EXHIBIT 10.12.5
AMENDMENT NO. 5 TO THE AMENDED AND RESTATED
SYSTEM EQUIPMENT PURCHASE AGREEMENT
THIS AMENDMENT NO. 5 (the "Amendment" or "Amendment No. 5"), executed
as of September 23, 2003, is made and entered into by and between CRICKET
COMMUNICATIONS, INC., a Delaware corporation ("Owner") and LUCENT TECHNOLOGIES
INC., a Delaware corporation ("Vendor") and shall be effective on the Settlement
Date, as defined herein. In the event the Settlement Date has not occurred then
this Amendment No. 5 shall be null and void and have no effect.
RECITALS
WHEREAS, Owner and Vendor entered into that certain Amended and
Restated System Equipment Purchase Agreement, dated as of June 30, 2000, as
amended by Amendment No. 1, effective March 22, 2002 ("Amendment No. 1"),
Amendment No. 2, effective March 22, 2002 ("Amendment No. 2"), Amendment No. 3,
effective March 22, 2002 ("Amendment No. 3") and Amendment No. 4, effective
September 10, 2002 ("Amendment No. 4") and the Letter Agreements dated September
30, 2002 and December 20, 2002 (collectively, the "Contract" or "SEPA"); and
WHEREAS, Owner and certain of its affiliates (collectively "Debtors")
filed petitions under chapter 11 of title 11 of the United States Code
("Bankruptcy Code") on April 13, 2003 (the "Petition Date") in the United States
Bankruptcy Court for the Southern District of California ("Court"); and
WHEREAS, Owner and Vendor, by this Amendment No. 5, hereby amend
certain terms of the Contract for conducting business after the Approval Order
has become a Final Order (as each capitalized term is hereinafter defined); and
WHEREAS, Owner, the other Debtors and Vendor are entering into a
separate agreement concurrently with this Amendment No. 5 regarding the
settlement of certain Contract issues arising prior to the Petition Date (the
"Settlement Agreement"); and
WHEREAS, upon execution of the Settlement Agreement and this Amendment
No. 5, Owner shall file a motion with the Court requesting an order (the
"Approval Order") approving and authorizing Owner to enter into the Settlement
Agreement, including all payments and the releases set forth therein, and this
Amendment No. 5.
AGREEMENT
NOW, THEREFORE, incorporating the Recitals herein, and for other good
and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, Vendor and Owner
agree as follows:
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ARTICLE I
EFFECT OF AGREEMENT
1.1 INCONSISTENCIES. In the event there exists any
inconsistency between the Contract and this Amendment, the terms contained in
this Amendment shall govern (except as expressly provided herein). All
capitalized terms used herein and not otherwise defined shall have the meaning
given to such terms in the Contract.
1.2 ADEQUATE REPRESENTATION. Owner and Vendor acknowledge
and agree that they have been represented by their respective legal counsel of
choice, understand and are fully aware of the terms contained in this Amendment
and have voluntarily, without duress of any kind, entered into this Amendment.
ARTICLE II
AMENDMENTS TO CONTRACT
2.1 Effective as of the Settlement Date, Section 1.1 of
the Contract shall be and is hereby amended by adding the following new
definitions in the appropriate alphabetical order:
"Amendment No. 5" means Amendment No. 5 to the Amended and
Restated System-Equipment Purchase Agreement executed as of
September 23, 2003 by and between Owner and Vendor.
"Court" shall have the meaning given to such term in Amendment
No. 5.
"CP1 Assets" shall have the meaning given to such term in the
Settlement Agreement.
"Effective Date" shall have the meaning given to such term in
Owner's Final Plan (as defined in the Settlement Agreement).
"Final Approval Date" shall have the meaning given to such
term in the Settlement Agreement.
"Filing Date" means the date upon which Owner files a motion
with the Court requesting entry of an order approving (i) the
executed Settlement Agreement, (ii) the assumption by Owner of
the Contract as amended by Amendment No. 5.
"Final Order" means any order entered by the Court which has
not been reversed, stayed, modified or amended, the time in
which to appeal such order has expired and no appeal has been
taken, or, if any appeal has been taken, such appeal has been
resolved by the highest court to which it was appealed.
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"Settlement Agreement" shall have the meaning given to such
term in Amendment No. 5.
"Settlement Amount" means Vendor's Allowed Administrative
Claim in the amount of US $12,500,000.00.
"Settlement Date," means the later to occur of (i) the Final
Approval Date (as such term is defined in the Settlement
Agreement) and (ii) the date on which Vendor has received
payment in full of the Settlement Amount as provided in
Section 1 of the Settlement Agreement.
2.2 Effective as of the Settlement Date, Section 1.1 of the
Contract shall be and is hereby amended by deleting therefrom the definitions of
"Liquidated Damages" and "Minimum Purchase Commitment."
2.3 Effective as of the Settlement Date, Section 1.1 of the
Contract shall be and is hereby amended by deleting the phrase "five (5) years
there from" from the definition of "Contract Term" and adding and inserting in
its place the phrase "March 31, 2005."
2.4 Effective as of the Settlement Date, Section 2.1 of the
Contract shall be and is hereby amended by deleting the phrase "by Operating
Affiliates and" from the second sentence of the first paragraph of Section 2.1
of the Contract. Section 2.1 of the Contract is further amended by deleting the
third paragraph of Section 2.1.
2.5 Effective as of the Settlement Date, Section 2.4 of the
Contract shall be and is hereby amended by deleting the phrase "five (5) year
period commencing on the Effective Date" and adding and inserting in its place
the phrase "the Contract Term."
2.6 Effective as of the Settlement Date, Section 2.8(a) of the
Contract shall be and is hereby amended by deleting the first word "The" and
adding and inserting in its place the phrase "Except for the purchase money
security interest granted by the Owner to the Vendor pursuant to Amendment No.
5, the".
2.7 Effective as of the Settlement Date, Section 3.1 of the
Contract shall be and is hereby amended by adding the following new Subsections
3.1(c) and (d) inclusive to Section 3.1 of the Contract as follows:
"(c) On and after the Settlement Date, and prior to the
Effective Date, Vendor shall not reject Owner's Purchase
Orders for Products or Services for the maintenance, operation
and growth of the existing Systems, provided that (i) such
Purchase Orders are subject to the Contract, as amended by
Amendment No. 5, (b) such Purchase Orders allow for Vendor's
normal interval lead times, and (c) Owner submits payment in
full for the Products or Services, together with all
applicable Taxes, in immediately available funds, for all such
Products and Services at the time of submission of the
applicable Purchase Order.
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(d) Notwithstanding anything to the contrary set forth in
section 3.1(b) and 3.3(a) hereof, on and after the later to
occur of the Settlement Date and the Effective Date, Owner
shall pay all invoices in full within thirty (30) days after
shipment of Products or the date of the invoice for Services,
subject to credit limits, credit terms and conditions to be
determined by Vendor for Owner in Vendor's sole discretion
based upon Owner's credit and financial condition following
its emergence from bankruptcy. Such credit limits, credit
terms and conditions shall be subject to periodic adjustment,
in Vendor's sole discretion."
2.8 Effective as of the Settlement Date, Section 3.3(a) of the
Contract shall be and is hereby amended by deleting the first and last sentences
thereof.
2.9 Effective as of the Settlement Date, Section 5.1, exclusive of
Subsection 5.1.1 of the Contract is hereby deleted in its entirety. Subsection
5.1.1 shall be and is hereby amended by adding the following at the end of that
Subsection 5.1.1; and Contract references to Section 5.1 shall be deemed to mean
Subsection 5.1.1:
"Vendor shall provide Owner with the 10% Trigger discounts for
any and all BTS hardware, excluding only items under RS&R, SES
and non BTS Spares. The ten percent 10% Trigger discount shall
apply to and is incorporated into all prices in the new B
Exhibits for all BTS model pricing attached hereto as Exhibit
2 which shall replace all prior BTS pricing models of Exhibit
B of the SEPA."
2.10 Effective as of the Settlement Date, Section 5.2 of the
Contract shall be and is hereby amended and restated in its entirety to read as
follows:
"5.2 Taxes. Owner shall be liable for and shall pay all
state and local sales and use taxes or other similar transfer
taxes in the nature of sales or use taxes ("Taxes"), plus any
interest and penalties thereon, attributable to purchases of
Products and Services under the Contract; provided, however,
that to the extent any penalties related to delinquent taxes
arise solely as a result of Vendor's failure to collect and
remit the taxes from Owner on a timely basis, and such failure
was not a result of any request in writing by Owner to Vendor
not to collect the taxes for any reason, Owner shall not be
liable for such penalties but shall at all times remain liable
for the underlying tax and interest accrued thereon except if
Owner has made payment to Vendor for the invoiced sales tax
and Vendor does not remit to the Governmental Entity; (a)
Vendor shall bill such tax related amounts to Owner separately
stating the amount on the applicable invoice; and (b) Vendor
shall not bill to or otherwise attempt to collect from Owner
any tax, interest and penalties with respect to which Owner
has provided Vendor with an exemption certificate prepared in
accordance with applicable law or a direct pay permit validly
issued by a taxing authority. Owner and Vendor agree to fully
cooperate with each other as well as any
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Governmental Entity in resolving any Tax issues that may
arise. If the Owner shall pay Taxes to Vendor for which the
Vendor files and remits to a governmental taxing authority and
Vendor later receives a Tax credit from the taxing
governmental authority with respect to such Taxes, then the
Vendor shall credit to the Owner an amount equal to such Tax
credit. The amount of such credit will be applied against
future Vendor invoices after the assessment of normal Tax due
on such invoice(s) based on the invoiced amount prior to such
Tax credit."
2.11 Effective as of the Settlement Date, the subsection of Section
5 of the Contract titled "No Payment in Event of Material Breach" shall be and
is hereby amended in its entirety to read as follows:
"Subject to subsection 24.5, in the event the Vendor is in
material breach of the Contract, the Owner shall provide
written notice to the Vendor thereof, and if such breach is
capable of cure, the Vendor shall (i) commence to cure the
default within five (5) Business Days of Vendor's receipt of
such notice, and (ii) diligently pursue such cure and remedy
the breach entirely within ninety (90) days following delivery
of such notice. The occurrence of such material breach does
not relieve Owner of its obligations to make payments for the
Work related to such breach; however, Owner may suspend such
payments only until the earlier to occur of (i) Vendor
remedies the breach within ninety (90) days of receipt of
notice of such breach, and (ii) a court of competent
jurisdiction renders a decision that such payments are due and
owing to the Vendor. Suspension of payment pursuant to this
Section 5 shall not constitute a Payment Default under Section
24.7.1(a) of this Contract. Notwithstanding anything to the
contrary in this section 5 or elsewhere in the Contract, Owner
is not relieved of its obligations with respect to payment of
any and all amounts that are or become due under this Contract
with respect to (i) Taxes, (ii) Owner's failure to satisfy the
Discount Criteria in accordance with section 7.3 of the
Contract, and (iii) any and all unpaid invoices for Work
actually done or Products or Services actually delivered by
Vendor prior to such breach or unrelated to such breach."
2.12 Effective as of the Settlement Date, Section 7.3 of the
Contract shall be and is hereby amended by adding the following new paragraph at
the end of Section 7.3 of the Contract as follows:
"Owner has identified in a letter to Vendor dated May 15, 2002
the MSC-5ESS System Purchase Orders to which the Discount
Criteria (as set forth and defined in Section 3 of Amendment
No. 2 of the Contract) shall not apply, to which Vendor has
agreed, subject to the provisions of this Section 7.3.
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(a) The discount percentages (collectively, the "Discount
Percentages") applicable to all 5ESS switch Equipment,
Software, and Spares will be 90% of Vendor's List Price for
all purchases in existing Markets in which Owner has installed
Vendor Products as of the Settlement Date, and 83% of Vendor's
List Price for all purchases for all other Markets. The 10%
Trigger under Section 5.1.1 shall not apply to the foregoing
Discount Percentages. The Discount Percentages shall not apply
to the fees or to specific repair parts pricing for the
current Systems which are or shall be set forth in any SES
and/or RS&R agreements by and between Vendor and Owner, nor
shall the Discount Percentages apply to FMS pricing as set
forth in Section 11 of Amendment No. 2 of the Contract, except
to the extent that 5ESS switching components make up the FMS.
(b) Owner is obligated to satisfy the Discount Criteria
for the following Markets: the greater Denver, Phoenix,
Memphis, Albuquerque and Tulsa Systems (the "Discount Criteria
Markets").
(c) Vendor will perform an audit of the Owner's Systems
on or about January 1, 2005, to determine the number of
carriers in each Market in order to determine whether Owner
has satisfied the Discount Criteria. The audit will involve
examination of the System itself, not an examination of
inventory. If Owner has not satisfied the Discount Criteria in
each applicable Market, then Owner shall, at its option,
following the completion of such audit and in any event no
later than March 1, 2005, either place Purchase Orders and pay
the full amount owing for the number of required carriers to
meet the Discount Criteria, or pay an amount to Vendor equal
to the price differential between a 90% discount off the 5ESS
Switch List Price and an 85% discount off the 5ESS Switch List
Price (all List Prices and discount prices (the "Discount
Structure") as set forth on Exhibit B of the Contract titled
"Discount Structure for Cricket Communications") for the
applicable Discount Criteria Market in accordance with the
terms of Section 3 of Amendment No. 2 to the Contract (the
"Discount Reimbursement"). If Owner purchases additional
carriers to satisfy the Discount Criteria, then, thereafter,
Owner may ship to and install such carriers in any Vendor
Market. Notwithstanding anything to the Contrary set forth in
this Section or elsewhere in this Contract, the termination or
expiration of this Contract shall not relieve Owner of its
obligations with respect to payment of any and all amounts
that may be due as a result of Owner's failure to satisfy the
Discount Criteria as determined in accordance with this
Section 7.3 as modified herein including Section 24.5."
(d) If the Contract is terminated pursuant to its terms
(including, without limitation, termination pursuant to
Section 24.7.2 hereof) on or before March 1, 2005, then such
termination shall not relieve Owner of its
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obligations under this Section 7.3, and as soon as practicable
after the applicable termination date, Vendor shall conduct
its audit as referenced in paragraph (c) above and Owner
shall, within thirty (30) days of the date such audit is
provided to Owner, at its option, as provided in paragraph (c)
above, purchase the required carriers to meet the Discount
Criteria under the terms of this Contract as if the Contract
had not been terminated or pay the Discount Reimbursement."
2.13 Effective as of the Settlement Date, Section 12 of the
Contract shall be and is hereby amended by adding a new Section 12.3 to the
Contract as follows:
"12.3 Discontinuation of Products Purchased Before or After
the Settlement Date. All purchases prior to the Settlement
Date shall continue to be subject to the applicable seven (7)
or ten (10) year Product support periods from September 20,
1999 (the date of the original Contract), but in no event,
less than seven years from the ship date. Unless modified in
writing, the discontinued Product support applicable to all
purchases of Products after the Settlement Date shall be as
follows: (a) Vendor will use commercially reasonable efforts
to notify Owner six (6) months in advance of the effective
date of Discontinued Availability ("DA") of
Vendor-manufactured Products or Vendor-developed Software that
are provided under the Contract. Such notice may be provided
by electronic bulletin board to which Owner has access or by
written notice, at Vendor's sole option and in Vendor's sole
discretion. Such notice shall be waived in the event that a
functional equivalent as to Form, Fit and Function and price
is available. From such effective date of DA, Vendor shall
continue to support, repair, replace or maintain a
discontinued item for a period of two (2) years, provided,
however, Vendor shall not be excused from any warranty
obligations remaining on the DA effective date. In the case of
items supplied by third party vendors, Vendor will notify
Owner of the discontinuance of availability of hardware,
software, or support provided by the vendor as soon as
practical after Vendor receives notice from such vendor.
Notwithstanding anything in this paragraph to the contrary,
should the continued Product support period remaining (as
calculated subject to the seven (7) and ten (10) year periods
above) on any Products purchased under the Contract prior to
the Settlement Date have a support period greater than the two
(2) years, then the longer of the support period remaining
under the seven (7), (10) or two (2) years shall apply."
2.14 Effective as of the Settlement Date, the first sentence of
Section 13.5 of the Contract shall be and is hereby amended in its entirety to
read as follows: "The rights and obligations of the Owner and Vendor under this
Section 13.5 and under the RTU License shall survive the expiration or
termination of this Contract, regardless of the cause of termination, provided
Owner has rendered and continues to render payments (subject to applicable cure
periods, if any) on and after the Settlement Date in accordance with this
Contract."
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2.15 Effective as of the Settlement Date, Section 16.1 of the
Contract shall be and is hereby amended in its entirety to read as follows:
"The parties agree that the Vendor shall have no liability for
any liquidated damages."
2.16 Effective as of the Settlement Date, Section 18 of the
Contract shall be and is hereby amended by adding a new section 18.4 to the
Contract as follows:
"18.4 Purchases on or After the Settlement Date. All
Equipment, Software and Services purchased prior to the
Settlement Date, shall continue to be subject to the
applicable Warranty Periods as described in the SEPA prior to
Amendment No. 5. Unless modified in writing, the Warranty
Period applicable to all purchases of Equipment, Software and
Services on or after the Settlement Date, shall be as follows:
(a) All Equipment: the Warranty Period shall be twelve
(12) months from the date of shipment of Equipment, if not
installed by Vendor. If Equipment is installed by Vendor, the
Warranty Period shall be twelve (12) months from the date of
Vendor's Notice of Completion of Installation and Integration
Certificate.
(b) All Software: the Warranty Period shall be ninety
(90) days from the date of shipment of Software, if not
installed by Vendor. If Software is installed by or activated
by Vendor, the Warranty Period shall be ninety (90) days from
the date the Software is installed or activated by Vendor
unless earlier activated by Owner.
(c) All Services: the Warranty Period shall be thirty
(30) days from the date of completion of the Service.
Notwithstanding the foregoing, in no case shall a Warranty
Period commence later than the date Owner first puts the
Equipment, Software, or in the case of Services, puts the item
to which Services relate, into Commercial Service other than
solely for acceptance testing, whether or not revenue is
generated."
2.17 [Intentionally Deleted]
2.18 Effective as of the Settlement Date, Section 24.1 of the
Contract shall be and is hereby amended by adding the following sentence at the
end of Section 24.1: "Notwithstanding anything to the contrary in this
subsection 24.1 or elsewhere in the Contract, the termination of this Contract
pursuant to subsection 24.1 hereof shall not relieve Owner of its obligations
with respect to payment of any and all amounts that are or become due under this
Contract, including, but not limited to, any and all amounts that are or become
due with respect to (i) Taxes, (ii) Owner's failure to satisfy the Discount
Criteria in accordance with section 7.3 of the Contract,
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and (iii) any and all unpaid invoices for Work actually done or Products or
Services actually delivered by Vendor."
2.19 Effective as of the Settlement Date, Section 24.2 of the
Contract shall be and is hereby amended by adding the following at the end of
Section 24.2: "provided, however, that the Vendor's suspension of its
performance of the Work pursuant to the Vendor's exercise of remedies pursuant
to subsection 24.7.2(i)(a) and/or (b) hereof shall not constitute a Vendor Event
of Default and the Owner shall not be entitled to terminate the Contract
pursuant to this subsection 24.2(e) in the event Vendor suspends performance of
the Work pursuant to subsections 24.7.2(i)(a) and/or (b) hereof."
2.20 Effective as of the Settlement Date, Section 24.3(a)(ii) of
the Contract shall be and is hereby amended in its entirety to read as follows:
"(ii) in the case of any other Vendor Event of Default, the
Owner shall provide written notice of such Vendor Event of
Default to the Vendor, and the Vendor shall have failed (a) to
commence to cure the default within five (5) Business Days of
delivery of such notice, and (b) to diligently pursue such
cure and remedy the breach entirely within ninety (90) days of
delivery of such notice."
2.21 Effective as of the Settlement Date, Section 24.5 of the
Contract shall be and is hereby amended in its entirety to read as follows:
"If the Owner terminates this Contract pursuant to subsection
24.2 thereof, the Vendor shall not be entitled to receive
further payment other than payments due and payable under this
Contract and not subject to dispute prior to such termination
(provided that any such disputed amounts shall be paid by the
Owner when and if such dispute is in fact resolved); provided,
however, that notwithstanding anything to the contrary in this
section 24.5 or elsewhere in this Contract, the termination of
this Contract pursuant to subsection 24.2 hereof shall not
relieve Owner of its obligations with respect to payment of
any and all amounts that are or become due, including but not
limited to, any and all amounts that are or become due with
respect to (i) Taxes, (ii) Owner's failure to satisfy the
Discount Criteria in accordance with section 7.3 hereof, and
(iii) any and all unpaid invoices for Work actually done or
Products or Services actually delivered by Vendor."
2.22 Effective as of the Settlement Date, Section 24.7 of the
Contract shall be and is hereby deleted in its entirety and a new Section 24.7
is hereby added in its place as follows:
"24.7 Owner Events of Default.
24.7.1 Owner Events Of Default. The occurrence of any one or
more of the following after the Settlement Date shall
constitute an "Owner Event of Default" under this Contract:
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(a) Owner fails to pay any amount when due and owing (as
to which there is no good faith valid dispute) to Vendor
including, without limitation, any invoice, fee, charge, Tax
or other amount under this Contract, the Settlement Agreement,
or any other written agreement between Vendor and Owner, and
such failure to pay continues for a period of five (5)
Business Days after Vendor gives Owner written notice thereof
(in such case, a "Payment Default"); or
(b) (i) Owner materially breaches any of its other
non-monetary, material obligations under this Contract, the
Settlement Agreement, or under any other agreement between
Owner, its parent, or any of their respective subsidiaries and
Vendor or any of its subsidiaries, such breach is curable and
after the Vendor having provided written notice to Owner
thereof, the Owner shall have failed (A) to commence to cure
the default within five (5) Business Days of Owner's receipt
of such notice, and (B) to diligently pursue such cure and
remedy the breach entirely within ninety (90) days following
such notice, except for a non-monetary default of third party
products or software provided to Owner by Vendor, where such
default or cure period is in violation of such agreements
between Vendor and the third party provider; or (ii) Owner
shall have persistently and materially breached any of its
other non-monetary, material obligations under this Contract,
the Settlement Agreement, or under any other agreement between
Owner, its parent, or any of their respective subsidiaries and
Vendor or any of its subsidiaries, such breach is not curable,
and Vendor shall have provided written notice to Owner
thereof.
(c) Any material representation and warranty made by
Owner in the Settlement Agreement, Amendment No. 5 or any
subsequent amendment of this Contract executed and delivered
by Owner and Vendor, shall prove to have been false or
incorrect when made in any material respect; or
(d) Except for the chapter 11 bankruptcy cases commenced
by Owner and its affiliates as of April 13, 2003 and any
adversary or related proceedings commenced specifically within
the context of such bankruptcy cases (collectively, the
"Pending Chapter 11 Cases"), the Owner, its parent, or any of
their respective subsidiaries (i) files a voluntary petition
in bankruptcy or has an involuntary petition in bankruptcy
filed against it that is not dismissed within sixty (60) days
of such involuntary filing, (ii) admits the material
allegations of any petition in bankruptcy filed against it,
(iii) is adjudged bankrupt, (iv) makes a general assignment
for the benefit of its creditors, or if a receiver is
appointed for all or a substantial portion of its assets and
is not discharged within sixty (60) days after his
appointment, or (v) commences any proceeding for relief from
its creditors in any court under any federal or state
bankruptcy or insolvency statutes, and any such filing,
proceeding, adjudication or assignment as described herein
above shall otherwise
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materially impair the Owner's ability to perform its
obligations under this Contract; or
(e)(i) the Owner, its parent, or any of Owner's subsidiaries
is in default of any indebtedness, lease, obligation, or
liability (including, without limitation, indebtedness arising
under the New Senior Notes (as defined in the Owner's chapter
11 plan of reorganization)) which indebtedness, lease,
obligation or liability has an outstanding principal balance
of at least Twenty-Five Million Dollars (U.S. $25,000,000.00)
in the aggregate ("Material Contract"); (ii) Owner, its
parent, or any of their respective subsidiaries has been
served with notice of such Material Contract Default under the
terms of such Material Contract, if and to the extent notice
is required thereunder; (iii) such Material Contract Default
would permit the lender, lessor or other counter-party under
such Material Contract to accelerate all amounts outstanding
thereunder; and (iv) such Material Contract Default has not
been cured, waived or discharged in full (any such default
defined in this subsection (e) shall be referred to herein as
a "Material Contract Default"); or
(f) the Pending Chapter 11 Case of Owner, or its parent,
is converted to a case under Chapter 7 of the United States
Bankruptcy Code; or
(g) Owner fails within ten (10) Business Days of the
Final Approval Date to merge CP1 with and into Owner and to
transfer to Owner all of the CP1 Assets as described in the
Settlement Agreement (the "CP1 Event of Default").
24.7.2 Remedies.
(i) Upon the occurrence of any one or more Owner Event(s)
of Default, and subject to Section 24.7.2(ii) and (iii),
Vendor shall have the right in its sole discretion and without
prejudice to any other rights or remedies which it may have
under this Contract or at law or in equity, to exercise one or
more of the following remedies (which are cumulative and not
exclusive of any other right or remedy):
(a) immediately terminate this Contract in its
entirety and suspend performance hereunder (including
suspension of performance of all outstanding Purchase Orders),
without any further obligation or liability to Owner except
with respect to Products or Software already shipped and
Services already performed;
(b) (i) suspend all performance upon any pending
Purchase Order; (ii) suspend shipment of all Products and
Software; (iii) suspend performance of all Services and Work;
and/or (iv) reject any and all
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Purchase Orders submitted by the Owner (whether or not such
Purchase Orders have been accepted previously);
(c) accelerate and demand payment for any and
all amounts then outstanding and owing to Vendor by Owner;
(d) immediately terminate any and all
outstanding credit terms and/or credit facilities in effect
between the Vendor and the Owner; and/or
(e) proceed to collect all amounts owing by
Owner to Vendor by any means permitted by applicable law.
(ii) Notwithstanding the foregoing subsection 24.7.2:
(a) If a Payment Default occurs and is
continuing, and no other Owner Event of Default has occurred
and is continuing (other than a Material Contract Default),
and Owner fails to cure such Payment Default and pay all
outstanding amounts (as to which there is no good faith valid
dispute) owing to Vendor within five (5) Business Days of the
date of such Payment Default, then Vendor shall be entitled to
exercise one or more of the remedies specified in subsection
24.7.2 (i)(b) through (e), but Vendor shall not exercise the
remedy in subsection 24.7.2 (i)(a) except as permitted in
subsection 24.7.2(ii)(b); and
(b) If a Payment Default occurs and Owner fails
to cure such Payment Default and pay all outstanding amounts
(as to which there is no good faith valid dispute) owing to
Vendor (including, without limitation, such amounts that have
been invoiced but are not yet due) within thirty (30) calendar
days of the date of such Payment Default, then Vendor shall be
entitled to exercise one or more of the remedies provided in
Subsection 24.7.2 (i)(a) through (e), including, without
limitation, the right to terminate this Contract.
(c) Prior to March 31, 2005, if Owner cures all
Payment Defaults and pays all outstanding amounts (as to which
there is no good faith valid dispute) owing to Vendor
(including, without limitation, such amounts that have been
invoiced but are not yet due) within thirty (30) calendar days
of the date of any such Payment Default (and only if such
condition precedent has been satisfied), then Vendor shall
accept and perform the Work specified in all future Purchase
Orders for Products, Services, Software or other items of Work
and resume performance on all pending Purchase Orders, resume
shipment of all Products and Software, and resume performance
of all Services and Work under suspended Purchase Orders,
provided that: (i) such Purchase Orders are submitted under
and in accordance with this Contract, (ii) such Purchase
Orders are submitted to Vendor with payment in full of the
prices, fees, charges and
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Taxes for the Products, Services, Software or Work referenced
in such Purchase Orders at the time of submission of such
Purchase Orders, or in the case of pending or suspended
Purchase Orders, Owner shall have paid all of the unpaid
balance therefore to Vendor, and (iii) no other Owner Event of
Default has occurred and is continuing (except for a Material
Contract Default).
(d) If a Material Contract Default occurs and is
continuing, and no other Owner Event of Default has occurred
and is continuing, then Vendor shall be entitled only to
exercise the remedies specified in subsection 24.7.2 (i)(d)
above.
(e) Vendor's acceptance of Purchase Orders shall
not be deemed a waiver of any Owner Event of Default.
(f) If the CP1 Event of Default occurs, then
Vendor shall be entitled to exercise all of the remedies
specified in Section 24.7.2 above.
Nothing in Section 24.7.1 or 24.7.2 shall: (a) allow Vendor to
suspend or terminate its performance obligations under
Sections 2.8, 12, 13, 14, 15, 16.3, 18, 19, 20, 23, 24 or 26
of this Contract; or (b) relieve Owner of its payment or
performance obligations that survive by their terms the
termination of this Contract.
Any and all references in Section 24.7 to "good faith dispute"
arising with respect to amount(s) owing, shall apply only to
the disputed portion of such amount(s) and shall not otherwise
relieve the Owner of its timely payment obligations with
respect to the undisputed portion of such amount(s)."
2.23 Effective as of the Settlement Date, Section 24.8 of the
Contract shall be and is hereby amended by deleting Section 24.8(a) of the
Contract, inserting and adding in its place the phrase "[Intentionally omitted]"
and by deleting the last sentence of Section 24.8(b) and adding and inserting in
its place the following sentence: "In the event of termination pursuant to this
subsection 24.8(b), each party's obligations to perform shall be suspended
except for those obligations contained in section 2.8, 12, 13, 14, 15, 16.3, 18,
19, 20, 23, 24 and 26, or as otherwise required by law, provided, however, that
notwithstanding anything to the contrary in this section 24.8 or elsewhere in
this Contract, termination pursuant to this subsection 24.8(b) shall not relieve
Owner of its obligations with respect to any and all amounts that are or become
due under this Contract, including, but not limited to, any and all amounts that
are or become due with respect to (i) Taxes, (ii) Owner's failure to satisfy the
Discount Criteria in accordance with section 7.3 hereof, (iii) any and all
unpaid invoices for Work actually done or Products or Services actually
delivered by Vendor."
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2.24 Effective as of the Settlement Date, Exhibit B of the
Contract, titled "Discount Structure for Cricket Communications" shall be and is
hereby amended by adding the following new paragraph to Exhibit B as follows:
"Notwithstanding anything to the contrary in this Exhibit B,
except for the 5ESS Products set forth in Section 7.3 of the
Contract, all purchases of Products listed in this Exhibit B,
including any Products listed in the Discount Structure that
may be discontinued and for which a suitable replacement as to
Form, Fit and Function will be provided, shall continue to be
provided at the List Price as stated in Exhibit B, less the
discounts set forth in the Discount Structure. The applicable
List Price, as stated in Exhibit B, less the applicable
discount set forth in the Discount Structure shall remain
fixed through the Contract Term for the following family of
Products. New BTS model pricing, which takes into account the
Discount Structure, including the 10% Trigger, is included
hereto as Exhibit B1(A):
- Access Manager Hardware -----------10%
- Cell Site Hardware-----------------40%
- CDMA Hardware/Software-------------40%
- Optional Software Features---------40%
- Transmission Equipment-------------40%
- Flexent Applications Processor-----45%
Provided, however, that any Product not listed in the Discount
Structure (Products other than those listed immediately above
or the 5ESS switching products in Section 7.3 of the Contract)
will be subject to Vendor's standard List Price then in effect
at the time of purchase, less the applicable discount to be
negotiated, if any."
2.25 Effective as of the Settlement Date, Exhibit B-5 of the
Contract shall be and is hereby amended by adding a new Section 7.f. to Exhibit
B-5 of the Contract as follows:
"In addition to the foregoing, Owner shall pay to Vendor the
sum of Two Hundred Fifty Thousand Dollars ($250,000.00) in
fees ("Incremental ARMF") per each calendar quarter. The first
quarterly payment of $250,000 shall be due and payable on the
later to occur of October 1, 2003, or within five days of the
Final Approval Date (as such term is defined in the Settlement
Agreement). The remaining quarterly payments shall be payable
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on the first day of each calendar quarter thereafter beginning
on January 1, 2004, and continuing on the first day of each
calendar quarter thereafter through the Contract Term.
Incremental ARMF shall be inclusive of fees for Remote
Technical Support ("RTS") for CBX500 wireless Products and RTS
for PSAX2300 wireless Products ("RTS-Lite")."
2.26 Effective as of the Settlement Date, the Contract shall be and
is hereby amended by adding a new Exhibit W "Market Substantial Completion
Dates," attached to this Amendment as Exhibit 1, which sets forth the Market
Substantial Completion dates for purposes of determining (i) the anniversary
dates for the calculation of fees due under ARMF and OSF and (ii) the Warranty
Period for Systems to the extent the Warranty Period is determined based upon
the Substantial Completion Date. Should there be a conflict between this Exhibit
W and Exhibit S regarding the Market Substantial Completion dates, then Exhibit
W shall supersede Exhibit S.
2.27 REMOVED PROVISIONS. Effective as of the Settlement Date, the
text in each of Sections 6, 14.2.1(a)(ii), 16.2, 16.2.1, 16.4, 16.5, 20.3(3),
the section of Exhibit L titled "Standard Intervals" and Section 13 of Amendment
No. 2 of the Contract shall be and is hereby deleted in its entirety; and the
following phrase shall be and hereby is inserted and added in each such Section
where the text was deleted:
"[Intentionally omitted]"
2.28 Effective as of the Settlement Date, references to "Contract"
or "SEPA" shall mean the Contract as amended by this Amendment.
ARTICLE III
SECURITY INTEREST
3.1 SECURITY INTEREST. Owner hereby grants to Vendor a lien and
purchase money security interest (a "PMSI") on and in each item of Equipment or
other good sold on and after the Effective Date to Owner by Vendor until such
time as Vendor receives payment in full from Owner for such item or other good
that is subject to a PMSI (the "Collateral"). Accordingly, the applicable PMSI
for a given item of Equipment or other good sold to Owner after the Effective
Date shall be deemed released in full by Vendor upon Vendor's receipt of payment
from Owner for such item of Equipment or other good, and no PMSI shall attach to
any item of Equipment or other good sold to Owner for which Vendor has received
full payment in advance.
3.2 PERFECTION OF VENDOR'S SECURITY INTERESTS.
(a) Owner agrees to cooperate and join, at Vendor's
expense, with Vendor in taking such reasonable steps as are necessary to perfect
or continue the perfected status of the security interests granted hereunder,
including, without limitation, authorization of financing statements, amendments
thereto and continuation statements.
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(b) Vendor may at any time and from time to time, file
financing statements, continuation statements and amendments thereto in
furtherance of the security interests granted hereunder that describe the
Collateral in particular or in general and which contain any other information
required by the Uniform Commercial Code for the sufficiency or filing office
acceptance of any financing statement, continuation statement or amendment,
including whether Owner is an organization, the type of organization and any
organization identification number issued to Owner. Owner agrees to furnish any
such information to Vendor promptly upon request. To the extent the applicable
UCC provisions require execution of any such financing statements, continuation
statements or amendments to be signed by Owner, Owner shall promptly execute
them when presented by Vendor, subject to Owner reasonable review thereof.
Vendor agrees to provide Owner with a copy of each Uniform Commercial Code
financing statement, continuation statement or amendment filed pursuant to this
Section 3.2.
ARTICLE IV
MISCELLANEOUS
4.1 RATIFICATION AND CONFIRMATION. Except as amended and
supplemented by this Amendment, all of the terms and provisions of the Contract
shall remain in full force and effect and, except as expressly amended by this
Amendment, are hereby ratified and confirmed.
4.2 COOPERATION; OTHER DOCUMENTS. At all times following
the execution of this Amendment, each of the parties hereto agree to execute and
deliver to the other party , or shall cause to be executed and delivered to the
other party such additional agreements, instruments and documents, and shall do
or cause to be done all such acts and things, as the other party may reasonably
deem to be necessary or desirable and to assure the other party of the benefit
of this Amendment and the documents comprising or relating to this Amendment.
4.3 SES, RS&R AND RTS PROGRAMS. Vendor will offer to
Owner Vendor's Spare Exchange Services ("SES"), Repair Service and Return
("RS&R"), Remote Technical Support for CBX500 wireless Products ("RTS") and
PSAX2300 wireless Products ("RTS-Lite") upon execution of this Amendment by all
parties hereto. Owner and Vendor will enter into separate agreements for the
provision of SES on and after the Settlement Date, the provision of RS&R on and
after the Filing Date, and the provision of RTS and RTS-Lite to be made
retroactive to August 20, 2003, all substantially in the form of the
documentation Vendor has already provided to Owner regarding such services.
4.4 INTEGRATION. This Amendment, the Settlement
Agreement, the Contract (as amended by this Amendment), and all documents and
instruments executed in connection herewith or otherwise relating to this
Amendment, constitute the sole agreement of the parties with respect to the
subject matter hereof and thereof and supersede all oral negotiations and prior
writings with respect to the subject matter hereof and thereof.
4.5 AMENDMENT AND WAIVER. No amendment of this Amendment
, and no waiver, discharge or termination of any one or more of the provisions
thereof, shall be effective unless set forth in writing and signed by all
parties hereto.
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4.6 SUCCESSORS AND ASSIGNS. This Amendment and the
Contract: (i) shall be binding upon Vendor and Owner and upon their respective
heirs, nominees, successors and assigns, and (ii) shall inure to the benefit of
Vendor and Owner; provided, however, that Owner may not assign any rights
hereunder or any interest herein without obtaining the prior written consent of
Vendor, and any such assignment or attempted assignment shall be void and of no
effect with respect to Vendor.
4.7 COUNTERPARTS; EFFECTIVENESS. This Amendment may be
executed by facsimile signature in any number of counterparts and by the
different parties on separate counterparts, and each such counterpart shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the
parties hereto have caused this Amendment No. 5 to be executed by their duly
authorized representatives effective as of the date first above written.
LUCENT TECHNOLOGIES INC., CRICKET COMMUNICATIONS, INC.,
a Delaware corporation a Delaware corporation
By: /s/ FRANK A. DELCORE By: /s/ S.D. HUTCHESON
------------------------------ ------------------------------
Name: Frank A. DelCore Name: S.D. Hutcheson
---------------------------- ----------------------------
Title: Managing Director Title: CFO
--------------------------- ---------------------------
Date: 9/23/03 Date: 9/23/03
---------------------------- ----------------------------
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