provide Ordering Company Supplier's
firm schedule Completion Date for the Order. Failure to provide such notice
within that period shall be deemed acceptance of Order. Ordering Company or
Supplier may modify the terms or content of any Order if such changes are
mutually agreed to and documented in writing.
2.3 CHANGES IN ORDERING COMPANY'S ORDERS. Should Ordering
Company wish to obtain information sufficient to permit it to assess whether to
submit an Order adding, deducting or deviating from a prior Order (hereinafter a
"Change Information Request"), it shall request such information from Supplier
in writing. As promptly as reasonably possible after its receipt of a Change
Information Request, Supplier shall submit a proposal to Ordering Company which
includes any increases or decreases in Supplier's Price or changes in the
delivery or work schedule for the existing and new Orders necessitated by the
change. Unless Supplier receives an Order to implement such change from
Ordering Company within twenty-one (21) calendar days of Ordering Company's
receipt of Supplier's proposal, Ordering Company shall be deemed not to have
authorized the change and Supplier shall remain obligated to perform all
previously ordered work in accordance with (a) the governing Order (for
Products) or (b) for Licensed Material, the governing Order or appropriate
Supplemental Agreement. Changes by Ordering Company to an accepted Order shall
be treated as a separate Order only if such change materially affects Supplier's
ability to meet its obligations under the original Order, in which case any
Price (or discount, if applicable), shipment date or Services Completion Date
provided by Supplier with respect to such original Order shall be subject to
change.
2.4 CHANGES IN PRODUCTS BY SUPPLIER. Any change that
Supplier proposes to the Product furnished hereunder and the documentation
related thereto would be subject to the Change Notice Process attached hereto as
Exhibit 2-2.
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2.5 ORDER CANCELLATION AND HOLDS.
(a) CANCELLATION FOR CONVENIENCE.
(i) Ordering Company may, upon written notice to
Supplier, cancel an Order, provided that Ordering Company shall pay the
applicable fees, if any, set forth in Paragraphs (ii), (iii) and (iv)
below.
(ii) For those Products and Licensed Materials
canceled prior to shipment that are considered stock items, Ordering
Company agrees that it shall pay Supplier an Order cancellation fee
equal to fifteen percent (15%) of the Price or license fee for such
items.
(iii) For those Products and Licensed Materials
considered to be customized or non-stock items (1) not manufactured or
(2) manufactured but not yet accepted, Ordering Company shall pay a fee
based upon Supplier's incurred expenses (after adjustment for
recoveries and/or salvage value, if any), including, but not limited to
de-installation, transportation and associated general and
administrative expenses, plus a reasonable profit in the event that the
customized or non-stock items are not ultimately sold or licensed to
another party within ninety (90) days of cancellation, provided that
Supplier has made a reasonable attempt to sell or license such items.
(iv) If an Order for Services is canceled in whole
or in part after execution of such Order and prior to the scheduled
completion of such Services, Ordering Company agrees to pay Supplier
the fees due for Services provided (which fees, depending upon the
specific terms of the agreement, may be based on the applicable
periodic rates or equal to the percentage of the contracted project or
period that Supplier has completed multiplied by the total fee,
excluding expenses, for such project or period) and all expenses of any
type incurred for performing the Services prior to the date of
cancellation and any expenses Supplier may incur for terminating the
Services, including but not limited to:
(A) the cost of materials (less salvage
value, if any) which have been delivered to the work site prior to the
date of termination but which have not yet been incorporated into or
been consumed in performing the Services; plus
(B) the cost of undelivered materials
( less salvage value, if any) planned for use in performance of this
Agreement for which irrevocable Work Orders have been placed by
Supplier prior to the effective date of cancellation; plus
(C) the cost of any other capital
expenditure that has been incurred in order to perform the terminated
project and that cannot be re-applied by Supplier to provide other
Services; plus
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(D) the cost to Supplier of terminating
and settling any subcontracts.
(v) For purposes of this subparagraph (a),
"salvage value" shall include the proceeds of the sale of the
material to another Ordering Company and the costs Supplier avoids as a
result of its reapplying materials to meet other needs of Ordering
Company, the needs of other customers or its own internal needs within
ninety (90) days of Order cancellation. Supplier shall make reasonable
efforts to maximize salvage value. Upon written request, Supplier will
substantiate such avoided costs.
(b) HOLDS. Ordering Company may issue "holds" on Orders
or suspend performance under this Agreement, in whole or in part, upon written
notice to Supplier and shall compensate Supplier for any incremental expense
(including, but not limited to, warehousing, loss, damage and inventory carrying
costs) incurred. A hold automatically converts to an Order cancellation after
thirty (30) days.
(c) CANCELLATION FOR CAUSE. In the event Supplier shall
be in material breach or default of any of the terms, conditions, or covenants
of any Order or Supplemental Agreement and if such breach or default shall
continue for a period of forty-five (45) days in 1996 and thereafter thirty
(30) days after Supplier's receipt of notice thereof by Ordering Company, then,
in addition to the remedies specified in Section 5.1, ORDERING COMPANIES'
REMEDIES, Ordering Company shall have the right to cancel such Order or
Supplemental Agreement, except to the extent that Products, Licensed Materials
or Services have previously been provided pursuant to such Order or Supplemental
Agreement.
(d) SURVIVAL. The obligations of this Section 2.5 shall
survive termination of this Agreement.
2.6 SHIPPING, PACKING AND DELIVERY. (a) Supplier shall,
at no additional charge, pack Products in accordance with its standard practices
for shipments to Ordering Company's locations. Unless instructed otherwise by
Ordering Company, Supplier shall (i) ship Orders as available, but not before
the customer requested ship date, (ii) ship to the destination designated in the
Order, (iii) mark all subordinate documents with the Order number, (iv) enclose
a packing memorandum with each shipment, and when more than one package is
shipped, identify the package containing the memorandum, and (v) mark Ordering
Company's Order number on all packages and shipping papers.
(b) Where, in order to meet Ordering Company's requests,
Supplier packs Products in other than its normal manner, Ordering Company shall
pay Supplier's additional charges for such packing. Absent written agreement
otherwise, Supplier will deliver Products and Licensed Materials to Ordering
Company FOB (free on board) the manufacturing, warehouse or Software
distribution facility of Supplier or its vendor.
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(c) Unless otherwise directed by Ordering Company,
Supplier shall (i) ship equipment from its nearest facility or that of its
vendor capable of filling the Order, (ii) use the lowest available rate from
Ordering Company's pre-selected designated carrier (rail, truck or freight
forwarder), and (iii) prepay transportation charges at cost as a separate item
on Ordering Company's invoice when the cost of transportation is to be borne by
Ordering Company. Ordering Company shall promptly pay to Supplier any prepaid
transportation charges. Supplier will provide to Ordering Company a
transportation factor card to be used for estimating transportation rates.
Shipping and routing instructions may be furnished or altered by Ordering
Company in writing, subject to additional charges, if applicable.
(d) Supplier agrees not to deliver Products prior to five
(5) business days before the agreed upon delivery date without Ordering
Company's prior written authorization.
2.7 TITLE AND RISK OF LOSS. Title to and risk of loss to
Products and risk of loss of Licensed Materials shall pass to Ordering Company
upon delivery to Ordering Company. For purposes of this clause, "delivery"
shall mean the point at which Supplier or Supplier's supplier or agent turns
over possession of the Product or Licensed Materials to Ordering Company,
Ordering Company's employee, Ordering Company's pre-selected designated carrier,
Ordering Company's warehouse, or other Ordering Company's agent and not
necessarily the final destination shown on the Order. Ordering Company shall
notify Supplier promptly of any claim with respect to loss which occurs while
Supplier has the risk of loss and shall cooperate in every reasonable way to
facilitate the settlement of any claim.
ARTICLE III
PRICES AND PAYMENT
3.1 PRICES. (a) To the extent Ordering Company's Order is
subject to a firm price quotation made by Supplier, prices, fees, and charges
("Prices") shall be as set forth in Supplier's firm price quotation or as
specified in the governing Supplemental Agreement. In all other cases, Prices
shall be as set forth in the Product Information Catalog Extraction System
("PRICES") which provides toll free access to Supplier's complete Product
listing or in ELIB (electronic library information bulletin) or its successor
and will be provided in electronic media. For firm price quotations, Prices
shall be valid for thirty (30) days from the date of the quotation. Prices
shall be applied based upon the date Supplier receives Ordering Company's Order.
Both parties will work together in the first quarter of 1996 to develop a plan
for the migration to PRICES.
(b) The database for pricing of all Standard Service Units
("SSU's") Products and Services is Service Unit Dictionary System ("SUDS").
(c) Where Supplier is not performing installation, all
expenses after shipment from Supplier's manufacturing or software distribution
facility shall be paid by Ordering Company. If Supplier pays any of such
expenses, they shall be borne by Ordering Company plus
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a fifteen percent (15%) administration fee. Supplier will not incur such
expenses unless it is requested to do so in writing by Ordering Company (which
request shall constitute Ordering Company's agreement to pay Supplier for such
expenses).
(d) Notwithstanding the foregoing, if Supplier is delayed
from completion of an Order due to any change requested by Ordering Company or
as a result of delay by Ordering Company in furnishing information or in
performing its obligations (including site preparation), Supplier's prices are
subject to change to the extent that Supplier incurs costs for such delay.
(e) Unless expressly stated in writing, Supplier's prices
are exclusive of charges for transportation and other related Services, and any
sales or other tax or duty which Supplier may be required to collect or pay upon
the ordered transaction. Supplier shall include these items as separate items in
its invoiced prices to Ordering Company. Ordering Company shall be responsible
for prepaid transportation paid by Supplier. Billable premium transportation
will be used only with Ordering Company's concurrence.
(f) Supplier may amend its pricing schedules once every
six (6) months by providing sixty (60) days' prior written notice. Unless the
parties agree otherwise in writing, Supplier's unaccepted firm price quotations
may be amended on ten (10) days' written notice. Such changes in Supplier's
pricing shall apply only to Orders received on or after the effective date of
such price changes.
(g) In addition to the applicable Price, reasonable
expenses for travel and living of Supplier's personnel while on travel
assignments outside the local area, approved by Ordering Company, shall be
reimbursable. Such approval may be written or oral and on an individual case
basis or for a category of such assignments. If oral approval is given, it
shall be followed with a written approval in ten (10) days. Supplier shall
submit invoices for reimbursable travel and living expenses promptly upon
completion of the travel events. Supplier shall list the travel and living
charges as separate items on each invoice. Supplier shall retain all records in
accordance with IRS standards of such charges for a period of not less than one
(1) calendar year after the expiration of the travel assignment. Upon
reasonable request in the event of a question, Supplier shall make such records
available for inspection by Ordering Company.
3.2 INVOICES AND TERMS OF PAYMENT.
(a) FOR CALENDAR YEAR 1996. Invoices and terms of payment
shall be mutually agreed to by both parties no later than March 1, 1996. The
intent is that both parties will plan a movement toward the terms of Section
3.2(b), INVOICES AND TERMS OF PAYMENT, and away from the current practice,
NS/NSD Payment and Invoicing Policy dated January 30, 1995. The principles for
1996 which the parties will strive to meet will include (i) the provision of a
single bill per order on last shipment; (ii) such bill shall not be submitted
manually; (iii) billing upon shipment for Products, Licensed Materials
(including transportation charges and taxes, if applicable) and Engineering,
except engineering Services associated with
24
outside plant construction; (iv) billing for Installation upon Installation
Complete Date; and (v) implementation on or before April 1, 1996.
(b) AFTER 1996.
(i) Products, Licensed Materials (including
transportation charges and taxes, if applicable), and Engineering Services,
except engineering Services associated with outside plant construction, shall
be billed by Supplier when last shipment on an Order is made, or as soon
thereafter as practical;
(ii) Installation shall be billed upon Acceptance;
(iii) Engineering Services associated with outside
plant construction shall be billed as performed or, at Supplier's discretion,
on a monthly basis;
(iv) Consulting, design, outside plant
construction, system integration and program management Services shall be
billed, as mutually agreed to by the parties (1) on a progress basis based on
the percentage of job completed up to eighty-five percent of the charge or, (2)
on a monthly basis. Final billing for such Services will be invoiced when such
Service is completed;
(v) Unless otherwise agreed to, Maintenance
Services shall be billed monthly, in advance. Supplier will work with Ordering
Company to minimize the number of bills Ordering Company receives each month
for such Services. If Ordering Company requests quarterly or annual invoicing,
such invoicing shall be rendered in advance of such Services;
(vi) Payment for generally available Licensed
Material is payable in full upon delivery to First Field Application; and
(vii) Software and/or other technology development
for small projects (i.e. less than or equal to fifteen million dollars
($15,000,000) and less than or equal to twelve (12) months) shall be billed as
follows: ten percent (10%) at commitment (i.e., signing of contract), forty
percent (40%) upon delivery of the Software to the Integrated Test Network (if
the Software will not be tested in the ITN, this forty percent (40%) payment
shall be due upon delivery to the First Field Application), and fifty percent
(50%) when Software is ready for deployment, or thirty (30) days after
Acceptance of the Software in the First Field Application, whichever occurs
sooner. Billing for Software and/or other technology development for projects
other than small projects as defined in the preceding sentence, shall be
determined on a case by case basis. The parties will conform the Supplemental
Agreements to this Section 3.4(b)(vii) by March 31, 1996.
(c) Ordering Company shall pay such invoiced amounts, less
any items known then to be disputed items, within thirty (30) days of the date
of Supplier's invoice. Ordering Company shall notify Supplier of any disputed
invoice within eighteen (18) months from the date of the invoice. Such notice
of dispute shall not excuse Ordering Company from timely payment of the
undisputed portion(s) of any invoice containing a disputed portion.
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Supplier may apply any credit which remains outstanding in favor of Ordering
Company to the oldest undisputed invoice which remains in Ordering Company's
account, unless directed otherwise by Ordering Company.
(d) Unless otherwise agreed, payment of all amounts
contained in this Agreement shall be made in United States dollars and invoices
shall be rendered in the same currency. Unless otherwise agreed to by Supplier
and Ordering Company, payments shall be made by electronic transfer to the
account and address indicated by Supplier and shall reference the invoice(s) to
which they relate.
(e) AT&T guarantees payment in United States dollars of
the obligations of Ordering Companies that are not Affiliates of AT&T on any
Orders placed pursuant to this Agreement. Payment shall be made by AT&T within
thirty (30) days after receipt of invoice of a guaranteed payment. Such invoice
will only be issued to AT&T after Supplier has made reasonable efforts to obtain
payment from Ordering Company. Ordering Companies that are Affiliates of AT&T
shall bear sole responsibility for the performance of their obligations
hereunder.
3.3 TAXES. (a) Ordering Company shall bear all taxes,
levies, duties and other similar charges (and any related interest and
penalties), however designated, (herein referred to as "Tax") imposed as a
result of the existence or operation of this Agreement, Order or any
Supplemental Agreement, including but not limited to any tax which Ordering
Company is required to withhold, collect or deduct from payments to Supplier,
except (i) any tax imposed upon Supplier in a jurisdiction outside the United
States if such tax is allowable as a credit against the United States income
taxes of Supplier; and (ii) any net income tax imposed upon Supplier by the
United States or any governmental entity within the United States proper (the
fifty (50) states and the District of Columbia including, but not limited to
counties, municipalities and other localities). In order for the exception
contained in (i) to apply, Ordering Company must furnish Supplier with such
evidence as may be required by United States taxing authorities to establish
that such Tax has been paid, if any, so Supplier may claim the credit.
(b) If Ordering Company is required to bear a tax pursuant
to paragraph (a) above, Ordering Company shall pay to Supplier or the
appropriate government entity or taxing authority, such Tax and other charges
and any additional amounts as are necessary to ensure that the net amounts
received by Supplier after all such payments or withholdings equal the amounts
to which Supplier is otherwise entitled under this Agreement as if such Tax or
other charges did not exist.
(c) If Ordering Company is exempt from any Tax, Ordering
Company shall provide Supplier with all required documentation necessary to
establish Ordering Company's exempt status. Ordering Company hereby agrees to
indemnify Supplier from any Tax, including penalties and interest, resulting
from Supplier's reliance on Ordering Company's claim of exempt status.
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(d) If Ordering Company disputes in good faith the
applicability of any Tax imposed as a result of the existence or operation of
this Agreement, Ordering Company, at its own expense and in its own name, may
contest the taxing jurisdiction of the disputed Tax. In the event the
applicable law requires that such contest must be taken in the name of Supplier
only, Supplier shall in good faith and with due diligence at Ordering Company's
sole expense contest the imposition of such Tax provided that (i) Supplier will
not be required to pursue such contest if the action will result in a lien
against Supplier for which Ordering Company has not adequately indemnified
Supplier or (ii) will result in a penalty being assessed against Supplier for
which Ordering Company has not adequately indemnified Supplier.
ARTICLE IV
INTELLECTUAL PROPERTY RIGHTS
4.1 USE OF INFORMATION. (a) All technical and business
Information disclosed by one party to the other subsequent to the execution of
this Agreement in whatever form recorded which is marked "proprietary" or
"confidential" or 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 shall remain the property of the furnishing
party. Similarly, all technical and business Information disclosed by one party
to the other party prior to the execution of this Agreement and described at the
time of disclosure by the furnishing party as being proprietary or confidential
or known by the party receiving disclosure of such Information to be proprietary
or confidential shall remain the property of the furnishing party (regardless of
whether it is ever recorded in tangible form).
(b) The furnishing party grants the receiving party the
right to use such Information only as follows: Such Information (i) shall not
be reproduced or copied, in whole or part, except for use as authorized in this
Agreement; and (ii) shall, together with any full or partial copies thereof, be
returned or destroyed when no longer needed. Supplier shall use Ordering
Company's Information only for the purpose of performing under this Agreement,
and Ordering Company shall use Supplier's Information only (i) to order
Products, Licensed Materials or Services; (ii) to evaluate Supplier's Products,
Licensed Materials or Services; or (iii) to install, operate and maintain the
particular Products or Licensed Materials for which such Information was
originally furnished. Unless the furnishing party consents in writing, such
Information, except for that part, if any, which was previously 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, or
which a receiving party receives from a third party without restriction, or
which is independently developed by 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 that
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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. The contents of this Agreement are
confidential and shall not be disclosed by either party to third parties,
without the prior written agreement of both parties hereto, except to the extent
required by applicable law, a court or regulatory agency of competent
jurisdiction.
(c) Each party shall be liable to the other for damages
resulting from violation of this Section 4.1. Those damages shall be unlimited
as to nature and limited as to amount to thirty million dollars ($30,000,000)
per occurrence.
4.2 INFRINGEMENT AND MISAPPROPRIATION. (a) In the event
of any claim, action, proceeding or suit by a third party against Ordering
Company alleging an infringement of any patent, copyright, trademark or
misappropriation of a trade secret recognized in any jurisdiction where an
Ordering Company may lawfully use or operate Products or Licensed Materials
purchased hereunder, or if by reason of the use, in accordance with Supplier's
Specifications, in any such jurisdiction of any Products or Licensed Materials
furnished by Supplier to an Ordering Company under this Agreement, Supplier, at
its expense, shall defend Ordering Company, subject to the conditions and
exceptions stated in Paragraphs (b), (c), (d), and (e) below. Supplier shall
reimburse Ordering Company for all costs, expenses or attorneys' fees incurred
at Supplier's written request or authorization, and shall indemnify Ordering
Company against any liability assessed against Ordering Company by final
judgment on account of such infringement or violation arising out of such use.
In no event shall Supplier be liable for Ordering Company's consequential
damages.
(b) If Ordering Company's use is enjoined or in Supplier's
opinion is likely to be enjoined, Supplier shall, at its expense use its
reasonable best efforts, to either (i) replace the enjoined Product or Licensed
Materials furnished pursuant to this Agreement with a substitute free of any
infringement; (ii) modify it so that it will be free of the infringement; or
(iii) procure for Ordering Company a license or other right to use it. If none
of the foregoing options is achievable through reasonable best efforts, Supplier
shall remove the enjoined Product or Licensed Materials and refund or credit to
Ordering Company any amounts paid to Supplier therefor less a reasonable charge
for depreciation and any actual period of use by Ordering Company. In no event,
however, shall Supplier's liability under this Section 4.2(b) exceed the
amount(s) paid by Ordering Company to Supplier to purchase the Product or to
obtain the right to use the Licensed Materials which are alleged to violate the
rights described in Paragraph (a) above.
(c) Ordering Company shall give Supplier prompt written
notice of all such claims, actions, proceedings or suits alleging infringement
or violation and Supplier shall have full and complete authority to assume the
sole defense thereof, including appeals, and to settle same. Ordering Company
shall, upon Supplier's request and at Supplier's expense, furnish all
28
information and assistance available to Ordering Company and cooperate in every
reasonable way to facilitate the defense and/or settlement of any such claim,
action, proceeding or suit.
(d) No undertaking of Supplier under this clause shall
extend to any such alleged infringement or violation to the extent that it: (i)
solely arises from adherence to design modifications, Specifications, drawings,
or written instructions which Supplier is directed by Ordering Company to follow
but only if such alleged infringement or misappropriation does not reside in
material of Supplier's origin, design or selection; or (ii) arises from
adherence to instructions to apply Ordering Company's trademark, trade name or
other company identification; or (iii) resides in equipment or Software which is
furnished by Ordering Company to Supplier for use under this Agreement; or (iv)
arises from use of the Product or Licensed Materials provided by Supplier in
combination with any item not furnished directly by Supplier; or (v) is based
upon modification made by Ordering Company of any Product or Licensed Materials;
or (vi) arises from use of any Product or Licensed Material in a manner for
which it was not designed. In the foregoing cases numbered (i) through (vi),
Ordering Company shall defend and save Supplier harmless, subject to the same
terms and conditions and exceptions stated above, with respect to Supplier's
rights and obligations under this clause.
(e) The liability of Supplier, AT&T and Ordering Company
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 Section 4.2.
4.3 NO PATENT LICENSES. Nothing contained herein shall be
construed as conferring by implication, estoppel or otherwise any license or
right under any patent, except that which is essential to the use of the
Products and/or Licensed Materials as provided by Supplier, and provided however
that this Section 4.3 shall not limit or modify any of the rights and
obligations of the Intellectual Property Agreements or the Supplemental General
Purchase Agreement, No. LC3757D, both executed as of this date as Ancillary
Agreements to the Separation and Distribution Agreement. Supplier shall retain
all ownership rights in all intellectual property used or embodied in Supplier's
Products, Licensed Materials and Service unless otherwise expressed herein, or
in a Supplemental Agreement.
4.4 TRADEMARKS. (a) Subject to the provisions of the
Brand License Agreement, executed as of this date as an Ancillary Agreement to
the Separation and Distribution Agreement, each party shall have the right to
use Products and Licensed Materials which bear the other party's trademarks,
trade name, logos, trade devices, service marks, symbols, and codes, unless
otherwise directed by that party to remove such indicia.
(b) Except as provided in Section s 4.4 (a) above, each
party (including in the case of AT&T, each Ordering Company) shall not use in
advertising or otherwise, any of the other party's trade name, logo, trademark,
trade device, service mark, symbol, code or Specification, or any abbreviation,
contraction, or simulation thereof, without the prior written
29
consent of such party. Neither party shall claim any ownership therein, and
any such usage shall inure to the benefit of the party which owns such trade
name, logo, trademark, trade device, service mark, symbol, code or
Specification.
4.5 PROPRIETARY NOTICE. Ordering Company shall reproduce
and include any Supplier copyright or proprietary notice on all authorized
copies of Licensed Materials. Ordering Company shall also mark all media
containing such copies with a warning that the Licensed Materials are subject to
restrictions contained in an agreement between Supplier and AT&T and that such
Licensed Material are the property of Supplier.
ARTICLE V
RISK MANAGEMENT
5.1 ORDERING COMPANIES' REMEDIES.
(a) An Ordering Company's exclusive remedies and the entire liability
of Supplier, Supplier's Affiliates and their employees and agents, and their
vendors for any claim, loss, damage or expense of Ordering Company or any other
entity arising out of this Agreement or any Supplemental 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, warranty, tort, including
negligence, or strict liability, shall be as follows:
(i) For infringement -- the remedy set forth above
in Section 4.2, INFRINGEMENT AND MISAPPROPRIATION;
(ii) For breach of Section 4.1, USE OF INFORMATION,
the remedy set forth above in Section 4.1 (c)
(iii) For the performance or nonperformance of
Products, Software, and Services or claims that they do not conform to a
warranty -- the remedy shall include those set forth in the applicable
"warranty" clause;
(iv) For third party claims against Ordering
Company for personal injury and property damage for which Supplier is held
liable -- the remedy afforded by the governing law;
(v) For tangible property damage to Ordering
Company caused by Supplier's negligence -- the amount of the direct damages; and
(vi) For Supplier's failure to deliver Products,
Licensed Materials or Services on Supplier's scheduled delivery date, if
Supplier fails to deliver such Products, Licensed Materials or Services (aa) in
1996 within forty-five (45) days from receipt of written notice from Ordering
Company to Supplier of its failure to deliver such Products, Licensed
30
Materials or Services on Supplier's scheduled delivery date and (ab) thereafter
thirty (30) days from receipt of such notice, the following remedies shall
apply:
(A) Ordering Company may cancel the Order
without incursion of cancellation fees; and,
(B) Ordering Company may request and Supplier
will reduce AT&T's volume purchase commitment by an amount equal to the value of
the Order. In addition, if a worldwide supply shortage exists, Ordering Company
may request and, upon such request, shall receive priority on allocation of such
delivered Products, Licensed Materials or Services in a shortage condition based
upon priority criteria agreed to between Supplier and its affected customers
established for the particular shortage condition.
(b) Notwithstanding any other provision of this Agreement
and except as provided in Section 5.1(a)(ii) above, ORDERING COMPANIES'
REMEDIES, Supplier, Supplier's Affiliates and their employees and agents, and
their vendors shall not be liable for any consequential damages in the nature of
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, warranty, tort, including
negligence, or strict liability.
(c) Other than damages pursuant to Section 5.1(a)(ii)
above, ORDERING COMPANIES' REMEDIES, Supplier's total liability for incidental
and/or consequential damages and damages resulting from network outages which
must be reported by Ordering Company to the Federal Communications Commission in
accordance with its rules ("Network Outage(s)") shall not exceed ten million
dollars ($10,000,000) per occurrence with a total not to exceed of thirty
million dollars ($30,000,000) in any one year. This Section 5.1(c) shall
survive failure of an exclusive or limited remedy.
(d) Ordering Company shall give Supplier prompt written
notice of any claim. Any action or proceeding against Supplier must be brought
within thirty-six (36) months after the cause of action accrues.
(e) Supplier acknowledges that a Network Outage will cause
damage to AT&T in an amount impossible to ascertain. Supplier agrees to pay
AT&T, as liquidated damages and not as a penalty, the sum of one million dollars
($1,000,000) per occurrence in the event of a Network Outage caused solely by
Supplier in connection with network infrastructure equipment and one hundred
thousand dollars ($100,000) per occurrence in the event of a Network Outage
caused solely by Supplier in connection with GBCS Products, whether or not by
breach of warranty and whether before, during or after any Warranty Period.
With respect to a Network Outage caused solely by Supplier in connection with
network infrastructure equipment, Supplier's total liability for damages for
Network Outages, including the liquidated damages described herein shall be one
million dollars ($1,000,000) per occurrence not to exceed the amount of three
million dollars ($3,000,000) for any calendar year, and Supplier's total
liability
31
for damages for Network Outages for any three (3) year period of this Agreement,
including the liquidated damages described herein, shall be five million dollars
($5,000,000); provided that AT&T is meeting its obligations specified in Section
1A.3, VOLUME COMMITMENT, and the Pricing Agreement. With respect to Network
Outages caused solely by Supplier in connection with GBCS Products, Supplier's
total liability under this section shall be one hundred thousand dollars
($100,000) per occurrence not to exceed the amount of three hundred thousand
dollars ($300,000) for any calendar year ,and Supplier's total liability for
damages for Network Outages for any three (3) year period of this Agreement,
including the liquidated damages described herein, shall be five hundred
thousand dollars ($500,000); provided that AT&T is meeting its obligations
specified in Section 1A.3, VOLUME COMMITMENT, and the Pricing Agreement. If, at
any time during the term of this Agreement, AT&T fails to meet its obligations
specified in Section 1A.3, VOLUME COMMITMENT, and the Pricing Agreement, it
shall not be entitled to the remedy in this Section 5.1(e). Any damages paid by
Supplier pursuant to this Subparagraph shall be considered incidental and
consequential damages subject to the limitations on AT&T's right to recover same
that are set forth in Section 5.1(c), ORDERING COMPANIES' REMEDIES. At AT&T's
option, AT&T may take all or part of the payment as a credit against any invoice
due or to become due to Supplier. The remedies available to AT&T under Section
5.1, ORDERING COMPANIES' REMEDIES, and the foregoing liquidated damages shall
constitute AT&T's sole and exclusive remedy for Network Outages caused to any
extent by Supplier during the term of this Agreement.
5.2 SUPPLIER PERFORMANCE. AT&T and Supplier will jointly
develop requirements for an annual Supplier Merit Award by December 1st of each
year for the following year. For 1996, the requirements are listed in Exhibit
5-1. The award program will provide that if Supplier meets or exceeds either
award performance criteria for receipt of a Supplier Merit Award, AT&T shall:
(a) increase its minimum volume purchase
commitment for the following year (if the volume purchase commitment in Section
1A.3, VOLUME COMMITMENT, is in effect), by twenty million dollars ($20,000,000)
for achieving the on-time delivery criteria and ten million dollars
($10,000,000) for achieving the FCC reportable incidents criteria or
(b) if a volume purchase commitment is not in
effect, increase its purchase or license of Supplier's Products, Licensed
Materials and Services for the following year by twenty million dollars
($20,000,000) for achieving the on-time delivery criteria and ten million
dollars ($10,000,000) for achieving the FCC reportable incidents criteria. A
public relations program will be jointly developed and executed in support of
this award program.
5.3 INSURANCE. Supplier shall maintain and cause
Supplier's subcontractors to maintain during the term of this Agreement: (a)
Workers' Compensation insurance as prescribed by the law of the state or nation
in which the work is performed, (b) employer's liability insurance with limits
of at least three hundred thousand dollars ($300,000) for each occurrence; (c)
comprehensive automobile liability insurance if the use of motor vehicles is
required, with
32
limits of at least one million dollars ($1,000,000) combined single limit for
bodily injury and property damage for each occurrence; (d) Comprehensive General
Liability ("CGL") insurance, including Blanket Contractual Liability and Broad
Form Property damage, with limits of at least one million dollars ($1,000,000)
combined single limit for personal injury and property damage for each
occurrence; and (e) if the furnishing to Ordering Company (by sale or otherwise)
of Products or material is involved, CGL insurance endorsed to include products
liability and completed operations coverage in the amount of five million
dollars ($5,000,000) for each occurrence. If specifically requested by Ordering
Company, Supplier's subcontractors shall furnish, prior to the start of work,
certificates or adequate proof of the foregoing insurance, including copies of
the endorsements and insurance policies. Supplier's obligations to maintain
insurance may be satisfied by providing proof of self-insurance in a form
satisfactory to Company.
ARTICLE VA
ARBITRATION; DISPUTE RESOLUTION
5A.1 AGREEMENT TO ARBITRATE. The procedures for
discussion, negotiation and arbitration set forth in this Article 5A shall apply
to all disputes, controversies or claims (whether sounding in contract, tort or
otherwise) that may arise out of or related to, or arise under or in connection
with this Agreement or any Supplemental Agreement, or the transactions
contemplated hereby or thereby (including all actions taken in furtherance of
the transactions contemplated hereby or thereby on or prior to the date hereof),
or the commercial or economic relationship of the parties relating hereto,
between the parties. Each party agrees that the procedures set forth in this
Article 5A shall be the sole and exclusive remedy in connection with any
dispute, controversy or claim relating to any of the foregoing matters and
irrevocably waives any right to commence any Action in or before any
Governmental Authority except as expressly provided in Section 5A.7(b), CERTAIN
ADDITIONAL MATTERS, and 5A.8, LIMITED COURT ACTIONS, below and except to the
extent provided under the Arbitration Act in the case of judicial review of
arbitration results or awards. Each party on behalf of itself irrevocably
waives any right to any trial by jury with respect to any such claim,
controversy, or dispute.
5A.2 ESCALATION. (a) It is the intent of the parties to
use their respective reasonable best efforts to resolve expeditiously any
dispute, controversy or claim between or among them with respect to the matters
covered hereby that may arise from time to time on a mutually acceptable
negotiated basis. In furtherance of the foregoing, any party involved in a
dispute, controversy or claim may deliver a notice (an "Escalation Notice")
demanding an in-person meeting involving representatives of the parties at a
senior level of management of the parties (or if the parties agree, of the
appropriate strategic business unit or division within such entity). A copy of
any such Escalation Notice shall be given to the General Counsel, or like
officer or official, of each party involved in the dispute, controversy or claim
(which copy shall state that it is an Escalation Notice pursuant to this
Agreement). Any agenda, location or procedures for such discussions or
negotiations between the parties may be established by the
33
parties from time to time; provided, however, that the parties shall use their
reasonable best efforts to meet within thirty (30) days of the Escalation
Notice.
(b) The parties may, by mutual consent, retain a mediator to
aid the parties in their discussions and negotiations by informally providing
advice to the parties. Any opinion expressed by the mediator shall be strictly
advisory and shall not be binding on the parties, nor shall any opinion
expressed by the mediator be admissible in any arbitration proceedings. The
mediator may be chosen from a list of mediators previously selected by the
parties or by other agreement of the parties. Costs of the mediation shall be
borne equally by the parties involved in the matter, except that each party
shall be responsible for its own expenses. Mediation is not a prerequisite to a
demand for arbitration under Section 5A.3, DEMAND FOR ARBITRATION.
5A.3 DEMAND FOR ARBITRATION. (a) At any time after the
first to occur of (i) the date of the meeting actually held pursuant to the
applicable Escalation Notice or (ii) forty five (45) days after the delivery of
an Escalation Notice (as applicable, the "Arbitration Demand Date"), any party
involved in the dispute, controversy or claim (regardless of whether such party
delivered the Escalation Notice) may, unless the applicable deadline has
occurred, make a written demand (the "Arbitration Demand Notice") that the
dispute be resolved by binding arbitration, which Arbitration Demand Notice
shall be given in the manner set forth in Section 6.3, NOTICES. In the event
that any party shall deliver an Arbitration Demand Notice to another party, such
other party may itself deliver an Arbitration Demand Notice to such first party
with respect to any related dispute, controversy or claim with respect to which
the applicable deadline has not passed without the requirement of delivering an
Escalation Notice. No party may assert that the failure to resolve any matter
during any discussions or negotiation, the course of conduct during the
discussions or negotiations or the failure to agree on a mutually acceptable
time, agenda, location or procedures for the meeting, in each case, as
contemplated by Section 5A.2, ESCALATION, is prerequisite to a demand for
arbitration under this Section 5A.3.
(b) Any Arbitration Demand Notice may be given until one year
and forty-five (45) days after the later of the occurrence of the act or event
in the exercise of reasonable due diligence giving rise to the underlying claim
or the date on which such act or event was, or should have been, discovered by
the party asserting the claim (as applicable, and as it may in a particular case
be specifically extended by the parties in writing, the "Applicable Deadline").
Any discussions, negotiations or mediations between the parties pursuant to this
Agreement or otherwise will not toll the Applicable Deadline unless expressly
agreed in writing by the parties. Each of the parties agrees that if an
Arbitration Demand Notice with respect to a dispute, controversy or claim is not
given prior to the expiration of the Applicable Deadline, as between or among
the parties, such dispute, controversy or claim will be barred. Subject to
Section 5A.7(d), CERTAIN ADDITIONAL MATTERS, and 5A.8, LIMITED COURT
ACTIONS,
upon delivery of an Arbitration Demand Notice pursuant to Section 5A.3(b),
DEMAND FOR ARBITRATION, prior to the Applicable Deadline, the dispute,
controversy or claim shall be decided by a sole arbitrator in accordance with
the rules set forth in this Article 5A.
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5A.4 ARBITRATORS. (a) Within fifteen (15) days after a
valid Arbitration Demand Notice is given, the parties involved in the dispute,
controversy or claim referenced therein shall attempt to select a sole
arbitrator satisfactory to all such parties.
(b) In the event that such parties are not able to jointly
select a sole arbitrator within such fifteen (15) day period, such parties shall
each appoint an arbitrator within thirty (30) days after delivery of the
Arbitration Demand Notice. If one party appoints an arbitrator within such time
period and the other party or parties fail to appoint an arbitrator within such
time period, the arbitrator appointed by the one party shall be the sole
arbitrator of the matter.
(c) In the event that a sole arbitrator is not selected
pursuant to paragraph (a) or (b) above and, instead, two (2) or three (3)
arbitrators are selected pursuant to paragraph (b) above, the two or three
arbitrators will, within thirty (30) days after the appointment of the later of
them to be appointed, select an additional arbitrator who shall act as the sole
arbitrator of the dispute. After selection of such sole arbitrator, the initial
arbitrators shall have no further role with respect to the dispute. In the
event that the arbitrators so appointed do not, within thirty (30) days after
the appointment of the later of them to be appointed, agree on the selection of
the sole arbitrator, any party involved in such dispute may apply to CPR, New
York, New York, to select the sole arbitrator, which selection shall be made by
such organization within thirty (30) days after such application. Any
arbitrator selected pursuant to this paragraph (c) shall be disinterested with
respect to any of the parties and the matter and shall be reasonably competent
in the applicable subject matter.
(d) The sole arbitrator selected pursuant to paragraph (a),
(b) or (c) above will set a time for the hearing of the matter which will
commence no later than ninety (90) days after the date of appointment of the
sole arbitrator pursuant to paragraph (a), (b) or (c) above, and which hearing
will be no longer than thirty (30) days (unless in the judgment of the
arbitrator the matter is unusually complex and sophisticated and thereby
requires a longer time, in which event such hearing shall be no longer than
ninety (90) days). The final decision of such arbitrator will be rendered in
writing to the parties not later than sixty (60) days after the last hearing
date, unless otherwise agreed by the parties in writing.
(e) The place of any arbitration hereunder will be New Jersey,
unless otherwise agreed by the parties.
5A.5 HEARINGS. Within the time period specified in Section
5A.4(d), ARBITRATORS, the matter shall be presented to the arbitrator at a
hearing by means of written submissions of memoranda and verified witness
statements, filed simultaneously, and responses, if necessary in the judgment of
the arbitrator or both parties. If the arbitrator deems it to be essential to a
fair resolution of the dispute, live cross-examination or direct examination may
be permitted, but is not generally contemplated to be necessary. The arbitrator
shall actively manage the arbitration with a view to achieving a just, speedy
and cost-effective resolution of the dispute, claim or controversy. The
arbitrator may, in his discretion, set time and other limits on the presentation
of each party's case, its memoranda or other submissions, and refuse to receive
35
any proffered evidence, which the arbitrator, in his discretion, finds to be
cumulative, unnecessary, irrelevant or of low probative nature. Except as
otherwise set forth herein, any arbitration hereunder will be conducted in
accordance with the CPR Rules for Non-Administered Arbitration of Business
Disputes (except that the arbitration will not be conducted under the auspices
of the CPR and the fee schedule of the CPR will not apply). Except as expressly
set forth in Section 5A.8(b), LIMITED COURT ACTIONS, the decision of the
arbitrator will be final and binding on the parties, and judgment therein may be
had and will be enforceable in any court having jurisdiction over the parties.
Arbitration awards will bear interest at an annual rate of the Prime Rate Plus
two percent (2%) per annum. To the extent that the provisions of this Agreement
and the prevailing rules of the CPR conflict, the provisions of this Agreement
shall govern.
5A.6 DISCOVERY AND CERTAIN OTHER MATTERS. (a) Any party
involved in the applicable dispute may request limited document production from
the other party or parties of specific and expressly relevant documents, with
the reasonable expenses of the producing party incurred in such production paid
by the requesting party. Any such discovery (which rights to documents shall be
substantially less than document discovery rights prevailing under the Federal
Rules of Civil Procedure) shall be conducted expeditiously and shall not cause
the hearing provided for in Section 5A.5, HEARINGS, to be adjourned except upon
consent of all parties involved in the applicable dispute or upon an
extraordinary showing of cause demonstrating that such adjournment is necessary
to permit discovery essential to a party to the proceeding. Depositions,
interrogatories or other forms of discovery (other than the document production
set forth above) shall not occur except with the consent of the parties involved
in the applicable dispute. Disputes concerning the scope of document production
and enforcement of the document production requests will be determined by
written agreement of the parties involved in the applicable dispute or, failing
such agreement, will be referred to the arbitrator for resolution. All
discovery requests will be subject to the proprietary rights and rights of
privilege of the parties, and the arbitrator will adopt procedures to protect
such rights and to maintain the confidential treatment of the arbitration
proceedings (except as may be required by law). Subject to the foregoing, the
arbitrator shall have the power to issue subpoenas to compel the production of
documents relevant to the dispute, controversy or claim.
(b) Except where contrary to the provisions set forth in this
Agreement or any Supplemental Agreement, the rules of the CPR for commercial
arbitration will be applied to all matters of procedure, including discovery.
The arbitrator shall have full power and authority to determine issues of
arbitrability but shall otherwise be limited to interpreting or continuing the
applicable provisions of this Agreement and will have no authority or power to
limit, expand, alter, amend, modify, revoke or suspend any condition or
provision of the Agreement; it being understood, however, the arbitrator will
have full authority to implement the provisions of this Agreement, and to
fashion appropriate remedies for breaches of this Agreement (including, other
than in the case of disputes, controversies or claims relating to, arising out
of or resulting from Patents (as such term is defined in the Patent License
Agreement), interim or permanent injunctive relief); provided that the
arbitrator shall not have (i) any authority in excess of the
36
authority a court having jurisdiction over the parties and the controversy or
dispute would have absent these arbitration provisions or (ii) any right or
power to award punitive damages. It is the intention of the parties that in
rendering a decision, the arbitrator give effect to the applicable provisions of
this agreement and follow applicable law (it being understood and agreed that
this sentence shall not give rise to a right of judicial review of the
arbitrator's award).
(c) If a party fails or refuses to appear at and participate
in an arbitration hearing after due notice, the arbitrator may hear and
determine the controversy upon evidence produced by the appearing party.
(d) Arbitration costs will be borne equally by each party
involved in the matter, except that each party will be responsible for its own
attorneys fees and other costs, expenses, including the costs of witnesses
selected by such party.
5A.7 CERTAIN ADDITIONAL MATTERS. (a) Any arbitration award
shall be a bare award limited to a holding for or against a party and shall be
without findings as to facts, issues or conclusions of law (including with
respect to any matters relating to the validity or infringement of Patents) and
shall be without a statement of the reasoning on which the award rests, but must
be in adequate form so that a judgment of a court may be entered thereupon.
Judgment upon any arbitration award hereunder may be entered in any court having
jurisdiction thereof.
(b) Prior to the time at which an arbitrator is appointed
pursuant to Section 5A.4(c), ARBITRATORS, any party may seek one or more
temporary restraining orders in a court of competent jurisdiction if necessary
in order to preserve and protect the status quo. Neither the request for, nor
grant or denial of, any such temporary restraining order shall be deemed a
waiver of the obligation to arbitrate as set forth herein and the arbitrator may
dissolve, continue or modify any such order. Any such temporary restraining
order shall remain in effect until the first to occur of the expiration of the
order in accordance with its terms or the dissolution thereof by the arbitrator.
(c) Except as required by law, the parties shall hold, and
shall cause their respective officers, directors, employees, agents and other
representatives to hold, the existence, content and result of mediation or
arbitration in confidence in accordance with the provisions of Section 6.2 and
except as may be required in order to enforce any award. Each of the parties
shall request that any mediator or arbitrator comply with such confidentiality
requirement.
(d) In the event that at any time the sole arbitrator shall
fail to serve as an arbitrator for any reason, the parties shall select a new
arbitrator who shall be disinterested as to the parties and the matter in
accordance with the procedures set forth herein for the selection of the initial
arbitrator. The extent, if any, to which testimony previously given shall be
repeated or
37
as to which the replacement arbitrator elects to rely on the stenographic record
(if there is one) of such testimony shall be determined by the replacement
arbitrator.
5A.8 LIMITED COURT ACTIONS. (a) Notwithstanding anything
herein to the contrary, in the event that any party reasonably determines the
amount of controversy in any dispute, controversy or claim (or any series of
related disputes, controversies or claims) under this Agreement is, or is
reasonably likely to be, in excess of one hundred million dollars ($100,000,000)
and if such party desires to commence an Action in lieu of complying with the
arbitration provisions of this Article, such party shall so state in its
Arbitration Demand Notice. If the other parties to the arbitration do not agree
that the amount in controversy in such dispute, controversy or claim (or such
series of related disputes, controversies or claims) is, or is reasonably likely
to be, in excess of one hundred million dollars ($100,000,000), the arbitrator
selected pursuant to Section 5A.4, ARBITRATORS, hereof shall decide whether the
amount in controversies or claims) is, or is reasonably likely to be, in excess
of one hundred million dollars ($100,000,000). The arbitrator shall set a date
that is no later than ten (10) days after the date of his appointment for
submissions by the parties with respect to such issue. There shall not be any
discovery in connection with such issue. The arbitrator shall render his
decision on such issue within five (5) days of such date so set by the
arbitrator. In the event that the arbitrator determines that the amount in
controversy in such dispute, controversy or claim (or such series of related
disputes, controversies or claims) is, or is reasonably likely to be, in excess
of one hundred million dollars ($100,000,000), the provisions of Sections
5A.4(d), and (e), ARBITRATORS, 5A.5, HEARINGS, 5A.6, DISCOVERY AND CERTAIN
OTHER
MATTERS, 5A.7, CERTAIN ADDITIONAL MATTERS, and 5A.10, LAW GOVERNING
ARBITRATION
PROCEDURES, hereof shall not apply and on or before (but, except as expressly
set forth in Section 5A.8(b), not after) the tenth (10th) business day after the
date of such decision, any party to the arbitration may commence an Action with
respect to such dispute, controversy or claim (or such series of related
disputes, controversies or claims) in any court of competent jurisdiction. If
the arbitrator does not so determine, the provisions of this Article (including
with respect to time periods) shall apply as if no determinations were sought or
made pursuant to this Section 5A.8.
(b) In the event that an arbitration award in excess of one
hundred million dollars ($100,000,000) is issued in any arbitration proceeding
commenced hereunder, any party may, within sixty (60) days after the date of
such award, submit the dispute, controversy or claim (or series of related
disputes, controversies or claims) giving rise thereto a court of competent
jurisdiction, regardless of whether such party or any other party sought to
commence an action in lieu of proceeding with arbitration in accordance with
Section 5A.8(a). In such event, the applicable court may, if it determines that
it would be advisable in connection with the matter, allow the parties to seek
additional discovery or to present additional evidence. Each party shall be
entitled to present arguments to the court with respect to whether any such
additional discovery or evidence shall be permitted and with respect to all
other matters relating to the applicable dispute, controversy or claim (or
series of related disputes, controversies or claims).
38
5A.9 CONTINUITY OF SERVICE AND PERFORMANCE. Unless
otherwise agreed in writing, the parties will continue to provide service and
honor all other commitments under this Agreement during the course of dispute
resolution pursuant to the provisions of this Article 5A with respect to all
matters not subject to such dispute, controversy or claim.
5A.10 LAW GOVERNING ARBITRATION PROCEDURES. The
interpretation of the provisions of this Article 5A, only insofar as they relate
to the agreement to arbitrate and any procedures pursuant thereto shall be
governed by the Arbitration Act and other applicable federal law. In all other
respects, the interpretation of this Agreement shall be governed as set forth in
Section 6.19, GOVERNING LAW.
ARTICLE VI
MISCELLANEOUS
6.1 EXPORT CONTROL. The parties acknowledge that
Products, Licensed Materials and Information (including, but not limited to,
Services and training) provided under this Agreement are subject to U.S. export
laws and regulations, and any use or transfer of such Products and Information
must be authorized under those regulations. AT&T agrees that it will not use,
distribute, transfer, or transmit the Products, Licensed Materials or
Information (even if incorporated into other products) in violation of U.S.
export regulations. If requested by Supplier, AT&T shall sign written
assurances and other export-related documents as may be required for Supplier to
comply with U.S. export regulations. This Section does not grant AT&T any
contractual right to Export Supplier's Products and Licensed Materials. Such
right shall only be granted expressly in an applicable Supplemental Agreement.
6.2 PUBLICATION OF AGREEMENT. The parties shall treat the
provisions of this Agreement and any Supplemental Agreement or any Order
submitted hereunder as Information subject to the restrictions on use and
disclosure set forth in Section 4.1, USE OF INFORMATION, except as reasonably
necessary for performance hereunder (including enforcement of Supplier's
obligations under the Pricing Agreement and AT&T's obligations under Exhibit 1
thereto) 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 party required to disclose information concerning this
Agreement, a Supplemental Agreement or Order to a third party in accordance with
the previous sentence shall take all reasonable steps to secure a protective
order or otherwise assure that the Agreement, Supplemental Agreement or Order
will be withheld from the public record.
6.3 NOTICES. All notices under this Agreement shall be in
writing (except where otherwise stated) by confirmed, facsimile, electronic mail
or similar communication, or by certified or registered mail. Within ten (10)
days following the Effective Date, the parties will exchange the names and
addresses to whom the notices should be sent. A notice shall be deemed to have
been given, if by electronic mail, facsimile or similar communication, on the
date it is
39
sent, and, if by certified or registered mail, on the date it is deposited
postage prepaid. Communications may be made orally between the parties when the
nature of the communication does not require written notice. In the event of a
change of address, written notice of such change shall be given promptly to the
other party.
6.4 ORDERING COMPANY'S RESPONSIBILITY. (a) Ordering
Company shall, at no charge to Supplier, provide Supplier with notice of site
conditions known to Ordering Company and such electrical and environmental
conditions, technical information, data, technical support or assistance as may
reasonably be required by Supplier to fulfill its obligations under this
Agreement, any Supplemental Agreement or Order. If Ordering Company fails to
provide the required conditions, technical information, data, support or
assistance, Supplier shall be discharged from its obligations to perform
hereunder for that Order. Where Services are to be performed by Supplier in
buildings owned or controlled by Ordering Company, Ordering Company shall be
responsible for ensuring that the premises where the work is to be performed by
Supplier are accessible to Supplier and ready and suitable for the Services to
be performed in accordance with Supplier's reasonable site-preparation
conditions communicated in advance to Ordering Company. Such conditions
include, but are not limited to, (a) site readiness and (b) access to adequate
storage space for tools and other small items necessary for the work, 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, if available.
(b) Supplier's representative shall have the right to
inspect the site prior to Service Start Date. If Ordering Company or its other
vendors or contractors fail to timely complete site readiness or if the work of
Ordering Company or its other vendors or contractors interferes with Supplier's
performance, the applicable Completion Date shall be extended as necessary to
compensate for such delay or interference and additional charges shall be
invoiced to recover the additional expenses incurred by Supplier as a result of
such failure or interference. Moreover, should Ordering Company fail to comply
with the reasonable site-preparation conditions after Supplier provides Ordering
Company notice, Supplier may perform such work or furnish such items and charge
Ordering Company for them in addition to the prices otherwise charged by
Supplier for such Services.
6.5 SUPPLIER'S RESPONSIBILITY. (a) Supplier shall become
acquainted with conditions governing the delivery, receipt and storage of
materials at the site of the work so that Supplier will not interfere with
Ordering Company's operations. For items other than those identified in Section
6.4, ORDERING COMPANY'S RESPONSIBILITY, above, storage space will not
necessarily be provided adjacent to the site of the work. Therefore, Supplier
shall be expected to select, uncrate, remove and transport materials from the
storage areas provided. Except to the extent that Supplier's property located
on Ordering Company's property is damaged or misappropriated by employees,
contractors or representatives of Ordering Company, Ordering Company is not
responsible for the safekeeping of such property. When Supplier's property
located on Ordering Company's property is damaged or misappropriated by
employees, contractors, or representatives of Ordering Company, Ordering Company
shall be liable to Supplier for such damage or misappropriation. Supplier shall
not stop, delay or interfere with
40
Ordering Company's work schedule without the prior approval of Ordering Company.
Supplier shall provide and maintain sufficient covering and take any other
precautions necessary to protect Ordering Company's stock, equipment and other
property from damage due to Supplier's performance of the work.
(b) Supplier recognizes that the continuity of Ordering
Company's telecommunications services is of paramount importance to Ordering
Company, and Supplier shall at all times exercise reasonable care to prevent
damage to Company's plant and shall not use any equipment or methods which
Ordering Company has informed Supplier, either in writing or through oral
directives at the work site, might endanger or interfere with its service.
6.6 EACH PARTY'S RESPONSIBILITY. Each party shall be
entirely responsible for all persons that it furnishes working in harmony with
all others when working on the other party's premises or those of Ordering
Company's customers. Services performed by either party or its other vendors or
contractors shall not interfere with the other party's performance of services.
6.7 ASSURANCE OF SUPPLY. (a) AT&T and Supplier will
jointly conduct regularly scheduled Life Cycle Management reviews for the
purpose of sharing information concerning current and future Product and support
requirements in order to permit both parties to make informed decisions
concerning such matters. AT&T's priority is to assure the ongoing growth and
service capabilities of the network are satisfied. In order to ensure the long
term viability of the network, AT&T will have the option to request sustained
manufacturing service for all Products and components that are used in the
network.
(b) Supplier must provide written notification to AT&T
eighteen (18) months in advance of Supplier's intended date of DA of any Product
used in Ordering Company's network, or to substitute or replace such Product if
Form, Fit or Function is affected. Supplier will provide nine (9) months
written notice with regard to GBCS Products not used in Order Company's network.
If Supplier's vendor terminates production of a Product and/or component of a
Product, Supplier will use reasonable efforts to provide the Products or
components or secure sources for such Products or components; provided however,
that Supplier reserves the right to provide a shorter notice in the event
suppliers of a Product or critical component terminates production or
maintenance of such items and no other sources for such items can be secured.
Within six (6) months of notification of DA, AT&T will provide written
notification to Supplier that it concurs with Supplier's decision or that it
intends to negotiate the terms, conditions and prices under which availability
shall be extended, provided that such Product and/or its components are
available to Supplier. Unless otherwise agreed to, the framework for that
agreement is that Supplier will be entitled to recover its costs of providing
continued availability, plus a reasonable profit. Software DA is governed by
Section 9.20, NOTIFICATION OF DISCONTINUED AVAILABILITY OF SOFTWARE.
6.8 PUBLICITY. Each party shall submit to the other a
proposed copy of all advertising wherein the name, trademark, code,
Specification or service mark of the other party
41
or its Affiliates is mentioned. Neither party shall publish or use such
advertising without the other's prior written approval, which consent shall not
be unreasonably withheld or delayed.
6.9 RIGHT OF ACCESS/PERMITS AND APPROVALS. Each party
shall have the right to enter the premises of the other party during normal
business hours with respect to the performance of this Agreement, subject to all
plant rules and regulations, security regulations and procedures and U.S.
Government clearance requirements if applicable. No charge shall be made for
such access. Reasonable prior notification shall be given when access is
required. Ordering Company shall have the responsibility for obtaining all
state, local and federal approvals and permits prior to the commencement of the
work. Any limitation of or delay in providing timely access may result in a
change of Supplier's schedule for performing its obligations hereunder and
additional charges to recover additional expenses incurred by Supplier as a
result of such limitations or delays.
6.10 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; provided, however, that Ordering
Company shall not be relieved by reason of such cause of its obligation to make
payments to Supplier. If any Force Majeure condition occurs, the party delayed
or unable to perform shall give prompt notice to the other party, stating the
nature of the Force Majeure condition and any action being taken to avoid or
minimize its effect. The party affected by the other's delay or inability to
perform (hereinafter the "Affected Party") may elect to: (a) suspend the
applicable Supplemental Agreement or Order for the duration of the Force Majeure
condition and (i) only to the extent reasonably necessary to maintain the normal
operation of the Affected Party's business, buy, sell, obtain or furnish
elsewhere the Product, Licensed Material or Services to be bought, sold,
obtained or furnished thereunder (unless such sale or furnishing is prohibited
under this Agreement, a Supplemental Agreement or an Order, in which event an
Ordering Company experiencing a Force Majeure condition shall bear Supplier's
reasonable costs (including inventory costs) incurred awaiting cessation of the
Force Majeure condition) and, at the option of the Affected Party, deduct from
any commitment the quantity bought, sold, obtained or furnished or for which
commitments have been made elsewhere and (ii) once the Force Majeure condition
ceases, resume performance under the applicable Supplemental Agreement or Order
with an option in the Affected Party to extend the period of such Supplemental
Agreement or Order up to the length of time the Force Majeure condition endured
and/or (b) when the delay or nonperformance continues for a period of at least
thirty (30) days, terminate, at no charge and without any liability, the
applicable Supplemental Agreement or Order or the part of it relating to
Products or Licensed Material not already shipped, or Services not already
performed. Unless written notice is given within forty-five (45) days after the
Affected Party is notified of the Force Majeure condition, option (a) shall be
deemed selected. Nothing contained herein or elsewhere shall impose any
obligation on either party to settle any labor difficulty.
6.11 INDEPENDENT CONTRACTOR. All work performed by
Supplier, AT&T or an Ordering Company 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
42
the employees or agents of the other. Each party is wholly responsible for
withholding and payment of all federal, state, and local income and other
payroll taxes with respect to its employees, including contributions from them
as required by law.
6.12 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.
6.13 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, including, but not limited to
COMPLIANCE WITH LAW, TRADEMARKS, INFRINGEMENT AND
MISAPPROPRIATION, INSURANCE,
RELEASES VOID, USE OF INFORMATION, CONTINUING PRODUCT SUPPORT -
PARTS AND
SERVICE, PRODUCT WARRANTY, SOFTWARE WARRANTY, WARRANTY FOR
SERVICES OTHER THAN
MAINTENANCE, MAINTENANCE SERVICE WARRANTY and WARRANTY, shall survive
such
termination, cancellation or expiration.
6.14 GOVERNMENT CONTRACT PROVISIONS. Ordering Company
shall identify in a request for proposed Supplemental Agreement if a Product,
Licensed Material or Service to be provided by Supplier is intended for use
under a government contract and if government contract flowdown provisions shall
apply to such procurement, with identification of such flowdown provisions. In
such a case, Supplier will advise AT&T if it will submit a proposal, bid or
accept an Order on such basis and, if so, it will address its acceptance or
compliance with the flowdown terms and conditions in its proposal, bid or
Supplemental Agreement. Orders placed in accordance with such proposal, bid or
Supplemental Agreement will be subject to the identified government contract
provisions as negotiated. If an Order or Supplemental Agreement fails to
specify the inclusion of government flowdown clauses or is issued by AT&T
without the prior identification of government contract use or flowdown clauses
as provided above, Supplier shall have the right to terminate such Order or
Supplemental Agreement and collect from Ordering Company charges for expenses
incurred until the effective date of such termination.
6.15 QUALITY SYSTEM AUDIT. (a) Supplier shall maintain a
compliant quality system that is subject to third party quality system audit
that shall include the following elements:
(i) Management Responsibility
(ii) Quality System Principles
(iii) Quality in Marketing
(iv) Quality in Specification/Design
(v) Quality in Procurement
(vi) Quality in Production
(vii) Control of Production
(viii) Product Verification
(ix) Control of Measuring and Test Equipment
43
(x) Non-conformity
(xi) Corrective Action
(xii) Handling and Post-production
(xiii) Quality Documentation and Records
(xiv) Use of Statistical Methods
(b) Such an audit shall assess the effectiveness and
documentation of the various elements that comprise a functioning quality
system. Supplier agrees that any deficiencies discovered in Supplier's quality
system as a result of the audit(s) shall be remedied by Supplier at Supplier's
expense.
6.16 ISO 9000. Supplier will undertake all reasonable
actions to become ISO 9000 registered. Certain vintage Products are exempt from
this Section. Such registration must be made by a third party registrar(s)
accredited in the following countries: United States or such other country as
may be designated in writing by AT&T or an Ordering Company.
6.17 UTILIZATION OF MINORITY AND WOMEN-OWNED BUSINESS
ENTERPRISES. It is AT&T's policy that minority and women-owned business
enterprises ("MWBE's) as defined in Exhibit 6-1 shall have the maximum
practicable opportunity to participate in the performance of contracts. Supplier
agrees to use its good faith efforts to utilize MWBE's to carry out this policy
to the fullest extent consistent with the efficient performance of its business
and this Agreement. In addition to these general conditions for MWBE support,
provided that Ordering Company will work with Supplier to seek out MWBE's and
works with Supplier in the development of opportunities for the use of MWBE's,
Supplier agrees to (a) work with Ordering Company to develop opportunities for
the utilization of MWBE's for first tier procurement of Supplier's Products,
Licensed Materials and Services by Ordering Company, (b) use its good faith
efforts to utilize MWBE's in support of this Agreement and strive to achieve the
portion of total expenditures for all Products, Licensed Materials and Services
purchased from Supplier equal to 5% of the value of Ordering Companies'
purchases of Products, Licensed Materials and Services from Supplier in 1996,
and strive to increase such percentage by 10% each of the following years of
this Agreement and (c) support Ordering Companies' state and regional goals for
MWBE and service-disabled veterans spending in California and other
states/regions as may be defined in the future. Supplier agrees to conduct a
program which will enable MWBE's to be considered fairly as subcontractors and
suppliers under this Agreement. Supplier shall submit to AT&T periodic reports
of work with known MWBE's in the form of Exhibit 6-1 in such manner and at such
time (not more than quarterly) as AT&T's representative may prescribe. Such
periodic reports shall state separately for MBE's and WBE's the subcontracted
work which is attributable to Ordering Companies. In instances where direct
correlation cannot be determined, such MWBE payments may be established by
Supplier comparing Ordering Company's payments to Supplier, in that period, to
total payments to Supplier from all of its customers, in that period, and then
arriving at Ordering Company's apportionment of such MWBE payments. Nothing in
this clause shall affect or diminish Supplier's obligations as set forth in the
assignment and subcontracting provisions.
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6.18 ASSIGNABILITY. Except as provided in this clause,
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. Any
attempted assignment in contravention of this clause shall be void and
ineffective. Nothing shall preclude a party from employing a subcontractor in
carrying out its obligations under this Agreement; provided, however, that if
Supplier uses a subcontractor to perform a material service or obligation under
this Agreement, such use will be subject to AT&T's written consent. Supplier's
use of such subcontractor shall not release Supplier from its obligations under
this Agreement. Notwithstanding the foregoing, Supplier shall have the right to
assign this Agreement and to assign its rights under this Agreement, in whole or
in part, to any present or future Affiliate or to any entity which purchases
from Supplier the operating asset(s) utilized by Supplier to fulfill its
obligations hereunder, subject to AT&T's written consent, which consent shall
not be unreasonably withheld; provided, however, that in any such event Supplier
shall not be released from its obligations hereunder and shall indemnify, defend
and hold harmless each Ordering Company for all losses or damages arising in
connection therewith, including from any breach of this Agreement by such
assignee. The notice of assignment shall state the effective date thereof.
Following the effective date and to the extent of the assignment, Supplier shall
not be released from obligations. For purposes of this clause, the "Agreement"
includes this Agreement, each Supplemental Agreement, each Order and any other
subordinate agreement placed under this Agreement.
6.19 GOVERNING LAW. Except as set forth in Section
5A.10, LAW GOVERNING ARBITRATION PROCEDURES, this Agreement and, unless
expressly provided therein, each Supplemental Agreement, shall be governed by
and construed and interpreted in accordance with the laws of the State of New
Jersey, irrespective of the choice of laws principles of the State of New
Jersey, as to all matters, including matters of validity, construction, effect,
performance and remedies.
6.20 COMPLIANCE WITH LAW. Each party shall comply at its
own expense with applicable laws, ordinances, regulations, codes, rules,
guidelines, orders, permits and approvals of any governmental body, including,
but not limited to, those relating to the environment, health, and safety. Each
Party agrees to indemnify, defend (at the other party's request) and save
harmless the other party, its Affiliates, its and their customers and each of
their officers, directors and employees from and against any losses, damages,
claims, demands, suits, liabilities, fines, penalties and expenses (including
reasonable attorney's fees) that arise out of or result from (i) failure to do
so or (ii) activity, duty or status of such party that triggers any obligation
to investigate or remediate environmental contamination.
6.21 RECORD RETENTION. Ordering Company agrees to keep
true and accurate records with regard to its use of Supplier's Licensed
Material. Supplier shall have the right to inspect such records at any
reasonable time, not more often than once each calendar year, upon reasonable
notice in writing to Ordering Company. Supplier shall bear the cost of such
auditing.
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6.22 NON-WAIVERS. The failure of either party at any time
to enforce any right or remedy available to it under this Agreement or otherwise
with respect to any breach or failure by the other party shall not be construed
to be a waiver of such right or remedy with respect to any other breach or
failure by the other party.
6.23 THIRD PARTY BENEFICIARIES. Except as otherwise
provided in Section 1A.7, PURCHASES BY AT&T'S AFFILIATES, of this Agreement or
as expressly provided in any Supplemental Agreement, the provisions of this
Agreement and each Supplemental Agreement are solely for the benefit of the
parties and are not intended to confer upon any person except the parties any
rights or remedies hereunder. There are no third party beneficiaries of this
Agreement or any Supplemental Agreement and neither this Agreement nor any
Supplemental Agreement shall provide any third person with any remedy, claim,
liability, reimbursement, claim of action or other right in excess of those
existing without reference to this Agreement or any Supplemental Agreement.
6.24 SEVERABILITY. If any provision of this Agreement or
any Supplemental Agreement or the application thereof to any person or
circumstance is determined by a court of competent jurisdiction to be invalid,
void or unenforceable, the remaining provisions hereof or thereof, or the
application of such provision to persons or circumstances or in jurisdiction
other than those as to which it has been held invalid or unenforceable, shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby or thereby, as the case may be, is not affected
in any manner adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the parties.
6.25 HEADINGS. The article, section and paragraph headings
contained in this Agreement and in the Supplemental Agreements are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement or any Supplemental Agreement.
6.26 COUNTERPARTS. This Agreement and each Supplemental
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party.
6.27 AMENDMENTS. No provisions of this Agreement or any
Supplemental Agreement shall be deemed waived, amended, supplemented or modified
by any party, unless such waiver, amendment, supplement or modification is in
writing and signed by the authorized representative of the party against whom it
is sought to enforce such waiver, amendment, supplement or modification.
46
6.28 INTERPRETATION. Words in the singular shall be held
to include the plural and vice versa and words of one gender shall be held to
include the other genders as the context requires. The terms "hereof," "herein"
and "herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement (or the applicable Supplemental Agreement)
as a whole (including all of the Schedules, Exhibits and Appendices hereto and
thereto) and not to any particular provision of this Agreement (or such
Supplemental Agreement). Article, Section, Exhibit, Schedule and Appendix
references are to the Articles, Sections, Exhibits, Schedules and Appendices to
this Agreement (or the applicable Supplemental Agreement) unless otherwise
specified. The word "including" and words of similar import when used in this
Agreement (or the applicable Supplemental Agreement) shall mean "including,
without limitation," unless the context otherwise requires or unless otherwise
specified. The word "or" shall not be exclusive.
6.29 ENTIRE AGREEMENT. The terms and conditions contained
in this General Purchase Agreement supersede all contemporaneous oral and all
prior oral or written quotations, communications, agreements and 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 Ordering Company's purchase Orders and
Supplier's sales forms are deleted. The statements of Supplier's employees and
descriptions of Supplier's Products, Licensed Materials and Services do not
constitute warranties or other contractual obligations and shall not be relied
upon by any Ordering Company as such. Terms shall not be modified or amended
except by a writing signed by authorized representative of both parties.
ARTICLE VII
PURPOSE AND ORGANIZATION OF PART II
7.1 PURPOSE AND SCOPE OF PART II. Part II sets forth the
specific additional terms and conditions pursuant to which Supplier shall
provide, and Ordering Company shall purchase or license, Supplier's Products,
Licensed Materials and Services that relate to the operation of
telecommunications network infrastructure. The terms and conditions of Ordering
Company's purchase and licensing of Products, Licensed Materials and Services
provided by Supplier's Global Business Communications Systems business unit are
set forth in Part III. A non-exclusive list of the specific Products, Licensed
Materials and Services is set forth in the Product Information Catalog
Extraction System ("PRICES") database. Supplier may at any time, and without
consent of Ordering Company, revise or otherwise amend that database solely to
add to it additional items offered by Supplier under Part II. Supplier shall
remove items from that database only in accordance with Section 6.7, ASSURANCE
OF SUPPLY. Failure of Supplier to list a Product or Service in that database
shall not preclude Supplier from providing such item pursuant to Part II.
7.2 ORGANIZATION OF PART II. Part II is organized as
follows:
47
(a) Article 8 sets forth the additional terms and
conditions governing Supplier's provision of Products;
(b) Article 9 sets forth the additional terms and
conditions governing Supplier's licensing of Licensed Materials;
(c) Article 10 sets forth the additional terms and
conditions governing Supplier's provision of Engineering, Installation,
Maintenance, and other Miscellaneous Services;
(d) Article 11 sets forth the additional terms and
conditions governing Supplier's provision of Outside Plant Construction
Services; and
(e) Article 12 sets forth the additional terms and
conditions governing Supplier's provision of Consulting Services.
ARTICLE VIII
PURCHASE OF PRODUCTS
8.1 GENERAL. The provisions of this Article 8 shall be
applicable to the purchase of Products from Supplier. If Software is also to be
licensed for use on a purchased Product, or if a Product is also to be
engineered or installed by Supplier, the provisions of Articles 9 and 10 shall
also be applicable.
8.2 PRODUCT WARRANTY. (a) Supplier warrants to Ordering
Company only, that:
(i) As of the date title passes, Supplier will
have the right to sell, transfer, and assign such Products and the
title conveyed by Supplier shall be good and Products shall be
delivered free from any security interests or any other liens or
encumbrances;
(ii) Upon shipment or, if installed by Supplier
upon Acceptance, Supplier's Manufactured Products will be new (except
if manufactured discontinued, or with Ordering Company's approval),
free from defects in material, workmanship, and design (except to the
extent (A) designed, in whole or in part, by Ordering Company or
persons furnished by Ordering Company; or (B) such design defects are
caused by the presence in Supplier's Manufactured Product of substitute
components of Ordering Company's selection and not recommended by
Supplier), and will conform to Supplier's Specifications or any other
agreed-upon Specifications referenced in the Order for such Products;
and
(iii) With respect to Vendor Items, Supplier, to the
extent permitted, does hereby assign to Ordering Company the warranties
given to Supplier by its vendor
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of such Vendor Items. Such assignment will be effective on the date of
shipment of such Vendor Items. With respect to Vendor Items
recommended by Supplier in its Specifications for which the Vendor's
warranty cannot be assigned to Ordering Company, or if assigned, less
than sixty (60) days remain of the Vendor's warranty at the time of
assignment, Supplier warrants for sixty (60) days from date of shipment
or if installed by Supplier from Acceptance that such Vendor's Items
will be free from defects in material and workmanship and will conform
to Supplier's Specifications or any other agreed-upon Specification
referenced in the Order for such Products.
(iv) Neither inspection, Acceptance, nor payment
shall affect or reduce the term of any warranty.
(b) The Warranty Period for a Product is set forth in
Exhibit 8-1. The Warranty Period for a Product or part thereof repaired under
this Warranty is the period indicated in Exhibit 8-1.
(c) If, under normal and proper use during the applicable
Warranty Period, a defect or nonconformity is identified in a Product furnished
by Supplier, Ordering Company shall notify Supplier in writing of such defect or
nonconformity promptly after Ordering Company discovers such defect or
nonconformity and follow Supplier's instructions regarding the return of
defective or nonconforming Product. With respect to a defect or nonconformity
of Products to Supplier's Specifications or any other agreed upon Specification
referenced in the Order for such Products, Supplier shall take the following
action promptly:
(i) Within the first sixty (60) days after (aa)
installation completion of a Product, if Supplier has installed the
Product or (ab) delivery, if Supplier is not installing the Product, if
Ordering Company notifies Supplier of a defect or nonconformity of
Products to the Specifications, that does not appear to be curable
through repair or replacement within a reasonable time period, Ordering
Company will be entitled, at its option, to a refund of the Product's
purchase price and installation charges and the associated Licensed
Materials charges. Should Ordering Company seek such a refund, it will
provide Supplier such cooperation as necessary to enable Supplier to
remove the Product from Ordering Company's premises, if necessary. In
the event of such refund, Ordering Company may also return for credit
any other Products intended for use with the defective Product that
cannot be applied to another use by Ordering Company and may cancel,
without liability for cancellation charges, any pending Orders for such
Product.
(ii) After sixty (60) days from (aa) installation
completion of a Product, if Supplier has installed the Product or (ab)
delivery, if Supplier is not installing the Product, with respect to a
defect or nonconformity of Products to Supplier's Specifications,
Supplier shall take the following action promptly:
49
(A) Supplier, at its option, shall
attempt first to repair or replace such Product without charge or, if
not feasible, provide a refund or credit based on the original purchase
price, installation charges paid by Ordering Company if installed by
Supplier, and the associated Licensed Materials charges. Ordering
Company must return Product to Supplier for repair and replacement,
except as noted in Sections 8.2 (c) (ii) (B) and (C). In the event of
such refund, Ordering Company may also return for credit any other
Products intended for use with the defective Product that cannot be
applied to another use by Ordering Company and may cancel, without
liability for cancellation charges, any pending Orders for such
Product.
(B) Supplier, in the case of any service
affecting defect, shall either (1) repair such defect in the field
using best reasonable efforts to avoid any service interruption; or (2)
immediately replace the defective Product, Licensed Material, or
Service with a working replacement, at Supplier's expense, for the time
that it takes the original Product, Licensed Material, or Service to be
repaired. At Ordering Company's option, Ordering Company may elect to
retain the replacement Product, Licensed Material, or Service if
substitution of the original after repair could cause a further service
interruption. Where Supplier has elected to repair or replace a
Product (other than Cable and Wire Products) which has not been
installed by Supplier and Supplier ascertains that the Product is not
readily returnable by Ordering Company, Supplier will repair or replace
the Product at Ordering Company's site. For the purposes of Sections
8.2 (c) (ii) (B) and (C) and Section 8.2 (d), Cable and Wire Products
shall mean fiber optics and associated products and copper cable and
associated products, including, but not limited to, interbay cable,
closures, arrays, and mounts.
(C) With respect to Cable and Wire
Products which Supplier has ascertained are not readily returnable for
repair, whether or not installed by Supplier, Supplier may elect to
repair the Cable and Wire Products at Ordering Company's site.
(d) If Supplier has elected to repair or replace a
defective Product, Ordering Company is responsible for removing and reinstalling
the Product and, in addition, for on-site repair or replacement of cable and
wire products, Ordering Company must make the Product accessible for repair or
replacement, and is responsible to restore the site.
(e) Products returned for repair or replacement will be
accepted by Supplier only in accordance with its instructions and procedures for
such returns. The transportation expense associated with returning such Product
to Supplier shall be borne by Ordering Company. Supplier shall pay the cost of
transportation of the repaired or replacing Product to the destination
designated by Ordering Company. The same Product or part shall not be returned
by Supplier to Ordering Company with the notation no-trouble-found (NTF) on more
than two (2) occasions. On the third occasion that a Product or part has been
classified by Supplier as NTF, the Product or part shall be returned to Supplier
and shall become Supplier's property. Supplier shall ship a new, refurbished, or
reconditioned replacement to Ordering Company for the returned Product or part
at no charge for that Product under warranty. For out of warranty
50
Product, Supplier shall ship a new, refurbished, or reconditioned replacement to
Ordering Company for the returned Product or part at Supplier's current
negotiated price for the production equipment element/component.
(f) The defective or nonconforming Products or parts which
are replaced shall become Supplier's property. Supplier may use either new,
remanufactured, reconditioned, refurbished, or functionally equivalent Products
or parts in the furnishing of repairs or replacements under this Agreement.
Unless otherwise agreed or unless unavailable, Supplier shall use new components
in the repair of Products.
(g) If a Product for which warranty Service is claimed is
not defective or is in conformance, Ordering Company shall pay Supplier's costs
of handling, inspecting, testing, and transporting, and, if applicable,
reasonable traveling and related expenses as referenced in Section 3.1 (g),
PRICES.
(h) Supplier makes no warranty with respect to defective
conditions or nonconformities resulting from the following: Ordering Company
modifications, misuse, neglect, accident or abuse, improper wiring, repairing,
splicing, alteration, installation, storage or maintenance other than by
Supplier, use in a manner not in accordance with Supplier's or vendor's
Specifications or operating instructions or failure of Ordering Company to apply
previously applicable Supplier modifications and corrections which were
available without extra charges and which Ordering Company had had reasonable
opportunity to apply. In addition, Supplier makes no warranty with respect to
Products which have had their serial numbers or month and year of manufacture
removed or altered and with respect to expendable items, including, without
limitation, fuses, light bulbs, motor brushes, and the like.
(i) THE FOREGOING PRODUCT 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, EXCEPT
FOR (a) TANGIBLE PROPERTY DAMAGE AND PERSONAL INJURY FOR WHICH
SUPPLIER IS HELD
LIABLE AND (b) THE REMEDY PROVIDED IN SECTION 5.1(e), ORDERING
COMPANIES'
REMEDIES, ORDERING COMPANY' S SOLE AND EXCLUSIVE REMEDY SHALL BE
SUPPLIER' S
OBLIGATION TO REPAIR, REPLACE, CREDIT, OR REFUND AS SET FORTH ABOVE IN
THIS
WARRANTY.
8.3 CONTINUING PRODUCT SUPPORT - PARTS AND SERVICES.
(a) In addition to repairs provided for under Product
Warranty, Supplier offers repair services and repair parts in accordance with
Supplier's repair and repair parts practices and mutually agreed upon terms and
conditions then in effect for Supplier's Manufactured Products furnished
pursuant to this Agreement. Such repair Services and repair parts shall be
available while Supplier is manufacturing or stocking such Products or repair
parts, and in any event for ten (10) years from Supplier's last shipment of a
host system to Ordering Company for
51
Supplier's 5ESS Switch System, and five (5) years or the duration of the period
of the host system, whichever is longer, for other 5ESS Switch Products sold to
Ordering Company as an addition to an existing 5ESS Switch System. The period
for all other Supplier's Manufactured Products is five (5) years after such
Product's discontinued availability effective date unless modified by
Supplemental Agreements. Supplier may use either new, remanufactured,
reconditioned, refurbished, or functionally equivalent Products or parts in the
furnishing of repairs or replacements under this Agreement.
(b) If after the agreed to support period Supplier is
unable to provide repair part(s) and/or repair service (s) and a functionally
equivalent replacement has not been designated, Supplier shall advise Ordering
Company, by written notice prior to such discontinuance to allow Ordering
Company to plan appropriately, and if Supplier is unable to identify another
source of supply for such repair part(s) and/or repair service(s), Supplier
shall provide Ordering Company, upon request, with nonexclusive licenses for
manufacturing drawings and Specifications of raw materials and components to the
extent Supplier can grant such licenses, so that Ordering Company will have
sufficient information to have manufactured, or obtain such Service or parts
from other sources. License terms for the foregoing manufacturing drawings,
Specifications, and related documentation, such as manufacturing shop
instructions, test programs and test instructions, including charges mutually
agreed to, will be in accordance with Supplier's licensing procedures then in
effect. In addition to the above licenses, if requested by Ordering Company,
Supplier shall provide, at mutually agreeable prices, all dedicated tools and
test beds necessary for Ordering Company to test such Products.
(c) With respect to Vendor Items, and subject to Section
1.118, VENDOR ITEMS, if during the agreed to support period, Supplier's vendor
terminates production of repair parts or repair services, Supplier will use
reasonable efforts to provide the repair parts or repair services or secure
sources for such parts or services. However, if no other sources or
functionally equivalent replacement can be secured, Supplier shall advise
Ordering Company, by written notice prior to such discontinuance to allow
Ordering Company to plan appropriately. Supplier shall provide Ordering Company,
upon request, a detailed list of all commercially available parts and components
purchased by Supplier disclosing the part number, name and location of supplier,
and prices of the purchased items.
(d) With respect to Vendor Items and subject to Section
1.120 if after the agreed to support period, Supplier is unable to provide
repair part(s) and/or repair service(s) and a functionally equivalent
replacement has not been designated, Supplier shall advise Ordering Company, by
written notice prior to such discontinuance to allow Ordering Company to plan
appropriately, and if Supplier is unable to identify another source of supply
for such repair part(s) and/or repair service(s), Supplier shall provide
Ordering Company, upon request, a detailed list of all commercially available
parts and components purchased by Supplier disclosing the part number, name and
location of supplier, and prices of the purchased items.
8.4 TECHNICAL SUPPORT OF PRODUCTS. Supplier shall, in
addition to its obligations under Product Warranty, make available, at mutually
agreeable rates, ongoing
52
technical support including, but not limited to the expertise to identify,
isolate, and resolve problems, that Supplier customarily provides to its
customers, including telephone assistance, field Service, and technical
consultation Service for Products provided under this Agreement for a period of
ten (10) years after Supplier's last shipment of a host system to Ordering
Company for Supplier's 5ESS Switch System, and five (5) years or the duration of
the period of the host system, whichever is longer, for other 5ESS Switch
Products sold to Ordering Company as an addition to an existing 5ESS Switch
System. The period for all other Supplier's Manufactured Products is five (5)
years after such Product's discontinued availability effective date unless
modified by Supplemental Agreements.
8.5 DOCUMENTATION. Supplier shall furnish to Ordering
Company at no additional charge and grant Ordering Company the right to use one
copy of the documentation for the Products provided hereunder for the purpose of
operating and maintaining such Products. Such documentation will be that
customarily provided by Supplier to its customers at no additional charge.
Supplier shall also furnish to Ordering Company the Application and Planning
Guide or a document similar to it. If Ordering Company wishes to perform its
own installation, Supplier, at an additional charge, if applicable, shall
furnish to Ordering Company and grant Ordering Company the right to use one copy
of the documentation for the Products provided hereunder for its evaluation and
installation purposes. The foregoing grant is subject to Section 4.1, USE OF
INFORMATION, and does not include the right to disclose the content of such
documents to persons other than employees of Ordering Company, its Affiliates,
representatives, or contractors who will be involved in the Work, provided,
however, that upon written agreement of Ordering Company to pay any applicable
licensing fee in accordance with ordinary commercial practices, persons with a
need to know in connection with installation of the specific Product shall be
allowed to use such documentation. Such documentation shall be provided prior
to, included with, or shortly after the shipment of the Products from Supplier
to Ordering Company. Additional copies of the documentation are available at
mutually agreeable prices.
8.6 SPECIFICATIONS. Upon request, Supplier shall provide
to Ordering Company, at no charge, and grant Ordering Company the right to use a
copy of Supplier's available commercial Specifications applicable to Products
orderable hereunder for the purpose of operating and maintaining Products.
Additional copies are available at mutually agreeable prices. Supplier shall
also furnish to Ordering Company the Application and Planning Guide or a
document similar to it. If Ordering Company wishes to perform its own
installation, Supplier, at an additional charge if applicable, shall furnish to
Ordering Company and grant Ordering Company the right to use one copy of the
documentation for the Products provided hereunder for its evaluation and
installation purposes. The foregoing grant is subject to Section 4.1, USE OF
INFORMATION, and does not include the right to disclose the content of such
documents to persons other than employees of Ordering Company, its Affiliates,
representatives, or contractors who will be involved in the Work provided,
however, that upon written agreement of Ordering Company to pay any applicable
licensing fee in accordance with ordinary commercial practices,
53
persons with a need to know in connection with installation of the specific
Product shall be allowed to use such documentation.
8.7 EQUIPMENT TESTING.
(a) Supplier is responsible for the performance of
standard factory production tests in the absence of any other testing mutually
agreed to by the parties. Such tests shall be performed in accordance with
Supplier's normal testing and quality control procedures in order to insure that
the equipment provided hereunder meets all applicable Specifications. At the
option of Ordering Company, Supplier shall furnish a copy of its high level test
and quality control process descriptions to Ordering Company prior to initiating
any such testing and Ordering Company, at its expense and with Supplier's
agreement, may request in advance to witness any of the testing by giving prior
notice to Supplier. Such request must be received with sufficient advance
notice that the observation would not delay the completion of a test. Supplier
also agrees to maintain detailed records of all such tests and to provide
Ordering Company, at no charge, and if requested, with written results of these
tests. Supplier reserves the right to make changes to its test and quality
control process descriptions without prior notification to Ordering Company.
(b) In the event that the equipment fails to meet the
applicable Specifications and test requirements, Supplier shall make the
necessary adjustments or repairs and repeat the applicable tests. If, in the
opinion of Supplier, the failure rates experienced during these tests become
unsatisfactory, all shipments of like equipment to Ordering Company shall be
suspended unless otherwise authorized by Ordering Company in writing.
(c) If Supplier is unable or unwilling to correct, at
Supplier's expense, any failure to meet the applicable Specification and test
requirements found during testing provided hereunder within thirty (30) days of
such discovery or such longer period as may be mutually agreed upon, Ordering
Company, at its option, shall be relieved of all responsibilities under this
Agreement with respect to such equipment or the portion thereof which was not
corrected.
8.8 ENVIRONMENTAL/RELIABILITY TESTING. Upon reasonable
request by Ordering Company and at a mutually agreeable charge, Supplier shall
perform environmental testing of the production equipment in accordance with
Ordering Company's Technical Reference-PUB 51001 entitled NETWORK
EQUIPMENT-BUILDING SYSTEM (NEBS) GENERAL EQUIPMENT REQUIREMENTS,
Sections 3, 4,
and 5 and Bellcore's Technical Reference-TR-NWT-000063 entitled NETWORK
EQUIPMENT-BUILDING SYSTEM (NEBS) GENERIC EQUIPMENT REQUIREMENTS.
Supplier agrees
to report the test results to Ordering Company. If such test results already
exist, Supplier will furnish test results to Ordering Company at no additional
charge.
8.9 FAILURE MODE ANALYSIS OF FAILED COMPONENTS. Supplier
shall perform failure mode analysis on components of Products purchased by
Ordering Company with a persistent history of failure to determine the specific
cause of the component failure. The results
54
of this analysis and planned corrective action shall be provided to Ordering
Company within fourteen (14) calendar days of the completion of the analysis.
8.10 FLOOR PLAN DATA SHEETS. Supplier shall, at Ordering
Company's request, at a mutually agreeable price, and within a reasonable
time frame after product design completion, deliver to Ordering Company a
completed Floor Plan Data (FPD) sheet, for equipment sold hereunder. Such FPD
sheets shall be prepared in accordance with the requirements of Technical
Reference 51005, dated December 1984, as amended from time to time.
8.11 MONTHLY ORDER AND SHIPMENT REPORTS. Supplier agrees
to render monthly Order and shipment reports at a mutually agreeable charge, if
applicable, on or before the fifteenth (15th) working day of the succeeding
month: (a) Monthly Order and shipment reports containing the information
required in a mutually agreeable format; (b) at the request of Ordering Company,
monthly summaries of actual shipping intervals achieved on material Ordered
under this Agreement; (c) at the request of Ordering Company, monthly repair
summaries on material including (i) number of units received for repair, (ii) a
breakdown of in-warranty repairs versus out-of-warranty repairs, (iii) summary
of all repairs for no trouble found, and (iv) number of units repaired within
same day, 24 hours, and one to seven days, and (d) at the request of Ordering
Company, monthly report identifying the number of units returned and repaired by
Supplier (RS&R Open Order Report).
8.12 RADIATION ASSISTANCE. If Product provided to Ordering
Company in compliance with applicable FCC rules are thought to provide
interference to others, Supplier shall provide to Ordering Company information
relating to methods of suppressing such interference at a mutually agreeable
price and Ordering Company shall pay the cost of suppressing such interference.
8.13 MARKING. All material furnished under this Agreement
shall be marked for identification purposes in accordance with mutually agreed
upon marking specifications set forth in any Supplemental Agreement or Order
referencing this Agreement and as follows: (a) with Supplier's model/serial
number; and (b) with month and year of manufacture. In addition, Supplier
agrees to add any other reasonable identification which might be requested by
Ordering Company such as, but not limited to, distinctive marks conforming to
Ordering Company's Serialization Plan. Charges, if any, for such additional
identification marking shall be as agreed upon by Supplier and Ordering Company.
This clause does not reduce or modify Supplier's obligations under Section 4.4,
TRADEMARKS, included in this Agreement.
8.14 PERIODIC PRODUCT QUALIFICATION REVIEWS. Supplier
shall conduct periodic product qualification ("PPQ") reviews to ensure that the
Product continues to meet its design intent. The PPQ reviews are a Bellcore
requirement and results are reported to Bellcore. If requested, Supplier shall
provide to Ordering Company the results of such reviews.
55
8.15 MAINTENANCE/POST WARRANTY. Supplier may offer various
programs which provide services beyond the warranty repairs above. At Ordering
Company's option, Ordering Company may purchase these Repair Service and Return
("R/SAR"), Spares Exchange Service ("SES"), and other offerings at prices, terms
and conditions to be mutually agreed upon.
8.16 PLANNING INFORMATION FOR ORDERS FOR COMMERCIALLY
AVAILABLE PRODUCTS. (a) This planning information addresses the process for all
Orders of Supplier's commercially available Products. It is not applicable to
custom Products or special arrangements on such things as inventory or
manufacturing (i.e., any custom or legacy products requiring unique procedures,
such as NGLN, DDM1000, FT-Series G and projects such as Customer Connectivity).
Special Product or unique arrangements will require a Supplemental Agreement to
document the agreements made specifically for that Product or project only.
(b) Supplier and Ordering Company shall identify Products
or technologies that will require special arrangements and for which
Supplemental Agreements must be negotiated.
(c) Ordering Company will provide to Supplier on a
monthly basis via the Customer Demand Planning (CDP) mechanized system, a
forecast of Product requirements consisting of funded, unfunded, and a
projection of unforecasted demand. This forecast is considered unconstrained
and will be provided for a rolling twelve (12) months as well as an aggregate
forecast for the subsequent year. It will represent forecasted demand by fiscal
month.
(d) A current listing of Products that are presently
forecasted by Network Services Division/Inventory Management ("NSD/IM") will be
mutually agreed upon and updated periodically as the scope of the forecasting
process changes. Forecasts furnished by Ordering Company will eventually
encompass all of the network Product requirements for Ordering Companies.
(e) Orders will be placed within Supplier's planning
interval documented in Exhibit 2-1, Planning Intervals, to the extent possible,
and will constitute a commitment to buy. Ordering Company will compare the
monthly forecast with the semi-annual planning forecast being provided in April
and September, and will reconcile the two accordingly. In the future, if the
frequency of these forecasts changes, a similar reconciliation will be performed
on all Product elements that are provided in the planning forecasts. Ordering
Company and Supplier will review Ordering Company's forecasting accuracy
quarterly with the goal of obtaining 80% forecasting accuracy. Ordering Company
will work with Supplier to provide Product level requirements on a monthly basis
especially for those forecasts within the six (6) month window as part of the
rolling forecast.
(f) CUSTOMER DEMAND PLANNING (CDP). Should Ordering
Company request a programming change to the CDP system that would benefit
external users of the CDP system, Supplier shall make such modification at no
cost to Ordering Company. If Ordering Company has a request for a modification
to the CDP system that is specific to Ordering Company's needs,
56
such modification to the system shall be made at a cost mutually agreed upon by
Ordering Company and Supplier. Supplier shall provide Ordering Company with CDP
system support via the 1-800-CDP-8845 Hotline at no cost to Ordering Company.
(g) METRICS. Ordering Company and Supplier agree to
monitor forecast accuracy on a monthly basis. Forecast accuracy measurements
shall be based upon a two month lead time for each forecasted item. CDP shall
be the vehicle for gathering data on forecast accuracy and shipping performance.
Ordering Company will monitor its forecasts and seek to achieve improvements in
accuracy as described in Exhibit 8-3. Supplier will monitor and seek to achieve
improvements on performance to customer requested completion date (CRCD), and
performance to published order intervals. This is an informal process and does
not imply penalty for non-performance. The 1996 metric goals are set forth in
Exhibit 8-3. Joint goals and metrics for future years will be mutually
negotiated for continuous improvement.
(h) FORECASTING PROCESS MONITORING. Forecasting Process
Performance Goals will be monitored on an ongoing basis by the Inventory
Management Process Management Team and the Forecasting Quality Improvement Team.
Additional meetings to review forecasting specifics may be scheduled as needed
by either Ordering Company or Supplier.
ARTICLE IX
SOFTWARE
9.1 GENERAL. (a) The provisions of this Article 9 apply
to the furnishing of Software by Supplier to Ordering Company pursuant to this
Agreement. Supplier's use of certain Licensed Materials may be restricted by
mutual agreement of the parties as specified in a Supplemental Agreement. The
ownership interests and rights of the parties in Custom Software, in addition to
the applicable rights set forth in this Article, shall be established on a
case-by-case basis in subsequent Supplemental Agreements.
(b) To the extent that any provision set forth in this
Article conflicts with any provision set forth elsewhere in this Agreement, this
Article shall control.
(c) Software in this Article means both Custom Software
and Licensed Materials.
9.2 LICENSE. (a) Unless otherwise specified in a
Supplemental Agreement, upon delivery of Licensed Materials, Supplier grants to
Ordering Company a personal, nontransferable, and nonexclusive license pursuant
to this Agreement to use Licensed Materials at a site(s) or, in the case of a
Designated Processor, with either the Designated Processor or temporarily on any
comparable replacement if the Designated Processor becomes inoperative, until
the Designated Processor is restored to operational status. Ordering Company
shall use Licensed Materials only for its own internal business operations.
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(b) Ordering Company shall not sublicense such Licensed
Materials, nor modify, decompile, or disassemble Licensed Material furnished
solely as object code to generate corresponding Source Code, provided, however,
that Ordering Company shall be authorized to sublicense Software in connection
with its rights in Section 1A.1, PURPOSE AND SCOPE OF THIS AGREEMENT, to
dispose of Products and Licensed Materials.
9.3 SOFTWARE. On the delivery date, Supplier shall
furnish to Ordering Company, at the fee specified in the Order or Supplemental
Agreement, at least the following basic items: (a) Object Code stored in a
medium compatible with the equipment described in Supplier's Specifications or
the applicable Supplemental Agreement, and identified in the Order; (b) user
documentation which Supplier normally furnishes to customers with the Licensed
Materials at no additional charge, and any user documentation specified in the
applicable Supplemental Agreement; (c) if not previously provided, the required
machine configuration; and (d) Source Code if licensed or furnished by Supplier
as part of the Software ordered hereunder.
9.4 ACCESS TO SOURCE CODE.
(a) With respect to Software which has not been the
subject of a notice of discontinued availability pursuant to Section 9.20,
NOTIFICATION OF DISCONTINUED AVAILABILITY OF SOFTWARE, if Supplier is
declared
bankrupt or refuses to perform maintenance of the Software, or fails to provide
for the performance of maintenance of the Software to the extent that Ordering
Company is unable to use the Software for its intended purpose and perform
maintenance, then Supplier, or others acting on behalf of Supplier, shall
furnish to Ordering Company (under a suitable license agreement, if applicable),
Supplier's then existing Software Source Code, Software development programs,
and associated documentation for such standard version to the extent necessary
for Ordering Company to maintain and enhance for its own use the standard
version of that Software for which it has a perpetual, non-exclusive right to
use.
(b) If Ordering Company's use of the Software Source Code
provided pursuant to Section 9.4(a) involves use or copying of copyrighted
material or the practice of any invention covered by a patent, Supplier shall
not assert the copyright or patent against Ordering Company for use of the
Software Source Code as originally provided by Supplier.
9.5 RESTRICTIONS AND CONFIDENTIALITY. (a) Except for any
part of such Licensed Materials which is or becomes generally known to the
public through acts not attributable to Ordering Company, Ordering Company shall
hold such Licensed Materials in confidence, and shall not, without Supplier'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. Ordering Company shall not copy Licensed Materials embodied in
Firmware. Ordering Company shall not make any copies of any other Licensed
Materials except as necessary in connection with the rights granted hereunder.
Ordering Company shall comply fully with the proprietary notice requirements set
forth in Section 4.1,
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USE OF INFORMATION, and the record keeping obligation of Section 6.21, RECORD
RETENTION.
(b) Ordering Company shall take appropriate action, by
instruction, by agreement, or otherwise, with all persons permitted access to
the Licensed Materials so as to enable Ordering Company to satisfy its
obligations under this Agreement.
(c) When the Licensed Materials are no longer needed by
Ordering Company, or if Ordering Company's license is canceled or terminated,
Ordering Company shall return all copies of such Licensed Materials to Supplier
or follow written disposition instructions provided by Supplier.
(d) Custom Software and Related Documentation shall be
treated as proprietary information of a party or parties in accordance with
Section 4.1, USE OF INFORMATION.
9.6 INSTALLATION OF SOFTWARE. (a) Where Ordering Company
is responsible for installation of Software, Supplier's sole responsibility is
to deliver the Software to Ordering Company on or before the scheduled Delivery
Date specified in the Order or Supplemental Agreement. However, if Supplier is
expressly responsible for such installation, Supplier shall deliver the Software
to Ordering Company in sufficient time for it to be installed on or before the
scheduled Installation Complete Date specified in the Order or Supplemental
Agreement, and Supplier shall complete its installation and associated testing
on or before such date.
(b) Where Ordering Company has assumed responsibility for
the installation of newly licensed Software, Supplier will, at Ordering
Company's request and without charge provide for the first such installation a
reasonable level of technical assistance, which may include on-site assistance,
when Ordering Company encounters installation difficulties. For all subsequent
installations of such Software by Ordering Company, unless otherwise stipulated
under conditions of an Order or Supplement Agreement, Supplier reserves the
right to charge Ordering Company for any Ordering Company-requested assistance.
9.7 OPTIONAL SOFTWARE FEATURES. Licensed Materials
provided to Ordering Company under this Agreement may contain optional features
which are separately licensed and priced. Ordering Company agrees that such
optional features will not be activated without written authorization from
Supplier and Ordering Company's payment of the appropriate license fees. If, in
spite of Ordering Company's best effort to comply with this restriction, such
features are activated and used by Ordering Company, Ordering Company agrees to
so notify Supplier promptly and to pay Supplier the license fees for the
activated features, as well as the reasonable cost of money for the period in
which such features were activated.
9.8 CENTRALIZED MAINTENANCE. (a) Ordering Company may
specify in an Order or Supplemental Agreement that, for centralized maintenance
purposes, all Software changes, including Enhancements, provided by Supplier
shall be provided only to Ordering
59
Company's Centralized Support Organization. Supplier will, in that event, be
responsive to maintenance requests which Ordering Company's Centralized Support
Organization issues. This Organization will be responsible for Software
application, initial Acceptance testing and distribution of the Software to all
licensed installations.
(b) Subject to payment of all applicable fees, Supplier
grants Ordering Company the right to transmit the Software by means of data
links to each licensed installation.
(c) Supplier grants to Ordering Company, at a fee to be
negotiated in a Supplemental Agreement, a license to use a copy of the Software
for centralized maintenance purposes only. Supplier shall provide this
maintenance copy of the Software in response to an Order requesting same. The
maintenance copy provided to Ordering Company's Centralized Support Organization
will be used only to perform systems or application support functions for
Ordering Company's application programmers.
9.9 ENHANCEMENTS. Supplier shall offer to Ordering
Company during the term of an Order or Supplemental Agreement, at an agreed upon
charge, if any, all Software Enhancements and Related Documentation, generally
made available by Supplier. All Enhancements provided to Ordering Company shall
be considered Software subject to the provisions of an Order or Supplemental
Agreement.
9.10 INTELLECTUAL PROPERTY RIGHTS. (a) Title to the
Licensed Material and to Intellectual property rights herein shall remain in
Supplier or Supplier's licenser, as applicable. Ordering Company shall have the
right to make the number of copies of the Licensed Materials solely for use as
authorized in an Order or Supplemental Agreement, and archival copies as
appropriate. Ordering Company however, shall not reproduce copies of the
Licensed Materials for the purpose of supplying it to others except individuals
authorized herein.
(b) All Licensed Material (whether or not part of
Firmware) furnished by Supplier, and all copies thereof made by Ordering
Company, including translations, compilations, and partial copies thereof, are,
as between Ordering Company and Supplier, solely the property of Supplier.
(c) Title to Custom Software shall be specified in the
applicable Supplemental Agreement.
9.11 TRAINING AND TECHNICAL SERVICE. Supplier shall
provide: (a) assistance and advice, as may be specifically requested by
Ordering Company necessary to assist in the testing and use of the Software
under the terms and conditions specified in the Order or Supplemental Agreement,
and (b) at no additional charge, any training as it normally provides without
charge to other customers.
9.12 MODIFICATIONS. In those instances where Source Code
is provided, Ordering Company may make Modifications to the Software as
permitted in a Supplemental
60
Agreement. Ordering Company shall have all rights, title and interest to any
Modifications and resulting derivative works and the Intellectual Property
Rights in such Modifications or works. Moreover, unless otherwise agreed by the
parties, nothing shall limit Ordering Company's right to reproduce and use the
modified Software, provided, however, any portion or aspect of the modified
Software which is licensed from Supplier shall continue to be subject to all the
provisions of the license, and nothing contained herein grants to Ordering
Company any rights to use the Software other than as recited in the license.
9.13 REDESIGNATION OR TRANSFER OF DESIGNATED SITE OR
COMPUTER. (a) If Ordering Company's use of the Software is limited to a
designated site or a Designated Processor, the provisions of this clause shall
apply. A redesignation shall refer to the movement of Software to upgraded
equipment. A transfer shall refer to a temporary change of site of the
Software.
(b) Without an additional charge or fee or any requirement
for any additional license, except where feature or size sensitive units are a
factor, Ordering Company may:
(i) Redesignate the site or Designated Processor
at which the Software will be used and shall notify Supplier of the new
site or Designated Processor and the effective date of the
redesignation; and
(ii) Concurrently operate the Software at another
site or Designated Processor for a period not to exceed three (3)
months for the purpose of redesignating the assigned using site.
(c) The license granted for a designated site or
Designated Processor may be transferred with notice to Supplier (within a
reasonable time after such transfer) and at no additional charge or fee to
Ordering Company to a backup computer if the designated site or Designated
Processor is inoperative due to malfunction, due to performance of preventive or
remedial maintenance, due to engineering changes or due to changes in features
or model, until the designated site or Designated Processor is restored to
operative status and processing of the data already entered in the backup
computer has been completed. Supplier may charge Ordering Company for services
requested by Ordering Company in support of such relocation.
9.14 SOFTWARE ACCEPTANCE. (a) Upon installation completion
of the Software in the Integrated Test Network (ITN) or the First Field
Application, Ordering Company has the right to conduct an Acceptance Test.
Unless otherwise agreed by the parties, Ordering Company shall have an
Acceptance Test Period of thirty (30) consecutive calendar days to conduct this
test. The Software shall be deemed accepted by Ordering Company unless Ordering
Company notifies Supplier in writing to the contrary within the Acceptance Test
Period described above. If the Software fails the Acceptance Test during the
Acceptance Test Period, Supplier shall use its reasonable efforts to correct
each error to minimize the Acceptance delay, and the Acceptance Date shall be
extended on a day-to-day basis until the Software, as modified, is accepted.
Acceptance of a particular release of Software in the ITN or in the First Field
Application shall
61
constitute Acceptance of all copies of such Software to be provided Ordering
Company, regardless of when each such copy of such Software is installed on its
Designated Processor.
(b) If Ordering Company elects in the Order not to perform
Acceptance Tests for any Software, the Acceptance Date for such Software shall
be the Delivery Date if not installed by Supplier or the Installation Complete
Date if installed by Supplier, as applicable.
(c) For an Acceptance Test conducted by Ordering Company
on newly licensed Software, Supplier will, at Ordering Company's request and
without charge, provide a reasonable level of technical assistance to Ordering
Company when difficulties are encountered by Ordering Company.
(d) In the event that Software has not passed the
Acceptance Test within six (6) months after the Delivery Date, at Ordering
Company's option, (i) Ordering Company shall return all copies of the Software
to Supplier and Supplier shall reimburse Ordering Company for any fees (e.g.,
license, R&D, etc.) paid for such Software or (ii) if mutually agreed to by the
parties, Ordering Company may retain the Software at an equitable adjustment in
the fees as may be agreed to by the parties, in which case the Software shall be
deemed accepted.
9.15 SOFTWARE WARRANTY. (a) Supplier warrants to Ordering
Company all of the following:
(i) The Software will be free from significant
errors, will conform to and perform in accordance with the
Specifications. The media containing the Software will be free from
defects in material and workmanship. The Software will be compatible
with and may be used in conjunction with other Software and the
hardware as described in the Specifications.
(ii) Work will be performed in accordance with
industry standards.
(iii) There are no copy protection or similar
mechanisms within the Software which will, either now or in the future,
interfere with the rights granted to Ordering Company.
(iv) Supplier has the right to grant the licenses
as granted herein, and has not done anything to interfere with the
exercise of Ordering Company's rights.
(v) At the time of delivery, to Supplier's
knowledge, the Software does not contain any malicious code, program,
or other internal component (e.g. computer virus, computer worm,
computer time bomb, or similar component), which could damage, destroy,
or alter Software, Firmware, or hardware or which could, in any manner,
reveal, damage, destroy, or alter any data or other information
accessed through or processed by the Software in any manner. Supplier
shall immediately advise Ordering
62
Company, in writing, upon reasonable suspicion or actual knowledge that
the Software provided may result in the harm described above.
(b) All warranties shall survive inspection, Acceptance
and payment.
(c) If, under normal and proper use during the applicable
Warranty Period specified in Exhibit 8-1 Software proves to have a defect which
materially affects its performance in accordance with the applicable
Specifications and Ordering Company notifies Supplier in writing of such defect
promptly after Ordering Company discovers such defect and follows Supplier's
instructions, if any, regarding return of defective Software, Supplier shall,
attempt first to either correct or replace such Software without charge, or if
correction or replacement is not feasible, provide a refund or credit based on
the original license fee. In addition, should a defect in Software prevent in
whole or in part the use of any Product(s) that cannot be applied to another use
by Ordering Company, Ordering Company may, at its election, also return such
Product(s) for a full refund.
(d) Software returned for correction or replacement will
be accepted by Supplier only in accordance with its instructions and procedures
for such returns. The transportation expense associated with returning such
Software to Supplier shall be borne by Ordering Company. Supplier shall pay the
costs of transportation of the corrected or replacing Software to the
destination designated by Ordering Company.
(e) If Software for which warranty Service is claimed is
not defective or nonconforming, Ordering Company shall pay Supplier's costs of
handling, inspecting, testing, and transporting and, if applicable, traveling
and related expenses.
(f) Supplier makes no warranty with respect to defective
conditions or nonconformities resulting from the following: modifications,
misuse, neglect, or accident; events outside Supplier's control; installation,
use of Software or Software maintenance in a manner not in accordance with
Supplier's Specifications, operating instructions, or license-to-use; or failure
of Ordering Company to apply previously applicable Supplier modifications and
corrections. In addition, Supplier makes no warranty with respect to defects
related to Ordering Company's database errors. Moreover, no warranty is made
that Software will run uninterrupted or error free.
(g) If any Software is lost or damaged during the Warranty
Period or such other time as Supplier maintains the Software as a generally
available product offering, while in the possession of Ordering Company,
Supplier will promptly replace the Software at the established charge for
providing the associated media unless such is provided by Ordering Company.
(h) If an Order specifies that Ordering Company's use of
the Software is limited to a designated site or a Designated Processor, the
provisions of this clause shall apply. If Ordering Company performs
installation and elects to perform applicable tests for any
63
Software, the warranty for such Software shall commence on the Delivery Date.
If Supplier performs installation of any Software, the Warranty for such
Software shall commence upon installation completion.
(i) If Software is purchased with a license for multiple
sites (e.g., unlimited replication rights, or limited multiple replication
rights), the warranty for such Software shall commence upon Acceptance by
Ordering Company in the ITN or in the First Field Application, as appropriate.
(j) Supplier warrants that installation of any new
Software will not shorten or lessen the warranty of existing Software.
(k) THE FOREGOING SOFTWARE 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
PARTICULAR PURPOSE.
EXCEPT FOR (a) TANGIBLE PROPERTY DAMAGE AND PERSONAL INJURY FOR
WHICH SUPPLIER
IS HELD LIABLE AND (b) THE REMEDY PROVIDED IN SECTION 5.1(e), ORDERING
COMPANIES' REMEDIES, ORDERING COMPANY'S SOLE AND EXCLUSIVE REMEDY
SHALL BE
SUPPLIER'S OBLIGATION TO CORRECT, REPLACE, CREDIT, OR REFUND AS SET
FORTH ABOVE
IN THIS WARRANTY.
9.16 CANCELLATION OF LICENSE. If Ordering Company fails to
comply with any of the material terms and conditions of this Agreement, Order or
Supplemental Agreement and such failure continues beyond ten (10) days after
receipt of written notice thereof by Ordering Company, the conditions of Article
5A, ARBITRATION; DISPUTE RESOLUTION shall apply. Supplier's cancellation of the
license at issue shall be tolled pending the outcome of the Dispute Resolution
process. Simultaneous with initial invocation of such process, Ordering Company
shall deposit and have held in escrow, until such dispute is resolved, an amount
equal to the current market price of the license in question.
9.17 RELATED DOCUMENTATION. Supplier shall furnish to
Ordering Company, at no additional charge and grant Ordering Company the right
to use one copy of the Related Documentation for Software furnished by Supplier
pursuant to this Agreement for the sole purpose of operating and maintaining
such Software. Such Related Documentation will be that customarily provided by
Supplier to its customers for such Software, consistent with the vintage,
options and feature of the system on which it operates. Such Related
Documentation shall be provided prior to, included with, or shortly after
provision of Software by Supplier to Ordering Company. Additional copies of the
Related Documentation are available at prices set forth in Supplier's Price
List.
9.18 ADDITIONAL RIGHTS IN LICENSED MATERIAL. (a) The
additional rights granted by Supplier to Ordering Company herein apply to 4ESS
Switch, 5ESS Switch, 2NCP,
64
SLC2000, FT2000, DDM, and DACS Product families. Both parties agree that these
same rights may be extended to other Products by mutual agreement and documented
within a Supplemental Agreement.
(b) Ordering Company may transfer its right to use Licensed Materials
furnished under this Agreement without the payment of an additional right-to-use
fee by transferee, except where feature or size sensitive units are a factor,
but only under the following conditions:
(i) Such Licensed Materials shall be used only within the
country in which it is currently deployed, however, Supplier will not
unreasonably withhold its consent to use outside such country provided the
proprietary information associated with the use of the Software can be
adequately protected;
(ii) Except as otherwise provided in the Agreement, the right to
use such Licensed Material may be transferred, only together with the
Product with which Ordering Company has a right to use such Licensed
Material, and such right to use the Licensed Material shall continue to be
limited to use with such Product;
(iii) Before any such Licensed Material shall be transferred,
Ordering Company shall notify Supplier of such transfer and the transferee
shall have agreed in writing (a copy of which will be provided to Supplier
at its request) to keep such Licensed Material in confidence and to
corresponding conditions respecting use of Licensed Materials as those
imposed on Ordering Company; and
(iv) Within the country in which the Licensed Material was
originally deployed, the transferee shall have the same right to Licensed
Material warranty or Licensed Material maintenance for such Software as the
transferor, provided the transferee continues to pay the fees, if any,
associated with such Software or Software maintenance.
9.19 SOFTWARE MAINTENANCE SERVICE. Unless otherwise agreed by Supplier
in writing, maintenance Service for Software shall only be available for (a) the
version/generic that is current at the time that such Service is ordered, (b)
the immediately preceding version/generic, and (c) a version/generic for which
the term of warranty is still in effect. Ordering Company will be notified in
writing six (6) months in advance of maintenance Service discontinuance for
version/generics prior to the preceding version/generic.
9.20 NOTIFICATION OF DISCONTINUED AVAILABILITY OF SOFTWARE.
Supplier
shall notify Ordering Company at least one (1) year in advance of discontinued
availability of the last standard Software generic. For a minimum of two (2)
years after discontinued availability, Supplier will make available to Ordering
Company, Software Support Service or other mutually agreed upon arrangements
which afford Ordering Company reasonable continued use of the
65
Software. If Supplier refuses to provide Software Support Service beyond the
minimum two (2) year period, Supplier shall grant to Ordering Company a license
to use the Software Source Code under terms and conditions to be negotiated at
that time.
ARTICLE X
ENGINEERING, INSTALLATION, MAINTENANCE
AND OTHER MISCELLANEOUS SERVICES
10.1 GENERAL. The provisions of this Article X shall be applicable to
the furnishing by Supplier of Services other than Services furnished pursuant to
any other Article of this Agreement. Such services include, but are not limited
to (a) Engineering Services such as preparation of equipment Specifications,
preparation and updating of office records, and preparation of a summary of
material not specifically itemized in the Order (b) Installation Services such
as installation, equipment removal, and cable mining (c) Maintenance Services,
and (d) other Miscellaneous Services.
10.2 WARRANTY FOR SERVICES OTHER THAN MAINTENANCE SERVICES. (a)
Supplier warrants to Ordering Company that Services will be performed in a
professional manner and in accordance with Supplier's Specifications or those
referenced in the Order and with accepted practices in the community in which
such Services are performed, using material free from defects except where such
material is provided by Ordering Company. If the Services prove to be not so
performed and if Ordering Company notifies Supplier, with respect to
Engineering, Installation, or other Miscellaneous Services, within a six (6)
month period commencing on the date of completion of the Service, as identified
in writing by Supplier, Supplier, at its option, either will correct the defect
or nonconforming Service for which Supplier is responsible or render a full or
prorated refund or credit based on the original charge for the Services. After
the corrective action, Ordering Company shall have the right to inspect and
accept the corrective work done.
(b) Where Supplier performs Engineering or Installation Services as
part of a combined engineering, furnishing, and installation Order, the six (6)
month period referenced above shall commence on the date of Ordering Company's
Acceptance of Installation Service.
(c) THE FOREGOING SERVICES 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.
EXCEPT FOR
(a) TANGIBLE PROPERTY DAMAGE AND PERSONAL INJURY FOR WHICH SUPPLIER
IS HELD
LIABLE AND (b) THE REMEDY PROVIDED IN SECTION 5.1(e), ORDERING
COMPANIES'
REMEDIES, ORDERING COMPANY'S SOLE AND EXCLUSIVE REMEDY SHALL BE
SUPPLIER'S
OBLIGATION TO MAKE CORRECTIONS OR GIVE A CREDIT OR REFUND AS SET
FORTH ABOVE IN
THIS WARRANTY.
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A. ENGINEERING SERVICES
10.3 ORDERING. Engineering Services may be ordered separately or in
combination with Installation Services.
10.4 STANDARDS FOR ENGINEERING SERVICES. Supplier agrees to perform
Engineering Services in accordance with the engineering Standards provided by
and/or approved by Ordering Company.
10.5 STANDARDS FOR CENTRAL OFFICE RECORD SERVICES. (a) Supplier agrees
to perform central office records services in accordance with central office
records standards provided and/or approved by Ordering Company.
(b) Ordering Company will provide Computer Aided Drafting (CAD)
specifications, CAD drafting tools, standard drawing files and other
conventions, in order that all completed CAD drawings will comply with Ordering
Company's standards. Title to CAD specifications, tools, drawing files, and
other data supplied to Supplier by Ordering Company shall remain in Ordering
Company at all times both before and after the Work is done.
(c) Supplier shall be responsible for loss or damage to CAD tools,
drawing files, models, blueprints, and other materials in Supplier's possession
under this Agreement belonging to Ordering Company, and shall, if requested,
furnish Ordering Company with acceptable certificates of insurance covering this
risk.
(d) All project and/or Order specific CAD drawings, specifications
and engineering calculations shall be forwarded to Ordering Company and become
Ordering Company's exclusive property prior to final payment by Ordering
Company on this Agreement or an Order, unless otherwise agreed in writing by
Ordering Company's representative.
10.6 ENGINEERING INTELLECTUAL PROPERTY. All engineering service
outputs and final products, including but not limited to equipment
Specifications, office records, and material summaries, shall be the sole
property of Ordering Company. All tools, reference material, and proprietary
information used by Engineering Services to create or produce these outputs or
documents shall remain the sole property of Supplier.
B. INSTALLATION SERVICES
10.7 CONDITIONS OF INSTALLATION AND OTHER SERVICES PERFORMED ON
ORDERING COMPANY'S SITE. (a) ITEMS PROVIDED BY ORDERING COMPANY.
Ordering
Company will be responsible for furnishing the following items (as required by
the conditions of the particular installation or other on-site Service,
hereinafter collectively referred to as the "Service") at no charge to
Supplier and these items will not be included in Supplier's price for the
Services. Should Supplier incur expense, subject to Ordering Company's
preapproval, as a result of Ordering Company's failure to provide any of these
items, billing in addition to the contract price will be rendered to and paid by
Ordering Company. In addition, if Ordering Company's
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failure to provide any of these items results in delaying Supplier's
performance, the affected Completion Date may be extended.
(i) ACCESS TO BUILDING AND WORK SITE - Allow employees of
Supplier and its subcontractors controlled access to premises and
facilities at prearranged hours during the scheduled Service or at such
other times as are reasonably requested by Supplier. The parties shall
endeavor, to the extent practical, to agree on a building and work site
access schedule prior to the start of work. Ordering Company shall obtain
for Supplier's and its subcontractors' employees any necessary
identification and clearance credentials to enable Supplier and its
subcontractors to have access to the work site.
(ii) GENERAL BUILDING CONDITIONS - Take such action as may be
necessary to insure that the premises 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 Supplier'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, Ordering Company
shall, if requested by Supplier, provide Supplier with sufficient data to
assist Supplier in evaluating the environmental conditions at the work site
(including the presence of Hazardous Materials). Ordering Company is
responsible for removing and disposing of the Hazardous Materials,
including but not limited to asbestos, prior to commencement of the
Services.
(iii) REPAIRS TO BUILDINGS - Prior to Service start date, to the
extent practical, make such alterations and repairs as are necessary for
proper installation of Products.
(iv) OPENINGS IN BUILDINGS - Prior to Service start date,
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
Supplier with input provided by Ordering Company. Supplier shall provide
such drawings to Ordering Company in sufficient time to meet project
service dates. Ordering Company shall fireproof (with steel covers) all
paths throughout the building.
(v) ELECTRICAL CURRENT, HEAT, LIGHT, AND WATER - Provide
electrical 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 the Services. At new locations without existing
utilities Supplier may be requested in writing, prior to start date, to
provide utilities, subject to negotiations with Ordering Company.
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(vi) BUILDING EVACUATION - Prior to Services start date,
provide building evacuation plans in case of a fire or other emergency.
(vii) CEILING INSERTS - Provide ceiling inserts as required
using Supplier's standard spacing arrangement for ceiling support
equipment.
(viii) MATERIAL FURNISHED BY ORDERING COMPANY - New or used third
party material furnished by Ordering Company shall be in such condition
that it requires no repair and no adjustment or test effort in excess of
that normal for new equipment. Ordering Company assumes all responsibility
for the proper functioning of such material. Ordering Company shall also
provide the necessary third party Product information and, where possible
and permitted, access to special third party test equipment and tools, for
Supplier to properly install such material.
(ix) 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, Ordering Company will provide suitable, portable facilities
including supplies and custodial Services. Provide emergency eyewash
station in power room near battery stands.
(x) FLOOR SPACE AND STORAGE FACILITIES - Supplier will
identify to Ordering Company its need for space to store materials and
tools necessary for the work. If adequate space in the building is
available, Ordering Company will license Supplier to use such space
reasonably adjacent to the work site for storage of material and tools for
near-term use. If such space is not available, the parties will negotiate
other arrangements, such as trailers or off-site warehouses, to achieve the
maximum practical economies. To the extent feasible, Ordering Company will
permit Supplier's personnel to use luncheon facilities in the building and
will license Supplier to use administrative space solely for the purpose of
the Work.
(xi) 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.
(xii) 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. Supplier will inform Ordering Company as
to which storage facilities at the work site Supplier will keep locked.
(xiii) USE OF AVAILABLE TESTING EQUIPMENT - Ordering Company
shall make available to Supplier the maintenance test facilities which are
imbedded in equipment to which the Product being installed will be
connected or added, and, if available, meters, test sets, and other
portable apparatus that is unique to the Product being installed.
Supplier's use of such test equipment shall not interfere with Ordering
Company's normal equipment maintenance functions.
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(xiv) ACCESS TO EXISTING PLANT - Ordering Company shall permit
Supplier 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
Ordering Company's normal maintenance of equipment.
(xv) GROUNDS - Ordering Company shall provide access to
suitable and isolated building ground as required for Supplier's standard
grounding of equipment. Where installation is outside or in a building
under construction, Ordering Company shall also furnish lightning
protection ground.
(xvi) REQUIREMENTS FOR ORDERING COMPANY DESIGNED CIRCUITS -
Ordering Company shall furnish information covering the proper test and
readjust requirements for apparatus and requirements for circuit
performance associated with circuits designed by Ordering Company or
standard circuits modified by Ordering Company's drawings.
(xvii) CLEARING EQUIPMENT FOR MODIFICATIONS - Ordering Company
shall remove, or transfer telecommunications traffic on trunks and sundry
working equipment, and make other arrangements required to permit Supplier
to modify existing equipment.
(xviii) BATTERY ROOM VENTILATION - Ordering Company shall provide
the required ventilation for battery rooms or areas.
(xix) HOUSE SERVICE PANEL - Ordering Company shall provide
electric power from Ordering Company's Service panel to Supplier's power
board and shall run all leads between said Service panel and power board.
(xx) THROUGH TESTS AND TRUNK TESTS - Ordering Company shall
make required through tests and trunk tests to other offices after Supplier
provides its notice of completion or notice of advanced turnover.
(b) ITEMS TO BE FURNISHED BY SUPPLIER. The following items will be
furnished by Supplier (if required by the conditions of the particular Service)
and the price thereof is included in Supplier's price for Services:
(i) PROTECTION OF EQUIPMENT AND BUILDINGS - Supplier shall
provide protection for Ordering Company's equipment, network integrity and
buildings during the
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PAGE
performance of the Services and in accordance with Supplier's standard
practices. Supplier shall make every effort possible to prevent
interruptions to network integrity.
(ii) METHOD OF PROCEDURE - Supplier shall prepare detailed
(MOP), as defined by Ordering Company before starting work. Ordering
Company shall review the MOP and any requested changes shall be negotiated.
Ordering Company shall give Supplier written acceptance of the MOP prior to
start of the work.
(iii) POWER CONDUIT - Supplier shall install power conduit and
wire as specified in Ordering Company's specifications.
(iv) FRAME AND AISLE LIGHTING - Supplier shall install conduit,
wire, fixtures, and other necessary material for frame and aisle lighting
as specified in Ordering Company's specification.
(v) TEMPORARY DAILY CLOSING & FIREPROOFING - Supplier shall
provide temporary daily closing for all occupied buildings, and fireproof
all openings that Supplier makes in any occupied building in the course of
providing the Services.
(vi) RESTORATION - Where it is necessary in the performance of
the Services to open sidewalks, driveways, curbing, alleys, streets, or
other property, Supplier shall restore said property to at least its former
condition.
(vii) TOOLS AND EQUIPMENT - Unless otherwise specifically
provided in this Agreement, Supplier shall provide all labor, tools and
equipment (the "tools") for performance of this Agreement. Should
Supplier actually use any tools provided by Ordering Company, Supplier
acknowledges that Supplier accepts the tools "as is, where is". Supplier
shall not, however, be responsible for consequential damages in the nature
of lost revenues, profits, or savings arising from Supplier's non-negligent
use of a defective tool. Supplier acknowledges that Ordering Company has no
responsibility for the condition or state of repair of the tools and
Supplier shall have risk of loss and damage to such tools. Supplier agrees
not to remove the tools from the work site and to return the tools to
Ordering Company upon completion of use, or at such earlier time as
Ordering Company may request, in the same condition as when received by
Supplier, reasonable wear and tear excepted.
(viii) CLEAN UP - Supplier at all times, and at its expense,
shall keep the premise free from accumulation of waste materials or rubbish
c aused by Supplier's operation. Upon completion of the Work, Supplier
shall, at its expense, as promptly as practical, remove from the premises
all of Supplier's implements, equipment, tools, machines, surplus, and
waste materials and debris. If Supplier fails to clean up as provided
herein, Ordering Company may do so and charge the cost thereof to Supplier
or deduct same from Ordering Company's payment to Supplier.
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(ix) SENSITIVE EQUIPMENT - Supplier will consider and treat all
Ordering Company equipment as sensitive equipment at the work site (e.g.,
equipment sensitive to static electricity or light).
(x) HAZARDOUS MATERIALS CLEANUP - At the conclusion of the
Services, Supplier shall be responsible for the cleanup, removal, and
proper disposal of all Hazardous Materials introduced by Supplier or its
subcontractors to Ordering Company's premises.
(xi) The following items may be furnished by Supplier if
requested by Ordering Company. Prices associated with these activities will
be subject to negotiations and no such activities will be furnished without
prior written consent of Ordering Company:
(A) READJUSTING APPARATUS - Supplier may provide
readjustment (in excess of that normally required on new apparatus) of
apparatus associated with relocated or rewired circuits.
(B) RERUNNING CROSS-CONNECTIONS - Supplier may rerun
permanent cross-connections in accordance with revised cross-connection
lists furnished by Ordering Company's cross-connection list.
(C) HANDLING, PACKING, TRANSPORTATION, AND DISPOSITION OF
REMOVED AND SURPLUS ORDERING COMPANY EQUIPMENT - Supplier may pack,
transport, and dispose of surplus and removed Ordering Company equipment as
agreed by the parties.
(D) PREMIUM TIME ALLOWANCES AND NIGHT SHIFT BONUSES -
Supplier may have its Services personnel work premium time and night shifts
to the extent that Supplier may deem such to be necessary to effect the
required coordination of installing and testing operations or other
Services because of Ordering Company's requirements.
(E) EMERGENCY LIGHTING SYSTEM - Supplier may provide new
emergency lighting system (other than the original ceiling mounted stumble
lighting) to satisfy illumination and safety needs of Products of certain
height.
10.8 ACCEPTANCE OF INSTALLATION. (a) At reasonable times during the
course of Supplier's installation, Ordering Company, at its request may, or upon
Supplier's request shall, inspect completed portions of such installation. Upon
Supplier's further request, and upon sufficient notice to Ordering Company,
Ordering Company shall observe Supplier's testing of the Product being installed
to determine that such testing and the test results are in accordance with
Supplier's Acceptance standards or Acceptance procedures. The job shall be
considered complete and ready for Acceptance by Ordering Company when the
Product has been installed
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and tested by Supplier in accordance with its standard procedures, and Supplier
represents such Product to be in working order. Upon completion of the
installation, Supplier will submit to Ordering Company a written notice of
completion or, if Ordering Company has elected advance-turnover of subsystems, a
written notice of completion of advance-turnover.
(b) Ordering Company shall promptly make its final inspection of
substantial conformance with Supplier's specifications and do everything
necessary to expedite Acceptance of the job. Supplier will promptly correct any
defects for which it is responsible. The job will be considered as fully
accepted unless Supplier receives written notification to the contrary within
thirty (30) days after submitting the notice of completion.
(c) Acceptance shall be effective if executed in writing only by an
individual designated by Ordering Company in writing prior to installation start
date.
C. MAINTENANCE SERVICES
10.9 GENERAL SERVICE DESCRIPTION. Maintenance Services for Products
and Software include, but are not limited to, fixed-term Service and
time-and-material Service.
(a) Fixed-term Maintenance Service consists of procedures, as
determined by Supplier for particular Products and Software and for fixed
periods, to keep Products and Software operating materially in accordance with
their specifications. Such Service includes diagnostic Service using on-site or
remote techniques, as appropriate, to analyze a problem and prescribe remedial
action, and a mandatory escalation procedure to provide successively higher
levels of expertise. Fixed-term Maintenance Service will be rendered during the
Service hours selected by Ordering Company in accordance with the Level of
Service Specified in an Order from options offered by Supplier. At the time a
Maintenance Service agreement is established, Service Level Options will be
mutually agreed to by parties.
(b) Each Order shall be for a minimum of one (1) year and shall
commence on the date set forth in the Order. Supplier will provide written
notification to Ordering Company ninety (90) days prior to Order expiration, and
Ordering Company shall notify Supplier sixty (60) days prior to expiration date
of their intention to renew an Order for a period of time at prices to be
negotiated.
(c) Time-and-material Service includes, on a call-by-call basis and
on the basis of Supplier service personnel availability, technical assistance
using on-site or remote techniques, as appropriate, to analyze a problem,
prescribe remedial action and, if ordered, make necessary repairs.
(i) TYPES OF SUPPORT SERVICES. The following Support Services may
be supplied to Ordering Company in accordance with the Maintenance Level of
Service ordered.
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(A) CALL RECEIPT AND ROUTING - Supplier will provide a
call receipt and routing function for use by Ordering Company. Ordering
Company may access twenty-four (24) hour a day, seven (7) day a week
telephone support for all Severity Level problems with the dial-in number
being specified in the Maintenance Service Agreement. Requests may be made
by electronic means as specified in the Maintenance Service Agreement, and
with the mutual acceptance of Ordering Company and Supplier. Supplier will
maintain an entitlement database to determine Ordering Company entitlements
(i.e., Service Level) and how the call should be routed. Supplier will work
problems outside the ARM coverage period only at Ordering Company's
expressed request and Ordering Company will be billed at Supplier's time
and material rates.
(B) ASSISTANCE REQUEST DATABASE ACCESS - Pursuant to a
fixed-term Maintenance Order and subject to availability, Ordering Company
will be given access to automated trouble reporting tools. Customized
trouble reporting features are fee-based.
(C) CONSULTATIVE SUPPORT - Remote telephone services
include delivering technical assistance and advice for service ARs reported
by Ordering Company.
(D) THIRD PARTY SOFTWARE SUPPORT - If a condition is
caused by the Third Party Software covered in the Order, Supplier shall be
responsible for diagnosing and resolving Third Party Software defects.
(E) DIAGNOSTIC SUPPORT - Supplier shall support Ordering
Company in analyzing Ordering Company problems, including isolation of
defects to one of the following areas:
(1) Problems arising as a result of Products or their
associated materials or documentation; and
(2) Other problems not directly related to Products,
such as Ordering Company operations problems, database problems, as well as
any other interfacing system problems.
(F) WORKING LOCATION - Supplier's working location is
remote from Product site. At Ordering Company's request, and as agreed to
by Supplier, Supplier will provide on-site assistance in resolving a
problem. Such assistance will be billed at a minimum of eight (8) hours a
day at the then current Supplier Time and Material (T&M) rate. Reasonable
travel and living expenses incurred by Supplier will also be billed.
(G) SEVERITY LEVEL AND PRIORITIZATION - Supplier shall
perform Problem Resolution Management in accordance with the Severity Level
condition
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identified by Ordering Company. Severity Level Definitions are further
defined in Exhibit 10-1. The priority for problem resolution will be based
on the Severity Level of outstanding reported conditions. Severity Level
One (1) conditions will receive top priority support. In the event that
Ordering Company's notification of a Severity Level One causes Supplier to
redirect its efforts being expended on a lower Severity Level condition,
Supplier shall notify Ordering Company that there will be a delay in
correcting the lower Severity Level condition.
(H) PROBLEM MANAGEMENT - Supplier shall perform procedures
and actions upon written or oral request of Ordering Company to investigate
and develop the resolution of a reported condition in a manner that
provides Ordering Company a single interface. This service is performed
only for Products covered under the Maintenance Service Order.
(I) MANAGEMENT NOTIFICATION - Supplier will observe the
following escalation procedures:
(1) SEVERITY LEVEL ONE - In the event of a Severity
Level One condition that is still unrestored four (4) hours after the
condition is reported, Supplier will notify Supplier's supervisory
management or next level of expertise of the unrestored condition. If the
condition is still unrestored within eight (8) hours after the condition is
reported, the next higher level of Supplier supervisory management or level
of expertise will be notified of the unresolved condition. Once the highest
level of expertise is reached, no further escalation will occur.
(2) SEVERITY LEVEL TWO - In the event of a Severity
Level Two condition that is still unrestored twelve (12) hours after the
condition is reported, Supplier will notify Supplier's supervisory
management of the unrestored condition.
(J) SERVICE PERFORMANCE REPORTS (SPR) - Supplier will
provide quarterly reports of Supplier's performance against the objectives
stated in this Article 10.
(K) ORDERING COMPANY NOTIFICATION BULLETINS - Supplier will
provide Ordering Company Notification Bulletins to Ordering Company on an
as needed basis.
(L) ON-SITE ASSISTANCE - At Ordering Company's request and
as agreed to by Supplier, a Supplier's engineer may be dispatched to
Ordering Company's site for resolution of a problem. If the problem is not
caused by a Designated Processor covered by this Agreement, On-Site
Assistance will be billed at minimum of eight (8) hours a day at the then
current Supplier time and material (T&M) rate.
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Reasonable travel and living expenses incurred by Supplier as referenced in
Section 3.1(g), PRICES, will also be billed.
(ii) PERFORMANCE METRICS & OBJECTIVES. (A) The Performance
Metrics described in this Section shall apply to Products and Licensed
Software covered under the Preferred and Standard Service Levels as
described in Section 10.2(c)(ii)(E) above. The problem must be reproducible
at either Supplier's location or on Ordering Company's system verifiable by
Supplier. The Severity Level of any problem shall be determined by Ordering
Company; however, if during resolution Supplier determines that the
Severity Level of the problem claimed by Ordering Company to be inaccurate,
the Severity Level may be changed by Supplier upon mutual agreement with
Ordering Company. Ordering Company requests which do not go through
Supplier's Call Receipt function will be excluded from the Performance
Metrics.
(B) Initial Response. During the term of a fixed-term
Maintenance Service Agreement, and upon expiration of any product warranty,
Supplier agrees to respond to Ordering Company's request for Support
Service called in through Supplier's Call Receipt function as described in
the table in Section 10.9 (c) (ii) (E), GENERAL SERVICE DESCRIPTION, within
sixty (60) minutes, twenty-four (24) hours a day, seven (7) days a week,
for all Severity Levels as reported in the assistance request database.
Response time will be validated through the use of the Service Performance
Report (SPR). Ordering Company requests which do not go through Supplier's
Call Receipt function will be excluded from the Performance Metrics.
(C) Service Restoration for Service Levels One and Two
shall be mutually agreed to by Ordering Company and Supplier, and
documented in the Maintenance Service Agreement. Restoral time will be
validated through the use of the Service Performance Report (SPR).
(D) Resolution of Defect and Service Severity Levels One
through Four shall be mutually agreed to by Ordering Company and Supplier,
and documented in the Maintenance Service Agreement. Resolution times will
be validated through the use of the Service Performance Report (SPR).
(E) The following table represents the Performance
Objectives for the Metrics listed in (B), (C), (D) above.
COMMITMENTS
METRIC OBJECTIVE PREFERRED STANDARD
- --------------------------------------------------------------------------
Initial Response % 100% 95% 75%
- --------------------------------------------------------------------------
Restore Severity Level 1 AR 100% 95% 75%
- --------------------------------------------------------------------------
Restore Severity Level 2 AR 100% 95% 75%
- --------------------------------------------------------------------------
Resolve Service AR 100% 95% 75%
- --------------------------------------------------------------------------
Resolve Defect AR 100% 95% 75%
- --------------------------------------------------------------------------
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In addition, for 4ESS switch and 5ESS switch, the Switching Software Support
Plan (SSP), defines how the level of support changes with time upon the
introduction of new base releases. Exhibit 10-2 further explains the support
service that will be offered during each of the life cycle phases.
10.10 ELIGIBILITY FOR MAINTENANCE SERVICE. (a) Products and Software
furnished and installed by Supplier are eligible for Maintenance Service without
initial evaluation by Supplier provided the Service commences not later than the
end of the Warranty Period. Unless otherwise agreed by Supplier in writing,
Maintenance Service for Software shall only be available for the generic that is
current at the time that such Service is ordered and the immediately preceding
generic, as well as a generic where the term of warranty is still in effect.
(b) In all other situations, the Products and Software shall not be
eligible for Maintenance Service until Supplier, at its option, has made an
initial evaluation to determine whether modifications are required to make the
Product or Software eligible. If, in Supplier's judgment, modifications are
required for this purpose, Supplier will provide a written estimate based on
standard rates to Ordering Company for making such modifications. Upon Ordering
Company's written Acceptance, Ordering Company will be billed at Supplier's then
standard rate for such evaluation and any such modifications furnished by
Supplier. Software will not be eligible for Maintenance Service unless Supplier
determines that the Software is in good working order in accordance with its
Specifications and can be maintained in such condition.
10.11 ORDERS FOR MAINTENANCE SERVICES. Ordering Company shall place
Orders for Maintenance Services, indicating the Level of Service to be provided
for each Product upon commencement of the Order. The Level of Service chosen
shall remain in effect without change for the contract period covered by the
Order. All installations of each Product and each release of Software must be
served at the same Level of Service.
10.12 PRICES. Sixty (60) days prior to the expiration of any fixed-term
Service Order, Supplier will, at Ordering Company's request, submit a price for
the renewal of the Service. Charges for time-and-material Maintenance Service
shall be determined at Supplier's applicable time and material rates in effect
at the time an Order for such Service is accepted and will be based on the total
work-hours (which includes travel time) expended on the job, and actual travel
expense. Such charges shall be based on a minimum number of hours.
10.13 PERIODS OF MAINTENANCE SERVICE. Maintenance Service will be
provided in accordance with the Level of Service specified in an Order.
10.14 MAINTENANCE SERVICE EXCLUSIONS. (a) Unless expressly agreed by
Supplier, Maintenance Services to be provided under this Article do not include:
(i) Performing preventive maintenance;
(ii) Making corrections to user-defined reports;
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(iii) Making Specification changes or performing Services
connected with relocation of the Product;
(iv) Service which is impractical for Supplier to render because
of changes not authorized by Supplier in the Designated Product processor,
hardware configuration, Supplier's Product or the Product environment in
which Supplier's Product operates;
(v) Modification or replacement of Product, repair of damage,
or increase in Service time caused by:
(A) Failure to continually provide a suitable operational
environment with all facilities prescribed by the applicable document
including, but not limited to, the failure to provide, or the failure of,
adequate electrical power, air conditioning, or humidity control;
(B) The use of the Product in a manner not in accordance
with its Specifications, operating instruction or license-to-use;
(C) Accident; disaster, which shall include, but not be
limited to, fire, flood, earthquake, water, wind and lightning;
transportation; neglect or misuse; pest damage; or power failures or surges
from sources external to the Product;
(D) Modifications, maintenance, or repair performed by a
party other than Supplier;
(E) The conversion from one Supplier Software release to
Supplier's subsequent Software Release, or the failure of Ordering Company
to apply previously applicable modifications and corrections offered by
Supplier;
(F) Attachment of unspecified or non-approved products to
the Product, including updates from manufacturers of third party Software
and Software not licensed by Supplier, or Designated Processors that have
not been certified by Supplier, or failure of a processor or other
equipment or software not maintained by Supplier, or failure of removable
or rotating storage media.
(vi) Problem Management, as follows:
(A) Database Problems - If the condition is mutually
determined to be the result of corruption of the Software Product data
base, and such corruption is not the direct result of the Product, the
condition will be referred back to Ordering Company for resolution. At
Ordering Company's request, and at Supplier's option, Supplier may prepare
a proposal for billable corrective action to correct Ordering Company's
database. However, if corruption is the result of, or caused by another of
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Supplier's Products or Services, Supplier shall initiate Problem Management
regardless of whether such Software Product is covered under an Order.
(B) Hardware/Firmware Problems - When a condition has been
isolated to a problem in hardware or Firmware not covered under this
Agreement, the condition will be referred back to Ordering Company for
disposition under whatever arrangements Ordering Company may have for such
hardware or Firmware.
(C) Other/Interfacing Problems - If the condition is
determined mutually to be caused by systems other than the Products covered
under the existing Order, including, but not limited to, systems which
interface with the Product, the condition will be referred to Ordering
Company for corrective action unless such other system has been furnished
by Supplier, in which case, Supplier shall initiate Problem Management.
However, if a defect is identified with Software or Products covered by the
Order which is documented or advertised to interface or work with other
systems, hardware, Products or Software, Supplier shall conduct restoral
and correction procedures as required for a defect and not as Problem
Resolution Management.
(D) Additional Services - Additional services, including
but not limited to custom feature development, training, planning sessions,
and other value-added services, are not included in the fees paid under
this Agreement. Such services may be available through a Firm Price Quote
(FPQ).
(b) At the request of Ordering Company, Supplier, at its option, may
perform Maintenance Services in the excluded conditions listed above, at
Supplier's rates and terms in effect at the time of such request.
10.15 ORDERING COMPANY RESPONSIBILITIES. In addition to the
responsibilities specified in Section 6.4, ORDERING COMPANY'S RESPONSIBILITIES,
Ordering Company shall be responsible for:
(a) PROVIDING INFORMATION TO CALL RECEIPT. (i) Identification of the
condition and its isolation to a particular component of the system believed to
be Supplier's responsibility.
(ii) Collection of sufficient supporting documentation from the
Product or Software for inclusion in the AR database.
(iii) Determination that there are no outstanding conforming
Software Product Updates that correct the condition.
(iv) The calling Ordering Company personnel shall provide the
following information, if applicable:
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(A) Caller's name, Location, and Company;
(B) Call-back Telephone Number;
(C) Remote Dial Access to Ordering Company System;
(D) System name and Location;
(E) Processor Location, Type, and Serial Number, if
available;
(F) Nature of the Question or Situation;
(G) The Calling Party's Alternate Contact;
(H) Description and History of Problem and Efforts to
Solve it by Ordering Company;
(I) Contract number or other proof of coverage as
requested by Supplier.
(b) PROVIDING PROBLEM DIAGNOSTIC MATERIALS. If Ordering Company
reports a condition, Ordering Company will be responsible for providing adequate
support material to enable the diagnosis of the condition. Such support
materials may include, but not be limited to, a description of the
circumstances, a dump of system logs or buffers, a listing of database contents,
and console printouts as required by Supplier.
(c) MAINTAINING THE PRODUCT OR SOFTWARE. (i) Make no modifications
other than those approved by Supplier. This includes updates from manufacturers
of third party Software or Designated Processors that have not been validated by
Supplier.
(ii) Install all Software Product Updates licensed by Ordering
Company under this Agreement within a reasonable time, unless Ordering
Company has previously notified Supplier of defects discovered in the
Software Product Update that make installation unfeasible.
(iii) Follow all Supplier's and relevant third party Software or
Designated Processor manufacturer's applicable installation, operation,
administration, and maintenance instructions.
(iv) Provide the proper environment and electrical and
telecommunications connections as specified by Supplier or the relevant
Designated Processor manufacturer.
(v) Maintain a back-up procedure external to the Designated
Processors sufficient to reconstruct lost or altered files, data, or
programs.
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(vi) Install the appropriate Class A Change Notices in a timely
fashion as mutually agreed to by the parties.
(d) ASSISTING SUPPLIER PERSONNEL PROVIDING ON-SITE ASSISTANCE. (i)
Have an Ordering Company representative at the equipment location during
any on-site Supplier service activity. Ordering Company may be subject to
additional incurred time and material charges if Ordering Company fails to
have a representative at the equipment location at the agreed time.
(ii) Provide adequate communication facilities and work space
for Supplier.
(iii) Provide the maintenance test facilities which are embedded
in equipment to which the product being installed will be connected or
added, and maintenance documentation sufficient for maintenance of Products
and Software not covered by this Agreement that interface with the Products
and Software covered under this Agreement.
(iv) Ensure that work done at the site by Ordering Company does
not interfere with Supplier's performance of On-Site Assistance.
10.16 MAINTENANCE OF RELOCATED SOFTWARE. Software serviced under this
Agreement which is moved to another Designated Processor of Ordering Company
shall continue to be covered under this Agreement provided that Supplier has
received forty-five (45) days prior written notice of such relocation and, if
requested by Supplier, the parties have renegotiated the objective response time
(the time within which Supplier shall use reasonable efforts to respond to
Ordering Company maintenance requests) selected by Ordering Company in an Order.
If Ordering Company requests Supplier to relocate Software, Ordering Company
shall be charged for all such work performed by Supplier at the negotiated
rates.
10.17 SOFTWARE PRODUCT UPDATE SERVICES. Pursuant to a fixed-term
Software Maintenance Service Order, Supplier agrees to provide the Software
Product Update Services in accordance with the following terms and conditions:
(a) DEFECT REPORTING - Any defects found in the Software Product may
be reported by calling Supplier's Call Receipt function. A tracking report will
be entered into the AR tracking database and referred to Supplier's technical
support.
(b) SOFTWARE PRODUCT UPDATES - Supplier will correct defects in the
Software Product and third party Software in accordance with the support
Services as described in Exhibit 8-1. Supplier will correct defects as follows:
(i) Supplier may periodically provide Software Product Updates to
the Software to correct defect conditions. If requested by Ordering
Company, Supplier shall provide documentation to enable Ordering Company to
train Ordering Company's
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personnel in the operation of the Software modified by such release.
Supplier shall make modifications to the documentation to clarify issues or
items not clear to Ordering Company, as required.
(ii) Fees paid in accordance with a Software Maintenance Service
Order cover only Product Updates made generally available during the term
covered by an Order. After expiration of the term covered by an Order,
Ordering Company is entitled to the next scheduled Product Update, which
may contain corrections for defects reported during the term of an Order.
(iii) Due to the nature of Software, Software Product Updates
require all previous Software Product Updates for the particular
generic/software release as prerequisites. It may not be possible to
install any Software Product Updates unless all previous Software Product
Updates have been installed. These previous Software Product Updates are
available for an additional fee.
(iv) If the condition is isolated to the related documentation
for the Product or Software, the fix will be given to Ordering Company as
part of the defect correction or Product Update procedure. Within two (2)
years, a permanent fix will be published in the following release of the
related documentation.
(c) NOTIFICATION OF CORRECTIONS - Supplier agrees to notify Ordering
Company of the availability of a resolution or work-around to a defect reported
by Ordering Company.
(d) ORDERING COMPANY CORRECTIVE MAINTENANCE RESPONSIBILITY -
Ordering
Company agrees to install the corrections or replacements provided under this
Agreement within a reasonable period of time. Ordering Company's failure to
install emergency fixes, work-arounds, patches or releases will cause the
Software Product to be considered non-standard until all such fixes are
installed, unless Ordering Company has previously notified Supplier of problems
with such emergency fixes, work-arounds, patches or releases.
10.18 MAINTENANCE SERVICES WARRANTY. Supplier warrants to Ordering
Company that Maintenance Services will be performed in a professional manner and
in accordance with Supplier's specifications or those referenced in an Order and
with accepted practices in the community in which such Services are performed,
using material free from defects except where such material is provided by
Ordering Company. If the Services prove to be not so performed and if Ordering
Company notifies Supplier, within the period of time equal to the repaired
Product warranty period (Exhibit 8-1), of the Product being repaired, or six (6)
months, whichever is less, commencing on the date of Acceptance of the Service,
as identified in writing by Supplier, Supplier, at its option, either will
correct the defect or nonconforming Service for which Supplier is responsible or
render a full or prorated refund or credit based on the
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original charge for the Services. After the corrective action, Ordering Company
shall have the right to Acceptance of the corrective work done.
D. MISCELLANEOUS SERVICES
10.19 TRAINING. If requested by Ordering Company, Supplier will, at
mutually agreed to prices: (a) provide instructors and the necessary
instructional material of Supplier's standard format to train Ordering Company's
personnel in the installation, planning and practices, operation, maintenance,
and repair of material furnished under this Agreement with such classes to be
conducted at intervals and locations agreed upon by Supplier and Ordering
Company; or (b) license Ordering Company to reproduce Supplier's copyrighted
training modules or manuals, covering those areas of interest outlined in (a) of
this clause, sufficient in detail and format, to allow Ordering Company to
develop and conduct its own training program.
10.20 INSTALLATION/CUTOVER ASSISTANCE. In the event Supplier is not
installing the material, and if requested by Ordering Company, Supplier agrees
to make available at the installation site, at a negotiated price plus travel
and living expenses, a field engineer to render installation and cutover
assistance as required by Ordering Company.
ARTICLE XI
OUTSIDE PLANT SERVICES
11.1 PURPOSE AND SCOPE OF THIS ARTICLE. The purpose of this Article 11
is to set forth certain additional terms and conditions relating to the
provision of Outside Plant Services ("Services"). With respect to such Services,
to the extent that any provision set forth in this Article 11 conflicts with any
provision set forth elsewhere in this Agreement or in any project, Work Order or
Field Order, this Article 11 shall control. In the event of any conflict between
this Article 11 and the Specifications, this Article 11 shall control. This
Agreement shall not affect or modify any agreements between the parties
regarding Services currently in the course of performance at the time of
execution hereof; however, to the extent that there are ambiguities or subject
matters not addressed in such agreements, this General Purchase Agreement shall
apply.
11.2 WORK; SUPPLIER MATERIALS; PERMITS; RAILROADS; SECURITY.
(a) Supplier will provide, construct or install or arrange to have
provided, constructed or installed those Products and Services as specified in
the Work Order or Supplemental Agreement (such Products and Services hereinafter
referred to as "Work"). Work shall not consist of the tasks and
responsibilities, including supply of materials or performance of services to be
provided or performed by Ordering Company, as set forth in Section 11.4,
ORDERING COMPANY OBLIGATIONS, below.
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(b) For materials to be furnished by Supplier, Supplier
shall assume full responsibility for furnishing materials of the quality and
quantity specified, and shall be responsible for the timely delivery of all
materials subject to the reasonable availability of such materials. Such
materials shall conform to the respective Specifications and shall be subject
to the warranty limitations set forth in Section 11.12, PRODUCT RELOCATION OR
MODIFICATION, below. Prior to purchasing a substitute product, Supplier shall
submit a formal written request to the Engineer for Acceptance. If requested
by Engineer, Supplier shall furnish manufacturer's shop drawings and
specifications.
(c) Supplier shall obtain all permits, licenses and
approvals at its own expense other than Ordering Company Permits (as defined in
Section 11.4, ORDERING COMPANY OBLIGATIONS, below) that are required for
Supplier's construction operations, including waste disposal. Supplier shall
comply with the requirements of all permits, licenses and approvals and shall,
at all times, keep a copy of the permits, licenses and approvals at the Site.
(d) If Sunday, holiday, or night Work is specifically
called for as a permit requirement, Supplier shall provide adequate personnel,
equipment, and supervision for the proper performance and control of the Work
in accordance with such requirement. For such Work, Supplier shall be entitled
to extra payment, unless such Work was specifically contemplated in the
applicable Work Order and included in the Price.
(e) Where Work is to be performed on railroad property,
Supplier shall cooperate with the railroad personnel in performance of the Work
and shall satisfy railroad requirements.
(f) Supplier shall be responsible for all security
affecting the performance of its Work.
11.3 ORDERING COMPANY FURNISHED MATERIALS. (a) All
material furnished by Ordering Company shall be delivered to Supplier at
storeyards or other locations to be mutually agreed upon; and, Supplier shall
have charge of, and be responsible for, all the material upon and after its
delivery to Supplier and shall return to Ordering Company all the material not
required for the completion of the Work, excluding waste.
(b) Supplier shall replace all Ordering Company furnished
materials which are lost or damaged while in the custody of Supplier.
Replacement materials shall be of a type and quality substantially equal to the
original materials, acceptable to the Engineer, and shall be obtained promptly
to prevent delay of the Work.
(c) Supplier shall rehandle and reload, if required, all
Ordering Company furnished materials and equipment which have been rejected by
Supplier.
(d) Ordering Company shall reimburse Supplier for all its
material shipping and handling expenses associated with:
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(i) The return and/or replacement of defective
Ordering Company provided materials.
(ii) The return of excess materials resulting from
the termination of an Order or a decrease in the quantities of
materials required to complete a Work Order for reasons other than
breach of contract or material non-performance by Supplier.
(iii) The return of materials provided by Ordering
Company in excess of those requested by Supplier in the Bill of
Materials.
(e) Unless expressly stated to the contrary, the Price
does not include costs for any Ordering Company furnished material nor does it
include any Supplier charges for re-engineering, reinstallation, modification,
or repair Services to Ordering Company furnished material. New or used
material (if any) furnished by Ordering Company shall be in such condition that
it requires no repair and no adjustment or test effort in excess of that normal
for new material. Ordering Company assumes all responsibility for the proper
functioning of such material under normal conditions of use and/or when
properly installed. Ordering Company shall also provide the necessary
information for Supplier to properly install such material.
11.4 ORDERING COMPANY OBLIGATIONS. (a) On or before the
start date, at its own expense, Ordering Company will complete or provide, or
arrange for the completion or provision, of all of the following "Ordering
Company Obligations" set forth or referred to in this Section 11.4, ORDERING
COMPANY OBLIGATIONS. Ordering Company shall fulfill all obligations applicable
to Ordering Company-owned or -controlled buildings set forth in Section 10.7,
CONDITIONS OF INSTALLATION AND OTHER SERVICES PERFORMED ON
ORDERING COMPANY'S
SITE, above, including but not limited to provision of adequate Access to
Building and Site, General Building Conditions, Repairs to Buildings, Openings
in Buildings, Floor Space and Storage Facilities and Building Grounds. In
addition to Ordering Company's obligations in the Specifications, Ordering
Company shall comply with the following:
(i) CONSULTANTS FOR SPECIAL SITES - Except as
otherwise provided in Section 11.18, ARCHAEOLOGICAL SITES;
ENVIRONMENTAL PROTECTION, Ordering Company shall provide, or, at
Ordering Company's option, shall authorize Supplier to provide, any
consultants for special considerations, including, but not limited to,
biologists to evaluate endangered species impacts or archaeologists to
evaluate historically sensitive sites and qualified experts to
evaluate environmentally hazardous conditions. In the event that
Supplier provides such consultants, Ordering Company shall reimburse
Supplier for such consultant costs on a Lump Sum Price basis; and
(ii) EASEMENTS, PERMITS, AND RIGHTS OF WAY -
Unless otherwise required by applicable ordinances, codes or statutes,
any necessary highway permits, construction permits, easements,
joint-use or right of way grants shall be obtained and paid for by
Ordering Company and Ordering Company shall file, or have filed, the
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necessary papers (collectively, the "Ordering Company Permits").
Ordering Company Permits and corresponding permit applications, if
necessary, are included in the Agreement Documents. If a permit is
unavailable at the time of issue of the Agreement Documents, the permit
application only will appear. Permits which are not available at the
time of issue of the Agreement Documents will be provided to Supplier
prior to the Start Date specified in each Work Order. When permits not
listed in the Agreement Documents are obtained by Ordering Company, a
copy will be provided to Supplier.
(iii) Railroad flagmen and/or inspectors required
to be on the Site as a condition of an easement permit or right of way
or other railroad requirement, will be provided by Ordering Company at
no cost to Supplier.
11.5 WORK ORDERS; CHANGES. (a) Ordering Company shall
submit Work Orders to Supplier utilizing Ordering Company's form. Each Work
Order and Field Order shall contain or refer to a document containing the
information necessary for Supplier to fulfill the Work Order, including, but
not limited to, the information called for by Section 2.1, ORDERS, above, a
reference to this Agreement, Special Conditions, a Start Date, Completion Date
and a Completion Schedule. If such work items have been mutually agreed upon
in a writing signed by the parties (e.g., a Supplemental Agreement or a
previously issued Work Order), then Supplier shall proceed to fulfill the Work
Order (i.e., the Work Order shall function as a notice by Ordering Company for
Supplier to proceed with the Work). If such items have not been agreed upon,
Supplier may reject the Work Order or propose changes to the Work Order. If
the parties are unable to agree, the Work Order shall be deemed abandoned.
(b) Each Work Order and Field Order shall be subject to
the terms and conditions of this Agreement which shall control over any
conflicting provisions in such Work Order.
(c) Changes by Ordering Company to an accepted Work Order
shall be treated as a separate Work Order unless the parties expressly agree
otherwise. In addition, subject to Section 11.18, ARCHAEOLOGICAL SITES;
ENVIRONMENTAL PROTECTION, Supplier may identify additional changes to the Work
which must be performed due to certain conditions, as set forth in Section
11.8, LOCAL CONDITIONS; DIFFERING SITE CONDITIONS below. If any such change
affects Supplier's ability to meet its obligations under the original Work
Order, any Price or Completion Date quoted by Supplier with respect to such
original Work Order is subject to change. All such changes must be approved in
writing by authorized representatives of both parties using Ordering Company's
Form.
(d) Minor changes may be made by means of a Field Order.
11.6 PLANT PROTECTION; UNDERGROUND FACILITIES. (a)
Supplier shall adhere to the applicable MOP with respect to Ordering Company's
underground facilities.
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(b) Ordering Company has made minimal efforts to identify
existing utilities by field surveys and utility records research. Existing
underground and aerial utilities within the construction limits of the Work are
indicated on the Drawings only to the extent information on such utilities has
been made available to, or discovered by, the Engineer in the performance of
the design work. Except to the extent that the information contains a material
misrepresentation of fact, the Engineer and Ordering Company expressly disclaim
all responsibility for the accuracy and completeness of the information
indicated. Supplier shall conduct its operations on the basis that underground
and aerial utilities may exist which are not indicated on the Drawings.
(c) Supplier shall be responsible for locating and
identifying, except for Ordering Company's facilities or structures, all
existing utilities or structures within the construction limits of Work and
elsewhere where Supplier's construction operations may subject the utilities
or structures to damage. This shall be done prior to the performance of the
Work. All information relative to the above shall be recorded and incorporated
into the records in a manner reasonably acceptable by the Engineer.
(d) For Ordering Company facilities or structures,
Supplier shall adhere to the "One Call" procedure, as set forth in the
Specifications.
11.7 PROTECTION OF PUBLIC AND PUBLIC PROPERTY. Subject to
any more stringent requirements of Section 11.18, ARCHAEOLOGICAL SITES;
ENVIRONMENTAL PROTECTION, and Section 6.20, COMPLIANCE WITH LAW:
(a) Supplier shall in the performance of the Work exercise
reasonable measures to minimize inconvenience to the public and shall use its
reasonable efforts to preserve and protect all trees, shrubs, grass, or other
vegetation on or adjacent to the right of way or Site which do not
unreasonably interfere with the Work. Unless otherwise required by Ordering
Company's Representative, Supplier shall restore all such property which may
be disturbed in the execution of its Work to its former visible condition.
(b) In accordance with Supplier's standard procedures,
all pavement, surfacing, driveways, curbs, walks, buildings, utility poles, guy
wires, fences, and other surface structures affected by Supplier's Work,
together with all sod and shrubs in yards and parking areas, shall be
substantially restored to their original visible condition, whether within or
outside the easement. Supplier shall be responsible for (i) making reasonably
satisfactory and acceptable arrangements with the owner of, or the agency or
authority having jurisdiction over, the damaged property concerning its repair
or (ii) replacement, or payment of reasonable costs incurred in connection with
such damage caused by Supplier or its Subcontractors.
11.8 LOCAL CONDITIONS; DIFFERING SITE CONDITIONS. (a)
Upon execution of a Work Order, Supplier admits to being reasonably informed as
to the nature and locations of the Work set forth therein; provided, however,
that in all cases, except as otherwise provided in Section 11.18,
ARCHAEOLOGICAL SITES; ENVIRONMENTAL PROTECTION, Differing
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Site Conditions shall be the basis for a Change Order and additional
compensation as set forth below in this Section 11.8.
(b) Delays, Additional Work, or extra costs may result
from Differing Site Conditions of which neither Ordering Company nor Supplier
should reasonably have had knowledge at the time of the effective date of the
earlier of the Supplemental Agreement, the Work Order and the Change Order. In
such case:
(i) Supplier shall, promptly and before Differing
Site Conditions are disturbed, notify the Engineer in writing by means
of the Ordering Company Change Order Form of such conditions;
(ii) After receiving notice from Supplier, the
Engineer shall promptly investigate the Differing Site Conditions,
and, if in his reasonable judgment, such conditions exist, the
Ordering Company Representative shall by means of a Change Order make
an equitable adjustment to the Price and the Completion Schedule, as
agreed by Supplier; and
(iii) No claim of Supplier for an equitable
adjustment because of Differing Site Conditions shall be allowed
unless written notice has been given as required.
11.9 OUTSIDE PLANT SERVICES SCHEDULING. Prior to the
pre-construction meeting, Supplier shall submit a detailed Outside Plant
Services Scheduling schedule as set forth in the Specifications. The Engineer,
Supplier and Ordering Company Representative shall hold weekly status meetings
at mutually agreed upon times and places. Additional coordination between the
parties will be held on an as needed basis as set forth in the Specifications.
11.10 INSPECTION AND CORRECTION OF DEFECTS; ACCEPTANCE.
(a) Ordering Company's Representative shall have free access to the Work
performed and materials furnished by Supplier under this Agreement for the
purpose of inspection thereof. Prior to the commencement of the Warranty
Period (as defined in Section 11.12, WARRANTY, below), Supplier shall upon
receipt of written request from Ordering Company's Representative, furnish
sufficient labor and facilities at Supplier's expense, to make an inspection
of Work already completed by uncovering and exposing the Work for inspection.
(b) If the inspection discloses that the Work reasonably
conforms to the applicable Specifications in all material respects, the cost to
Supplier of (i) uncovering and exposing the Work, and (ii) examining and
restoring of the Work shall be considered a Change Order and shall be paid for
by Ordering Company. In addition, if completion of the Work has been delayed
thereby, Supplier shall be granted a suitable extension of time and/or delay
and disruption compensation, as mutually determined by Ordering Company and
Supplier.
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(c) If the inspection discloses that the Work does not
conform to the applicable Specifications in all material respects, Supplier
shall not have a basis for a Change Order and shall correct the Work at its own
expense. The Completion Date shall not be extended because of any delay caused
by such non-conforming Work.
(d) If Ordering Company notifies Supplier of a defect or
non-conformance during the progress of the Work or prior to Final Acceptance or
Beneficial Occupancy, Supplier will schedule the repair or replacement of such
Work within two (2) work days after receipt of written notice.
(e) Supplier may submit to Ordering Company a notice of
completion, placing Ordering Company on notice that the Work is complete and
ready for inspection. Ordering Company shall inspect the Work promptly and in
no event later than seven (7) business days after receipt of such notice. In
the event that Ordering Company does not inspect the Work within such time
period, Final Acceptance shall be deemed to have occurred with respect to such
Work. If the inspection results in a Punch List, Final Acceptance shall occur
when the Punch List is complete to Ordering Company's reasonable satisfaction.
Again, Supplier may submit a notice of completion regarding the Punch List and
the same procedure set forth above shall apply (i.e., Ordering Company shall
inspect the Work no later than seven (7) business days after receipt of such
notice and Final Acceptance shall be deemed if Ordering Company fails to
inspect within that time).
11.11 SUPERVISION; CONTROL OF WORK. (a) Supplier shall
keep on the Work site a competent Superintendent and any necessary assistants
and all of them shall be reasonably satisfactory to Ordering Company's
Representative.
(b) Supplier shall have full control and direction (i)
over the mode and manner of doing the Work, subject to Sections 6.20,
COMPLIANCE WITH LAWS, and 11.18, ARCHAEOLOGICAL SITES; ENVIRONMENTAL
PROTECTION, and MOPS and (ii) of its personnel employed on or about the Work.
11.12 WARRANTY.
(a) FOR PRODUCTS. The Warranty for Products is set
forth in Section 8.2, WARRANTY; the Warranty Period is set forth in
Exhibit 8-1, provided, however, that the Warranty Period begins on
the earlier of Final Acceptance of a completed Work Order or
Beneficial Occupancy.
(b) FOR SERVICES. The warranty shall begin on the
earlier of Final Acceptance of a completed Work Order or Beneficial Occupancy
and shall extend for one (1) year (the "Warranty Period"). Supplier agrees to
perform Work in a professional manner; using competent and responsible
personnel trained as required by the most stringent of accepted industry
practice, Supplier practice, Section 6.20 COMPLIANCE WITH LAWS, and Applicable
EH&S Requirements (Section 11.18 (c)); and in accordance with the
Specifications or other
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agreed upon specifications and in accordance with accepted practices in the
community in which the Work is performed using material free from defects
except where such material is provided by Ordering Company. If Work provided
by Supplier proves not to have been so performed, and if Ordering Company
notifies Supplier in writing to that effect within the Warranty Period, then
Supplier shall, at its option, correct any defects or render a full pro-rated
refund or credit based on the original charges for the Work.
(c) If the refund or option is not chosen and if, during
the Warranty Period, Ordering Company notifies Supplier of a defect covered
under paragraphs (a) and (b) above, then Supplier shall commence to repair or
replace such Work within seven (7) days after receipt of written notice.
Notwithstanding the above, if the refund or credit option is not chosen and if
Ordering Company notifies Supplier that the defective or non-conforming Work is
of a critical nature for network protection or for safety reasons, Supplier
shall commence to repair or replace the Work within twenty-four (24) hours
after receipt of written notice.
(d) The warranties provided in this Section 11.12 do not
cover repair for damages, malfunctions or service failures caused by: (i)
actions of any personnel not employed, directly or indirectly, by Supplier;
(ii) Ordering Company's failure to follow Supplier's installation,
maintenance or operation instructions; or (iii) a condition of Force Majeure.
(e) THE WARRANTIES STATED IN THIS SECTION 11.12 ARE
EXCLUSIVE AND ARE IN LIEU OF ALL OTHER EXPRESSED OR IMPLIED
WARRANTIES,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A
PARTICULAR PURPOSE. EXCEPT FOR (a) TANGIBLE PROPERTY DAMAGE AND
PERSONAL
INJURY FOR WHICH SUPPLIER IS HELD LIABLE AND (b) THE REMEDY PROVIDED
IN SECTION
5.1(e), ORDERING COMPANIES' REMEDIES, ORDERING COMPANY'S SOLE AND
EXCLUSIVE
REMEDY SHALL BE SUPPLIER'S OBLIGATION TO REPAIR, REPLACE, MAKE
CORRECTIONS OR
REFUND AS SET FORTH ABOVE IN THIS WARRANTY.
(f) PRODUCT RELOCATION OR MODIFICATION. Ordering Company
shall advise Supplier promptly of any change in location or modification to any
Product covered by warranty service under this Agreement. If such change, in
Supplier's opinion, creates a safety hazard or is likely to cause a
malfunction, Supplier may at Ordering Company's expense, correct the
condition. If the condition cannot be corrected to Supplier's reasonable
satisfaction, Supplier reserves the right to terminate without liability
warranty service under this Agreement for the products relocated and/or
modified.
11.13 SAFETY; EMERGENCY. (a) Supplier shall be responsible
for the safety of the Work it performs; provided, however, that Supplier shall
not be responsible for any unsafe circumstance caused by Ordering Company or
Others.
(b) Whenever, in the reasonable opinion of Ordering
Company or the Engineer, Supplier has not taken sufficient precautions for the
safety of the public or the
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protection of the Work or adjacent structures or property, and whenever, in the
reasonable opinion of Ordering Company or the Engineer, an emergency has arisen
and immediate action is considered necessary, then Ordering Company, with prior
notice to Supplier, may provide suitable protection by causing Work to be done
and material to be furnished and placed. To the extent that Supplier is
responsible for such emergency, the reasonable out-of-pocket cost of such Work
and material shall be borne by Supplier, and if the same is not paid on
presentation of the bills therefor, such costs may be deducted from amounts due
or to become due Supplier. The performance of such emergency Work shall not
relieve Supplier to the extent of its responsibility for damage which may
occur. Ordering Company shall make a good faith effort to contact and utilize
the services of Supplier to correct the emergency protection problem prior to
retaining the services of another contractor.
11.14 ENGINEER'S DRAWINGS AND SPECIFICATIONS. (a) Supplier
will be furnished a sufficient number of sets of Drawings including revisions
thereto and sufficient copies of the Specifications without charge. All
Drawings and Specifications shall be returned to the Engineer upon completion
of the Work. Supplier may retain sufficient copies to perform its Warranty
administration.
(b) The Drawings shall be signed by Ordering Company's
Representative and by Supplier.
(c) Supplier shall conduct a normal and customary check
of all dimensions, elevations, and quantities indicated on the Drawings and
lists furnished by the Engineer. If Suppliers discovers in the course of its
work, major discrepancies between the Drawings and the conditions at the site,
errors or omissions in the Drawings, and in the layout as given by stakes,
points, or instructions, Supplier shall notify the Engineer. Supplier will
not be allowed to take advantage of errors or omissions in the Drawings or
other Agreement Documents. Full instructions will be furnished by the Engineer
should such error or omission be discovered, and Supplier shall carry out such
instructions as if originally specified; provided, however, that in the event
that such instructions result in an increase in Supplier's costs or in a
Construction Delay (as defined in Section 11.20, CONSTRUCTION DELAY, below) in
the Completion Schedule, Supplier shall be entitled to reasonable compensation
and, if necessary, an extension in the Completion Schedule.
11.15 REFERENCE STANDARDS. Reference to the standards of
any technical society, organization, or association, or to codes of local or
state authorities, or AT&T EH&S Practices shall mean the latest standard, code,
Specification, or tentative standard adopted and published, unless specifically
stated otherwise. Since the Agreement will likely cover multiple years, except
as otherwise required by Section 6.20, COMPLIANCE WITH LAW, Supplier will be
given sufficient time to assess and comply with new standards, and to request
additional time and/or compensation for compliance.
11.16 RECORDS. Supplier shall maintain complete records
including, but not limited to all labor and equipment hours, material
purchased, and Work subcontracted to other
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parties. The records shall be maintained in accordance with recognized
commercial accounting practices and in such manner that they may be readily
audited. The records, including all supporting documents, shall be available
at all reasonable times for audit by Ordering Company both during the contract
period and for one year following the date of final payment or until all
disputes, if any, between Supplier and Ordering Company have been finally
resolved, whichever is later. Supplier shall also maintain weekly sheets,
showing all labor and equipment employed and material received.
(a) Supplier shall maintain at the site where Work is
being performed or Supplier's local construction office a file of current
copies of all Drawings, Specifications, and other Agreement Documents and
supplementary data.
(b) Supplier shall create a timed and dated pictorial
record of the Site, including paths of ingress and egress, before and after
Work is performed for the purpose of precluding or settling claims.
11.17 UNFAVORABLE CONSTRUCTION CONDITIONS. (a) During
periods of unfavorable weather, wet or frozen grounds, or other unsuitable
construction conditions, Supplier shall confine its operations to Work which
will not be affected adversely thereby. No portion of the Work shall be
constructed under conditions which would adversely affect the quality or
efficiency thereof, unless special means or precautions are taken by Supplier
to perform the Work in a proper and satisfactory manner.
(b) If adverse weather conditions are encountered by
Supplier or its subcontractor(s) which are abnormal for the location and time
of year for which such claim is made, the construction schedule shall be
extended by an amount of time equal to the effect of such adverse weather. If
adverse weather is the basis of a claim by Supplier for additional time, such
claim shall be documented by Supplier and include data substantiating that
weather conditions were abnormal for the period of time in question and
Supplier could not have been reasonably anticipated such adverse weather and
that such weather conditions had an adverse effect on the construction
schedule.
11.18 ARCHAEOLOGICAL SITES; ENVIRONMENTAL PROTECTION. (a)
Known archaeological, historical or cultural sites along the route will be
indicated on the Drawings by the Engineer.
(b) If archaeological, historical or cultural artifacts
are encountered during construction anywhere along the route, construction at
that location shall stop and the Engineer shall be promptly notified. Supplier
shall not harm or disturb such artifacts until instructed by Ordering Company
or Engineer as to how to proceed. If an extended delay is anticipated,
Supplier may elect to move to another location of Work. Notwithstanding
anything to the contrary herein, Demobilization and Remobilization or
construction delay due to unanticipated
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archaeological findings shall be a basis for extra payment. Ordering Company
shall be responsible for obtaining any necessary permits in order to continue
Work in the affected area.
(c) Ordering Company shall provide Supplier with AT&T
EH&S Practices, including updates. At the end of each calendar year, Ordering
Company shall provide Supplier a list of all AT&T EH&S Practices still in
effect. AT&T EH&S Practices shall be deemed applicable to the Work under a
Work Order only when provided to Supplier at or prior to the date of the Work
Order. Supplier shall at its own expense comply with the most stringent of:
applicable governmental laws, regulations, ordinances, rules, codes, orders,
guidances, permits, approvals; applicable easement or license conditions;
applicable Supplier EH&S practices; and applicable AT&T EH&S Practices
(collectively "Applicable EH&S Requirements").
(d) Supplier shall be deemed the generator of all waste
associated with the Work and shall dispose of that waste at its own expense as
set forth in Section 11.18(c), ARCHAELOGICAL SITES; ENVIRONMENTAL PROTECTION,
above. "Waste" shall include without limitation all hazardous and
non-hazardous substances and materials associated with the Work which are
intended to be discarded, scrapped, or recycled. It shall be presumed that all
substances and materials associated with the Work that are not incorporated
into the Work (including without limitation damaged components or tools,
leftovers, containers, garbage, scrap, residues or byproducts), except for
substances and materials that Supplier or Ordering Company intend to use in
their original form in connection with similar work, are waste.
(e) In the event conditions are discovered or created at
or near the site of the Work which may require (i) investigation or remediation
or (ii) unforeseen measures to protect the environment, health or safety
(collectively "Adverse EH&S Conditions"), the party discovering the condition
shall immediately notify the other party. The party in the best position to do
so (or, if the parties are equally situated, Supplier) will then immediately
take reasonable measures temporarily to contain or otherwise avoid exacerbation
of or exposure to the conditions. Unless Ordering Company affirmatively
notifies Supplier otherwise, Supplier shall also take such other actions as
Applicable EH&S Requirements prescribe.
(f) In the event Supplier's failure to comply with
Section 11.18(c), ARCHAELOGICAL SITES; ENVIRONMENTAL PROTECTION, above or
Supplier's negligence or willful misconduct was a not insignificant cause of
(i) the Adverse EH&S Conditions or (ii) exacerbation of the Adverse EH&S
Conditions, Supplier shall indemnify and hold harmless Ordering Company and be
responsible for all costs associated with curing the Adverse EH&S Conditions.
In all other events Ordering Company shall indemnify and hold harmless Supplier
from and be responsible for all costs associated with curing the Adverse EH&S
Conditions.
11.19 REPORTING DEFECTS. (a) If any part of Supplier's
Work depends, for its proper execution or results, upon the Work of any Others,
excepting Subcontractors, Supplier shall inspect and promptly report to
Ordering Company's Representative any defects in the Work
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that render it unsuitable for the proper execution or results, and Supplier
shall not proceed with that phase of the Work until so authorized by Ordering
Company's Representative. Ordering Company may request and Supplier shall
provide such reports in writing.
(b) Supplier shall be made aware of the delivery status of
Ordering Company furnished materials and of the progress of construction Work
being performed under separate contracts, in each case as informed by Ordering
Company pursuant to (c) below.
(c) Ordering Company will furnish information to Supplier
which may be available to it regarding the status of Ordering Company furnished
materials or construction Work being performed under separate contracts.
11.20 CONSTRUCTION DELAY. (a) Supplier will complete all
Work on or before the Completion Date unless either Ordering Company agrees to
extend that Date or Supplier is entitled to an extension pursuant to this
Agreement.
(b) Ordering Company will perform all of its obligations,
including provision of labor and materials to be furnished by it in such a
manner so as not to delay the progress of the Work (such being a "Construction
Delay"), and in event of its failure to do so, thereby causing loss to Supplier
or as a result of one or more of the circumstances set forth in paragraph (c)
immediately below, Ordering Company agrees that it will compensate Supplier for
such loss and, if necessary, reschedule the Completion Date to a mutually
agreed upon date. Supplier agrees that if Supplier shall delay the progress of
the Work in breach of its obligations hereunder and such delay causes Ordering
Company to sustain a loss, then Supplier will reimburse Ordering Company for
such loss, subject to the limitation of Supplier's liability set forth in
Article 5 of this Agreement.
(c) Notwithstanding anything to the contrary in this
Agreement, among the causes of "Construction Delay" for which Supplier shall be
compensated and the Completion Date shall be rescheduled pursuant to paragraph
(b) immediately above, are the following:
(i) Lack of Ordering Company Permits;
(ii) Lack of Ordering Company furnished material;
(iii) Work stoppage by landowner;
(iv) Work stoppage by permitting agency even
though Supplier has met the requirements of the relevant permits;
(v) Railroad company denying access to the
right-of-way or rail due to railroad's operations which regulate the
Work conditions;
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(vi) Work stoppage by Ordering Company to implement new
requirements, including changes to the Completion Date or Completion
Schedule;
(vii) Waiting for the presence of the Ordering Company
Representative;
(viii) Defective or damaged Ordering Company furnished
material;
(ix) Special Service Precautions per the Specifications; and
(x) Waiting for Engineer's written approval to proceed due to
the interference of other contractors.
(d) Delay time is payable by Ordering Company for Construction
Delay for the reasons set forth above, when Supplier is prevented from or
delayed in working on any contracted item that is available to Supplier.
Construction Delay time will begin after Supplier has been denied access to the
Work or Ordering Company has delayed the Work for an accumulated time in excess
of one (1) hour during a given normal working day.
(e) The term "accumulated time" shall include discontinuous
amounts of time and shall be applied to an entire crew. For example, a
four-person crew that incurred a forty five (45) minute Construction Delay due
to a permit problem and then later in the same working day incurred an
additional Construction Delay for another reason, would begin Construction Delay
time for the crew after fifteen (15) minutes of the second delay. If a crew is
into Construction Delay time at the end of a Work day and is prevented from
working on any contracted item available the next Work day and the condition
that caused the Construction Delay still exists, then Construction Delay time
shall continue without the requirement that it be in excess of one hour for the
second day.
(f) If Supplier is forced to cease all or a portion of its
operations due to lack of right-of-way, by reason of injunction against Ordering
Company or other legal obstacles, or delay in Ordering Company-furnished
material deliveries, Ordering Company may request that Supplier move to another
site or to move off the project. At Ordering Company's request, Supplier shall
move from the portion of the project upon which he was previously engaged to
another point in the project designated by Ordering Company or to an Ordering
Company location completely off the project. Supplier shall at a later date
complete the Work left behind, when requested to do so by Ordering Company, and
such Work shall be done at prices specified in the Proposal plus Demobilization
and Remobilization.
11.21 NOTICE OF LABOR DISPUTES. Whenever Supplier has knowledge
that any labor dispute is delaying or threatens to delay the timely performance
of the Work, Supplier shall promptly give notice thereof to Ordering Company.
Supplier shall confirm the notice in writing within three (3) Work days.
11.22 PERFORMANCE AND PAYMENT BOND. Ordering Company shall have
the right to require Supplier to furnish a bond for the full and faithful
performance of the Work and
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for the payment of all bills, debts and obligations related to the Work. The
bond shall be in such form, principal amount and with such sureties as may be
required by Ordering Company. Ordering Company shall reimburse Supplier for the
net premium on the bond upon receipt of the sureties' bills to Supplier.
Supplier agrees and represents that no amount for bond premium is included in
the contract price.
11.23 APPLICATION FOR PAYMENT; TERMS OF PAYMENT. (a) Supplier
shall render to Ordering Company Applications for Payment for an amount based
upon the quantities of Work in a Work Order which have been completed by
Supplier during the monthly invoicing period, unless billing is rendered sooner
pursuant to a written modification of this Section or for delay and disruption
compensation or Special Conditions accrued as provided for elsewhere in the
Agreement. Ordering Company shall promptly approve the Application for Payment
within ten (10) business days or notify Supplier of any disputed items in an
Application for Payment. If at the expiration of such ten business day period,
Supplier does not receive written approval or rejection from Ordering Company,
the Application for Payment shall be deemed approved.
(b) The method of measurement, basis of payment and conditions
under which payments for Special Conditions are made can be found in the
Specifications.
(c) For material furnished by Supplier, the same terms of payment
shall apply as the terms which apply for Services billed by Supplier. For
Material supplied by Ordering Company and ordered from Supplier pursuant to
another Article of this General Purchase Agreement (e.g., an Order for cable),
the terms of payment are set forth in such Article or elsewhere in this
Agreement.
11.24 LIENS. If as a result of any act or omission of Supplier,
any lien is filed by a Subcontractor against Ordering Company, Supplier shall
cause the same to be discharged of record within forty-five (45) days after
receipt of written notice thereof from Ordering Company.
ARTICLE XII
CONSULTING SERVICES
12.1 GENERAL. The provisions of this Article 12 shall be
applicable to the furnishing by Supplier to Ordering Company of Consulting
Services. Software development is not a Consulting Service governed by this
Article; it is governed by Article 9 of this Agreement.
12.2 STATEMENT OF WORK. (a) From time to time hereafter, Ordering
Company may authorize Supplier to render to Ordering Company Consulting Services
and related work (hereinafter "Work") by submitting an Order to Supplier or by
entering into a Supplemental Agreement with Supplier. All Work conducted by
Supplier in response to such an Order or Supplemental Agreement shall be
considered Work under this Article, and the terms and conditions hereof shall
govern. Supplier shall render all the Services specified in the request within
the time allowed therein and shall meet all interim deadlines set by the
parties.
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(b) Supplier agrees that all information provided to Ordering
Company pursuant to this Agreement will be collected, compiled and provided to
Ordering Company in a lawful and ethical manner. Supplier shall not provide to
Ordering Company any information which has been provided to Supplier under the
terms of a written or oral non-disclosure confidentiality agreement. Such
Information includes, but is not limited to, proprietary, confidential, or trade
secret Information of a party that was obtained by Supplier during Supplier's
prior employment by such party. In the performance of this Agreement, Supplier
shall not at any time: (i) misrepresent itself or its status to any third party;
(ii) provide a false or deliberately misleading reason for inquiries or the
collection of Information; (iii) misstate the nature of its relationship with
Ordering Company; or (iv) use any element of fraud, dishonesty or criminal
conduct in connection with its performance under this Agreement and the
provisions of this Section 12.2.
12.3 OWNERSHIP OF INFORMATION. (a) Ordering Company acknowledges
that Supplier expressly reserves and retains sole ownership in its trademarks
and all intellectual property, including its copyrighted materials (report
formats, creative materials, etc.) and unique inventing and research systems and
methodologies as utilized in performing work. None of the above may be kept,
copied or utilized by Ordering Company in any manner.
(b) Except as expressly set forth herein, nothing contained
herein shall be construed as conferring to either party by implication, estoppel
or otherwise any license or right under any patent, trademark, service mark,
trade dress, indicia of origin, copyright, mask work protection right, or any
other intellectual property right which is owned, controlled by or licensed to
either party.
(c) The parties' respective ownership interests, up to and
including one hundred percent (100%), in and rights to use information used or
produced by Supplier to perform Consulting Services hereunder, other than those
specified above, shall be determined on a case by case basis in each Order or
Supplemental Agreement pursuant to which Ordering Company purchases Consulting
Services from Supplier.
12.4 EQUIPMENT SUPPLIER. Ordering Company warrants that no
current corporate policy, would give rise to Supplier or any of its Affiliated
Companies being disqualified, as a result of this Agreement or the work
performed under it, from bidding upon or being awarded a contract to supply
telecommunications or computer equipment, Software, or related Services to
Ordering Company.
12.5 ORDERING COMPANY'S RESPONSIBILITY. In addition to Ordering
Company's responsibilities specified in Section 6.4, ORDERING COMPANY' S
RESPONSIBILITY, Ordering Company shall, at no charge to Supplier, provide
Supplier with financial, operational and technical information, data, technical
support, personnel or assistance as may reasonably be required by Supplier to
fulfill its obligations under this Article.
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12.6 WARRANTY. Supplier warrants to Ordering Company that
Services will be performed in a professional manner and in accordance with
Ordering Company's specifications or those referenced in the Order and shall be
in accordance with such requirements or restrictions as may be lawfully imposed
by governmental authority. If the Services prove to be not so performed and if
Ordering Company notifies Supplier within a thirty (30) day period, commencing
on the date of completion of the Service, at Ordering Company's option, Supplier
either will correct the nonconforming Service for which Supplier is responsible
or render a full or prorated refund or credit based on the original charge for
the Services.
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IN WITNESS WHEREOF, the parties have caused this General Purchase
Agreement to be executed by their duly authorized representatives on the
date(s) indicated.
AT&T CORP. LUCENT TECHNOLOGIES INC.
By /s/ By /s/
--------------------------------- ---------------------------------
Name _______________________________ Name________________________________
Title ______________________________ Title ______________________________
Date _______________________________ Date _______________________________
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