Exhibit 2.1
CDMA AMENDMENT
TO CELLULAR SYSTEM PURCHASE AGREEMENT BETWEEN
MOTOROLA, INC. AND TRICOM, S.A.
This Code Division Multiple Access Amendment ("CDMA Amendment")
to the Cellular System Purchase Agreement and to the Installation
and Optimization Services Agreement, both signed on June 7, 1994
is entered into between Motorola, Inc., a Delaware corporation,
by and through its Cellular Infrastructure Group with offices at
1701 Golf Road, Rolling Meadows, Illinois 60008 U.S.A.
("Motorola") and Tricom, S.A., formerly known as Telepuerto San
Isidro, S.A., a company in Dominican Republic with offices at
Number 95, Lope de Vega Avenue, Santo Domingo, National District,
Dominican Republic ("Tricom"), on this thirteenth (13th) day of
August, 1998. Motorola and Tricom may be referred to herein as a
"Party" or collectively as the "Parties."
A. WHEREAS, on June 7, 1994, Motorola and Tricom entered into a
Cellular System Purchase Agreement ("Purchase Agreement")
for the supply of equipment and Software for an analog
cellular system in the Dominican Republic (the "Area"); and
B. WHEREAS, on June 7, 1994, Motorola and Tricom entered into
an Installation and Optimization Services Agreement ("I&O
Agreement") for the services rendered in association with
the analog cellular system; and
C. WHEREAS, Tricom has obtained or will obtain a license to
operate a cellular radiotelephone system utilizing IS-95
code division multiple access technology in the Area; and
D. WHEREAS, Motorola has the hardware and Software products for
a CDMA cellular system designed to operate in the 1900 MHz
band; and
E. WHEREAS, Motorola desires to sell and license, and Tricom
desires to purchase and license a CDMA Cellular System (as
defined below) for the Area as set forth in this CDMA
Amendment, the Purchase Agreement, and the I&O Agreement.
NOW THEREFORE, in consideration of the mutual obligations
contained herein, the Parties hereby agree to amend the Purchase
Agreement as set forth below.
1. SCOPE OF CDMA AMENDMENT
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This CDMA Amendment establishes the terms pursuant to which
Motorola shall sell and license to Tricom, and Tricom shall
purchase and license from Motorola the Initial CDMA Cellular
System, the CDMA Expansion Products, Software, and Services
as defined herein and within Attachment "A."
2. DEFINITIONS
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The following definitions shall be added to Section 1 of the
Purchase Agreement.
Code Division Multiple Access ("CDMA") Cellular System
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"CDMA Cellular System" shall mean the EMX switching
equipment, base site controller, base station RF equipment,
the Software licensed and other products furnished by
Motorola pursuant to this CDMA Amendment for 150,000 lines
as set forth in the Attachment "A" and the subsequent
amendments to the Attachment "A."
Conditional Acceptance and Final Acceptance
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"Conditional Acceptance" shall occur when the Parties
complete the Acceptance Test Plans ("ATP"). In the event
that Tricom places Phase 1 of the Initial CDMA Cellular
System into Commercial Service before the Parties complete
the ATPs, Motorola agrees to nevertheless complete said ATPs
with Tricom. "Final Acceptance" shall occur and be evidence
when Tricom signs the Acceptance Completion Certificate at
that point in time when all Punchlist items have been
resolved.
With respect to the CDMA Expansion Product and Services, and
considering that Tricom has entered into an IOS Agreement,
Conditional and Final Acceptance shall occur in the same
manner as provided above with respect to the Initial CDMA
Cellular System.
Initial CDMA Cellular System
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"Initial CDMA Cellular System" shall mean the equipment set
forth in Attachment "A" for the first 36,335 lines of the
CDMA Cellular System.
"Phase 1 of the Initial CDMA Cellular System" shall
mean one (1) EMX 5000, one (1) CBSC, and the associated
equipment for eighteen (18) cell sites.
"Phase 2 of the Initial CDMA Cellular System" shall
mean the additional equipment for the first 36,335
lines as specified in Attachment "A."
CDMA Expansion Product
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"CDMA Expansion Product" shall mean all FNE, Software and
other products purchased to add to or expand the Initial
CDMA Cellular System as summarized in the Attachment "A" or
subsequent amendments to the Attachment "A" as may be
mutually agreed and signed by both Parties hereto.
All other definitions in the Purchase Agreement and the I&O
Agreement shall remain in effect.
3. PAYMENT TERMS AND PRICING
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3.1. General Payment Terms
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Motorola agrees to delete the requirement of a letter
of credit as specified in Section 5.1.1 of the Purchase
Agreement. Motorola agrees to allow Tricom to use an
open account. Motorola reserves the right to revoke
the privilege of an open account in the event that
Tricom is not in good standing. The Parties agree to
work together to determine such good standing status.
In addition, due to the volume purchase of this CDMA
Cellular System, Motorola agrees to extend the payment
term in Section 5.1.2 of the Purchase Agreement to
seventy-five (75) days from the invoice date.
In the event that Tricom has not made a payment after
said seventy-five (75) days, Motorola agrees to advise
Tricom in writing within ten (10) days of such
nonpayment. Motorola further agrees to reduce the
service fee to the rate of one percent (1%) for any
amounts due which remains unpaid as specified in
Section 5.1.5 of the Purchase Agreement.
3.2. Invoicing Terms
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For Phase 1 and Phase 2 of the Initial CDMA Cellular
System and the CDMA Expansion Product, the following
invoicing terms shall apply:
(a) Upon the shipment date, Motorola shall invoice
Tricom seventy percent (70%) of value of that
shipment for Phase 1 or Phase 2 of the Initial
CDMA Cellular System or CDMA Expansion Product.
(b) Upon Conditional Acceptance, Motorola shall
invoice Tricom the remaining thirty percent (30%)
of the value of Phase 1 or Phase 2 of the Initial
CDMA Cellular System or CDMA Expansion Product.
For the application of Section 14 Force Majeure of the
Purchase Agreement, performance shall mean payment.
3.3. Pricing
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The equipment and pricing for the 150,000 lines of the
CDMA Cellular System is set forth in the Attachment "A"
Summary Page. By signing this CDMA Amendment, Tricom
commits to purchase and license the equipment and
Software for said 150,000 lines of the CDMA Cellular
System at the price set forth in the Attachment "A."
In addition, Attachment "A" details the equipment and
pricing for the Initial CDMA Cellular System. Tricom
agrees to issue a purchase order for said Initial CDMA
Cellular System concurrent with the execution of this
CDMA Amendment.
3.4. Pricing for Additional Equipment
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In the event that Tricom desires to purchase additional
equipment for the CDMA Cellular System, Motorola agrees
to provide Tricom with an additional twenty-five
percent (25%) discount on the RF equipment in addition
to the current discount level for the analog RF
equipment which Motorola gives to Tricom's partner,
Motorola Network Management Group.
3.5. Future Prices
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For a period of five (5) years after the Parties sign
this CDMA Amendment, Motorola agrees to extend to
Tricom the same prices as specified in Attachment A for
Tricom's volume purchases of additional equipment in
increments of a minimum of fifty thousand (50,000)
lines, based on the same design criteria as the CDMA
Cellular System.
4. TECHNICAL SPECIFICATIONS AND PROJECT REQUIREMENTS
4.1. The Parties agree to add the CDMA technical
specifications attached hereto and incorporated herein
as Attachment B1.
4.2. Motorola agrees to comply with tile following
requirements in addition to adhering to the technical
specifications in Attachment B1:
4.2.1 Motorola acknowledges that Tricom may use the
services of an independent third party to
assist Tricom with the CDMA Cellular System
including such responsibilities as review and
analyze the system design for the Initial
CDMA Cellular System and the CDMA Expansion
Product.
4.2.2 Motorola warrants the system design,
coverage, capacity and call quality of the
CDMA Cellular System. This Motorola warranty
is based on the CDMA Cellular System capacity
verification Utilizing Motorola's propagation
tool in conjunction with another independent
tool to audit the capacity of the Initial
CDMA Cellular System and the CDMA Expansion
Product and mutually agreed metric drive
tests on the cell site cloisters which
Motorola agrees to perform prior to
Conditional Acceptance of that cluster. In
the event that the Parties determine that the
mutually agreed criteria have not been met,
Motorola will first attempt to meet such
criteria through reviewing the installation
and optimization of the CDMA Cellular System.
If, after Motorola reviews the installation
and optimization of the CDMA Cellular System,
the Parties determine that the criteria are
still not met, then Motorola agrees to
engineer a solution to meet the criteria and
provide Motorola-manufactured Fixed Network
Equipment, at its own expense, for that
solution.
4.2.3 System Reliability Outage Credits.
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Motorola agrees to provide Tricomwith an
equipment purchase credit of (i) US
$40,000.00 (forty thousand US dollars) for
any unplanned system outage for a duration of
more than sixty (60) minutes and (11) $500.00
(five hundred US dollars) for each additional
minute after said sixty (60) minutes. Such
outage must (i) render the entire CDMA
Cellular System inoperative or make the
completion of all outgoing or ingoing calls
impossible and (ii) be due solely to the
fault of Motorola-supplied equipment or
Motorola personnel. The total amount of
Motorola's credits shall not exceed US
$1,000,000.00 (one million US dollars). At
the time when Tricom issues the next valid
purchase order for CDMA Expansion Product,
Motorola shall apply these credits, at its
option, to either future purchases of
Motorola equipment or Tricom's open
receivables.
4.2.3 Motorola agrees to provide Tricom with the
following: (i) an Implementation Development
Plan ("IDP") which shall include a list of
the personnel assigned to this project, the
services which Motorola shall provide,
specific locations for the Sites, demarcation
of each Party's respective responsibilities,
etc., (ii) a progress report on a monthly
basis indicating the status of the project,
(iii) a list of recommended spare parts which
Tricom may purchase at its option; such list
is set forth in Attachment A1. The
information regarding expanding the major
system components (i.e., EMX 5000, CBSCS, and
the BTS 4852) is set forth in the Attachment
B1 Technical Specifications.
5. ACCEPTANCE TEST PLAN
The Parties agree to add the Acceptance Test Plans for the
CDMA Cellular System as Attachment "C," and the critical
path schedule which shall set forth the parties respective
responsibilities as Attachment "I" to this CDMA Amendment.
6. SCHEDULE, DELIVERY, AND TERMINATION
The Parties agree to add a schedule for the Initial CDMA
Cellular System as Attachment "I" to this CDMA Amendment.
This schedule shall set forth the Parties respective
responsibilities related to the Initial CDMA Cellular
System.
6.1. Delivery. Motorola agrees to ship, install, and
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prepare through hardware optimization Phase 1 for
Conditional Acceptance in fourteen (14) weeks from the
date that Motorola receives a valid purchase order from
Tricom, excluding each day from the time that Tricom's
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freight forwarder, Trans Mar, signs for each of
Motorola's shipments until the time after Tricom
notifies Motorola, and Motorola verifies and signs that
each such shipment is at the respective Site.
Motorola further agrees to ship, install, and prepare
Phase 2 of the Initial CDMA Cellular System for
Conditional Acceptance within twelve (12) months from
the date that Motorola receives a valid purchase order
from Tricom for said Phase 2.
Tricom agrees to have each Site ready for installation
according to the mutually agreed matrix for each Site.
Tricom's sales and marketing plans are established
based on the schedule for the Initial CDMA Cellular
System. Therefore, time is of the essence with this
CDMA Amendment. Motorola agrees to promptly notify
Tricom, in writing, of any delays and/or any actual or
potential labor dispute which delay or threatens to
delay, the timely performance of this CDMA Amendment.
6.2. Delays. If Motorola fails to have Phase I of the
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Initial CDMA Cellular System ready for Conditional
Acceptance within the fourteen (14) weeks with the
exclusion specified in 6.1 above, and such failure is
solely attributable to Motorola, Motorola agrees to pay
liquidated damages in the amount of US $50,000.00
(fifty thousand US dollars), for each day of delay,
Furthermore, if Motorola fails to have Phase 2 of the
Initial CDMA Cellular System ready for Conditional
Acceptance within the twelve (12) months specified in
6.1 above, and such failure is solely attributable to
Motorola, Motorola agrees to pay liquidated damages in
the amount of US$50,000.00 (fifty thousand US dollars),
for each day of delay.
The Parties agree that the maximum amount of liquidated
damages which Motorola could pay to Tricom for delays
of either Phase 1 and Phase 2 is a total for both
Phases of US $1,000,000.00 (one million US dollars).
Motorola shall apply, at its option, any monies owed to
Tricom for liquidated damages to either (i) future
purchases of Motorola equipment or (i) Tricom's open
receivables, said credits shall apply to the next valid
purchase order which Tricom issues for CDMA Expansion
Product.
The Parties agree that Motorola will not pay any
liquidated damages until after the six (6) weeks period
as specified in Section 6.4 below. The Parties further
agree that in the event that Tricom opts to terminate
this CDMA Amendment and return the Motorola-supplied
equipment of Phase 1 as also specified in Section 6.4,
then Motorola shall not pay Tricom any such liquidated
damages.
6.3. Incentives. If the Parties complete the ATPs for Phase
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1 of the Initial CDMA Cellular System prior to the
fourteen (14) weeks as specified in Section 6.1 above,
Tricom agrees to pay Motorola an amount of US$50,000.00
(fifty thousand US dollars) as an incentive to
Motorola, for each day that Motorola is early.
Furthermore, if the Parties complete the ATPs for Phase
2 of the Initial CDMA Cellular System prior to the
twelve (12) month period as specified above, Tricom
agrees to pay Motorola an amount of US$50,000.00 (fifty
thousands US dollars) as an incentive to Motorola, for
each day that Motorola is early.
The Parties agree that the maximum amount of money
which Tricom could pay to Motorola for incentives for
either Phase 1 and Phase 2 is a total for both Phases
of US $1,000,000.00 (one million US dollars).
Tricom agrees to pay such incentives to Motorola at the
time when Tricom issues the next valid purchase order
to Motorola for CDMA Expansion Product.
6.4. Termination. If Motorola does not pass the System
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Level ATPs for the Initial CDMA Cellular System, the
Parties agree to work together to resolve the
outstanding issues of those System Level ATPs which
were not successful. if the Parties cannot resolve the
outstanding issues within six (6) weeks from the
completion of the first System Level ATP, and those
unresolved issues were due solely to Motorola, then
Tricom, at its option, may immediately terminate this
CDMA Amendment and return the Motorola-supplied
equipment of the Initial CDMA Cellular System. In
addition, Motorola agrees to return to Tricom the money
which Tricom paid to Motorola for said Motorola-
supplied equipment.
7. OPERATION AND MAINTENANCE
Motorola agrees to perform operation and maintenance
services for a period of three (3) months from Conditional
Acceptance as defined above. Motorola agrees to install,
commission, optimize and monitor (i) the CBSC which includes
the A+ / SS7 signaling links between the CBSC and BTSs and
(ii) the EMX 5000 CDMA switch which includes the DMX links
between the CDMA System and Tricom's analog network and the
R1 and SS7 signaling links interconnecting the CDMA System
and the PSTN.
All other network links and interconnects and / or network
elements of Tricom are not included in the operation and
maintenance services.
Tricom may, at its option, purchase operation and
maintenance services after the three (3) month period
specified in the paragraph above, and Motorola agrees to
provide a quote for such additional services, upon Tricom's
written request.
8. FNE WARRANTY
Motorola agrees to warranty the FNE for the CDMA Cellular
System in accordance with the terms of Section 6 Warranties
of the Purchase Agreement.
9. SOFTWARE
Motorola agrees to license the Software for the CDMA System
in accordance with the term of Exhibit F Software License to
the Purchase Agreement.
10. YEAR 2000 WARRANTY
Motorola warrants that the CDMA Cellular System which
Motorola ships to Tricom pursuant to this CDMA Amendment
shall be able to accurately process date data from, into and
between the year 1999 and the year 2000, including leap year
calculations, as necessary for the primary communication
purpose(s) for which the specific CDMA Cellular System is
designed when Tricom uses the CDMA Cellular System in
accordance with Motorola's documentation, provided that all
other products used in combination with the CDMA Cellular
System properly exchange date data with the CDMA Cellular
System. This warranty shall extend through May 1, 2000.
Shipments prior to January 1, 1999 may require upgrades to
be year 2000 ready. Motorola shall make hardware
modifications (including upgrades) available, at no
additional charge, for those modifications which are
required solely to accommodate Year 2000 ready software
modifications (including upgrades). All other hardware
modifications to accommodate software modifications
(including upgrades) shall be made available at all
additional charge.
IN THE EVENT OF A BREACH OF THIS YEAR 2000 WARRANTY,
TRICOM'S SOLE AND EXCLUSIVE REMEDY SHALL BE TO REPAIR AND /
OR REPLACE.
11. ARBITRATION
Any dispute arising out of or in connection with this CDMA
Amendment shall be submitted for arbitration in Miami,
Florida U.S.A. to be conducted by the American Arbitration
Association in accordance with its substantive and
procedural rules, with the exception of intellectual
property rights which shall be submitted to a court of law
in the State of Illinois. All such proceedings shall be
conducted in English and a daily transcript in shall be
prepared in English. In the event that a dispute arises
between Tricom and Motorola, three arbitrators shall be
selected as follows. One shall be selected by Tricom arid
the other one by Motorola, and the third arbitrator shall be
selected by the other two arbitrators, which third
arbitrator shall concurrently serve as Chairman of the
arbitration panel; provided, that if either Tricom or
Motorola does not select an arbitrator, then the arbitrator
selected by the other Party may select the remaining two
arbitrators. All of the arbitrators shall be fluent in both
the English and Spanish languages. The English language
text of this CDMA Amendment shall be used in any arbitration
proceedings commenced pursuant to this Section. Arbitration
awards shall be final and binding upon the parties hereto.
The costs of arbitration shall be reasonably determined by
the arbitration panel. Any award of the arbitrators shall
be enforceable by any court having jurisdiction over the
Party or Parties against which the award has been rendered,
or wherever assets of the Party or Parties against which the
award has been rendered call be located.
12. AUTHORITY
Each party represents and warrants that (i) it has obtained
all necessary approvals consents and authorization to enter
into this CDMA Amendment and to perform and carry out its
obligations, (ii) the persons executing this CDMA Amendment
have express authority to do so, and in so executing this
CDMA Amendment, bind the party, and (iii) this CDMA
Amendment is a valid and binding obligation of such party,
enforceable in accordance with its terms.
13. RATIFICATION AND INTEGRATION
Except as specifically stated in this CDMA Amendment,
nothing contained herein shall in any way alter, waive,
annul, vary or affect any terms, condition or provision of
the Purchase Agreement or the I&O Agreement. It is the
intent of the Parties that all of the terms, conditions and
provisions of the Purchase Agreement and the I&O Agreement
shall be in all other respects ratified, confirmed and
continue in full force and effect. This CDMA Amendment and
the Attachments constitute the entire agreement,
representation, whether oral or written. No modification,
amendment or other change may be made to this CDMA Amendment
unless reduce to writing and executed by authorized
representatives of both Parties.
IN WITNESS WHEREOF, the Parties hereto have caused this CDMA
Amendment to be duly executed by their duly authorized officers
as of the day and year first above written.
MOTOROLA, INC. TRICOM
CELLULAR INFRASTRUCTURE
GROUP
BY: /s/ Daniel C. Przybylski BY: /s/ Marcos J. Troncoso
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NAME: Daniel C. Przybylski NAME: Marcos J. Troncoso M.
TITLE: Corporate Vice President TITLE: Executive Vice-
and Regional Director of President and
Operations Caribbean and Directors of
Latin America Secretary of the
Board of Tricom, S.A.