1
EXHIBIT 10.1
Confidential treatment has been requested with respect to certain
provisions of this Exhibit, which provisions have been omitted from this
Exhibit 10.1, marked by asterisks (***) and filed separately with the
Commission.
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EXHIBIT 10.1
NETWORK PRODUCTS PURCHASE AGREEMENT
Northern Telecom Inc., a Delaware corporation having offices at 0000 Xxxxxxxx
Xxxxxxx, Xxxxx X, Xxxxxxxxxx, Xxxxxxx 00000-0000 ("Nortel") and MGC
Communications, Inc., a Nevada corporation, having its principal offices and
place of business at 0000 Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000 ("Buyer")
agree as follows:
1. SCOPE
1.1 Certain terms used in this Agreement shall be defined as set
forth in Exhibit A.
1.2 The terms and conditions of this Agreement shall apply to the
purchase by Buyer and the sale by Nortel of Equipment and
Services and the licensing of Software furnished in connection
with such Equipment. The terms and conditions contained in a
Product Attachment shall modify and/or supplement the other
terms and conditions of this Agreement, only with respect to
the Product Line and Services described in the Product
Attachment.
1.3 All Products and Services obtained by Buyer pursuant to this
Agreement shall be obtained by Buyer solely for initial use by
Buyer in its internal business to provide services available
through its networks, and not as stock in trade or inventory
which is intended for resale by Buyer to any third party as
new and unused material. All such Products shall be installed
in the United States.
2. TERM
2.1 This Agreement shall be in effect during the period that any
Product Attachment is in effect. Each Product Attachment
shall be in effect during its Product Attachment Term. This
Agreement or any part thereof may be terminated in accordance
with the express provisions of this Agreement concerning
termination or by written agreement of the parties.
2.2 The termination of this Agreement or any part thereof shall
not affect the obligations of either party thereunder which
have not been fully performed with respect to any accepted
Order, unless such Order is expressly terminated in accordance
with this Agreement or by written agreement of the parties.
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3. ORDERING
All purchases pursuant to this Agreement shall be made by means of
Orders issued from time to time by Buyer and accepted by Nortel in
writing within fifteen (15) days. Nortel will not reject an Order
without advising Buyer of the deficiency in the Order and providing
Buyer with a reasonable time to cure such deficiency. Any Order not
accepted in writing by Nortel within fifteen (15) days or any
deficient Order not cured by Buyer within a reasonable time shall be
deemed to be void. All Orders shall reference this Agreement and the
applicable Product Attachment and shall be governed solely by the
terms and conditions set forth herein as modified and/or supplemented
pursuant to Section 1.2 by the terms and conditions of any applicable
Product Attachments.
4. PRICES
4.1 The prices, charges, and fees applicable to Orders shall be
set forth in the appropriate Product Attachments and may be
revised in accordance with the provisions stated therein.
Buyer shall pay transportation charges, including insurance,
in accordance with the applicable Product Attachment.
4.2 Until the total of all prices, charges and fees for Products
and related Services furnished hereunder shall have been paid
to Nortel, Buyer shall cooperate with Nortel in perfecting
Nortel's purchase money security interest in such Products and
Buyer shall promptly execute all documents and take all
actions required by Nortel in connection therewith. Buyer
shall not sell, lease or otherwise transfer such Products or
any portion thereof or allow any liens or encumbrances to
attach to such Products or any portion thereof prior to
payment in full to Nortel of the total of all such prices,
charges, and fees.
5. TERMS OF PAYMENT
5.1 The amounts payable for Products and/or Services may be
invoiced by Nortel to Buyer in accordance with the applicable
Product Attachments. All amounts payable and properly invoiced
pursuant to this Agreement shall be paid by Buyer to Nortel
within thirty (30) days from the date of Nortel's invoice in
accordance with the payment instructions contained in such
invoice.
5.2 Overdue payments, excluding those which are the subject of a
good faith dispute, shall be subject to interest charges,
calculated daily commencing on the 31st day after the date of
the invoice, at one and one half percent (1-1/2%) per month or
such lesser rate as may be the maximum permissible rate under
applicable law.
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6. TAXES
Buyer shall at Nortel's direction promptly reimburse Nortel or pay
directly to the applicable government or taxing authority all taxes
and charges arising hereunder, including, without limitation,
penalties and interest, except for taxes computed upon the net income
of Nortel. Buyer's obligations pursuant to this Section 6 shall
survive any termination of this Agreement.
7. RISK OF LOSS, TITLE
7.1 Risk of loss or damage to Products shall pass to Buyer upon
delivery to the loading dock at the installation site or other
delivery location specified by Buyer in its Order, and Buyer
shall keep such Products fully insured for the total amount
then due Nortel for such Products.
7.2 Good title to Equipment furnished pursuant to each Order
issued hereunder which shall be free and clear of all liens
and encumbrances shall vest in Buyer upon full payment by
Buyer of the total prices, charges and fees payable by Buyer
for such Equipment and any related Software or Services
furnished by Nortel in connection with such Equipment.
7.3 Buyer shall receive a license to use Software subject to the
terms set forth in Exhibit B.
8. TESTING, TURNOVER AND ACCEPTANCE
8.1 If Nortel installs any Products furnished hereunder, the
rights and obligations of the parties with respect to testing,
turnover and acceptance of such Products shall be as set forth
in the applicable Product Attachment.
8.2 If Nortel is not required by the terms of a Product Attachment
to install Products furnished hereunder, Nortel shall prior to
delivery of the Products perform such factory tests as Nortel
determines to be appropriate in order to confirm that such
Products shall be in accordance with the applicable
Specifications. Buyer shall be deemed to have accepted the
Products upon completion of such tests.
8.3 In the event that Buyer places Products into
revenue-generating service, such Products shall be deemed to
have been accepted by Buyer without limitation or restriction.
Notwithstanding the foregoing, Buyer may place the Products
into revenue-generating service for purposes of testing the
Product without being deemed to have accepted such Products
provided such testing does not continue for more than one (1)
day.
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9. DISCLAIMERS OF WARRANTIES AND REMEDIES
THE WARRANTIES AND REMEDIES SET FORTH IN EXHIBIT D AND IN ANY PRODUCT
ATTACHMENT CONSTITUTE THE ONLY WARRANTIES OF NORTEL WITH RESPECT TO
THE PRODUCTS AND SERVICES AND BUYER'S EXCLUSIVE REMEDIES IN THE EVENT
SUCH WARRANTIES ARE BREACHED. THEY ARE IN LIEU OF ALL OTHER
WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESS OR IMPLIED, INCLUDING,
WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. NORTEL SHALL NOT BE LIABLE FOR ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES OF ANY NATURE WHATSOEVER, BEFORE OR AFTER THE
PLACING OF ANY PRODUCT INTO SERVICE.
10. LIABILITY FOR BODILY INJURY, PROPERTY DAMAGE AND PATENT INFRINGEMENT
10.1 A party hereto shall defend the other party against any suit,
claim, or proceeding brought against the other party for
direct damages due to bodily injuries (including death) or
damage to tangible property which allegedly result from the
negligence or willful misconduct of the defending party in the
performance of this Agreement. The defending party shall pay
all litigation costs, reasonable attorney's fees, settlement
payments and such direct damages awarded or resulting from any
such suit, claim or proceeding.
10.2 Nortel shall defend and hold harmless Buyer against any suit,
claim or proceeding brought against Buyer alleging that any
Products, excluding Vendor Items, furnished hereunder infringe
any United States patent. Nortel shall pay all litigation
costs, reasonable attorney's fees, settlement payments and any
damages awarded or resulting from any such suit, claim or
proceeding. With respect to Vendor Items, Nortel shall assign
any rights with respect to infringement of U.S. patents
granted to Nortel by the supplier of such Vendor Items to the
extent of Nortel's right to do so.
10.3 The party entitled to defense pursuant to Section 10.1 or 10.2
shall promptly advise the party required to provide such
defense of the applicable suit, claim, or proceeding and
shall cooperate with such party in the defense or settlement
thereof. The party required to provide such defense shall
have sole control of the defense of the applicable suit,
claim, or proceeding and of all negotiations for its
settlement or compromise.
10.4 If an injunction is obtained against Buyer's use of any
Products as a result of any suit, claim, or proceeding
described in Section 10.2, Nortel shall at Nortel's option and
at Nortel's expense use its reasonable efforts to either:
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10.4.1 procure for Buyer the right to continue using the
portions of the Products enjoined from use; or
10.4.2 replace or modify the same with equivalent or better
Products so that Buyer's use is not subject to any
such injunction.
10.5 If Nortel cannot perform under Section 10.4.1 or 10.4.2, Buyer
shall have the right to return the infringing Products to
Nortel upon written notice to Nortel, and in the event of such
return, neither party shall have any further liabilities or
obligations under this Agreement on account of such
infringement or return, except Nortel shall refund, (a) the
price paid by Buyer for the Products if Buyer exercises its
right to return the Products during the two (2) year period
following the start of the Warranty Period of the Products, or
(b) the depreciated value of such Products carried on Buyer's
books at the time of such return, less any outstanding monies
due Nortel hereunder if Buyer exercises its right to return
such Products after such two (2) year period.
10.6 The obligations of Nortel hereunder with respect to any suit,
claim, or proceeding described in Section 10.2 shall not apply
with respect to Products which are (a) manufactured or
supplied by Nortel in accordance with any design or any
special instruction furnished by Buyer, (b) used by Buyer in a
manner or for a purpose not contemplated by this Agreement,
(c) located by Buyer outside the United States, or (d) used by
Buyer in combination with other products not provided by
Nortel, including, without limitation, any software developed
solely by Buyer through the permitted use of Products
furnished hereunder, provided the infringement arises from
such combination or the use thereof. Buyer shall indemnify and
hold Nortel harmless against any loss, cost, expense, damage,
settlement or other liability, including, but not limited to,
attorneys' fees, which may be incurred by Nortel with respect
to any suit, claim, or proceeding described in this Section
10.6.
10.7 Notwithstanding the above, Nortel shall have no obligation or
liability with regard to any patent infringement suit, claim,
or proceeding that may be made or brought against Buyer (i)
alleging that method of use claims in such patent are
infringed by any service offering and/or by any use by Buyer
of Products furnished hereunder to make such service offering
available or (ii) resulting in a settlement payment, or award
of damages, or accounting of profits, where such settlement,
award, or accounting is based on the revenues or profits
earned or other value obtained by Buyer from its use of such
Products and/or is based on the lost revenues or profits of
third parties arising from Buyer's use of such Products.
10.8 If Nortel determines that any Products are or may become the
subject of a suit, claim, or proceeding as described in
Section 10.7, Nortel may provide
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Buyer with notice to that effect. Nortel shall have no
liability to Buyer pursuant to Section 10.2, 10.4, or 10.5
with respect to Buyer's use of such Products which occurs
after the thirtieth (30th) day following the date of such
notice. In addition to its obligations pursuant to Section
10.3, if Buyer becomes aware that any Products may become the
subject of any such suit, claim, or proceeding before
receiving any such notice from Nortel, Buyer shall provide
Nortel with notice to that effect.
10.9 After receipt of notice from Nortel pursuant to Section 10.8,
Buyer shall have the option to return to Nortel the applicable
Products identified in such notice and Nortel shall refund,
(a) the price paid by Buyer for the Products if Buyer
exercises its right to return the Products during the two (2)
year period following the start of the Warranty Period of the
Products, or (b) the depreciated value (as carried on the
books of Buyer) of the returned Products to Buyer as more
fully set forth in Section 10.5 if such return occurs after
the two (2) year period.
10.10 The provisions of Sections 10.2 through 10.9 state the entire
liability of Nortel and its suppliers and the exclusive remedy
of Buyer with respect to any suits, claims, or proceedings of
the nature described in Section 10.2.
10.11 Each party's respective obligations pursuant to this Section
shall survive any termination of this Agreement.
11. REMEDIES AND LIMITATION OF LIABILITY
11.1 Nortel shall have the right to suspend its performance by
written notice to Buyer and forthwith remove and take
possession of all Products that shall have been delivered to
Buyer, if, prior to payment to Nortel of any amounts due
pursuant to this Agreement with respect to such Products,
Buyer shall (a) become insolvent or bankrupt or cease, be
unable, or admit in writing its inability, to pay all debts as
they mature, or make a general assignment for the benefit of,
or enter into any arrangement with, creditors, (b) authorize,
apply for, or consent to the appointment of, a receiver,
trustee, or liquidator of all or a substantial part of its
assets or have proceedings seeking such appointment commenced
against it which are not terminated within ninety (90) days of
such commencement, or (c) file a voluntary petition under any
bankruptcy or insolvency law or under the reorganization or
arrangement provisions of the United States Bankruptcy Code or
any similar law of any jurisdiction or have proceedings under
any such law instituted against it which are not terminated
within ninety (90) days of such commencement.
11.2 In the event of any material breach of this Agreement which
shall continue for thirty (30) or more days after written
notice of such breach (including a reasonably detailed
statement of the nature of such breach) shall have
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been given to the breaching party by the aggrieved party, the
aggrieved party shall be entitled at its option to avail
itself of any and all remedies available at law or equity,
except as otherwise provided in this Agreement.
11.3 Nothing contained in Section 11.2 or elsewhere in this
Agreement shall make Nortel liable for any incidental,
indirect, consequential or special damages of any nature
whatsoever for any breach of this Agreement whether the claims
for such damages arise in tort, contract, or otherwise, or
shall increase the liability of Nortel under Section 9 or 10
or Exhibit D beyond that prescribed therein.
11.4 Nortel shall not be liable for any additional costs, expenses,
losses or damages resulting from errors, acts or omissions of
Buyer, including, but not limited to, inaccuracy,
incompleteness or untimeliness in the provision of information
by Buyer to Nortel or fulfillment by Buyer of any of its
obligations under this Agreement. Buyer shall pay Nortel the
amount of any such costs, expenses, losses or damage incurred
by Nortel.
11.5 Any action for breach of this Agreement or to enforce any
right hereunder shall be commenced within four (4) years after
the cause of action accrues or it shall be deemed waived and
barred.
11.6 The limitations on Nortel's liability and other obligations
set forth in Sections 9, 10, and 11 shall survive any
termination of this Agreement.
12. FORCE MAJEURE
If the performance by a party of any of its obligations under this
Agreement shall be interfered with by reason of any circumstances
beyond the reasonable control of that party, including without
limitation, unavailability of supplies or sources of energy, power
failure, breakdown of machinery, or labor difficulties, including
without limitation, strikes, slowdowns, picketing or boycotts, then
that party shall be excused from such performance for a period equal
to the delay resulting from the applicable circumstances and such
additional period as may be reasonably necessary to allow that party
to resume its performance. With respect to labor difficulties as
described above, a party shall not be obligated to accede to any
demands being made by employees or other personnel.
13. CONFIDENTIAL INFORMATION
13.1 Each party which receives the other party's Confidential
Information shall use reasonable care to hold such
Confidential Information in confidence and not disclose such
Confidential Information to anyone other than to its employees
and employees of its affiliates with a need to know. A party
that receives the other party's Confidential Information shall
not
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reproduce such Confidential Information, except to the extent
reasonably required for the performance of its obligations
pursuant to this Agreement and in connection with any
permitted use of such Confidential Information.
13.2 Buyer shall take reasonable care to use Nortel's Confidential
Information only for study, operating, or maintenance purposes
in connection with Buyer's use of Products furnished by Nortel
pursuant to this Agreement.
13.3 Nortel shall take reasonable care to use Buyer's Confidential
Information only to perform Nortel's obligations to provide
Products and/or Services to Buyer, provided Nortel may use any
of Buyer's Confidential Information for the development,
manufacture, marketing and maintenance of new products and/or
services and/or changes or modifications to the existing
Products and/or Services, which Nortel may, in either case,
provide to third parties without restriction.
13.4 The obligations of either party pursuant to this Section 13
shall not extend to any Confidential Information which
recipient can demonstrate through written documentation was
already known to the recipient prior to its disclosure to the
recipient, was known or generally available to the public at
the time of disclosure to the recipient, becomes known or
generally available to the public (other than by act of the
recipient) subsequent to its disclosure to the recipient, is
disclosed or made available in writing to the recipient by a
third party having a bona fide right to do so, or is required
to be disclosed by process of law, provided that the recipient
shall notify the disclosing party promptly upon any request or
demand for such disclosure.
13.5 The parties' obligations pursuant to this Section 13 shall
survive any termination of this Agreement.
14. BUYER'S RESPONSIBILITIES
14.1 All sites at which the Products shall be delivered or
installed shall be prepared by Buyer in accordance with
Nortel's standards, including, without limitation,
environmental requirements.
14.2 Buyer shall provide Nortel-designated personnel access to the
Products during the times deemed necessary by Nortel to
install, maintain and service the Products in accordance with
Nortel's obligations. Nortel personnel shall comply with
Buyer's reasonable site and security regulations, provided
Nortel receives written notice of any such regulations
reasonably in advance of the arrival of Nortel's personnel at
the site.
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14.3 Buyer shall provide reasonable working space and facilities,
including heat, light, ventilation, telephones, electrical
current, trash removal and other necessary utilities for use
by Nortel-designated maintenance personnel, and adequate
secure storage space, if required by Nortel, for Products and
materials. Buyer shall also provide adequate security for the
Products while on Buyer's site.
14.4 Buyer shall obtain all necessary governmental permits
applicable to Buyer in connection with the installation,
operation, and maintenance of Products furnished hereunder,
excluding any applicable permits required in the normal course
of Nortel's doing business.
14.5 Any information which Nortel reasonably requests from Buyer
and which is necessary for Nortel to properly install or
maintain the Products shall be provided by Buyer to Nortel in
a timely fashion and in a form reasonably specified by Nortel.
15. HAZARDOUS MATERIALS
15.1 Prior to issuing any Order for Services to be performed at
Buyer's facilities, Buyer shall identify and notify Nortel in
writing of the existence of all Hazardous Materials which
Nortel may encounter during the performance of such Services,
including, without limitation, any Hazardous Materials
contained within any equipment to be removed by Nortel.
15.2 If Buyer breaches its obligations pursuant to Section 15.1,
(a) Nortel may discontinue the performance of the appropriate
Services until all the applicable Hazardous Materials have
been removed or abated to Nortel's satisfaction by Buyer at
Buyer's sole expense, and (b) Buyer shall defend, indemnify
and hold Nortel harmless from any and all damages, claims,
losses, liabilities and expenses, including, without
limitation, attorneys' fees, which arise out of Buyer's breach
of such obligations. Buyer's obligations pursuant to this
Section 15.2 shall survive any termination of this Agreement.
16. SUBCONTRACTING
Nortel may subcontract any of its obligations under this Agreement,
but no such subcontract shall relieve Nortel of primary responsibility
for performance of its obligations.
17. REGULATORY COMPLIANCE
In the event of any change in the Specifications or Nortel's
manufacturing or
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delivery processes for any Products as a result of the imposition of
requirements by any government, Nortel may upon notice to Buyer,
increase its prices, charges and fees to cover the added costs and
expenses directly and indirectly incurred by Nortel as a result of
such change.
18. GENERAL
18.1 If any of the provisions of this Agreement shall be invalid or
unenforceable under applicable law and a party deems such
provisions to be material, that party may terminate this
Agreement upon notice to the other party. Otherwise, such
invalidity or unenforceability shall not invalidate or render
this Agreement unenforceable, but this Agreement shall be
construed as if not containing the particular invalid or
unenforceable provision and the rights and obligations of the
parties shall be construed and enforced accordingly.
18.2 A party shall not release without the prior written approval
of the other party any advertising or other publicity relating
to this Agreement wherein such other party may reasonably be
identified. In addition each party shall take reasonable
precautions to keep the existence and the contents of this
Agreement confidential so long as this Agreement remains in
effect and for a period of three (3) years thereafter, except
as may be reasonably required to enforce this Agreement or by
law.
18.3 The construction, interpretation and performance of this
Agreement shall be governed by the laws of the State of
Nevada, except for its rules with respect to the conflict of
laws.
18.4 Neither party may assign or transfer this Agreement or any of
its rights hereunder without the prior written consent of the
other party, such consent not to be unreasonably withheld,
except Buyer's consent shall not be required for any
assignment or transfer by Nortel (a) to any Affiliate of all
or any part of this Agreement or of Nortel's rights hereunder,
or (b) to any third party of Nortel's right to receive any
monies which may become due to Nortel pursuant to this
Agreement.
18.5 Notices and other communications shall be transmitted in
writing by certified United States Mail, postage prepaid,
return receipt requested, by guaranteed overnight delivery,
or by facsimile addressed to the parties as follows:
To Buyer: MGC Communications, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxx Xxxxxx/Xxxx Xxxxx
Facsimile: (000) 000-0000
00
Xxxxxxxx Xx. XXX0000X
Page 11
To Nortel: Northern Telecom Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: Vice President & General Manager,
Access Networks
Facsimile: (000) 000-0000
In addition, notices submitted by Buyer to Nortel specific to
any Product Attachment shall be delivered to the address
stated in the applicable Product Attachment along with a copy
submitted to Nortel at the address stated above.
Any notice or communication sent under this Agreement shall be
deemed given upon receipt, as evidenced by the United States
Postal Service return receipt Mail if given by certified
United States Mail, on the following business day if sent by
guaranteed overnight delivery, or on the transmission date if
given by facsimile during the receiving party's normal
business hours.
The address information listed for a party in this Section or
any Product Attachment may be changed from time to time by
that party by giving notice to the other as provided above.
18.6 In the event of a conflict between the provisions of this
Agreement which are not contained in a Product Attachment and
the provisions of a Product Attachment, the provisions of the
Product Attachment shall prevail with respect to the Product
Line and Services described in that Product Attachment.
18.7 All headings used herein are for index and reference purposes
only, and shall not be given any substantive effect. This
Agreement has been created jointly by the parties, and no rule
of construction requiring interpretation against the drafter
of this Agreement shall apply in its interpretation.
18.8 Buyer shall not export any technical data received from Nortel
pursuant to this Agreement, or release any such technical data
with the knowledge or intent that such technical data will be
exported or transmitted to any country or to foreign nationals
of any country, except in accordance with applicable U.S. law
concerning the exporting of such technical data. Buyer shall
obtain all authorizations from the U.S. government in
accordance with applicable law prior to exporting or
transmitting any such technical data as described above.
18.9 Any changes to this Agreement may only be effected if agreed
upon in writing by duly authorized representatives of the
parties hereto. No
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agency, partnership, joint venture, or other similar business
relationship shall be or is created by this Agreement.
18.10 This Agreement, including all Product Attachments and Exhibits
constitutes the entire agreement of the parties with respect
to the subject matter hereof.
NORTHERN TELECOM INC. MGC COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxx By: /s/ Xxxxx X. Xxxxxxxxxx
------------------------------ ------------------------------
(Signature) (Signature)
Name: Xxxxxx Xxxx Name: Xxxxx X. Xxxxxxxxxx
--------------------------- ---------------------------
(Print) (Print)
Title: Group Vice President Title: President/CEO
----------------------------- -----------------------------
Date: 21 May 97 Date: 5/9/97
----------------------------- -----------------------------
NORTEL LAW DEPT.
/s/
--------------------------
APPROVED AS TO FORM
April 29, 1997
-------------------------
Date
00
Xxxxxxxx Xx. XXX0000X
Page 1
EXHIBIT A
DEFINITIONS
As used in the Agreement (as defined below), the following initially
capitalized terms shall have the following meanings:
"Affiliate" shall mean Nortel's parent corporation, Northern Telecom
Limited and any corporation controlled directly or indirectly by
Northern Telecom Limited through the ownership or control of shares or
other securities in such corporation.
"Agreement" shall mean the Agreement to which this Exhibit is
attached, and all Exhibits and Product Attachments.
"Confidential Information" shall mean all information, including,
without limitation, specifications, drawings, documentation, know-how
and pricing information, of every kind or description which may be
disclosed by either party or an Affiliate to the other party in
connection with this Agreement, provided the disclosing party shall
clearly xxxx any such information which is disclosed in writing as the
confidential property of the disclosing party and the disclosing party
shall identify the confidential nature of any such information which
it orally discloses at the time of such disclosure and shall provide a
written summary of the orally disclosed information to the recipient
within fifteen (15) days of such disclosure.
"Equipment" shall mean the hardware listed or otherwise identified in,
or pursuant to, any Product Attachment.
"Exhibits" shall mean Exhibits A, B, C, and D attached hereto, and any
additional Exhibits which Nortel and Buyer subsequently agree in
writing shall be incorporated into, and made a part of the Agreement
by reference.
"Hazardous Materials" shall mean any pollutants or dangerous, toxic or
hazardous substances (including, without limitation, asbestos) as
defined in, or pursuant to, the OSHA Hazard Communication Standard (29
CFR Part 1910, Subpart Z), the Resource Conservation and Recovery Act
of 1976 (42 USC Section 6901, et seq.), the Toxic Substances Control
Act (15 USC Section 2601, et seq.), the Comprehensive Environmental
Response Compensation and Liability Act (42 USC Section 9601, et
seq.), and any other federal, state or local environmental law,
ordinance, rule or regulation.
"Order" shall mean a written purchase order issued by Buyer to Nortel.
Each Order shall specify on the face of the Order the types and
quantities of Products and/or Services to be furnished by Nortel
pursuant to the Order, the applicable prices, charges and/or fees with
respect to such Products and/or Services,
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Buyer's facility to which the Products are to be delivered, the
delivery and/or completion schedule, and any other information which
may be required to be included in an Order in accordance with the
provisions of this Agreement.
"Product Attachments" shall mean any Product Attachments which the
parties agree in writing shall be incorporated into, and made a part
of, this Agreement.
"Product Attachment Term" shall mean the period specified in a Product
Attachment during which that Product Attachment shall be in effect.
"Product Line" shall mean the Products described in and which may be
furnished pursuant to a specific Product Attachment.
"Products" shall mean any Equipment and/or Software which may be
provided under this Agreement.
"Services" shall mean all services listed or otherwise identified in,
or pursuant to, any Product Attachment which may be purchased from or
provided by Nortel and which are associated with the Product Line
described in that Product Attachment.
"Software" shall mean (a) programs in machine-readable code or
firmware which (i) are owned by, or licensed to, Nortel or any of its
Affiliates, (ii) reside in Equipment memories, tapes, disks or other
media, and (iii) provide basic logic operating instructions and
user-related application instructions, and (b) documentation
associated with any such programs which may be furnished by Nortel to
Buyer from time to time.
"Specifications" shall mean, with respect to any Product Line, the
specifications identified in the applicable Product Attachment,
provided Nortel shall have the right at its sole discretion to modify,
change or amend such specifications at any time.
"Third Party Software Vendor" shall mean any supplier of programs
contained in the Software which is not an Affiliate.
"Vendor Items" shall mean, with respect to a Product Line, those
portions of the Product which are identified in the applicable Product
Attachment as Vendor Items.
"Warranty Period" shall mean, with respect to a Product Line, the
Warranty Period specified in the applicable Product Attachment.
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EXHIBIT B
SOFTWARE LICENSE
1. Buyer acknowledges that the Software may contain programs
which have been supplied by, and are proprietary to, Third
Party Software Vendors. In addition to the terms and
conditions herein, Buyer shall abide by any additional terms
and conditions provided by Nortel to Buyer with respect to any
Software provided by any Third Party Software Vendor.
2. Upon Buyer's payment to Nortel of the applicable fees with
respect to any Software furnished to Buyer pursuant to this
Agreement, Buyer shall be granted a personal, non-exclusive,
paid-up license to use the version of the Software furnished
to Buyer only in conjunction with Buyer's use of the Equipment
with respect to which such Software was furnished for the life
of that Equipment as it may be repaired or modified. Buyer
shall be granted no title or ownership rights to the Software,
which rights shall remain in Nortel or its suppliers.
3. As a condition precedent to this license and to the supply of
Software by Nortel pursuant to the Agreement, Nortel requires
Buyer to give proper assurances to Nortel for the protection
of the Software. Accordingly, all Software supplied by Nortel
under or in implementation of the Agreement shall be treated
by Buyer as the exclusive property, and as proprietary and a
TRADE SECRET, of Nortel and/or its suppliers, as appropriate,
and Buyer shall: a) hold the Software, including, without
limitation, any methods or concepts utilized therein in
confidence for the benefit of Nortel and/or its suppliers, as
appropriate; b) not provide or make the Software available to
any person except to its employees on a 'need to know' basis;
c) not reproduce, copy, or modify the Software in whole or in
part except as authorized by Nortel; d) not attempt to
decompile, reverse engineer, disassemble, reverse translate,
or in any other manner decode the Software; e) issue adequate
instructions to all persons, and take all actions reasonably
necessary to satisfy Buyer's obligations under this license;
and f) forthwith return to Nortel, or with Nortel's consent
destroy, any magnetic tape, disc, semiconductor device or
other memory device or system and/or documentation or other
material, including, but not limited to all printed material
furnished by Nortel to Buyer which shall be replaced, modified
or updated.
4. The obligations of Buyer hereunder shall not extend to any
information or data relating to the Software which is now
available to the general public or becomes available by reason
of acts or failures to act not attributable to Buyer.
5. Buyer shall not assign this license or sublicense any rights
herein granted
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Contract No. MGC9701N
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to any other party without Nortel's prior written consent,
such consent not to be unreasonably withheld.
6. Buyer shall indemnify and hold Nortel and its suppliers, as
appropriate, harmless from any loss or damage resulting from a
breach of this Exhibit B. The obligations of Buyer under this
Exhibit B shall survive the termination of the Agreement and
shall continue if the Software is removed from service.
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EXHIBIT C
STORAGE
If Buyer notifies Nortel prior to the scheduled shipment date of Products that
Buyer does not wish to receive such Products on the date agreed by the parties,
or the installation site or other delivery location is not prepared in
sufficient time for Nortel to make delivery in accordance with such date, or
Buyer fails to take delivery of any portion of such Products, Nortel may place
the applicable Products in storage. In that event Buyer shall be liable for all
additional costs thereby incurred by Nortel. Delivery by Nortel of any
Products to a storage location as provided above shall be deemed to constitute
delivery of the Products to Buyer for purposes of this Agreement, including,
without limitation, provisions for payment, invoicing, passage of risk of loss,
and commencement of the Warranty Period.
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EXHIBIT D
LIMITED WARRANTIES AND REMEDIES
1. Nortel warrants that the Equipment supplied hereunder will under
normal use and service be free from defective material and faulty
workmanship and will conform to the applicable Specifications for the
Warranty Period specified in the Product Attachment with respect to
such Equipment. The foregoing warranty shall not apply to items
normally consumed in operation, such as, but not limited to, lamps and
fuses or to Vendor Items. Any installation Services performed by
Nortel with respect to such Equipment shall be free from defects in
workmanship for the Warranty Period set forth in the applicable
Product Attachment.
2. Nortel's sole obligation and Buyer's exclusive remedy under the
warranty set forth in Section 1 above shall be limited to the
replacement or repair, at Nortel's option and expense, of the
defective Equipment, or correction of the defective installation
Services. Replacement Equipment may be new or reconditioned at
Nortel's option.
3. Nortel warrants that any Software licensed by Nortel to Buyer under
this Agreement shall function during the Warranty Period of the
Equipment with respect to which such Software is furnished without any
material, service-affecting nonconformance to the applicable
Specifications, provided that Buyer shall have paid all Software
support fees specified in the applicable Product Attachment. If the
Software fails to so function, Buyer's sole remedy and Nortel's sole
obligation under this warranty is for Nortel to correct such failure
through, at Nortel's option, the replacement or modification of the
Software or such other actions as Nortel reasonably determines to be
appropriate.
4. Unless otherwise stated in a Product Attachment, (a) Nortel's
warranties in Section 3 above shall only apply to the portion of the
Software actually developed by Nortel or its Affiliates, (b) all
other Software shall be provided by Nortel "AS IS", (c) Nortel shall
assign to Buyer on a nonexclusive basis any warranty on such other
Software provided to Nortel by the developer of such other Software to
the extent of Nortel's legal right to do so.
5. The obligations and remedies set forth in Sections 1, 2, and 3 above
shall be conditional upon: the Equipment not having been altered or
repaired, the Software not having been modified, and the Products not
having been installed outside the United States; any defect or
nonconformance not being the result of mishandling, abuse, misuse,
improper storage, improper performance of installation, other
services, maintenance or operation by other than Nortel (including use
in conjunction with any product which is incompatible with the
applicable Equipment or Software or of inferior performance), and/or
any error, act, or omission of Buyer described in Section 11.4; the
Product not having been
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damaged by fire, explosion, power failure, power surge, or other power
irregularity, lightning, failure to comply with all applicable
environmental requirements for the Products specified by Nortel or any
other applicable supplier, such as but not limited to temperature or
humidity ranges, or any act of God, nature or public enemy; and
written notice of the defect having been given to Nortel within the
applicable Warranty Period.
6. The performance by Nortel of any of its obligations described in
Section 2 or 3 of this Exhibit D shall not extend the applicable
Warranty Period except to the extent specified in the applicable
Product Attachment.
7. Upon expiration of the applicable Warranty Period for Equipment
furnished hereunder, repair and replacement Service for such Equipment
shall be available to Buyer from Nortel in accordance with Nortel's
then-current terms, conditions and prices. Such repair and
replacement Service and notice of any discontinuance of such repair
and replacement Service shall be available for a minimum period set
forth in the Product Attachment applicable to such Equipment. This
provision shall survive the expiration of this Agreement.
8. Unless Nortel elects to repair or replace defective Equipment at
Buyer's facility, all Equipment to be repaired or replaced, whether in
or out of warranty, shall be packed by Buyer in accordance with
Nortel's instructions stated in the applicable Product Attachment and
shipped at Buyer's expense and risk of loss to a location designated
by Nortel. Replacement Equipment shall be returned to Buyer at
Nortel's expense and risk of loss. Buyer shall ship the defective
Equipment to Nortel within thirty (30) days of receipt of the
replacement Equipment. In the event Nortel fails to receive such
defective Equipment within such thirty (30) day period, Nortel shall
invoice Buyer for the replacement Equipment at the then-current price
in effect therefor.
9. With respect to any Vendor Item furnished by Nortel to Buyer pursuant
to this Agreement, Nortel shall assign to Buyer on a nonexclusive
basis any warranty granted by the party that supplied such Vendor Item
to Nortel to the extent of Nortel's right to do so.
10. Neither Nortel nor Nortel's suppliers, as appropriate, shall have any
responsibility for warranties offered by Buyer to any of its
customers. Buyer shall indemnify Nortel and Nortel's suppliers, as
appropriate, with respect thereto.
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PRODUCT ATTACHMENT
CARRIER NETWORKS PRODUCTS
Northern Telecom Inc. ("Nortel") and MGC Communications, Inc. ("Buyer") agree
as follows:
1. INCORPORATION BY REFERENCE
This Product Attachment shall be incorporated into and made a part of
Network Products Purchase Agreement No. MGC9701N between Nortel and
Buyer.
2. DEFINITIONS
For purposes of this Product Attachment:
"Acceptance Criteria" shall mean, with respect to any Products
installed by Nortel hereunder, the standards and specifications
contained in the Nortel Installation Manuals which are applicable to
such Products.
"Equipment" shall mean the equipment listed in Schedule A.
"Extension" shall mean Equipment and/or Software which Nortel
engineers and installs and which is added to an Initial System after
the Turnover Date of the Initial System.
"Initial System" shall mean the Equipment and Software which is
included in any configuration identified in Schedule A as an "Initial
System."
"Installation Site" shall mean Buyer's facility identified in an Order
to which the applicable Products identified in such Order shall be
delivered or at which the applicable Services, if any, are to be
performed, respectively.
"Merchandise" shall mean any Equipment which is not part of a System
and with respect to which no engineering or installation Services
shall be provided by Nortel.
"Product Attachment Term" shall mean the period which shall commence
on the date this Product Attachment is executed by the latter of the
parties and shall expire thirty six (36) months thereafter.
"Services" shall mean the services described in Schedule B.
"Software" shall mean the software listed in Schedule A.
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"Specifications" shall mean with respect to any Products furnished
hereunder, the specifications published by Nortel which Nortel
identifies as its standard performance specifications for such
Products as of the date of Buyer's Order for such Products.
"System" shall mean any Initial System or Extension.
"Turnover Date" shall mean, with respect to any Products installed by
Nortel hereunder, the date on which Nortel provides the Turnover
Notice to Buyer pursuant to Section 8.a. of this Product Attachment.
"Warranty Period" shall mean, with respect to:
(a) Any System, the period which shall commence upon the Turnover
Date with respect to such System and shall expire twelve (12)
months thereafter,
(b) Merchandise, the period which shall commence upon the date of
shipment with respect to such Merchandise by Nortel to Buyer
and shall expire ninety (90) days thereafter,
(c) Installation Services involving any System, the period which
shall commence upon the Turnover Date with respect to such
System and shall expire twelve (12) months thereafter,
(d) Equipment which is repaired or replaced pursuant to Nortel's
obligations under Exhibit D to the Agreement, the period
commencing five (5) days after (i) shipment of the replacement
Equipment to Buyer or (ii) completion of the repair at the
Installation Site of the applicable Equipment and which shall
expire on the later of thirty (30) days thereafter or the last
day of the original Warranty Period with respect to the
Equipment which was repaired or replaced, and
(e) Software which was corrected pursuant to Nortel's obligations
under Exhibit D to the Agreement, the period commencing upon
delivery of the corrected Software by Nortel to Buyer and
expiring on the later of thirty (30) days thereafter or the
last day of the original Warranty Period with respect to such
Software.
3. SCOPE
Buyer shall, no later than September 30, 1998, issue Orders for a
minimum of fifteen (15) DMS-500 Initial Systems and a minimum of
seventy five thousand (75,000) DMS-500/RSC Switching Lines described
in the attached Schedule A, for delivery and installation scheduled to
be completed no later than December 31,
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1998, in Buyer's facilities. The first three (3) DMS-500 Initial
Systems shall be delivered to and installed in the Buyer's facilities
located at Atlanta, Georgia; Chicago, Illinois; and Ontario,
California, and the remaining seventeen (17) shall be delivered and
installed in the Buyer's facilities to be designated by the Buyer.
Buyer shall, no later than September 30, 1999, issue additional Orders
for a minimum of five (5) DMS-500 Initial Systems and a minimum of
twenty five thousand (25,000) DMS-500/RSC Switching Lines described in
the attached Schedule A, for delivery and installation scheduled to be
completed no later than December 31, 1999, in Buyer's facilities to be
designated by Buyer. Buyer shall pay the prices, fees and charges set
forth in the attached Schedule A, Part I, Section 1.3, for all of the
Initial Systems Ordered for installation and delivery, in accordance
with Section 7 of this Product Attachment.
Buyer may, during the Product Attachment Term, issue additional Orders
for any miscellaneous circuit packs, as described in the attached
Schedule A ("Miscellaneous Circuit Packs"). Buyer shall receive a 43%
discount off the current list price on any Miscellaneous Circuit Pack
Orders included with Buyer's Order for the DMS-500 Initial System, on
which the Miscellaneous Circuit Packs will be installed, and for
purposes of this Agreement, such described Miscellaneous Circuit Pack
Orders shall be treated as part of the Initial System Order. Buyer
shall receive a 25% discount off the current list price on any Orders
issued for Miscellaneous Circuit Packs at any other time during and
prior to the expiration of the Product Attachment Term, and for
purposes of this Agreement, such Orders shall be treated as an Order
for Merchandise.
Buyer may, during the Product Attachment Term, issue additional Orders
for the Optional Power Plant Equipment described in the attached
Schedule A, Part I, Section 1.4. Buyer shall pay the prices, fees and
charges set forth in the attached Schedule A, Part I, Section 1.4,
for the Optional Power Plant Equipment in accordance with Section 7 of
this Product Attachment.
Buyer may, during the Product Attachment Term, issue additional Orders
for the Extensions and RSC-S Remote System described in the attached
Schedule A, Parts III and IV, respectively. Buyer shall pay the
prices, fees and charges set forth in the attached Schedule A, Parts
III and IV, respectively, for the Extensions and RSC-S Remote Systems
in accordance with Section 7 of this Product Attachment.
4. SCHEDULES
The following Schedules which are attached hereto are an integral part
of the Product Attachment and are incorporated herein by reference:
Schedule A - Products, Prices, and Fees
Schedule B - Services and Charges
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Schedule C - Delivery
Schedule D - Documentation
Schedule E - Revolving Credit Note and Security Agreement
5. ORDERING
With respect to Section 3, ORDERING of the Agreement the following
additional terms shall apply:
a. Buyer shall identify in each Order for Products whether the Products
constitute an Initial System, Extension, or Merchandise. All Orders
for Extensions, Merchandise, or any Services other than engineering
and installation Services provided by Nortel in connection with an
Order for an Initial System shall be subject to written agreement of
Buyer and Nortel on the applicable prices, charges and fees with
respect thereto as required pursuant to Section 6, PRICING, of this
Product Attachment.
b. Notwithstanding Exhibit C to the Agreement, Buyer may by written
notice to Nortel cancel without charge any Order for Products and/or
Services prior to the delivery date of the applicable Products set
forth in such Order or the agreed date for the commencement by Nortel
of the applicable Services ("Service Commencement Date"), except that
if Buyer cancels such Order within six (6) weeks or less of any such
date, a cancellation fee of fifteen percent (15%) of the aggregate
price of all Products and/or Services included in such canceled Order
shall be payable by Buyer. Nortel may invoice such amount upon receipt
of Buyer's notice of cancellation of the Order.
c. Notwithstanding Exhibit C to the Agreement, Buyer may by written
notice to Nortel not less than six (6) weeks prior to the delivery
date of any Products set forth in an Order and/or the Service
Commencement Date of the applicable Services, delay the delivery date
of such Products and/or the Service Commencement Date of such Services
for a period which shall not exceed ninety (90) days from the date
such Products were originally scheduled to be delivered or ninety (90)
days from the Service Commencement Date, subject to the availability
from Nortel of the applicable Products and/or Services after such
period of delay.
d. Except as set forth in Sections 5.b. and 5.c. of this Product
Attachment, any change to an Order after Nortel's acceptance of such
Order shall require written agreement of Nortel and Buyer upon a
written change to the Order ("Change Order") which shall reference the
original Order and be executed by the parties. No such changes shall
be implemented until the applicable Change Order has been executed by
the parties.
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e. With respect to each Order for Products which is accepted by Nortel,
Buyer may make a written request at least ninety (90) days prior to
the scheduled shipment date of such Products for a change ("Change")
consisting of certain addition(s) or deletion(s) to such Products.
After receipt of such request, Nortel shall submit a Job Change Order
("JCO") to Buyer for Buyer's approval with respect to the requested
Change, except that Nortel shall be under no obligation to submit such
JCO to Buyer if Nortel determines that the Price applicable to such
Order would be reduced by more than ten percent (10%) as a result of
the implementation of the Change. Each JCO shall state whether the
requested Change shall increase or decrease the Price and/or time
required by Nortel for any aspect of its performance under the
Agreement with respect to such Order. Buyer shall accept or reject the
JCO in writing within ten (10) days of receipt thereof. Failure of the
Buyer to accept or reject the JCO in writing as described above shall
be deemed a rejection of the JCO by Buyer. In the event an accepted
JCO involves the return to Nortel of any Equipment which shall have
been previously delivered to Buyer, Nortel may invoice and Buyer shall
pay the transportation costs and Nortel's then-current restocking
charge for the returned Equipment.
f. Any increase or decrease in the Price with respect to an Order
hereunder which is occasioned by an accepted JCO shall be added to or
subtracted from, as applicable, the amount of the last payment due
pursuant to Section 6 with respect to such Order.
g. If Buyer rejects a proposed JCO, then the rights and obligations of
the parties with respect to the applicable Order shall not be subject
to Buyer's requested Changes, provided that Buyer shall promptly pay
to Nortel all of Nortel's additional costs and expenses incurred
hereunder in accordance with Buyer's requested Changes and Nortel's
additional costs and expenses subsequently incurred in order that
Nortel may be able to perform Nortel's obligations without
modification by the requested Changes, and Nortel shall be entitled to
an extension of the dates for performance of its obligations with
respect to the applicable Order as a result of any delays in such
performance which result from the foregoing.
6. PRICING
With respect to Section 4, PRICES of the Agreement, the following
additional terms shall apply:
a. The prices set forth in Schedule A with respect to any Initial System
shall be in effect for the Term of this Agreement.
b. The prices for Equipment and the fees for the right to use the
Software included in any Extension, prices for any Merchandise, and
charges for any Services, other
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than engineering and installation Services provided with any Initial
System shall be as subsequently agreed in writing by Nortel and Buyer.
c. All transportation charges associated with the shipment of the
Products to Buyer for delivery are included in the prices, fees and
charges as set forth in the attached Schedule A.
7. TERMS OF PAYMENT
With respect to Section 5, TERMS OF PAYMENT, the following additional
terms shall apply:
a. With respect to the first ten (10) Initial Systems furnished
hereunder by Nortel to Buyer, price listed in Schedule A shall be paid
in accordance with the following:
(1) For good and valuable consideration, Buyer and Nortel hereby
agree that Buyer may pay in installments a portion of the purchase
price for the first ten (10) DMS-500 Initial Systems which Buyer shall
issue Orders for installation and delivery under this Agreement during
the initial twenty six (26) months of the Product Attachment Term
("Ten Systems"). The following terms and conditions shall apply:
a. The maximum amount to be paid in installments for
each of the Ten Systems shall not exceed Four Hundred Thousand
($400,000.00) Dollars ("Maximum Amount").
b. The first DMS-500 Initial System for which the Buyer
shall issue Orders, pursuant to this Agreement, for delivery
and installation in the Buyer's facilities located in Atlanta,
Georgia ("Atlanta Switch"), shall be the model for the number
of host and remote switching lines ("Lines"), Ordered for and
installed in the Ten Systems. In the event that Buyer issues
an Order for installation and delivery of any or all of the
Ten Systems with the same or greater number of Lines in
comparison to the Atlanta Switch, Buyer shall be limited to
the Maximum Amount for the total amount that Buyer may pay in
installment payments. In the event that Buyer issues an Order
for installation and delivery of any or all of the Ten Systems
with a reduced number of Lines in comparison to the Atlanta
Switch, Nortel shall reduce the Maximum Amount for that
particular Initial System by Ten Dollars ($10.00) per line as
the Line size decreases ("Reduced Maximum Amount"). In
determining the Reduced Maximum Amount, Nortel shall subtract
the total number of Lines Ordered for the Initial System from
the total number of Lines of the Atlanta Switch, multiply the
resulting balance times Ten Dollars ($10.00), subtract the
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product from Four Hundred Thousand Dollars ($400,000.00) and
the resulting balance shall equal the Reduced Maximum Amount.
c. Buyer shall pay, with regard to each of the Ten
Systems, the resulting balance of the Maximum Amount or
Reduced Maximum Amount for that Initial System subtracted
from the One Million Five Hundred Fifty Eight Thousand Dollar
($1,558,000.00) purchase price for the DMS-500 Initial System
listed in Schedule A, Part I, Section 1.3, in accordance with
Section 7, Paragraph (a.), Subparagraph (2), of this Product
Attachment.
d. For and in consideration of the purchase price for
the DMS-500 Initial System, Buyer shall receive a software
license, as described in the Exhibit B attached to the Network
Product Purchase Agreement, granting Buyer the right to use
the software installed in each DMS-500 Initial System
purchased under this Agreement. With regard to the Ten
Systems, Buyer shall receive the same software license as
described in the Exhibit B attached to the Network Product
Purchase Agreement, with the following exceptions:
(i) The Maximum Amount or the Reduced Maximum
Amount is equal to the right to use fee for the
software listed in the attached Schedule A, Part II,
Section 2.1 ("Special Software").
(ii) The Buyer's software license for the Special
Software is contingent upon Buyer's successful
completion of all installment payments for each of
the Ten Systems. Notwithstanding any of Nortel's
rights and remedies under this Agreement, in the
event that the Buyer does not successfully complete
all installment payments for any or all of the Ten
Systems, Nortel shall revoke Buyer's software license
for the Special Software and seek any or all other
remedies against Buyer that Nortel may be entitled to
under this Agreement, at law or in equity.
e. Buyer shall, with respect to the payment of the
Maximum Amount and/or Reduced Maximum Amount for each of the
Ten Systems, execute a Security Agreement and Revolving
Credit Note, copies of which are attached hereto as Schedule
E, on or before the Turnover Date for the first of the Ten
Systems, in accordance with Section 8, hereinafter.
f. Buyer shall provide Nortel with quarterly financial
statements within forty five (45) days of the end of each
quarter and with annual audited financial statements for
Buyer's fiscal year within sixty (60) days of the end of each
calendar year. Buyer may pay off the balance due and
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owing to Nortel at any time prior to the completion of the
thirty (30) month term without penalty.
g. Buyer has the option, during the Period, to issue
additional Orders for the DMS-500 Optional Software listed in
the attached Schedule A, Part II, Section 3.0 and to pay the
purchase price for the Software in installments, provided that
the Buyer has a credit balance with respect to the Maximum
Amount or Reduced Maximum Amount due and owing for that
particular Initial System of the Ten Systems.
(2) The remaining portion of the purchase price for the Ten
Systems as calculated pursuant to Section 7, Paragraph a, Subparagraph
(1) (c), hereinabove, shall be invoiced by Nortel in accordance with
the following schedule:
a. Twenty percent (20%) of such price may be invoiced
upon Nortel's acceptance of the Order for such Initial System,
b. Fifty percent (50%) of such price may be invoiced on
the date of shipment by Nortel to Buyer of the switch
component of such Initial System,
c. Twenty percent (20%) of such price may be invoiced on
the Turnover Date of such Initial System, and
d. Ten percent (10%) of such price may be invoiced on
the date of Acceptance of such Initial System.
b. With respect to the remaining Initial Systems, excluding the Ten
Systems, furnished hereunder by Nortel to Buyer the price listed in
Schedule A shall be invoiced by Nortel in accordance with the
following schedule:
(i) Twenty percent (20%) of such price may be invoiced upon
Nortel's acceptance of the Order for such Initial System,
(ii) Fifty percent (50%) of such price may be invoiced on the date
of shipment by Nortel to Buyer of the switch component of such
Initial System,
(iii) Twenty percent (20%) of such price may be invoiced on the
Turnover Date of such Initial System, and
(iv) Ten percent (10%) of such price may be invoiced on the date of
Acceptance of such Initial System.
c. With respect to each Extension furnished hereunder by Nortel to Buyer,
the applicable price determined in accordance with Section 6.b. of
this Product
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Attachment shall be invoiced by Nortel in accordance with the
following schedule:
(i) Twenty percent (20%) of such price may be invoiced upon
Nortel's acceptance of the Order for such Extension,
(ii) Fifty percent (50%) of such price may be invoiced on the date
of shipment by Nortel to Buyer of the Equipment included in
such Extension,
(iii) Twenty percent (20%) of such price may be invoiced on the
Turnover Date with respect to such Extension, and
(iv) Ten percent (10%) of such price may be invoiced on the date of
Acceptance of such Extension.
d. Except as may be otherwise agreed in writing by the parties Nortel's
prices for Merchandise and charges for any Services determined in
accordance with Section 6.b. above may be respectively invoiced upon
delivery of such Merchandise and upon performance of such Services by
Nortel.
e. The Debtor and the Secured Party hereby agree that the Secured Party
shall have a first priority purchase money security interest in the
collateral listed in the Security Agreement, Article II, attached
hereto as Schedule E subject to the following terms and conditions:
(i) Secured Party shall have a first priority purchase money
security interest in each of the Ten Systems for the amount of
the purchase price to be paid by Debtor, as listed in the
Schedule A, Part I, attached hereto, less Four Hundred
Thousand ($400,000.00) Dollars (the "Initial Payment"); and
(ii) Upon the Debtor's complete payment of the Initial Payment for
any one or more of the Ten Systems, the Secured Party shall
subordinate its security interest in such of the Ten Systems
as to which such payments have been received in favor of a
third party lender; provided however, that such subordination
shall be limited such that the security interest in favor of a
third party lender to which the Secured Party's security
interest is subordinate cannot secure the indebtedness in
excess of the amount of the Initial Payment with respect to
that Initial System or eighty percent (80%) of the fair market
value of the Initial System, which ever is greater.
8. TESTING, TURNOVER, AND ACCEPTANCE
Pursuant to Section 8.1 of the Agreement, the rights and obligations
of the parties with respect to testing, turnover and acceptance of any
Products furnished hereunder and installed by Nortel shall be as
follows:
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a. Nortel shall provide Buyer with five (5) days written notice prior to
commencing final commissioning and testing of any Products installed
by Nortel. Buyer shall cause an authorized representative of Buyer to
be present at the applicable Installation Site to witness such final
commissioning and testing, provided that in the event such
representative fails to be present for any reason, Nortel shall not be
required to delay performance of such final commissioning and testing.
In connection with the final commissioning and testing of such
Products, Nortel shall test the Products for conformity with the
applicable Acceptance Criteria. When such tests have been successfully
completed, Nortel shall provide Buyer with written notice ("Turnover
Notice") that the applicable Products meet such Acceptance Criteria
and are ready for Buyer's testing for compliance with such Acceptance
Criteria. Buyer shall promptly complete and return to Nortel Buyer's
acknowledgment of receipt of such Turnover Notice.
b. Following the Turnover Date, Buyer may test the applicable Products
for compliance with the Acceptance Criteria using the tests and test
procedures contained in Nortel's Installation Manuals with respect to
such Products. Within fifteen (15) days following the Turnover Date
of the applicable Products, Buyer shall notify Nortel either that
Buyer has accepted such Products in writing using Nortel's standard
Acceptance Notice form or that Buyer has not accepted such Products in
which case Buyer shall also provide Nortel with a written notice
("Notice of Deficiency") which shall provide in reasonable detail the
manner in which Buyer asserts that the Products failed to meet the
Acceptance Criteria. With respect to any such details with which
Nortel agrees, Nortel shall promptly proceed to take appropriate
corrective action and following correction, Buyer may retest the
Products in accordance with this Section. Buyer shall accept the
Products in writing without delay when the tests pursuant to this
Section indicate that the Products comply with the Acceptance
Criteria.
c. With respect to any points of disagreement between Nortel and Buyer
concerning any Notice of Deficiency which are not resolved by Nortel
and Buyer within ten (10) days after the effective date of the Notice
of Deficiency, Buyer, at its option, may waive any rights it may have
on account of any such points of disagreement, or require that the
disputed points be resolved by arbitration.
d. Buyer shall notify Nortel in writing of its election pursuant to
Section 8.c. not later than ten (10) days after the effective date of
the Notice of Deficiency, if any, given to Nortel by Buyer. Upon
expiration of such ten (10) day period unless Buyer has notified
Nortel to the contrary, Buyer shall be deemed to have elected to waive
its right with respect to any points of disagreement then existing
between it and Nortel with respect to such Notice of Deficiency.
e. If Buyer makes timely election to require arbitration of such disputed
points, the arbitrator shall be chosen by mutual agreement. If the
parties cannot agree upon
31
MGC Communications, Inc.
Carrier Product Attachment
Page 11
an arbitrator within three (3) days of Buyer's election to arbitrate,
each party shall within three (3) days thereafter select an
independent and an unaffiliated person to be an arbitrator. These two
(2) persons selected shall select a third person, independent and
unaffiliated with either party, as a third arbitrator. The arbitration
shall be conducted in accordance with the Rules of the American
Arbitration Association, provided, however that the Arbitrator(s)
shall be empowered to reduce the Prices of Products only to the extent
that the Arbitrator(s) find that the benefit of Buyer's bargain has
been reduced. The Arbitrator(s) shall not have any authority to grant
partial or total rescission unless the Arbitrator(s) determine that
(i) Buyer has not substantially received the benefit of its bargain;
and (ii) money damages will not provide an adequate remedy. Judgment
upon the award rendered by the Arbitrator(s) may be entered in any
Court of competent jurisdiction.
f. For purposes of this Product Attachment, "Acceptance" of the
applicable Products shall occur upon the earliest of the following and
Buyer shall upon request sign Nortel's Acceptance Notice confirming
such Acceptance without any conditions, restrictions, or limitations
of any nature whatsoever:
(i) The date on which Buyer accepts such Products pursuant to
Section 8.b. of this Product Attachment;
(ii) The failure of Buyer to provide Nortel with any notice
required by Section 8.b. of this Product Attachment, with
respect to such Products;
(iii) Use by Buyer of such Products or any portion thereof in
revenue-producing service at any time; or
(iv) Waiver by Buyer of its rights pursuant to Section 8.c. or 8.d.
g. Acceptance by Buyer of such Products pursuant to Section 8.f. of this
Product Attachment above shall not be withheld or postponed due to:
(i) Deficiencies of such Products resulting from causes not
attributable to Nortel, such as, but not limited to (A)
inaccuracy of information provided by Buyer, (B) inadequacy or
deficiencies of any materials, facilities or services provided
directly or indirectly by Buyer and tested in conjunction with
the applicable Products, (C) other conditions external to the
Products which are beyond the limits specified by Nortel in
the Specifications for the Products and which are used by
Nortel in performance calculations with respect to the
Acceptance Criteria, or (D) spurious outputs from adjacent
material; or
32
MGC Communications, Inc.
Carrier Product Attachment
Page 12
(ii) Minor deficiencies or shortages with respect to such Products
which are attributable to Nortel, but of a nature that do not
prevent full and efficient operation of the Products.
h. With respect to any deficiencies of the type described in Section
8.g.(i), Nortel shall at Buyer's request and expense assist Buyer in
the elimination or minimization of any such deficiencies. With respect
to any deficiencies or shortages as described in the Section 8.g.(ii),
Nortel shall, at Nortel's expense, take prompt and effective action to
correct any such deficiencies or shortages.
i. In the event Buyer's Acceptance of any Products is withheld or
postponed due to any deficiencies of the type described in Section
8.g.(i), Nortel shall invoice and Buyer shall pay Nortel's charges and
reasonable expenses incurred by Nortel associated with Nortel's
investigation of the reasons for Buyer's withholding or postponement
of such Acceptance.
9. WARRANTIES AND REMEDIES
With respect to Exhibit D, LIMITED WARRANTIES AND REMEDIES, the
following additional terms shall apply:
a. Except as set forth in Section 9.b. below, Nortel shall in performance
of its obligations under Section 2 of Exhibit D to the Agreement, (i)
ship replacement Equipment or complete the repair within thirty (30)
days of Nortel's receipt of the Equipment to be replaced or repaired,
and (ii) commence the correction of the applicable installation
Services within thirty (30) days of receipt of notice from Buyer
pursuant to Section 5 of Exhibit D to the Agreement.
b. For emergency warranty service situations involving the Equipment,
Nortel shall during the applicable Warranty Period use all reasonable
efforts to ship replacement Equipment within twenty-four (24) hours of
notification of the applicable warranty defect by Buyer pursuant to
Section 5 of Exhibit D to the Agreement, provided that Buyer shall
have requested such emergency service. Nortel may invoice Buyer and
Buyer shall pay Nortel's surcharge for emergency warranty services. If
Nortel determines that due to the particular circumstances, onsite
technical assistance is necessary, Nortel shall use all reasonable
efforts to dispatch emergency service personnel to the applicable
Installation Site within twenty-four (24) hours of receipt of notice
from Buyer as described above.
c. All Products to be repaired or replaced, both within and outside of
the applicable Warranty Period, shall be packed by Buyer in accordance
with Nortel's then-current instructions.
d. No later than ninety (90) days prior to the expiration of the Warranty
Period with respect to any Initial System, Nortel shall offer to Buyer
post-warranty support
33
MGC Communications, Inc.
Carrier Product Attachment
Page 13
by means of an extended service plan or other terms, provided that
neither party shall have any obligation with respect thereto except as
may be agreed upon in writing by the parties.
10. NOTICES
Pursuant to Section 18.5 of the Agreement, any notices by Buyer to
Nortel which are specific to this Product Attachment shall be
delivered to the following address:
Northern Telecom Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxxxx, Xxxxx 00000-0000
Attn.: Vice President and General Manager,
Carrier Networks
Facsimile (000) 000-0000
11. ADDITIONAL TERMS
The following additional terms shall apply to the Agreement:
(a) With respect to Section 14, BUYER'S RESPONSIBILITIES, the following
additional terms shall apply:
(i) Buyer shall be responsible for ordering and coordinating with
each applicable local telephone company the installation of
all central office trunks and test trunks and Buyer shall be
responsible for all utility charges associated with the
installation, testing, operation and maintenance of Products
furnished hereunder, including, but not limited to, all
applicable charges for such central office trunks, test trunks
and any tie lines.
(b) Nortel shall provide documentation with respect to the Products in
accordance with Schedule D to this Product Attachment.
NORTHERN TELECOM INC. MGC COMMUNICATIONS, INC.
By: /s/ Xxxxxx Xxxx By: /s/ Xxxxx X. Xxxxxxxxxx
----------------------------------------------------- ------------------------------------------
(Signature) (Signature)
Name: Xxxxxx Xxxx Name: Xxxxx X. Xxxxxxxxxx
--------------------------------------------------- ----------------------------------------
(Print) (Print)
Title: Group Vice President Title: President/CEO
-------------------------------------------------- ---------------------------------------
NORTEL LAW DEPT.
/s/
---------------------
APPROVED AS TO FORM
April 29, 1997
--------------------
Date
34
MGC Communications, Inc.
Carrier Product Attachment
Page 14
Date: 21 May 97 Date: 5/9/97
--------------------------------------------------- ----------------------------------------
35
MGC COMMUNICATIONS, INC.
CARRIER PRODUCT ATTACHMENT
SCHEDULE A
SCHEDULE A
PRODUCTS, PRICES AND FEES
36
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
I. DMS-500 INITIAL SYSTEM
(DMS-500 SWITCHING SYSTEM)
***
37
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
I. DMS-500 INITIAL SYSTEM
(DMS-500 SWITCHING SYSTEM)
***
38
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
1.0 DMS-500 STANDARD SOFTWARE FEATURES
1.1 Nortel may deliver Software ordered hereunder in a single
Software load which may include Software which Buyer has not
yet licensed ("Non-licensed Software"). Except as set forth
in Section 1.2 below, Buyer shall not be entitled to use such
Non-licensed Software, until such time as the applicable right
to use fees are paid by Buyer pursuant to Section 1.5.
1.2 For the purpose of gathering market trial information and
prior to payment of any applicable right-to-use fees, certain
Non-licensed Software may be placed in service by Buyer on a
limited, non-revenue-generating, trial basis only ("Feature
Trial"). Buyer may request the right to evaluate such Non-
licensed Software for a maximum period of six (6) months
commencing as of the date of Nortel's written consent to such
Feature Trial. Nortel shall respond to Buyer's request as
described above in writing. Within ten (10) business days
following expiration of the agreed to Feature Trial period,
Buyer shall notify Nortel in writing of its plans for
activation or deactivation of such Non-licensed Software, and
the corresponding number of units activated, if applicable.
1.3 Upon Buyer's placement of any Non-licensed Software in revenue
generating service, Buyer shall pay the applicable
right-to-use fees for such Non-licensed Software pursuant to
this Agreement, except as described in Section 1.2. Buyer
shall also have the option to pay the applicable right-to-use
fees for any Non-licensed Software upon installation of a
Software load containing such Non-licensed Software. For any
Non-licensed Software that is installed and added pursuant to
a product computing module load ("PCL") and or non-computing
module load ("NCL"), if any, the right-to-use fees shall be
the list price for such feature in effect as of the date of
activation.
1.4 To ensure Buyer's proper activation and/or usage of the
appropriate Software, Buyer shall properly notify Nortel at
the address specified in Section 9 of this Product Attachment
to the attention of Director, Sales Engineering, prior to the
activation and/or usage by Buyer of any Software. Buyer shall
identify all Software being activated and/or used (including
the number of units activated, if applicable) in each Intial
System.
1.5 Nortel shall promptly review notification from Buyer provided
pursuant to Section 1.4 above and identify any applicable
prerequisite Equipment or Software required by Buyer prior to
activation and/or usage of the applicable Software. Nortel
shall respond to Buyer's written notice by means of a price
quotation. Such price quotation shall include Nortel's consent
to activate and/or use such Software or notification that such
Software requires engineering to determine whether the current
switch configuration will require additional Equipment prior
to activation and/or usage. Upon Buyer's written acceptance
of Nortel's price quotation, Nortel shall grant its consent to
Buyer to activate and/or use such Software prior to payment of
the applicable right-to-use fees. However, under no
circumstances shall such Software be activated and/or used by
Buyer prior to Buyer's acceptance of Nortel's price quotation.
Nortel shall invoice Buyer for all applicable right to use
fees and associated feature activation engineering charges.
One hundred percent (100%) of such invoiced right to use fees
and engineering charges shall be due and payable within thirty
(30) days of the date of Nortel's invoice therefor.
1.6 Notwithstanding the foregoing, Buyer shall not be required to
pay additional right to use fees associated with the Software
licensed prior to the initial date of this Product Attachment.
39
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
1.7 Nortel reserves the right, every six (6) months to submit a
written report for each site containing a Software load. The
written report shall identify all Software activated and/or
used (including the number of incremental units activated, if
applicable) by Buyer during the applicable reporting period.
Buyer shall audit the report against Purchase Order(s) which
have been submitted by Buyer and accepted by Nortel during the
applicable period to determine the existence of any
discrepancies. Buyer shall submit such audited written report
to Nortel at the address specified in Section 9 of this
Product Attachment to the attention of Director, Sales
Engineering, within thirty (30) days from receipt of such
request.
1.8 Nortel also reserves the right to access by remote polling or
to conduct an on-site inspection of any site in which a
Software load is installed and/or to perform an on-site review
of Buyer's books and records related to such site to verify
activation and/or usage of Software.
1.9 Nortel shall issue invoices, for any applicable prices,
charges or fees, in addition to those amounts previously
invoiced, as a result of Buyer's activation and/or usage of
any Software that does not appear on Nortel's written report
or that appear as a result of Nortel's remote polling of an
Initial Systems.
1.10 Upon payment of the applicable right to use fees for Software
activated and/or used by Buyer, Buyer shall receive a
non-exclusive paid-up license to use such Software in
accordance with the provisions of this Agreement. Nortel may
immediately terminate the applicable license granted hereunder
for Buyer's failure to pay the applicable right to use fees
for such Software which has been activated and/or used.
1.11 The obligations of Buyer under this Section 1 shall without
limitation survive the termination of this Agreement and shall
continue if the Software is removed from service. Buyer agrees
to indemnify Nortel or Third Party Software Vendors as
appropriate for any loss or damage resulting from a breach of
this Section 1.
40
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
2.0 LLT0B0005 SOFTWARE INCLUDED IN THE DMS-500 INITIAL SYSTEM NOT
ELIGIBLE FOR "DEFERRED BILLING."
2.1 SOFTWARE INCLUDED IN INITIAL SYSTEM NOT ELIGIBLE FOR "DEFERRED
BILLING"
The following represents the LLT0B0005 Software packages that
are included in the price of the DMS-500 Initial System,
described in Schedule A, Part 1, Section 1.0. The following is
a list of Software only and does not include any/all required
Equipment to provide feature functionality.
S/W PACKAGE DESCRIPTION
----------- -----------
BAS00001 Base Xxxx
BAS00002 Base ANI
BAS00003 Base Generic
BAS00004 Base OA&M
BAS00007 Base Logs
BAS00020 Base Flexible Bellcore AMA
BAS00028 Base DPP
BASE0001 Local Base
BASE0006 Base SN SR60
LOC00001 Local Services
SS700001 SS7 Trunk Signalling
TEL00001 Telecom Layer
TEL00002 TEL CCS7 Channelized Access
TEL00008 XXX0 Xxxx
XXX00000 XXX Services
BAS00012 BAS Remote
EQA00001 Equal Access Local
EQA00002 Equal Access Toll
EQA00003 Cellular - Xxxxxxxxxxxx Xxx Xxxxxx
XXX00000 Intermediate Tandem
EQA00006 EQA C7ISUPLRLTA Conn. EAEO
EQA00007 EQA EA Alt Sw Point
EQA00009 EQA IBN Intra LATA PIC EAEO
EQA00012 EQA C7ISUPLRLTA Conn. AT
NI000007 NI0 ISDN Base
NI000011 NI0 NI-1 PRI
NI000022 NI0 ISDN PRI Base
NTS00005 Equal Access 800
SMA00001 SMA TR303 I/F
2.2 CENTRAL OFFICE LIMITED USAGE FEATURES NOT ELIGIBLE FOR "DEFERRED
BILLING."
The Buyer has a Software license for the following Software
features which may be utilized for the associated initial number
of licenced units. For each additional unit in excess of the
initial number of units, refer to the S/W Optional Part II,
Section 3.2 for incremental pricing and to
41
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
Section 3.1 for special incremental software package pricing.
The following is a list of Software only and does not include
any/all required Equipment to provide feature functionality.
S/W PACKAGE DESCRIPTION UNIT INITIAL UNITS
----------- ----------- ---- -------------
LICENCED
--------
LEA00001 LEAS Toll 1st 50k Directory Directory # 50,000
2.1 LLT0B0005 SOFTWARE INCLUDED IN THE DMS-500 INITIAL SYSTEM ELIGIBLE FOR
"DEFERRED BILLING."
2.1 SOFTWARE INCLUDED IN INITIAL SYSTEM ELIGIBLE FOR "DEFERRED
BILLING"
The following represents the LLT0B0005 Software packages that
are included in the price of the DMS-500 Initial System,
described in Schedule A, Part 1, Section 1.0. The following is
a list of Software only and does not include any/all required
Equipment to provide feature functionality.
S/W PACKAGE DESCRIPTION
----------- -----------
XXX00000 XXX Xxxxxxxx
XXX00000 MDC CLASS on MDC
MDC00006 MDC MBG Standard
MDC00007 MBS Minimum
MDC00010 MDC CLASS on MDC/MPV II
MDC00033 MDC Name/Number Blocking
RES00006 RES Service Enablers
RES00021 RES Anonymous Caller Rejection
RES00022 RES Calling Name Delivery Blocking
RES00027 RES Visual Message Waiting
RES00030 RES Customer Originated Trace
2.2 CENTRAL OFFICE LIMITED USAGE FEATURES ELIGIBLE FOR "DEFERRED
BILLING"
The Buyer has a Software license for the following Software
features which may be utilized for the associated initial number
of licenced units. For each additional unit in excess of the
initial number of units, refer to the S/W Optional Part II,
Section 3.2 for incremental pricing and to Section 3.1 for
special incremental software package pricing. The following is a
list of Software only and does not include any/all required
Equipment to provide feature functionality.
S/W PACKAGE DESCRIPTION UNIT INITIAL UNITS
----------- ----------- ---- -------------
LICENCED
--------
MDC00001 MDC Base Featured Line 11,000
RES00003 RES Display Functionality /Privacy Featured Line 100
RES00005 RES Non-Display Services Featured Line 100
RES00023 RES Calling Name Display SW Featured Line 100
RES00025 RES Call Waiting Display Featured Line 5,000
42
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
RES00032 RES Selective Call Forwarding Featured Line 100
RES00033 RES Selective Call Rejection Featured Line 100
RES00034 RES Distinctive Ringing/Call Wtg Featured Line 100
RES00035 RES Selective Call Acceptance Featured Line 100
RES00036 RES Auto-Recall Blck to Private No. Featured Line 100
3.0 LLT0B005 SOFTWARE OPTIONAL TO THE DMS-500 INITIAL SYSTEM
3.1 CENTRAL OFFICE FEATURE ADDITIONS OVER LIMITED USAGE FEATURES
The Buyer has a Software license for the following Software
features which may be purchased at an incremental price, beyond
the initial licenced units as indicated in Section 2.1.
S/W PACKAGE DESCRIPTION UNIT MIN. UNIT PRICE/
----------- ----------- ---- ---------- ------
INCREMENTS UNIT
---------- ----
MDC00001 MDC Base Featured Line 100 $14.00
RES00023 RES Calling Name Disp Featured Line 100 $30.00
RES00025 RES Call Waiting Disp Featured Line 5,000 $3.00
RES00036 RES Auto-Recall Blck Featured Line 1 $1.00
The following six (6) Class* Software features have a right to
use fee of twenty nine dollars ($29.00) per each Class* line in
100 line increments, beyond the initial licenced units as
indicated purchase on a individual basis then refer to the S/W
Optional Part II, Section 3.2 for incremental pricing.
RES00003* RES Display Functionality /Privacy
RES00005* RES Non-Display Services
RES00032* RES Selective Call Forwarding
RES00033* RES Selective Call Rejection
RES00034* RES Distinctive Ringing/Call Wtg
RES00035* RES Selective Call Acceptance
3.2 LLT0B005 SOFTWARE OPTIONAL
The following represents the LLT0B005 optional Software packages that
are not included in the price of the DMS-500 Initial System as
defined in Schedule A, Part I, Section 1.0 of this Product Attachment.
The following Software represents those feature packages that may be
ordered by Buyer at an additional price for a DMS-500 Initial System
and does not include any/all required Equipment to provide feature
functionality.
PRODUCT NAME ORDER CODE PRICE AND NOTES
------------ ---------- ---------------
BASE SN SR70 Processor BASE0009 The upgrade if previously licensed
from: BASE0006 = $185,000
43
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
ACD ACD Base ACD00001 The fee is $500 per ACD line plus $5,000 per
ACD user group.
ACD MIS ACD00005 The fee is $250 per ACD line.
ACD Miscellaneous ACD00006 $52,000
ACD Compucall ACD00002 The fee is $7,500 per switched virtual circuit.
ACD Compucall-Func ACD00007 The fee is $42,000 per switched virtual circuit.
ACD Ctrx Coord V&Dta ACD00008 The fee is $5,000 per 100 Centrex lines.
ACD Networking ACD00004 The fee is $25,000 for the first 100 Network
ACD lines plus $500.00 per Network ACD line over the
first 100.
ACD Network ACD on PRI ACD00010 The fee is $400.00 per ACD line.
ACD Network ACD on SS7 ACD00009 The fee is $400.00 per ACD line.
AIN Essentials AIN00002 $700,000
AIN Default Routing AIN00010 $65,000
AIN Call Management AIN00006 $200,000
AIN Call Model Cntrl AIN00007 $190,000
AIN Primer AIN00001 The fee is $80,000 Net (not subject to any
discounts) to be paid annually.
AIN SSP Svcs Enhcemnts AIN00011 $40,000
BAS XXXX XX-Cut Re-wrt BAS00049 $8,000
BAS Enh Permanent Signal BAS00041 $40,000
BAS MAP TELNET Access BAS00021 No Charge
BAS SDM Table Access BAS00022 No Charge
BAS RSC-S BAS00009 The fee is $120,000 per module incremental.
BAS Remotes Generic BAS00012 $700.00 per LCM/LCME in the Remote office +
$5,500/Remote
DTP Datapath DTP00001 $17,500
DTP DataCall Tester DTP00003 No Charge
ENS E911 ENS00005 $15,000
ENS ACD PSAP ENS00002 The fee is $47,000 plus $2,000 per E911 position.
The fee is $32,000 plus $2,000 per E911 position if
ENS00001 has been previously licensed.
ENS LDT PSAP ENS00001 $125,000
ENS Large SRDB ENS00004 If more than 1 million records are required the
fee is $195,000*. If less than 1 million records
are required the fee is $145,000*.
EQA Local EQA00001 $4,800 per LGC/LGCI, $4,800 per LTC/LTCI, and $1,600
per LME. The total fee shall not exceed $72,000 per
office.
EQA Toll EQA00002 $1,200 per DCM and $300.00 per TM. The total shall
not exceed $190,000 per office.
EQA Celular Interconnect EQA00004 $25,000
EQA Enh WATS O.[POTS EQA00010 $20,000
EQA Equal Access OSS EQA00011 $8,000
EQA POTS IraLATA PICeaeo EQA00008 $20,000
EQA Intermediate Tandem EQA00005 $20,000
ISUP Cellular ISUP0001 $150,000
XXX XXXX Local LEA00002 $22,500
XXX XXXX Toll LEA00001 $20,000 for each additional Group of 10,000
Directory numbers over the first 50,000.
44
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
LEA SS7 I/W with LEAS LEA00003 $30,000
LOC Carrier Parameter LOC00002 $20,000
MDC - MDC Minimum MDC00001 $1,750 per group of 100 MDC lines, not to exceed
$404,000 per office. The first 100 MDC lines are
included in the base price.
MDC - MDC MSAC MDC00002 $21,733
MDC Personal Call Screen MDC00020 $5,000
MDC Teen Service MDC00035 The fee is $5,000 per 100 MDC lines
MDC MBG Min MDC00005 $73,500
MDC NETNAME Expand MDC00025 $2,000
MDC MBS STD MDC00008 $50,000
MDC MDC PRO MDC00009 $239,200
MDC Enhanced WATS MDC00034 $20,000
MDC MDR VIA AMA MDC00018 $20,000
MDC XXX XXX00000 $195,000
MDC SMDR for XXX XXX00000 $15,000
MDC Tailored MDC 1 MDC00012 $26,500
MDC Tailored MDC 2 MDC00013 $40,000
MDC MBS Installer Tools MDC00019 $30,000
MDC Tailored MDC 3 MDC00014 $45,000
MDC Tailored MDC 4 MDC00015 $30,000
MDC Tailored NARS MDC00016 $50,000
NI0 DPN Support NI000003 $10,000
NI0 DWS NI000004 The fee is $50,000 plus $11,500 per DWS Access
link.
NI0 DWS Carrier Acc NI000028 $200,000 If RES00026 has been
previously/concurrently licensed the fee is $10 K
for the first 5 K EQUIPPED lines & $10 K for each
add'l 5K EQUIPPED lines over the first 5 K EQUIPPED
lines. RES 26 MD'D IN NA04..
NI0 DWS Flexible Acc NI000027 $71,500 *If ESN00003 has been previously purchased
and more than 1 million records are required, the
fee is $50,000. If ESN00003 has been previously
purchased and less than 1 million records are
required, the fee is No Charge
NI0 Intertol ISUP & SS7 NI000023 $200,000 The fee for the functional group PROV0001
is included in the fee for NI000023
NI0 DataSPAN NI000002 The fee is $20,000 per LPP cabinet.
NI0 ISDN BASE NI000007 The fee is $68,500 plus $500 per 100 ISDN Lines plus
$250 for each 2B+D line and $100 for each 1B+D line
NI0 ISDN PRI BASE NI000022 $2,000 per PRI link.
NI0 NI-1 BRI Enhancd Mtc NI000009 $68,000
NI0 NI-1 BRI NI000008 The fee is $251,000 per switch plus $7,200 per each
increment of 480 lines.
NI0 NI-1 PRI Ntwrkng NI000013 The fee is $28,000 plus $3,750 per PRI link.
NI0 NI-1 PRI NI000011 The fee is $66,500 plus $4,800 per PRI link.
NI0 NI-1 Packet NI000010 The license fee is 75K which includes the RTU the
software on: the first 2 NTFX10AA's
45
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
(which may be x.25 and/or x.75 protocols), the first
100 'D' terminals, and the first 10 'B' terminals.
There is an additional 35K license fee to use the
software on
NI0 NI-1 Tandem NI000014 $60,000
NI0 NI-1 PRI IW 4E/5ESS NI000012 $50,000
RES Disp Funct & Prvcy RES00003 $1,500 for each additional 100 featured lines over
the first 100 featured lines. This capability is
sold in blocks of 100 featured lines.
RES Non-Display Services RES00005 $1,500 for each additional 100 featured lines over
the first 100 featured lines. This feature is sold
in increments of 100 featured lines.
RES Call N.D. SW/TCAP RES00023 $3,000 for each additional 100 featured lines over
the first 100. This capability is sold in
increments of 100 featured lines.
RES Selective Call Fwd RES00032 $1,500 for each additional 100 featured lines lines
over the first 100 featured lines. This capability
is sold in increments of 100 featured lines.
RES Selective Call Rej RES00033 $1,500 for each additional 100 featured lines over
the first 100 featured lines. This capability is
sold in increments of 100 featured lines.
RES Dist Ring Call Wtg RES00034 $1,500 for each additional 100 featured lines over
the first 100 featured lines. This capability is
sold in increments of 100 featured lines.
RES Select Call Accept RES00035 $3,000 for each additional 100 SCA lines over the
first 100.
RES Access Management RES00001 $8,000
RES Telemetry Applic RES00010 The fee is $30,000 plus $5,000 per utility telemetry
trunk.
RES Univ Acc to 3WC RES00012 $75,000
RES Univ Acc to CLASS RES00011 The fee is $169,500 for the first 5000 equipped
lines plus $90,000 for each additional 5000
equipped lines over the first 5000.
RES Advncd Cstm Calling RES00002 The fee is $15,000 for the first 100 Advanced Custom
Calling featured lines plus $2,500 for each
additional 100 featured lines. This capability is
sold in increments of 100 featured lines.
RES & MDC Warm Line RES00018 $5,000
RES Call FWD Remote Act RES00019 $27,000
RES Call Screening RES00047 $45,000
RES Call Wake Up Svc RES00014 The fee is $15,000 per switch.
RES Expansion Svcs RES00016 The fee is $20,000 for the first 100 Single Line
Variety pack featured lines plus $1,500 for each
additional 100 featured lines over the
46
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
first 100 featured lines. This capability is sold
in increments of 100 featured lines.
RES Ext Bridged Svcs RES00013 $7,500
RES Sbscr Prgmbl Rng Ctl RES00037 $13,000
RES Sub Act Code Blking RES00015 $20,000
RES Teen Service RES00017 The fee is $11,500 for the first 100 Teen lines plus
$1,500 for each additional 100 Teen lines over the
first 100.
RES Toll Alert RES00038 $275,000
RES Call Waiting Display RES00025 $15,000 for each additional 5000 EQUIPPED lines over
the first 5000. This capability is sold in
increments of 5,000 equipped lines.
RES Call Wtg Delux [TR] RES00040 Fee is $20 K for the first 5 K EQUIPPED lines & $20
K for each add'l 5 K EQUIPPED lines over the first
5 K . This capability is sold in increments of 5K
equipped lines.
RES VSLE & Call Logging RES00024 $50,000
RES I/F Functionality RES00004 The fee is $35,000. If NTX732 has been
previously purchased, the fee is $5,000.
RES Bulk Call Line ID RES00028 The fee is $20,000 for the first 50 data links plus
$10,000 for each additional 25 links over the first
50.
RES Rem Call Fwd Enh RES00020 $12,500
RES SMDI CLID Suppr RES00039 $12,000 The fee is No CHARGE if NTXN07AA has been
previously licensed. The fee is per switch.
RES Auto Recall RES00029 $5,000
RES Auto-Recall Blocking RES00036 The fee is $1.00 (Net Price - not subject to any
discount) per wired line.
RES Cust Tracing Enh RES00031 $3,500
RES Signlng Routng OAM RES00007 $20,000
SAID Essentials SAID0001 $100,000
SAID ESP Phase 2 SAID0005 $15,000
SAID ESP SAID0003 $60,000
SAID Plus SAID0002 $30,000
SAID Universal SAID0004 $60,000
WLC 40mA current limit WLC00004 $5,000
XXX Xxxxxxxx XXX00000 $25,000
XXX Xxxx Xxxxx XXX00000 $20,000
AIN ACB/AR Premium AIN00018 $5,000
BAS RSC-S Sync BAS00015 $30,000
BAS SCM/SMS/SMU BAS00016 $11,000
BAS SCM-SLC96 Spec Svcs BAS00027 $12,000
CDD Trnk Grp Mem Usage CDD00004 $22,500
LOC Intl 15-Dgt Dial LOC00004 $75,000
NTS Extended Capability NTS00012 $15,000
SMA TR303 I/F SMA00001 The fee is $50,000 per SMA or ESMA/SMA2 module.
TEL X0 Xxxx-xxxxx Xxxxxx XXX00000 $30,000
TEL X0 Xxxx Xxx. Xxxxxxx XXX00000 $90,000
47
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
TEL X0 Xxxx Xxxx. Xxxxxx XXX00000 $36,000
TEL X0 Xxxxxxx Xxxxxxxxx XXX00000 The fee is No Charge for a STP office because the
fee is included in the STPE0200 OR the fee is
$76,000 for LOCAL, TOLL, LOCAL/TOLL, TOLL/TOPS, or
LOCAL/TOLL/TOPS offices.
TEL X0 Xxxxxxx Xxxxxxxxx XXX00000 The fee is $200,000 for the first 511 route sets
plus $25,000 per each add'l group of 000 xxxxx xxxx.
XXX Xxxxxxx Xxxxxxxxx XXX00000 $120,000 The fee is no charge if NTX840AA or
NTXJ40AA has been previously licensed.
XXXX CUSTDP Trigger CAIN0500 $100,000
XXXX Extension Parms CAIN0200 $50,000
XXXX SCP Simulator CAIN0300 $30,000
XXXX SPECDIG Trigger CAIN0501 $100,000
XXXX Test Query Tool CAIN0400 $30,000
CRDS Card Services CRDS0001 $120,000
CRDS MVP Card Services CRDS0003 $50,000
CRDS TCAP Card Services CRDS0002 $25,000
N00R N00 Routing N00R0001 $100,000
N00R N00/NXX TCAP N00R0002 $125,000
NPRI PRI Netwk Interface NPRI0001 $25,000 NTXS81AA functionality now ordered under
NTS00013
NSER Network Services NSER0001 $100,000
NSER TCAP Auth & A.V. NSER0002 $20,000
PRLT ISDN PRI RLT PRLT0001 $175,000
UDWS UCS Dialable Wbnd UDWS0001 $175,000
UTRS UCS Trans & Rout UTRS0001 $90,000
BSVR Billing Server Optn BSVR0001 This is a custom developed package developed for a
single customer. It is not available to other
customers. Available for 2 DMS200 sites in PA only
in LEC & LET loads. It is x-coupled in all other
PCLs.
XXX XXX XXX00000 $200,000
DCR Dual X25 link DCR00003 The fee is $20,000 per Network processor and $3,000
per switch.
DCR Mult. Net. Access DCR00002 $56,000
UCSB UCS Base UCSB0001 $286,700
48
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
III. DMS-500 Extensions
(DMS-500 Extensions)
***
49
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
III. DMS-500 Extensions
(DMS-500 Extensions)
***
50
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
III. DMS-500 Extensions
(DMS-500 Extensions)
***
51
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
III. DMS-500 Extensions
(DMS-500 Extensions)
***
52
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
III. DMS-500 Extensions
(DMS-500 Extensions)
***
53
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
IV. RSC-S SYSTEM
NORTEL SHALL ENGINEER EACH INITIAL SYSTEM ORDERED HEREUNDER IN ACCORDANCE
WITH NORTEL'S STANDARD ENGINEERING PRACTICES AND PROCEDURES, AND
THEREAFTER NORTEL SHALL PROVIDE BUYER WITH A DETAILED LIST OF THE
COMPONENTS OF SUCH INITIAL SYSTEM.
1.0 INITIAL RSC-S (OPTIONAL)
1.1 THE FOLLOWING REPRESENTS THE SONET REMOTE SWITCHING CENTER
EQUIPMENT THAT WILL BE DELIVERED WITH THE INITIAL SYSTEM;
- (1) Remote Cluster Controller (RCC2) Shelf
- (1) Remote Maintenance Module (RMM) Shelf for Testing,
Diagnostics, and Alarms
- (1) Line Concentrating Module Enhanced (LCME), 480 Wired /
480 Equipped POTS Lines
- (1) Host LTCI, 384 Wired / 384 Equipped Ports
- Common equipment including XPM+
- CMR and UTRs
- Sixteen (16) DS-1 C-Side Interfaces
- Any required Service/Test Circuits
- Any required ENET, MS or processor memory expansions
relating to this LTCI
- Power Distribution equipment to support the above
configuration.
- Nortel's standard compliment of one spare per unique circuit
pack for the DMS-500 Initial System.
1.2 INITIAL RSC-S SYSTEM:
The price for the Initial RSC-S equipped and wired as
described in Section 2.1 above, including host LTCI and the
fee for the license of the Software is Two Hundred
Thirty-Seven Thousand Dollars ($237,000).
2.0 RSC-S EXTENSION PRICING
2.1 RSC-S LINES
The price for an RSC-S Line Extension includes the following.
The LCM provides line side interface to the RSC-S. Each RSC-S
Line Extension may be purchased in increments as defined
below:
a) LCM Equipment or then current common control.
b) Any required processor memory Extension.
c) Any required RSC-S service/test circuits to support
the RSC-S Extension.
d) Power Distribution Center (PDC) equipment as
required to support the RSC-S Extension.
e) Spare circuit.
54
MGC Communications, Inc.
Carrier Product Attachment
Schedule A
IV. RSC-S SYSTEM
2.2 RSC-S LINE PRICING
RSC-S lines may be purchased at the below listed prices:
LINE TYPE INITIAL PRICE/LINE EXTENSION PRICE/LINE
--------- ------------------ --------------------
Wired Lines - Non ISDN Frame $60 $90
Wired Lines - ISDN Frame $80 $120
Equipped POTS $26 $39
Equipped MBS $59 $89
Equipped ISDN BRI Line $70 $105
Non ISDN wired frames will be purchased in one thousand two
hundred eighty (1,280) wired line increments. ISDN wired
frames will be purchased in nine hundred sixty (960) wired line
increments. POTS and MBS equipped lines will be purchased in
one hundred (100) line increments. ISDN BRI equipped lines
will be purchased in fifty (50) line increments.
55
MGC COMMUNICATIONS, INC.
CARRIER PRODUCT ATTACHMENT
SCHEDULE B
SCHEDULE B
SERVICES AND CHARGES
ENGINEERING
1. Nortel shall engineer each System furnished hereunder in accordance
with Nortel's engineering practices applicable to such Initial System
at the time such engineering is performed.
2. Nortel's charges for engineering each Initial System are included in
the prices and fees for the Initial System set forth in Schedule A.
3. The provision of any other engineering by Nortel and the charges
associated therewith shall be as subsequently agreed in writing by
Nortel and Buyer.
INSTALLATION
1. Nortel shall install each Initial System furnished hereunder at the
applicable Installation Site in accordance with Nortel's installation
practices applicable to such Initial System at the time such
installation is performed.
2. Nortel's charges for performance of such installation are included in
the prices and fees for the Initial System set forth in Schedule A.
3. The provision of any other installation by Nortel and the charges
associated therewith shall be as subsequently agreed in writing by
Nortel and Buyer.
TRAINING
1. With each Initial System furnished hereunder, Nortel shall provide to
Buyer at no additional charge one hundred (100) days of training at
Nortel's Training Center currently located in Raleigh, North Carolina.
Such training shall be in any of the courses scheduled to be provided
at that Training Center as set forth in NTI's applicable Technical
Training Course catalog with respect to the Products described in
Schedule A to this Product Attachment.
2. Buyer shall be responsible for the payment of all travel and living
expenses of its employees whom Buyer sends to receive such training.
3. Additional Training in such courses shall be provided by Nortel to
Buyer subject to availability and scheduling of such courses. NTI may
change the schedule of such courses at any time. Such additional
training shall be provided at NTI's then-current charges.
56
MGC COMMUNICATIONS, INC.
CARRIER PRODUCT ATTACHMENT
SCHEDULE B
4. All training provided by NTI shall consist of such materials and cover
such subject as NTI in its sole discretion determines to be
appropriate. Nortel makes no representation concerning the ability of
anyone to satisfactorily complete any training.
5. Nortel may add to, or delete from, the subject matter and or medium of
any of the training courses which NTI provides. In addition, NTI may
reschedule such courses as NTI determines to be appropriate.
6. The availability of any training to Buyer as set forth above shall be
subject to any prerequisites identified by NTI in its training catalog
or other documentation with respect to such training.
ADDITIONAL SERVICES
1. All other services to be furnished hereunder shall be subject to
written agreement of the parties which shall set forth the terms and
conditions applicable to the provision of such services and a
description of such services and the charges for such services.
57
MGC COMMUNICATIONS, INC.
CARRIER PRODUCT ATTACHMENT
SCHEDULE C
SCHEDULE C
DELIVERY
INTENTIONALLY LEFT BLANK
58
MGC COMMUNICATIONS, INC.
CARRIER PRODUCT ATTACHMENT
SCHEDULE D
SCHEDULE D
DOCUMENTATION
Certain documentation with respect to the Products may be made available to
Buyer on CD-ROM pursuant to the terms and conditions set forth below.
In addition, Nortel may furnish to Buyer such other documentation with respect
to the Products as Nortel deems appropriate.
HELMSMAN TERMS AND CONDITIONS
1. DEFINITIONS
"CD-ROM" shall mean a compact disk with read-only memory.
"CD-ROM Software" shall mean the computer programs which provide basic logic,
operating instructions or user-related application instructions with respect to
the retrieval of CD-ROM Documentation, along with the documentation used to
describe, maintain and use such computer programs.
"CD-ROM Documentation" shall mean the documentation that Nortel makes available
to its customers on CD-ROM with respect to DMS-250, DMS-300, and/or DMS-STP
Systems.
2. SCOPE
With the delivery of each Initial System ordered by Buyer, Nortel shall deliver
a CD-ROM on which the appropriate CD-ROM Documentation is contained and a user
manual which shall set forth the procedures by which Buyer may use the CD-ROM
Software to access to the CD-ROM Documentation.
Buyer shall be solely responsible for obtaining, at its cost and expense, any
computer or other equipment and software required to use the CD-ROM, CD-ROM
Software and/or CD-ROM Documentation.
Buyer may order additional CD-ROMs from Nortel at Nortel's then current fees
therefor, and any such additional CD-ROMs shall be subject to these terms and
conditions.
3. LICENSE
Upon delivery of the CD-ROM, Nortel shall grant to Buyer a non-exclusive,
non-transferable and non-assignable license, subject to these terms and
conditions:
59
MGC COMMUNICATIONS, INC.
CARRIER PRODUCT ATTACHMENT
SCHEDULE D
(a) to use CD-ROM Software solely to access to the CD-ROM Documentation;
and
(b) to use the CD-ROM Documentation solely to operate and maintain the
Initial System with which it was delivered.
Buyer acknowledges that, as between Nortel and Buyer, Nortel retains title to
and all other rights and interest in the CD-ROM Software and CD-ROM
Documentation. Buyer shall not modify, translate or copy the CD-ROM Software
or CD-ROM Documentation without Nortel's prior written consent. Buyer shall
hold secret and not disclose to any person, except Buyer's employees with a
need to know, any of the CD-ROM Software or CD-ROM Documentation.
Buyer shall not sell, license, reproduce or otherwise convey or directly or
indirectly allow access to the CD-ROM Software or CD-ROM Documentation to any
other person, firm, corporation or other entity.
Except to the extent expressly set forth in this Schedule D, Nortel shall have
no obligations of any nature whatsoever with respect to the CD-ROM Software or
the CD-ROM Documentation.
4. DISCLAIMER OF WARRANTY AND LIABILITY
NORTEL MAKES NO REPRESENTATIONS OR WARRANTIES OF ANY NATURE WHATSOEVER WITH
RESPECT TO THE CD-ROM, CD-ROM SOFTWARE, CD-ROM DOCUMENTATION OR ANY
INFORMATION CONTAINED ON ANY OF THE FOREGOING OR ANY RESULTS OR CONCLUSIONS
REACHED BY BUYER AS A RESULT OF ACCESS TO OR USE THEREOF, OR WITH RESPECT TO
ANY OTHER MATTER OR SERVICE PROVIDED BY NORTEL, WHETHER STATUTORY, EXPRESS OR
IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR AGAINST INFRINGEMENT. NORTEL SHALL NOT BE
LIABLE FOR ANY DIRECT, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES
OF ANY NATURE WHATSOEVER INCLUDING ANY SUCH DAMAGES WHICH MAY ARISE OUT OF THE
USE OF OR INABILITY TO USE OR ACCESS THE CD-ROM, THE CD-ROM SOFTWARE, THE
CD-ROM DOCUMENTATION, AND FURTHER INCLUDING LOSS OF USE, REVENUE, PROFITS OR
ANTICIPATED SAVINGS REGARDLESS OF HOW SUCH DAMAGES MAY HAVE BEEN CAUSED.
5. GENERAL
Nothing contained in this Schedule D shall limit, in any manner, Nortel's right
to change the CD-ROM Software or CD-ROM Documentation or the design or
characteristics of Nortel's Products at any time without notice and without
liability.
60
MGC Communications, Inc.
Carrier Product Attachment
Schedule E
SCHEDULE E
I. REVOLVING CREDIT NOTE
61
REVOLVING CREDIT NOTE
$4,000,000.00 New York, New York May 21, 1997
FOR VALUE RECEIVED, the undersigned, MGC COMMUNICATIONS, INC., a
Nevada corporation ("Maker"), promises to pay to the order of NORTHERN TELECOM
INC., a Delaware corporation ("Payee"), the principal sum of FOUR MILLION AND
NO/100 DOLLARS ($4,000,000.00), or so much thereof as may be advanced or deemed
advanced and outstanding hereunder from time to time, together with interest as
provided below. All payments on this Revolving Credit Note (the "Note") shall
be due and payable in lawful money of the United States of America, without
setoff, counterclaim or deduction, at the office of Payee at 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxxxx 00000-0000, or such other place as Payee shall
request.
Reference is hereby made to that certain Network Products Purchase
Agreement No. MGC9701N dated as of May 21, 1997, between Maker and Payee (as
modified by that certain Product Attachment - Carrier Networks Products dated
as of May 21, 1997, between Maker and Payee [the "Attachment"], the
"Purchase Agreement"). All initially-capitalized terms used herein shall have
the meanings given such terms in the Purchase Agreement unless otherwise
defined herein. This Note is the "Revolving Note" referred to in the Purchase
Agreement.
1. ADVANCES. On each Turnover Date for the first ten Initial Systems
(as such terms are defined in the Attachment), an amount equal to the Maximum
Amount or the Reduced Maximum Amount, as applicable, for each such Initial
System, will be advanced hereunder by the Payee for the benefit of the Maker.
The sum of all such advances at any time outstanding shall not exceed the
lesser of $4,000,000.00 or the sum of the Maximum Amount or Reduced Maximum
Amount, as applicable, for each of the first ten Initial Systems for which the
Turnover Date has occurred (such lesser amount, as reduced in accordance with
paragraph 2, being hereinafter referred to as the "Available Amount"). Advances
may be made by Payee to Maker hereunder from time to time from the date hereof
through but excluding May 21, 1999 (the "Advance Termination Date"). Payee
shall in no event make any advances hereunder during the existence of any Event
of Default (as hereinafter defined). If at any time the Available Amount
exceeds the outstanding principal balance of this Note, the Maker may request
advances hereunder to pay for software purchased under the Purchase Agreement
for use in the first ten Initial Systems. All advances shall be made by credit
against the obligations of the Maker under the Purchase Agreement. No cash
advances shall be made to the Maker. Absent manifest error, the records of the
Payee with respect to the times and amounts of the advances hereunder shall be
conclusive.
2. REDUCTIONS IN AVAILABILITY; MANDATORY PREPAYMENTS. On each date
which is thirty months after the Turnover Date for any of the first ten Initial
Systems, the Available Amount shall be reduced by an amount equal to the
Maximum Amount (or Reduced Maximum Amount, as applicable) for such Initial
System. If at any time
62
the outstanding principal balance of this Note exceeds the Available Amount (as
reduced pursuant to this paragraph 2) for any reason, the Maker shall
immediately pay the amount of such excess to the Payee.
3. INTEREST. The unpaid principal balance from time to time
outstanding hereunder shall bear interest at a rate per annum which shall from
day to day be equal to the lesser of (a) fourteen percent (14%) (calculated
based on a 360-day year and the actual number of days elapsed) or (b) the
Maximum Lawful Rate (as hereinafter defined). Following the occurrence and
during the continuance of an Event of Default, the unpaid principal balance
outstanding hereunder, and, to the extent permitted by applicable law, any
accrued but unpaid interest, shall bear interest at a rate per annum which
shall from time to time be equal to the lesser of (a) seventeen percent (17%)
(calculated based on a 360-day year and the actual number of days elapsed) or
(b) the Maximum Lawful Rate.
4. PAYMENTS. Beginning with the last day of the calendar quarter
following the Turnover Date for the first Initial System and continuing on the
last day of each succeeding calendar quarter thereafter through but excluding
June 30, 2002 (the "Maturity Date"), the Maker shall make payments of principal
and interest on this Note in an amount equal to ten percent (10%) of the
Maker's total gross revenue from operations for the calendar quarter ending on
such date. In the event that such payment amount is insufficient to pay all of
the accrued but unpaid interest owing under this Note on any such payment date,
the Maker may at its option pay the additional accrued but unpaid interest. Any
accrued but unpaid interest which is not paid on any payment date shall be
treated as an advance hereunder and added to the outstanding principal balance
of this Note as of the date on which such payment was due. The entire unpaid
principal balance of this Note, plus all accrued but unpaid interest thereon,
shall be due and payable in full on the Maturity Date.
5. SECURITY. Payment and performance of this Note is secured by the
liens and security interests created by the Security Agreement of even date
herewith executed by the Maker in favor of the Payee.
6. VOLUNTARY PREPAYMENTS. The unpaid principal balance of this Note
may be prepaid in whole or in part at any time without premium or penalty.
7. EVENTS OF DEFAULT AND REMEDIES. Without notice or demand (which are
hereby waived), the entire unpaid principal balance of, and all accrued but
unpaid interest on, this Note shall immediately become due and payable at the
option of the holder hereof upon the occurrence of any Event of Default. The
occurrence of any one or more of the following shall constitute an Event of
Default hereunder (each an "Event of Default"): (a) a failure by Maker to make
any payment of principal or interest on this Note or any other payment required
of Maker by the Loan Documents when due and such failure continues for a period
of five (5) days after Payee has provided notice to Maker via facsimile; (b)
Maker shall fail to observe or perform any obligation, requirement, covenant or
restriction to be observed or performed by it under the Security Agreement or
any other Loan Document (other than a payment
2
63
described in subparagraph (a) above) and such failure continues for a period of
five (5) days after Payee has provided notice to Maker via facsimile, or a
default or event of default occurs under any other Loan Document which is not
cured within any applicable grace period provided therein; (c) any
representation or warranty made by Maker to Payee in any of the Loan Documents
or in any financial statement, representation, warranty or certificate made or
furnished to Payee in connection with the Security Agreement or any of the
other Loan Documents, or the Purchase Agreement, or as an inducement for Payee
to enter into the Security Agreement, the other Loan Documents or the Purchase
Agreement, shall be false, misleading, incorrect or incomplete in any material
respect; (d) the appointment of a receiver, trustee, conservator, or liquidator
of Maker, any guarantor of any of the Obligations (a "Guarantor"), the
Collateral or any part thereof, or any other property of Maker or of any
Guarantor which is not dismissed within thirty (30) days after its filing; (e)
a filing by Maker or any Guarantor of a voluntary petition seeking an entry of
an order for relief as a debtor in a proceeding under the United States
Bankruptcy Code or seeking reorganization or rearrangement or taking advantage
of any bankruptcy, insolvency, liquidation, conservatorship, receivership,
moratorium, rearrangement, reorganization or other similar law for the relief
of debtors, or an answer by Maker or any Guarantor admitting the material
allegations of a petition filed against Maker or a Guarantor, as the case may
be, in any bankruptcy, reorganization, insolvency, conservatorship, or similar
proceeding, or an admission by Maker or any Guarantor in writing of an
inability to generally pay its, his or their debts as they become due; (f) the
making by Maker or any Guarantor of a general assignment for the benefit of
creditors; (g) failure of Maker to generally pay its debts as they mature or
failure of any Guarantor to generally pay its debts when they mature; (h) the
filing of a petition or entry of an order for relief by or against Maker or any
Guarantor as debtor in a proceeding under the United States Bankruptcy Code by
any court of competent jurisdiction, or approving a petition seeking
reorganization of Maker or any Guarantor or an arrangement of their debts, or
appointing a receiver, trustee, conservator, or liquidator of Maker or any
Guarantor, the Collateral or any party thereof, or any other property of Maker
or of any Guarantor not dismissed within thirty (30) days after filing; (i) the
occurrence of a default by Maker or any Guarantor, or an event or condition
which, with the giving of notice or passage of time, or both, would constitute
a default by Maker or any Guarantor under any agreement between Maker or any
Guarantor and Payee; (j) the liquidation, termination, or dissolution of Maker
or any Guarantor; (k) if Maker or any Guarantor repudiates any of its
obligations under the Note or contests the validity of the security interest
granted in the Security Agreement or the enforceability of the rights and
remedies provided in the Security Agreement; (l) Maker or any Guarantor shall
have concealed, removed, or permitted to be concealed or removed, any part of
its property, with intent to hinder, delay or defraud its creditors or any of
them, or made or suffered a transfer of any of its property which may be
fraudulent under any bankruptcy, fraudulent conveyance or similar law, or shall
have made any transfer of its property to or for the benefit of a creditor at a
time when other creditors similarly situated have not been paid; or have
suffered or permitted, while insolvent, any creditor to obtain a lien upon any
of its property through legal proceedings or distraint; (m) Maker or any
Guarantor shall be in default of an obligation to pay any indebtedness greater
than Fifty Thousand
3
64
Dollars ($50,000) due any third person and as a result of such failure to pay,
the third person has accellerated their obligation to pay; (n) Maker or any
Guarantor shall suffer final judgments not covered by insurance for payment of
money aggregating in excess of Two Hundred Fifty Thousand Dollars ($250,000)
and shall not discharge such judgment within thirty (30) days, unless such
judgement is not subject to execution or the execution of such judgement is
stayed pending appeal; or (o) the Loan Documents shall at any time after their
execution and delivery and for any reason, due to any action or inaction of the
Maker, cease to create valid and perfected first priority liens on or security
interests in and to the property purported to be subject to such Loan
Documents. Upon the occurrence of an Event of Default, the holder of this Note
may (i) offset against this Note any sum or sums owed by the holder hereof to
Maker or any Guarantor, (ii) proceed to protect and enforce its rights either
by suit in equity and/or by action at law, or by other appropriate proceedings,
whether for the specific performance of any covenant or agreement contained in
this note, or in aid of the exercise of any power or right granted by this
Note, or to enforce any other legal or equitable right of the holder of this
Note, and/or (iii) pursue the remedies available to Payee under the Security
Agreement, the other Loan Documents, at law and otherwise.
8. ATTORNEY'S FEES AND COSTS. In the event of any litigation between
Maker and Payee with respect to this note, the prevailing party shall be
entitled to recover its reasonable attorneys fees and expenses.
9. CUMULATIVE RIGHTS. No delay on the part of the holder of this Note
in the exercise of any power or right under this Note, or under any other Loan
Document shall operate as a waiver thereof, nor shall a single or partial
exercise of any such power or right. Enforcement by the holder of this Note of
any security for the payment hereof shall not constitute any election by it of
remedies so as to preclude the exercise of any other remedy available to it.
10. MAXIMUM INTEREST RATE. Regardless of any provision contained
herein, or in any other Loan Document, Payee shall never be entitled to
contract for, charge, receive, take, collect, reserve or apply, as interest on
this Note, any amount in excess of the maximum rate of interest from time to
time permitted under state or federal law applicable to the indebtedness
evidenced hereby, after taking into account any amount, fee or charge which is
characterized as interest under applicable law (the "Maximum Lawful Rate"), and
in the event Payee ever contracts for, charges, receives, takes, collects,
reserves or applies, as interest, any such excess, such amount which would be
deemed excessive interest shall be deemed a partial prepayment of principal on
this Note and treated hereunder as such; and, if this Note is paid in full, any
remaining excess shall promptly be paid to Maker. In determining whether the
interest paid or payable, under any specific contingency, exceeds the Maximum
Lawful Rate, Maker and Payee shall, to the maximum extent permitted under
applicable law, (a) characterize any nonprincipal payment as an expense, fee or
premium rather than as interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate and spread, as appropriate
to reflect variations in the Maximum Lawful Rate, the total amount of interest
throughout the
4
65
entire contemplated term of this Note, so that the interest rate does not
exceed the Maximum Lawful Rate throughout the entire term of this Note;
provided that, if the unpaid principal balance hereof is paid and performed in
full prior to the end of the full contemplated term hereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Lawful
Rate, Payee shall refund to Maker the amount of such excess and, in such event,
Payee shall not be subject to any penalties provided by any laws for
contracting for, charging, receiving, taking, collecting, reserving or applying
interest in excess of the Maximum Lawful Rate. Upon the tender by Payee or any
holder of this Note to Maker of any excess amount, Maker will be deemed to have
accepted such excess in full satisfaction of any claim (including, without
limitation, a claim of usury) arising out of such excess being contracted for,
charged, received, taken, collected, reserved or applied.
11. WAIVER. Maker, and each surety, endorser, guarantor, and other
party ever liable for the payment of any sum of money payable on this Note,
jointly and severally waive notice, demand, presentment, protest, notice of
protest, notice of nonpayment, notice of dishonor, notice of intention to
accelerate, notice of acceleration, and any and all lack of diligence or delay
in collection or the filing of suit hereon which may occur, and agree that
their liability on this Note shall not be affected by any renewal or extension
in the time of payment hereof, by any indulgences, or by any release,
impairment or change in any security for the payment of this Note, and hereby
consent to any and all renewals, extensions, indulgences, releases, or changes
(including partial payments), regardless of the number of such renewals,
extensions, indulgences, releases or changes, without notice and for any period
or periods of time, before or after maturity, all without prejudice to the
holder. The holder shall similarly have the right to deal in any way, at any
time, with one or more of the foregoing parties without notice to any other
party, and to grant any such party any extensions of time for payment of any of
said indebtedness, or to release or substitute part or all of the collateral
securing this Note, or to grant any other indulgences or forbearance
whatsoever, without notice to any other party and without in any way affecting
the personal liability of any party hereunder.
12. SUCCESSORS AND ASSIGNS. All of the covenants, stipulations,
promises and agreements in this Note by or on behalf of Maker shall bind
Maker's successors and assigns, whether so expressed or not; provided, however,
that Maker may not, without the prior consent of Payee, assign any rights,
powers, duties, or obligations under this Note. Any holder of this Note shall
succeed to the rights of Payee hereunder.
13. INVALID PROVISIONS. Any provision in this Note prohibited by law
shall be ineffective only to the extent of such prohibition and shall not
invalidate the remainder of this Note.
14. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND APPLICABLE FEDERAL LAW.
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15. NOTICES. All notices or demand given hereunder shall be given as
provided in the Security Agreement.
16. HEADINGS. The headings of the sections of this Note are inserted
for convenience only and shall not be deemed to constitute a part hereof.
17. PAYMENTS; BUSINESS DAY. Each payment or prepayment hereon must be
paid at the office of Payee specified above in lawful money as therein
specified and in funds which are or will be available for immediate use by
Payee at such office on or before 2:00 p.m., Dallas, Texas, time on the day
such payment or prepayment is due. If a payment of principal or interest hereon
is due on a day which is not a Business Day (as defined in the Security
Agreement), Maker shall be entitled to delay such payment until the next
succeeding Business Day.
18. FINAL AGREEMENT. THIS WRITTEN LOAN AGREEMENT, TOGETHER WITH THE
OTHER LOAN DOCUMENTS AS WRITTEN, REPRESENT THE FINAL AGREEMENT OF MAKER AND
PAYEE AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF MAKER AND PAYEE. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN MAKER AND PAYEE.
19. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE MAKER AND EACH SURETY, ENDORSER, GUARANTOR, AND OTHER PARTY
EVER LIABLE FOR THE PAYMENT OF ANY SUM OF MONEY PAYABLE ON THIS NOTE, HEREBY
IRREVOCABLY AND EXPRESSLY AND JOINTLY AND SEVERALLY WAIVE ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT,
TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS NOTE, THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF
THE PAYEE IN THE NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.
EXECUTED at Las Vegas, Nevada, as of the day and year first above
written.
MGC COMMUNICATIONS, INC.
By:/s/ Xxxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxxxxx
---------------------------------
Title: President/CEO
--------------------------------
[SEAL]
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MGC Communications, Inc.
Carrier Product Attachment
Schedule E
SCHEDULE E
II. SECURITY AGREEMENT
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SECURITY AGREEMENT
------------------
(MGC Communications, Inc.)
THIS SECURITY AGREEMENT (the "Agreement") dated as of May 21, 1997, is
by and between MGC Communications, Inc., a Nevada corporation (the "Debtor"),
whose address is 0000 Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000, and whose
Tax I.D. No. is ________________ and Northern Telecom Inc., a Delaware
corporation (the "Secured Party"), whose address is 0000 Xxxxxxxx Xxxxxxxxx,
Xxxxxxxxxx, Xxxxx 00000-0000.
R E C I T A L S:
WHEREAS, the Debtor and the Secured Party have entered into that
certain Network Products Purchase Agreement No. MGC9701N dated as of May 21,
1997 (the "Purchase Agreement"), pursuant to which the Debtor intends to
purchase from the Secured Party certain telecommunications equipment as more
fully described in the Purchase Agreement; and
WHEREAS, the Debtor has requested the Secured Party to finance a
portion of the purchase price for the purchase by the Debtor of the first ten
Initial Systems (as defined in the Product Attachment - Carrier Networks
Products attached to the Purchase Agreement, hereinafter the "Product
Attachment") purchased under the Purchase Agreement; and
WHEREAS, the Secured Party has agreed to finance a portion of such
purchases on the terms provided in that certain Revolving Credit Note dated
May 21, 1997, in the maximum principal amount of Four Million Dollars
($4,000,000) made by the Debtor payable to the order of the Secured Party (the
"Note"), the Purchase Agreement and this Agreement; and
WHEREAS, the execution and delivery of this Agreement by the Debtor is
a condition to the extension of credit to the Debtor by the Secured Party;
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the adequacy, receipt and sufficiency of which are
hereby acknowledged, and in order to induce the Secured Party to extend credit
to the Debtor under the Note, the parties hereto hereby agree as follows:
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ARTICLE I
Definitions
Section 1.01. Definitions. As used in this Agreement, the following
terms have the following meanings:
"Account" means any "account," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by
the Debtor, and, in any event, shall include, without limitation, each
of the following, whether now owned or hereafter acquired by the
Debtor: (a) all rights of the Debtor to payment for goods sold or
leased or services rendered, whether or not earned by performance, (b)
all accounts receivable of the Debtor, (c) all rights of the Debtor to
receive any payment of money or other form of consideration, (d) all
security pledged, assigned or granted to or held by the Debtor to
secure any of the foregoing, (e) all guaranties of, or
indemnification's with respect to, any of the foregoing, and (f) all
rights of the Debtor as an unpaid seller of goods or services,
including, but not limited to, all rights of stoppage in transit,
replevin, reclamation and resale.
"Agreement" has the meaning specified in the preamble to this
Agreement.
"Business Day" means any day on which Secured Party is open
for its general business at its offices in Richardson, Texas.
"Chattel Paper" means any "chattel paper," as such term is
defined in Article or Chapter 9 of the UCC, now owned or hereafter
acquired by the Debtor.
"Collateral" has the meaning specified in Section 2.01 of
this Agreement.
"Debtor" has the meaning specified its the preamble to this
agreement.
"Default Rate" means the lesser of (a) seventeen percent
(17%) per annum or (b) the Maximum Lawful Rate (as defined in the
Note).
"Document" means any "document," as such term is defined in
Article or Chapter 9 of the UCC, sold to the Debtor now owned or
hereafter acquired by the Debtor, including, without limitation, all
documents of title and all receipts covering, evidencing or
representing goods now owned or hereafter acquired by the Debtor.
"Equipment" means any "equipment," as such term is defined in
Article or Chapter 9 of the UCC, sold to the Debtor by the Secured
Party including, without limitation, the equipment shown on Schedule 1
attached hereto and incorporated herein by reference, and any and all
additions, substitutions and replacements of any of the foregoing,
wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
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"General Intangibles" means any "general intangibles," as
such term is defined in Article or Chapter 9 of t he UCC, now owned or
hereafter acquired by the Debtor and, in any event, shall include,
without limitation, each of the following, whether now owned or
hereafter acquired by the Debtor: (a) all of the Debtor's service
marks, trade names, trade secrets, registrations, goodwill,
franchises, licenses, permits, proprietary information, customer
lists, designs and inventions; (b) all of the Debtor's books, records,
data, plans, manuals, computer software, computer tapes, computer
disks, computer programs, source codes, object codes and all rights of
the Debtor to retrieve data and other information from third parties;
(c) all of the Debtor's contract rights, partnership interests, joint
venture interests, securities, deposit accounts, investment accounts
and certificates of deposit; (d) all rights of the Debtor to payment
under letters of credit and similar agreements; (e) all tax refunds
and tax refund claims of the Debtor; (f) all choices in action and
causes of action of the Debtor (whether arising in contract, tort or
otherwise and whether or not currently in litigation) and all
judgments in favor of the Debtor; (g) all rights and claims of the
Debtor under warranties and indemnities; and (h) all rights of the
Debtor under any insurance, surety or similar contract or arrangement.
"Instrument" means any "instrument," as such term is defined
in Article or Chapter 9 of the UCC, now owned or hereafter acquired by
the Debtor, and, in any event, shall include all promissory notes,
drafts, bills of exchange and trade acceptances of the Debtor, whether
now owned or hereafter acquired.
"Loan Documents" means this Agreement, the Note, and each
other certificate, document, instrument or agreement executed or
delivered the connection with any of the forgoing, as the same may be
amended restated, supplemented or otherwise modified from time to
time.
"Lien" means any claim, mortgage, deed of trust, pledge,
security interest, encumbrance, lien, or charge of any kind
(including, without limitation, any agreement to give any of the
foregoing, any conditional sale or other title retention agreement or
any lease, consignment or bailment in the nature thereof).
"Note" has the meaning specified in the Recitals to this
Agreement.
"Obligations" means the obligations, indebtedness and
liabilities of Debtor under the Note, the Purchase Agreement, this
Agreement and the other Loan Documents.
"Person" means an individual, partnership, join venture,
corporation, joint stock company, bank, trust, unincorporated
organization or a government or any department or agency thereof.
"Proceeds" means any "proceeds," as such term is defined in
Article or Chapter 9 of the UCC and, in any event, shall include, but
not be limited to, (a) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to the Debtor
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from time to time with respect to any of the Collateral, (b) any and
all payments (in any form whatsoever) made or due and payable to the
Debtor from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part
of the Collateral by any governmental authority (or any Person acting,
or purporting to act, for or on behalf of any governmental authority),
and (c) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Purchase Agreement" has the meaning specified in the
Recitals to this Agreement.
"Secured Party" has the meaning specified the preamble to
this Agreement.
"Software" means any and all software sold or licensed by the
Secured Party to the Debtor, including without limitation all source
code and object code, and all manuals and other documentation relating
thereto and each copy thereof regardless of the media in which they
are stored.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York; provided, that if, by applicable law, the
perfection or effect of perfection or non-perfection of the security
interest created hereunder in any Collateral is governed by the
Uniform Commercial Code as in effect on or after the date hereof in
any other jurisdiction, "UCC" means the Uniform Commercial Code as in
effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or the effect of perfection or
non-perfection.
Section 1.02. Other Definitional Provisions. References to "Sections,"
"subsections," "Exhibits" and "Schedules" shall be to Sections, subsections,
Exhibits and Schedules, respectively, of this Agreement unless otherwise
specifically provided. All definitions contained in this Agreement are equally
applicable to the singular and plural forms of the terms defined. All
references to statutes and regulations shall include any amendments of the same
and any successor statutes and regulations. References to particular sections
of the UCC should be read to refer also to parallel sections of the Uniform
Commercial Code as enacted in each state or other jurisdiction where any
portion of the Collateral is or may be located.
ARTICLE II
Security Interest
Section 2.01. Collateral for Security Interest. As collateral security
for the prompt payment and performance in full when due of the Obligations
(whether at stated maturity, by acceleration or otherwise), the Debtor hereby
pledges and assigns (as collateral) to the Secured Party, and grants to the
Secured Party a continuing lien on and security interest in, all of the
Debtor's right, title and interest in and to the following, with respect to the
first ten (10) DMS-500 Initial Systems (the "Ten Initial Systems") purchased
pursuant to the
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Purchase Agreement, whether now owned or hereafter arising or acquired and
wherever located (collectively, the "Collateral"):
(a) all Equipment;
(b) all Software;
(c) the proceeds, in cash or otherwise, of any of the property
described in the foregoing clauses (a) through (b) and all
liens, security, rights, remedies and claims of the Debtor
with respect thereto;
(d) all Proceeds and products of any or all of the foregoing.
Section 2.02. Debtor Remains Liable. Notwithstanding anything to the
contrary contained herein, (a) the Debtor shall remain liable under the
contracts, agreements, documents and instruments included in the Collateral to
the extent set forth therein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been executed, (b)
the exercise by the Secured Party of any of its rights or remedies hereunder
shall not release the Debtor from any of its duties or obligations under the
contracts, agreements, documents and instruments included in the Collateral,
and (c) the Secured Party shall not have any indebtedness, liability or
obligation under any of the contracts, agreements, documents and instruments
included in the Collateral by reason of this Agreement, and the Secured Party
shall not be obligated to perform any of the obligations or duties of the
Debtor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
Section 2.03. Subordination of Security Interest.Upon the Debtor's
complete payment of the total purchase price, less Four Hundred Thousand
($400,000.00) Dollars (the "Initial Payment") for any one or more of the Ten
Initial Systems, the Secured Party shall subordinate its security interest in
such of the Ten Initial Systems as to which such payments have been received in
favor of a third party lender; provided however, that such subordination shall
be limited such that the security interest in favor of a third party lender to
which the Secured Party's security interest is subordinate cannot secure the
indebtedness in excess of the amount of the Initial Payment with respect to
that Initial System or eighty percent (80%) of the fair market value of the
Initial System, which ever is greater.
ARTICLE III
Representations and Warranties
To induce the Secured Party to enter into this Agreement and to make
credit available under the Notes, the Debtor represents and warrants to the
Secured Party that:
Section 3.01. Title. The Debtor is, and with respect to Collateral
acquired after the date hereof the Debtor will be, the legal and beneficial
owner of the Collateral free and clear of any Lien or other encumbrance, except
for Liens in favor of the Secured Party.
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Section 3.02. Financing Statements. No financing statement, security
agreement or other Lien instrument covering all or any part of the Collateral
is on file in any public office, except as may have been filed in favor of the
Secured Party pursuant to this Agreement and except for other financing
statements evidencing Liens in favor of the Secured Party. Except as otherwise
disclosed on Schedule 2 hereto, the Debtor does not do business and has not
done business within the past five (5) years under a trade name or any name
other than its legal name set forth at the beginning of this Agreement.
Section 3.03. Principal Place of Business. The principal place of
business and chief executive office of the Debtor, and the office where the
Debtor keeps its books and records, is located at the address of the Debtor
shown at the beginning of this Agreement.
Section 3.04. Location of Collateral. All Equipment of the Debtor is
located at the places specified on Schedule 3 hereto. If any such location is
leased by the Debtor, the name and address of the landlord leasing such
location is identified on Schedule 3 hereto. The Debtor has exclusive
possession and control of its Equipment. None of the Equipment of the Debtor is
evidenced by a Document (including, without limitation, a negotiable document
of title).
Section 3.05. Perfection. Upon the filing of Uniform Commercial Code
financing statements in the jurisdictions listed on Schedule 4 attached hereto,
the security interest in favor of the Secured Party created herein will
constitute a valid and perfected Lien upon and security interest in the
Collateral subject to no equal or prior Liens.
ARTICLE IV
Covenants
The Debtor covenants and agrees with the Secured Party that until the
Obligations are paid and performed in full:
Section 4.01. Encumbrances. The Debtor shall not create, permit or
suffer to exist, and shall defend the Collateral against, any Lien or other
encumbrance on the Collateral (other than the Lien created by this Agreement),
and shall defend the Debtor's title to and other rights in the Collateral and
the Secured Party's pledge and collateral assignment of and security interest
in the Collateral against the claims and demands of all Persons. The Debtor
shall do nothing to impair the rights of the Secured Party in the Collateral.
Section 4.02. Disposition of Collateral. The Debtor shall not sell,
lease, assign (by operation of law or otherwise) or otherwise dispose of, or
grant any option with respect to, the Collateral or any part thereof without
the prior written consent of the Secured Party, which will not be unreasonably
withheld.
Section 4.03. Further Assurances. At any time and from time to time,
upon the request of the Secured Party, and at the sole expense of the Debtor,
the Debtor shall promptly execute and deliver all such further agreements,
documents and instruments and take such further action as the Secured Party may
deem necessary or appropriate to
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preserve and perfect its security interest in and pledge and collateral
assignment of the Collateral and carry out the provisions and purposes of this
Agreement or to enable the Secured Party to exercise and enforce its rights and
remedies hereunder with respect to any of the Collateral. Without limiting the
generality of the foregoing, the Debtor shall (a) execute and deliver to the
Secured Party such financing statements as the Secured Party may from time to
time require; (b) deliver and pledge to the Secured Party all Documents
(including, without limitation, documents of title) evidencing Equipment and
cause the Secured Party to be named as lienholder on all such Documents of
title; and (c) execute and deliver to the Secured Party such other agreements,
documents and instruments as the Secured Party may require to perfect and
maintain the validity, effectiveness and priority of the Liens intended to be
created by the Loan Documents. The Debtor authorizes the Secured Party to file
one or more financing or continuation statements, and amendments thereto,
relating to all or any part of the Collateral without the signature of the
Debtor where permitted by law. A carbon, photographic or other reproduction of
this Agreement or of any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement and may be filed as a
financing statement.
Section 4.04. Insurance. The Debtor shall maintain insurance covering
the Collateral in an amount equal to the full replacement cost thereof naming
the Secured Party as loss payee and additional insured. Recoveries under any
such policy of insurance shall be paid to the Secured Party as its interest may
appear.
Section 4.05. Bailees. If any of the Collateral is at any time in the
possession or control of any warehouseman, bailee or any of the Debtor's agents
or processors, the Debtor shall notify such warehouseman, bailee, agent or
processor of the security interest created hereunder and shall instruct such
Person to hold such Collateral for the Secured Party's account subject to the
Secured Party's instructions.
Section 4.06. Inspection Rights. The Debtor shall permit the Secured
Party and its representatives to examine, inspect and audit the Collateral and
to examine, inspect and audit the Debtor's books and records relating to the
Collateral.
Section 4.07. Mortgagee and Landlord Waivers. The Debtor shall cause
each mortgagee of real property owned by the Debtor and each landlord of real
property leased by the Debtor to execute and deliver instruments satisfactory
in form and substance to the Secured Party by which such mortgagee or landlord
waives its rights, if any, in the Collateral.
Section 4.08. Corporate Changes. The Debtor shall not change its name,
identity or corporate structure in any manner that might make any financing
statement filed in connection with this Agreement seriously misleading unless
the Debtor shall have given the Secured Party thirty (30) days prior written
notice thereof and shall have taken all action deemed necessary or desirable by
the Secured Party to protect its Liens and the perfection and priority thereof.
The Debtor shall not change its principal place of business, chief executive
office or the place where it keeps its books and records unless it shall have
given the Secured Party thirty (30) days prior written notice thereof and shall
have taken all
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action deemed necessary or desirable by the Secured Party to cause its security
interest in the Collateral to be perfected with the priority required by this
Agreement.
Section 4.09. Books and Records; Information. The Debtor shall keep
accurate and complete books and records of the Collateral and the Debtor's
business and financial condition in accordance with generally accepted
accounting principles consistently applied. The Debtor shall from time to time
at the request of the Secured Party deliver to the Secured Party such
information regarding the Collateral and the Debtor as the Secured Party may
reasonably request, including, without limitation, lists and descriptions of
the Collateral and evidence of the identity and existence of the Collateral. To
the extent required by Section 4.03 of this Agreement, the Debtor shall xxxx
its books and records to reflect the security interest of the Secured Party
under this Agreement.
Section 4.10. Equipment
(a) The Debtor shall keep the Equipment only at any of the
locations specified on Schedule 2 hereto or, upon thirty (30) days prior
written notice to the Secured Party, at such other places within the United
States of America where all action required to perfect the Secured Party's
security interest in the Equipment with the priority required by this Agreement
shall have been taken.
(b) The Debtor shall maintain the Equipment (ordinary wear and
tear excepted) in accordance with any manufacturer's manual. The Debtor shall
not permit any waste or destruction of the Equipment or any part thereof. The
Debtor shall not permit the Equipment to be used in violation of any law, rule
or regulation or the terms of any policy of insurance. The Debtor shall not use
or permit any of the Equipment to be used in any manner or for any purpose that
would impair its value in any material respect or expose it to unusual risk.
Section 4.11. Warehouse Receipts Non-Negotiable. The Debtor agrees
that if any warehouse receipt or receipt in the nature of a warehouse receipt
is issued in respect of any of the Collateral, such warehouse receipt or
receipt in the nature thereof shall not be "negotiable" (as such term is used
in Section 7.104 of the UCC) unless such warehouse receipt or receipt in the
nature thereof is delivered to the Secured Party.
Section 4.12. Notification. The Debtor shall promptly notify the
Secured Party of (a) any Lien, encumbrance or claim that has attached to or
been made or asserted against any of the Collateral, (b) any material change in
any of the Collateral, including, without limitation any material damage to or
loss of Collateral, and (c) the occurrence of any other event or condition
(including, without limitation, matters as to Lien priority) that could
reasonably be expected to have a material adverse effect on the Collateral or
the security interest created hereunder.
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ARTICLE V
Rights of the Secured Party
Section 5.01. Power of Attorney. The Debtor hereby irrevocably
constitutes and appoints the Secured Party and any officer or agent thereof,
with full power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the name of the Debtor or in its own
name, to take after the occurrence and during the continuance of an Event of
Default, any and all action and to execute any and all documents and
instruments which the Secured Party at any time and from time to time deems
necessary or desirable to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, the Debtor hereby gives the
Secured Party the power and right on behalf of the Debtor and in its own name
to do any of the following, without notice to or the consent of the Debtor:
(i) to demand, xxx for, collect or receive, in the name
of the Debtor or in its own name, any money or property at any time
payable or receivable on account of or in exchange for any of the
Collateral and, in connection therewith, endorse checks, notes,
drafts, acceptances, money orders, documents of title or any other
instruments for the payment of money under the Collateral or any
policy of insurance;
(ii) to pay or discharge taxes, Liens or other
encumbrances levied or placed on or threatened against the Collateral;
(iii) (A) to direct account debtors and any other parties
liable for any payment under any of the Collateral to make payment of
any and all monies due and to become due thereunder directly to the
Secured Party or as the Secured Party shall direct; (B) to receive
payment of and receipt for any and all monies, claims and other
amounts due and to become due at any time in respect of or arising out
of any Collateral; (C) to sign and endorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, proxies, stock powers, verifications and
notices in connection with accounts and other documents relating to
the Collateral; (D) to commence and prosecute any suit, action or
proceeding at law or in equity in any court of competent jurisdiction
to collect the Collateral or any part thereof and to enforce any other
right in respect of any Collateral; (E) to defend any suit, action or
proceeding brought against the Debtor with respect to any Collateral;
(F) to settle, compromise or adjust any suit, action or proceeding
described above and, in connection therewith, to give such discharges
or releases as the Secured Party may deem appropriate; (G) to add or
release any guarantor, endorser, surety or other party to any of the
Collateral; (H) to renew, extend or otherwise change the terms and
conditions of any of the Collateral; (I) to make, settle, compromise
or adjust any claims under or pertaining to any of the Collateral
(including claims under any policy of insurance); and (J) to sell,
transfer, pledge, convey, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as
though the Secured Party were the absolute owner thereof for all
purposes, and to do, at the Secured Party's option and the Debtor's
expense, at any time, or from time to time, all acts and things which
the Secured Party deems necessary to protect, preserve, maintain, or
realize upon the Collateral and the Secured Party's security interest
therein.
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This power of attorney is a power coupled with an interest and shall
be irrevocable. The Secured Party shall be under no duty to exercise or
withhold the exercise of any of the rights, powers, privileges and options
expressly or implicitly granted to the Secured Party in this Agreement, and
shall not be liable for any failure to do so or any delay in doing so. Neither
the Secured Party nor any Person designated by the Secured Party shall be
liable for any act or omission or for any error of judgment or any mistake of
fact or law. This power of attorney is conferred on the Secured Party solely to
protect, preserve, maintain and realize upon its security interest in the
Collateral. The Secured Party shall not be responsible for any decline in the
value of the Collateral and shall not be required to take any steps to preserve
rights against prior parties or to protect, preserve or maintain any Lien given
to secure the Collateral.
Section 5.02. Setoff. The Secured Party shall have the right to set
off and apply against the Obligations, at any time and without notice to the
Debtor, any and all deposits (general or special, time or demand, provisional
or final) or other sums at any time credited by or owing from the Secured Party
to the Debtor whether or not the Obligations are then due. The rights and
remedies of the Secured Party hereunder are in addition to other rights and
remedies (including, without limitation, other rights of setoff) that the
Secured Party may have.
Section 5.03. Assignment by the Secured Party. The Secured Party may
at any time assign or otherwise transfer all or any portion of its rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, the Obligations) to any other Person, and such Person shall
thereupon become vested with all the benefits thereof granted to the Secured
Party, herein or otherwise.
Section 5.04. Performance by the Secured Party. If the Debtor shall
fail to perform any covenant or agreement contained in this Agreement, the
Secured Party may perform or attempt to perform such covenant or agreement on
behalf of the Debtor. In such event, the Debtor shall, at the request of the
Secured Party, promptly pay any amount expended by the Secured Party in
connection with such performance or attempted performance to the Secured Party,
together with interest thereon at the Default Rate from and including the date
of such expenditure to but excluding the date such expenditure is paid in full.
Notwithstanding the foregoing, it is expressly agreed that the Secured Party
shall not have any liability or responsibility for the performance of any
obligation of the Debtor under this Agreement.
ARTICLE VI
Default
Section 6.01. Rights and Remedies. If an Event of Default shall have
occurred and be continuing, the Secured Party shall have the following rights
and remedies:
(i) In addition to all other rights and
remedies granted to the Secured Party in this Agreement or in any
other Loan Document or by applicable law, the Secured Party shall have
all of the rights and remedies of a secured party
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under the UCC (whether or not the UCC applies to the affected
Collateral) and the Secured Party may also, without notice except as
specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange, broker's
board or at any of the Secured Party's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the
Secured Party may deem commercially reasonable or otherwise as may be
permitted by law. Without limiting the generality of the foregoing,
the Secured Party may (A) without demand or notice to the Debtor,
collect, receive or take possession of the Collateral or any part
thereof and for that purpose the Secured Party may enter upon any
premises on which the Collateral is located and remove the Collateral
therefrom or render it inoperable, and/or (B) sell, lease or otherwise
dispose of the Collateral, or any part thereof, in one or more parcels
at public or private sale or sales, at the Secured Party's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Secured Party may deem commercially reasonable or
otherwise as may be permitted by law. The Secured Party shall have the
right at any public sale or sales, and, to the extent permitted by
applicable law, at any private sale or sales, to bid (which bid may
be, in whole or in part, in the form of cancellation of indebtedness)
and become a purchaser of the Collateral or any part thereof free of
any right or equity of redemption on the part of the Debtor, which
right or equity of redemption is hereby expressly waived and released
by the Debtor. Upon the request of the Secured Party, the Debtor shall
assemble the Collateral and make it available to the Secured Party at
any place designated by the Secured Party that is reasonably
convenient to the Debtor and the Secured Party. The Debtor agrees that
the Secured Party shall not be obligated to give more than five (5)
days prior written notice of the time and place of any public sale or
of the time after which any private sale may take place and that such
notice shall constitute reasonable notice of such matters. The Secured
Party shall not be obligated to make any sale of Collateral if it
shall determine not to do so, regardless of the fact that notice of
sale of Collateral may have been given. The Secured Party may, without
notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and
place fixed for sale, and such sale may, without further notice, be
made at the time and place to which the same was so adjourned. The
Debtor shall be liable for all expenses of retaking, holding,
preparing for sale or the like, and all attorneys' fees, legal
expenses and other costs and expenses incurred by the Secured Party in
connection with the collection of the Obligations and the enforcement
of the Secured Party's rights under this Agreement. The Debtor shall
remain liable for any deficiency if the Proceeds of any sale or other
disposition of the Collateral applied to the Obligations are
insufficient to pay the Obligations in full. The Secured Party may
apply the Collateral against the Obligations in such order and manner
as the Secured Party may elect in its sole discretion. The Debtor
waives all rights of marshalling, valuation and appraisal in respect
of the Collateral. Any cash held by the Secured Party as Collateral
and all cash proceeds received by the Secured Party in respect of any
sale of, collection from or other realization upon all or any part of
the Collateral may, in the discretion of the Secured Party, be held by
the Secured Party as collateral for, and then or at any time
thereafter applied in whole or in part by the Secured Party against,
the Obligations in such order as the Secured Party shall select. Any
surplus of such cash
11
79
or cash proceeds and interest accrued thereon, if any, held by the
Secured Party and remaining after payment in full of all the
Obligations shall be paid over to the Debtor or to whomsoever may be
lawfully entitled to receive such surplus; provided that the Secured
Party shall have no obligation to invest or otherwise pay interest on
any amounts held by it in connection with or pursuant to this
Agreement.
(ii) The Secured Party may cause any or all of the
Collateral held by it to be transferred into the name of the Secured
Party or the name or names of the Secured Party's nominee or nominees.
(iii) The Secured Party may exercise any and all rights
and remedies of the Debtor under or in respect of the Collateral,
including, without limitation, any and all rights of the Debtor to
demand or otherwise require payment of any amount under, or
performance of any provision of, any of the Collateral.
(iv) The Secured Party may collect or receive all money
or property at any time payable or receivable on account of or in
exchange for any of the Collateral, but shall be under no obligation
to do so.
(v) On any sale of the Collateral, the Secured Party is
hereby authorized to comply with any limitation or restriction with
which compliance is necessary, in the view of the Secured Party's
counsel, in order to avoid any violation of applicable law or in order
to obtain any required approval of the purchaser or purchasers by any
applicable governmental authority.
ARTICLE VII
Miscellaneous
Section 7.01. No Waiver; Cumulative Remedies. No failure on the part
of the Secured Party to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement are
cumulative and not exclusive of any rights and remedies provided by law.
Section 7.02. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Debtor and the Secured Party and their
respective heirs, successors and assigns, except that the Debtor may not assign
any of its rights or obligations under this Agreement without the prior written
consent of the Secured Party.
SECTION 7.03. AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT TOGETHER
WITH THE OTHER LOAN DOCUMENTS AS WRITTEN EMBODIES THE FINAL, ENTIRE AGREEMENT
AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS,
AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL,
RELATING TO THE SUBJECT
12
80
MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO. The
provisions of this Agreement may be amended or waived only by an instrument in
writing signed by the parties hereto.
Section 7.04. Notices. All notices and other communications provided
for in this Agreement shall be given or made by telecopy or in writing and
telecopied, mailed by certified mail return receipt requested, or delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof; or, as to any party at such other address as shall
be designated by such party in a notice to the other party given in accordance
with this Section 7.04. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given when transmitted by
telecopy or when personally delivered or, in the case of a mailed notice, three
Business Days after deposit in the mails, in each case given or addressed as
aforesaid; provided, however, that notices to the Secured Party shall be deemed
given when received by the Secured Party.
SECTION 7.05. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES) AND APPLICABLE LAWS OF THE U.S.
Section 7.06. Headings. The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section 7.07. Survival of Representations and Warranties. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by the Secured Party shall affect the
representations and warranties or the right of the Secured Party to rely upon
them.
Section 7.08. Counterparts. This Agreement may be executed in any
number of counterparts, and by the parties hereto on separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
Section 7.09. Waiver of Bond. In the event the Secured Party seeks to
take possession of any or all of the Collateral by judicial process, the Debtor
hereby irrevocably waives any bonds and any surety or security relating thereto
that may be required by applicable law as an incident to such possession, and
waives any demand for possession prior to the commencement of any such suit or
action.
Section 7.10. Severability. Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Agreement, and any such
prohibition
13
81
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 7.11. Construction. The Debtor and the Secured Party
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement with its
legal counsel and that this Agreement shall be construed as if jointly drafted
by the Debtor and the Secured Party.
Section 7.12. Termination. If all of the Obligations shall have been
paid and performed in full, the Secured Party shall, upon the written request
of the Debtor, execute and deliver to the Debtor a proper instrument or
instruments acknowledging the release and termination of the security interests
created by this Agreement, and shall duly assign and deliver to the Debtor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Secured Party and has not
previously been sold or otherwise applied pursuant to this Agreement.
SECTION 7.13. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEBTOR HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE SECURED PARTY IN THE
NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.
14
82
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
DEBTOR:
MGC COMMUNICATIONS, INC.
By:/S/Xxxxx X. Xxxxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
--------------------------------------
Title: President/CEO
-------------------------------------
Address for Notices:
0000 Xxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx
---------------------------------
SECURED PARTY:
NORTHERN TELECOM INC.
By: /S/Xxxxxx Xxxx
----------------------------------------
Name: Xxxxxx Xxxx
--------------------------------------
Title: Group Vice President
[NORTEL LAW DEPT. STAMP] Address for Notices:
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxx 00000-0000
Fax No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: General Manager and
Vice President, Carrier Networks
15
83
Schedule 1
Equipment
16
84
MGC Communications, Inc.
Security Agreement
Schedule 1
I. DMS-500 INITIAL SYSTEM
(DMS-500 SWITCHING SYSTEM)
***
85
MGC Communications, Inc.
Security Agreement
Schedule 1
I. DMS-500 INITIAL SYSTEM
(DMS-500 SWITCHING SYSTEM)
***
86
MGC Communications, Inc.
Security Agreement
Schedule 1
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
1.0 DMS-500 STANDARD SOFTWARE FEATURES
1.1 Nortel may deliver Software ordered hereunder in a single
Software load which may include Software which Buyer has not
yet licensed ("Non-licensed Software"). Except as set forth
in Section 1.2 below, Buyer shall not be entitled to use such
Non-licensed Software, until such time as the applicable right
to use fees are paid by Buyer pursuant to Section 1.5.
1.2 For the purpose of gathering market trial information and
prior to payment of any applicable right-to-use fees, certain
Non-licensed Software may be placed in service by Buyer on a
limited, non-revenue-generating, trial basis only ("Feature
Trial"). Buyer may request the right to evaluate such Non-
licensed Software for a maximum period of six (6) months
commencing as of the date of Nortel's written consent to such
Feature Trial. Nortel shall respond to Buyer's request as
described above in writing. Within ten (10) business days
following expiration of the agreed to Feature Trial period,
Buyer shall notify Nortel in writing of its plans for
activation or deactivation of such Non-licensed Software, and
the corresponding number of units activated, if applicable.
1.3 Upon Buyer's placement of any Non-licensed Software in revenue
generating service, Buyer shall pay the applicable
right-to-use fees for such Non-licensed Software pursuant to
this Agreement, except as described in Section 1.2. Buyer
shall also have the option to pay the applicable right-to-use
fees for any Non-licensed Software upon installation of a
Software load containing such Non-licensed Software. For any
Non-licensed Software that is installed and added pursuant to
a product computing module load ("PCL") and or non-computing
module load ("NCL"), if any, the right-to-use fees shall be
the list price for such feature in effect as of the date of
activation.
1.4 To ensure Buyer's proper activation and/or usage of the
appropriate Software, Buyer shall properly notify Nortel at
the address specified in Section 9 of this Product Attachment
to the attention of Director, Sales Engineering, prior to the
activation and/or usage by Buyer of any Software. Buyer shall
identify all Software being activated and/or used (including
the number of units activated, if applicable) in each Intial
System.
1.5 Nortel shall promptly review notification from Buyer provided
pursuant to Section 1.4 above and identify any applicable
prerequisite Equipment or Software required by Buyer prior to
activation and/or usage of the applicable Software. Nortel
shall respond to Buyer's written notice by means of a price
quotation. Such price quotation shall include Nortel's consent
to activate and/or use such Software or notification that such
Software requires engineering to determine whether the current
switch configuration will require additional Equipment prior
to activation and/or usage. Upon Buyer's written acceptance
of Nortel's price quotation, Nortel shall grant its consent to
Buyer to activate and/or use such Software prior to payment of
the applicable right-to-use fees. However, under no
circumstances shall such Software be activated and/or used by
Buyer prior to Buyer's acceptance of Nortel's price quotation.
Nortel shall invoice Buyer for all applicable right to use
fees and associated feature activation engineering charges.
One hundred percent (100%) of such invoiced right to use fees
and engineering charges shall be due and payable within thirty
(30) days of the date of Nortel's invoice therefor.
1.6 Notwithstanding the foregoing, Buyer shall not be required to
pay additional right to use fees associated with the Software
licensed prior to the initial date of this Product Attachment.
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MGC Communications, Inc.
Security Agreement
Schedule 1
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
1.7 Nortel reserves the right, every six (6) months to submit a
written report for each site containing a Software load. The
written report shall identify all Software activated and/or
used (including the number of incremental units activated, if
applicable) by Buyer during the applicable reporting period.
Buyer shall audit the report against Purchase Order(s) which
have been submitted by Buyer and accepted by Nortel during the
applicable period to determine the existence of any
discrepancies. Buyer shall submit such audited written report
to Nortel at the address specified in Section 9 of this
Product Attachment to the attention of Director, Sales
Engineering, within thirty (30) days from receipt of such
request.
1.8 Nortel also reserves the right to access by remote polling or
to conduct an on-site inspection of any site in which a
Software load is installed and/or to perform an on-site review
of Buyer's books and records related to such site to verify
activation and/or usage of Software.
1.9 Nortel shall issue invoices, for any applicable prices,
charges or fees, in addition to those amounts previously
invoiced, as a result of Buyer's activation and/or usage of
any Software that does not appear on Nortel's written report
or that appear as a result of Nortel's remote polling of an
Initial Systems.
1.10 Upon payment of the applicable right to use fees for Software
activated and/or used by Buyer, Buyer shall receive a
non-exclusive paid-up license to use such Software in
accordance with the provisions of this Agreement. Nortel may
immediately terminate the applicable license granted hereunder
for Buyer's failure to pay the applicable right to use fees
for such Software which has been activated and/or used.
1.11 The obligations of Buyer under this Section 1 shall without
limitation survive the termination of this Agreement and shall
continue if the Software is removed from service. Buyer agrees
to indemnify Nortel or Third Party Software Vendors as
appropriate for any loss or damage resulting from a breach of
this Section 1.
88
MGC Communications, Inc.
Security Agreement
Schedule 1
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
2.0 LLT0B0005 SOFTWARE INCLUDED IN THE DMS-500 INITIAL SYSTEM NOT
ELIGIBLE FOR "DEFERRED BILLING."
2.1 SOFTWARE INCLUDED IN INITIAL SYSTEM NOT ELIGIBLE FOR "DEFERRED
BILLING"
The following represents the LLT0B0005 Software packages that
are included in the price of the DMS-500 Initial System,
described in Schedule A, Part 1, Section 1.0. The following is
a list of Software only and does not include any/all required
Equipment to provide feature functionality.
S/W PACKAGE DESCRIPTION
----------- -----------
BAS00001 Base Xxxx
BAS00002 Base ANI
BAS00003 Base Generic
BAS00004 Base OA&M
BAS00007 Base Logs
BAS00020 Base Flexible Bellcore AMA
BAS00028 Base DPP
BASE0001 Local Base
BASE0006 Base SN SR60
LOC00001 Local Services
SS700001 SS7 Trunk Signalling
TEL00001 Telecom Layer
TEL00002 TEL CCS7 Channelized Access
TEL00008 XXX0 Xxxx
XXX00000 XXX Services
BAS00012 BAS Remote
EQA00001 Equal Access Local
EQA00002 Equal Access Toll
EQA00003 Cellular - Xxxxxxxxxxxx Xxx Xxxxxx
XXX00000 Intermediate Tandem
EQA00006 EQA C7ISUPLRLTA Conn. EAEO
EQA00007 EQA EA Alt Sw Point
EQA00009 EQA IBN Intra LATA PIC EAEO
EQA00012 EQA C7ISUPLRLTA Conn. AT
NI000007 NI0 ISDN Base
NI000011 NI0 NI-1 PRI
NI000022 NI0 ISDN PRI Base
NTS00005 Equal Access 800
SMA00001 SMA TR303 I/F
2.2 CENTRAL OFFICE LIMITED USAGE FEATURES NOT ELIGIBLE FOR "DEFERRED
BILLING."
The Buyer has a Software license for the following Software
features which may be utilized for the associated initial number
of licenced units. For each additional unit in excess of the
initial number of units, refer to the S/W Optional Part II,
Section 3.2 for incremental pricing and to
89
MGC Communications, Inc.
Security Agreement
Schedule 1
II.DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
Section 3.1 for special incremental software package pricing.
The following is a list of Software only and does not include
any/all required Equipment to provide feature functionality.
S/W PACKAGE DESCRIPTION UNIT INITIAL UNITS
----------- ----------- ---- -------------
LICENCED
--------
LEA00001 LEAS Toll 1st 50k Directory Directory # 50,000
2.1 LLT0B0005 SOFTWARE INCLUDED IN THE DMS-500 INITIAL SYSTEM ELIGIBLE FOR
"DEFERRED BILLING."
2.1 SOFTWARE INCLUDED IN INITIAL SYSTEM ELIGIBLE FOR "DEFERRED
BILLING"
The following represents the LLT0B0005 Software packages that
are included in the price of the DMS-500 Initial System,
described in Schedule A, Part 1, Section 1.0. The following is
a list of Software only and does not include any/all required
Equipment to provide feature functionality.
S/W PACKAGE DESCRIPTION
----------- -----------
XXX00000 XXX Xxxxxxxx
XXX00000 MDC CLASS on MDC
MDC00006 MDC MBG Standard
MDC00007 MBS Minimum
MDC00010 MDC CLASS on MDC/MPV II
MDC00033 MDC Name/Number Blocking
RES00006 RES Service Enablers
RES00021 RES Anonymous Caller Rejection
RES00022 RES Calling Name Delivery Blocking
RES00027 RES Visual Message Waiting
RES00030 RES Customer Originated Trace
2.2 CENTRAL OFFICE LIMITED USAGE FEATURES ELIGIBLE FOR "DEFERRED
BILLING"
The Buyer has a Software license for the following Software
features which may be utilized for the associated initial number
of licenced units. For each additional unit in excess of the
initial number of units, refer to the S/W Optional Part II,
Section 3.2 for incremental pricing and to Section 3.1 for
special incremental software package pricing. The following is a
list of Software only and does not include any/all required
Equipment to provide feature functionality.
S/W PACKAGE DESCRIPTION UNIT INITIAL UNITS
----------- ----------- ---- -------------
LICENCED
--------
MDC00001 MDC Base Featured Line 11,000
RES00003 RES Display Functionality /Privacy Featured Line 100
RES00005 RES Non-Display Services Featured Line 100
RES00023 RES Calling Name Display SW Featured Line 100
RES00025 RES Call Waiting Display Featured Line 5,000
90
MGC Communications, Inc.
Security Agreement
Schedule 1
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
RES00032 RES Selective Call Forwarding Featured Line 100
RES00033 RES Selective Call Rejection Featured Line 100
RES00034 RES Distinctive Ringing/Call Wtg Featured Line 100
RES00035 RES Selective Call Acceptance Featured Line 100
RES00036 RES Auto-Recall Blck to Private No. Featured Line 100
3.0 LLT0B005 SOFTWARE OPTIONAL TO THE DMS-500 INITIAL SYSTEM
3.1 CENTRAL OFFICE FEATURE ADDITIONS OVER LIMITED USAGE FEATURES
The Buyer has a Software license for the following Software
features which may be purchased at an incremental price, beyond
the initial licenced units as indicated in Section 2.1.
S/W PACKAGE DESCRIPTION UNIT MIN. UNIT PRICE/
----------- ----------- ---- ---------- ------
INCREMENTS UNIT
---------- ----
MDC00001 MDC Base Featured Line 100 $14.00
RES00023 RES Calling Name Disp Featured Line 100 $30.00
RES00025 RES Call Waiting Disp Featured Line 5,000 $ 3.00
RES00036 RES Auto-Recall Blck Featured Line 1 $ 1.00
The following six (6) Class* Software features have a right to
use fee of twenty nine dollars ($29.00) per each Class* line in
100 line increments, beyond the initial licenced units as
indicated purchase on a individual basis then refer to the S/W
Optional Part II, Section 3.2 for incremental pricing.
RES00003* RES Display Functionality /Privacy
RES00005* RES Non-Display Services
RES00032* RES Selective Call Forwarding
RES00033* RES Selective Call Rejection
RES00034* RES Distinctive Ringing/Call Wtg
RES00035* RES Selective Call Acceptance
3.2 LLT0B005 SOFTWARE OPTIONAL
The following represents the LLT0B005 optional Software packages that
are not included in the price of the DMS-500 Initial System as
defined in Schedule A, Part I, Section 1.0 of this Product Attachment.
The following Software represents those feature packages that may be
ordered by Buyer at an additional price for a DMS-500 Initial System
and does not include any/all required Equipment to provide feature
functionality.
PRODUCT NAME ORDER CODE PRICE AND NOTES
------------ ---------- ---------------
BASE SN SR70 Processor BASE0009 The upgrade if previously licensed
from: BASE0006 = $185,000
91
MGC Communications, Inc.
Security Agreement
Schedule 1
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
ACD ACD Base ACD00001 The fee is $500 per ACD line plus $5,000 per
ACD user group.
ACD MIS ACD00005 The fee is $250 per ACD line.
ACD Miscellaneous ACD00006 $52,000
ACD Compucall ACD00002 The fee is $7,500 per switched virtual circuit.
ACD Compucall-Func ACD00007 The fee is $42,000 per switched virtual circuit.
ACD Ctrx Coord V&Dta ACD00008 The fee is $5,000 per 100 Centrex lines.
ACD Networking ACD00004 The fee is $25,000 for the first 100 Network
ACD lines plus $500.00 per Network ACD line over the
first 100.
ACD Network ACD on PRI ACD00010 The fee is $400.00 per ACD line.
ACD Network ACD on SS7 ACD00009 The fee is $400.00 per ACD line.
AIN Essentials AIN00002 $700,000
AIN Default Routing AIN00010 $65,000
AIN Call Management AIN00006 $200,000
AIN Call Model Cntrl AIN00007 $190,000
AIN Primer AIN00001 The fee is $80,000 Net (not subject to any
discounts) to be paid annually.
AIN SSP Svcs Enhcemnts AIN00011 $40,000
BAS XXXX XX-Cut Re-wrt BAS00049 $8,000
BAS Enh Permanent Signal BAS00041 $40,000
BAS MAP TELNET Access BAS00021 No Charge
BAS SDM Table Access BAS00022 No Charge
BAS RSC-S BAS00009 The fee is $120,000 per module incremental.
BAS Remotes Generic BAS00012 $700.00 per LCM/LCME in the Remote office +
$5,500/Remote
DTP Datapath DTP00001 $17,500
DTP DataCall Tester DTP00003 No Charge
ENS E911 ENS00005 $15,000
ENS ACD PSAP ENS00002 The fee is $47,000 plus $2,000 per E911 position.
The fee is $32,000 plus $2,000 per E911 position if
ENS00001 has been previously licensed.
ENS LDT PSAP ENS00001 $125,000
ENS Large SRDB ENS00004 If more than 1 million records are required the
fee is $195,000*. If less than 1 million records
are required the fee is $145,000*.
EQA Local EQA00001 $4,800 per LGC/LGCI, $4,800 per LTC/LTCI, and $1,600
per LME. The total fee shall not exceed $72,000 per
office.
EQA Toll EQA00002 $1,200 per DCM and $300.00 per TM. The total shall
not exceed $190,000 per office.
EQA Celular Interconnect EQA00004 $25,000
EQA Enh WATS O.[POTS EQA00010 $20,000
EQA Equal Access OSS EQA00011 $8,000
EQA POTS IraLATA PICeaeo EQA00008 $20,000
EQA Intermediate Tandem EQA00005 $20,000
ISUP Cellular ISUP0001 $150,000
XXX XXXX Local LEA00002 $22,500
XXX XXXX Toll LEA00001 $20,000 for each additional Group of 10,000
Directory numbers over the first 50,000.
92
MGC Communications, Inc.
Security Agreement
Schedule 1
II.DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
LEA SS7 I/W with LEAS LEA00003 $30,000
LOC Carrier Parameter LOC00002 $20,000
MDC - MDC Minimum MDC00001 $1,750 per group of 100 MDC lines, not to exceed
$404,000 per office. The first 100 MDC lines are
included in the base price.
MDC - MDC MSAC MDC00002 $21,733
MDC Personal Call Screen MDC00020 $5,000
MDC Teen Service MDC00035 The fee is $5,000 per 100 MDC lines
MDC MBG Min MDC00005 $73,500
MDC NETNAME Expand MDC00025 $2,000
MDC MBS STD MDC00008 $50,000
MDC MDC PRO MDC00009 $239,200
MDC Enhanced WATS MDC00034 $20,000
MDC MDR VIA AMA MDC00018 $20,000
MDC XXX XXX00000 $195,000
MDC SMDR for XXX XXX00000 $15,000
MDC Tailored MDC 1 MDC00012 $26,500
MDC Tailored MDC 2 MDC00013 $40,000
MDC MBS Installer Tools MDC00019 $30,000
MDC Tailored MDC 3 MDC00014 $45,000
MDC Tailored MDC 4 MDC00015 $30,000
MDC Tailored NARS MDC00016 $50,000
NI0 DPN Support NI000003 $10,000
NI0 DWS NI000004 The fee is $50,000 plus $11,500 per DWS Access
link.
NI0 DWS Carrier Acc NI000028 $200,000 If RES00026 has been
previously/concurrently licensed the fee is $10 K
for the first 5K EQUIPPED lines & $10K for each
add'l 5K EQUIPPED lines over the first 5K EQUIPPED
lines. RES 26 MD'D IN NA04.
NI0 DWS Flexible Acc NI000027 $71,500 *If ESN00003 has been previously purchased
and more than 1 million records are required, the
fee is $50,000. If ESN00003 has been previously
purchased and less than 1 million records are
required, the fee is No Charge
NI0 Intertol ISUP & SS7 NI000023 $200,000 The fee for the functional group PROV0001
is included in the fee for NI000023
NI0 DataSPAN NI000002 The fee is $20,000 per LPP cabinet.
NI0 ISDN BASE NI000007 The fee is $68,500 plus $500 per 100 ISDN Lines plus
$250 for each 2B+D line and $100 for each 1B+D line
NI0 ISDN PRI BASE NI000022 $2,000 per PRI link.
NI0 NI-1 BRI Enhancd Mtc NI000009 $68,000
NI0 NI-1 BRI NI000008 The fee is $251,000 per switch plus $7,200 per each
increment of 480 lines.
NI0 NI-1 PRI Ntwrkng NI000013 The fee is $28,000 plus $3,750 per PRI link.
NI0 NI-1 PRI NI000011 The fee is $66,500 plus $4,800 per PRI link.
NI0 NI-1 Packet NI000010 The license fee is 75K which includes the RTU the
software on: the first 2 NTFX10AA's
93
MGC Communications, Inc.
Security Agreement
Schedule 1
II.DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
(which may be x.25 and/or x.75 protocols), the first
100 'D' terminals, and the first 10 'B' terminals.
There is an additional 35K license fee to use the
software on
NI0 NI-1 Tandem NI000014 $60,000
NI0 NI-1 PRI IW 4E/5ESS NI000012 $50,000
RES Disp Funct &Prvcy RES00003 $1,500 for each additional 100 featured lines over
the first 100 featured lines. This capability is
sold in blocks of 100 featured lines.
RES Non-Display Services RES00005 $1,500 for each additional 100 featured lines over
the first 100 featured lines. This feature is sold
in increments of 100 featured lines.
RES Call N.D. SW/TCAP RES00023 $3,000 for each additional 100 featured lines over
the first 100. This capability is sold in
increments of 100 featured lines.
RES Selective Call Fwd RES00032 $1,500 for each additional 100 featured lines lines
over the first 100 featured lines. This capability
is sold in increments of 100 featured lines.
RES Selective Call Rej RES00033 $1,500 for each additional 100 featured lines over
the first 100 featured lines. This capability is
sold in increments of 100 featured lines.
RES Dist Ring Call Wtg RES00034 $1,500 for each additional 100 featured lines over
the first 100 featured lines. This capability is
sold in increments of 100 featured lines.
RES Select Call Accept RES00035 $3,000 for each additional 100 SCA lines over the
first 100.
RES Access Management RES00001 $8,000
RES Telemetry Applic RES00010 The fee is $30,000 plus $5,000 per utility telemetry
trunk.
RES Univ Acc to 3WC RES00012 $75,000
RES Univ Acc to CLASS RES00011 The fee is $169,500 for the first 5000 equipped
lines plus $90,000 for each additional 5000
equipped lines over the first 5000.
RES Advncd Cstm Calling RES00002 The fee is $15,000 for the first 100 Advanced Custom
Calling featured lines plus $2,500 for each
additional 100 featured lines. This capability is
sold in increments of 100 featured lines.
RES & MDC Warm Line RES00018 $5,000
RES Call FWD Remote Act RES00019 $27,000
RES Call Screening RES00047 $45,000
RES Call Wake Up Svc RES00014 The fee is $15,000 per switch.
RES Expansion Svcs RES00016 The fee is $20,000 for the first 100 Single Line
Variety pack featured lines plus $1,500 for each
additional 100 featured lines over the
94
MGC Communications, Inc.
Security Agreement
Schedule 1
II.DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
first 100 featured lines. This capability is sold
in increments of 100 featured lines.
RES Ext Bridged Svcs RES00013 $7,500
RES Sbscr Prgmbl Rng Ctl RES00037 $13,000
RES Sub Act Code Blking RES00015 $20,000
RES Teen Service RES00017 The fee is $11,500 for the first 100 Teen lines plus
$1,500 for each additional 100 Teen lines over the
first 100.
RES Toll Alert RES00038 $275,000
RES Call Waiting Display RES00025 $15,000 for each additional 5000 EQUIPPED lines over
the first 5000. This capability is sold in
increments of 5,000 equipped lines.
RES Call Wtg Delux [TR] RES00040 Fee is $20 K for the first 5K EQUIPPED lines & $20
K for each add'l 5K EQUIPPED lines over the first
5K. This capability is sold in increments of 5K
equipped lines.
RES VSLE & Call Logging RES00024 $50,000
RES I/F Functionality RES00004 The fee is $35,000. If NTX732 has been previously purchased,
the fee is $5,000.
RES Bulk Call Line ID RES00028 The fee is $20,000 for the first 50 data links plus
$10,000 for each additional 25 links over the first
50.
RES Rem Call Fwd Enh RES00020 $12,500
RES SMDI CLID Suppr RES00039 $12,000 The fee is No CHARGE if NTXN07AA has been
previously licensed. The fee is per switch.
RES Auto Recall RES00029 $5,000
RES Auto-Recall Blocking RES00036 The fee is $1.00 (Net Price - not subject to any
discount) per wired line.
RES Cust Tracing Enh RES00031 $3,500
RES Signlng Routng OAM RES00007 $20,000
SAID Essentials SAID0001 $100,000
SAID ESP Phase 2 SAID0005 $15,000
SAID ESP SAID0003 $60,000
SAID Plus SAID0002 $30,000
SAID Universal SAID0004 $60,000
WLC 40mA current limit WLC00004 $5,000
XXX Xxxxxxxx XXX00000 $25,000
XXX Xxxx Xxxxx XXX00000 $20,000
AIN ACB/AR Premium AIN00018 $5,000
BAS RSC-S Sync BAS00015 $30,000
BAS SCM/SMS/SMU BAS00016 $11,000
BAS SCM-SLC96 Spec Svcs BAS00027 $12,000
CDD Trnk Grp Mem Usage CDD00004 $22,500
LOC Intl 15-Dgt Dial LOC00004 $75,000
NTS Extended Capability NTS00012 $15,000
SMA TR303 I/F SMA00001 The fee is $50,000 per SMA or ESMA/SMA2 module.
TEL X0 Xxxx-xxxxx Xxxxxx XXX00000 $30,000
TEL X0 Xxxx Xxx. Xxxxxxx XXX00000 $90,000
95
MGC Communications, Inc.
Security Agreement
Schedule 1
II. DMS-500 STANDARD FEATURES / OPTIONAL FEATURES
(DMS-500 INITIAL SYSTEM SOFTWARE)
TEL X0 Xxxx Xxxx. Xxxxxx XXX00000 $36,000
TEL X0 Xxxxxxx Xxxxxxxxx XXX00000 The fee is No Charge for a STP office because the
fee is included in the STPE0200 OR the fee is
$76,000 for LOCAL, TOLL, LOCAL/TOLL, TOLL/TOPS, or
LOCAL/TOLL/TOPS offices.
TEL X0 Xxxxxxx Xxxxxxxxx XXX00000 The fee is $200,000 for the first 511 route sets
plus $25,000 per each add'l group of 000 xxxxx xxxx.
XXX Xxxxxxx Xxxxxxxxx XXX00000 $120,000 The fee is no charge if NTX840AA or
NTXJ40AA has been previously licensed.
XXXX CUSTDP Trigger CAIN0500 $100,000
XXXX Extension Parms CAIN0200 $50,000
XXXX SCP Simulator CAIN0300 $30,000
XXXX SPECDIG Trigger CAIN0501 $100,000
XXXX Test Query Tool CAIN0400 $30,000
CRDS Card Services CRDS0001 $120,000
CRDS MVP Card Services CRDS0003 $50,000
CRDS TCAP Card Services CRDS0002 $25,000
N00R N00 Routing N00R0001 $100,000
N00R N00/NXX TCAP N00R0002 $125,000
NPRI PRI Netwk Interface NPRI0001 $25,000 NTXS81AA functionality now ordered under
NTS00013
NSER Network Services NSER0001 $100,000
NSER TCAP Auth & A.V. NSER0002 $20,000
PRLT ISDN PRI RLT PRLT0001 $175,000
UDWS UCS Dialable Wbnd UDWS0001 $175,000
UTRS UCS Trans & Rout UTRS0001 $90,000
BSVR Billing Server Optn BSVR0001 This is a custom developed package developed for a
single customer. It is not available to other
customers. Available for 2 DMS200 sites in PA only
in LEC & LET loads. It is x-coupled in all other
PCLs.
XXX XXX XXX00000 $200,000
DCR Dual X25 link DCR00003 The fee is $20,000 per Network processor and $3,000
per switch.
DCR Mult. Net. Access DCR00002 $56,000
UCSB UCS Base UCSB0001 $286,700
96
MGC Communications, Inc.
Security Agreement
Schedule 1
III. DMS-500 Extensions
(DMS-500 Extensions)
***
97
MGC Communications, Inc.
Security Agreement
Schedule 1
III. DMS-500 Extensions
(DMS-500 Extensions)
***
98
MGC Communications, Inc.
Security Agreement
Schedule 1
III. DMS-500 Extensions
(DMS-500 Extensions)
***
99
MGC Communications, Inc.
Security Agreement
Schedule 1
III. DMS-500 Extensions
(DMS-500 Extensions)
***
100
MGC Communications, Inc.
Security Agreement
Schedule 1
III. DMS-500 Extensions
(DMS-500 Extensions)
***
101
MGC Communications, Inc.
Security Agreement
Schedule 1
IV. RSC-S System
NORTEL SHALL ENGINEER EACH INITIAL SYSTEM ORDERED HEREUNDER IN ACCORDANCE
WITH NORTEL'S STANDARD ENGINEERING PRACTICES AND PROCEDURES, AND
THEREAFTER NORTEL SHALL PROVIDE BUYER WITH A DETAILED LIST OF THE
COMPONENTS OF SUCH INITIAL SYSTEM.
1.0 INITIAL RSC-S (OPTIONAL)
1.1 THE FOLLOWING REPRESENTS THE SONET REMOTE SWITCHING CENTER
EQUIPMENT THAT WILL BE DELIVERED WITH THE INITIAL SYSTEM;
- (1) Remote Cluster Controller (RCC2) Shelf
- (1) Remote Maintenance Module (RMM) Shelf for Testing,
Diagnostics, and Alarms
- (1) Line Concentrating Module Enhanced (LCME), 480 Wired /
480 Equipped POTS Lines
- (1) Host LTCI, 384 Wired / 384 Equipped Ports
- Common equipment including XPM+
- CMR and UTRs
- Sixteen (16) DS-1 C-Side Interfaces
- Any required Service/Test Circuits
- Any required ENET, MS or processor memory expansions
relating to this LTCI
- Power Distribution equipment to support the above
configuration.
- Nortel's standard compliment of one spare per unique circuit
pack for the DMS-500 Initial System.
1.2 INITIAL RSC-S SYSTEM:
The price for the Initial RSC-S equipped and wired as
described in Section 2.1 above, including host LTCI and the
fee for the license of the Software is Two Hundred
Thirty-Seven Thousand Dollars ($237,000).
2.0 RSC-S EXTENSION PRICING
2.1 RSC-S LINES
The price for an RSC-S Line Extension includes the following.
The LCM provides line side interface to the RSC-S. Each RSC-S
Line Extension may be purchased in increments as defined
below:
a) LCM Equipment or then current common control.
b) Any required processor memory Extension.
c) Any required RSC-S service/test circuits to support
the RSC-S Extension.
d) Power Distribution Center (PDC) equipment as
required to support the RSC-S Extension.
e) Spare circuit.
102
MGC Communications, Inc.
Security Agreement
Schedule 1
IV. RSC-S System
2.2 RSC-S LINE PRICING
RSC-S lines may be purchased at the below listed prices:
LINE TYPE INITIAL PRICE/LINE EXTENSION PRICE/LINE
--------- ------------------ --------------------
Wired Lines - Non ISDN Frame $60 $ 90
Wired Lines - ISDN Frame $80 $120
Equipped POTS $26 $ 39
Equipped MBS $59 $ 89
Equipped ISDN BRI Line $70 $105
Non ISDN wired frames will be purchased in one thousand two
hundred eighty (1,280) wired line increments. ISDN wired
frames will be purchased in nine hundred sixty (960) wired line
increments. POTS and MBS equipped lines will be purchased in
one hundred (100) line increments. ISDN BRI equipped lines
will be purchased in fifty (50) line increments.
103
Schedule 2
Trade Names, Etc.
MGC Communications, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
NevTEL
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
17
104
Schedule 3
Locations of Equipment
================================================================================
EQUIPMENT
================================================================================
Location Name and Address of Landlord of
Premises (if any)
--------------------------------------------------------------------------------
DeKalb County, Toco Hills, Xxxxxxx
Xxxxxx County, Atlanta, Georgia
--------------------------------------------------------------------------------
Xxxxx County, Des Plains, Illinois
Xxxxx County, Chicago, Illinois
--------------------------------------------------------------------------------
Los Angeles County, Pomona,
California
San Bernadino County, Ontario,
California
--------------------------------------------------------------------------------
Xxxxx County, Las Vegas, Nevada Rancho Road Associates II
Xxx X. Xxxxxx, General Partner
0000 X. Xxxxxxxx Xxx.
Xxx Xxxxx, Xxxxxx 00000
--------------------------------------------------------------------------------
18
105
Schedule 4
Jurisdictions for Filing
UCC-1 Financing Statements
1. DeKalb County, Toco Hills, Georgia
2. Xxxxxx County, Atlanta, Georgia
3. Xxxxx County, Des Plains, Illinois
4. Xxxxx County, Chicago, Illinois
5. Los Angeles County, Pomona, California
6. San Bernadino County, Ontario, California
7. Xxxxx County, Las Vegas, Nevada
19
106
CONTRACT NO. MGC9701N
ACCESSNODE PRODUCT ATTACHMENT
PAGE 1
PRODUCT ATTACHMENT
S/DMS ACCESSNODE PRODUCTS
Northern Telecom Inc. ("Nortel") and MCG ("Buyer") agree as follows:
NOW, THEREFORE Buyer and Nortel agree as follows:
1. INCORPORATION BY REFERENCE
This Product Attachment shall be incorporated into and made a part of
Network Products Purchase Agreement No. MGC9701N ("Agreement") between
Nortel and Buyer.
2. DEFINITIONS
For purposes of this Product Attachment:
"Equipment" shall mean the equipment listed in Schedule A.
"Product Attachment Term" shall mean the period which shall commence on
the date this Product Attachment is executed by the latter of the
parties and shall expire on December 31, 1999.
"Services" shall mean the services described in Schedule B.
"Software" shall mean the software listed in Schedule A.
"Specifications" shall mean Nortel's standard published performance
specifications for the Products.
"Vendor Items" shall mean the equipment marked with an asterisk (*) in
Schedule A.
"Warranty Period" shall mean twelve (12) months from the date of
shipment stamped on the Equipment or, if the date of shipment is not
marked on the Equipment, fifteen (15) months from the date of
manufacture. In the event Nortel performs installation Services, the
Equipment warranty shall be twelve (12) months from the date of
acceptance as set forth in Section 7 herein.
3. SCHEDULES
The following Schedules which are attached hereto are an integral part
of the Product Attachment and are incorporated herein by reference:
Schedule A - Products, Prices, and Fees
Schedule B - Services and Charges
000
XXXXXXXX XX. XXX0000X
ACCESSNODE PRODUCT ATTACHMENT
PAGE 2
Schedule C - Delivery Intervals
Schedule D - Forecast
4. ORDERING
4.1 All Orders shall specify the Products required and the
Services, Nortel is to perform, if any.
4.2 Any change to the original Order initiated by Buyer after
Nortel's acceptance of the Order and any resulting adjustments
to prices, schedule and/or other requirements of the Order
shall be negotiated, mutually agreed upon and subsequently
detailed in a written change to the Order ("Change Order"),
referencing the original Order and executed by authorized
representatives of Buyer and Nortel. The adjustment of the
Order prices for Products and charges for any Services, as
applicable, in a Change Order shall be established on the
basis of Nortel's then current merchandise prices for such
Products and/or charges for Services. In the event that the
Change Order affects work already performed, the adjustment of
the Order price shall include reasonable charges incurred by
Nortel related to such work. No such changes shall be
performed until a Change Order has been executed by Nortel and
Buyer as described above.
5. PRICING
5.1 Pricing for AccessNode Equipment and Software shall be as set
forth in Schedule A, Sections 1 through 7.
5.2 The prices for engineering, installation and/or system line-up
and testing ("SLAT") Services performed by Nortel with respect
to an accepted Order shall be as quoted by Nortel and agreed
to by Buyer prior to issuance of the applicable Order.
5.3 Nortel will prepay freight charges and the cost of any
insurance requested by Buyer and invoice Buyer for these items
at Nortel's actual cost. These charges will appear as separate
line items on Nortel's invoice.
5.4 Buyer and Seller shall, on at least an annual basis, review
the pricing for Product set forth in Schedule A to ensure
pricing, including any credits granted to Buyer under Section
11, is generally in line with competitive market pricing. If
Buyer reasonably determines that prices have decreased and
adjustments are necessary, then Buyer and Seller shall
negotiate in good faith to bring prices to competitive parity.
000
XXXXXXXX XX. XXX0000X
ACCESSNODE PRODUCT ATTACHMENT
PAGE 3
6. TERMS OF PAYMENT
Nortel shall invoice Buyer for the price of the Products as well as any
prepaid freight and insurance charges upon shipment of the Products.
Any Services provided hereunder shall be invoiced to Buyer upon
Nortel's completion of such Services.
7. TESTING, TURNOVER, AND ACCEPTANCE
7.1 When Nortel installs the Products, Buyer's acceptance of the
Products and Services shall take place, or be deemed to have
taken place, upon completion by Nortel of installation and
SLAT Services in accordance with Nortel's standard procedures
and practices, as evidenced by the acceptance test results
showing that the Products meet and perform in accordance with
the applicable Specifications. Upon such acceptance, Nortel
shall provide Buyer with a turnover notice to be acknowledged
in writing by Buyer. By providing the turnover notice, Nortel
certifies that the Products meet and perform in accordance
with the applicable Specifications. Acceptance of the Products
shall not be withheld or postponed due to:
a) deficiencies of the Products or any other product
with which such Products are used or operated,
resulting from causes not attributable to Nortel,
such as but not limited to (i) inaccuracy of
information provided by Buyer, (ii) inadequacy or
deficiencies of product, facilities or services
provided by Buyer or a third party and tested in
conjunction with the Products, or (iii) other
conditions, external to the Products provided by
Nortel, which are beyond limits specified herein and
are used by Nortel in performance calculations and
spurious outputs from adjacent product. Nortel shall,
however, at Buyer's expense, assist Buyer in the
elimination or minimization of such deficiencies; or
b) minor deficiencies or shortages, attributable to
Nortel, of a nature that do not prevent full and
efficient commercial operation of the Products.
Nortel shall, however, at its expense, take prompt
and effective action to correct any such deficiencies
or shortages.
7.2 The effort associated with Nortel's investigation of any
deficiencies not attributable to Nortel shall be billed to
Buyer.
000
XXXXXXXX XX. XXX0000X
ACCESSNODE PRODUCT ATTACHMENT
PAGE 4
8. WARRANTIES AND REMEDIES
8.1 The repair or replacement of Equipment and the correction of
defective installation Services shall be warranted for a
period of ninety (90) days or the remainder of the original
Warranty Period whichever is longer.
8.2 Nortel shall provide Buyer with repair and replacement service
for a minimum period of seven (7) years from the commencement
date of this Product Attachment, subject to the condition that
should Nortel discontinue manufacture or repair of the Product
or portions thereof prior to the expiration of such seven (7)
year period (such right of discontinuance being expressly
reserved by Nortel), Nortel shall provide Buyer with a twelve
(12) month prior written notice of any discontinuance so as to
enable Buyer to place an order for its requirements or to
enter into any other mutually satisfactory agreement with
Nortel prior to such discontinuance. This provision shall
survive the expiration of this Product Attachment.
9. NOTICES
Pursuant to Section 18.5 of the Agreement, any notices by Buyer to
Nortel which are specific to this Product Attachment shall be delivered
to the following address:
Northern Telecom Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx X
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attn: Vice President and General Manager, Access Networks
10. ADDITIONAL TERMS
10.1 Nortel may, from time to time, issue updates to the Software
and, upon Buyer's payment of applicable Right to Use Fees or
Software License Fees, if any, shall license these updates to
Buyer. Nortel shall classify such updates as either: 1)
Incremental Software Upgrades ("ISUs"), designed to correct
any nonconformance to the applicable Software specifications
or 2) enhancements which will provide additional features
("Enhancements"). Updates to Software, classified as ISUs by
Nortel, will be provided at no cost to Buyer. Notwithstanding
the foregoing, ISUs and Enhancements shall not include the
cost of any associated hardware that may be required to update
such ISUs. Updates classified as Enhancements, which will be
used by Buyer in its operations shall be made available to
Buyer on a billable basis. In the event Nortel determines that
the update includes both ISUs and Enhancements which will be
used by Buyer in its operations, such update shall be made
available to Buyer. If Buyer elects to receive the update,
Nortel shall invoice Buyer only for the amount
000
XXXXXXXX XX. XXX0000X
ACCESSNODE PRODUCT ATTACHMENT
PAGE 5
determined by Nortel to be attributed to the Enhancements
contained in such update.
10.2 In order to allow Nortel to meet its delivery requirements,
Buyer shall issue a forecast showing the specific types and
quantities of Products to be released and the dates such
Products will be released throughout the Product Attachment
Term. Buyer shall update such forecasts quarterly with each
forecast stating the specific types of Products and quantities
of Products to be released during the next quarter. The
initial forecast shall be as set forth in Schedule D. In the
event Buyer does not meet its obligation to update its
forecast quarterly, then Nortel shall not be obligated to meet
its forecasted delivery intervals as stated in Schedule C.
Nortel's only obligation regarding such delivery intervals
shall be to meet delivery dates set forth in an accepted
Order. If Nortel, prior to acceptance of an Order, advises
Buyer that it cannot meet a delivery date shown in an Order,
both parties will negotiate a revised date prior to acceptance
of the Order by Nortel. The installation and SLAT intervals
applicable to an Order will be quoted by Nortel and agreed to
by Buyer and Nortel prior to issuance of such Order.
10.3 If Nortel is providing Buyer with installation Services, Buyer
shall be responsible for having all installation sites ready
on time and in accordance with Nortel's requirements. Buyer
shall be responsible for any expense incurred by Nortel as a
result of Buyer's failure to meet the foregoing obligations.
11. PURCHASE COMMITMENT
11.1 During the Product Attachment Term, Buyer commits to purchase
and/or license, as applicable, and take delivery from Nortel
of seventy-one thousand, six hundred and forty-four (71,644)
lines ("Purchase Commitment") of AccessNode Product, based on
the models set forth in Schedule A, Sections 1A through 1D.
The five thousand, seven hundred eighty-eight (5,788) lines
purchased by NevTel, Inc. under Xxxxxxxx Xx. XX0000XXX shall
count toward Buyer's fulfillment of the Purchase Commitment
under this Product Attachment.
11.2 In consideration of Buyer's Purchase Commitment above, Nortel
shall provide Buyer a credit in an amount not to exceed One
Hundred Forty Thousand Dollars ($140,000.00). Such credit
shall be applied only against the first and last Orders
submitted by Buyer toward Buyer's Purchase Commitment, and
provided such Orders shall be for the purchase of at least
seven (7) AccessNode models as set forth in Schedule A,
Sections 1A through 1D. Such credit shall be in increments of
Ten Thousand Dollars ($10,000.00) per AccessNode model.
000
XXXXXXXX XX. XXX0000X
ACCESSNODE PRODUCT ATTACHMENT
PAGE 6
11.3 In the event Buyer fails to purchase and/or license, as
applicable, and take delivery of its Purchase Commitment, as
set forth in Section 11.1, by the end of the Product
Attachment Term, Nortel shall invoice Buyer a fee based on ten
percent (10%) of the product of (i) the difference between
Purchase Commitment and the actual number of lines purchased;
(ii) the per line price of One Hundred and Sixty Dollars
($160.00).
11.4 Nortel has also provided Buyer special pricing on seventeen
(17) DS-1 Fed AccessNodes ("DFAs"), as provided in Proposal
No. P70171, and purchased by Buyer under Order No. ______.
Such DFA purchases shall count toward Buyer's fulfillment of
the Purchase Commitment but shall not be eligible for the
credit set forth in Section 11.3 above.
NORTHERN TELECOM INC. MGC COMMUNICATIONS, INC.
By: By:
---------------------------------- ---------------------------------
Signature Signature
Name: Name:
-------------------------------- -------------------------------
Print Print
Title: Title:
------------------------------- ------------------------------
Date: Date:
-------------------------------- -------------------------------
