CONFIDENTIAL TREATMENT REQUESTED*
Exhibit 10.1
LNM00NMYQ03001
ADDENDUM NUMBER ONE
5ESS(R) SWITCH AND TRANSMISSION SYSTEMS
PURCHASE AGREEMENT
BETWEEN CHOICE ONE COMMUNICATION INC.
AND LUCENT TECHNOLOGIES INC.
This Product Purchase Addendum One Number LNM00NMYQ03001 (hereinafter
"Addendum") is made effective as of the January 1, 2000 ("Effective Date"), by
and between Choice One Communication Inc., a Delaware corporation with offices
located at 000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxx Xxxx 00000
(hereinafter "Customer"), and Lucent Technologies Inc., a Delaware corporation,
with offices located at 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx 00000,
(hereinafter "Seller").
WHEREAS, Choice One Communication Inc. and Seller have entered into a certain
General Agreement, LNM980612RMCO (the "General Agreement") effective June 17,
1998, setting forth the terms and conditions pursuant to which Seller agreed to
supply and Customer agreed to procure certain Seller Products, Licensed
Materials or Services (as such terms are defined therein); and
WHEREAS, Customer and Seller desire to establish in this Addendum discounts, and
additional terms and conditions applicable to Customer's purchase and/or license
for use, as appropriate, of certain of Seller's 5ESS(R) Switching Systems,
7R/E(TM) Packet Solutions (7R/E), Transmission Systems and related Licensed
Materials and Services and Operations Software during the term of this Addendum,
as set forth below,
NOW THEREFORE, in consideration of the mutual promises hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1.0 SCOPE OF ADDENDUM
Notwithstanding anything to the contrary contained within the General Agreement,
this Addendum shall govern any purchase order placed by Customer during the Term
for Seller's 5ESS Switching Systems, 7R/E Packet Solutions, Transmission
Systems, Power Systems, Communications Software Product, Network Product Group
Products and related Licensed Materials and Services. This Addendum is issued
pursuant to and incorporates the non-conflicting terms and conditions of the
General Agreement. In the event of any conflict or inconsistency between the
terms of this Addendum and the terms of the General Agreement, the terms of this
Addendum shall prevail.
* Portions of this agreement have been omitted and filed separately with the
Commission pursuant to an application for confidential treatment under Rule
24b-2. 1
By virtue of placing orders with Seller or using any Products, Licensed
Materials or Services provided hereunder, Customer agrees to be bound to the
obligations and limitations set forth in this General Agreement respecting such
Products, Licensed Materials or Services.
2.0 TERM
The term of this Addendum shall commence on the Effective Date. The Term of the
General Agreement his hereby amended so that the General Agreement and this
Addendum shall expire on December 31, 2002.
REFER TO THE GENERAL AGREEMENT AND MODIFY AS FOLLOWS:
ARTICLE 1.9 INVOICES AND TERMS OF PAYMENT: (a) For Products, Licensed
Materials and Services (including transportation charges and taxes, if
applicable) Seller will invoice Customer, all amounts due for Products and
Licensed Materials upon shipment and all amounts due for Services, upon
completion of Services or, in either event, as soon as practical thereafter.
Customer shall pay such invoiced amounts for receipt by Lucent
within( ) of the invoice date. Xxxx and Hold Products will
be invoiced by Seller upon the earlier of (i) completion of assembly at Seller's
facility or (ii) upon stocking at Customer's designated location. Such invoice
will serve as Seller's notification that Xxxx and Hold Products are complete and
ready to be released by Customer for final shipment.
(b) Customer shall pay all amounts due Seller hereunder-using Electronic Funds
Transfer ("EFT"). EFT payments by Customer shall be made to the following
account of Seller or such other account as is subsequently designated by Seller
in writing and, concurrent with the EFT payment, Customer shall fax a copy of
the remittal to Seller's Manager Cash Operations at 000-000-0000.
Chase Manhattan Bank
New York, New York
Account Name: Lucent Technologies Inc.
(
)
(c) If Customer fails to pay any invoiced amount when due, the invoiced
amount will be subject to a late payment charge at the rate of
( ) per month, or portion thereof, of the amount due (but not to
exceed the maximum lawful rate). Customer agrees to pay Seller's reasonable
attorneys' fees and other costs incurred by Seller in the collection of any
amounts invoiced hereunder.
(d) Customer agrees to review all invoices furnished by Seller
hereunder upon receipt and, notify Seller of any billing discrepancies within
( ) receipt of the applicable invoice. Such inquiries can be
directed to Seller in writing or by telephone. Inquiries shall be made to the
telephone number or, if in writing, to the address identified on the invoice.
2
ARTICLE 1.14 WARRANTY:
(a) Seller warrants to Customer only, that during the applicable Warranty
Periods set forth below (i) Seller's manufactured Products (exclusive of
Software) will be free from defects in material and workmanship and will conform
to Seller's Specifications for such Products; (ii) Software developed by Seller
will be free from those defects which materially affect performance in
accordance with Seller's Specifications; and (iii) Services will be performed in
a workmanlike manner and in accordance with good usage and accepted practices in
the community in which Services are provided. With respect to Products or
Software or partial assembly of Products furnished by Seller but neither
manufactured by Seller nor purchased by Seller pursuant to its procurement
Specifications ("Vendor Items"), Seller, to the extent permitted, does hereby
assign to Customer the warranties given to Seller by its vendor(s) of such
Vendor Items.
(b) For purposes of this Agreement the term "Warranty Period" means the period
of time listed below which, unless otherwise stated, commences on date of
shipment or, if installed by Seller the earliest of either: (i) acceptance by
Customer; or (ii) thirty (30) days from the date Seller submits its notice of
completion of its installation; or (iii) the date Customer first puts Products
and/or Licensed Materials into service. For Xxxx and Hold Products the warranty
will commence upon the date of stocking at Seller's facility or Customer's
designated location. The Warranty Period for any Product or Software (or part
thereof) repaired or replaced under this Section 1.14 is the period listed in
the right column below or the unexpired portion of the new Product Warranty
Period, whichever is longer.
--------------------------------------------------------------------------------
SELLER'S MANUFACTURED PRODUCTS AND SOFTWARE
WARRANTY PERIOD
--------------------------------------------------------------------------------
Base Period Repaired
New Product Product
or Part
--------------------------------------------------------------------------------
5ESS Switching Systems Products ( ) ( )
--------------------------------------------------------------------------------
7R/E Packet Solutions Product ( ) ( )
--------------------------------------------------------------------------------
CENTRAL OFFICE POWER EQUIPMENT:
--------------------------------------------------------------------------------
Associated with Switching Systems ( ) ( )
--------------------------------------------------------------------------------
Not Associated with Switching Systems ( ) ( )
--------------------------------------------------------------------------------
TRANSMISSION SYSTEMS PRODUCTS:
--------------------------------------------------------------------------------
WaveStar 2.5G ( ) ( )
--------------------------------------------------------------------------------
WaveStar 10G ( ) ( )
--------------------------------------------------------------------------------
DDM-2000 OC-3 ( ) ( )
--------------------------------------------------------------------------------
AnyMedia FAST ( ) ( )
--------------------------------------------------------------------------------
SLC 2000 Access System ( ) ( )
--------------------------------------------------------------------------------
SLC Series 5 (System and Plug In) ( ) ( )
--------------------------------------------------------------------------------
CBX500 ATM Switching ( ) ( )
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
SELLER'S MANUFACTURED PRODUCTS AND SOFTWARE
WARRANTY PERIOD
--------------------------------------------------------------------------------
Base Period Repaired
New Product Product
or Part
--------------------------------------------------------------------------------
PacketStar PSAX2300 ( ) ( )
--------------------------------------------------------------------------------
PacketStar PSAX1250 ( ) ( )
--------------------------------------------------------------------------------
Other Transmission Products (i.e., DDM Plus
Repeater Cases) ( ) ( )
--------------------------------------------------------------------------------
Network Cable Systems Products ( ) ( )
--------------------------------------------------------------------------------
All Other Products ( ) ( )
--------------------------------------------------------------------------------
SOFTWARE:
--------------------------------------------------------------------------------
5ESS Switching System Software ( ) ( )
--------------------------------------------------------------------------------
7R/E Packet Solutions Software ( ) ( )
--------------------------------------------------------------------------------
Transmission Systems Software ( ) ( )
--------------------------------------------------------------------------------
Operations Systems Software ( ) ( )
--------------------------------------------------------------------------------
All Other Software ( ) ( )
--------------------------------------------------------------------------------
(c) If, under normal and proper use, a defect or non-conformity appears in
Seller's manufactured Products or Software during the applicable Warranty Period
and Customer promptly notifies Seller in writing of such defect or
non-conformance and follows Seller's instructions regarding return of defective
or non-conforming Product or Software, Seller, at its option, will either
repair, replace or correct the same without charge at its manufacturing or
repair facility or provide a refund or credit based on the original purchase
price or license fee. If engineering or installation Services prove not to be
performed as warranted within a six (6) month period commencing on the date of
completion of the Services, Seller, at its option, either will correct the
defect or non-conforming Services or render a full or pro-rated refund or credit
based on the original charges for the Services. No Product or Software will be
accepted for repair or replacement without the written authorization of and in
accordance with instructions of Seller. Removal and reinstallation expenses as
well as transportation expenses associated with returning such Product or
Software to Seller shall be borne by Customer. Seller shall pay the costs of
transportation of the repaired or replacing Product or Software to any United
States destination designated by Customer. If Seller determines that returned
Product or Software is not defective, Customer shall pay Seller's costs of
handling, inspecting, testing and transportation and, if applicable, travel and
related expenses. In repairing or replacing any Product, part of Product, or
Software medium under this warranty, Seller may use either new, remanufactured,
reconditioned, refurbished or functionally equivalent Products or parts.
Replaced Products or parts shall become Seller's property.
(d) With respect to Seller's manufactured Products which Seller has ascertained
are not readily returnable for repair, Seller, at its option, with concurrence
from Customer, may elect to
4
(e) repair or replace the Products at Customer's site. Customer's concurrence
shall not be unreasonably withheld. If a visit to Customer's site is necessary,
reasonable prior notification will be given when access is required. Customer,
at its expense, shall make the Products accessible for repair or replacement and
shall restore the site after Seller has completed its repairs or replacement.
(e) Seller makes no warranty with respect to defective conditions or
non-conformities resulting from any of the following: Customer's modifications,
misuse, neglect, accident or abuse; improper wiring, repairing, splicing,
alteration, installation, storage or maintenance; use in a manner not in
accordance with Seller's or its vendor's Specifications, or operating
instructions or failure of Customer to apply previously applicable Seller's
modifications or corrections. In addition, Seller makes no warranty with respect
to Products which have had their serial numbers or month and year of manufacture
removed, altered and with respect to expendable items, including, without
limitation, fuses, light bulbs, motor brushes and the like. No warranty is made
that Software will run uninterrupted or error free, and in addition Seller makes
no warranty with respect to defects related to Customer's data base errors.
(f) THE FOREGOING WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER EXPRESS
AND IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CUSTOMER'S SOLE AND
EXCLUSIVE REMEDY SHALL BE SELLER'S OBLIGATION TO REPAIR, REPLACE, CREDIT, OR
REFUND AS SET FORTH ABOVE IN THIS WARRANTY.
ARTICLE 1.20 NOTICES:
(a) Any notice, demand or other communication (other than an order) required, or
which may be given, under this Agreement shall, unless specifically otherwise
provided in this Agreement, be in writing and shall be given or made by
nationally recognized overnight courier service, confirmed facsimile, or
certified mail, return receipt requested and shall be addressed to the
respective parties as follows:
If to Seller:
Lucent Technologies Inc.
Global Commercial Markets
5440 Millstream Road, E2N32
X-00 & Xx. Xxxx Xxxxxx Xxxx
XxXxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Contract Manager
5
If to Customer:
ChoiceOne Communication Inc.
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, SVP Engineering and Operations
(b) Any such notice shall be effective upon receipt. Each party may change its
designated representative who is to receive communications and notices and/or
the applicable address for such communications and notices by giving notice
thereof to the other party provided herein.
DELETE APPENDIX A IN ITS ENTIRETY AND REPLACE WITH THE FOLLOWING:
APPENDIX A
A-1.1 SCOPE OF APPENDIX A
This Appendix A (hereinafter "Appendix") shall govern any purchase order placed
by Customer during the Term for Seller's 5ESS(R) Products, 7R/E Packet Solutions
Products, Transmission Systems Products and related Licensed Materials. This
Appendix is issued pursuant to and incorporates the non-conflicting terms and
conditions of the General Agreement. In the event of any conflict or
inconsistency between the terms of this Appendix and the terms of the General
Agreement, the terms of this Appendix shall prevail. The terms Appendix and
Addendum are interchangeable within this Section.
A-1.2 DEFINITIONS
For the purpose of this Appendix, the following definitions will apply:
a) "5ESS Switching Systems Products" means the 5ESS Switch, Growth and related
Licensed Materials including, without limitation, Base Software.
b) "5ESS Switch" means any 5ESS Switch system (including the 5ESS Compact
Digital Exchange ("CDX") and 5ESS Very Compact Digital Exchange ("VCDX")).
With the exception of the VCDX, a 5ESS Switch contains at a minimum, an
Administrative Module (AM), Communications Module (CM), and at least one
(1) switch module. Any such Switch can act as a host for Optically Remote
Modules ("ORMs"), Remote Switch Modules ("RSMs"), Extended Switch Modules
("EXMs") and/or Distinctive Remote Modules (DRMs). The VCDX/DRM contains a
Sun Workstation and one (1) Switch Module.
c) "Base Software" means the operating system and related Software, and
operations, administration and maintenance features and functions, for all
Seller's switch-based platforms.
6
d) "Growth" means any 5ESS hardware or software not purchased with the
associated 5ESS Switch required to support the expansion of such 5ESS
Switch, which may include without limitation any ORMs, RSMs, DRMs or EXMs.
e) "List Price" means Seller's list price in effect at the time of order
placement.
f) "Switch Module/Switch Module 2000 (SM2000)" means a Module Control/Time
Slot Interchange Unit along with a number of Peripheral units and related
Software added to an embedded 5ESS Switch or to an existing RSM site.
g) "Peripherals" means hardware and/or Software extensions added subsequent to
the installation of the initial 5ESS Switch, or Switch Module/Switch Module
2000.
h) "Transmission Systems Products" means a DDM-2000 OC-1 Fiber Reach
Multiplexer, DDM-2000 OC-3 Multiplexer, WaveStar 2.5G, WaveStar 10G,
AnyMedia FAST, SLC(R)-2000 Access System, SLC(R)-Series 5 Carrier System,
Gateways, Routers, PacketStar PSAX2300, PacketStar PSAX1250, ATM Switch
CBX500, Integrated Access Devices (IAD), Echo Canceller, Millennia ADM
155C, or related Licensed Materials.
i) "Total Paid Purchases" means all Customers purchases of Seller's 5ESS
Switches, 7 R/E and Transmission Systems Products for which Seller has
received payment, including but not limited to hardware, software,
engineering, installation, training and documentation.
j) "7R/E Packet Solution" contains at least a minimum of one unit each of a
Call Feature Server, One-Link Manager, and Packet Gateway purchased and
installed at one time (it also may contain more than one unit of each of
these components) in addition to other 7R/E hardware and Software elements.
A 7R/E Packet Solution does not include the 5ESS Switch or circuit
switching network elements that may interface with the 7R/E Packet
Solutions products.
A-1.3 TERMS OF DISCOUNT
Any purchase orders placed pursuant to this Appendix shall reference
Contract Number ( ) to qualify for the discounts incorporated
herein. During the Term, all discounts shown in this Appendix are applicable to
all Seller's Products, and related Licensed Materials listed herein only and are
not applicable to related Services such as engineering and installation. Such
discounts shall be applied to Seller's List Price. Discounts set forth in this
Appendix will apply to all purchase orders requiring Seller's then-current
standard delivery interval.
A-1.4 CUSTOMER'S PURCHASE COMMITMENT
In consideration for the discounts, allowances, and incentives set
forth in this Appendix, Customer agrees to directly procure from Seller, during
the Term, a minimum of ( ) of Seller's 5ESS, 7R/E Packet
Solutions, Transmission Systems
7
Products, Operations Software, Profession Services, and related Licensed
Materials (the "Purchase Commitment"). In addition, as consideration of this
contract the customer agrees to give Seller exclusivity during the term of this
contract on all 5ESS Switches, ATM Switches, Optical Lightwave and Digital Loop
Carrier for narrowband services.
A-1.4.1 SELLER VOLUME PURCHASE DISCOUNTS
In addition to the Product discounts given to Customer by Seller in
this Appendix, Seller agrees to grant Customer additional Volume Purchase
Discount Credits as follows:
a) For each calendar year that the Customer purchases forty million dollars
($40 Million) or greater of Products and Services pursuant to Article A-1.4
above from Seller, the Seller will award Customer a 1% purchase credit on
said purchases to be used on future purchases of Products.
b) For each calendar quarter that the Customer purchases twelve and half
million dollars ($12.5 Million) or greater of Products and Services
pursuant to Article A-1.4 above from Seller, the Seller will award Customer
a 1% purchase credit on said purchases to be used on future purchase of
Products.
( ) above shall (
).
A-1.5 ANNUAL FORECAST
Within thirty (30) days of the execution date of this Appendix, Customer will
submit in writing a non-binding current forecast of its planned purchases of
Seller's 5ESS, 7R/E Packet Solutions, Transmission Systems Products and/or
related Licensed Materials and Services. Such forecasts shall include type(s),
quantities, locations and other information as mutually agreed to by the
parties. The forecasts will be updated monthly, and shall provide a twelve (12)
month rolling view of all prospective purchases by month. Customer will submit
such forecasts to Seller's Account Manager at the following address:
Xxxx Xxxxx, Account Manager
Lucent Technologies Inc.
00 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
Email: xxxxxx@xxxxxx.xxx
Customer will designate upon execution of this Appendix an authorized
representative to coordinate the ordering and distribution of Products and
related Licensed Materials and to interface with Seller's Account Executive as
needed.
8
A-1.6 PRICING PLAN FOR 5ESS(R) PRODUCTS
In consideration for Customer 's Purchase Commitment as set forth in the Section
"Customer's Purchase Commitment", Seller will provide the following discounts as
described herein off the List Price for all purchases of the following Products
made by Customer directly from Seller during the Term:
A-1.6.1 DISCOUNT SCHEDULE FOR 5ESS(R) SWITCH
PRODUCTS
------------------------------------------------------------------------- ----------------------------
PRODUCT TYPE INITIAL SWITCH DISCOUNTS FOR GROWTH DISCOUNTS FOR PERIPHERAL
DISCOUNTS SM-2000 SWITCH MODULES GROWTH
----------------------------------------------- ----------------------------- ----------------------------
5ESS(R)Switch
(Hardware & Software) ( ) ( ) ( )
----------------------------------------------- ----------------------------- ----------------------------
RSM/ORM/EXM/DRM ( ) NA ( )
(Hardware and
Software)
----------------------------------------------- ----------------------------- ----------------------------
*This discount shall apply to SM-2000 Growth purchases only. The
( ) discount shall also apply to Peripherals and circuit
packs contained within such SM-2000 Module and ordered as part of the Growth
purchase order. Pricing for all other Peripheral orders shall be calculated
using the ( ) shown above.
Customer's Regional Office architecture is shown in Exhibit 1 attached hereto.
In addition, Exhibits 2 and 3 attached hereto provide equipment lists and prices
for the 5ESS Host Switch and 5ESS DRM Switch.
A-1.6.2 NETWORK GROWTH WINDOW DISCOUNTS FOR CUSTOMER DESIGNATED PERIODS
( ) Seller will provide to Customer the ability to
designate ( ) 5ESS network growth windows during the Term of this
Addendum, ( ). Each growth window will last(
) . During these designated growth windows, Seller will grant to
Customer a growth discount of ( ) on all 5ESS Host Switch
orders for subsequent Growth and Peripheral Growth of said 5ESS Host Switches
in Customers network. ( ) for subsequent Growth and
Peripheral Growth of said RSM/ORM/EXM/DRM switches in Customers network.
9
Orders received for Growth and Peripheral Growth for either 5ESS Host Switches
or RSM/ORM/EXM/DRM switches outside of such designated periods shall be priced
in accordance with the discounts contained within Section 1.6.1 entitled,
"Discount Schedule for 5ESS(R)-Switch Products".
The ( ) network growth windows referenced herein must be designated
in writing by the Customer at the time of order placement and the commencement
of such periods can only begin after Turnover of the applicable 5ESS(R) Host
Switch, RSM/ORM/EXM or DRM.
A-1.6.3 PRICING PLAN FOR 5ESS SWITCH SOFTWARE RELEASES
For purposes of this section, the fees for Base Software releases shall mean the
Software RTU and Office Data Assembler ("ODA") fees. The purchase by Customer of
a 5ESS Switch during the Term includes, a license (subject to the licensing
provisions of the General Agreement) to use the then-current Base Software
release. In addition, if Customer licenses each consecutive annual generic Base
Software release (after the generic release in effect at the time of each 5ESS
Switch installation), then the RTU fees for each subsequent generic Base
Software release will be ( )following the
). This (
). Customer
will be responsible for all engineering charges associated with each Base
Software release furnished by Seller under this Appendix. Base Software releases
shall be available to Customer in accordance with Seller's published
announcement stating when customers can order Base Software subject, however, to
Seller's then-current availability process and Seller's standard order
intervals.
For any 5ESS switch for which customer has purchased and installed an
Administrative Services Module (ASM) equipped to support the ODA functionality,
Seller will reduce the Basic Software RTU fee, as stated in the paragraphs above
for said 5ESS Switch to sixty-eight thousand dollars ($68,000) per release for
the first three (3) years following the in-service date (Cutover) of each newly
installed 5ESS Switch or for the Term of the Addendum for existing 5ESS
Switches.
A-1.6.3.1 PRICING PLAN FOR 5ESS SWITCH FEATURE RTU BUYOUT
Offer 1: Seller proposes that for (
) payments of ( )which shall be
(
) for a total of sixteen million five hundred thousand dollars ($16,500,000),
Customer may implement any number of the 5ESS Switch features listed as
"INCLUDED" in either Exhibit 2 section E2-1.2 "5ESS Host Configuration Including
Software Buyout" or Exhibit 3 section E3-1.2 "5ESS DRM Configuration Including
Software Buyout", provided Customer does not exceed the following conditions.
10
1) Thirty (30) Switch (5ESS Host or DRM) Locations
2) Six hundred thousand (600,000) total lines
3) Maximum of fifteen hundred (1,500) ISDN lines per 30 Switch locations
4) Maximum of three thousand PRI lines per 30 Switch locations
A detailed list of the 5ESS Software RTU features that are included in the 5ESS
Software Buyout are shown in Exhibit 18. Seller authorizes Customer to move line
quantities between the thirty (30) Switch locations provided that Customer does
not exceed a total of six hundred thousand (600,000) network lines. Customer
agrees to purchase Software RTU's in accordance with the discounts contained
within Section 1.6.1 entitled, "Discount Schedule for 5ESS(R)-Switch Products"
for any of the features included in Exhibit 18 that exceed the maximums stated
above or for any other features not listed in Exhibit 18 that were not purchased
with the original 5ESS Host or DRM Switch order.
Offer 2: If Customer ( ) for the above
5ESS Switch Feature RTU's ( ) Seller
agrees to offer Customer ( ) resulting
in a total 5ESS Switch RTU Feature ( ).
Customer agrees to notify Seller within thirty (30) days of the execution of
this Addendum whether or not Customer elects to exercise either of the 5ESS
Switch Feature RTU offers stated above. If Customers elects not to exercise the
5ESS Switch Feature RTU Buyout within the stated thirty (30) days, then Seller
will provide Customer with the Feature Activation and Reconciliation (FACR)
program to track the 5ESS Switch RTU feature fees. Customer agrees to use this
program to track the optional RTU fees which have been activated. On a annual
basis (January), Customer agrees to provide to Seller the FACR report to
facilitate Seller's Software Feature audit process of RTU fees activated by
Customer. For the current contract year Customer agrees to provide the FACR
report within sixty (60) of execution of this Addendum. Seller will provide
billing to Customer for the incremental features which have been activated.
In addition, if Customer elects to implement one of the 5ESS Switch Feature RTU
offers stated above, Seller will provide Customer with the FACR program to track
the 5ESS Switch RTU feature fees annually, against the RTU Buyout conditions
stated above. On an annual basis (each January), Customer agrees to provide to
Seller the FACR report to facilitate a audit process of RTU fees versus the
conditions of the RTU Buyout. Seller will provide billing to Customer for the
incremental features which exceed the terms and conditions of the RTU Buyout
offer.
A-1.6.3.2 5ESS SWITCH FEATURE RTU SOFTWARE POOL
In recognition of Customer's commitment to purchase one of the 5ESS Switch
Feature RTU Buyout offers outlined in Section A-1.6.3.1 Seller commits to create
a 5ESS Switch Feature (
11
). The 5ESS Switch Feature RTU Software Pool must be used prior to
the end of the term of this Addendum.
A-1.6.3.3 PRICING PLAN FOR 5ESS SWITCH LONG DISTANCE SOFTWARE
FEATURES
During the Term of this Addendum, Seller grants Customer an
( ) on all 5ESS Switch Long Distance Software features.
If Customer elects to purchase the 5ESS Switch Long Distance Software features
at the time Customer purchases a new 5ESS Switch, then the material shall be
priced in accordance with the discounts contained within Section 1.6.1 entitled,
"Discount Schedule for 5ESS(R)-Switch Products". Any 5ESS Switch hardware
required to add the 5ESS Switch Long Distance Software features shall be priced
in accordance with the discounts contained within Section 1.6.1 entitled,
"Discount Schedule for 5ESS-Switch Products" or in accordance with the discounts
contained within Section A-1.6.2 entitled, "Network Growth Window Discounts For
Customer Designated Periods", as applicable.
A-1.6.4 5ESS SWITCH TRAINING INCENTIVE
Seller will provide to Customer ( ) tuition free training days for
each 5ESS Switch and ( ) days for each remote (RSM, ORM, EXM,
DRM) procured from Seller. Training days earned by Customer for each 5ESS Switch
or remote shall be used ( ) prior to or ( )
after the Turnover date of such Switch. Customer is responsible for all
associated travel and living expenses for Customer personnel. Seller, at its
option, shall offer training regionally at Seller's Training Centers. While
Seller recommends core courses from its Customer Training Catalog, Customer may
choose from any of Seller's 5ESS Switch related courses.
A-1.6.5 INVENTORY CONTROL PROVISIONS FOR 5ESS SWITCHES
Seller will offer the Spares Exchange Service for 5ESS Switching Equipment
(SES-5) to address Customer's 5ESS System inventory control requirements. SES-5
will enhance equipment maintenance by facilitating the exchange of defective
circuit packs for new or remanufactured devices in a timely manner. This service
operates on a twenty-four-hour, seven-day-week basis, under the following
delivery services options:
1. Normal Delivery Interval (2 to 7 days) ( ) plug-in
2. Emergency Delivery Interval (24 hours) ( )
3. Critical Delivery Interval (less than 24 hours) ( ) (minimum
( ) order)
SES-5 will exchange Seller-manufactured material required to support a 5ESS
Switch and the embedded 3B21 Computer for "readily returnable" material (e.g.,
circuit packs and plug-ins, but not disk or tape drives). Customer shall not be
charged for the "readily returnable" material
12
provided by Seller through SES-5 if the material for which it is exchanged is
determined by Seller to be under warranty. If Seller determines such exchanged
material to be out of warranty, Customer will be billed and shall pay for the
material furnished by Seller through SES-5 based on the current SES-5 catalog
price.
A-1.6.6 5ESS SWITCH DOCUMENTATION
Seller shall provide to Customer for each Host Switch and DRM/VCDX site
at no charge, one (1) set of 5ESS-Switch Product documentation (each of the most
recent text and drawing on CD-ROM) and one (1) set of Switch Critical
Documentation on paper. In addition, Seller shall provide to Customer's
headquarters location two (2) sets of 5ESS Switch Product documentation (one in
paper and one on CD-ROM). No documentation will be provided to the RSM, EXM, ORM
sites.
In addition, at no additional charge to the Customer , Seller will provide to
Customer during the two (2) year period following the Turnover of each 5ESS or
DRM/VCDX Switch purchased by Customer hereunder, those updates to the Related
Documentation which Seller makes generally available to its other customers
during such time period. After the initial two (2) year update period described
above, Customer may purchase an update subscription at Seller's standard
subscription rate.
A-1.7 PRICING PLAN FOR 7R/E PACKET SWITCH PRODUCTS
In consideration for Customer 's Purchase Commitment as set forth in the Section
"Customer's Purchase Commitment" Seller will provide the following product
configurations to be available to be deployed in Customer's network in
preparation for the evolution to the 7R/E Packet Solutions platform prior to the
introduction of the 7R/E product line.
A-1.7.1 7R/E PACKET SOLUTIONS MODEL PRICE
Exhibit 4 attached hereto provides a model 7R/E Switch configuration which
approximates the current 5ESS Switch standard market model being used by
Customer in host deployments. Seller will provide firm price quotations to
Customer for its 7R/E Packet Solutions purchases. To constitute a 7R/E Packet
Solution it must contain at least a minimum of one unit each of a Call Feature
Server, One-Link Manager, and Packet Gateway purchased and installed at one time
(it also may contain more than one unit of each of these components) in addition
to other 7R/E hardware and Software elements (hereinafter referred to as "7R/E
Packet Solution"). A 7R/E Packet Solution does not include the 5ESS Switch or
circuit switching network elements that may interface with the 7R/E Packet
Solutions products.
Customer discount levels and list prices for the ( ) Seller
will ( ). The price
level ( ).
A-1.7.2 DRM/VCDX EVOLUTION TO SINGLE 7R/E PACKET SWITCH MODULE (PSM):
13
Should Customer elect to evolve any DRM/VCDX to a single 7 R/E PSM, Seller will
provide to Customer (
) (1) CFS. (
).
If the 5ESS Hosting Switch of said DRM/VCDX has not been evolved to a 7R/E host,
then customer shall pay for the addition of the 7 R/E OneLink Manager. Customer
will be responsible for the Seller's Engineering and Installation charges and
any 7R/E LAGS and TAGS required for subscriber growth.
A-1.7.3 DRM/VCDX EVOLUTION TO MULTIPLE PSM/SM2K 5ESS-7R/E HOST:
Should Customer exceed the capacity of the DRM/VCDX and desire to evolve the
DRM/VCDX to a multiple PSM/SM2K 5ESS-7R/E Host, Customer agrees to purchase the
7 R/E products for ( ). Included in this purchase
price ( ). Customer will be
responsible for the Seller's Engineering and Installation charges and any 7R/E
LAGS and TAGS required for subscriber growth.
A-1.7.4 EVOLVE EXISTING 5ESS HOST SWITCH TO MULTIPLE PSM/SM2K 5ESS-7R/E
HOST
Any 5ESS Host Switches deployed prior to the Effective Date of this Addendum
which Customer elects to be evolved to a 7 R/E Multiple PSM/SM2K 5ESS-7R/E Host,
Customer agrees to purchase the 7 R/E products for (
).
Customer will be responsible for the Seller's Engineering and Installation
charges and any 7R/E LAGS and TAGS required for subscriber growth.
A-1.7.5 EVOLVE NEW 5ESS HOST SWITCH TO MULTIPLE PSM/SM2K 5ESS-7R/E
HOST
Should the Customer elect to evolve any new 5ESS host switch to a PSM/SM2K
5ESS-7R/E HOST, (
).
Customer will be responsible for the Seller's Engineering and Installation
charges, One Link Manager, and any 7R/E LAGS and TAGS required for subscriber
growth.
A-1.7.6 EVOLVE ANYMEDIA FAST TO 7 R/E LAG
To evolve an AnyMedia FAST system as configured in Exhibit 10 to a 7 R/E LAG
requires the replacement of the AnyMedia FAST Comdacs and the addition of a ATM
Feeder Multiplexer
14
(AFM) circuit pack, if it has not already been deployed, to provide DSL services
out of the AnyMedia FAST system. (
), Seller agrees to
). Customer agrees to purchase the AFM circuit
pack per Exhibit 10, if Customer has not previously deployed the AFM circuit
pack in the AnyMedia FAST system.
A-1.7.7 7R/E PACKET SOLUTION TRAINING INCENTIVE
Seller will provide to Customer one hundred (100) tuition free training days
with the 1st 7R/E Packet Solutions Host Switch procured from Seller. Customer is
responsible for all associated travel and living expenses for Customer
personnel. Seller, at its option, shall offer training regionally at Seller's
Training Centers. While Seller recommends core courses from its Customer
Training Catalog, Customer may choose from any of Seller's 7R/E Packet Switch
related courses.
A-1.7.8 7R/E SWITCH DOCUMENTATION
Seller shall provide to Customer for each new or evolved 7R/E Host Switch site
at no charge, one standard set of 7R/E Packet Solutions Switch product
documentation in electronic form. In addition, Seller shall provide to (
).
In addition, at no additional charge to the Customer, Seller will provide to
Customer during the one (1) year period following the Turnover of each new or
evolved 7R/E Switch purchased by Customer hereunder, those updates related to
documentation error corrections. After the initial one (1) year update period
described above, Customer may purchase an update subscription at Seller's
standard subscription rate.
A-1.8 TECHNICAL SUPPORT OF SELLER'S SWITCH AND TRANSMISSION SYSTEMS
PRODUCTS AND LICENSED MATERIALS
Seller will, in addition to its repair obligations under the "Warranty" clause
of the General Agreement, make available for purchase by Customer technical
support for Seller's Switch and Transmission Systems Products and related
Licensed Materials. Such technical support shall be provided under mutually
agreed upon, separate technical support agreements entered into by the parties
or on a per-problem basis at Seller's prevailing rates.
Seller will, in addition to the technical support specified above, make
available for purchase by Customer post-warranty technical support. Such
post-warranty technical support shall be provided under mutually agreed upon,
separate post-warranty service contracts entered into by
the parties or on a per-problem basis at Seller's prevailing rates. Separately
from such warranty or post-warranty technical support services, Seller may offer
Services designed to enhance the operating capabilities of Customer 's network
or system on a billable basis.
15
A-1.8.1 TECHNICAL FIELD SUPPORT AND PROGRAM MANAGEMENT
Seller will during the term of this Addendum provide (
). For both the
technical field engineer and program manager, the product expertise and location
will be mutually agreed upon between Seller and Customer.
A-1.8.2 FIVE FACILITY ACCESS INCENTIVE
In consideration of the Purchase Commitment set forth in Section 4, "Customer
Purchase Commitment," Seller will provide Customer access to Seller's Feature
Interactive Verification Environment (FIVE) facility in Lisle, Illinois to
enable Customer to test the following to the extent relating to the 5ESS
Switching Systems Products purchased under this Appendix: new features of
Seller's 5ESS Switching Systems Products, verification of new applications and
simulation of call scenarios. To the extent relating to Seller's Switching and
Transmission Systems Products purchased under this Appendix, Seller may use the
FIVE facility on a billable basis to integrate other vendor's equipment for
Customer-specific applications. Such access shall be provided on a reservation
basis only. Customer agrees to be reasonable in its requests for reservations
and will provide reasonable notice of any cancellation.
A-1.9 PRICING PLAN FOR TRANSMISSION SYSTEMS PRODUCTS
Seller will provide the following discounts off the List Price for all purchases
of the following Products made by Customer directly from Seller during the Term.
Seller agrees during the Term of this Addendum (
). Seller also agrees (
).
TRANSMISSION SYSTEMS PRODUCTS DISCOUNT SCHEDULE
------------------------------------------------------------------ ------------
TRANSMISSION SYSTEMS PRODUCTS* DISCOUNT
------------------------------------------------------------------ ------------
DDM-2000
------------------------------------------------------------------ ------------
DDM-2000 OC-3 BAYS/SHELVES 70%
------------------------------------------------------------------ ------------
DDM-2000 OC-3 PLUGS-INS 55%
------------------------------------------------------------------ ------------
DDM-2000 XX- 0 SOFTWARE 75%
------------------------------------------------------------------ ------------
WAVESTAR
------------------------------------------------------------------ ------------
2.5G Bays/Shelves 57%
------------------------------------------------------------------ ------------
2.5G Plug-ins 57%
------------------------------------------------------------------ ------------
2.5G Software 57%
------------------------------------------------------------------ ------------
10G Bay/Shelves 50%
------------------------------------------------------------------ ------------
10G Plug-ins 50%
------------------------------------------------------------------ ------------
10G Software 50%
------------------------------------------------------------------ ------------
ANYMEDIA FAST
------------------------------------------------------------------ ------------
16
TRANSMISSION SYSTEMS PRODUCTS DISCOUNT SCHEDULE
------------------------------------------------------------------ ------------
Bays/Shelves/Commons/Application Packs/Software ( )
------------------------------------------------------------------ ------------
ISDN Application Pack (LPU 116) ( )
------------------------------------------------------------------ ------------
Data Application Packs (i.e. ADSL, SDSL, xDSL, ATM Feeder ( )
Multiplexer)
------------------------------------------------------------------ ------------
SLC-2000 CARRIER SYSTEM:
------------------------------------------------------------------ ------------
SLC-2000 Bay/Shelves/Commons/Channel Units/Software ( )
------------------------------------------------------------------ ------------
SLC CONNECTREACH
------------------------------------------------------------------ ------------
Chassis/Shelves/Channel Units/Software ( )
------------------------------------------------------------------ ------------
DATA EQUIPMENT
------------------------------------------------------------------ ------------
CBX ATM Switch ( )
------------------------------------------------------------------ ------------
PacketStar PSAX2300 ( )
------------------------------------------------------------------ ------------
PacketStar PSAX1250 ( )
------------------------------------------------------------------ ------------
Stinger DSLAM
------------------------------------------------------------------ ------------
Hardware Equipment ( )
------------------------------------------------------------------ -------------
Software Equipment ( )
------------------------------------------------------------------ ------------
CellPipe IAD's ( )
------------------------------------------------------------------ ------------
Routers (Springtide) ( )
------------------------------------------------------------------ ------------
*This does not include Network Products Group equipment. The applicable
merchandise class for Seller's Transmission Systems Products and related
Licensed Materials shall determine the applicable discount level.
Customers Colocation office architecture is shown in Exhibits 5 and 6. In
addition, Exhibits 7 and 8 provide colocation equipment lists and pricing for
these colocation offices excluding Seller's OS Solutions. Detailed equipment
models for these colocations are shown in Exhibits 9, 10, 11, and 12 attached
hereto. Seller's Element Management hardware/software equipment lists and
pricing for Seller's WaveStar 2.5G, WaveStar 10G, DDM-2000, FT-2000 and AnyMedia
FAST systems are shown in Exhibit 14.
A-1.9.1 TRANSMISSION SYSTEMS PRODUCTS TRAINING
Seller ( ) where said Transmission Products are
deployed. In addition, for new product platforms introductions Seller (
). Training
as used herein shall mean one (1) student day per training class. Training days
earned by Customer for Transmission Systems Products shall be used within
( ) for such Transmission Systems Products. Customer is
responsible for all associated travel and living expenses for Customer
personnel. Seller, at its
17
option, shall offer training regionally at Seller's Training Centers. While
Seller recommends core courses from its Customer Training Catalog, Customer may
choose from any of Seller's Transmission Systems Product related courses.
A-1.9.2 TRANSMISSION PRODUCTS DOCUMENTATION
Seller ( ),( ) of Transmission Product
Documentation per Host Switch site for the Transmission Products that are
deployed from said Host Switch Site, in both paper and CDROM. During the term of
this contract Seller ( ) to said documentation in both paper and
CDROM.
A-1.10 ADDITIONAL PRODUCT INCENTIVES
In consideration of Customer's Purchase Commitment outlined in Section A-1.4, (
).
A-1.10.1 PACKETSTAR PSAX1250 OFFER FOR EXISTING COLOCATIONS
In recognition of Customer's commitment to Seller to deploy Sellers PacketStar
PSAX1250 in all new colocation sites after the execution of this Addendum,
( ) PacketStar PSAX1250 systems as configured
in Exhibit 11,( ) PacketStar PSAX1250 systems purchased in
accordance with the configuration and pricing specified in Exhibit 11, for
deployment into Customer's existing colocations that were deployed prior to
January 1, 2000. To exercise this offer, at a minimum Customer must place an
order for ( ) PacketStar PSAX1250's ( )
on one order and they all must be deployed into Customer's existing colocations.
Seller agrees to let Customer modify the configuration as shown in Exhibit 11 to
meet Customer's requirements, however ( ) PacketStar PSAX1250's
( ) must be configured either (1) identically to the ( ) on
the same order or (2) identically to the lower priced configuration of any
( ) purchased on the same order, if the configurations are not
identical. The maximum total of PacketStar PSAX1250's provided ( ) .
If desired by Customer, any Engineering or Installation services required by
Seller to perform the retrofit of the existing colocations is to be purchased
pursuant to a separate quote.
(
).
A-1.10.2 STINGER DSLAM OFFER FOR EXISTING COLOCATIONS
In recognition of Customers commitment to Seller to deploy Seller's Stinger
DSLAM in all new colocation sites requiring DSLAM capability, after the
execution of this Addendum,(
) , for the deployment into Customer's existing
colocations that were deployed prior to January 1, 2000. To exercise this offer,
Customer must place an order for (
18
twenty (20) Stinger DSLAM's (10 purchased and 10 at no charge) on one order and
they all must be deployed into Customer's existing colocations. Seller agrees to
let Customer modify the configuration as shown in Exhibit 12 to meet Customers
requirements, however the ten (10) Stinger DSLAM's provided at no charge cannot
contain more than forty-eight (48) DSL ports of either SDSL or ADSL and must
have common equipment configured either (1) identically to the ten (10)
purchased on the same order of (2) identically to the lower priced configuration
of any one of the ten (10) purchased on the same order, if the configurations
are not identical. For the ten (10) Stinger DSLAM's provided at no charge
Customer agrees to purchase, in accordance with the pricing shown in Exhibit 12,
all growth DSL ports over the initial forty-eight (48) DSL ports provided. The
maximum total of Stinger DSLAM's provided at no charge cannot exceed seventy-two
(72). If desired by Customer, any Engineering or Installation Services required
by Seller to perform the retrofit of the existing colocations is to be purchased
pursuant to a separate quote. In addition, when Customer deploys the Stinger
DSLAM's in Customer's existing colocation sites, Customer agrees to remove
Customer's Paradyne DSLAM's from said existing colocation sites and not
re-deploy them in Customer's network.
(
).
A-1.10.3 NSA-LOOPCARE OFFER FOR EXISTING COLOCATIONS
In recognition of Customer's commitment to Seller to deploy Sellers OneVision
NFM operation system in Customer's network, as well as NSA-LoopCare operation
system in all new colocation sites after the execution of this Addendum, Seller
agrees to provide to Customer one hundred and forty-four (144) CL 2000 or CL
3000 NSA LoopCare systems, as configured in Exhibit 16, for the deployment into
Customer's existing colocations that were deployed prior to January 1, 2000. To
exercise this offer, Customer must place an order for two hundred and
twenty-five (225) CL 2000 or CL 3000 systems (81 purchased and 144 at no charge)
on one order and the one hundred and forty-four (144) provided at no charge must
be deployed into Customer's existing colocations. Customer agrees to notify
Seller on which platform (CL 2000 or CL 3000) Customer plans to deploy in
Customer's new colocation sites and Seller agrees to provide that platform (CL
2000 or CL 3000) for the one hundred and forty-four (144) provided at no charge.
If desired by Customer, any Engineering or Installation Services required by
Seller to perform the retrofit of the existing colocations is to be purchased
pursuant to a separate quote.
In addition, when ( ) in Customer's ( )
Customer (
) and ( ).
A-1.11 OAM&P SOLUTION
Seller agrees to continue to work with Customer to provide the most cost
effective Operating, Administration, Maintenance & Provisioning (OAM&P)
solutions. The OMA&P products available by Seller are shown in Exhibit 16
attached hereto. Seler agrees to hold pricing firm for the Term of this
Addendum.
19
Seller and Customer agree to split 50:50 the cost of a maximum of two hundred
(200) hours of engineering consulting fees to integrate Seller's OMA&P Products
listed in Exhibit 14 into Seller's OneVision NFM operations system per Exhibit
16.
A-1.12 MARKETING PRICING ADJUSTMENT
The parties agree that Customer shall be extended (
). The parties shall (
) following the Effective Date of this Addendum, led by the Seller's Program
Manager or Account Executive ( ) to determine
(
), taking into account (
). Pricing information shall include (
). If Customer determines Seller's prices for Products and Services
( ), the parties shall (
); provided, however, that (
) Customer's (
) for Seller's ( ).
With regard to 5ESS and 7R/E Switching Product family only, if Seller's prices
are not competitive with comparable products, Customer shall be entitled to the
benefit of the lower price from the time such lower price was first generally
available in the market, provided that such time period shall not exceed six (6)
months. Seller shall provide Customer a credit against future prices for the
difference between the prices originally invoiced Customer during the previous
six (6) months and the new lower price. In order to administer this provision,
both parties shall provide the other with appropriate information: Customer
shall advise Seller about the market prices available from other suppliers, and
Seller shall advise Customer about prices Seller has quoted or charged
Customer's competitors. The information provided by one party to another shall
not identify the other entities and shall otherwise be subject to the
confidentiality and non-disclosure provisions of the General Agreement. For
purposes of this Section, the term "comparable products" shall mean products
which have similar features and functionality to Seller products and when are
made generally available in the market.
A-1.13 CHECKMATE MARKETING & BUSINESS SOLUTIONS MARKETING DEVELOPMET FUND
ALLOWANCE
In consideration for the Purchase Commitment set forth in the Section,
"CUSTOMER'S PURCHASE COMMITMENT," Seller agrees to allocate to the Checkmate
Marketing & Business Solutions Market Development Fund (hereinafter "MDF")
described in Appendix B, Checkmate Marketing & Business Solutions, Marketing
Development Fund Guidelines, attached hereto and by this reference made part of
this Agreement, a total of one percent (1%) of Customer's Total Paid Direct
Purchases of Seller's 5ESS, 7R/E Products (hardware and related Licensed
Materials) and Seller's Transmission Systems Products procured during the Term
of the Addendum.
20
Said allocation shall be based upon the purchase price paid to Seller by
Customer for such Products and shall be calculated by Seller pursuant to the
Marketing Development Fund Guidelines referenced herein. Any amounts allocated
to the MDF hereunder shall be subject in all respects to and may be utilized by
Customer only in accordance with MDF Guidelines and must be used prior to
expiration of the Term.
A-1.14 CHANGE ORDER PROCESS
The Change Control Process, Exhibit 17 attached hereto, will be the only
authorized mechanism to request and approve changes. The authorized persons to
request and/or approve changes will be identified in writing by both parties as
part of the Process. All work identified and performed through the Contract
Change Control Process will be governed by the terms and conditions of the
aforementioned Exhibit.
3.0 ENTIRE AGREEMENT
Except as specifically modified, amended or supplemented herein, all terms and
conditions of the General Agreement shall remain in full force and effect. The
terms and conditions contained in this Addendum and those nonconflicting terms
and conditions of the General Agreement supersede all prior oral and written
understandings between the parties and shall constitute the entire agreement
between the parties with respect to the subject matter herein.
IN WITNESS WHEREOF, the parties have caused this Appendix to be executed by
their duly authorized representatives on the date(s) indicated.
CHOICE ONE COMMUNICATIONS INC. LUCENT TECHNOLOGIES INC.
By: By:
---------------------------- ---------------------------------
Name: Name:
-------------------------- ---------------------------------
Title: Title:
------------------------- ---------------------------------
Date: Date:
--------------------------- --------------------------------
00
XXXXXXXX X
CHECKMATE
MARKETING & BUSINESS SOLUTIONS
MARKETING DEVELOPMENT FUND
GUIDELINES
00
XXXXXXXX X
CHECKMATE MARKETING & BUSINESS SOLUTIONS
MARKETING DEVELOPMENT FUND GUIDELINES
The Checkmate Marketing & Business Solutions Marketing Development Fund
(hereinafter "MDF") is a cooperative approach to marketing and promotion. The
program provides assistance for pre-approved market development and promotional
activities executed by authorized Lucent Technologies Global Commercial Markets
(GCM) customers to stimulate switched services sales activity.
MDF FUNDING
o Funding is based on the year's purchases of Lucent Technologies Network
Systems 5ESS(R), 7 R/E, Transmission and OS products only. Network Systems
products are used to calculate the amount of MDF funds. NOTE: Network Cable
Systems products are not eligible for rebate reimbursement calculations
under this plan.
o For customers to be eligible for MDF, a written marketing plan must be
jointly approved by the Lucent Technologies GCM Marketing Administrator and
sales organization and the customer's marketing and sales organization prior
to submission of any MDF reimbursement claims.
o Proper MDF forms are submitted by the customer along with supporting
documentation for pre-approval. After approval, copies of original paid
invoices are submitted. MDF reimbursements are issued as credits to be
applied to current or future Lucent Technologies invoices.
o Funding is based on a percentage of the year's total paid direct purchases.
o MDF reimbursements apply to marketing activity within the approved plan
only.
IT'S A FIVE STEP PROCESS
1. Jointly prepare a Marketing Development Business Plan. This plan must at a
minimum include:
o Marketing opportunities or projects designed to stimulate switched
services sales activities
o Forecasts of new revenues produced with corresponding cost summaries,
and
o Specific "measurements of success."
2. Submit a completed MDF Submittal Form for pre-approval.
3. When the project is completed, the approved MDF Submittal Form will be
returned to Lucent Technologies along with paid invoices and substantiating
documents.
4. The MDF program administrator will process the reimbursement claim, verify
that funding is available, and, if so, forward the approval documentation
to the customer with a reimbursement certificate.
5. When submitted by the customer, the amount of the reimbursement certificate
will be credited to the customer's account.
ANSWERS TO YOUR QUESTIONS . . .
Your primary MDF contact with Lucent Technologies is your Account
Representative. Your Representative can provide whatever assistance you may need
in providing direction and planning marketing strategies. Lucent Technologies
has appointed a Marketing Development Fund Administrator who handles day-to-day
details of tracking and coordinating reimbursement claims within Lucent
Technologies. You may contact the Administrator at the following address: 0 Xxxx
Xxxxxx Xx., Xxxx 0X00, Xxxxxxxxxx, XX 00000-0000.
23
CHECKMATE MARKETING & BUSINESS SOLUTIONS
MARKETING DEVELOPMENT FUND GUIDELINES
ACTIVITIES ELIGIBLE FOR MDF REIMBURSEMENT
DIRECT MARKETING
Direct marketing may include advertising, e.g. print ads and radio spots,
collateral salesware, catalogs, trade show fees, Lucent Technologies product
displays, direct mail and telemarketing programs and other pre-approved
activities. MDF funds may be utilized to assist with individual company
customization of direct marketing materials, including development, printing,
and one-time production costs on authorized mailings.
EVENTS
MDF allowances may be used to off-set Lucent Technologies sponsorship of events
such as technology forums, conferences, seminars, trade shows or other business
related activities. Pre-approval requests must clearly demonstrate goals and
objectives of the event. Reimbursement claims must include a list of any other
co-sponsors, a copy of guest invitations to the event, detailed event cost
estimates, and a full description of the participation, involvement, and
activity by the Lucent Technologies Representative who would attend or support
the event.
DATABASE ACQUISITION
MDF can be utilized to fund a variety of pre-approved database tools such as
market-based automated pricing tools (which could include basic Centrex rates,
standard features, and ISDN rates and features), and Marketing Information
Databases (such as MKIS) for client prospecting, lead generation and
infrastructure modeling.
SALES INCENTIVE PROGRAMS
Incentive programs to stimulate switched services sales are designed and
administered by the customer. A jointly established target for service activity
penetration must be in effect and tracked for the duration of the program.
Proposed incentive programs must conform to the following guidelines:
o An outline of procedures to administer, track and audit the program is
provided.
o Estimated program costs, award descriptions and values are identified.
o A complete program activity description with specific time-frames is
established.
o A list of participating Account Executives and Sales Managers and their
incentive program objectives is submitted to Lucent Technologies.
TRAINING
Lucent Technologies offers a wide range of educational opportunities, and
encourages Lucent Technologies sponsored customers to increase product knowledge
and marketing and sales skills. Lucent Technologies training courses are
delivered at Lucent Technologies training locations or suitcased to remote
locations.
MDF PERSONNEL
Under the MDF program, the Lucent Technologies customer may fund technical
consultants and/or marketing sales consultant personnel to implement marketing
and sales programs to stimulate switched services sales activity. All
pre-approved personnel funded by MDF must be dedicated 100% to stimulating
Lucent Technologies switched services sales. All expenses must conform to
standard Lucent Technologies voucher guidelines. All expenses require
pre-approval and must include: overall project concept, opportunity
identification, program cost, and a detailed action plan with measurable
milestones and start-stop dates. MDF payments for personnel are made quarterly.
24
