Exhibt 10.1
AMENDED AND RESTATED CDMA MASTER SUPPLY AGREEMENT
BETWEEN
UNITED STATES CELLULAR CORPORATION
AND
NORTEL NETWORKS INC.
TABLE OF CONTENTS
SECTION PAGE
1. DEFINITIONS 1
2. SCOPE 5
3. PURCHASE ORDERS 6
4. PRICE 7
5. PAYMENT 8
6. DELIVERY, RISK OF LOSS, TITLE 10
7. WARRANTIES, REMEDIES AND LIMITATION OF WARRANTIES
AND REMEDIES AND DISCLAIMERS OF WARRANTIES AND
LIABILITY 13
8. FORCE MAJEURE 16
9. PATENT OR COPYRIGHT INFRINGEMENTS 17
10. SOFTWARE LICENSE 19
11. SOFTWARE UPDATES 20
12. REMEDIES 20
13. BUYER'S RESPONSIBILITIES 22
14. TESTING, TURNOVER AND ACCEPTANCE 23
15. COVERAGE, INTERFERENCE AND THIRD-PARTY FACILITIES 24
16. REGULATORY COMPLIANCE 24
17. CHANGES 25
18. CONDITION OF INSTALLATION SITE(S) 26
19. RELEASE OF INFORMATION 26
20. CONFIDENTIALITY 26
21. INTERCONNECTION TO SWITCH 27
22. EQUIPMENT CHANGES 27
23. LONG TERM SUPPORT 28
24. INSURANCE; GENERAL INDEMNITY; LIMITATION OF
LIABILITY 29
25. SUPPLEMENT AND ANNEXES 30
26. GENERAL 30
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SUPPLEMENT AND ANNEXES
SUPPLEMENT 1 - SPECIFIC TERMS RELATED TO EQUIPMENT PRICING, PRODUCT CREDITS
AND DISCOUNTS, TRADE-IN ALLOWANCES AND TRAINING
ANNEX 1 - HARDWARE DESCRIPTIONS
ANNEX 2 - SERVICES DESCRIPTIONS
ANNEX 3 - STATEMENT OF WORK
ANNEX 4 - TURNOVER AND ACCEPTANCE NOTICES
ANNEX 5 - WARRANTY SERVICES
ANNEX 6 - SAMPLE PROJECT PLAN
ANNEX 7 - AFFILIATES
ANNEX 8 - SOFTWARE ACCESS
ANNEX 9 - MTX10 AND MTX 11 SOFTWARE
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AMENDED AND RESTATED CDMA MASTER SUPPLY AGREEMENT
THIS AMENDED AND RESTATED CDMA MASTER SUPPLY AGREEMENT (this "Agreement") is
effective as of April 18, 2002 (the "Effective Date") by and between United
States Cellular Corporation, a Delaware corporation with offices located at 8410
West Bryn Mawr Avenue, Suite 700, Chicago, Illinois 60631 ("Buyer"), and Nortel
Networks Inc., a Delaware corporation with offices located at 2221 Lakeside
Boulevard, Richardson, TX 75082 ("Seller").
WITNESSETH:
WHEREAS, Buyer and Seller entered into the CDMA Master Supply Agreement dated
April 18, 2002 for the sale and purchase of Seller's CDMA equipment and services
("Existing CDMA Agreement"); and,
WHEREAS, the parties wish to amend and restate the Existing CDMA Agreement to
effect certain amendments and changes to the Existing CDMA Agreement:
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereby agree as follows:
1. DEFINITIONS
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As used herein, the following capitalized terms have the following
meanings:
1.1 "Affiliate" shall mean any entity that is (a) owned directly or indirectly
by Buyer or Buyer's parent company, Telephone and Data Systems, Inc.
("TDS"); (b) controlled directly or indirectly by Buyer or TDS; (c) under
common ownership with Buyer or TDS, directly or indirectly; (d) under
common control with Buyer or TDS, directly or indirectly; or (e) managed
(pursuant to a management agreement) by Buyer, TDS or an entity that falls
within the description set forth in clause (a), (b), (c) or (d) of this
definition. For purposes of this definition (i) "control" (and with
correlative meaning, "controlled") shall mean the ability to direct or
cause the direction of the management and operating policies of an entity,
whether by contract or otherwise; and (ii) "ownership" (and with
correlative meaning, "owned") shall mean the possession of 50% or more of
the voting securities or other voting equity interest in an entity. Annex 7
is a list of the Affiliates.
1.2 "Aggregate Volume Commitment" shall mean the purchase hereunder by Buyer of
Equipment (and related Services) for a total of 3500 Minimum Configurations
during the Term.
1.3 "BSC" shall mean a Seller-engineered CDMA base station controller that (a)
provides radio channel management between a Switch and a BTS, and (b)
includes a base station manager ("BSM").
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1.4 "BTS" shall mean a Seller-engineered CDMA base transceiver station that (a)
provides a radio link with mobile subscribers, and (b) is controlled by a
BSC.
1.5 "Buyer's Expanded Network" shall mean Buyer's wireless telecommunications
network which shall not have more than 75 Switches or more than 7,500,000
subscribers.
1.6 "CDMA" shall mean Code Division Multiple Access-based telecommunication
services operational in the 800 MHz or 1900 MHz band of the electromagnetic
spectrum.
1.7 "Commissioning" shall mean Seller's on-site testing of installed Equipment
to determine whether such Equipment complies with the applicable Acceptance
Criteria (as defined in Section 14.1).
1.8 "Cumulative Annual Volume Commitment" shall mean the purchase hereunder by
Buyer of Equipment (and related Services) for the specified number of
Minimum Configurations during the period commencing on the Effective Date
and ending at the end of the applicable time period set forth in the
following table:
Cumulative Annual
Time Period Volume Commitment
-------------------------------------------------------
From the Effective Date through 500
Dec. 31, 2002
Calendar Year 2003 1100
Calendar Year 2004 1900
Calendar Year 2005 2700
Calendar Year 2006 3500
1.9 "Documentation" shall mean (a) the Equipment-related documentation provided
by Seller (including, without limitation, applicable installation manuals,
Nortel Networks Practices ("NTPs"), maintenance instructions and user
manuals) that contains the Specifications and describes in detail the
engineering, installation, commissioning, maintenance, operation and repair
of the Equipment; and (b) any other documentation or other materials that
Seller generally provides to purchasers of the Equipment; provided,
however, that "Documentation" shall not include the Materials or the
Training Manuals.
1.10 "Equipment" shall mean, either singularly or collectively (as the case may
be), the Hardware and Software products provided by Seller hereunder.
Subject to the limitations set forth in Section 2.1(d), the terms of this
Agreement applicable to "Equipment" shall also be deemed to apply to OEM
Equipment, unless otherwise expressly indicated in this Agreement.
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1.11 "Freight" shall mean freight, freight-related insurance and other
freight-related costs and expenses.
1.12 "Hardware" shall mean, either singularly or collectively (as the case may
be), the CDMA 800 MHz and CDMA 1900 MHz Seller-engineered hardware
components including, without limitation, the hardware portions of the
BSCs, BTSs, Switches, Systems, and Merchandise.
1.13 "Installation" shall mean the installation of Equipment by Seller at the
Installation Site in accordance with the applicable Documentation, Purchase
Order and the provisions set forth in Annex 3.
1.14 "Installation Site" shall mean the location (in the United States)
specified by Buyer in a site-specific Purchase Order for Equipment if such
Purchase Order provides for Installation.
1.15 "Market" shall mean (a) any MSA, RSA, MTA or BTA, as such are defined by
the FCC, or (b) any other geographic area or similar apportionment defined
by the FCC from time to time in connection with wireless
telecommunications.
1.16 "Merchandise" shall mean miscellaneous Hardware with respect to which
Seller does not provide Installation or Commissioning; provided, however,
that "Merchandise" shall not include BSCs, BTSs, Switches, or Systems.
1.17 "Materials" shall mean any and all designs, documentation and other work
product prepared by Seller and delivered to Buyer pursuant to the support
Services set forth in Annex 2; provided, however, that "Materials" shall
not include any Software.
1.18 "Minimum Configuration" shall mean a BTS consisting of one 800 MHz, 24 Vdc,
1 Cxr, MFRM w/128 CEs and 1xVoice Software (or the equivalent thereof).
1.19 "OEM Equipment" shall mean any hardware or software made available by
Seller for sale to Buyer under this Agreement that (a) is not
Seller-engineered or Seller-proprietary, (b) is not integrated into the
Equipment during the manufacturing process; and (c) is specifically
identified by Seller as (i) OEM Equipment, or (ii) a vendor item on certain
price quotations by Seller.
1.20 "Optional Features" shall mean certain features of the Software that may be
activated at Buyer's option upon the payment of certain license fees, if
applicable, and are not licensed as part of a Universal Load.
1.21 "Project" shall mean the delivery, Installation and Commissioning by Seller
of 200 or more BTSs in accordance with a mutually agreed upon plan pursuant
to which Seller shall ship such Equipment initially to a Seller-managed
warehouse.
1.22 "Project Schedule" shall mean the Ship Date, delivery, Installation,
Commissioning and Turnover dates, as applicable, proposed by Buyer and
accepted by Seller in connection with any Equipment purchased hereunder.
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1.23 "Purchase Order" shall mean any purchase order issued to Seller by Buyer or
an Affiliate pursuant to Section 3.
1.24 "Services" shall mean those services performed by Seller under this
Agreement including delivery, Installation, Commissioning, warranty and
post-warranty support.
1.25 "Ship Date" shall mean the date set forth in the Project Schedule or on the
applicable Purchase Order (which has been accepted by Seller) as the date
for shipment of the applicable Equipment from Seller's facility to the
Initial Delivery Location.
1.26 "Software" shall mean, either singularly or collectively (as the case may
be), the CDMA 800 MHz and CDMA 1900 MHz Seller-proprietary and third-party
software computer programs (consisting of firmware and logic instructions
in machine-readable code residing in, or intended to be loaded in, Hardware
memories providing basic logic, operating instructions and user-related
application instructions) as well as the related Documentation; provided
that "Software" shall not include any of Buyer's data or Buyer's customer
data.
1.27 "Software Release" shall mean the Universal Load and the applicable
Optional Features for each version of the Software.
1.28 "Special Delivery" shall mean the delivery of Equipment which requires the
use of personnel, methods and/or tools in excess of reasonable and
customary delivery (i.e., by not more than two delivery personnel via a
lift truck) of Equipment; provided that "Special Delivery" shall include,
without limitation, delivery using a crane, heavy duty fork lift, special
delivery vehicle (e.g., snowmobile, helicopter, boom truck), or more than
two delivery personnel.
1.29 "Specifications" shall mean the technical specifications that describe and
explain the standard functional capabilities of and requirements for the
Equipment and Services as set forth in the applicable Documentation.
1.30 "Standards" shall mean the then-current interim or final versions of
technical specifications developed by one of the ANSI-accredited standards
organizations governing the operational and/or interface standards for CDMA
800 MHz or CDMA 1900 MHz hardware and software.
1.31 "Switch" shall mean any of Seller's DMS-MTX family of switches.
1.32 "System" shall mean a Switch along with its related BTSs.
1.33 "Term" shall mean the period commencing on the Effective Date and ending on
December 31, 2006, unless terminated earlier in accordance with the terms
and conditions hereof. If Buyer satisfies the Aggregate Volume Commitment
on or before December 31, 2006, Buyer may, at its sole discretion, extend
the Term for a period not to exceed one year upon written notice to Seller
on or before December 31, 2006.
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1.34 "Third-Party CDMA Cell Site" shall mean a CDMA base transceiver station
that is functionally equivalent to a BTS and was engineered and supplied by
a third-party supplier.
1.35 "Training Manuals" shall mean the manuals and other training course
materials provided by Seller to participants in Seller's training courses;
provided, however, that "Training Manuals" shall not include the
Documentation or the Materials.
1.36 "Universal Load" shall mean Seller's commercially available base operating
Software together with certain standard incremental subscriber and/or
carrier software features included at Seller's sole discretion.
1.37 "Warranty Period" shall mean:
1.37.1 With respect to Hardware for which Installation and Commissioning
is performed by Seller (other than as part of a Project), the
period commencing on the Turnover Date and ending upon the earlier
to occur of (a) the date that is twelve months after the Turnover
Date, or (b) the date that is fifteen months after the date of
shipment (subject to Sections 6.6 and 6.8) to the Initial Delivery
Location; provided, however, if Seller fails to complete Turnover
within 90 days after the date of shipment to the Initial Delivery
Location, for reasons attributable to Seller or its agents, the
Warranty Period shall be extended on a day-for-day basis for each
day thereafter until Turnover is achieved.
1.37.2 With respect to Hardware for which Installation and Commissioning
is performed by Seller in connection with a Project, the period
commencing on the Turnover Date and ending upon the date that is
twelve months after the Turnover Date.
1.37.3 With respect to Hardware installed or commissioned by Buyer, the
sixteen-month period commencing on the date of shipment by Seller
to the Initial Delivery Location.
1.37.4 With respect to a Software Release, the twelve-month period
commencing on the date that such Software Release is initially
implemented in Buyer's wireless telecommunications network.
1.37.5 With respect to Merchandise, the twelve-month period commencing on
the date of shipment by Seller of such Merchandise.
1.37.6 With respect to any Service, the 30-day period commencing on the
date of completion of such Service.
2. SCOPE
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2.1 During the Term, in accordance with an appropriate Purchase Order issued by
Buyer and accepted by Seller for Equipment and/or Services, Seller shall:
(a) deliver the Equipment and perform Installation and Commissioning of the
Equipment for use in the United States; (b) acquire and maintain all local,
state and federal government approvals required
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in Seller's normal course of doing business; (c) grant to Buyer a
nonexclusive license to use all Software associated with, and integral to,
Hardware purchased by Buyer hereunder, which license shall continue beyond
the Term provided that such Software has been paid for by Buyer hereunder;
and (d) furnish OEM Equipment to Buyer.
2.2 During the Term, if Buyer or an Affiliate desires to purchase Equipment
pursuant to this Agreement other than for use in the United States, Buyer
or such Affiliate shall issue a Purchase Order for such Equipment directly
to the applicable affiliate of Seller in each applicable territory pursuant
to the terms of this Agreement subject to any modifications to such terms
that are required to comply with applicable laws and regulations in such
territory. Subject to Buyer's obligations set forth in Section 2.3 below,
any Purchase Order issued and accepted hereunder shall create contractual
rights and obligations solely between Buyer or an Affiliate which issued
the Purchase Order and Seller or Seller's Affiliate which accepted the
Purchase Order, unless otherwise expressly set forth in this Agreement.
2.3 Any Affiliate may submit a Purchase Order pursuant to the terms and
conditions of this Agreement; provided, however, that Buyer shall guarantee
the performance of any such Affiliate's obligations under this Agreement,
including but not limited to, such Affiliate's payment obligations.
References to Buyer in this Agreement shall be deemed to include each
Affiliate issuing a Purchase Order under this Agreement, and such
Affiliates, by placing such Purchase Orders, shall be deemed to have
accepted the terms and conditions of this Agreement applicable to Buyer.
Upon written notice from Buyer to Seller, Buyer may add Affiliates to or
delete Affiliates from the list set forth in Annex 7, provided that Buyer
shall continue to guarantee the performance of any Affiliate under any
Purchase Order placed by such Affiliate prior to Seller's receipt of
Buyer's notice of deletion of such Affiliate from Annex 7.
3. PURCHASE ORDERS
---------------
3.1 Notwithstanding that a Purchase Order may not refer to this Agreement, any
Purchase Order for Equipment and/or Services issued during the Term shall
be deemed to have been issued pursuant to this Agreement and shall be
governed by the terms and conditions of this Agreement unless the parties
expressly agree to the contrary in writing. Except for non-conflicting
administrative terms as provided below, any additional or preprinted terms
or conditions on any Purchase Order (or on any notice from Seller accepting
a Purchase Order) shall be null, void and of no effect. Each Purchase Order
shall specify:
3.1.1 a description of the ordered Equipment (as set forth in Annex 1)
and/or any Services (as set forth in Annex 2) including any
cross-reference to the Prices set forth in Supplement 1;
3.1.2 the Initial Delivery Location or Installation Site, as the case may
be, for the Equipment;
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3.1.3 the Prices for the ordered Equipment and/or Services as set forth
in Supplement 1 (or, if not set forth in Supplement 1, as quoted by
Seller from time to time);
3.1.4 the Project Schedule or Project Plan (or a proposal for either), as
the case may be;
3.1.5 other appropriate information as may be required by Seller to fill
the Purchase Order (including, without limitation, Buyer's floor
plan and frequency plan), provided that prior to Buyer's issuance
of such Purchase Order, Seller has notified Buyer of Seller's need
for such information; and
3.1.6 the location to which the applicable invoice shall be rendered for
payment.
3.2 Any Purchase Order issued by Buyer and not rejected in writing within ten
business days after receipt by Seller shall be deemed accepted by Seller.
On the last business day of each week during the Term, Buyer shall provide
to Seller a summary of all Purchase Orders submitted to Seller during such
week (each, a "Summary"). For the purposes of this Section 3.2, "receipt"
by Seller shall mean the earlier of (a) Seller's receipt of the Purchase
Order, or (b) Seller's receipt of a Summary that includes such Purchase
Order. Buyer shall not be obligated to provide a Summary for any week
during which Buyer does not issue any Purchase Orders.
3.3 Seller shall not reject any Purchase Order for Hardware solely on the basis
of Seller's inability to comply with Buyer's proposed dates for shipment of
such Hardware (from Seller's facility to the Initial Delivery Location)
unless the proposed dates for shipment of such Hardware are inconsistent
with the Intervals set forth in Section 6.9.1 or (a) the sum of (i) the
units of Hardware set forth in such Purchase Order for shipment during any
Forecast Period, plus (ii) the units of Hardware that have a Ship Date
during such Forecast Period and are set forth in Purchase Orders, if any,
previously accepted by Seller; is greater than (b) 110% of the Forecast for
such Forecast Period.
4. PRICE
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4.1 The prices for certain Equipment, Merchandise and Services (each, a
"Price") are set forth in Supplement 1. From time to time, Seller shall
quote the price to Buyer for any Equipment, Merchandise or Services for
which a Price is not specified in Supplement 1. All Prices set forth in
this Agreement and/or quoted by Seller from time to time are in United
States dollars.
4.2 Seller shall specify whether or not Freight is included in each of the
Prices provided to Buyer pursuant to this Agreement. Unless otherwise
specified in Supplement 1, except for prices for spares and piece parts,
all Prices pursuant to this Agreement for Equipment to be delivered to an
Initial Delivery Location within the United States shall include all export
duties, import duties and related customs charges in connection with the
shipment of Equipment from Seller's facility to each Initial Delivery
Location.
4.3 Unless otherwise specified in Supplement 1, the unit Prices for the
Equipment do not include Seller's charges for Installation and
Commissioning. The Prices for Installation and Commissioning of certain
Equipment are set forth separately in Supplement 1.
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4.4 After expiration of the Warranty Period for certain Hardware, Buyer may
purchase repair and/or replacement Services in connection with such
Hardware at the Prices set forth in Supplement 1.
5. PAYMENT
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5.1 With respect to Equipment for which Seller does not provide Installation
and Commissioning, Seller shall invoice Buyer for 100% of the Price of such
Equipment and any applicable prepaid Freight upon shipment of such
Equipment by Seller to the Initial Delivery Location. With respect to
Equipment for which Seller provides Installation and Commissioning, Seller
shall invoice Buyer for (a) 90% of the Price of such Equipment, inclusive
of any prepaid Freight, if applicable, upon shipment of such Equipment by
Seller to the Initial Delivery Location, (b) the 10% balance of the Price
of such Equipment upon Acceptance of such Equipment, and (c) 100% of the
Price of Installation and Commissioning of such Equipment upon Acceptance
of such Equipment. Seller shall provide each invoice to Buyer on or before
the second business day after the date of such invoice. Buyer's payment of
each invoice shall be due to Seller within 30 days after the date of such
invoice.
5.1.1 If Seller fails to provide an invoice to Buyer on or before the
second business day after the date of such invoice, then the due
date for payment of such invoice shall be extended day-for-day
until Seller provides such invoice to Buyer, provided that Buyer
shall be required to provide reasonable evidence as to the date of
receipt of such invoice.
5.1.2 If Buyer receives Equipment that has sustained obvious or visible
damage in transit, then (a) Buyer shall promptly notify Seller
thereof and shall return such damaged Equipment to Seller; (b)
promptly after Seller's receipt of such notice, Seller shall ship
to Buyer a replacement for such damaged Equipment; and (c) the date
of the invoice for such Equipment shall be deemed to be the date
that Seller ships such replacement Equipment from Seller's
facility.
5.1.3 If any portion of an invoice is the subject of a good faith
dispute, Buyer shall provide in writing the basis for its dispute
within 30 days after the date of the invoice and the undisputed
portion of such invoice shall be due and payable within 30 days
after the date of the applicable invoice. If such dispute is
resolved in favor of Buyer, Seller shall invoice Buyer for the
correct amount which shall be due and payable within 30 days after
the date of such corrected invoice. If such dispute is resolved in
favor of Seller, Buyer's payment of the disputed amount shall
remain due and payable within 30 days after the date of the
applicable invoice.
5.2 All past due amounts (collectively, "Past Due Amounts") shall bear interest
at a rate of 12% per annum (1% per month or such lesser rate as may be the
maximum permissible rate under applicable law) beginning on the date on
which the applicable Past Due Amounts are due and payable and ending when
paid.
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5.3 Buyer shall promptly reimburse and/or pay Seller, upon demand, or shall pay
directly, if so requested by Seller, all taxes and charges (including,
without limitation, penalty and interest, imposed by any federal, state, or
local governmental or taxing authority) relating to the purchase, license,
ownership, possession, use, operation or relocation of Equipment,
Merchandise, or Services provided by Seller under this Agreement,
excluding, however, all taxes based upon the net income of Seller. To the
extent Seller is required by law to collect such taxes, Seller shall add
such taxes to invoices as separately stated charges which shall be paid by
Buyer unless the Buyer is exempt from such taxes and furnishes Seller with
a certificate of exemption in a form reasonably acceptable to Seller prior
to issuance of such invoice. Buyer shall hold Seller harmless from any and
all claims levied by a proper taxing authority for such taxes, including
any interest, penalties or late charges due to Buyer's failure to perform
hereunder. If any taxes collected by Seller are inappropriately assessed
against Buyer or any such taxes are charged at the incorrect rate of
taxation, then within 30 days after Seller receives notice of the
overpayment ("Tax Credits"), Seller shall credit Buyer's outstanding (and,
if necessary, future) invoices for an amount agreed upon by the parties as
the amount of tax inappropriately assessed or incorrectly charged, if any.
Within 30 days after the expiration or termination of this Agreement (or,
for Tax Credits arising thereafter, within 30 days after notice of such Tax
Credits), Seller shall pay to Buyer any Tax Credits outstanding upon the
expiration or termination of this Agreement or arising thereafter. Notice
of overpayment shall be considered received by Seller when (a) Seller
discovers an error in the assessment or calculation of taxes; (b) Buyer
provides Seller with written notice of the tax error; or (c) any local,
state or federal agency advises Seller of the tax error. The terms and
conditions of this Section 5.3 shall survive the expiration or termination
of this Agreement.
5.4 Until the Price for each unit of Equipment is paid to Seller, Seller shall
retain and Buyer hereby grants to Seller a purchase money security interest
in such unit of Equipment, and Buyer shall cooperate with Seller (solely at
Seller's cost and expense) in perfecting such purchase money security
interest.
5.5 Seller reserves the right to require reasonable assurances of payment by
Buyer as a condition to accepting Purchase Orders.
5.6 Prior to payment in full of the Price, Buyer shall not sell or lease
Equipment purchased by it, or allow any liens or encumbrances to attach to
any such Equipment, or remove such Equipment from the Installation Site (if
applicable) provided that an Affiliate may lease such Equipment to Buyer at
anytime without violating this Section.
5.7 In this Section, "Receivables" shall mean all or any portion of any right
of Seller to payments from Buyer arising under this Agreement or any
Purchase Orders submitted pursuant to this Agreement, together with all or
any associated rights and remedies of Seller. Buyer hereby consents to: (i)
the Seller's provision to any proposed assignee of Receivables and its
advisors, under written obligations of confidentiality, of a copy of this
Agreement, any amendments hereto and any applicable Purchase Orders,
invoices or any other documentation related to the Receivables, as
necessary to facilitate the assignment by Seller of Receivables; and (ii)
the assignment by Seller of any Receivables
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to any assignee without further notice. Notwithstanding any such
assignment, Buyer shall retain (y) against any such assignee all claims in
recoupment and all defenses that Buyer has arising from the transactions
governed by this Agreement and (z) against Seller all rights and defenses
it has against Seller.
5.8 Upon Buyer's written request, Seller shall provide reasonable documentation
substantiating any pass-through charges or any charges made on a time and
materials basis.
6. DELIVERY, RISK OF LOSS, TITLE
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6.1 Delivery
6.1.1 All Equipment shipped by Seller from a location outside of the
United States to Buyer's designated initial delivery location in
the United States (the "Initial Delivery Location") shall be
shipped by Seller Delivered Duty Paid ("DDP"). Under DDP, Seller
shall (a) be solely responsible for all customs clearance
formalities for export/import; (b) select the common carrier; and
(c) provide for insurance and assume risk of loss until delivery of
the Equipment to Buyer's Initial Delivery Location. Seller shall
make all applications required under the laws of the exporting and
importing countries (or any other applicable country) in connection
with the Equipment and related technology being sold and shall
request such authorizations as may be required for exporting and
importing such Equipment and related technology from and to such
countries. Buyer acknowledges that Seller cannot guarantee the
issuance of any export or import license. Buyer shall be entitled
to rely on Seller's written confirmation to Buyer that Seller has
obtained such licenses. For Equipment for which the Initial
Delivery Location is outside of the United States, Seller's
obligation to ship the Equipment is subject to and conditional upon
the issuance of any such requisite export and import licenses.
6.1.2 Seller shall ship all Equipment from within the United States
F.O.B. Buyer's designated Initial Delivery Location. Seller shall
pre-pay all Freight from the place of shipment to each applicable
Initial Delivery Location. If Freight is not included in the Price
for the applicable Equipment, Seller may bill Buyer for Freight
(solely on a pass-through basis without any mark-up or
administrative charge) by adding it to the invoice for the
applicable Equipment. If Freight is included in the Price for the
applicable Equipment, Seller shall select the method of and common
carrier for shipment. If Freight is not included in the Price,
Seller shall select the method of and common carrier for shipment
unless, at least 14 days prior to the applicable Ship Date, Buyer
notifies Seller that Buyer desires to select the method of and
common carrier for shipment. Buyer shall be solely responsible for
arranging and paying for any relocation of Equipment from the
Initial Delivery Location to the Installation Site. Buyer may
request that Seller quote a price to Buyer for relocation of
Equipment from the Initial Delivery Location to the Installation
Site. If Buyer accepts such price, Seller shall prepay the charges
for delivery from the Initial Delivery Location to the specified
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Installation Site, and Seller shall bill such charges to Buyer as a
separate item on the applicable invoice.
6.2 Title and risk of loss or damage to all Equipment furnished by Seller to
Buyer in accordance with this Agreement shall pass to Buyer upon delivery
of such Equipment to the Initial Delivery Location. The foregoing
notwithstanding, title to Software shall not pass to Buyer at any time.
6.3 Seller warrants to Buyer that title to all Equipment furnished by Seller to
Buyer in accordance with this Agreement shall be good and clear title, free
and clear of all liens and encumbrances.
6.4 Notwithstanding Sections 6.1 and 6.2, for each Project, Seller shall ship
the Equipment to a Seller-managed warehouse facility for collection and
consolidation. Title and risk of loss for such Equipment shall pass from
Seller to Buyer upon delivery of such Equipment to the Seller-managed
warehouse facility which shall be deemed to be the Initial Delivery
Location. While located in a Seller-managed warehouse facility, Seller
shall ensure that such Equipment (a) is clearly and conspicuously marked as
belonging to Buyer; (b) is physically segregated from any other equipment
or materials located in such Seller-managed warehouse facility; and (c) is
available for relocation by Seller upon reasonable notice. In accordance
with the Project Plan, Seller shall ship such Equipment from such warehouse
facility to Buyer's designated Installation Site at no additional charge to
Buyer; provided that Seller performs the Installation of such Equipment and
no Special Delivery is required. For a period not to exceed four months
commencing upon the mutually agreed upon start date for each Project,
Seller shall provide the Seller-managed warehouse facility for collection
and consolidation of the Equipment. Accordingly, all Equipment initially
shipped to the Seller-managed warehouse facility must be delivered to the
applicable Installation Site during such four-month period.
6.5 Along with each delivery of Equipment by Seller, Seller shall also deliver
to Buyer in electronic form, via the following web site address,
http://www130.nortelnetworks.com/cgi-bin/eserv/cs/main.jsp the applicable
Documentation for such Equipment. Buyer may make a reasonable number of
copies of such Documentation (in electronic or paper format) and, subject
to Section 20, may use such Documentation for purposes of installing BTSs,
maintaining and operating the Equipment. Buyer may also order additional
copies of the Documentation from Seller at Seller's then-current price.
Buyer shall ensure that all copies of the Documentation created by Buyer
include any copyright or similar proprietary notices included by Seller in
the original versions of such Documentation. Buyer shall ensure that proper
versions of the Documentation are distributed to Buyer's personnel. At no
additional charge to Buyer, Seller shall provide to Buyer in electronic
form all updates, revisions and corrections to such Documentation.
6.6 At least 30 days prior to the Ship Date for any unit of Equipment, Buyer
may notify Seller that Buyer desires to postpone the delivery of such
Equipment. Upon Seller's receipt of such notice, Seller may place such
Equipment in storage, and Buyer shall be responsible for all reasonable
storage and associated costs thereby incurred by Seller.
11
Likewise, if Buyer, as of the scheduled Ship Date, has failed to adequately
prepare the Installation Site for delivery of such Equipment, Seller may
place such Equipment in storage and Buyer shall be responsible for all
reasonable storage and associated costs thereby incurred by Seller.
Seller's delivery of such Equipment to a storage location as provided in
this Section shall constitute shipment of the Equipment for purposes of
invoicing. In addition, if such Equipment is in such storage location for
more than fifteen days, then notwithstanding anything to the contrary in
Section 6.2, title and risk of loss or damage to the stored Equipment shall
pass from Seller to Buyer at the end of such fifteen-day period.
Notwithstanding anything to the contrary contained in Section 1.37, if any
such Equipment is stored for more than 60 days, then for purposes of
determining the Warranty Period for such Equipment, the date that is 60
days after Seller's delivery of such Equipment to the storage location
shall be deemed to be the Ship Date for such Equipment.
6.7 At least five business days prior to Seller's shipment of any Equipment,
Buyer may, upon written notice to Seller, change the destination for such
Equipment to an alternative Initial Delivery Location in the United States,
and Seller shall ship such Equipment to such alternative Initial Delivery
Location.
6.8 Subject to Sections 6.6 and 6.7, if Seller attempts to timely deliver
Equipment to any Initial Delivery Location, and Buyer has failed to fulfill
Buyer's obligations hereunder to prepare for receipt of such Equipment at
such Initial Delivery Location, Seller shall place such Equipment in
storage, and Buyer shall be responsible for all reasonable storage and
associated costs thereby incurred by Seller. Seller's delivery of such
Equipment to a storage location as provided in this Section shall
constitute shipment of the Equipment for purposes of (a) invoicing, (b)
passage of title and risk of loss or damage to the stored Equipment, and
(c) determining the Warranty Period for such Equipment.
6.9 Order-to-Shipment Intervals
6.9.1 To the extent that Buyer has forecasted its requirements for
Equipment in accordance with Section 13.4 and such Equipment is of
a standard configuration, Seller shall ship such Equipment within
the intervals set forth in the following table (the "Intervals") if
the Initial Delivery Location is within the United States:
Activity Switch/BSC BTS
------------------------- ---------- -----
Receipt of P.O. Week 1 Week 1
Network Design/CIQ Mtg. Week 2 -----
Approved CIQ/Buyer
Network Design Approval Week 3 -----
JOM/Generate JCO Week 4 Week 2
Buyer Floor Plan Approval Week 5 -----
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Activity Switch/BSC BTS
------------------------- ---------- -----
Finalize Specs Week 6-8 Week 3
Factory Order Finalized Week 9 Week 4
Shipment Week 16 Week 12
6.9.2 Prior to Seller's acceptance of a Purchase Order for Hardware, the
parties shall mutually agree upon the order-to-shipment intervals
for such Hardware if (a) the sum of (i) the units of Hardware set
forth in such Purchase Order for shipment during any Forecast
Period, plus (ii) the units of Hardware that have a Ship Date
during such Forecast Period and are set forth in Purchase Orders,
if any, previously accepted by Seller; is greater than (b) 110% of
the Forecast for such Forecast Period.
7. WARRANTIES, REMEDIES AND LIMITATION OF WARRANTIES AND REMEDIES AND
---------------------------------------------------------------------------
DISCLAIMERS OF WARRANTIES AND LIABILITY
---------------------------------------
7.1 Hardware Warranty
7.1.1 Seller warrants that during the Warranty Period, the Hardware
furnished under this Agreement shall be free from defects in
material and workmanship, and shall conform to the applicable
portions of the Specifications. Performance of Seller's obligations
hereunder for any warranty repair that extends more than 15 days
shall extend the Warranty Period on a day-for-day basis thereafter.
Any Hardware repaired or replaced during the Warranty Period shall
continue to be warranted until the later of (a) the expiration of
the Warranty Period, or (b) the date that is 90 days after shipment
of such repaired or replacement Hardware.
7.1.2 Seller's sole obligation and Buyer's exclusive remedy for Seller's
breach of the warranty set forth in Section 7.1.1 or 7.1.3 are
limited to the replacement or repair, at Seller's option, of the
defective component of the Hardware. Such replacement Hardware may
be new or reconditioned to perform as new, at Seller's option.
Buyer shall be responsible for de-installation of any defective
Hardware and reinstallation of any repaired or replacement
Hardware, as well as the risk of loss and Freight for shipping the
defective Hardware to Seller. Seller shall bear the risk of loss
and Freight for shipping the repaired or replacement Hardware to
Buyer. Title to defective, repaired or replacement Hardware shall
pass to Seller or Buyer, as appropriate, upon such party's receipt
thereof.
7.1.3 Seller represents and warrants to Buyer that, provided the
Equipment is operated in accordance with its Documentation,
Equipment shall comply with the FCC standards relating to radio
frequency emissions in force as of the date of shipment to the
Initial Delivery Location.
13
7.2 Services Warranty
7.2.1 Seller warrants that the Services shall be performed (a) in a
professional and workmanlike manner; (b) in accordance with all
applicable industry standards; and (c) by personnel that have the
skills, training and experience commensurate with their
responsibilities in connection with performance of the Services.
7.2.2 Seller's sole obligation and Buyer's exclusive remedy for Seller's
breach of this warranty are limited to Seller's correction or
reperformance of the defective Services. Within 15 days after
written notice from Buyer, the parties shall agree on a plan for
problem resolution which may include onsite Services as
appropriate.
7.3 Software Warranty. Seller warrants that during the Warranty Period, the
Software shall conform in all material respects to the Specifications
therefor when such Software is used in the operating environment specified
in the Documentation. If the Software fails to conform to the foregoing
warranty, Buyer's exclusive remedy under this warranty shall be to require
Seller to correct such Software. The correction of the Software shall not
extend the Warranty Period of such Software, except in the case of E1
Critical and E2 Major (as defined in Annex 2), whereby such correction of
the Software takes longer than 14 days, the Warranty Period shall be
extended on a day-for-day basis thereafter. The parties shall on a
case-by-case basis mutually agree on the scope and timing of problem
resolution efforts, consistent with Annex 2 Technical Assistance Services,
which may include onsite Services as appropriate.
7.4 The remedies set forth in this Section with respect to the warranties set
forth above are conditioned upon Buyer providing to Seller during the
applicable Warranty Period a written notice (or an oral notice promptly
followed by a written notice) of any failure of the applicable Hardware,
Software or Services.
7.5 Response Services/Time
7.5.1 During the Warranty Period, Seller's technical assistance service
department ("TAS") shall provide reasonable assistance to Buyer in
the investigation and resolution of warranty defects that affect
Buyer's ability to provide services to Buyer's customers. If such
assistance is requested by Buyer, Buyer shall follow Seller's
standard policies and procedures related to such TAS services as
set forth in Annex 5. For routine warranty service situations,
Seller shall ship replacement or repaired Hardware (or components
thereof) within fifteen business days following Buyer's notice to
Seller of such defective Hardware (or components thereof).
7.5.2 During the Warranty Period, if Buyer requests emergency warranty
service, Seller shall use all reasonable efforts to ship
replacement Hardware (or components thereof) within 24 hours after
notification by Buyer of the warranty defect. Provided that such
replacement Hardware is shipped by Buyer within 24 hours after such
notification, Buyer shall pay to Seller the surcharge set forth in
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Annex 5 for such expedited shipment of replacement Hardware unless
Buyer has (a) purchased and maintained the spares inventory level
for the Hardware as set forth in the NTPs or as otherwise
recommended in writing by Seller, provided Seller has previously
provided Buyer with a copy of the NTPs or other Documentation
referencing the recommended quantity of spares; and (b) properly
maintained the Hardware in accordance with Seller's maintenance
procedures as set forth in the NTPs or as otherwise recommended in
writing by Seller, provided Seller has previously provided Buyer
with a copy of the NTPs or Documentation referencing such
maintenance procedures.
7.5.3 Except as otherwise provided in Section 5.1.2 with respect to
Equipment received by Buyer that has sustained obvious or visible
damage in transit, Buyer shall ship defective Hardware to Seller
within 60 days after Buyer's receipt of the replacement Hardware.
If Buyer fails to ship such defective Hardware to Seller within
such 60-day period, Seller shall invoice Buyer for the Price
hereunder for such Hardware. If Buyer returns such defective
Hardware to Seller within 90 days after Buyer pays Seller therefor,
Seller shall credit Buyer for the Price of the replacement Hardware
on the next invoice.
7.6 Exclusions. Seller's obligations under this Section 7 shall not apply to
(a) Equipment or components thereof (such as fuses and bulbs) that are
normally consumed in operation or have a normal life inherently shorter
than the Warranty Period; (b) defects that are the result of storage,
installation, use, maintenance or repair by Buyer other than in accordance
with the Documentation (including, without limitation, operation of the
Equipment outside the environmental parameters defined in the
Specifications); (c) defects that are the result of improper operation of
Equipment by Buyer with other hardware including (i) the operation of
Equipment with hardware that is not supplied, authorized, recommended or
required by Seller for use with the Equipment, as set forth in the
applicable Specifications, or (ii) use of Equipment with any improperly
operating equipment that was not supplied by Seller under this Agreement;
(d) Equipment or components thereof that, due to no fault of Seller, have
been subjected to any other kind of misuse or detrimental exposure or have
been involved in an accident, fire, explosion, or any other cause not
attributable to Seller; or (e) Equipment that has been altered, improperly
repaired, improperly installed or relocated other than by or on behalf of
Seller.
7.7 DISCLAIMER. THE WARRANTIES AND REMEDIES SET FORTH IN THIS AGREEMENT
CONSTITUTE THE ONLY WARRANTIES WITH RESPECT TO THE EQUIPMENT AND SERVICES
PROVIDED, AND BUYER'S EXCLUSIVE REMEDIES IN THE EVENT SUCH EQUIPMENT AND
SERVICES DO NOT CONFORM WITH SUCH WARRANTIES. SUCH WARRANTIES AND REMEDIES
ARE IN LIEU OF ALL OTHER WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR
IMPLIED INCLUDING, WITHOUT LIMITATION, THE WARRANTY OF MERCHANTABILITY AND
THE WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. SELLER DISCLAIMS ANY
WARRANTY THAT THE EQUIPMENT, DOCUMENTATION, MATERIALS, TRAINING MANUALS OR
SERVICES PROVIDED UNDER THIS AGREEMENT WILL NOT INFRINGE ANY
15
COPYRIGHT, PATENT, TRADE SECRET OR ANY OTHER PROPRIETARY RIGHT OF ANY THIRD
PARTY.
7.8 OEM Equipment. OEM Equipment furnished in conjunction with a Switch (i.e.,
terminals and printers) shall be warranted by Seller in accordance with the
Hardware warranty set forth in Section 7.1 and related warranty claims
shall be managed and administered by Seller. With respect to all other OEM
Equipment ordered by Buyer, Seller shall ensure that the third-party
vendors of such OEM Equipment provide directly to Buyer such vendors'
standard warranties for such OEM Equipment; provided, however, that Seller
shall manage and administer Buyer's warranty claims for such OEM Equipment.
Except for the warranty of title provided in Section 6.3, the warranties
provided in this Section 7.8 are Seller's exclusive warranties with respect
to the OEM Equipment.
7.9 The expiration or termination of this Agreement shall not relieve Seller of
its obligations under this Section 7.
8. FORCE MAJEURE
-------------
8.1 Neither party shall be deemed in default of this Agreement or any Purchase
Order placed hereunder to the extent that any delay or failure in the
performance of its obligations is directly caused by or directly results
from any cause beyond its reasonable control (or the control of its
employees, agents or subcontractors) and without its fault or negligence
(or the fault or negligence of its employees, agents or subcontractors)
including, without limitation, acts of God, acts of civil or military
authority (including legislative, judicial, or administrative acts or
decisions), labor strikes, embargoes, epidemics, wars, riots,
insurrections, fires, explosions, earthquakes, floods or unusually severe
weather conditions (each, a "Force Majeure Condition"); provided, however,
that a party's inability to obtain necessary materials or services from its
suppliers or subcontractors shall not be deemed to be a Force Majeure
Condition unless such suppliers or subcontractors are unable to provide
such materials or services due to a Force Majeure Condition affecting such
suppliers or subcontractors or such materials or services are in short
supply and availability of such materials or services is sharply curtailed
on a world-wide basis. If a Force Majeure Condition occurs, the affected
party shall immediately notify the other party. Subject to Section 8.2,
each party shall provide reasonable assistance the other party to mitigate
the adverse affects of any Force Majeure Condition.
8.2 If a Force Majeure Condition occurs, the unaffected party may elect (a) to
suspend performance under any affected Purchase Order for the duration of
the Force Majeure Condition; (b) to buy third-party products and services
similar to the Equipment and Services ordered under the affected Purchase
Order; (c) to sell to a third-party customer the Equipment and Services
ordered under the affected Purchase Order; (d) to deduct from any Purchase
Order the Equipment and Services bought, sold or otherwise committed to
elsewhere (and to reduce the applicable Cumulative Annual Volume Commitment
and the Aggregate Volume Commitment accordingly); and (e) to resume
performance under such Purchase Order when the Force Majeure Condition
ceases.
16
8.3 If a Force Majeure Condition continues for a period of 30 days or more, the
unaffected party may, upon written notice to the affected party, rescind
acceptance of or cancel the affected Purchase Order or part thereof which
may be affected by the Force Majeure Condition and if the unaffected party
is the Buyer, reduce the applicable Cumulative Annual Volume Commitment and
the Aggregate Volume Commitment accordingly.
8.4 Upon the cessation of a Force Majeure Condition, Seller shall resume
performance hereunder pursuant to the affected Purchase Order if such
Purchase Order has not been cancelled.
9. PATENT OR COPYRIGHT INFRINGEMENTS
---------------------------------
9.1 Seller shall indemnify Buyer with respect to any suit, claim, or proceeding
brought by a third party against Buyer alleging that Buyer's use of the
Equipment, Documentation, Materials or Training Manuals constitutes an
infringement of any United States patent or copyright or misappropriation
of any trade secret. Seller shall defend Buyer against any such claims and
shall pay all litigation costs, reasonable attorneys' fees, settlement
payments and any damages awarded in any final judgment arising from such
suit, claim or proceeding; provided, however, that Buyer shall promptly
advise Seller of any such suit, claim, or proceeding and shall cooperate
with Seller, at Seller's cost and expense, in the defense or settlement of
such suit, claim or proceeding; and further provided that Seller shall have
sole control of the defense of such suit, claim or proceeding.
9.2 If an injunction is obtained by a third party against Buyer's use of
Equipment, Documentation, Materials or Training Manuals arising from any
such patent or copyright infringement or trade secret misappropriation
suit, claim or proceeding, in whole or in part, Seller shall, at its
option, either: (a) procure for Buyer the right to continue using the
portion of the Equipment, Documentation, Materials or Training Manuals the
use of which has been enjoined; or (b) replace or modify such portion of
the Equipment, Documentation, Materials or Training Manuals so that Buyer's
use is not subject to such injunction.
9.3 Buyer shall return to Seller the applicable Equipment, Documentation,
Materials or Training Manuals (or portion thereof), and neither party shall
have any further liabilities or obligations under this Agreement in
connection with such patent or copyright infringement or trade secret
misappropriation suit, claim or proceeding except as provided in Sections
9.3.1 and 9.3.2 if: (a) Seller notifies Buyer that Seller cannot perform
under Section 9.2 in connection with such Equipment, Documentation,
Materials or Training Manuals; or (b) if Seller notifies Buyer in writing
that Seller reasonably believes that an injunction may issue with respect
to such Equipment, Documentation, Materials or Training Manuals. Upon
Seller's receipt of such Equipment, Documentation, Materials or Training
Manuals, Seller shall refund to Buyer the amounts specified in Section
9.3.1 or 9.3.2 as the case may be.
9.3.1 If Buyer returns such Equipment, Documentation, Materials or
Training Manuals (or portion thereof) during the two-year period
commencing on the date that Buyer purchased same, Seller shall
refund to Buyer an amount equal to the Price
17
paid by Buyer for such Equipment, Documentation, Materials or
Training Manuals (or portion thereof).
9.3.2 If Buyer returns such Equipment, Documentation, Materials or
Training Manuals (or portion thereof) more than two years after
Buyer purchased same, Seller shall refund to Buyer an amount equal
to the then-current depreciated value of such Equipment,
Documentation, Materials or Training Manuals (or portion thereof)
calculated using straight-line depreciation over an eight-year
period commencing two years after the date that Buyer purchased
such Equipment, Documentation, Materials or Training Manuals.
9.4 If a suit, claim or proceeding is brought by a third party against Buyer
alleging that the use of OEM Equipment purchased hereunder constitutes an
infringement of any United States patent or copyright or misappropriation
of any trade secret, Seller shall indemnify Buyer with respect to a claim
of infringement arising in connection with Buyer's "stand-alone" use of the
item of OEM Equipment (i.e., claims other than claims involving use in
conjunction or combination with Seller's Equipment) to the same extent as
Seller is indemnified by the vendor of such OEM Equipment, and Seller will
either (a) assign to Buyer such indemnification rights as Seller has from
the vendor of such OEM Equipment to the extent such assignment is
permitted, or (b) provide to Buyer full rights of indemnification as though
Buyer were a third-party beneficiary of such rights. If a claim of
infringement or misappropriation is based upon the use of such OEM
Equipment in combination with Seller's Equipment, Documentation, Materials
or Training Manuals, Seller shall indemnify Buyer therefor in accordance
with Section 9.1. In any such event, Seller shall provide Buyer with the
remedies set forth in Sections 9.2 and 9.3.
9.5 Seller's indemnity obligations under Section 9.1 shall not apply to
infringement or misappropriation claims (a) arising from any portion of the
Equipment, Documentation, Materials or Training Manuals that is
manufactured using Buyer's design, where such claims would not have arisen
but for the use of Buyer's design; (b) arising from the use of the
Equipment, Documentation, Materials or Training Manuals in combination with
any other apparatus or material not supplied or required by Seller (or
otherwise required generally for use of such Equipment, Documentation,
Materials or Training Manuals as intended and there are no alternatives
that do not infringe or misappropriate) to the extent that such claims
arise from such combination usage; or (c) alleging that method of use
claims in a patent are infringed by any service offering and/or by any use
by Buyer of Equipment, Documentation, Materials or Training Manuals
furnished hereunder to make such service offering available. For purposes
of clause (a), Equipment, Documentation, Materials and Training Manuals
that are manufactured in accordance with Buyer's choice of Seller-provided
options and features shall not be deemed to have been "manufactured using
Buyer's design."
9.6 The foregoing states the entire liability of Seller to Buyer for patent or
copyright infringement or trade secret misappropriation in connection with
the Equipment, Documentation, Materials or Training Manuals.
18
9.7 The rights and obligations of the parties under this Section 9 shall
survive the expiration or termination of this Agreement.
10. SOFTWARE LICENSE
----------------
10.1 With respect to all Software associated with and integral to the Hardware
purchased by Buyer hereunder, Seller hereby grants Buyer a nonexclusive
license to use the Software with the Equipment to the extent of the
activation or authorized usage level (including, without limitation, radios
(voice channels), effective voice channels (EVC), BSCs, BTSs, or
subscribers). To the extent Software is furnished for use with designated
Equipment or Buyer-furnished equipment ("CFE"), Seller hereby grants to
Buyer a nonexclusive license to use such Software only on such Equipment or
CFE, as applicable. Seller represents that the Software contains trade
secrets. Accordingly, Buyer shall treat the Software as Seller's
Confidential Information (as defined in Section 20). Buyer will ensure that
anyone authorized by Buyer to use the Software shall do so in compliance
with the terms of this Agreement.
10.1.1 If Buyer has not chosen the MTX Software Release buy-out option (as
described in Section 4 of Supplement 1), then upon Buyer's request,
Seller shall provide to Buyer a list of Seller's then-current
Optional Features. If Seller notifies Buyer in writing of the Price
of a particular Optional Feature at any time during the Term, the
Price of such Optional Feature shall not be increased for the
remainder of the Term.
10.1.2 If Buyer chooses to obtain a license from Seller for additional
Optional Features and/ or additional measurable units as described
above, Seller may audit Buyer's Systems (either remotely or
visually or some combination thereof) to verify Buyer's compliance
with the licensed unit quantities. Seller may conduct such an audit
of Buyer's Systems (solely at Seller's cost and expense) upon any
such activation to determine the initial quantity of measurable
units. On a quarterly basis during each calendar year of the Term
thereafter, Seller shall have the right to audit Buyer's System
(solely at Seller's cost and expense) as set forth herein to
determine the quantity of measurable units utilized by Buyer;
provided that Seller shall (a) notify Buyer in writing at least ten
days prior to commencing any such audit, (b) perform such audits
during Buyer's normal business hours, and (c) avoid interfering
with or disrupting Buyer's day-to-day operations. Buyer shall
provide reasonable cooperation with such audits. Seller's right to
audit and invoice Buyer in accordance with this Section 10.1.2 for
measurable units added following the expiration or termination of
this Agreement shall survive for a period of two years following
the expiration or termination of this Agreement.
10.2 Buyer shall not: (a) use, copy, modify, transfer or distribute the Software
except as provided in the Documentation or as expressly authorized
hereunder; (b) reverse assemble, reverse compile, reverse engineer or
otherwise translate the Software; (c) create derivative works of the
Software or modify the Software except as provided in the Documentation or
as expressly authorized hereunder; or (d) sublicense, rent or lease
19
the Software, provided that an Affiliate may lease such Software to Buyer
at anytime without violating this Section.
10.3 Buyer acknowledges that the Software includes intellectual property
licensed to Seller by third parties. Such third-party licensors shall be
deemed to be beneficiaries of this provision. With respect to third-party
Software, Buyer shall comply with the license terms and conditions provided
by Seller in writing with respect to any such Software provided that Seller
has given Buyer a reasonable opportunity to review and evaluate any such
terms and conditions. Buyer shall also comply with the terms and conditions
contained in any Seller or third-party "shrink wrap" or "click" licenses
that are provided prior to the use of the Software. None of the terms and
conditions of such third-party licenses or any Seller "shrink wrap" or
"click" license shall affect the length of the Warranty Period or the
rights of Buyer related to the use of the Software.
10.4 The rights and obligations of the parties under this Section 10 shall
survive the expiration or termination of this Agreement.
11. SOFTWARE UPDATES
----------------
11.1 If Buyer chooses to obtain a license from Seller for a Software Release
that requires an upgrade of more than two consecutive Software Releases,
charges for additional Services in addition to the Price of such Software
Release as set forth in Section 4.3.4 of Supplement 1 may apply. For
example, an upgrade from MTX10 to MTX13 would not result in any additional
Service charges, while an upgrade from MTX09 (or a prior release) to MTX13
may result in additional Service charges which shall be quoted by Seller on
a case-by-case basis and must be accepted by Buyer prior to such upgrade.
Additionally, future Hardware purchases may require the support of a
then-current Software Release.
11.2 Any such Software Release may require the purchase of additional Hardware
by Buyer.
12. REMEDIES
--------
12.1 Insolvency
12.1.1 Seller may suspend its performance under this Agreement by written
notice to the Buyer and forthwith remove and take possession of any
portion of the Equipment that has been delivered if the Buyer,
prior to payment to Seller of the Price, shall become insolvent or
bankrupt, make a general assignment for the benefit of, or enter
into any arrangement with creditors, file a voluntary petition
under any bankruptcy, insolvency, or similar law, or have
proceedings under any such laws or proceedings seeking appointment
of a receiver, trustee or liquidator instituted against it which
are not terminated within 30 days after commencement thereof.
12.1.2 Subject to the parties rights and obligations set forth in Annex 8,
if Seller shall become insolvent or bankrupt, make a general
assignment for the benefit of, or enter into any arrangement with
creditors, file a voluntary petition under any bankruptcy,
insolvency, or similar law, or have proceedings under any such laws
20
or proceedings seeking appointment of a receiver, trustee or
liquidator instituted against it which are not terminated within 30
days after commencement thereof, then upon written notice to
Seller, Buyer may (a) suspend its performance under this Agreement
with respect to any Purchase Orders or portions thereof that have
not been fulfilled or completed, (b) terminate Buyer's obligations
with respect to the Cumulative Annual Volume Commitments and the
Aggregate Volume Commitment, or (c) terminate this Agreement in its
entirety. If Buyer chooses to terminate the Cumulative Annual
Volume Commitments and the Aggregate Volume Commitment, as detailed
above, the Prices shall no longer apply to the Equipment and the
parties shall renegotiate the prices applicable to the Equipment.
12.2 If either party materially breaches this Agreement and such material breach
continues for a period of 30 or more days after written notice of such
breach (including a reasonably detailed statement of the nature of such
breach) from the aggrieved party to the breaching party:
12.2.1 the aggrieved party may suspend its performance under this
Agreement for so long as the breach continues uncorrected, provided
that such party shall continue to comply with the applicable
provisions of Sections 10 and 20 relating to protection of the
Software and Confidential Information; or
12.2.2 the aggrieved party may terminate this Agreement upon written
notice to the other party upon the expiration of the 30-day cure
period if the breaching party has not cured such material breach;
and
12.2.3 the aggrieved party may avail itself of any and all remedies
available at law or equity whether or not it elects to suspend its
performance or terminate this Agreement under Section 12.2.1 or
12.2.2, as applicable.
12.3 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT,
EXCEPT IN THE CASE OF A BREACH BY EITHER PARTY OF ITS OBLIGATIONS UNDER
SECTION 19 (RELEASE OF INFORMATION) OR SECTION 20 (CONFIDENTIALITY), OR A
BREACH BY BUYER OF ITS OBLIGATIONS UNDER SECTION 10 (SOFTWARE LICENSE),
NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR INCIDENTAL, INDIRECT,
CONSEQUENTIAL, OR SPECIAL DAMAGES OF ANY NATURE WHATSOEVER IN CONNECTION
WITH ANY ACTION ARISING OUT OF OR RESULTING FROM THIS AGREEMENT.
12.4 Any action for breach of this Agreement or to enforce any right hereunder
shall be commenced within four years after the cause of action accrues or
it shall be deemed waived and barred. For the purposes of this Section
12.4, a cause of action shall be deemed to have accrued when a party has
knowledge of the facts giving rise to such cause of action or, in the
exercise of reasonable diligence, should have been aware of such facts.
21
12.5 The following Sections shall survive any termination or expiration of this
Agreement: Buyer's Affiliate guarantee set forth in Section 2.3; Section 5,
Payment; Section 7 Warranties, Remedies and Limitation of Warranties and
Remedies and Disclaimers of Warranties and Liability; Section 9, Patent or
Copyright Infringements; Section 10, Software License;; Section 12.3;
Section 12.4; Section 19, Release of Information; Section 20,
Confidentiality; Section 23, Long Term Support; and Section 24.3.
Additionally, the obligations of the parties under this Agreement related
to any accepted Purchase Order shall survive termination or expiration of
this Agreement, except that, if this Agreement is terminated for breach
pursuant to Section 12.2, the nonbreaching party shall have the option of
terminating any unfilled Purchase Orders. The rights and obligations of
Buyer and Seller under this Agreement which by their nature would continue
beyond the termination or expiration of this Agreement, shall survive such
termination or expiration.
13. BUYER'S RESPONSIBILITIES
------------------------
13.1 Subject to Section 11(g) of Supplement 1, Buyer shall purchase Equipment
and Services in an amount equal to or exceeding the Aggregate Volume
Commitment during the Term.
13.2 With respect to each Installation, Buyer shall perform its responsibilities
as set forth in Annex 3 and the following:
13.2.1 Buyer shall prepare the Installation Sites in accordance with
Seller's requirements for the Equipment as further set forth herein
and in Annex 3 sufficiently in advance to avoid delaying Seller's
performance hereunder.
13.2.2 Buyer, at its expense, shall obtain all necessary local and federal
government permits applicable to a cellular telecommunications
system installation and operation (excluding any applicable permits
required in the normal course of Seller's business). Buyer
acknowledges that all site engineering (including BTSs),
architectural work, civil work and supervision thereof, site
selection engineering, propagation engineering, environmental
approvals and rights-of-way are the responsibility of Buyer.
13.3 Buyer shall ensure that only qualified technicians perform Equipment
maintenance and repair during the Warranty Period, and such maintenance and
repair shall be limited to routine tasks performed in accordance with
written specifications therefor provided by Seller.
13.4 Beginning as of the Effective Date and on each January 1 and July 1
thereafter during the Term, Buyer shall provide Seller with a forecast
reflecting Buyer's good faith estimate of Buyer's anticipated Equipment
purchases and related times for delivery thereof during the succeeding
twelve-month period. The second six-month period in each such forecast
shall be deemed to be the "Forecast Period" to which such "Forecast" shall
apply.
22
14. TESTING, TURNOVER AND ACCEPTANCE
--------------------------------
14.1 On completion of Installation, Seller shall provide Buyer five (5) days
prior written notification that such Equipment is ready for Commissioning.
Following such notification, Buyer may elect to have a representative
present to witness and acknowledge completion of such testing; however, if
Buyer does not provide a qualified representative to observe such testing,
such election shall not invalidate the test results nor shall such election
be a reason or valid basis for Buyer not to accept the Equipment. Seller
shall test the Equipment in accordance with its standard testing procedures
to determine Equipment conformity with the Standards and Specifications set
forth in the Documentation ("Acceptance Criteria"), as amended from time to
time. Seller shall notify Buyer reasonably in advance of the first
scheduled Commissioning utilizing such amended Acceptance Criteria.
14.2 On the date that such Commissioning has been successfully completed, Seller
shall turn the Equipment over to Buyer ("Turnover"). On the date of
Turnover ("Turnover Date"), Buyer shall complete and return to Seller a
"Turnover Notice" as described in Annex 4.
14.3 For purposes of this Agreement, the occurrence of any of the following
shall be deemed to constitute "Acceptance" of the Equipment:
14.3.1 Within fifteen days following the Turnover Date, Buyer shall either
accept the Equipment in writing by returning to Seller an
"Acceptance Notice" as provided in Annex 4, or Buyer shall notify
Seller in writing specifying in reasonable detail those particulars
in which the Equipment does not meet the Acceptance Criteria. With
respect to any such particulars, Seller shall promptly proceed to
take corrective action, and following correction thereof to Buyer's
reasonable satisfaction, Buyer shall accept the Equipment in
writing.
14.3.2 The failure of Buyer to notify Seller within fifteen days the after
Turnover Date (or, in the case of correction, fifteen days
following such correction) of any particulars in which the
Equipment does not meet the Acceptance Criteria, or the use by
Buyer of the Equipment or any portion thereof in revenue-producing
service at any time, shall be deemed to constitute Acceptance.
14.4 Notwithstanding the foregoing, Buyer will be deemed to have accepted the
Equipment, without limitation or restriction other than that set forth in
Section 14.6.2, by no later than the date such Equipment is placed into
revenue-generating service.
14.5 Buyer shall be deemed to have accepted Services purchased separately from
Equipment upon completion of such Services or upon specific milestones as
may be identified in the applicable Project Schedule.
14.6 Buyer shall not unreasonably withhold acceptance of any Equipment or
Service and acceptance shall not be withheld or postponed due to:
14.6.1 deficiencies or nonconformities of Equipment or Services resulting
from causes not attributable to Seller including, without
limitation (a) a material change in or
23
inaccuracy of information provided by Buyer, (b) inadequacies or
deficiencies of any materials, facilities, or services provided
directly or indirectly by Buyer, or (c) other conditions external
to the Equipment or Services that are beyond the limits specified
in the Specifications; or
14.6.2 deficiencies or shortages with respect to the Equipment or Services
that are attributable to Seller but are of a nature that does not
prevent operation of the Equipment in a live, commercial
environment ("Punch List Items") provided that Seller, at its
expense, shall correct such Punch List Items within 30 days (or
other mutually agreed upon time period) after Buyer has Accepted
such Equipment or Services.
14.7 Acceptance of Equipment for which Installation is not provided shall be
deemed to occur upon receipt and inspection by Buyer.
15. COVERAGE, INTERFERENCE AND THIRD-PARTY FACILITIES
-------------------------------------------------
15.1 Seller shall have no liability as a result of non-performance, failures or
poor performance of the System caused by, resulting from or attributable to
Buyer-provided designs, specifications or equipment configuration
requirements, provided, however that Seller shall advise Buyer if Seller
has reason to believe such Buyer-provided designs, specifications or
equipment configurations will not allow the Equipment to operate in
accordance with the Specifications. However, in no event shall Seller be
obligated to review Buyer's designs, specification(s), or configurations
except in the event Buyer has purchased Seller's Services for such review.
Buyer's choice of Seller-provided options and features for the Equipment
shall not constitute Buyer-provided designs, specifications or equipment
configuration requirements.
15.2 Seller shall not be responsible for any failures or inadequacies of
performance resulting from equipment not supplied and installed by Seller
or Seller's agents or subcontractors pursuant to this Agreement. Seller
shall not be responsible for interference or disruption of service caused
by operation of other radio systems, lightning, motor ignition or other
similar interference. In the event Buyer utilizes facilities or services
supplied by others such as common carrier circuits, antennas or towers,
Buyer shall have the total responsibility for the availability or adequacy
of such services or facilities.
16. REGULATORY COMPLIANCE
---------------------
16.1 Seller shall install Equipment so that it complies in all material respects
with all federal, state, and local laws and regulations in force on the
Effective Date, which directly impose obligations upon the manufacturer,
seller, or installer thereof.
16.2 The Prices set forth for the Equipment are based on Seller's design,
manufacture, and delivery of the Equipment pursuant to its design criteria
and manufacturing processes and procedures in effect on the Effective Date.
If, as a result of the imposition of requirements by any federal, state or
local government during the Term there is a change in such criteria,
processes or procedure or any change in the Equipment, Buyer and Seller
shall conduct good faith negotiations in order to establish an equitable
adjustment in the
24
Prices, to reflect the added cost and expense of such change. In the event
Buyer and Seller do not reach agreement on such equitable adjustment, Buyer
may cancel any Purchase Order(s) (or portion thereof) with regard to the
affected Equipment. In the event Buyer cancels any Purchase Orders as
contemplated in the preceding sentence, Buyer and Seller shall conduct
further good faith negotiations relating to a reduction in the applicable
Cumulative Annual Volume Commitment and the Aggregate Volume Commitment,
considering the scope and impact of the change in governmental
requirements.
17. CHANGES
-------
17.1 Up to ninety (90) days prior to the scheduled Ship Date (or such later time
as is acceptable to Seller), Buyer may request Equipment addition(s) or
deletion(s) to an original Equipment configuration. At any time prior to
the start of Commissioning, Buyer may request changes to the applicable
Project Schedule or Statement of Work. All such Equipment reconfigurations
or changes to Annex 3 or the Project Schedule ("Changes") shall be subject
to prior written approval of Seller.
17.2 Except as provided in Section 17.3, all Changes shall be documented in a
written change order ("Change Order"), which shall be executed by Buyer and
returned to Seller prior to implementation of the requested Changes. The
Change Order shall detail any adjustments to the Price, Statement of Work,
or Project Schedule required by Seller for any aspect of its performance
under this Agreement.
17.3 Upon written request of Buyer for a Change to a Statement of Work that
entails additional services totaling $10,000, or less, and upon written
acceptance thereof by Seller, Seller will proceed in good faith to
implement such Change prior to receipt of an executed Change Order. Within
ten (10) business days following Buyer's written request, the parties shall
agree upon an appropriate price for such Changes, all of which will be
summarized in a subsequent Change Order and executed by an authorized
representative of Buyer within fifteen (15) days following the date of the
request for Change.
17.4 Calculations for the price of any Equipment reconfigurations prior to the
Ship Date shall be based on Prices set forth in Supplement 1, provided that
(i) any additions shall include any necessary engineering, Installation and
testing charges and (ii) any deletions shall include applicable discounts;
and, provided further, that the net cumulative amount of Changes shall not
reduce the Price of a Purchase Order by more than ten percent (10%).
17.5 Buyer may elect to cancel, upon prior written notification to Seller,
Purchase Orders prior to shipment of Equipment subject to the following:
17.5.1 Without charge, Buyer may cancel any Purchase Order no later than
ninety (90) days prior to the earliest scheduled Ship Date. If
Buyer cancels a Purchase Order less than ninety (90) days prior to
the earliest scheduled Ship Date, Buyer agrees to pay Seller its
standard restocking fees set forth in Section 1.8 of Supplement 1
incurred as a result of such cancellation, provided Seller is not
able to reasonably
25
reallocate the canceled Equipment to Buyer's outstanding Purchase
Orders, if any, or to Seller's other customers.
17.5.2 Buyer may not cancel a Purchase Order after the Ship Date.
18. CONDITION OF INSTALLATION SITE(S)
---------------------------------
Buyer warrants that to the best of its knowledge, the Installation Site is
free from friable asbestos or other hazardous contamination. In the event
that such contamination is found to be present at the Installation Site,
Seller shall be relieved of all of its obligations hereunder until such
contamination is removed. In the event that Buyer fails or refuses to
remove such contamination, Seller shall have the right to remove the
Equipment or portions thereof if already delivered and relocate the
Equipment to an alternate site provided by Buyer and charge Buyer for (i)
any additional delivery charges to the new Installation Site, (ii) all
materials expended at the site including cabling, permanently affixed
equipment, and those items which cannot reasonably be removed for use
elsewhere, (iii) specifically ordered items requested by Buyer, and (iv)
all labor and materials expended at the sites relating to the relocation
using Seller's then-current rates. If Seller contaminates the Installation
Site, Seller shall promptly arrange to remove such contamination at no cost
to Buyer. If the removal of such contamination by Seller delays the
Turnover Date beyond the scheduled Turnover Date stated in the Project
Schedule, Buyer shall be entitled to Late Fees in accordance with Section
11 of Supplement 1.
19. RELEASE OF INFORMATION
----------------------
19.1 Unless required by law, or as otherwise permitted under this Agreement,
Buyer and Seller agree that the terms and conditions of this Agreement
shall not be disclosed to any other party without the prior written consent
of the other, except as set forth herein. Without the consent of the other
party and on a need-to-know basis, (a) Seller may release information to
Nortel Networks Corporation, its research and development affiliates, or
any majority-owned subsidiaries of any such company ("Seller Affiliate")
and (b), Buyer may release information to its Affiliates. Seller Affiliates
and Affiliates who receive any such information shall be obligated to
maintain the confidentiality of the information in accordance with the
terms set forth in this Agreement; failure to do so shall result in
liability on the part of Buyer or Seller, as applicable.
19.2 Neither Buyer nor Seller shall publish or use any advertising, sales
promotion, press releases or publicity matters relating to this Agreement
without the prior written approval of the other.
20. CONFIDENTIALITY
---------------
Buyer, Seller and Seller Affiliates shall receive in confidence from each
other all technical information, business information, documentation and
expertise which is either (i) stamped or otherwise marked as being
confidential or proprietary whether in written or electronic form, or (ii)
if delivered in oral form, is summarized in a written memorandum within
thirty (30) days thereafter and listed as being confidential ("Confidential
Information"). Confidential Information shall be deemed to include any
26
nonpublic information that is reasonably understood by the receiving party
to be proprietary and confidential to the disclosing party because of
proprietary legends or other markings, the circumstances of disclosure
thereof, or the nature of the information itself. Neither Buyer, Seller nor
any Seller Affiliate shall, except as previously authorized in writing by
the other party, publish, disclose or make use of the Confidential
Information (except as required by law and after notice to the other party)
for any purpose other than in the performance of its obligations under this
Agreement, unless and until the Confidential Information shall have ceased
to be proprietary as evidenced by general public knowledge or shall have
been legally acquired by such party from a third party without obligations
of confidentiality. This prohibition against disclosure, publication or use
of Confidential Information shall not restrict either party's use of
information known to it prior to disclosure hereunder or either party's
development of similar information in the exercise of its own technical
skill, so long as such other information is independently developed by such
party without making use of Confidential Information.
21. INTERCONNECTION TO SWITCH
-------------------------
21.1 Buyer is given the option to purchase individual units of Equipment
hereunder, and Buyer understands that such units of Equipment purchased
hereunder do not necessarily provide Buyer with a complete cellular
telecommunications network. In some cases, Buyer may intend to interconnect
the Equipment to a Switch which Switch, and the facilities for
interconnection, may not be included in Buyer's Purchase Order. In the
event that Buyer interconnects such Equipment to a Switch not a part of a
complete System purchase (hereinafter "Host Switch"), it is understood and
agreed that the making and maintaining of all necessary arrangements
(whether commercial, legal or otherwise) with the supplier of such Switch
including not only arrangements necessary to permit the timely performance
by Seller of its responsibilities under this Agreement, (e.g., physical and
remote dial-up access to the Host Switch for installation and services
purposes), but also any arrangements necessary for the ongoing operation of
the Equipment in conjunction with the Host Switch, shall be solely the
responsibility of Buyer, and failure by Buyer to timely make or maintain,
any necessary arrangements shall not excuse Buyer from its obligations
under this Agreement.
21.2 Buyer acknowledges and agrees that the proper operation of the Equipment
and/or the availability of certain Optional Features is dependent upon
having the appropriate Software Release operating on the Host Switch.
22. EQUIPMENT CHANGES
-----------------
22.1 With respect to any Equipment ordered by or delivered to Buyer hereunder,
Seller reserves the right to make changes in such Equipment (in whole or in
part) or in the related Specifications or Documentation in effect as of the
date of shipment by Seller to the Initial Delivery Location; provided that
(a) Seller shall provide written notice thereof to Buyer a reasonable time
following receipt of Buyer's Purchase Order for additional units of any
such Equipment; and (b) such changes will not limit, reduce, or adversely
affect performance, functionality or compatibility of the Equipment as
previously
27
published by Seller in the originally applicable Specifications. Seller
shall not be obligated to make any such changes in Equipment delivered
prior to implementation of such changes.
22.2 If any such changes limit, reduce, or adversely affect performance,
functionality or compatibility of the Equipment, and Seller fails to remedy
same within 90 days after notice thereof, then notwithstanding any other
remedies available under this Agreement, Seller's failure to provide a
remedy hereunder shall be deemed a material breach of this Agreement in
accordance with Section 12.2.
23. LONG TERM SUPPORT
-----------------
23.1 For the 7-year period commencing as of the MD Date, as defined below, of
the applicable Hardware or as mutually agreed upon by the parties ("Support
Term") Seller shall make available for sale to Buyer at then-current
prices, terms and conditions (unless such prices, terms and conditions are
superseded by prevailing contractual provisions (e.g., the Prices set forth
in Supplement 1)), functionally equivalent replacement parts for the
maintenance and repair of the Hardware purchased under this Agreement
("Replacement Parts").
23.2 During the Support Term, Seller shall also make available for sale to
Buyer, support for the Software licensed by Buyer hereunder at Seller's
then-current prices, terms and conditions based upon Seller's Software
support policies (unless such prices, terms and conditions are superseded
by prevailing contractual provisions, e.g., the Prices set forth in
Supplement 1).
23.3 Seller may at any time discontinue to manufacture any part of the Equipment
("MD Equipment"), provided, however, that Seller shall first notify Buyer
in writing of Seller's intent to discontinue the manufacture of such MD
Equipment reasonably in advance of the scheduled date for discontinuance
("MD Date"), but in no event less than ninety (90) days prior to the MD
Date. Such notification shall specify the description and approximate
quantity of the MD Equipment which Seller then has in inventory, or plans
to inventory, sufficiently in advance of the MD Date, to allow Buyer to
purchase any Discontinued Equipment it may desire prior to the MD Date at
Seller's then-current prices, terms and conditions (unless such prices,
terms and conditions are superseded by prevailing contractual provisions).
23.4 At the conclusion of the Support Term, and for a period of five (5)
consecutive years thereafter, in the event Seller is unable to provide
Buyer with additional quantities of Replacement Parts, Seller shall, upon
Buyer's written request, deliver to Buyer the drawings and specifications
for such Replacement Parts as may be necessary to allow Buyer to
manufacture (or cause to be manufactured) or procure any Replacement Parts
which Seller no longer has available for purchase ("Buyer Produced Parts").
Seller will provide Buyer a non-exclusive royalty free license to make (or
have made) and use such Buyer Produced Parts, provided such Buyer Produced
Parts shall be used only as Replacement Parts for Equipment purchased
hereunder. Seller shall provide Buyer drawings and specifications for OEM
Equipment only to the extent Seller has the right to
28
legally disclose such drawings and specifications. Any drawings or
specifications for the Buyer Produced Parts provided to Buyer by Seller
shall be governed by Section 20 of this Agreement, unless the exchange of
such technical information is superseded by then-current contractual
provisions.
24. INSURANCE; GENERAL INDEMNITY; LIMITATION OF LIABILITY
-----------------------------------------------------
24.1 Seller will procure and maintain, during the Term, insurance with
financially sound and reputable insurance companies in not less than the
following amounts:
24.1.1 Workers' Compensation insurance in accordance with the provisions
of the applicable Workers' Compensation or similar law of each
state or other political subdivision with jurisdiction applicable
to Seller's respective personnel, and Employers liability in the
amount of $1,000,000 per occurrence; and
24.1.2 All-risk property insurance covering all property owned by or under
the control of Seller insured for full replacement value with
commercially reasonable deductibles; and
24.1.3 Commercial General Liability insurance (without any exclusion for
liability arising from RF emissions but including contractual
liability, products liability, and completed operations coverage)
with a coverage limit of not less than $10,000,000 combined single
limit per occurrence of bodily injury or property damage liability;
and
24.1.4 If Seller (or any of its employees or agents) is required to use
any vehicle in the performance of this Agreement, Business Vehicle
Liability insurance for the operation of all owned, non-owned and
hired vehicles with a coverage limit of not less than $1,000,000
combined single limit per accident for bodily injury and property
damage liability.
24.2 All insurance required to be provided pursuant to Sections 24.1.3 and
24.1.4 (a) shall be occurrence based, and (b) shall name Buyer as an
additional insured with respect only to the operations of Seller. Seller
shall waive subrogation in favor of Buyer in respect of the all-risk
property insurance referred to in Section 24.1.2.
24.3 Each party shall be liable for direct losses incurred by the other party
due to bodily injury or damage to tangible property, including the
Hardware, which results from the negligence of that party's employees or
agents, provided, however, that nothing in this Section shall affect or in
any way increase Seller's obligation under this Agreement with respect to
the performance of the Hardware and/or Software. Except for bodily injury,
Seller's obligations under Section 9, or a breach by Seller of its
obligations under Section 19 or 20, or a breach by Buyer of its obligations
under Section 10, 19 or 20, the total liability of either party
(individually) for all claims of any kind for any loss or damage, whether
in contract, warranty, tort (including negligence), strict liability or
otherwise, or claims for indemnification arising out of, connected with, or
resulting from the performance or non-performance of this Agreement shall
in no case exceed the cumulative Price of all Purchase Orders accepted by
Seller under this Agreement.
29
25. SUPPLEMENT AND ANNEXES
----------------------
The following Supplement and Annexes shall form an integral part of this
Agreement as though written out in full in this Agreement:
SUPPLEMENT 1 - SPECIFIC TERMS RELATED TO EQUIPMENT PRICING, PRODUCT CREDITS
AND DISCOUNTS, TRADE-IN ALLOWANCES AND TRAINING
ANNEX 1 - HARDWARE DESCRIPTIONS
ANNEX 2 - SERVICES DESCRIPTIONS
ANNEX 3 - STATEMENT OF WORK
ANNEX 4 - TURNOVER AND ACCEPTANCE NOTICES
ANNEX 5 - WARRANTY SERVICES
ANNEX 6 - SAMPLE PROJECT PLAN
ANNEX 7 - AFFILIATES
ANNEX 8 - SOFTWARE ACCESS
ANNEX 9 - MTX10 AND MTX 11 SOFTWARE
26. GENERAL
-------
26.1 Either party may assign or transfer this Agreement or any rights hereunder
only with the prior written consent of the other party, except that (a)
Seller may assign its rights and obligations under this Agreement to a
Seller Affiliate without the consent of Buyer, provided such Seller
Affiliate is not a competitor of Buyer in the provisions of wireless
telecommunication services, in which case Buyer's consent will be required;
and (b) Buyer may assign its rights and obligations under this Agreement to
TDS or any Affiliate without the consent of Seller, provided such Affiliate
is not a competitor of Seller in the manufacture and sale of wireless
telecommunications equipment, in which case Seller's consent will be
required. No assignment or sublicense of or under this Agreement, or of any
rights under this Agreement, by Buyer or Seller, shall relieve such party
of primary responsibility for performance of its obligations under this
Agreement. Seller reserves the right to refuse to honor any assignment or
sublicense which, in the opinion of its legal counsel, would require it to
violate any United States export restriction, other law, or regulation.
Seller reserves the right to subcontract any portion of its obligation
under this Agreement, but no such subcontract shall relieve Seller of
primary responsibility for performance of Seller's obligations under this
Agreement.
26.2 The appointment of subcontractors by Seller and the staffing of Seller's
personnel shall be at Seller's discretion, provided, however, that Buyer
may request and Seller shall remove and replace any subcontractor or
employee whom Buyer, in its reasonable judgment, finds objectionable or
otherwise incompetent to perform the required tasks. Any such request shall
be in writing stating in reasonable detail Buyer's justification for the
request. Within two weeks after Seller's receipt of such written request,
Seller shall replace such removed subcontractor or employee.
30
26.3 Neither party shall knowingly solicit to hire employees of the other party
with whom it had contact as a result of having been directly involved in
the performance of this Agreement. Neither party shall be precluded from
conducting generalized searches for employees (and hiring those employees
who respond to generalized searches) either through the use of search firms
or advertisements in the media.
26.4 Notices and other communications shall be transmitted in writing by
Certified U.S. Mail, postage prepaid, return receipt requested, or by a
nationally recognized overnight courier, addressed to the parties as
follows:
Nortel Networks Inc.
4010 E. Chapel Hill-Nelson Hwy
Research Triangle Park, NC 27709
Attention: Contracts Dept 9787 MS D17/03/0F2
United States Cellular Corporation
8410 West Bryn Mawr Avenue, Suite 700
Chicago, Illinois 60631-3486
Attention: Purchasing Manager
with a copy to
United States Cellular Corporation
8410 West Bryn Mawr Avenue, Suite 700
Chicago, Illinois 60631-3486
Attention: Executive Vice President and Chief Technology Officer
Telephone and Data Systems, Inc.
30 N. LaSalle Street
Suite 4000
Chicago, Illinois 60602
Attention: Peter Sereda, Vice President and Treasurer
and a copy to:
Sidley Austin Brown & Wood
10 South Dearborn Street
Chicago, Illinois 60603
Attention: Stephen P. Fitzell, Esq.
Any notice given pursuant to this Section 26.4 shall be effective upon
receipt as evidenced by the U.S. Postal Service return receipt card or
courier's documentation.
26.5 Except as otherwise provided herein, this Agreement may not be modified or
amended or any rights of a party to it waived except in a writing signed by
duly authorized representatives of the parties hereto.
26.6 Failure by either party at any time to require performance by the other
party or to claim a breach of any provision of this Agreement shall not be
construed as affecting any
31
subsequent breach or the right to require performance with respect thereto
or to claim a breach with respect thereto.
26.7 The rights and obligations of the parties and all interpretations and
performance of this Agreement shall be governed in all respects by the laws
of the State of Illinois except for its rules with respect to the conflict
of laws.
26.8 Section headings are inserted for convenience only and shall not be used in
any way to construe the terms of this Agreement.
26.9 The relationship between the parties is that of independent contractors.
Neither party has any authority to bind the other party.
26.10 The invalidity in whole or in part, of any provision of this Agreement
shall not affect the validity of the remainder of such provision or this
Agreement.
26.11 This Agreement may be executed in multiple counterparts, each of which
shall be deemed an original and all of which taken together shall
constitute one and the same instrument.
26.12 Each party hereto represents and warrants that (i) it has obtained all
necessary approvals, consents and authorizations of third parties and
governmental authorities to enter into this Agreement and to perform and
carry out its obligations hereunder; (ii) the persons executing this
Agreement on its behalf have express authority to do so, and, in so doing,
to bind the party thereto; and (iii) the execution, delivery and
performance of this Agreement has been duly authorized by all necessary
partnership or corporate action and this Agreement is a valid and binding
obligation of such party, enforceable in accordance with its terms.
26.13 No agent, employee or representative of Seller has any authority to bind
Seller to any affirmation, representation, or warranty concerning the
Equipment, except as stated in this Agreement and unless such affirmation,
representation, or warranty is specifically included within this
Agreement, it shall not be enforceable by Buyer or any assignee or
sublicensee of Buyer. Buyer hereby acknowledges and agrees that it has not
relied on any representations or warranties other than those expressly set
forth in this Agreement. This Agreement constitutes the entire agreement
between Seller and the Buyer with respect to the subject matter hereof and
supersedes all previous negotiations, proposals, commitments, writings,
advertisements, publications and understandings of any nature whatsoever.
26.14 References to a "Section," when used without further attribution, shall
refer to the particular sections of the main body of this Agreement;
provided that references to a "Section" in an Annex or the Supplement,
when used without further attribution, shall refer to the particular
sections of the Annex or Supplement in which such reference appears.
32
26.15 Any reference herein to Software or Equipment being "sold," "purchased" or
the like shall be deemed to refer to the Software or the software portion
of the applicable Equipment, respectively, being licensed to Buyer.
33
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their representatives being thereunto duly authorized.
UNITED STATES CELLULAR NORTEL NETWORKS INC.
CORPORATION
By: /s/ Hichem Garnaoui By: /s/ Anthony Cioffi
------------------------ ---------------------
Name: Hichem Garnaoui Name: Anthony Cioffi
---------------------- -------------------
(Type/Print) (Type/Print)
Title: VP-National Networks Title: RVP-East
--------------------- ------------------
Date: August 6, 2002 Date: August 2, 2002
---------------------- -------------------
34