Exhibit 10.4
**-Certain information omitted and filed separately with the Commission pursuant
to a confidential treatment request under Rule 24b-2 of the Commission.
SDBAS SUPPLY AGREEMENT
This Supply Agreement is made effective as of the 4th day of February 1998
("Effective Date") by and between Lucent Technologies Inc., a Delaware
corporation, having an address at 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx
00000 ("Company") and BroadBand Technologies, Inc., a Delaware corporation,
having an address at 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxxx, Xxxxx Xxxxxxxx 00000-0000
("Supplier") (together "the parties").
WITNESSETH
WHEREAS, Supplier and Company's predecessor-in-interest, AT&T Corp.,
entered into a certain Agreement LGC-A65-D dated as of November 1, 1995 (the
"Agreement") which sets forth terms and conditions governing the purchase and
sale of Supplier's products and services between the parties; and
WHEREAS, by Notice of Assignment dated February 5, 1996, AT&T Corp. has
assigned to Company all of its right, title and interest in and to the Agreement
effective as of February 1, 1996; and
WHEREAS, Company and ********************* Network Services, Inc. have
entered into a certain FSN Procurement Agreement, BC13760, dated as of July 12,
1996 (the "FSN Agreement"), whereby Company agrees to provide to **********
******** Network Services, Inc. and ************* Affiliates (collectively
"*************") certain products and services for a switched digital video
system to be deployed by ****** ************;
WHEREAS, the products and services to be furnished by Company to
************* under the FSN Agreement include, without limitation, certain
products and services to be provided by Supplier to Company;
WHEREAS, Supplier and Company entered into a First Amendment to Agreement
LGC-A65-D dated as of July 12, 1996 (the "First Amendment") which sets forth
terms and conditions under which Supplier shall sell to Company and Company may
purchase from Supplier those products and services which are to be furnished to
**************** under the FSN Agreement;
2
WHEREAS, the parties desire that Agreement LGC-A65-D and the First
Amendment and any and all other amendments, modifications or revisions to the
Agreement be superseded by this Supply Agreement, which will set forth the sole
and exclusive terms and conditions under which Supplier shall sell to Company
and Company may purchase from Supplier those products and services which are to
be furnished to *************** under the FSN Agreement;
WHEREAS, Company may have existing obligations to certain other customers
(collectively "Customers") arising out of or relating to events or actions that
occurred prior to the Effective Date of this Agreement to provide to Customers
certain products and services for switched digital video systems or SDBAS
systems to be deployed by Customers ("Customer Obligations); and
WHEREAS, the parties desire that this Supply Agreement will set forth the
sole and exclusive terms and conditions under which Supplier shall sell to
Company and Company may purchase from Supplier certain products and services
which may be furnished to Customers to satisfy the Customer Obligations or any
other obligations that Company may from time to time undertake in lieu of the
Customer Obligations (collectively "Company's Obligations");
NOW, THEREFORE, in consideration of the mutual promises herein set forth
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties, Supplier and Company agree as follows:
ARTICLE I
Scope of Supply Agreement and Relationship of Parties
SECTION 1.01. Except as mutually agreed by the parties in writing, this
Supply Agreement shall apply only to transactions between Supplier and Company
for the purchase and sale of Material (as defined in Article II below) and
related services to be provided to ************** under the FSN Agreement or to
Customers pursuant to Company's Obligations. Such Material and related services
are hereby offered for sale by Supplier and may be purchased by Company as
required for the FSN Agreement and Company's Obligations in accordance with the
terms, conditions, and specifications of this Supply Agreement.
SECTION 1.02. Except to the extent provided in Article IV, this Supply
Agreement shall not be construed to impose any commitment by Company to purchase
any Materials
3
or services, and Materials and services shall be furnished by Supplier on an
as-ordered basis. Except as provided in Article IV of this Supply Agreement, the
parties agree that nothing contained in this Supply Agreement shall be deemed a
commitment on behalf of Company to purchase from Supplier any minimum quantities
or dollar value of Materials; it being expressly understood and agreed that any
obligation of Company to purchase Materials under this Supply Agreement shall be
contingent upon the corresponding purchase of such Materials from Company by
******************** under the FSN Agreement or by Customers pursuant to
Company's Obligations.
SECTION 1.03. Supplier agrees that all Material to be sold to Company under
this Supply Agreement shall comply in all respects with the specifications
attached as Attachment A.
SECTION 1.04. The relationship of Supplier and Company as established under
this Supply Agreement will be and remain one of independent contractors, and
neither party will at any time or in any way represent itself as being a dealer,
agent or other representative of the other party or as having authority to
assume or create obligations or act in any manner on behalf of the other party.
SECTION 1.05. The parties acknowledge that Company has delivered to
Supplier a full and complete copy of the FSN Agreement. Supplier agrees to treat
such copy in accordance with the confidentiality and non-disclosure provisions
of this Supply Agreement.
ARTICLE II
Definitions
SECTION 2.01. For purposes of this Supply Agreement, the following
definitions shall apply:
"Access Subnetwork Equipment" or "ASE" means the SLC-2000 Access System
with FLX Switched Digital Video to be supplied by Company with the capability
for switched digital video under the FSN Agreement or pursuant to Company's
Obligations.
"***************** Affiliate" means an entity that owns, directly or
indirectly, a greater than fifty percent (50%) voting interest in
*********************************** ("Parent"), or any entity in which
************************* **************** or its Parent owns, directly or
indirectly, at least a fifty percent (50%) voting interest. The term shall also
include those entities in which ***************** *****************************
4
********* or its Parent own, directly or indirectly, a less than fifty percent
(50%) but more than twenty percent (20%) voting interest ("Minority Owned
Affiliates") and that are listed in Appendix J to the FSN Agreement, as modified
and amended from time to time.
"**************** Region" means any and all of the areas of *************
*************** ****************************** Affiliate provided service at any
time during the Term.
"Beta Test Date" means ******************* initial deployment of hardware
and software under the FSN Agreement to a limited number of subscribers to test
the FSN.
"Change in Control" means any one of the following circumstances or events:
(i) The stockholders of a Party ("Acquired Party") approve a
transaction, including, without limitation, a merger or
consolidation (however denominated or effectuated), with an
Acquiror, including, without limitation, a merger or
consolidation, or series of transactions with the same Acquiror
("Combination"), and immediately after such transaction(s) less
than 60% of the combined voting power of the then-outstanding
securities of the Acquired Party or the Acquiror, will be held in
the aggregate by the holders of securities entitled, immediately
prior to such Combination, to vote generally in the election of
directors of the Acquired Party ("Voting Securities");
(ii) The stockholders of the Acquired Party approve the sale or
transfer of all or substantially all of its assets to any other
Person or entity, and less than 60% of the combined voting power
of the then-outstanding Voting Securities of such Acquiror
immediately after such transaction will be held in the aggregate
by the holders of the Voting Securities of the Acquired Party
immediately prior to such sale;
(iii) An Acquiror acquires in one or a series of transactions beneficial
ownership of more than 40% of the outstanding shares of Voting
Securities of a Party;
(iv) The stockholders of a Party approve a plan of complete liquidation
or dissolution of the Party;
5
(v) Any Acquiror obtains direct or indirect Control (as herein
defined) over a party and, in Lucent's reasonable judgment, such
Control may threaten Lucent's interests. For the purposes of this
subsection, the term "Control" shall mean the possession directly
or indirectly of the power to direct or cause the direction of the
management or policies of a Party, whether through the ability to
exercise voting power, by contract or otherwise;
(vi) At any time, Continuing Directors (as herein defined) shall not
constitute at least 50% of the members of the Board ("Continuing
Director" means (i) each individual, who has been a director of
the Party for at least twelve (12) consecutive months before such
time and (ii) each individual who was nominated or elected to be a
director of the Party by at least a majority of the Continuing
Directors at the time of such nomination or election); or
(vii) Any other transaction which has the effect of causing the
substantive changes in the Acquired Party described in any of the
preceding paragraphs.
For the purposes of this definition, the term "Acquiror" shall mean one person
or entity, or two or more persons and/or entities constituting a "group" for
purposes of the Securities Exchange Act of 1934, as amended.
"Circuit Packs" means any or all of the **********************************
*******************************************************************************
****************************************************************************.
"Code Corrections" means corrections to Software malfunctions to bring
Software into conformance with its specifications.
"Companion Agreement" means that certain Procurement Agreement dated as of
July 1, 1996 between ***** ********** and Supplier for the purchase and sale of
any *** ***********************************************************************
*******************************************************************************
6
********************************************************************************
*********************.
"Designated Processor" means hardware platforms used in the FSN with which
Software is compatible.
"Event" means (i) actual failures or adverse functioning of products
resulting in the disruption of network access and/or the services provided by an
ASE or equivalent system, to customers of ***************, Company, Supplier,
Customers, or any other purchaser or user of the products in the United States
of America, for a period of thirty (30) uninterrupted minutes per occurrence; or
(ii) actual defects in design and/or manufacturing of the products which are
known by Company and/or Supplier regardless of whether such actual defects in
design and/or manufacturing have resulted in any actual malfunctions or failures
of the products, and which have the ability of causing the disruption of network
access and/or the services provided by an ASE, or equivalent system, to
customers of ****************, Company, Supplier, Customers, or any other
purchaser or user of the products in the United States of America for minimum
period of thirty (30) uninterrupted minutes per occurrence. For purposes of this
definition, "products" means hardware and software sold by Company and Supplier
under the FSN Agreement and this Supply Agreement, respectively, and other items
that are manufactured and/or sold by Company or Supplier which are the same as,
or functionally or operationally similar to, such hardware and software.
"Executive Team" means a team comprised of two representatives of the
Company selected by the Company and two representatives of the Supplier selected
by the Supplier, with each team member having equal voting privileges.
"First Service Application" or "FSA" means a set of managed activities,
administered by Company, that validates the first deployment of new products
(Material) for the first time in any Company's customer environment. The FSA
process assures that the first service deployment is timely and exceeds
Company's customers' expectations with respect to quality, delivery,
installation, testing operation, maintenance, and acceptance.
"First Service Application Date" or "FSA Date" means ******************* or
a Customer's initial commercial deployment of hardware and software to provide
telephony and/or video services over the FSN. The *************** FSA Date is
targeted for two (2) months after the Beta Test Date.
7
"Full Service Network" or "FSN" means a switched digital video system
deployed by ************* or a Customer that enables delivery of a range of
services, from narrowband to broadband telephony to digital broadcast video and
interactive multimedia services, as diagramed in Appendix B to the FSN
Agreement.
"HDT" means a host digital terminal as diagramed in Appendix B of the FSN
Agreement.
"Headcount Year" is a measure of services provided by one or more engineers
or programmers that are in the aggregate equivalent to those that would be
provided by a dedicated full-time programmer or engineer working two hundred
twenty (220) days.
"Homes Passed" shall have the meaning set forth in Section 4.04.
"Initial Availability" means the first date on which Material is delivered
and installed at a customer field or lab location on a newly developed offering.
"Initial Customer Application" means a controlled process, administered by
Company, to assure that new products (Material) meet or exceed Company's
customers' expectations with respect to quality, delivery, installation,
testing, operations, maintenance and acceptance.
"Interconnect Information" or "ICA" means the nonproprietary technical
information necessary to comply with those FCC requirements designed to provide
Company's customers a functional interface with the Material supplied by
Supplier hereunder.
"Licensed Materials" means the Software and Related Documentation for which
licenses are granted by Supplier to Company under this Supply Agreement.
"Material" means Supplier's Material (hardware and software) as listed in
Attachments A and B, including any additions or supplements thereto, attached to
and made part of this Supply Agreement.
"ONU" means an optical network unit as diagramed in Appendix B of the FSN
Agreement.
"Parts" means maintenance, replacement and repair parts for the Material
covered by this Supply Agreement.
8
"Predecessor Agreement" means the agreement between Supplier and Company
known as Contract No. LGC-A65-D dated November 1, 1995, as amended.
"Purchase Order" means a purchase order from Company to Supplier sent
pursuant to this Supply Agreement.
"Related Documentation" means materials, useful in connection with Software
and Materials required to engineer, operate, maintain, and install Software such
as, but not limited to, programs, translations and parameters, listings, user
manuals, methods, practices, job aides, flow charts, installation and other
instructions, logic diagrams, and listings, program descriptions and
specifications.
"SDV" means a product, system or architecture that provides broadband
digital edge switching and transport and narrowband transport of electronic
and/or optical signals within the access portion of a communications or
distribution network.
"SDV Subsystem" means Supplier's hardware and software that provides SDV.
This includes two key hardware elements: (1) the Host Digital Terminal, and (2)
the Optical Network unit, operating software, and the video operation system
known as the VAM, and any additions or modifications to these elements as may
occur over the life of the Agreement.
"Software" means computer programs, procedures, and rules designed to make
use of and to extend the capabilities of hardware (including, but not limited
to, control programs, operating system programs, processing programs, diagnostic
programs, audit programs, system measurement programs and tools, special system
programs, authoring tools and documentation used to maintain, describe and use
all such programs) offered for license by Supplier hereunder. The term shall not
include Source Code format unless otherwise specified herein.
"Software Enhancement" means any change in Software that improves the basic
function of the Software.
"Software Upgrade" means improvements in Software that relate to operating
performance but do not change the basic function of the Software.
"Source Code" means any version of Software incorporating high level or
assembly language that generally is not directly executable by a processor.
9
"Technical Information" shall include all Source Code, object code, and
Related Documentation for the operating system and any other Software used in
the Material or Parts, and all design drawings, materials/parts lists, and
specifications used in the design and manufacture of Material or Parts, as well
as all corrections, updates and enhancements to such Software and other
information.
"Technical Information" shall also include:
(i) manufacturing drawings and specifications including Circuit
Pack schematics; (ii) manufacturing drawings and specifications covering
special tooling and operation thereof; (iii) a detailed list of all
commercially available Parts and components purchased by Supplier on the
open market disclosing the part number, name and location of the
supplier; and (iv) repair specifications and test procedures, as
available.
"Term" shall have the meaning set forth in Section 3.01.
"Video Equipped HDTs" means that at least one or more of each of the
following has been shipped to ********** *********** by Company or Supplier for
use with an HDT: DBP 2515 Digital Broadcast Processor, ANI 2514 ATM Network
Interface Quad 3 UNI-Directional and 1 Bi-Directional card, ANI 2514 ATM Network
Interface Quad Uni-Directional card, SCP 2521 Shelf Control Processor, or any
successor equipment.
ARTICLE III
Term of Agreement
SECTION 3.01. Except as provided in Article XCII (Survival of Obligations),
the term ("Term") of this Supply Agreement shall commence as of the Effective
Date and shall be coterminous with the longer of the Company's Obligations or
the FSN Agreement, which is currently in effect until December 31, 2002. To the
extent the term of the FSN Agreement is extended beyond December 31, 2002, this
Supply Agreement shall be correspondingly extended upon the mutual written
agreement of the parties.
SECTION 3.02. Notwithstanding anything contained in Section 3.01 to the
contrary, this Supply Agreement shall terminate (a) upon the expiration or
earlier termination of the FSN Agreement for any cause or reason, as long as
there are no outstanding Customer Obligations or (b) in accordance
10
with the provisions of Section 6.01 of this Supply Agreement.
SECTION 3.03. Either party may terminate this Supply Agreement by notice in
writing if (a) the other party makes an assignment for the benefit of creditors
(other than solely an assignment of monies due), or (b) the other party
evidences an inability to pay debts as they become due, unless adequate
assurance of such ability to pay is provided within thirty (30) calendar days of
such notice.
SECTION 3.04. If a proceeding is commenced under any provision of the
United States Bankruptcy Code, voluntary or involuntary, by or against either
party, and this Supply Agreement has not been terminated, the non-debtor party
may file a request with the bankruptcy court to have the court set a date within
sixty (60) calendar days after the commencement of the case, by which the debtor
party will assume or reject this Supply Agreement, and the debtor party shall
cooperate and take whatever steps necessary to assume or reject the Supply
Agreement by such date.
ARTICLE IV
***************** Purchase Objectives
SECTION 4.01. Subject to the terms and conditions of the FSN Agreement,
************* has committed to purchase during the Term, through itself and the
******** ************* Affiliates, certain hardware and software that includes
Video Equipped HDTs in sufficient volume to exceed
******************************** Homes Passed (as defined in Section 4.04)
within the ********************* Region. **** *************** may also purchase
in excess of the foregoing amounts under the FSN Agreement.
SECTION 4.02. Subject to the terms and conditions of the FSN Agreement,
************** and the **** *********** Affiliates have agreed that until the
earlier of (a) December 31, 1998, or (b) the date on which ************
********** has exceeded *********************** Homes Passed within the
**************** Region (the "Requirement Date"), ******************* will
purchase from Company under the FSN Agreement and/or Supplier under the
Companion Agreement all Circuit Packs required by ********************* and the
**** *********** Affiliates for deployment of the ASE in the **** ***********
Region.
SECTION 4.03. Subject to the provisions of Article VI, to the extent (a)
the commitment and agreement
11
of ************** referenced in Sections 4.01 and 4.02 above includes Material,
and (b) ************** actually purchases such Material from Company under the
FSN Agreement, Company agrees to purchase all such Material from Supplier under
this Supply Agreement. To the extent *************** or the *****************
Affiliates actually purchase Circuit Packs from Company after the Requirement
Date under the FSN Agreement and subject to the provisions of Article VI,
Company also agrees to purchase such Circuit Packs from Supplier under this
Supply Agreement.
SECTION 4.04. With respect to purchases of Material, it is understood and
agreed that each HDT is designed to service multiple ONUs, and that each ONU,
when deployed and equipped with the appropriate Circuit Packs, has the
capability to provide telephone, video, telephone and video or other
telecommunications services to living units made up of single family dwellings,
single residences in multi-family dwellings and single business locations. When
Company has shipped to ******************** or any **** ***************
Affiliate an ONU, with or without associated Circuit Packs, ************** shall
be deemed to have passed the number of homes equal to the living unit engineered
capacity of that ONU; provided that a sufficient quantity of HDTs has been
shipped for use with such ONUs ("Homes Passed").
ARTICLE V
License Grants
SECTION 5.01. Supplier grants to Company (to the extent not already granted
pursuant to the Predecessor Agreement and still in full force and effect) a
nonexclusive, perpetual, fully paid-up, royalty-free license to reproduce and
use the Licensed Materials, and to sub-license and authorize Customers, Customer
Affiliates, ****** ******************, ************* Affiliates, other entities
purchasing Material under the FSN Agreement, and their end-users of the
Materials to use the Licensed Materials. Software provided in object code form
shall not be modified, decompiled, disassembled or reverse-engineered. Supplier
shall provide with each copy of the Software specific installation and
applications guidelines describing the procedures necessary to create additional
authorized implementations on a new Designated Processor to increase the
capacity of Designated Processors on multi-processor computer systems. Supplier
will exert reasonable efforts to ensure that all Software provided by Supplier
is delivered to Company with an appropriate proprietary legend so as to
12
assist ************* and Customers in the protection of such Software.
SECTION 5.02. Notwithstanding anything contained in this Supply Agreement
to the contrary, Supplier, on behalf of itself, its successors, and assigns,
grants to Company (to the extent not already granted pursuant to the Predecessor
Agreement and still in full force and effect), an irrevocable, perpetual,
nontransferable, and nonexclusive:
(a) right to use Technical Information for the design, development,
manufacture, or maintenance of Material and Parts;
(b) license under its copyrights to create derivative works, and to use,
copy, and distribute Technical Information and any derivative works, but only in
connection with the design, development, manufacture, or maintenance of Material
and Parts;
(c) right to grant to any third party rights of the scope granted to
Company under subsections (a) and (b) above, to the extent reasonably necessary
to carry out activities of supplying Company with Material and Parts or
components thereof;
(d) license under its copyrights to copy, use, and distribute object code
versions of Software included in the Material or Parts but only in connection
with the sale, lease or distribution of such Material or Parts; and
(e) license under its patents and patent applications to make, have made,
use, offer to sell, sell, and import Material and Parts components thereof.
SECTION 5.03. The rights granted in Section 5.02 shall apply to Material
and Parts which are to be supplied by Company to Customers pursuant to Company's
Obligations and to **************** pursuant to the FSN Agreement and/or the
Companion Agreement. Company agrees not to exercise the rights granted in
Section 5.02 prior to a material failure by Supplier to supply Materials or
Parts and the expiration of any applicable cure period, and only for those
Materials or Parts which Supplier fails to supply. The rights granted in Section
5.02 shall terminate five years after Company first ships to a customer any
Materials or Parts manufactured by Company pursuant to Section 5.02, however,
Company shall retain rights under Section 5.02 for as long as necessary to
provide maintenance, replacement or repair parts to customers as required under
the FSN Agreement and the Companion Agreement. In the event that the Supplier
13
should file a petition under the federal bankruptcy laws, or that an involuntary
petition shall be filed against the Supplier, the parties intend that Company
shall be protected in the continued enjoyment of its rights under Section 5.02,
including, if it so elects, the protection conferred upon licensees under 11
U.S.C. Section 365(n).
SECTION 5.04. Within seven (7) days after the execution of this Supply
Agreement, the parties shall execute and deliver, in the form provided as
Attachment G, an escrow agreement between Supplier and Company for the delivery
of Technical Information used in the development and manufacture of Materials
and Parts, for use by Company in accordance with the rights granted in Section
5.02.
SECTION 5.05. In the event Company elects to exercise any right granted in
Section 5.02, Company shall have no obligation to pay Supplier any additional
compensation for the exercise of such right prior to or during the six (6) month
period beginning when Company first furnished Materials or Parts manufactured
pursuant to Section 5.02 under the FSN Agreement or the Companion Agreement.
Thereafter, for a period not to exceed five (5) years from such first furnishing
by Company, Company shall pay to Supplier a royalty fee on each Material or Part
manufactured pursuant to Section 5.02 which Company furnishes under the FSN
Agreement or the Companion Agreement or pursuant to Company's Obligations. The
royalty fee shall be ************************************************ (if any)
from the sale of such Materials and Parts, and shall be payable on December 31
of each calendar year in which such Materials or Parts are shipped.
ARTICLE VI
Default and Termination
SECTION 6.01. Time is of the essence to this Agreement. In the even either
party is in breach of any of the terms, conditions or covenants of this Supply
Agreement or any Purchase Orders under this Supply Agreement, the defaulting
party shall initiate corrective action to remedy such breach or default or
provide the affected party a schedule acceptable to the nonbreaching party for
correcting such breach or default within ten (10) days after the giving of
written notice to the defaulting party thereof by the nonbreaching party. In the
event the breach or default is not corrected within thirty (30) days after the
giving of written notice to the defaulting party thereof by the nonbreaching
party or within the agreed upon schedule, whichever is later, then, in addition
to its right to pursue
14
all other rights and remedies at law, equity or otherwise, the nonbreaching
party shall have the right to cancel this Supply Agreement and/or any such
orders in whole or in part without charge, obligation or liability whatsoever,
except as to payment for Material already accepted by ************* prior to
such notice pursuant to the FSN Agreement.
SECTION 6.02. In the event this Supply Agreement is terminated due to the
termination of the FSN Agreement and the FSN Agreement is terminated for cause
or reasons not attributable to Supplier, Company shall pay to Supplier as its
sole liability:
(a) The invoiced amount for any Material ordered and shipped to Company
prior to the date of notice of termination; and
(b) The invoiced amount for any Services ordered by and performed for
Company prior to the date of notice of termination.
SECTION 6.03. Notwithstanding anything contained in Section 6.02 to the
contrary, Company shall not be liable to pay for any Material or Services under
Sections 6.02(a) or 6.02(b) that are not accepted by ********************* in
accordance with the acceptance procedures set forth in the FSN Agreement.
SECTION 6.04. In the event of a Change in Control of Supplier then Supplier
shall provide notice to Company of such Change in Control within 10 days of the
knowledge of the Change in Control. In addition, Supplier shall provide to
Company within 10 days of release copies of all public announcements regarding
any expectations of a Change in Control of Supplier. Upon the effective date of
the Change in Control, Company shall have the right to terminate this Agreement
by giving Supplier written notice of its intention to terminate at least 90 days
prior to the termination date specified in the termination notice.
ARTICLE VII
Purchases
SECTION 7.01. Company and Supplier will work with ***********************
and Customers to determine Company's requirements for the purchase of Material
and services pursuant to this Supply Agreement, and Company will request the
required Materials and services through placement of a Purchase Order. The
delivery schedule, cancelation terms and additional terms applicable to each
Purchase Order will
15
be agreed upon by Supplier and Company and set forth in the Purchase Order to
the extent not set forth herein. Company shall place each Purchase Order at
least ******************* ******** days in advance of the delivery date. If
Supplier, for any reason, cannot ship Material on the acknowledged ship date,
Supplier shall notify Company immediately. Company shall not, without Supplier's
consent, cancel or change the terms of a Purchase Order within one hundred
twenty (120) calendar days of the agreed upon delivery date for the Materials or
services to which said cancelation or change relates.
ARTICLE VIII
Inventory Prepayments and Existing Purchase Orders
SECTION 8.01. The parties acknowledge that Company has no outstanding
purchase commitments to Supplier (other than existing Purchase Orders already
placed by Company but not yet filled by Supplier pursuant to the Predecessor
Agreement), and that as of the Effective Date of this Agreement, Company has
made inventory prepayments in addition to the prepayments discussed in Article
IX (Prepayments) in the amount of **********, which shall serve as a credit
against future Purchase Orders placed by Company. These inventory prepayments
shall be credited against future Purchase Orders and shall be used up before
Supplier makes any further draw downs from the Hardware Prepayments discussed in
Article IX.
ARTICLE IX
Prepayments
SECTION 9.01. Software Prepayment. Company and Supplier acknowledge that
Company has provided to Supplier ********************************** as prepaid
Software right to use ("RTU") fees for Software licensed by Supplier to Company
under this Supply Agreement, and that Supplier has to date not drawn down any
amount from this prepayment. Supplier will draw down from this prepayment
*************** ************************* for each additional Home Passed by
**************** in the ************* Region, and will apply such amount to
amounts properly invoiced to Company for accepted Software (effective upon the
payment due date prescribed herein), until the total ************************
************ prepaid amount in exhausted. In the event this Supply Agreement
terminates, the Software prepayment under this Section 9.01 shall be
nonrefundable to Company.
16
SECTION 9.02. Hardware Prepayment. Company and Supplier acknowledge that
Company has provided to Supplier **************************************** as a
prepayment for hardware purchased by Company under this Supply Agreement, and
that Supplier has to date not drawn down any amount from this prepayment.
Supplier will, for each Home Passed by **************** in the *************
Region, draw down from this prepayment and will apply such amount to amounts
properly invoiced to Company for accepted Material other than Software
(effective upon the payment due date prescribed herein), until the total
************************ ************** prepaid amount is exhausted.
SECTION 9.03. Letter of Credit. Within thirty (30) days of the execution of
this Supply Agreement, Supplier will deliver a fully executed irrevocable
Standby Letter of Credit in the principal amount of ****************
************************** naming Company as beneficiary and securing
*********************************** of the hardware prepayment set forth in
Section 9.02, to be drawn down at the rate of three dollars ($3.00) per Home
Passed after such time as the unused portion of said hardware prepayment equals
************************************* and pursuant to which Lucent is entitled
to any unused amounts in the event Supplier is unable for financial reasons to
deliver on hardware related Purchase Orders placed by Company pursuant to this
Agreement. This Standby Letter of Credit shall be issued by a bank acceptable to
Company. The term of the Standby Letter of Credit shall be effective immediately
upon delivery by Supplier thereof and shall be automatically renewable and
remain in effect until the date on which ***** ********* purchases from Company
under the FSN Agreement are in sufficient quantity to exceed two million
(2,000,000) Homes Passed.
ARTICLE X
Pricing
SECTION 10.01. Prices for Material and Services ordered under this Supply
Agreement shall be those set forth in Attachment B and Supplier agrees that such
prices will not be increased during the Term except as per the Change Control
Process. To the extent required as part of the agreement between
****************** and Company to identify areas where ***************** can
reduce FSN costs, Supplier agrees to work in good faith with Company to identify
areas where **************** can reduce FSN costs, and the parties may implement
such reductions.
17
SECTION 10.02. In addition to the price modifications described in Article
XI of this Supply Agreement, the pricing set forth in Attachment B has been
modified to reflect the following effective immediately:
(a) Applicable only to purchases by Company for resale to Customers
pursuant to Company's Obligations and to ******************, *************
Affiliates, *****, and any other entities entitled to purchase from Company
under the FSN Agreement, Supplier agrees to extend the VAM Basic Software
License for applications from 120 digital broadcast channels up to and including
188 digital broadcast channels, at no additional cost to Company.
(b) Applicable only to purchases by Company for resale to Customers
pursuant to Company's Obligations and to ******************, *************
Affiliates, *****, and any other entities entitled to purchase from Company
under the FSN Agreement, Supplier agrees to extend the Basic Digital Broadcast
Software License for applications from 120 digital broadcast channels up to and
including 188 digital broadcast channels, at no additional cost to Company.
(c) Applicable only to purchases by Company for resale to Customers
pursuant to Company's Obligations and to *****************, *************
Affiliates, *****, and any other entities entitled to purchase from Company
under the FSN Agreement, Supplier agrees to extend the Interactive Video
Software - Low Penetration License to include applications from 25% up to and
including a 33% take rate, at no additional cost to Company.
SECTION 10.03. If at any time after three years from the Effective Date,
Company notifies Supplier in writing that *************** has obtained a written
proposal from another vendor offering to sell to ******************** systems
functionally equivalent to the ASE which are ***********************************
********************************************************************************
********************************************************************************
******************************************************************. If the
parties do not agree to lower their prices to coincide with any Market
18
Proposal and ************** exercises its right to terminate the FSN Agreement
as a result thereof, Company shall have the right to terminate this Supply
Agreement by forwarding written notice thereof to Supplier. In the event of such
termination, Company shall be liable only for the amounts specified in Section
6.02; and, provided further that in such event Supplier shall promptly refund
the unused portion of any prepayments made pursuant to Sections 9.01 and 9.02.
SECTION 10.04. If, at any time after three years from the Effective Date,
*************** desires to purchase commercially available products which are
functionally equivalent to the ASE but contain features or enhancements which
are unavailable on the Material then provided by Supplier (a "New Material"),
then Company shall notify Supplier thereof in writing. *************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
In the event ***************** and the parties are unable to mutually agree upon
terms and conditions for Supplier to provide such features and/or enhancements
to *************** and *************** exercises its right to terminate the FSN
Agreement as a result thereof, Company may terminate this Supply Agreement by
forwarding written notice thereof to Supplier. In the event of such termination,
Company shall be liable only for the amounts specified in Section 6.02; and,
provided further that in such event Supplier shall promptly refund the unused
portion of any prepayments made pursuant to Sections 9.01 and 9.02.
ARTICLE XI
Price Modification to Achieve
Model Price Per Home Passed
SECTION 11.01. To achieve the *************** model price level of
****************************** with Flexterm, per Home Passed at a 2,000,000
Homes Passed volume, the prices set forth in Attachment B have been reduced by
****** *************************************** per Home Passed when applied to
the standard ************* FSN Model and shall be effective immediately.
SECTION 11.02. To accommodate ***************** FSN model for higher video
traffic requirements (known as
19
Case Y), which results in a model price level of ****************
**************************** per Home Passed, a new item has been added to
Attachment B which combines three software licenses into one license. The three
licenses are:
(a) the High Bandwidth Software License (1 Mbps/Drop) R1.0, 1.1, 2.0;
(b) the Extended Digital Broadcast Software License (>188 Channels)
R1.0, 1.1, 2.0; and
(c) the VAM Extended Software License (>188 Channels) R1.0, 1.1, 2.0.
These three licenses are consolidated into one license; the ****************
Enhanced Broadcast/Signaling Software R1.0, 1.1, 2.0, and is offered to Company
under this Supply Agreement only. This single license will be sold on a per FLX
shelf basis, and the price to Company is **************************************.
This ************* Enhanced Broadcast/Signaling Software R1.0, 1.1, 2.0 shall be
subject to the ************************ described in Article XIII of this Supply
Agreement.
SECTION 11.03. For the aggregate levels of Homes Passed by **************
and the ************* Affiliates as indicated in the first column of the table
set forth below, Supplier will apply to purchases under this Supply Agreement
the corresponding discounts set forth in the second column of said table. Said
discounts shall be applied against the prices set forth in Attachment B. All
price and cost reductions will be calculated using the standard ***********
*************** FSN model set forth in Appendix B to the FSN Agreement. Supplier
and Company will mutually determine the specific unit prices to adjust to
achieve the required price levels when calculated according to the
**************** FSN Model and Attachment B shall be revised accordingly.
----------------------------------------- --------------------------------------
# Homes Passed Supplier $ per
HP Reduction
----------------------------------------- --------------------------------------
2,000,001 - 2,250,000 *******
----------------------------------------- --------------------------------------
2,250,001 - 2,750,000 *******
----------------------------------------- --------------------------------------
2,750,001 - 3,000,000 *******
----------------------------------------- --------------------------------------
3,000,001 - 3,250,000 *******
----------------------------------------- --------------------------------------
3,250,001 - 4,000,000 *******
----------------------------------------- --------------------------------------
20
----------------------------------------- --------------------------------------
4,000,001 and Over *******
----------------------------------------- --------------------------------------
SECTION 11.04. If during the term of the Agreement, Company is provided
more favorable pricing from Supplier due to cost reduction efforts, or for any
other reason, Supplier acknowledges that Company will receive this pricing for
Material supplied by Supplier under this Supply Agreement, subject to prior
Executive Team review and approval. However, in the event that the pricing set
forth in this Supply Agreement is the most favorable, Company will not extend
this pricing to any other customer without prior written approval from Supplier.
ARTICLE XII
Joint Cost Reduction Commitment
SECTION 12.01. Supplier agrees to work with Company to jointly achieve the
required cost reduction that will support a price reduction to ************** of
******** ************************************* per Homes Passed, when using the
standard *************** FSN model. This required cost reduction will entail a
commitment by both Supplier and Company to enter into joint design work to
achieve this cost reduction, regardless of the volume level projections. It is
the goal of the cost reduction efforts that this cost reduction will be achieved
within six months following completion of the ************** Beta Test.
SECTION 12.02. This Section is included as explanation of the Company and
Supplier cost reduction commitments, and should not be viewed as further
reductions to the price modifications as defined in Article XI (Price
Modification to Achieve Model Price Per Home Passed) of this Supply Agreement.
ARTICLE XIII
Software Incentive
SECTION 13.01. In order to motivate Company to maximize the selling price
of Supplier Software, Supplier agrees to provide to Company the sales incentive
described in Section 13.02 below on all Software licensed by Company under this
Supply Agreement during the Term. This includes all Software currently listed in
Attachment B of this Supply Agreement with the limited exception of that of
Supplier's
21
Software which is noted with an asterisk (*) on Attachment B to this Supply
Agreement.
SECTION 13.02. For all eligible Software under Section 13.01, the sales
incentive shall be in the form of a cash rebate to Company and shall be
calculated at *** of the prices in Attachment B to this Supply Agreement (as in
effect at the time of the purchase by Company), including any modifications to
such Attachment B prices that are mutually agreed to by Company and Supplier.
Supplier shall pay the foregoing sales incentive to Company by the 15th day of
the month following the end of each calendar quarter that this incentive is in
effect. Supplier shall then remit such quarterly payment to Company for all
shipments made by Supplier to Company during said quarter.
ARTICLE XIV
Custom Software
SECTION 14.01. Mandatory Requests. (a) Supplier acknowledges that
******************* shall be entitled to fund annually up to 10 Headcount Years
of custom Software development for access products or applications ("Custom
Software") and that ******************* may require Company to develop Custom
Software for up to this limit. Company agrees to immediately provide written
notification to Supplier if any such development work requires the resources of
Supplier. **************, Company and Supplier shall mutually agree on the
requirements, Headcount Years and delivery schedule of such development, with
the goal being to commence such development work within three months of
*************** request. Also depending on the scope and nature of such
development work, Supplier's goal will be to complete such development work
within six months of ******** *********** request and shall, in all events, seek
to finish such development work within a commercially reasonable time period.
(b) Prior to Supplier commencing such development work, Company and
Supplier will negotiate in good faith the fees to be paid to Supplier. Such fees
shall be based on the agreed to scope and nature of the required development
work and the desired schedule. In no event, however, shall the fees payable to
Supplier for any such work exceed ****** *********************************** for
each Headcount Year. This ******************************************* limitation
may be adjusted in December of each calendar year up to the amount of any change
in the Producer Price Index for Telecommunications Systems, Custom Software
Development during the preceding 12-month period.
22
SECTION 14.02. Discretionary Requests. Supplier acknowledges that
************** may also make discretionary requests for Custom Software in
addition to the mandatory development work cited above. Any such development
work to be performed by Supplier to meet ************* discretionary requests
shall be subject to prior negotiation between Company and Supplier regarding the
requirements, delivery schedule and the fees payable to Supplier for such
development work.
SECTION 14.03. Reservation of Rights. For mandatory Software development
requests, Company reserves the right to perform such development work itself, or
contract with other third parties to perform such development work, or at its
sole discretion, pass the requirement to Supplier. Company agrees that Supplier
shall have the right of first refusal prior to Company having any such
development work for SDBAS performed by any third party, except to the extent
that Company in its sole discretion believes that Supplier lacks the financial
resources or the ability to perform such development work.
SECTION 14.04. Ownership of Custom Software. All rights in and title to
Custom Software that is not embedded into existing Software or a derivative or
pre-existing work shall vest in the developing party. Supplier will grant to
Company, ***************** and *************** Affiliates a perpetual, fully
paid, exclusive license to use such Custom Software with the FSN, unless
**************, in its sole discretion, agrees to allow such Custom Software to
be licensed to others. In the event that any such Custom Software should be
licensed to others, compensation to ***** *********** will be negotiated on a
case-by-case basis.
ARTICLE XV
Controlled Introduction of Software
SECTION 15.01. Supplier agrees to notify Company prior to placing any
Software Upgrades or Software Enhancements on any Material covered under this
Supply Agreement or accepting any orders for delivery of Software Upgrades or
Software Enhancements for any Material covered under this Supply Agreement.
Supplier will submit to Company, for the purpose of testing by Company or its
customer (i.e., by *************** or one of the Customers), one prepurchase
copy of any proposed Software Upgrade or Software Enhancement at least 60 days
prior to the proposed general availability or proposed service date of such
Software Upgrade or Software Enhancement. In the event that
23
any Software Upgrade or Software Enhancement is unacceptable, Company shall
immediately provide written notification to Supplier of same. Supplier agrees
that it will not be providing any Software Upgrade or Software Enhancement on
any of Company's orders during the evaluation period without prior written
consent of Company and its customer. Supplier also agrees that Company will not
furnish any Software Upgrade or Software Enhancement following its customer's
evaluation until written approval has been received by Company from its
customer. Supplier will not charge Company any fees associated with the Software
evaluation copy which Company submits to its customer and such evaluation shall
in no way obligate Company to subsequent charges or contingencies regardless of
the results of the evaluation.
ARTICLE XVI
Software Support
SECTION 16.01. During the Software warranty period set forth in Section
17.06, Supplier will promptly provide, at no additional charge, procedures, as
determined by Supplier for particular Software, to keep Software operating
consistently with its specifications. Such procedures shall include diagnostic
service using onsite or remote techniques to analyze a problem and prescribe
remedial action. Further, throughout the Term, Supplier will provide all Code
Corrections at no charge. Supplier may provide such Code Corrections either
unbundled or included with a Software Upgrade or Enhancement, on the condition
that bundling does not delay prompt release of the Code Corrections to Company,
***************** and Customers.
SECTION 16.02. Unless otherwise agreed to in writing, Supplier shall
furnish to Company, at no additional charge, and on a nonproprietary basis, no
less than one copy of Related Documentation, and any amendments or revisions
made by or on behalf of Supplier during the Term, as is sufficient for Company
to plan, engineer, procure, install, operate and maintain the Material. Such
Related Documentation shall be furnished to Company together with the Material
to which it relates or at such time as any amendments or revisions are made
thereto, whichever is earlier. Company may reproduce and distribute such Related
Documentation to third parties for the purposes described and shall include in
any such reproductions any copyright notices contained in the original of the
items being reproduced.
24
ARTICLE XVII
Warranties
SECTION 17.01. Supplier warrants to Company and customers that Material
furnished will be new, merchantable, free from defects in design (except to the
extent designed by Company), material and workmanship and will conform to and
perform in accordance with the specifications, drawings and samples set forth in
this Agreement for a period of **** ************ for the hardware components of
the Material and *************** for the software components of the Material,
from the date of shipment from Supplier. Supplier also warrants to Company and
customers that services will be performed in a first class, workmanlike manner.
Future performance of the Material, as defined in Supplier's Performance
Specification (Attachment A), shall continue for the longer of (a) the
performance warranty period applicable to Company's sales to its customers of
the Material or of products which incorporate the Material, (b) one (1) year
after the Material is accepted by the Company's customer or (c) such greater
period as may be specified elsewhere in this Agreement. Supplier warrants that
at the time of delivery to Company such Material shall be free of any security
interest or any other lien or any other encumbrance whatsoever. All warranties
shall survive inspection, acceptance and payment to Supplier.
SECTION 17.02. Defective or non-conforming Material will, at Supplier's
option either be returned to Supplier for refund, repair, replacement and
reperformance, at no cost to Company or its customer, with risk of in-transit
loss and damage borne by Company or its customer and freight paid by Company or
its customer, or be repaired or replaced by Supplier on a customer's site or
another site designated by Company at no cost to Company. Unless otherwise
agreed upon by Supplier and Company, Supplier shall complete repairs and ship
the repaired Material within twenty-one (21) calendar days of receipt of
defective or non-conforming Material, or at Supplier option, ship replacement
Material within ten (10) calendar days after oral notification is given Supplier
by Company. Supplier shall bear the risk of in-transit loss and damage and shall
prepay and bear the cost of freight for shipments to Company of repaired or
replaced Material. If requested by Company, Supplier shall begin on-site repairs
within an average of three (3) days after verbal notification is given Supplier
by Company.
SECTION 17.03. If Material returned to Supplier or made available to
Supplier on site for repair as provided
25
for in this clause is determined to be beyond repair, Supplier shall promptly so
notify Company and, unless otherwise agreed to in writing by Supplier and
Company, ship replacement Material without charge within fourteen (14) calendar
days of such notification.
SECTION 17.04. Company agrees to make a reasonable effort to detect and/or
have its customer(s) detect and eliminate No Fault Found (NFF) or No Trouble
Found (NTF) returns of Material. The return volume of NFF/NTF units will be
monitored by Supplier and if other than a reasonable number of returns are
involved, the Company or its customer will be billed a handling charge for such
returns as defined in Attachment C. Supplier will notify Company or its customer
in writing prior to any billing.
SECTION 17.05. Replacement of Material shall be warranted as set forth
above in this Article. Any Material which is repaired, modified or otherwise
serviced by Supplier shall be warranted as provided in this Article for the
remainder of the warranty period (based upon the date repair, modification or
other service is completed and accepted by Company) or six (6) months after the
Material is shipped by Supplier to Company or a customer, whichever is longer.
SECTION 17.06. Supplier warrants that Supplier has the right to grant to
Company the Software and other licenses granted under this Supply Agreement.
Supplier further warrants to Company that the furnished Software shall be free
from defects in design, that it will conform to the applicable specifications,
and that it will operate satisfactorily in the system environment in which it is
initially installed. Defective Software will be corrected or replaced after
notification is given to Supplier by Company. Supplier, at its option, will
undertake to either correct or replace the defective Software without charge at
the location where it is installed in accordance with corrective action
prescribed for the applicable Severity Code (per Appendix C to the General
Purchase Agreement in effect between ************* and Company), or, at
Supplier's option, provide a refund or credit of the original license fee;
provided, however, that Supplier may elect to provide a credit to Company only
where Company reasonably determines the credit to be of value.
SECTION 17.07. COMPANY'S SOLE AND EXCLUSIVE REMEDY FOR BREACH OF A WARRANTY
CONTAINED IN THIS ARTICLE SHALL BE SUPPLIER'S OBLIGATION TO REPAIR, REPLACE,
CREDIT, OR REFUND AS SET FORTH IN THIS AGREEMENT, EXCEPT THAT THE FOREGOING
LIMITATION ON REMEDIES FOR BREACHES OF WARRANTIES
26
SHALL NOT LIMIT THE REMEDIES OF COMPANY OR ANY OTHER CAUSE OF ACTION FOR
PERSONAL INJURY INCLUDING DEATH AND PROPERTY DAMAGE CLAIMS AND FAILURE OF THE
MATERIAL TO MEET THE PORTABILITY, PERFORMANCE OR DESCRIPTIVE REQUIREMENTS OF
ATTACHMENT A, OR ANY COMBINATION OF THEM.
SECTION 17.08. SUPPLIER SHALL IN NO EVENT BE LIABLE TO COMPANY FOR ANY
INCIDENTAL, CONSEQUENTIAL, OR ANY OTHER INDIRECT LOSS OR DAMAGE, INCLUDING,
WITHOUT LIMITATION, LOST REVENUES OR LOST PROFITS OF ANY PERSON OR ENTITY,
ARISING OUT OF THIS ARTICLE OR ANY OBLIGATION RESULTING THEREFROM, WHETHER IN AN
ACTION FOR OR ARISING OUT OF BREACH OF CONTRACT, FOR TORT, OR ANY OTHER CAUSE OF
ACTION. EXCEPT FOR PERSONAL INJURY INCLUDING DEATH, AND PROPERTY DAMAGE CLAIMS,
SUPPLIER'S ENTIRE LIABILITY FOR DIRECT DAMAGES RESULTING FROM ANY CLAIM OR LOSS,
DAMAGE, OR EXPENSE FROM BREACH OF A WARRANTY CONTAINED IN THIS ARTICLE SHALL IN
NO EVENT EXCEED THE REPAIR OR REPLACEMENT COST, LICENSE FEE, OR PURCHASE PRICE,
AT SUPPLIER'S OPTION OF THE ITEM OR SERVICE THAT DIRECTLY GIVES RISE TO THE
CLAIM. NO ACTION OR PROCEEDING UNDER THIS ARTICLE AGAINST SUPPLIER MAY BE
COMMENCED MORE THAN THIRTY-SIX (36) MONTHS AFTER THE CAUSE OF ACTION ACCRUES.
ARTICLE XVIII
Additional Warranties
SECTION 18.01. (a) Supplier represents and warrants that, where applicable,
all products and Materials provided hereunder will be packaged, labeled, handled
and shipped in accordance with all applicable federal, state, county and local
laws, rules, regulations, orders and other lawfully mandated requirements. This
obligation shall include but not be limited to compliance with the following:
(i) all product labeling and other requirements imposed by the New
Jersey Worker and Community Right-to-Know Act, N.J.S.A. 34:5A-1, et seq.,
and all regulations adopted pursuant thereto;
(ii) all product labeling and other requirements imposed by the
Occupational Safety and Health Act of 1970 (OSHA), as amended, and all
regulations adopted pursuant thereto, including the Hazard Communication
Standard regulations; and
(iii) all requirements of the Hazardous Material Transportation
Act, the Toxic Substance Control Act, as amended, the Federal
Insecticide, Fungicide and
27
Rodenticide Act (FIFRA) and the New Jersey Pesticide Control Code
(N.J.A.C. 7:30).
(b) All unit packages or other substances which must be disclosed under
applicable law must bear a label indicating the following:
(i) name of the product;
(ii) chemical name and Chemical Abstracts Service (CAS) number of
the five most predominant substances in a container, whether they are
hazardous or nonhazardous;
(iii) chemical name and CAS number for all hazardous substances
constituting greater than 1% of the product (or greater than 0.1% for
carcinogens, mutagens, and teratogens);
(iv) appropriate hazard warnings; and
(v) the name and address of the manufacturer, importer, or other
responsible party.
(c) The label must be a sign, emblem or sticker of durable nature affixed
to or stenciled onto a container. Labels must be in English, easy to read, not
obscured, and prominently displayed on the unit package.
(d) In addition, Supplier agrees to furnish Company on or before the date
of delivery of Material, and thereafter upon request of Company, a copy of the
applicable Material Safety Data Sheet(s) (MSDS) for all Material provided
hereunder, in accordance with the OSHA requirements cited above. In the event of
any change in the composition of the Material during the course of the
Agreement, Supplier shall provide Company an updated MSDS and Supplier must
update the product label accordingly.
(e) Supplier agrees to defend, indemnify and hold harmless Company for any
loss, damage, penalty, fine or liability (including any costs and attorney's
fees) sustained because of Supplier's noncompliance with the provisions of this
Article.
ARTICLE XIX
Repairs Not Covered By Warranty
SECTION 19.01. With respect to all Material ordered under this Supply
Agreement for provision to *******
28
************ under the FSN Agreement, in addition to repairs provided for in
Article XVII, Supplier agrees to provide repair service during the term of this
Supply Agreement and until ****************** after the expiration of this
Supply Agreement with shipment and risk of loss to Company or its customer. With
respect to all Material ordered under this Supply Agreement for provision to
Customers pursuant to Company's Obligations, in addition to repairs provided for
in Article XVII, Supplier agrees to provide repair service during the greater of
the term of this Supply Agreement or until five years after the Discontinuance
of such Material pursuant to Article LIX. Material to be repaired under this
clause will be returned to a location designated by Supplier, and unless
otherwise agreed upon by Supplier and Company, Supplier shall ship the repaired
Material which meets the specifications within an average of twenty-eight (28)
days of receipt of the defective or non-conforming Material or replace such
Material within an average of fourteen (14) days, with shipment and risk of loss
to Supplier. With the concurrence and scheduling of Company, repair may be made
by Supplier on-site.
SECTION 19.02. If Material is returned to Supplier for repair as provided
for in this clause and is determined to be beyond repair, Supplier shall so
notify Company. If requested by Company, Supplier will sell to Company a
replacement at the price set forth in Supplier's then current agreement with
Company for said Material or, if no such agreement exists, at a reasonably
competitive price for such Material at the time for delivery or lastly, at a
price agreed upon by Supplier and Company.
SECTION 19.03. Replacement and repaired Material provided pursuant to this
Article shall be warranted for 90 calendar days from date of shipment.
SECTION 19.04. It is expressly understood and agreed that this Agreement
does not grant Supplier an exclusive privilege to repair any or all of the
Material purchased under this Supply Agreement for which Company may require
repair; and Company may perform the repairs or contract with others for these
services. In addition, Supplier authorizes Company and any qualified repairer
with whom Company may contract to perform repairs on all Material purchased
under this Supply Agreement.
SECTION 19.05. Price schedules for repairs under this clause are listed in
Attachment C. Supplier agrees to notify Company and obtain Company's approval in
writing if repair service will exceed 50% of replacement cost of new Material,
prior to performing any repair service for Company.
29
ARTICLE XX
Repair Procedures
SECTION 20.01. Company shall furnish the following information with
Material returned to Supplier for repair: (a) Company's name(s) and complete
address; (b) name(s) and telephone numbers(s) of Company's employee(s) to
contact in case of questions about the Material to be repaired; (c)
ship-to-address for return of repaired Material if different than (a); (d) a
complete list of Material returned; (e) the nature of the defect or failure if
known; (f) whether or not returned Material is in warranty, and (g) RMA number
previously obtained from Supplier. Supplier Customer Service representative
shall be contacted concerning any questions that arise concerning repair.
SECTION 20.02. Material repaired by Supplier shall have the repair
completion date stenciled or otherwise identified in a permanent manner at a
readily visible location on the Material. Supplier shall provide a quarterly
summary report highlighting failure analysis.
SECTION 20.03. All invoices originated by Supplier for repair services must
be clearly identified as such, and must contain: (a) a reference to Company's
Purchase Order for these repair services, (b) a detailed description of repairs
made by Supplier and the need therefor, and (c) an itemized listing of parts and
labor charges, if any. Replaced parts will, upon request, be available for
inspection by or returned to Company. Further, the provisions of Articles LIV
(Invoicing) and LII (Shipping), other than provisions relating to transportation
charges with respect to Material repaired under warranty, shall apply to
Supplier's return to Company of repaired Material.
ARTICLE XXI
Change Control Process
SECTION 21.01. Supplier acknowledges that ******** ******** or one of the
Customers may submit written requests to Company to request changes or revisions
to hardware and software to be furnished under the FSN Agreement or pursuant to
Company's Obligations and, to the extent **************** or Customer's request
involves Material, Company shall immediately notify Supplier (a
30
"Change Control Request"). Change Control Requests requiring 20 Headcount Years
or less will be handled in the normal change control process. Change Control
Requests that exceed 20 Headcount Years of effort ("Major Changes") will be
negotiated by the parties and will be performed under this process provided that
the parties reach mutually satisfactory agreement on requirements, Headcount
Years, price and delivery schedule. Any resulting Software shall be licensed to
Company under the provisions of Article V without payment of any additional
license fees or charges other than charges for the development work as provided
herein.
SECTION 21.02. Within fifteen (15) days (or a different period if mutually
agreed to by the parties) following receipt of a Change Control Request from
Company, Supplier shall provide a written response to Company specifying:
(a) the specifications for the work to be performed;
(b) the work schedule for the proposed work;
(c) a firm price quote for the work and associated new hardware unit
prices (if any) for the new Material;
(d) the number of Headcount Years required; and
(e) the impact, if any, on the delivery date of the Material to be
modified;
provided, however, that (i) the fees payable by Company for any such Change
Control Request shall not exceed *********** ***********************************
for each Headcount Year, and (ii) the Headcount Years proposed shall be
commercially reasonable. This ******************************************
limitation may be adjusted by Company in December of each calendar year up to
the amount of any change in the Producer Price Index for Telecommunications
Systems, Custom Software Development during the preceding 12-month period. This
limitation shall not, however, apply to Major Changes.
SECTION 21.03. If Supplier's response is approved in writing, Supplier will
proceed with the work. Supplier shall not be obligated to perform any requested
changes or revision to Material in advance of written approval from Company. In
the event that Supplier commits resources to the implementation of a Change
Control Request without prior written authorization, Company shall not be
charged for such work and such work shall not relieve Supplier of its
obligations to meet previously agreed upon schedules. For
31
purposes of this Supply Agreement, each Change Control Request response approved
in writing by Company shall constitute a formal change to this Supply Agreement
modifying the prices, functionality and/or schedules as addressed therein, and
any hardware or Software developed pursuant to such a request shall fall within
the definition of the term "Material".
SECTION 21.04. Supplier agrees to pay to Company as a Software Incentive
Fee 10% of the amount of fees provided by Company to Supplier under this Section
for changes to Software only. The Software Incentive Fee due to Company under
this Section will be made by Supplier within 30 days of the payment of the fees
for the Software changes made by Company to Supplier under this Section.
ARTICLE XXII
This Article intentionally left blank.
ARTICLE XXIII
Manufacturing Capacity
SECTION 23.01. Supplier warrants that it has established and covenants that
it will maintain during the Term sufficient manufacturing capacity for Material
to ensure that ********************* Beta Test Date, its or any Customer's FSA
Date, and any commercial FSN deployment will not be jeopardized due to Supplier
delivery delays.
ARTICLE XXIV
Training/Lab Material
SECTION 24.01. Supplier acknowledges that ***** ************ requires the
delivery and installation of ***** ********************************** by the
dates set forth in Attachment D-1 to this Supply Agreement. Supplier and Company
acknowledge that *** of these test systems have been delivered and installed.
Company agrees to provide Supplier with Purchase Orders for Material required
for the ********* system, and Supplier agrees to accept such Purchase Orders and
ship such Material in sufficient time to enable Company to deliver and install
the laboratory test system on time.
SECTION 24.02. Supplier agrees to upgrade the system described as "Lab
System 1" in Appendix D to the FSN Agreement and will provide new features and
functionalities
32
as each becomes available up through Release 2.1. Any Material associated with
such upgrades through Release 2.1 shall be provided by Supplier at no charge to
Company.
SECTION 24.03. Unless mutually agreed, Supplier shall have no obligation in
connection with sales to Customers to deliver software releases beyond those set
forth in Attachment D-2.
ARTICLE XXV
Interfaces
SECTION 25.01. Supplier agrees to provide Company, *********************
and Customers with any public interface specification documentation and
reasonable amounts of support to resolve any questions Company, ***************
or Customers may have regarding these interface specifications as they pertain
to FSN deployment or the ASE.
SECTION 25.02. For a period of *********** after providing any Material
pursuant to this Supply Agreement, Supplier shall, upon request, provide to
Company Interconnect Information.
ARTICLE XXVI
Testing and Quality
SECTION 26.01. Supplier will perform a factory systems test in accordance
with the following criteria:
(a) The term "system" is meant to describe a complete ASE transport system
including all standard subsystems. For normal production, it is acceptable to
test subsystems in a "system configuration" test environment consisting of a
captive test bed to which the specific subsystem under test is connected. These
arrangements are acceptable if the periodic qualification testing is used to
revalidate such test configurations. This can be accomplished by first testing a
defined system in the production manner followed by qualification testing of the
same system (using a full system environment).
(b) Correction of any production testing program deficiencies identified
will be made immediately. System configuration testing will be conducted on
Materials to demonstrate the ability to achieve stable, fault free operation for
a reasonable period of time while running operational exercises and diagnostic
routines at 120 degrees Fahrenheit. The testing duration will be such that
33
adherence to reliability requirements can be demonstrated. Manufacturing testing
burn-in intervals will be of sufficient duration, so that when coupled with
normal installation and turnover intervals, early-life reliability performance
at cut over will be at or below two and one-half times the steady-state
reliability level. That is, the instantaneous failure rate at cut over shall be
less than or equal to two and one-half times the expected steady-state
instantaneous failure rate.
(c) Periodically, an entire system will be subjected to qualification
testing to assure that product and manufacturing processes continue to
demonstrate conformance to design intent. All Material shipped loose and not in
a complete system configuration, such as spares and additions for growth, shall
receive testing to demonstrate functionality and quality levels at least
equivalent to Material embedded in systems. Manufacturing testing and burn-in
intervals will be of sufficient duration so that infant mortality failure rate
of Material shipped is no greater than two and one-half times the predicted
steady-state failure rate.
(d) Testing performed will provide verification of operability as
completely as possible with current manufacturing test capabilities. This will
include verification of performance over ranges of design limits to assure
operation in all possible field applications. Testing in a simulated use
environment (test bed) will normally be included as one of the test steps.
************ ******** or Customer owned circuit packs returned for repair must
be tested in a simulated use environment as part of the repair process. Returned
circuit packs which are found to be operational upon their receipt will be
tested under heat (120(Degree) F) to identify thermostatic devices which may
have been the cause for return. Return and repair results data shall be made
available to ************** or *************** agent or to Customer or
Customer's agent. The effectiveness of simulated use environments or the manner
of subsystem testing employed must have been verified as consistent with a full
level system test. This verification must have been conducted initially and at
periodic intervals as part of the periodic qualification discussed above. When
internal machine diagnostics are used in the testing of systems, subsystems or
Material shipped loose, the effectiveness of those diagnostics in the
identification of defective Material must be verified initially and again as
part of the periodic product qualification test.
SECTION 26.02. Unless Company gives Supplier written notice to the
contrary, Supplier shall notify Company when each installment of Material is
ready for
34
inspection and Company and its customer (i.e., ************* or one of the
Customers) or its customer's agent shall be given reasonable opportunity to
inspect the Material at any time prior to shipment under agreed upon Quality
Program Specifications listed in Appendix I to the FSN Agreement, as may be
changed from time to time with Supplier's written concurrence. Inspection or
failure to inspect on any occasion shall not affect Company's rights under
warranty or other provisions of this Supply Agreement. Supplier shall make
available at no additional cost to Company, such production testing facilities,
labor, data, specifications, procedures and such other documents, and assistance
as necessary for Company and its customer or its customer's agent to perform the
inspection. In addition, Supplier shall make available to Company and its
customer or its customer's agent, at no additional charge, data obtained through
Supplier's normal routines which show results of Supplier's inspection, tests
and audits of Material as specified in the agreed upon Quality Program
Specifications. Such data shall be sufficient to demonstrate that the Material
meets all quality and reliability requirements.
SECTION 26.03. Commitment to quality is a primary requirement of this
Supply Agreement and as used herein shall mean conformance to the terms,
conditions and specifications of this Supply Agreement. Supplier will ensure
continued quality improvement in the Materials covered in this Supply Agreement.
Supplier will demonstrate commitment to a "Quality Improvement Process" by
providing:
(i) a published statement of its quality policy signed by an
officer of the Company;
(ii) an established means of measuring and reporting customer
satisfaction;
(iii) a quality training and awareness program;
(iv) a continuous Quality Improvement Process;
(v) an established means of monitoring conformance to requirements
for Material and/or Services; and
(vi) an established in-coming "Material Quality Inspection
Program".
Further, Supplier shall implement and document a quality system(s) that
meets the requirements in ISO 9000 and Bellcore documents, GR-1252-CORE,
"Quality System Generic Requirements for Hardware", and TR-NWT-000179, "Quality
System Generic Requirements for Software". Upon Company's written request,
Supplier agrees to allow Company
35
and its customer or its customer's agent to conduct on-site reviews at the
Supplier's hardware manufacturing and software development facility(ies) to
verify compliance with requirements. Supplier also agrees to develop corrective
action plans for any quality system deficiencies that may be detected during
these periodic on-site reviews, and submit these to the Company and its customer
or its customer's agent within 30 days after the review. Further, Supplier
agrees to use its commercially reasonable best efforts to implement these
corrective action plans within six months after the review.
SECTION 26.04. Supplier agrees to abide by and meet all applicable
provisions of the Quality and Reliability Specifications in Appendix I to the
FSN Agreement. Any existing or anticipated noncompliance by Supplier with such
Specifications will be disclosed by Supplier to Company in writing on or before
April 4, 1998, to enable Company to notify *************** thereof pursuant to
the FSN Agreement. Such notice from Supplier shall include a written schedule
pursuant to which Supplier shall cure such instances of noncompliance. To the
extent Company's customer waives any obligation of Company to comply with such
Specifications for a stated period of time under this FSN Agreement, Company
agrees to waive such obligation for Supplier to comply under this Supply
Agreement for the corresponding period of time. The parties acknowledge that the
acquiescence by ************* or one of the Customers in or agreement to a
schedule under which Supplier or Company shall cure any noncompliance shall not
constitute a waiver by *************** or such Customer.
ARTICLE XXVII
Trouble Reports
SECTION 27.01. Supplier acknowledges that ****** *********** must reduce
its Access Subnetwork Trouble Report Rate by at least half within three years
following the Beta Test Date ("Overall Objective"). Supplier's Material, as part
of *************** FSN, will contribute to meeting this Objective. Supplier
agrees to assist Company in supporting ***************** Overall Objective by
providing reliability and other information, including but not limited to
Failures in Time (FIT) Rates for Material, and will provide additional support
and expertise which may contribute to the specification and achievement of
**************** objectives if requested by Company, at no cost to Company.
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ARTICLE XXVIII
General FSN Support
SECTION 28.01. The parties acknowledge that the FSN Agreement and
concomitant Appendices contain performance obligations which are intended to be
performed by Company and Supplier individually and, in some instances, Company
and Supplier together. With respect to those obligations of the FSN Agreement
and Appendices related to content and/or Material to be provided by Supplier,
Supplier agrees to provide the same in a timely manner and to cooperate with and
support Company generally in the provision to ********** *************** and the
************* Affiliates of the FSN.
ARTICLE XXIX
Cooperative Project Development Management
SECTION 29.01. Supplier agrees to participate with Company and
*************** throughout the product life cycle to assure that all Material
and services are delivered on time, and that they meet all requirements,
including functionality, maintainability, quality and reliability. Supplier also
agrees to assist Company with unbundling and testing work associated with the
ASE to the extent required to make the ASE function with other vendor's
equipment. Accordingly, a core management team comprised of representatives of
Company, Supplier and *************** has been established. This core management
team (or one or more subteams thereof) will review, assess and take corrective
action, where appropriate, in the areas of project management, risk management
and quality assurance. Supplier agrees it will actively participate on this team
and share information with the team as required.
ARTICLE XXX
Operating System Software
SECTION 30.01. Material includes any software (operating program in machine
readable form and related documentation or firmware) and storage media normally
furnished with or embedded in the Material. Title, including copyright, shall
remain in Supplier, and title to the software storage media shall follow title
to the rest of the Material. For the life of the Material listed in this
Agreement, Supplier grants to Company and any subsequent purchaser a
nonexclusive license to use said software on the Material on which it was
delivered. Company and any
37
subsequent purchaser may copy the software for use on such Material with which
it was originally delivered and for archival purposes, but shall not knowingly
reproduce either the original software or make copies of the software for
distribution to others. To avoid possible loss of Supplier Warranty, Company and
any subsequent purchaser may not add to, delete from or modify the software in
any manner without the written consent of Supplier. Any rejection by Supplier of
a Company proposed change to the Software or failure by the Supplier to respond
promptly to a Company proposed change shall be reviewed by the Executive Team
within (10) working days. In the event the Executive Team fails to take action
to the satisfaction of both parties within the ten (10) day period, either party
may move to mediation as set forth in Article XCIII (Dispute Resolution). No
changes, however extensive, shall alter Supplier's title to such original
software. Title to any such modification or addition to the software shall
remain in the entity which creates the modification or addition.
ARTICLE XXXI
Maintenance of Operating System Software
SECTION 31.01. Supplier agrees to promptly provide Company with any
modifications, in object code form, to Operating System Software made by
Supplier and normally furnished with or embedded in the material, where such
modifications have been announced by Supplier to be generally available. During
the Warranty Period, Supplier shall furnish such modifications at no charge or
at a mutually agreed to price to Company. Modifications which are "bug fixes"
shall be furnished at no charge to Company. After such Warranty Period, Supplier
shall offer such modifications no later than sixty (60) calendar days prior to
the public announcement by Supplier of such availability. Supplier shall
promptly provide to Company, at no charge, any revisions to the associated
documentation to reflect the modifications only if Company elects to upgrade.
All such modifications shall be subject to all terms and conditions (including
acceptance) of this Agreement. Company may incorporate the modifications into
the pre-existing software in its possession for Company's own use, or continue
using previous releases of the pre-existing software at Company's option.
SECTION 31.02. Supplier agrees to make available, at Company's request,
maintenance for at least two (2) previous releases of the software.
38
ARTICLE XXXII
Product Documentation
SECTION 32.01. Supplier agrees to furnish electronically, at no charge, one
set of product documentation provided in Company format using Company templates
including, but not limited to any technical marketing, planning or other
literature, bulletins or documentation used to install, operate, support,
trouble shoot, maintain and/or describe Supplier's Material, and any succeeding
updates and/or changes thereto, as described in the technical specification.
Company may use, reproduce, reformat, and distribute such product documentation.
Any modification to documentation covering Material requires prior written
approval of Supplier. Such approval shall not be unreasonably withheld.
SECTION 32.02. Company agrees to reproduce Supplier's copyright notice
contained in any documentation reproduced without charge by Company. For
documentation which is reformatted or modified by Company, Company shall have
the right to place only Company's own copyright notice on the reformatted or
modified documentation. It is the intent of the parties that Company's copyright
notice shall be interpreted to protect the underlying copyright rights of
Supplier to the documentation to the extent such underlying rights are owned by
Supplier. Company will provide Suppler recognition for the SDV Subsystem on all
appropriate documentation.
ARTICLE XXXIII
Quality
SECTION 33.01. Supplier warrants that all Supplier design, development,
production and service of Material are ISO 9001 certified and commits to
maintaining an acceptable rating in all the functions addressed by this
certification. Supplier also warrants that all Supplier subcontracted
manufacturing is periodically audited to ISO 9000 standards, Bellcore
GR-1252-CORE "Quality System Generic Requirements for Hardware" and/or Bellcore
TR-NWT-000179 "Quality System Generic Requirements for Software" and that
consideration will be given to selecting subcontractors that have ISO compliant
Quality systems whenever feasible. Supplier agrees to periodic Quality Systems
Audits to be performed by Company, at Supplier's or its subcontractor's
location(s), based on criteria defined in ISO 9001, Bellcore specification
GR-1252-CORE and/or Bellcore specification TR-NWT-000179. Notification of
39
audits will be given by Company to Supplier a minimum of 30 calendar days prior
to such audit(s).
SECTION 33.02. Supplier commits to establishing an end of the line Quality
Assurance audit on Material by first shipment of fully released production
Material. The focus of this audit shall be to replicate user application of
Material as specified to Company's customer. Test and examination of Material
under the quality audit shall be at an integration level sufficient to emulate
Supplier's system application environment and shall include but is not limited
to:
(a) Exercising said Material at circuit pack level as described in Section
26.01(b).
(b) Full operation of Material over a period of time sufficient to
demonstrate quality and reliability objectives as mutually defined by Supplier
and Company. It is the Supplier's option to meet the intent of these objectives
with either a single Quality Assurance audit test or with multiple audit test
steps necessary to demonstrate end Quality and Reliability objectives.
(c) A system for monitoring of key primary and ancillary product functions
and fault detection of material while under this test, as defined in the
Supplier quality plan.
Supplier agrees to perform a detailed failure analysis, down to the
component level as a minimum, of all Material found defective through the
Quality Assurance audit.
Supplier agrees to review customer return (defect) data to insure that the
scope of the Quality Assurance audit function, includes the
requirement(s)/condition(s) under which the return failed.
SECTION 33.03. Supplier commits to establishing a program of tracking
return rates on production Material. All Material which is in operation shall be
considered part of this tracking program. The return rate shall be defined as
the number of confirmed failures divided by the total number of circuit packs
installed in the field. For the purpose of this clause, the term "circuit pack"
shall be used to define the lowest replaceable unit of Material supplied to
Company.
The goals for this program shall be based on Bellcore TR-TSY-000929
"Reliability and Quality Measurements System" requirements for circuit pack
return rates. Any
40
return rate found to be in excess of 1.5 times the expected value for returns
shall be investigated fully. These return rates shall be calculated monthly for
all circuit packs which are in use by the customer. The data will be distributed
internally and to Company to drive corrective action. This data may also be made
available to Bellcore and customer only by written authorization of Company.
SECTION 33.04. Supplier agrees to provide a written corrective action plan
to the Company if the field failure rate is in excess of the requirements
outlined in section 33.03 above, or the end of the line quality audit reveals
repetitive component level failures as described in section 33.02. At a minimum,
such written corrective action shall address the following:
a) Incorporate the remedy in affected Material; and
b) All subsequent shipments of Material will incorporate the required
modification(s) correcting the problem and will be done at no
additional charge to Company; and
c) Repair and/or replace previously shipped Material that contains
the same problem or trend. In the event that Company would incur
costs due to such repair and/or replacement, including but not
limited to labor and shipping costs, Supplier shall be notified in
writing of such costs and Company and Supplier shall mutually
agree on same, including methodology for repair or replacement,
prior to Company incurring any expense for which it expects
reimbursement. Supplier shall bear risk of in transit loss and
damage for such repaired and/or replaced Material.
In addition, Supplier shall maintain an action item register whereby
complaints from the Company may be registered and tracked until closure.
Supplier also agrees to maintain an internal corrective action system
that seeks to monitor and react to all performance data available at
Suppliers facility and its subcontractors. Emphasis shall be placed on
early detection and prevention.
SECTION 33.05. As part of a program of continuous improvement, Supplier
agrees to initiate and maintain an internal quality plan which addresses all
aspects of the quality program for Material. Contained within this plan shall be
a series of key quality objectives as mutually agreed to by the parties, with
assigned goals addressing
41
long term reliability and quality. Performance to goals shall be measured on a
regular basis. Goals shall be adjusted to be more aggressive as the collected
data shows improvement.
In addition, Supplier agrees to initiate a joint quality plan with Company
addressing all aspects of the mutually agreed upon quality program. This plan
shall be specific to the Material. Supplier agrees that the plan shall include
commitments by Supplier to provide mutually agreed upon quality performance data
to Company.
SECTION 33.06. Prior to general availability of Material, Supplier shall
submit two (2) production samples produced in a continuous ran on permanent
production tooling to the Company's Product Management Organization or their
designant for examination and subsequent approval by the Product Manager.
Supplier shall not make any shipments under this Supply Agreement prior to
approval of the production samples which shall be issued by Company in writing
within thirty (30) calendar days of the receipt of samples. Unless specified
otherwise in this Agreement, the Company shall have the option of retaining and
paying for, or returning the samples to the Supplier.
If production samples do not comply in all respects with specifications and
drawings, Supplier shall have the option of resubmitting new samples or
retrofitting existing samples at no cost to Company to correct the
non-conformance. If such production samples are not submitted or retrofitted
within sixty (60) calendar days during the first six (6) months after the
availability of production Material or forty-five (45) calendar days during the
second six (6) months, or thirty (30) calendar days thereafter of the date of
Company's written notification to Supplier, Company shall have the right to
terminate this Agreement without any cost or charge to Company whatsoever,
including costs or charges incurred by Supplier in procuring equipment, Material
and special tooling to perform any part of this Agreement, loss or profits or
labor, and Materials expended in the production of samples. Company shall not
consider Supplier in default unless there is evidence of repeated failure to
meet these dates and only after notice in writing to Supplier. Upon receipt of
such notice the Executive Team shall have ten (10) working days to meet before
any action is taken by Company. In the event the Executive Team fails to take
action to the satisfaction on both parties within the ten (10) day period, and
subject to the provisions of Article XCIII (Dispute Resolution), either party
may pursue its rights and remedies at law, equity or otherwise.
42
ARTICLE XXXIV
Material Testing
SECTION 34.01. In addition to any other tests to be requested by Company or
as set forth in this Supply Agreement, the Supplier is responsible for the
performance of standard factory production tests which, in the absence of any
other testing requested by Company as set forth elsewhere in this Agreement,
shall be deemed to be the final tests under this Agreement. Such tests shall be
performed in accordance with the Supplier's normal testing and quality control
procedures for Material of the type purchased here under in order to insure that
the Material provided hereunder meets all applicable specifications. At the
option of Company, the Supplier shall furnish a copy of its test plans and
quality control procedures to Company prior to initiating any such testing and
Company, at its expense, may witness any of the testing by giving prior notice
to the Supplier. The Supplier also agrees to maintain detailed records of all
such tests and to provide Company, if requested, with written results of these
tests.
SECTION 34.02. In the event that the Material fails to meet the applicable
specifications and test requirements, the Supplier shall make the necessary
adjustments or repairs and repeat the applicable tests. If, in the opinion of
Company, the failure rates experienced during these tests become unsatisfactory,
all shipments of like Material to Company shall be suspended unless otherwise
authorized by Company.
SECTION 34.03. If the Supplier is unable or unwilling to correct, at the
Supplier's expense, any mutually agreed to deficiencies found during testing
provided hereunder within ninety (90) calendar days of such discovery or such
longer period as may be mutually agreed upon, Company, at its option, shall be
relieved of all responsibilities under this Supply Agreement except for payment,
as specified in this Agreement, for any Material that has been received by
Company and has satisfactorily passed all applicable tests. Prior to any action
as stated above, written notice shall be given to Supplier. Upon receipt of such
notice, the Executive Team shall have ten (10) working days to meet before any
action is taken by Company. In the event the Executive Team fails to take action
to the satisfaction of both parties within the ten (10) day period, and subject
to the provisions of Article XCIII (Dispute Resolution), either party may pursue
its rights and remedies at law, equity or otherwise.
43
ARTICLE XXXV
Engineering Changes
SECTION 35.01. Any change that Supplier proposes to the Material furnished
hereunder and the documentation related thereto that would impact upon (a)
reliability, (b) the Material specifications, or (c) form, fit, or function
requires the approval of Company, as outlined in the Engineering Change Control
Procedures set forth in Attachment E. Notwithstanding the requirements of
Attachment E, any rejection by Company of a Supplier proposed change to
Material, shall be reviewed by the Executive Team within ten (10) working days.
In the event the Executive Team fails to take action to the satisfaction of both
parties within the ten (10) day period, either party may move to mediation as
set forth in Article XCIII (Dispute Resolution). The Supplier shall forward such
proposed change to Company, at least thirty (30) calendar days prior to the
proposed effective date for those cases where an extremely unsatisfactory
condition requires immediate action, in which case Supplier shall promptly
advise Company. Supplier shall at the time of notification, provide Company with
(a) a product change number, (b) a description of such change, (c) the reason
for such change, (d) a classification of such change in accordance with the
change classifications below, (e) a description of the impact of such change
upon (1) reliability, (2) the equipment's specifications, and (3) form, fit, or
function; (f) proposed price impact, if any, for B, and (g) proposed effective
date for such change and recommended implementation schedule therefore.
SECTION 35.02. Any change in Material shall be classified into one of the
following two classes:
"A" Changes which are needed to correct inoperative electrical or
mechanical conditions, or extremely unsatisfactory operating
maintenance conditions, or conditions which result in safety
hazards, and which are judged severe enough to have to made to all
Material in process, stock, or installed. (Any conditional
application criteria to be specified in the change notification
document.)
"B" Changes which are sufficiently important to justify their
application to Material being manufactured (as soon as reasonably
possible), and which are recommended for application to existing
installations in the field. Examples of this
44
class of change may include, but are not limited to:
(a) Providing new features that directly affect subscriber
service.
(b) Providing design improvement which result in better service
capabilities, longer life or improved transmission margins.
(c) Providing changes in design which result in important cost
savings to Supplier or Company.
(d) Conditions of mandatory nature, for example, the
fulfillment of federal registration or future compatibility
requirements, or for conditions of sufficient importance to
be intended for universal application (change to be shown
as "recommended"). The final classification of any product
change proposed by Supplier will be by mutual agreement
between Supplier and Company.
SECTION 35.03. For Class A changes, Supplier shall, pursuant to the
provisions of this Agreement governing repair or replacement of Material under
warranty, replace or modify, at no charge, all affected Material furnished
hereunder and documentation related thereto. Supplier shall supply relevant
documentation to Company for all Class A changes. Supplier shall propose a
schedule for the application of these changes at all equipment locations which
shall not exceed one (1) year from date of the change notice. This schedule
shall be mutually agreed upon by Company and the Supplier.
SECTION 35.04. If Company, at Supplier's request in writing, implements
Class A changes, all reasonable costs incurred by Company shall be reimbursed by
Supplier, net thirty (30) calendar days of receipt of invoice. Supplier shall be
notified in writing of such costs and Company and Supplier shall mutually agree
on same, including methodology for repair or replacement, prior to
implementation of change(s).
SECTION 35.05. For Class B changes, Supplier shall first notify Company of
the exact nature of the change. Details on the proposed implementation procedure
for Material which is being or will be manufactured shall be discussed with
Company. Company shall, at its option, determine if Material previously shipped
will be replaced or modified. Should such replacements or modifications be
45
deemed necessary, Supplier shall, pursuant to the provision of this Agreement
governing repair of Material not covered under warranty, make arrangements for
the necessary Material replacement or modification at prices and schedules to be
mutually agreed upon by Company and the Supplier prior to implementation.
Documentation related thereto shall be provided by Supplier as specified for
Class A above.
SECTION 35.06. Company shall provide Supplier sixty (60) calendar days to
one hundred eighty (180) calendar days prior written notice of all Engineering
Changes that Company may request for incorporation into the Material. For a
service affecting defect, a corrective action plan shall be implemented by
Supplier within twenty-four (24) hours of being notified of such defect.
Supplier shall have thirty (30) calendar days to reply to the feasibility of the
requested Engineering Changes; if not feasible, Supplier will inform Company of
reason(s); if feasible, Supplier shall provide a quote of not less than thirty
(30) calendar days duration, on cost to be incurred by Company should Company
request supplier to implement change(s).
SECTION 35.07. To assist Company in determining the amount of the equitable
adjustment, the Supplier agrees to make available to Company pricing data
required by Company to accomplish the end. If the cost of supplies or materials
made obsolete or excess as a result of such change is included in the Supplier's
claim for adjustment, Company shall have the right to prescribe the manner of
disposition of such supplies or materials. Any claim for adjustment under this
clause must be asserted within thirty (30) calendar days from the date the
change is ordered. However, if Company determines that the facts justify such
action, it may receive, consider and adjust any such claim asserted at any time
prior to the date of final payment. Nothing contained in this clause shall
excuse the Supplier from proceeding with the work so changed.
SECTION 35.08. Change Induced Problems. If, after any engineering or any
other change by Supplier, Company determines and notifies Supplier that Material
or Parts do not operate in accordance with the specifications or fail to meet
any agreed upon acceptance test procedure, Supplier will evaluate any defective
Material or Part after their receipt and will notify Company of the result of
its evaluation and, if needed, its corrective action plan, within ten (10)
calendar days.
SECTION 35.09. Parts Obsolescence. In the event that any engineering or
other change made by Supplier obsoletes any Parts purchased by Company, Supplier
will
46
notify Company in writing, and will, at Supplier's expense, replace the obsolete
parts or reimburse Company its costs (including original delivery costs) for
such Parts. At Supplier's option and expense, Company will return obsolete Parts
which have been replaced (or for which Company has been reimbursed) by Supplier.
SECTION 35.10. Change Documentation. During the term of this Agreement, and
thereafter as long as Parts are made available, Supplier will, at its expense,
provide Company with a copy of each Engineering Change Order (ECO), Field
Retrofit Orders (FRO) or like documentation issued with respect to the operation
or maintenance of the Material. Documentation will include: the type and scope
of the change, technical documentation covering the reason or the change, part
logistics (delivery, rework, stocking, and reclamation), necessary software
patches and time frames for implementation. Copies will be provided to Company
as soon as practicable, but no later than ten (10) calendar days after the
issuance by Supplier.
SECTION 35.11. Field Retrofit Orders (FRO). FROs are modifications to
installed Material required to: meet safety requirements, assure proper
operation, and/or assure that the Material meets its specifications. Supplier
will, at its expense, provide Company with any Parts and instructions necessary
to implement any FRO issued by it during the term of this Agreement, and
thereafter as long as Parts are made available under this Agreement. Supplier
will reimburse Company for Company's labor for each FRO installed by Company, at
a rate mutually agreed to in advance of action taken by Company and Supplier.
SECTION 35.12. Epidemic Failures. Supplier warrants that Material and Parts
will comply with the failure rate and/or reliability requirements set forth in
the specifications. Claims for non-compliance will be established from Company's
service records for the Material and by showing that the average failure rate of
the monitored Material is not in conformance with the specifications. In the
event of noncompliance, Supplier will (a) correct the cause on all Material and
Parts to be shipped thereafter and (b) repair or replace all Material and Parts
within the Warranty period or, alternately, at Supplier's option, will pay
Company its costs of remedying the non-compliance. Company and Supplier shall
mutually agree on such costs, including methodology for repair or replacement,
prior to Company incurring any expense for which it expects reimbursement.
SECTION 35.13. When not inconsistent with the other provisions of this
Article, Company shall issue EC/CAR
47
in writing to notify Supplier of unsatisfactory conditions or performance of
Material which Company believes requires a change in the design, manufacturing
process or installation and engineering instructions. Supplier shall provide a
written acknowledgment to Company within 10 working days stating that Supplier
has received and will act on the EC/CAR. Supplier shall provide a written final
report to each EC/CAR within 90 days or for design related conditions within 120
days of receipt of such EC/CAR. This report shall include a plan for resolving
the EC/CAR and an estimated schedule for implementing the plan. To the extent
not inconsistent with this Supply Agreement, Supplier agrees to administer
EC/CAR in accordance with Bellcore Technical Reference XX-XXX-000000, Xxxxxxxxxx
for Engineering Complaints and Operational Trouble Reports. Nothing herein shall
limit Supplier's obligations under Article XXXV (Engineering Changes) and
Article XVII (Warranties) of this Supply Agreement.
ARTICLE XXXVI
Process Certification
SECTION 36.01. Company has the right to review, evaluate and recommend
Supplier's parts and supplies and Supplier's sources for parts and supplies. If
Supplier accepts Company's recommendation and this recommendation impacts
previously agree-to unit prices, such prices shall be negotiated and mutually
agreed to.
SECTION 36.02. In regard to Supplier's and its subcontractors manufacturing
processes, and with advance notice to Supplier, Company also reserves the right
to perform periodic quality surveys, evaluations and recommendations, including,
but not limited to, analyses of each manufacturing or assembly position for
acceptability of procedures, equipment calibration, and operator performance, as
well as evaluation of quality control/quality assurance and data collection and
analysis procedures.
SECTION 36.03. Supplier shall conduct appropriate incoming inspection of
components in accordance with its ISO Certification standard practices. Such
practices may be modified from time to time to address specific conditions as
requested by Company. Such modifications and any increases or decreases to price
resulting from such modifications shall be mutually agreed upon.
48
ARTICLE XXXVII
Packing
SECTION 37.01. All Material and Parts will be packed by Supplier at no
charge and in accordance with Bellcore Spec. TRNWT 000063 Iss. 5, generally
accepted industry standards, which are equal to or better than National Motor
Freight Classification (NMFC) 100 series, as well as other requirements set
forth in the specifications. All electronic plug-ins shipped separately from
their associated frames or mountings must be packaged using Electrostatic
Shielded Packaging. Electrostatic Shielded Packaging is defined herein as
packaging that meets the applicable requirements for 'ELECTROSTATIC SHIELDING
TYPE' packaging as prescribed in Electronic Industries Association (EIA) Interim
Standard IS-5-A ('Packaging Material Standards for ESD Sensitive Items').
Supplier will package Parts individually (except for small Parts, such as
screws) with appropriate protective Material to guarantee safe arrival (e.g.,
plug-in boards should be in static controlled packing or padded cartons). Bulk
packaging of Material and Parts is acceptable if agreed to by both parties. Each
box will contain Material or Parts ordered under a single Purchase Order, but
multiple boxes may be placed in a larger container. Supplier will, when so
requested by Company and without additional charge, provide and affix to each
Material packaging, bar code labels as Company will specify. At Supplier's
request, Company will provide pre-printed sensitive bar code labels for
Supplier's use.
ARTICLE XXXVIII
Purchase Orders
SECTION 38.01. Purchase orders issued under this Agreement shall be sent to
the following address:
BroadBand Technologies, Inc.
0000 Xxxxxxx Xxxxx Xxxxx
PO Box 13737
Research Triangle Park, NF 27709-3737
Attn: Customer Logistics Department
SECTION 38.02. Purchase orders shall specify: (a) description of Material,
inclusive of any numerical alphabetical identification referenced in the price
list in this Agreement, (b) ship date, (c) applicable price, (d) location to
which the Material is to be shipped and (e) location to which invoices shall be
sent for payment and
49
mode of transportation (i.e. carrier choice, etc.). The printed terms appearing
on a Purchase Order and the standard terms appearing on an electronic Purchase
Order shall be ineffective. Purchase orders issued under this Agreement shall be
deemed to have been accepted by Supplier upon the occurrence of the earliest of:
(1) expiration of ten (10) calendar days from the date of issuance of the
Purchase Order; (2) Supplier's written acceptance of the Purchase Order
(acknowledgment copy); (3) shipment of the Material; (4) commencement of
performance of the services covered by the Purchase Order; or (5) submission of
Supplier's first invoice for currently installed Material or the continuation of
services currently being performed. Notwithstanding the above, Purchase Orders
issued by Company prior to general availability of Material may be rejected by
Supplier for reasonable cause.
SECTION 38.03. Supplier agrees that Company may issue Purchase Orders via
facsimile, or hard copy Electronic Data Service (EDS). All Purchase Orders shall
reference and be subject to the terms of this Agreement. All Purchase Orders
sent via facsimile or electronically shall be transmitted to telephone number
000-000-0000 or such other number as Supplier may specify by written notice to
the Company. Supplier agrees to accept facsimile Purchase Orders, pursuant to
this Agreement, and Company shall not be required to transmit hard copies of
such Purchase Orders to Supplier.
ARTICLE XXXIX
Electronic Data Interchange (EDI)
SECTION 39.01. On mutual agreement of the parties, Supplier and Company
will use electronic means of issuing Purchase Orders, acknowledgments, Purchase
Order changes, invoices, ship notices, or such other purchasing communications
as may be agreed upon by Supplier and Company for transactions under this
Agreement ("Electronic Data Interchange" or "EDI").
ARTICLE XL
Order Placement
SECTION 40.01. Supplier agrees to limit its acceptance of Purchase Orders
for Material placed against this Agreement to Purchase Orders placed from
Company's Omaha Works Procurement Organization and Company's Network Systems
Manufacturing Organization, North Andover, MA. If,
50
during the terms of this Agreement, Supplier receives Purchase Orders from
Company locations other than as stated above, Supplier agrees to notify the
individual shown below as soon as possible for action to be taken on such
Purchase Order(s).
Lucent Technologies Inc.
Merrimack Valley
0000 Xxxxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxx
XX0000 Room 30-MZC-7
Tel: (000) 000-0000
SECTION 40.02. Company agrees that Supplier shall not be in breach of this
Agreement for failing to accept Purchase Orders from other locations. All
Purchase Orders shall clearly state the location from which the Purchase Order
is issued and the Supplier shall rely on such statement without any obligation
to investigate.
ARTICLE XLI
Rejections
SECTION 41.01. If Company rejects any or all of the Material not conforming
to specifications and/or drawings covered by this Agreement, and after a cure
period of sixty (60) calendar days from first production shipment of Material
during the first year of the Agreement, or a thirty (30) calendar days cure
period thereafter, Supplier is unable to remedy, Company may, in addition to all
its other rights at law or equity, exercise one or more of the following: (1)
return rejected material for full credit at the price charged, or (2) accept a
conforming part of any shipment; or (3) consider this Agreement breached to the
extent of the quantity rejected on the Purchase Order involved; or (4) have
rejected Material replaced by Supplier at the purchase price stipulated in this
Agreement.
ARTICLE XLII
Type Approvals
SECTION 42.01. Supplier will support Company's efforts to obtain Type
Approvals by providing Company with such documentation, information and
technical assistance as may be reasonably requested by Company to support
Company's application(s) for Type Approvals.
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ARTICLE XLIII
Electrical Safety
SECTION 43.01. All Material furnished under this Supply Agreement which is
designed for connection to an external power source shall contain at least a
three (3) prong plug and the equipment and plug shall be labeled to evidence an
Underwriters' Laboratories catalog listing.
ARTICLE XLIV
Continuing Availability
SECTION 44.01. With respect to Material to be provided to **************
under the FSN Agreement, Supplier agrees to offer for sale to Company, during
the term of this Agreement and for at least one year after the expiration of
this Agreement and Material conforming to the technical specifications set forth
in this Agreement. Supplier further agrees to offer for sale to Company, during
the term of this Agreement and until five years after the expiration of this
Agreement, Parts which are functionally equivalent and identical in form and fit
for the Material covered by this Agreement. With respect to Material to be
provided to Customers pursuant to Company's Obligations, Supplier agrees to
offer for sale to Company, during the greater of the term of this Agreement or
one year after the notice of Discontinuance of such Material pursuant to Article
LIX and Supplier further agrees to offer for sale to Company during the greater
of the term of this Agreement or five years after the Discontinuance of such
Material pursuant to Article LIX, Parts of which are functionally equivalent and
identical in form and fit for such Material. The price for the Material and
Parts shall be the price set forth in Supplier's then current agreement with
Company for said Material or Parts or, if no such agreement exists, at a price
agreed upon by Company and Supplier. If the parties fail to agree on a price,
the price shall be a reasonably competitive price, for said Material or Parts at
the time for delivery. The Material and parts shall be warranted as set forth in
Article XVII (Warranties).
SECTION 44.02. In the event Supplier fails to materially supply such
Material or Parts and Supplier is unable to obtain another source of supply for
Company, then such failure or inability shall be considered noncompliance with
this Article and Supplier shall provide Company with the technical information
or any other rights required so that Company can manufacture, have manufactured
or obtain such Material or Parts from other sources. In any event
52
when Company assumes manufacturing rights of Material as provided for in this
clause, the Executive Team shall be given 10 working days to meet and agree on
compensation to Supplier, as appropriate, for such right. In the event the
Executive Team fails to take action to the satisfaction of both parties within
the 10-day period, either party may move to mediation as set forth in Article
XCIII (Dispute Resolution).
The technical information includes, by example, and not by way of
limitation: (a) manufacturing drawings and specifications of raw materials and
components comprising such Material or Parts, (b) manufacturing drawings and
specifications covering special tooling and the operation thereof, (c) a
detailed list of all commercially available material or Parts and components
purchased by Supplier on the open market disclosing the material or part number,
name and location of the Supplier and price lists for the purchase thereof, and
(d) one complete copy of the source code used in the preparation of any software
licensed or otherwise acquired by Company from Supplier under this Agreement.
ARTICLE XLV
Technical Support
SECTION 45.01. Company shall be entitled to ongoing technical support,
including field service and assistance, provided, however, that the availability
or performance of this technical support service shall not be construed as
altering or affecting Supplier's obligations as set forth in Article XV or
elsewhere provided for in this Agreement.
SECTION 45.02. For the first twenty-one (21) months from January 1, 1998,
technical support via telephone will be provided at no charge and Supplier's
field service technical support services shall be provided to Company at no
charge, including emergency on-site twenty-four (24) hour technical assistance.
After the twenty-one (21) month period, and for a period of no less than five
(5) years after the expiration of this Agreement, charges for field service
technical support via telephone or on-site, will be as shown in Attachment C.
SECTION 45.03. If requested, Supplier agrees to provide on-site support at
no charge to Company (i) for the Beta Test and first service application of
Material in geographic areas defined by Company, and (ii) for the first service
application of each new release. Otherwise,
53
technical support shall be billable at supplier's then current rates. Supplier's
on-site support obligations shall extend to each of *************** geographic
areas and, with respect to Customers, to one geographic area per Customer.
SECTION 45.04. Video Administration Module (VAM) support will be provided
by BBT. VAM support includes but is not limited to technical support and
training.
SECTION 45.05. Telephone technical support response time will be as
follows. Supplier's normal work hours (8AM to 6PM) Eastern time, Monday thru
Friday, excluding holidays. Response time is fifteen (15) minutes. For all other
hours, target response time is within fifteen (15) minutes but no longer that
thirty (30) minutes.
SECTION 45.06. With respect to technical support for newly introduced
Broadband products and services and for Broadband products and services for
which Company has not, using commercially reasonable efforts, developed
technical support expertise and with respect to level 3 technical support for
all products, in return for Company's responsibility for and execution of any
activities on behalf of Supplier related to technical support, Supplier agrees
to either monetarily reimburse Company or supply the appropriate resources
(i.e., personnel) to assist Company and thereby offset Company's expenses
incurred in performing such activities. These costs and expenses will be derived
through mutual negotiation between the involved parties and shall be reasonable.
The parties shall work together to identify products and services covered by
this Section, and, to the extent considered by Company to be commercially
reasonable, Company will attempt to develop the expertise needed to provide
level 1 and level 2 technical support for such products and services.
ARTICLE XLVI
FSA/ICA Support
SECTION 46.01. In the event Supplier is not installing the Material, and if
requested by Company, Supplier agrees to make available at the installation
site, without charge, a field engineer(s) to render installation and cut-over
assistance as requested by Company and as defined below.
SECTION 46.02. ************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
54
********************************************************************************
**************************************************************************.
SECTION 46.03. *************************************************
********************************************************************************
*******************************************************************************.
SECTION 46.04. Additional Supplier FSA/ICA support to be mutually agreed
to, shall be at a cost as defined in Attachment C, unless mutually agreed to in
advance, in writing.
SECTION 46.05. Company will make a reasonable effort to notify Supplier, in
writing, at least 90 calendar days in advance of each FSA/ICA.
ARTICLE XLVII
Training
SECTION 47.01. If requested by Company, Supplier will, for internal Company
use, conduct training classes on Material, at no charge to Company as follows:
(a) Provide instructors and the necessary instructional modules, or manuals
and material both electronically and in paper copy in Supplier's standard format
and any succeeding updates and/or changes there to train up to 10 of Company's
personnel in the Supplier's offered course. The classes shall be conducted upon
at least 30 calendar days advance notice in writing at reasonable intervals at
locations agreed upon by Supplier and Company, and each class should ordinarily
have three or four participants.
(b) In addition, provide, on Supplier's premises, Training Certification
classes for up to 12 Company instructors, 6 in Planning and Engineering and 6 in
the Maintenance and Operations courses. Supplier recommends limiting each class
to three individuals. Trainer Certification if comprised of a three-day
technical class followed immediately with a two-day trainer certification class.
Up to two classes will be available per calendar quarter.
SECTION 47.02. Company agrees to pay Supplier three percent of actual
revenue received from Company's customer training classes TR-4661 and TR-4662 or
any future additional or similar type of course(s) developed during the period
of time this Agreement is in effect. Company will
55
develop a specific revenue tracking mechanism to determine the accuracy of the
training revenues applicable to Supplier. Supplier shall invoice Company by the
end of each calendar quarter for the previous three months of activity, not
inclusive of the month of the date of invoice.
ARTICLE XLVIII
Marking
SECTION 48.01. All Material furnished under this Supply Agreement shall be
marked for identification purposes in accordance with the specifications set
forth in this Agreement and as follows:
(a) with Supplier model/series number;
(b) with month and year of manufacture;
(c) markings in accordance with the requirements outlined in Technical
Reference 52001, dated October 1985 and Bellcore Documents #TR-STS-000485,
TR-STS-000383, TR-ISD-000325, TR-TSY-000081, and KS-23490, as amended from time
to time;
(d) Company comcode numbers; and
(e) Warranty Eligibility System (WES) (Attachment F).
SECTION 48.02. In addition, Supplier agrees to add any other identification
which might be requested by Company. Charges, if any, for such additional
identification marking shall be as agreed upon by Supplier and Company prior to
the implementation of any such change. This clause does not reduce or modify
Supplier's obligations under Article LX (Identification).
ARTICLE XLIX
Bar Code Shipping and Receiving Labels
SECTION 49.01. Supplier shall at its sole expense place Company's specified
bar code labels on all shipping packages and containers for the material shipped
under this Agreement. Such bar code labels and the placement thereof shall meet
the requirements shown in the document "Bar Coding with Lucent Technologies-How
To Get Started" (May 1, 1996) (a copy of which Supplier has in its possession).
Company may change such specification upon written notice to Supplier and
Supplier shall comply with such changes.
56
ARTICLE L
Emergency Service
SECTION 50.01. In addition to the Material replacement provisions set forth
in Article XVII (Warranties) and Article XIX (Repairs Not Covered Under
Warranty), Supplier agrees, in the event of an emergency out-of-service or a
dead on arrival (DOA) condition caused by Material furnished under this Supply
Agreement to ship on a best effort basis, replacement Material up to two units
at a time, within 24 hours of verbal notification only by Company or an
authorized representative of Company. Such notification must identify the
unit(s) to be replaced by model number and serial number, and identify if such
unit(s) are covered either under warranty or under a maintenance agreement with
Supplier. Company agrees to follow up the verbal notification with a written
confirmation by telefax within 24 hours. In order to schedule shipment of
replacement Material, Company may call Supplier at 000-000-0000 requesting
Technical Services. This service will be available 24 hours a day, seven days
per week. Supplier will respond to such calls within two hours of placement.
SECTION 50.02. If defective or nonconforming Material under warranty is not
returned to Supplier by Company in thirty (30) calendar days subsequent to
Company's receipt of replacement Material under this Article, it is understood
that Supplier shall have the right to invoice Company at the price set forth in
Supplier's then current agreement with Company for said Material or, if no such
agreement exists, at a price agreed to by Supplier and Company.
ARTICLE LI
Variation in Quantity
SECTION 51.01. Company assumes no liability for Material produced,
processed or shipped in excess of the amount specified in this Supply Agreement
or in a Purchase Order issued pursuant to this Supply Agreement. However, should
an overshipment occur, Company will use reasonable efforts to return such
Material to Supplier, at Supplier's expense.
57
ARTICLE LII
Shipping
SECTION 52.01. Supplier shall do the following: (1) ship the Material
covered by this Supply Agreement or a Purchase Order complete unless instructed
otherwise, (2) ship to the destination designated in the Supply Agreement or
Purchase Order, (3) ship according to routing instructions given by Company, (4)
place the Agreement and Purchase Order number on all subordinate documents, (5)
enclose a packing memorandum with each shipment and, when more than one package
is shipped, identify the package containing the memorandum, (6) xxxx the
Purchase Order number on all packages and shipping papers and (7) not ship
Material five working days earlier or five working days later than the
agreed-upon shipment date without Company's prior written authorization.
Adequate protective packing shall be furnished at no additional charge. Shipping
and routing instructions may be furnished or altered by Company verbally. If
Supplier does not make a reasonable effort to comply with the terms of Article
LIII (FOB) or Purchase Order or with Company's shipping or routing instructions,
Supplier authorizes Company to charge back to Supplier any increased cost
incurred by Company as a result of Supplier's failure to comply. Company agrees
to review each shipment upon receipt for contents and advise Supplier within 15
calendar days of any deficiencies.
ARTICLE LIII
FOB
SECTION 53.01. The Material shall be shipped FOB Supplier's
factory--Freight prepaid and billed as a separate item unless directed otherwise
by Company.
ARTICLE LIV
Invoicing
SECTION 54.01. Supplier shall (a) render original invoices in duplicate, or
as otherwise specified in this Agreement, showing Agreement number, Purchase
Order number, through routing and weight, (b) render separate invoices for each
shipment within 24 hours after shipment and (c) mail invoices with copies of
bills of lading and shipping notices to the address shown on this Agreement or
the Purchase Order. If prepayment of transportation charges is authorized,
Supplier shall include the transportation
58
charges from the FOB point to the destination as a separate item on the invoice
stating the name of the carrier used. No minimum billing charges are permitted
unless expressly authorized in the Agreement. If Company requests and Supplier
accepts a return of Material, Company shall be subject to a maximum restocking
charge, if applicable, of five percent of the list price of Material returned.
ARTICLE LV
Title and Risk of Loss
SECTION 55.01. Title and risk of loss and damage to Material purchased by
Company under this Agreement or a Purchase Order issued pursuant to this
Agreement shall vest in Company when the Material has been delivered at the FOB
point. If Supplier is expressly authorized to invoice Company for Material upon
shipment or prior to the performance of additional services, title to such
Material shall vest in Company upon payment of the invoice.
ARTICLE LVI
Monthly Order and Shipment Reports
SECTION 56.01. Supplier agrees to render monthly order and shipment reports
as applicable, on or before the tenth working day of the succeeding month
containing the information required on a mutually agreed to form.
ARTICLE LVII
Invoicing For Stock
SECTION 57.01. If Company requests, for reasons other than covered by
Article LXXIX (Force Majeure), that shipment be postponed beyond the date shown
on a Purchase Order, Supplier may invoice Company as of the original scheduled
delivery date for Material manufactured under this Agreement, if it has been
inspected and approved by Company's Product Management Organization or its
authorized agent, within five (5) working days after notification, (provided
inspection has been specified in this Agreement or in a Purchase Order issued
under this Agreement). If inspection is not completed within five (5) working
days, Supplier may invoice Company in accordance Article LIV (Invoicing) of this
Supply Agreement.
59
ARTICLE LVIII
Storage of Paid for Stock
SECTION 58.01. All Material invoiced to Company in accordance with Article
LVII (Invoicing for Stock) shall be marked conspicuously as Company's property,
and safely stored by Supplier separately from other Material stocks, without
charge to Company for a period of sixty (60) days, and shall be shipped out as
ordered by Company. Supplier assumes responsibility for any loss or damage to
such Material while stored by Supplier. Beyond the sixty (60) days, charges to
Company shall be mutually agreed to. Supplier shall advise the Company in
writing of any removal of the Material from one building to another, or from one
part of the same building to another and shall give such advance notice as may
be requested by the Company. Supplier agrees upon request by Company, to execute
and deliver to Company a xxxx of sale evidencing the conveyance of such
Material, free from liens and encumbrances, together with any other document
such as a bailment agreement, warehouse receipt, lease (or storage space),
mortgage, deed of trust, or surety bond as Company may deem necessary to secure
title in such Material as against third parties, all of which documents shall be
in a form acceptable to Company.
ARTICLE LIX
Discontinuance of Material
SECTION 59.01. In the event the Supplier should discontinue manufacturing
any Material, Supplier will provide Company:
(a) At least twelve (12) months prior notice of discontinuance; and
(b) The opportunity to place an End of Life Purchase Order for
discontinued Material which Supplier will accept during the notice
period as set forth in subsection (a) of this Article; and
(c) Supplier will accept delivery schedules for such Material up to
six (6) months after such End of Life Purchase Order.
60
ARTICLE LX
Identification
SECTION 60.01. Neither Supplier nor Company shall, without prior written
consent of the other, which shall not be unreasonably withheld, engage in
advertising, promotion or publicity related to this Agreement, or make public
use of any Identification in any circumstances related to this Agreement.
"Identification" means any copy or semblance of any trade name, trademark,
service xxxx, insignia, symbol, logo, or any other product, service or
organization designation, or any specification or drawing of the other party or
its affiliates, or evidence of inspection by or for any of them. Supplier shall
remove or obliterate any Identification prior to any use or disposition of any
material rejected or not purchased by the Company, and, shall indemnify, defend
and save harmless Company and its affiliates and each of their officers,
directors and employees from and against any losses, damages, claims, demands,
suits, liabilities, fines, penalties and expenses (including reasonable
attorneys' fees) arising out of Supplier's failure to comply with this clause.
ARTICLE LXI
Insignia
SECTION 61.01. If requested by Company in writing and agreed to by
Supplier, "Insignia", including certain trademarks, trade names, insignia,
symbols, decorative designs or packaging designs of Company or evidences of
Company's or Company's agent's inspection, will be properly affixed by Supplier
to the Material furnished or its packaging. Company shall retain all right,
title and interest in any and all packaging designs, finished artwork and
separations furnished to Supplier. Nothing in this Article shall be deemed to
apply to the SDV Subsystem, which shall be marked with Supplier's brand identity
and which shall include Supplier's FLX(C) trademark. This clause does not reduce
or modify Supplier's obligations under Article LX (Identification) and Article
LXII (Confidentiality). Material rejected or not purchased by Company which
utilized such Insignia shall have all such Insignia removed prior to any sale,
use or disposition thereof. Supplier agrees to indemnify and hold Company
harmless from any claim, loss or damage arising out of Supplier's failure to do
so.
ARTICLE LXII
Confidentiality
61
SECTION 62.01. All Information ("Information") means proprietary
specifications, designs, plans, drawings, software, data, prototypes or other
business and/or technical information) provided by either Party to the other
under this Agreement shall be held in confidence by the receiving Party; shall
be used only for the purpose of performing acts and obligations required by this
Agreement; shall be reproduced only to the extent necessary for that purpose;
and shall not be disclosed by the receiving Party without the prior written
approval of the disclosing Party. The receiving Party may, however, disclose the
Information to its employees, consultants and contractors with a need to know;
provided, that the receiving Party binds those employees, consultants and
contractors to terms at least as restrictive as those stated herein, advises
those employees, consultants and contractors of their confidentiality
obligations, and indemnifies the disclosing Party for any breach of those
obligations. Information shall be subject to the restrictions in this section if
it is in writing or other tangible form, only if clearly marked as proprietary
when disclosed to the receiving Party; or, if not in tangible form, is of a
nature that a reasonable person would conclude is confidential Information, and
the Information is reduced to writing clearly marked as proprietary, with a copy
of the writing being furnished to the receiving Party within thirty (30) days of
the disclosure of the intangible information, and with the writing containing a
notice that the information was previously provided in intangible form. These
restrictions on the use or disclosure of Information shall not apply to any
Information: (i) which is independently developed by or for the receiving Party;
(ii) which is lawfully received free of restriction from another source; (iii)
after it has become generally available to the public without breach of this
Agreement by the receiving party; (iv) which at the time of disclosure to the
receiving Party was known to that Party free of restriction as evidenced by
documentation in that Party's possession; (v) which the disclosing Party agrees
in writing is free of such restrictions; or (vi) which the receiving Party is
required to disclose under applicable laws, rules and regulations, provided that
the receiving Party shall first notify the disclosing Party of such required
disclosure and afford the disclosing party the opportunity to seek a protective
order relating to such disclosure. All Information shall remain the property of
the disclosing Party and shall be returned upon written request or upon the
receiving Party's determination that it no longer has a need for such
Information. The receiving Party may retain one copy of all written materials
returned to provide an archive record of the disclosure.
62
ARTICLE LXIII
Supplier's Information
SECTION 63.01. Supplier shall not provide under, or have provided in
contemplation of, this Agreement any idea, data, program, technical, business or
other intangible information, however conveyed, or any document, print, tape,
disc, semiconductor memory or other information-conveying tangible article,
unless Supplier has the right to do so.
ARTICLE LXIV
Compliance With Laws
SECTION 64.01. Each party and all persons furnished by each party shall
comply at their own expense with applicable Federal, state, local and foreign
laws, ordinances, regulations and codes, including those relating to the use of
chlorofluorocarbons, and including identification and procurement of required
permits, certificates, licenses, insurance, approvals and inspections, in
performance under this Agreement or a Purchase Order. Supplier agrees to
indemnify, defend and save harmless Company, its affiliates, and their customers
and each of their officers, directors and employees from and against losses,
damages, claims, demands, suits, liabilities, fines, penalties and expenses
(including reasonable attorneys' fees) that arise out of or result from any
failure to do so.
ARTICLE LXV
Taxes
SECTION 65.01. Company shall reimburse Supplier only for the following tax
payments with respect to transactions under this Agreement unless an exemption
applies: state and local sales and use taxes, as applicable. Taxes payable by
Company shall be billed as separate items on Supplier's invoices and shall not
be included in Supplier's prices. Company shall have the right to have Supplier
contest any such taxes that Company deems improperly levied at Company's expense
and subject to Company's direction and control.
ARTICLE LXVI
63
Government Contract Provisions
SECTION 66.01. The following provisions regarding equal opportunity, and
all applicable laws, rules, regulations and executive orders specifically
related thereto, including applicable provisions and clauses from the Federal
Acquisition Regulations and all supplements thereto are incorporated in this
Agreement, for as long as such provisions shall be in force and effect, as they
apply to work performed under specific U.S. Government contracts: 41 CFR 60-1.4,
Equal Opportunity; 41 CFR 60-1.7, Reports and Other Required Information; 41 CFR
60-1.8, Segregated Facilities; 41 CFR 60-250.4, Affirmative Action for Disabled
Veterans and Veterans of the Vietnam Era (if in excess of $10,000); and 41 CFR
60-741.4, Affirmative Action for Disabled Workers (if in excess of $2500),
wherein the terms "contractor" and "subcontractor" mean "Supplier". In addition,
Purchase Orders placed under this Agreement containing a negotiation that the
Material or services are intended for use under Government contracts shall be
subject to such other Government provisions printed, typed or written thereon,
or on the reverse side thereof, or in attachments thereto. Supplier may refuse
or accept any such Purchase Order at Supplier's discretion.
ARTICLE LXVII
Right of Entry and Plant Rules
SECTION 67.01. Each party shall have the right to enter the premises of the
other party during normal business hours with respect to the performance of this
Agreement, subject to all plant rules and regulations, security regulations and
procedures and U.S. Government clearance requirements as applicable. Each party
shall provide safe and proper facilities for such purpose, and no charge shall
be made for such visits. It is agreed that prior notification will be given when
access is required.
ARTICLE LXVIII
Export Control
SECTION 68.01. Supplier and Company assure each other that they do not
intend to and will not knowingly, without the prior written consent of the
United States Department of Commerce, transmit directly or indirectly:
64
(a) any technical information or software furnished to either party; or
(b) any immediate product (including processes, materials and services)
produced directly by the use of the technical information or software furnished
by either party; or
(c) any commodity produced by such immediate product if the immediate
product or the technical information or software furnished by either party is a
plant capable of producing a commodity or is a major component of such plant,
for as long as such applicable restrictions remain in effect;
to (i) Afghanistan, People's Republic of China, Iraq or to any Group Q, S, W, Y
or Z country as listed in Supplement No. 1 to Part 770 of the Export
Administration Regulations issued by the Department of Commerce, or (ii) any
citizen or resident of any of the aforementioned countries. Each party agrees to
promptly inform the other party in writing of any such written consent issued by
the Office of Export Administration.
SECTION 68.02. Each party assures the other that it will not transmit,
directly or indirectly, any information or software furnished hereunder or any
portion hereof, without the prior written consent of the other party, to any
country outside of the United States.
SECTION 68.03. The parties understand that the obligations under this
Article survive the expiration and/or termination of this Agreement.
ARTICLE LXIX
Assignment
SECTION 69.01. Supplier shall not assign any right or interest under this
Agreement (excepting solely for moneys due or to become due) without the prior
written consent of Company. Supplier shall be responsible to Company for all
Work performed by Supplier's sub-contractor(s) at any tier.
ARTICLE LXX
Releases Void
SECTION 70.01. Neither party shall require (a) waivers or releases of any
personal rights or
65
(b) execution of documents which conflict with the provisions of this Agreement,
from employees, representatives or customers of the other in connection with
visits to its premises and both parties agree that no such releases, waivers or
documents shall be pleaded by them or third persons in any action or proceeding.
ARTICLE LXXI
Services
SECTION 71.01. It is understood that visits by Supplier's representatives
or its suppliers' representatives for inspection, adjustment or other similar
purposes in connection with Material purchased under this Agreement shall for
all purposes be deemed "Work under this Agreement" and shall be at no charge to
Company unless otherwise agreed in writing between the parties.
ARTICLE LXXII
Registration and Radiation Standards
SECTION 72.01. When Material furnished under this Agreement is subject to
Part 68, Part 15 or any other part of the Federal Communication Commission's
Rules and Regulations, as may be amended from time to time (hereinafter "FCC
Rules"), Supplier warrants that such material complies with the registration,
certification, type-acceptance and/or verification standards of the FCC Rules in
effect at the time of Material shipment, including, but not limited to, all
labeling, customer instruction requirements, and the suppression of radiation to
specified levels. Supplier shall also establish periodic on-going compliance
retesting and follow a Quality Control Program, submitted to Company, to assure
that Material shipped complies with the applicable FCC Rules. Supplier agrees to
indemnify and save Company harmless from any liability, claims or demands
(including the costs, expenses and reasonable attorney's fees on account
thereof) that may be made because of Supplier's noncompliance with the
applicable FCC Rules. Supplier agrees to defend Company, at Company's request,
against such liability, claim or demand.
SECTION 72.02. In addition, should Material which is subject to Part 15 of
the FCC Rules, during use generate harmful interference to radio communications,
Supplier shall provide to Company information relating to methods of suppressing
such interference and pay the cost of suppressing such interference or, at the
option of Company,
66
accept the return of the Material and refund to Company the price paid for the
Material less a reasonable amount for depreciation, if applicable.
SECTION 72.03. To the extent that Material furnished under this Agreement
is also subject to FCC Rules governing the use of the Material as a component in
a system, Company shall be responsible for compliance with the applicable FCC
Rules governing the system. Supplier shall full cooperate with Company, by
providing technical support and information, and, upon written request from
Company, shall modify Material to enable Company to ensure ongoing compliance
with the FCC Rules. Company agrees to pay any verifiable increase in Supplier's
costs and/or expenses resulting from Company's request to modify Material to
enable Company to comply with the FCC Rules.
SECTION 72.04. Nothing in this clause shall be deemed to diminish or
otherwise limit Supplier's obligations under Article XVII (Warranties) or any
other clauses of this Supply Agreement.
ARTICLE LXXIII
Environment/Reliability Testing
SECTION 73.01. Supplier shall perform environmental testing of the
production Material in accordance with Bellcore's Technical
Reference-TR-NWT-000063 entitled NETWORK EQUIPMENT BUILDING SYSTEM (NEBS)
GENERIC EQUIPMENT REQUIREMENTS. The Supplier agrees to report the test results
to Company or its agents.
SECTION 73.02. An initial sample of production Material shall be subjected
by Supplier to Material Qualification Tests. These tests shall be more
comprehensive than the normal production tests and shall include checks of all
functions, protocols and interfaces and shall be repeated periodically at
intervals not to exceed three (3) months. Variables data (actual readings rather
than go/no go data) shall be recorded for these tests to ascertain any
changes/drifts in the measured parameters. Material Qualification Tests shall
also be performed upon the implementation of any major design changes requested
by Company.
SECTION 73.03. It is the responsibility of the Supplier to demonstrate
during the term of the Agreement that the actual reliability of the delivered
production Material equals or exceeds the reliability predictions. The Supplier
shall conduct studies to measure the
67
replacement/failure of supplied production Material under actual operating
conditions or simulated operating conditions in a controlled laboratory
environment. These studies may be (1) factory based (where returns are compared
with shipment figures), (2) conducted at an operational site with a sufficient
population of production Material in service to provide reasonable confidence in
observed replacement estimates, (3) an ongoing factory based (controlled)
reliability test of a sufficient sample of production Material to provide a
timely assessment of production Material reliability or (4) all of the above. At
Company's request, the results and the analysis of the collected data shall be
provided by the Supplier to Company.
ARTICLE LXXIV
Toxic Substances and Product Hazards
SECTION 74.01. Supplier hereby warrants to Company that, except as
expressly stated elsewhere in this Agreement, all material furnished by Supplier
as described in this Agreement is safe for its foreseeable use, is not defined
as a hazardous or toxic substance or material under applicable Federal, state or
local law, ordinance, rule, regulation or order (hereinafter collectively
referred to as "law" or "laws"), and presents no abnormal hazards to persons or
the environment. Supplier also warrants that it has no knowledge of any Federal,
state or local law, that prohibits the disposal of the material as normal refuse
without special precautions except as expressly stated elsewhere in this
Agreement. Supplier also warrants that where required by law, all material
furnished by Supplier is either on the EPA Chemical Inventory compiled under
Section 8(a) of the Toxic Substance Control Act, or is the subject of an
EPA-approved premanufacture notice under 40 CFR Part 720. Supplier further
warrants that all material furnished by Supplier complies with all use
restrictions, labeling requirements and all other health and safety requirements
imposed under Federal, state, or local laws. Supplier further warrants that,
where required by law, it shall provide to Company, prior to delivery of the
material, a Material Safety Data Sheet which complies with the requirements of
the Occupational Safety and Health Act of 1970 and all rules and regulations
promulgated thereunder.
SECTION 74.02. Supplier shall defend, indemnify and hold Company harmless
for any expenses (including, but not limited to, the cost of substitute
material, less accumulated depreciation) that Company may incur by reason of the
recall or prohibition against continued use or
68
disposal of material furnished by Supplier as described in its Agreement whether
such recall or prohibition is directed by Supplier or occurs under compulsion of
law. Company shall cooperate with Supplier to facilitate and minimize the
expense of any recall or prohibition against use or disposal of material
directed by Supplier or under compulsion of law.
SECTION 74.03. Supplier further shall defend, indemnify and hold Company
harmless of and from any claims, demands, suits, judgments, liabilities, costs
and expenses (including reasonable attorney's fees) which Company may incur
under any applicable Federal, state or local laws, and any and all amendments
thereto, including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act of 1980; the Consumer Product Safety Act of 1972;
the Toxic Substance Control Act; Fungicide, Rodenticide Act; the Occupational
Safety and Health Act; and the Atomic Energy Act; and any and all amendments to
all applicable Federal, state, or local laws, by reason of Company's
acquisition, use, distribution or disposal of material furnished by Supplier
under this Agreement.
ARTICLE LXXV
CFC and/or Heavy Metals in Packaging
SECTION 75.01. Supplier warrants to Company that no lead, cadmium, mercury
or hexavalent chromium have been intentionally added to any packaging or
packaging component (as defined under applicable laws) to be provided to Company
under this Agreement and that packaging materials were not manufactured using
and do not contain chlorofluorocarbons. Supplier further warrants to Company
that the sum of the concentration levels of lead, cadmium, mercury and
hexavalent chromium in the package or packaging component provided to Company
under this Agreement does not exceed 100 parts per million. Upon request,
Supplier shall provide to Company Certificates of Compliance certifying that the
packaging and/or packaging components provided under this Agreement are in
compliance with the requirements set forth above in this clause.
ARTICLE LXXVI
Ozone Depleting Chemicals
SECTION 76.01. Supplier hereby warrants that it is aware of international
agreements and pending legislation in several nations, including the United
States, which would limit, ban and/or tax importation of any product containing,
or produced using ozone depleting chemicals ("ODCs"),
69
including chlorofluorocarbons, halons and certain chlorinated solvents. Supplier
hereby warrants that the material furnished to Company will conform to all
applicable requirements established pursuant to such agreements, legislation and
regulations, and the material furnished to Company will be able to be imported
and used lawfully (and without additional taxes associated with ODCs not
reported to Company by Supplier as set forth in this clause) under all such
agreements, legislation and requirements. Supplier also warrants that it is
currently reducing, or if Supplier is not the manufacturer of the material, is
currently causing the manufacturing vendor to reduce and will, in an expeditious
manner, eliminate, or, as applicable, have its manufacturing vendor eliminate
the use of ODCs in the manufacture of the material.
SECTION 76.02. If the material furnished by Supplier under this Agreement
is manufactured outside the United States, Supplier shall, upon execution of
this Agreement, and at any time that new products are added to this Agreement or
changes are made to the material furnished under this Agreement, complete, sign
and return to Company the attached ODC Content Certification. The ODC Content
Certification must be signed by Supplier's facility manager, corporate officer
or his delegate.
SECTION 76.03. The term "ODC content" on the ODC Content Certification
means the total pounds of ODC used directly in the manufacture of each unit of
material. This includes all ODCs used in the manufacturing and assembly
operations for the material plus all ODCs used by Supplier's vendors and any
other vendors in producing components or other products incorporated into the
material sold to Company.
SECTION 76.04. Supplier is responsible to obtain information on the ODC
content of all components and other products acquired to manufacture the
material and to incorporate such information into the total ODC content reported
to Company; provided, however, that Supplier should not include in the ODC
content those components or other products which are manufactured in the United
States. Supplier hereby warrants to Company that all information furnished by
Supplier on the ODC Content Certification is complete and accurate and that
Company may rely on such information for any purpose, including but not limited
to providing reports to government agencies or otherwise complying with
applicable laws. Supplier shall defend, indemnify and hold Company harmless of
and from any claims, demands, suits, judgments, liabilities, fines, penalties,
costs and expenses (including additional ODC taxes as provided for in paragraph
one of this clause and reasonable
70
attorney's fees) which Company may incur under any applicable Federal, state, or
local laws or international agreements, and any and all amendments thereto by
reason of Company's use of reliance on the information furnished to Company by
Supplier on the ODC Content Certification or by reason of Supplier's breach of
this clause. Supplier shall cooperate with Company in responding to any inquiry
concerning the use of ODCs to manufacture the material or components thereof and
to execute without additional charge any documents reasonably required to
certify the absence or quantity of ODCs used to manufacture the material or
components thereof.
ARTICLE LXXVII
Ozone Depleting Substance Labeling
SECTION 77.01. Supplier warrants and certifies that all products, including
packaging and packaging components, provided to Company under this Agreement
have been accurately labeled, in accordance with the requirements of 40 CFR Part
82 entitled "Protection of Stratospheric Ozone, Subpart E--The Labeling of
Products Using Ozone Depleting Substances".
ARTICLE LXXVIII
Year 2000 Functionality
SECTION 78.01. Supplier warrants that Software will record, store, process
and present calendar dates falling on or after January 1, 2000, in the same
manner and with the same functionality as it performed before January 1, 2000.
This maintenance will be considered part of and covered under the maintenance
provisions of the Agreement at any additional charge to Company.
SECTION 78.02. Supplier's warrants that Software will perform, store,
process and present calendar dates falling on or after January 1, 2000, in the
same manner and with the same functionality as it performed before January 1,
2000, and that such Software will be interoperable with other software used by
the Company which may deliver records, receive records or interact with Software
in the course of processing data. This functionality will be part of the license
of software and will be provided at no charge.
ARTICLE LXXIX
71
Force Majeure
SECTION 79.01. Neither of the parties shall be held responsible for any
delay or failure in performance hereunder caused by fires, strikes, embargoes,
requirements imposed by Government regulation, civil or military authorities,
acts of God or by the public enemy or other similar causes beyond such party's
control. However, Supplier's delay or failure to perform shall not be excused by
a default of any of its subcontractors or suppliers unless such default arises
out of causes beyond the control of both the Supplier and its subcontractor or
supplier and without the fault or negligence of either of them, and unless the
supplies or services to be furnished by such subcontractor or supplier are not
obtainable from other sources. If such contingency occurs, the party injured by
the other's inability to perform may elect to: (a) terminate this Supply
Agreement or part thereof as to Material or Services not already received; (b)
suspend this Supply Agreement for the duration of the delaying cause, buy or
sell elsewhere Material and/or Services to be bought or sold hereunder, and
deduct from any commitment the quantity bought or sold for which commitments
have been made elsewhere; or (c) resume performance hereunder once the delaying
cause ceases with an option in the injured party to extend the period, hereunder
up to the length of time the contingency endured. Unless written notice is given
within thirty (30) days after such injured party is apprised of the contingency,
(c) shall be deemed selected.
ARTICLE LXXX
Regulatory Matters
SECTION 80.01. If requested by Company, Supplier will to the best of its
ability provide information and assistance required in the planning, conduct and
research associated with regulatory matters in connection with the Material to
be furnished hereunder.
ARTICLE LXXXI
Confidentiality and Non-Disclosure
SECTION 81.01. "Information" under Article LXII shall also include the FSN
Agreement (including, without limitation, the General Purchase Agreement between
********* ********* and Company) and any other information provided to Supplier,
in any form or medium, which is the confidential
72
and/or proprietary information of Company, ************** or Customers.
Notwithstanding anything contained in Article LXII, Supplier agrees to hold the
FSN Agreement in confidence, shall use the FSN Agreement only for the purpose of
performing Supplier's obligations and duties under this Supply Agreement and
shall not disclose the FSN Agreement to any third party without prior written
approval of the Company and *********************, except to the extent that
Supplier is required to disclose the FSN Agreement to any governmental agency
under applicable laws, rules, and regulations and, in such instance, the parties
and ********* *********** shall work together to prevent the disclosure of those
provisions of the FSN Agreement which ************* or Company determines to
contain particularly sensitive information.
ARTICLE LXXXII
Publicity
SECTION 82.01. Supplier agrees to submit to Company and Company agrees to
make a reasonable effort to submit to Supplier all advertising, sales promoting,
press releases and other publicity material relating to the Material furnished
or the services performed by Supplier under this Agreement wherein the other
party's names or marks are mentioned or language from which the connection of
said names or marks with Company or Supplier may be inferred or implied.
Supplier further agrees and Company agrees to make a reasonable effort not to
publish or use such advertising, sales promotion, press releases, or publicity
Material without the other party's prior written approval. This does not reduce
or modify Supplier's obligation under Article LX (Identification) of this
Agreement.
ARTICLE LXXXIII
Infringement
SECTION 83.01. Supplier shall indemnify and save harmless Company, its
affiliates, its and their customers, and each of their officers, directors,
employees, successors and assigns (all hereinafter referred to in this clause as
"Company") from and against any losses, damages, liabilities, fines, penalties,
and expenses (including reasonably attorneys' fees) that arise out of or result
from any proved or unproved claim (a) of infringement of any patent, copyright,
trademark or trade secret right, or other intellectual property right, private
right or any other proprietary or personal interest, and (b) caused by the
73
performance by Supplier under or in contemplation of this Agreement (an
"Infringement Claim"). If the Infringement Claim arises solely from the
Supplier's adherence to Company's written instructions regarding services or
tangible or intangible goods provided by Supplier ("Items") and if the Items are
not (a) commercial items available on the open market or the same as such items,
or (b) items of Supplier's designated origin, design or selection, Company shall
indemnify Supplier. Company or Supplier shall defend or settle, at its own
expense, any demand, action or suit on any Infringement Claim for which it is
the indemnitor under the preceding provisions, and each shall timely notify the
other of any assertion against it of any Infringement Claim and shall cooperate
in good faith with the other to facilitate the defense of any such claim.
SECTION 83.02. If the use and/or sale of such Material is enjoined,
Supplier shall at its own expense and option, procure for Company the right to
continue using or reselling Material, or replace the infringing Material or part
thereof with substantially equivalent Material or parts free of infringement, or
modify the Material or parts thereof so that they will be free of infringement,
or remove infringing Material in its entirety and refund to Company the full
Material purchase price and the costs associated with removal and transportation
of such Material.
ARTICLE LXXXIV
Indemnity
SECTION 84.01. All persons furnished by Supplier shall be considered solely
Supplier's employees or agents, and Supplier shall be responsible for payment of
all unemployment, social security and other payroll taxes, including
contributions when required by law. Supplier agrees to indemnify and save
harmless Company, its affiliates and their customers and each of their officers,
directors, employees, successors and assigns (all hereinafter referred to in
this clause as "Company") from and against any losses, damages, claims, demands,
suits and liabilities, fines, penalties and expenses (including reasonable
attorney's fees) that arise out of or result from: (1) injuries or death to
persons or damage to property, including theft, in any way arising out of or
occasioned by, caused or alleged to have been caused by or on account of the
performance of the work or services performed by Supplier or persons furnished
by Supplier, except any injuries (including death) or damage to property arising
from Company's negligence or willful misconduct, (2) assertions under Workers'
Compensation or similar acts made by persons furnished by Supplier or any
subcontractor, or by reason of any injuries to such persons for which Company
would be responsible under Workers' Compensation or similar acts
74
if the persons were employed by the Company, (3) any failure on the part of
Supplier to satisfy all claims for labor, equipment, Materials and other
obligations relating directly or indirectly to the performance of the Work, or
(4) any failure by Supplier to perform Supplier's obligations under this clause
or Article LXXXVI (Insurance). Supplier agrees to defend Company against any
such claim, demand or suit.
SECTION 84.02. In the case of any matter as to which Company or any third
party is partly at fault, the parties agree Supplier's liability under this
indemnity shall be based upon, and limited by, the extent of the fault of
Supplier compared to the extent of fault of Company and/or any third party. The
parties agree to cooperate in the defense or settlement of concurrent or joint
claims, to use their best efforts to agree privately on the sharing of fault and
the defense of claims, and, if necessary, to litigate the issue of comparative
fault and/or contribution in a tribunal o proceeding independent of claimant.
Neither party shall be bound by a settlement made by the other to which it has
not consented. Each party agrees to notify the other party within a reasonable
time of any written claims or demands against it for which the other party is
responsible hereunder.
ARTICLE LXXXV
Indemnity Obligations of Company
SECTION 85.01. In the event any Material provided by Supplier to Company
pursuant to this Agreement is integrated into or sold with or as part of any
product or system by Company, whether or not such Material is sold as a separate
part, then the Company hereby agrees to indemnify and hold harmless Supplier and
its affiliates against any losses, damages, liabilities, fines, penalties and
expenses (including reasonable attorneys fees and expenses) that arise out of or
result from Company's gross negligence or willful misconduct. Nothing will
prevent Supplier from making any claim notwithstanding that the Agreement does
not provide for indemnification by Company.
ARTICLE LXXXVI
Insurance
75
SECTION 86.01. Supplier shall maintain and cause Supplier's subcontractors
to maintain during the term of this Agreement: (1) Workers' Compensation
insurance as prescribed by the law of the state or nation in which the Work is
performed; (2) employer's liability insurance with limits of at least $500,000
for each occurrence; (3) automobile liability insurance if the use of motor
vehicles is required, with limits of at least $1,000,000 combined single limit
for bodily injury and property damage per occurrence; (4) Commercial General
Liability ("CGL") insurance, ISO 1988 or later occurrence form of insurance,
including Blanket Contractual Liability and Broad Form Property Damage, with
limits of at least $1,000,000 combined single limit for bodily injury and
property damage per occurrence; and (5) if the furnishing to Company (by sale or
otherwise) of material or construction services involved, CGL insurance endorsed
to include products liability and completed operations coverage in the amount of
$3,000,000 per occurrence. All CGL and automobile liability insurance shall
designate Lucent Technologies Inc., its affiliates, and its directors, officers
and employees (all referred to as "Company") as additional insured. All such
insurance must be primary and noncontributory and required to respond and pay
prior to any other insurance or self-insurance available. Any other coverage
available to Company shall apply on an excess basis. Supplier agrees that other
coverage available to Company shall apply on an excess basis. Supplier agrees
that Supplier, Supplier's insurer(s) and anyone claiming by, through under or in
Supplier's behalf shall have no claim, right of action or right of subrogation
against Company and its customers based on any loss or liability insured against
under the foregoing insurance. Supplier and Supplier's subcontractors shall
furnish prior to the start of Work certificates or adequate proof of the
foregoing insurance, including if specifically requested by Company,
endorsements and policies. Company shall be notified in writing at least thirty
(30) days prior to cancelation of or any change in the policy. Insurance
companies providing coverage under this Agreement must be rated by A-M Best with
at least an A-rating.
ARTICLE LXXXVII
Subcontracting
SECTION 87.01. Each party may use subcontractors to perform any portion of
that party's obligations under this Supply Agreement, provided that such party
remains solely and entirely responsible for the satisfactory performance of such
obligations, including the performance of its subcontractors.
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ARTICLE LXXXVIII
Timely Performance
SECTION 88.01. If Supplier has knowledge that anything prevents or
threatens to prevent the timely performance of Supplier's obligations under this
Agreement, Supplier shall immediately notify Company's Procurement
Representative thereof and include all relevant information concerning the delay
or potential delay.
ARTICLE LXXXIX
Exclusivity of Warranties
SECTION 89.01. The warranties of Supplier set forth in this Supply
Agreement are exclusive and are in lieu of all other express and implied
warranties (except warranties of title and against infringement), including, but
not limited to, warranties of merchantability and fitness for a particular
purpose.
ARTICLE XC
Waiver
SECTION 90.01. The failure of either party at any time to enforce any right
or remedy available to it under this Supply Agreement or otherwise with respect
to any breach or failure by the other party shall not be construed to be a
waiver of such right or remedy with respect to any other breach or failure by
the other party.
ARTICLE XCI
Notices
SECTION 91.01. Any notice or demand which under the terms of this Supply
Agreement or under any statute must or may be given or made by Supplier or
Company shall be in writing and shall be given or made by confirmed facsimile,
by hand or overnight courier service, or mailed by certified or registered mail
addressed to the respective parties as follow:
To Company: Lucent Technologies Inc.
Network Systems Manufacturing Org.
Xxxxxxxxx Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxx, Room 30-MZC-7
00
Xxxxx Xxxxxxx, XX 00000-0000
Attn: Xx. Xxxxxx X. Dubliel
Tel: (000) 000-0000
Fax Copies to: Lucent Technologies Inc.
00 Xxxxxxxx Xxxx, Xxxx 0X-000X
X.X. Xxx 000
Xxxxxxxx, XX 00000-0000
Attn: Xx. Xxxxx X. Manchester
Tel: (000) 000-0000
Fax: (000) 000-0000
Lucent Technologies
00 Xxxxxxxx Xxxx, Xxxx 0X-000
Xxxxxxxx, XX 00000-0000
Attn: Xx. Xxxxx Xxxxxxxx, Product Mgr.
Fax: (000) 000-0000
Lucent Technologies
000 Xxxx Xxxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xx. Xxxxx Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
To Suppliers: BroadBand Technologies, Inc.
0000 Xxxxxxx Xxxxx Xxxxx
X.X. Xxx 00000
Xxxxxx, XX 00000-0000
Attn: Chief Financial Officer
SECTION 91.02. Such notice or demand shall be deemed to have been given or
made when sent by facsimile, when delivered by hand or overnight courier or when
deposited, postage prepaid, in the U.S. mail.
SECTION 91.03. The above addresses may be changed at any time by giving
prior written notice as above provided.
ARTICLE XCII
Survival of Obligations
SECTION 92.01. The obligations of the parties under this Agreement and any
Purchase Order issued pursuant to this Agreement, which by their nature would
continue beyond the termination, cancelation or expiration of this Agreement or
Purchase Order, including, by way of illustration only and not limitation, those
in Article LXIV
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(Compliance With Laws), Article XLIV (Continuing Availability), Article LX
(Identification), Article LXXXIII (Infringement), Article LXX (Releases Void),
Article XIX (Repairs Not Covered Under Warranty), Article LXII
(Confidentiality), Article LXXXI (Confidentiality and Non-Disclosure), Article
LXXXVI (Insurance), Article LXXXIV (Indemnity), and Article XVII (Warranties),
shall survive termination, cancelation or expiration of this Agreement or
Purchase Order.
ARTICLE XCIII
Dispute Resolution
SECTION 93.01. The following procedures shall apply to any dispute or
disagreement between the Parties arising out of this Agreement.
SECTION 93.02. First:
(a) either Party may give written notification of such dispute or
disagreement to the other Party and
(b) the Parties shall communicate with each other promptly with a view to
resolving such dispute or disagreement within 21 days (or such extended period
as the Parties agree is appropriate in any case) after such written notification
is given.
SECTION 93.03. The giving of any notice regarding any dispute or
disagreement under this Article shall toll the running of all applicable
statutes of limitation until the later of (i) 90 days following the giving of
such notice or (ii) 30 days following the termination of discussions between the
Parties concerning such dispute or disagreement.
SECTION 93.04. Second, if at the end of the 21 day period referenced in
Section 93.02(b)(as it may be extended) such dispute or disagreement has not
been resolved to the satisfaction of both parties, either Party may request in
writing that such dispute or disagreement be the subject of non-binding
mediation. Following such request, the Parties shall endeavor in good faith
promptly to identify a single person (who shall be a person with experience and
good reputation) who shall assist the Parties in discussing such dispute or
disagreement and in attempting to reach a mutually acceptable business
resolution. Such mediation process shall terminate not later than 30 days
following the request therefor (or such extended or shorter period as the
Parties agree is appropriate). All applicable
79
statutes of limitation shall be tolled during the period of mediation.
SECTION 93.05. Third, if at the end of the 30 day period referenced in
Section 93.04 (as it may be extended or shortened) such dispute or disagreement
has not been resolved to the satisfaction of both parties, either Party (the
"complainant") may commence binding arbitration by giving the other Party (the
"respondent") notice in writing (the "initiating notice") setting forth in
reasonable detail the nature of its claim and the relief requested stating that
the complainant is invoking the procedures set forth in Sections 93.05 and 93.06
and naming the complainant's representative on the Arbitration Panel (as defined
below). Within 21 days of receipt of an initiating notice, the respondent shall
give the complainant notice in writing (the "response") setting forth in
reasonable detail: (1) the basis of its response to the claim; (2) the nature of
any counterclaim it has against the complainant arising from the same set of
facts and circumstances that gave rise to the original claim; (3) any other
counterclaim that Party wishes to bring at that time (although the Party has no
obligation to bring such counterclaims at that time); (4) the relief requested;
and (5) naming the respondent's representative on the Arbitration Panel. The two
representatives shall select a third person who is mutually acceptable to them.
If the representatives fail to make such selection within 21 days, the
complainant and the respondent shall each replace its representative with a new
representative and the new representatives shall be subject to the preceding
sentence and this sentence. Once a third person is selected, such person
together with the representatives of the complainant and the respondent shall
form the Arbitration Panel. The date upon which the Arbitration Panel is formed
shall be the "Commencement Date".
SECTION 93.06. The Arbitration Panel shall conduct proceedings to determine
the merits under applicable law of the claims set forth in the initiating notice
and the response. The proceedings shall be administered by JAMS/Endispute in
accordance with its Comprehensive Arbitration Rules and Procedures in effect as
of the Effective Date, subject to the following additional rules:
(a) the proceedings shall take place in New York City;
(b) the Arbitration Panel (including, if necessary, any replacement(s) to
the Arbitration Panel) shall be selected as set forth in Section 93.05;
80
(c) the available relief shall include damages, injunctive relief and
equitable relief to the extent allowed under the applicable law, this Agreement
and any other agreement between the parties;
(d) the parties shall attempt in good faith promptly to agree on the nature
and extent of any discovery in connection with the arbitration, provided that,
in the absence of such agreement, discovery shall be governed by
JAMS/Endispute's Comprehensive Arbitration Rules and Procedures. In addition,
the applicable law with respect to privilege and other protections from
disclosure, including the work product doctrine, shall appply.
(e) the final decision of the Arbitration Panel (the "Award") shall be
issued within six months of the Commencement Date (the date of issuance of the
Award being the "Award Date") and must be joined by at least two members of the
Arbitration Panel;
(f) each party to the proceedings shall pay its own costs in connection
with the proceedings, including the costs and expenses of its representative on
the Arbitration Panel, and the parties shall share equally the other costs of
the proceedings, including the fees of the third member of the Arbitration
Panel, except that the prevailing party shall be entitled to recover its
attorneys' fees incurred in prosecution thereof.
SECTION 93.07. In accordance with the Federal Arbitration Act, 9 U.S.C. ss.
1 et seq., the Award shall be final and binding and judgment thereon may be
entered by any state or federal court having jurisdiction thereof.
SECTION 93.08. Nothing in this Article shall be construed to preclude
either party from seeking injunctive relief in a court of competent jurisdiction
to prevent imminent irreparable harm. The dispute resolution procedures set
forth herein shall be stayed pending disposition of any application for such
relief. The Parties agree that a court of competent jurisdiction may consider
the merits of any claim that is subject to the dispute resolution procedures set
forth herein to the extent necessary to resolve any permissible application for
injunctive relief.
ARTICLE XCIV
Choice of Law
81
SECTION 94.01. The construction, interpretation and performance of this
Agreement and all transactions under it shall be governed by the laws of the
State of New Jersey, excluding its choice of law rules and excluding the
Convention for the International Sale of Goods. The parties agree that the
provisions of the New Jersey Uniform Commercial code apply to this Agreement and
all transactions under it, including agreements and transactions relating to the
furnishing of services, the lease or rental of equipment or Material, and the
license of software.
ARTICLE XCV
Jurisdiction
SECTION 95.01. Supplier and Company agree that any action or legal
proceeding arising out of this Agreement shall be brought only in a court of
competent jurisdiction in the United States of America and Supplier and Company
expressly submit to, and accept the jurisdiction of, any such court in
connection with such action or proceeding and Supplier and Company further
consent to the enforcement of any judgment against either party arising
therefrom in any jurisdiction in which either party has or shall have any
assets.
ARTICLE XCVI
Headings
SECTION 96.01. The headings of the Articles and Sections in this Supply
Agreement are inserted for convenience only and are not intended to effect the
meaning or interpretation of this Agreement.
ARTICLE XCVII
Severability
SECTION 97.01. If any of the provisions of this Agreement shall be invalid
or unenforceable, such invalidity or unenforceability shall not invalidate or
render unenforceable the entire Agreement, but rather the entire Agreement shall
be construed as if not containing the particular invalid or unenforceable
provision or provisions, and the rights and obligations of Supplier and Company
shall be construed and enforced accordingly.
82
ARTICLE XCVIII
Entire Agreement
SECTION 98.01. Except as otherwise agreed to in writing by the parties,
this Agreement shall constitute the entire agreement between the parties with
respect to the subject matter of this Agreement and shall supersede all
contemporaneous oral agreements and all prior oral and/or written quotations,
communications, agreements and understandings of the parties with respect to the
subject matter of this Supply Agreement. This Agreement shall not be modified or
rescinded, except by a writing signed by the party against whom the other party
is seeking to enforce a modification or recision.
ARTICLE XCIX
Counterparts
SECTION 99.01. This Supply Agreement may be executed in two or more
counterparts, and by each party on the same or different counterparts, but all
of such counterparts shall together constitute one and the same instrument and
agreement of the parties hereto.
ARTICLE C
Lost Profits
SECTION 100.01. Neither Supplier nor Company shall bring an action, claim
or suit against the other for its own lost profits arising out of any obligation
contained in this Supply Agreement, whether in an action for or arising out of
breach of contract, or tort, or in any other cause of action, except as a
counterclaim in the event that the other Party brings an action, claim or suit
against it.
ARTICLE CI
******************* Cancelations
SECTION 101.01. ********************* may cancel any purchase order, in
whole or in part, at any time after sixty (60) days from the delivery date set
forth in the applicable order. In the event that *************** cancels any or
all of such purchase orders, Company may cancel any related purchase orders
placed under this Supply Agreement. The amount of any canceled purchase orders
shall be
83
credited against any other committed purchases of Supplier under this Supply
Agreement.
SECTION 101.02. In the event ************* exercises its rights under the
FSN Agreement to defer or cancel delivery of all or any portion of a purchase
order for failure to obtain required regulatory approvals, Company shall have
the corresponding right to defer or cancel delivery of all or any portion of
related purchase orders for Material upon notice to Supplier. Upon such notice,
Supplier will not ship any Material covered by such orders until Company is
authorized by ***************** and Company instructs Supplier to do so.
ARTICLE CII
Nonconformance
SECTION 102.01. In the event ********************* notifies Company that
any Software release set forth in Attachment D-1 to this Agreement has not been
delivered with the required features and/or in conformance with ***********
*********** requirements by the scheduled lab test date, the Beta Test Date, the
FSA Date, or the general availability date set forth in Attachment D-1
("Nonconformance"), Company shall promptly provide notice thereof to Supplier.
Supplier will attempt to remedy any Nonconformances within the applicable
Performance Fee Date set forth in Attachment D-1.
SECTION 102.02. Supplier and Company agree to jointly work all aspects of
development and deployment to deliver conforming Software releases to
*************** on a timely basis.
ARTICLE CIII
Disclosure of Defects
SECTION 103.01. Supplier acknowledges that, for each and every Event that
results in the disruption of ***** ********** network access and/or the services
provided by an ASE, or equivalent system, to customer of ************** for a
period of thirty (30) uninterrupted minutes per occurrence, Company is required
to notify *************** of the occurrence of an Event within twenty-four (24)
hours of Company's first knowledge of the same and, within forty-eight (48)
hours thereafter, providing a detailed written description of the following: (i)
activities which led up
84
to or preceded the Event, (ii) the cause or causes of, including any and all
known contributing factors to, the Event, (iii) any and all actions taken by
Company, its agents, and contractors, and by the owner or user of the products
which are subject to the Event, to correct it, (iv) the date the Event will be
resolved, and (v) any and all measures which can be reasonably taken to avoid
the occurrence of the Event in *********************** products. Company is
further obligated to continue to provide these written descriptions to
************* every forty-eight (48) hours until such time as the Event has been
successfully resolved or until Company and *************** agree on their
discontinuance. For purposes of this Section, "products" means hardware and
software sold by Company and Supplier under the FSN Agreement and this Supply
Agreement, respectively, and other items that are manufactured and/or sold by
Company or Supplier which are the same as, or functionally or operationally
similar to, such hardware and software.
SECTION 103.02. Supplier agrees to cooperate with Company and to assist
Company in providing notifications and other information required of Company
under Section 103.01 with respect to the Material and other items that are
manufactured and/or sold by Supplier which are the same as, or functionally or
operationally similar to, such Material.
IN WITNESS WHEREOF, Company and Supplier have executed this Supply
Agreement by their authorized representatives.
Dated: February 4, 1998 LUCENT TECHNOLOGIES INC.,
by
-------------------------
BROADBAND TECHNOLOGIES, INC.,
by
-------------------------
Attachment A
MATERIAL/PERFORMANCE SPECIFICATIONS
All MATERIAL performance specifications and MATERIAL delivery milestones shall
be established through the Specification Control Process administered by Company
and Supplier. This Specification Control Process shall be mutually agreed to and
be implemented within thirty (30) calendar days of the effective date of this
Agreement.
ATTACHMENT B
SUPPLY AGREEMENT MATERIAL
==================================================================================================================================
LUCENT BBT PRODUCT CUSTOMER CONTRACT UNIT
COMCODE NUMBER SPECIFIC PRODUCT DESCRIPTION UNIT OF MEASURE PRICE
==================================================================================================================================
FLX 2500 SYSTEM SOFTWARE & LICENSES
----------------------------------------------------------------------------------------------------------------------------------
Release 1.0 to 2.1 for *************** only
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
Release 1.0 to 1.2
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per FLX shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
FLX 2500 SYSTEM TOOLS & LICENSES
----------------------------------------------------------------------------------------------------------------------------------
Release 1.2
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per 8 FLX Shelves ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per each Incremental FLX ********
Shelf beyond first 8 shelves
----------------------------------------------------------------------------------------------------------------------------------
FLX 2500 VAM EQUIPMENT SOFTWARE & LICENSES
----------------------------------------------------------------------------------------------------------------------------------
Release 4.0 to 4.2.5
==================================================================================================================================
==================================================================================================================================
LUCENT BBT PRODUCT CUSTOMER CONTRACT UNIT
COMCODE NUMBER SPECIFIC PRODUCT DESCRIPTION UNIT OF MEASURE PRICE
==================================================================================================================================
*********** *********** ************************ N/A ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per VAM Hardware ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** Xxxxxxxxxx ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per VAM Hardware ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ per VAM Hardware ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ per FLX Shelf ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per 100 Channels ********
----------------------------------------------------------------------------------------------------------------------------------
FLX 2500 VAM TOOLS & LICENSES
----------------------------------------------------------------------------------------------------------------------------------
Release 1.0
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per VAM Hardware ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per VAM Hardware ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per VAM Hardware ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ per VAM Hardware ********
----------------------------------------------------------------------------------------------------------------------------------
FLX SHELF MECHANICALS
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
FLX SHELF PLUG-INS
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
==================================================================================================================================
==================================================================================================================================
LUCENT BBT PRODUCT CUSTOMER CONTRACT UNIT
COMCODE NUMBER SPECIFIC PRODUCT DESCRIPTION UNIT OF MEASURE PRICE
==================================================================================================================================
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
FLX NODE
----------------------------------------------------------------------------------------------------------------------------------
*********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** BA ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
POWER EQUIPMENT
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** Xxxxxxxxxx ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** Xxxxxxxxxx ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** Xxxxxxxxxx ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** Xxxxxxxxxx ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** Xxxxxxxxxx ************************ each ********
==================================================================================================================================
==================================================================================================================================
LUCENT BBT PRODUCT CUSTOMER CONTRACT UNIT
COMCODE NUMBER SPECIFIC PRODUCT DESCRIPTION UNIT OF MEASURE PRICE
==================================================================================================================================
CROSS CONNECT EQUIPMENT
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** RCN ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** RCN ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** RCN ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** RCN ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
CUSTOMER PREMISE EQUIPMENT
----------------------------------------------------------------------------------------------------------------------------------
Pre-Packaged Assemblies
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
Individually Orderable Spares
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
----------------------------------------------------------------------------------------------------------------------------------
*********** *********** ************************ each ********
==================================================================================================================================
* Base items not subject to 10% commission
** Customer Premise Equipment has a 24 month warranty from FOB Point
+ Company and Supplier shall negotiate discounts within 60 days of the
effective date of the Agreement
++ This hardware is beyond Release 1.2
ATTACHMENT B
Other Materials
Notwithstanding anything in this Agreement or its Attachments to the contrary,
any existing Supplier products, or products previously promised by Supplier, or
any of its employees or agents to a Customer not listed herein that is required
by Company to fulfill its Customer Obligations shall be provided by Supplier at
a price equal to Supplier's **** ********
Attachment C
REPAIR AND FIELD SERVICE TECHNICAL SUPPORT PRICES
Out-of-Warranty or customer damaged MATERIAL repair charges shall be a minimum
of ***** of the current contract price, or **********, whichever is greater.
MATERIAL returned to SUPPLIER for repair with No Trouble Found shall incur a
********* handling charge.
Telephone Technical Support: No charge during WARRANTY period for MATERIAL
Beyond the WARRANTY period, no charge for calls received during SUPPLIER'S
normal work hours*. Calls received during non-working hours will be billed at a
rate of ********* per hour ** with
************************.
One-site Engineering at ********* per hour** per person Field Service Technical
Support, Monday through Friday, with ***************** per person ***. The rate
for weekends and holidays is ********* per hour.
* Supplier's normal work hours are 8:00 AM to 6:00 PM Eastern Standard
Time, Monday through Friday, except for holidays.
** Hourly rates shown are good through 12/31/99.
*** Billable time is calculated portal to portal. Any travel and lodging
expenses will be additional, as required.
*************************
EXHIBIT D-1
DELIVERY PERFORMANCE DAILY PERFORMANCE
DATE FEE DATE FEE FEE CAP
---- -------- --- -------
PRERELEASE LAB: ****************** ***** ***** *****
********************************************************
RELEASE 1.0 LAB: ************** ************** ************** **************
FSA: ************** ************** ************** **************
********************************************************
RELEASE 1.0.1 LAB: ************** ************** ************** **************
FSA: ************** ************** ************** **************
GA: ************** ************** ************** **************
********************************************************
ONU-32 Housing FSA: ************** ************** ************** **************
FLX Node-32 FSA: ************** ************** ************** **************
RELEASE 1.1 Pre-rels LAB: ************** ************** ************** **************
LAB: ************** ************** ************** **************
BETA: ************** ************** ************** **************
DELIVERY PERFORMANCE DAILY PERFORMANCE
DATE FEE DATE FEE FEE CAP
---- -------- --- -------
FSA: ************** ************** ************** **************
GA: ************** ************** ************** **************
********************************************************
RELEASE 1.2 FSA: **************
GA: **************
********************************************************
RELEASE 1.2.1* LAB: ************** ************** ************** **************
FSA: ************** ************** ************** **************
GA: ************** ************** ************** **************
********************************************************
RELEASE 2.0 LAB: ************** ************** ************** **************
FSA: ************** ************** ************** **************
GA: ************** ************** ************** **************
********************************************************
RELEASE 2.1 LAB: ************** ************** ************** **************
FSA: ************** ************** ************** **************
GA: ************** ************** ************** **************
********************************************************
******
******************************************************************
****************************
***********************************************************************
********************************************************
***********************************************
***********************************************************************
***********************************************************************
*******************
****************************************************************
*********************************************************
*****************************************************************
***********************************
***************************************
**************************************************************
***************************************
***************************************
***************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
SBC, RCN, Telus
EXHIBIT D-2
DELIVERY
DATE
----
PRERELEASE LAB: *********************
***************************************************
RELEASE 1.0 LAB: *********************
FSA: *********************
***************************************************
RELEASE 1.0.1 LAB: *********************
FSA: *********************
GA: *********************
***************************************************
ONU-32 Housing FSA: *********************
FLX Node-32 FSA: *********************
RELEASE 1.1 Pre-rels LAB: *********************
LAB: *********************
BETA: *********************
DELIVERY
DATE
----
FSA: *********************
GA: *********************
***************************************************
RELEASE 1.2 FSA: *********************
GA: *********************
***************************************************
******
********************************************************************************
****************************
***********************************************************************
********************************************************
***********************************************
***********************************************************************
***********************************************************************
*******************
****************************************************************
*********************************************************
***********************************************************************
***********************************
*****************************************************
**************************************************************
*****************************************************
*****************************************************
*************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
**************************************************************
Attachment E
ENGINEERING CHANGE CONTROL PROCEDURES
Supplier agrees to perform and administer all "Product Changes" in accordance
with Xxxx Communications Research document GR 209 CORE, Issue 2, January 1996,
titled "Generic Requirements for Product Change Notices", which is incorporated
herein by reference.
Supplier may make changes to MATERIAL, modify drawings, or make changes to
manufacturing specifications, provided the changes, modifications, or
substitutions DO NOT have an impact on the performance, reliability, form, fit,
or function of the MATERIAL without prior notification to Company. Supplier
shall maintain written records of all such changes, and make these records
available for Company's review upon request.
For such changes or modifications which DO have an impact on performance,
reliability, form, fit, or function, Supplier shall identify each such change or
modification in accordance with the classifications contained in the above Xxxx
Communications Research document via a Product Change Notification (PCN) form.
The Company shall immediately acknowledge receipt of the PCN to the
address/contact as stated on the PCN form and shall have thirty (30) calendar
days to advise Supplier if the proposed change or modification is unacceptable.
If Company notifies Supplier as required herein, that the proposed change or
modification is unacceptable, Supplier shall not implement such change or
modification. Company may reject any MATERIAL offered by Supplier which has been
changed or modified in a manner unacceptable to Company.
If Company has not notified Supplier that the change or modification is
unacceptable within thirty (30) calendar days following issuance of the Change
Notification, Supplier shall implement the change or modification as described
in the Change Notification.
If during the review of a proposed Product Change Notification, which has a
classification of either A or AC, issued by Supplier during the Warranty period
of the affected MATERIAL, the Company determines that implementation of the
PRODUCT CHANGE will cause the Company to incur "unreasonable expenses" such as,
but not limited to, expenses resulting from escorting Supplier's personnel to
numerous Company locations containing affected MATERIFAL or repeated product
changes to the same item of MATERIAL within a one (1) year time period, the
Company shall so notify Supplier, in writing, prior to the implementation of
such PRODUCT CHANGE. Upon such notification, the Company and Supplier shall
jointly determine the implementation procedure which will utilize the Supplier's
and/or Company's personnel in the most cost effective manner.
If Supplier and the Company conclude the agreed to implementation procedure will
probably cause the Company to incur "unreasonable expenses", the Company and
Supplier shall jointly determine the likely extent of such expenses and agree,
in writing, to a "not to exceed" estimate for such expenses. In no event shall
such estimate exceed the Company's purchase price for the MATERIAL to be
changed. The Company shall track and record all such expenses associated with
the PRODUCT CHANGE. Upon completion of its efforts, the Company shall submit to
Supplier, for reimbursement by Supplier, an invoice of the Company's
"unreasonable expenses" within forty-five (45) calendar days after the Company's
receipt of such invoice.
Issuing a Class A or AC product Change Notification shall not constitute an
agreement to provide such a change, but shall be construed as a recommendation
by the Supplier that the change is absolutely necessary.
Lucent Technologies 09-22-97
Warranty Eligibility System
Warranty Eligibility System (XXX)
Transaction
The Warranty Eligibility System (XXX) tracks a serialized product from
manufacturing to the customer and provides up-to-date information about the
product's warranty status. In order to accomplish this, XXX receives data from
entities whose functions affect an item's warrantability.
At the end of the manufacturing, shipping, or repair processes, information
about an item will be sent to XXX for inclusion on the Warranty Database. This
file can be sent to XXX using
1) UNIX file transfer at,
/usr/spool/uucppublic/receive/xxx/origsystem/WESXXNNNN
where origsystem is the UNIX machine originating the file XX is a
location code entry in the location table and NNNN is the sequence
number on the header record.
2) or by placing the formatted file on a floppy disk and mailing the disk
directly to the XXX group at:
Lucent Technologies
Westwood of Lisle
Attn.: X. Xxxxxxxxxx
0000 Xxxxxxxxxxx Xx.
Xxxxx, XX 00000
Batch files received for processing by XXX must be processed by a Header Record
as attached. Following the Data Records must be a Trailer Record also attached.
The Header and Trailer Records are interrogated by XXX and messages are returned
to the sending location indicating the status of each file transmitted to XXX.
These files should be sent at least once a week, depending on volume, in order
to keep the database current. That data needs to be formatted as shown on the
following page.
HEADER RECORD
LUCENT TECHNOLOGIES, INC. - PROPRIETARY
Use Purusant to Company Instruction
Lucent Technologies 09-22-97
Warranty Eligibility System
COLUMN FIELD SIZE FIELD CONTENT COMMENTS
------ ---------- ------------- --------
1-5 (05) Transaction Code &&HDR
6 (01) Blank
7-14 (08) Source of Input Job Name of Feeder
15 (01) Blank
16-19 (04) Transmission Sequence Zero Filled
Number Right Justified
20 (01) Blank
21-26 (06) Time HHMMSS
27 (01) Blank
28-33 (06) Date MMDDYY
34-123 (90) Blank
124-125 (02) Originating Location Location that
Originates this
Transaction
ALL ALPHA REPRESENTATION SHOULD BE CAPITALIZED
TRAILER RECORD
LUCENT TECHNOLOGIES, INC. - PROPRIETARY
Use Purusuant to Company Instruction
Lucent Technologies 09-22-97
Warranty Eligibility System
COLUMN FIELD SIZE FIELD CONTENT COMMENTS
------ ---------- ------------- --------
1-5 (05) Transaction Code &&TLR
6 (01) Blank
7-12 (06) Record Count
13-125 (113) Blank
ALL ALPHA REPRESENTATION SHOULD BE CAPITALIZED
ADD TRANSACTION FORMAT
COLUMN FIELD SIZE FIELD CONTENT COMMENTS
------ ---------- ------------- --------
LUCENT TECHNOLOGIES, INC. - PROPRIETARY
Use Purusuant to Company Instruction
Lucent Technologies 09-22-97
Warranty Eligibility System
1) 1 (01) Transaction Code A
2) 2-13 (12) Item Serial Number
3) 14-23 (10) Order Number AT&T Order
Number
24-38 (15) Blank
4) 39-44 (06) Manufacture Ship Date MMDDYY
5) 45-56 (12) Blank
6) 57-61 (05) Product Line Left Justified
7) 62-86 (25) Product Identification
Number
87-123 (37) Blank
8) 124-125 (02) Originating Location Location that
Originated
Transaction
ALL ALPHA REPRESENTATION SHOULD BE CAPITALIZED
1) One digit code representing the transaction to be performed by XXX, i.e. A
= Add, R = Repair, etc.
2) The twleve (12) digit number assigned to each unique product manufactured.
Includes a two or three digit manufacturing number (vendor code) as
described in KS-23490.
Example - 12 Digit Serial Number with a two (2) digit manufacturing id
number 9T
2 Characters last two digits of the year
2 Characters manufacturing identification number (vendor code)
2 Characters month (01 to 12) or fiscal week (21 to 72)
6 Characters sequential serial number
i.e. First Product Manufactured in March of 1997 = 979T03000001
Example - 12 Digit Serial Number with a three (3) digit manufacturing
id number of A0J
2 Characters last two digits of the year
2 Characters manufacturing identification number (vendor code)
2 Characters month (01 to 12) or fiscal week (21 to 72)
1 Character last digit of the manufacturing id number (vendor
code)
5 Characters sequential serial number
ie. First Product Manufactured in March of 1997 = 97A003J00001.
3) The identifier of an order placed by a customer.
4) The date an item was shipped from manufacturing. The format is MMDDYY.
LUCENT TECHNOLOGIES, INC. - PROPRIETARY
Use Purusuant to Company Instruction
Lucent Technologies 09-22-97
Warranty Eligibility System
5) The item serial number of the equipment that the current item is embedded in.
6) A five character identifier used to distinguish product for determining
warranty, which is assigned by the product manager in agreement with XXX.
7) The product identification number assigned by the product manager which
consists of the comcode. Left justified.
8) Location which originates the transaction.
SES TRANSACTION FORMAT
COLUMN FIELD SIZE FIELD CONTENT COMMENTS
------ ---------- ------------- --------
LUCENT TECHNOLOGIES, INC. - PROPRIETARY
Use Purusuant to Company Instruction
Lucent Technologies 09-22-97
Warranty Eligibility System
1) 1 (01) Transaction Code C
2) 2-13 (12) Item Serial Number
3) 14-23 (10) Order Number SES Order
Number
24-38 (15) Blank
4) 39-44 (06) Ship Date MMDDYY
45 (01) Blank
5) 46-51 (06) RMA Number (B-Spec)
6) 52-55 (04) Item Number (Main Item) Right Justified
w/leading zeros
56 (01) Blank
7) 57-61 (05) Product Line Left Justified
8) 62-86 (25) Product Identification
Number
87-123 (37) Blank
9) 124-125 (02) Originating Location Location that
Originated this
Transaction
ALL ALPHA REPRESENTATION SHOULD BE CAPITALIZED
SES SHIP TRANSACTION FORMAT
cont'd
1) One digit code representing the transaction to be performed by XXX, i.e. C =
SES Ship, A = Add, etc.
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Warranty Eligibility System
2) The number assigned to each unique product produced by factory. Includes a
two digit manufacturing identification number (assigned by the product manager
in agreement with WES) used in positions 3 and 4 of the 12 character serial
number as described in KS-23490.
3) The identifier of an order placed by a customer.
4) The date an item was shipped. The format is MMDDYY.
5) The returned material authorization item number.
6) Item number on the returned material authorization.
7) A five character identifier used to distinguish product for determining
warranty, which is assigned by the product manager in agreement with WES.
8) The product identification number assigned by the product manager which
consists of the comcode. Left justified.
9) Location which originates the transaction.
RGM TRANSACTION FORMAT
COLUMN FIELD SIZE FIELD CONTENT COMMENTS
------ ---------- ------------- --------
1) 1 (01) Transaction Code G
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2) 2-13 (12) Item Serial Number
3) 14-23 (10) Order Number AT&T
Order Number
24-38 (15) Blank
4) 39-44 (06) Returned Date MMDDYY
45-123 (79) Blank
5) 124-125 (02) Originating Location Location that
Originated
Transaction
ALL ALPHA REPRESENTATION SHOULD BE CAPITALIZED
1) One digit code representing the transaction to be performed by WES, i.e. A =
Add, G = RGM, etc.
2) The number assigned to each unique product produced by factory. Includes a
two digit manufacturing identification number (assigned by the product manager
in agreement with WES) used in positions 3 and 4 of the 12 character serial
number as described in KS-23490.
3) The identifier of an order placed by a customer.
4) The date an item was returned accompanied by a returned good memorandum or an
SES exchange.
5) Location which originates the transaction.
MMC SHIP TRANSACTION FORMAT
COLUMN FIELD SIZE FIELD CONTENT COMMENTS
------ ---------- ------------- --------
1) 1 (01) Transaction Code M
2) 2-13 (12) Item Serial Number
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Warranty Eligibility System
3) 14-23 (10) Order Number Number
24-38 (15) Blank
4) 39-44 (06) MMC Ship Date MMDDYY
45-61 (17) Blank
5) 62-86 (25) Product Identification Left Justified
Number
6) 87-91 (05) Product Line
92-123 (32) Blank
7) 124-125 (02) Originating Location Location that
Originated
Transaction
ALL ALPHA REPRESENTATION SHOULD BE CAPITALIZED
1) One digit code representing the transaction to be performed by WES, i.e. A =
Add, R = Repair, M = MMC Ship, etc.
2) The number assigned to each unique product produced by factory. Includes a
two digit manufacturing identification number (assigned by the product manager
in agreement with WES) used in positions 3 and 4 of the 12 character serial
number as described in KS-23490.
3) The identifier of an order placed by a customer.
4) The date an item was shipped from the MDC or Service center.
5) The product identification number assigned by product manager which consists
of the comcode. Left justified.
6) Up to five character code used to distinguish product for determining
warranty, which is assigned by the product manager in agreement with XXX.
7) Location which originates the transaction.
REPAIR TRANSACTION FORMAT
COLUMN FIELD SIZE FIELD CONTENT COMMENTS
------ ---------- ------------- --------
1) 1 (01) Transaction Code R
2) 2-13 (12) Item Serial Number
3) 14-23 (10) Repair Order Number
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Warranty Eligibility System
4) 24-38 (15) Customer Repair Order
Number
5) 39-44 (06) Repair Date MMDDYY
45-56 (12) Cust. Order Number
(overflow)
6) 57-61 (05) Product Line Left Justified
7) 62-86 (25) Product Identification
Number
8) 87-101 (15) Circuit Pack Code
or Microcode
9) 102-113 (12) Circuit Pack Series
or Issue of Microcode
114-116 (03) Blank
10) 117 (01) Repair Code
11) 118-119 (02) Manufacturing Location *
12) 120-123 (04) Manufacturing Date
13) 124-125 (02) Originating Location
ALL ALPHA REPRESENTATION SHOULD BE CAPITALIZED
* Location of manufacture required for 00LL00SSSSSS Item Serial Numbers.
LL is the location code for the site affixing the label
SSSSSS is the next serial number to be assigned by the location.
This format is only valid when the item was not previously bar-coded.
REPAIR TRANSACTION FORMAT
cont'd
1) One digit code representing the transaction to be performed by WES, i.e. A =
Add, R = Repair, etc.
2) The number assigned to each unique product produced by factory. Includes a
two digit manufacturing identification number (assigned by the product manager
in agreement with WES) used in positions 3 and 4 of the 12 character serial
number as described in KS-23490.
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Warranty Eligibility System
3) This is the order number the item was repair under, not the one it was
initially order under.
4) The customer's identifier for their repair order.
5) Date the item was repaired.
6) A five character used to distinguish product for determining warranty, which
is assigned by the product manager in agreement with XXX.
7) The product identification number assigned by product manager which consists
of the comcode. Left justified.
8) Apparatus code assigned for identification of product at cpcode level.
9) Production level of the cpcode.
10) The code that indicates what type of action was taken by repair organization
to satisfy the customer's repair order. The possible values are:
A = not repairable
K = no trouble found
R = trouble found (repairable)
11) Two digit code indicating place of manufacture.
12) Date of manufacture. MMYY
13) Location which originates the transaction.
SUBSTITUTE TRANSACTION FORMAT
COLUMN FIELD SIZE FIELD CONTENT COMMENTS
------ ---------- ------------- --------
1) 1 (01) Transaction Code S
2) 2-13 (12) Replaced Item Serial No.
3) 14-23 (10) Repair Order No.
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Warranty Eligibility System
4) 24-38 (15) Customer Order No.
5) 39-44 (06) Substitute Date MMDDYY
6) 45-56 (12) Replacing Item Serial No.
7) 57-61 (05) Product Line Product Line
Left Justified
8) 62-86 (25) Product Identification
87-98 (12) Cust. Order No. (overflow)
99-123 (25) Blank
9) 124-125 (02) Originating Location Location that
Originated
Transaction
ALL ALPHA REPRESENTATION SHOULD BE CAPITALIZED
SUBSTITUTE TRANSACTION FORMAT
cont'd
1) One digit code representing the transaction to be performed by WES, i.e. A =
Add, R = Repair, S = Substitute, etc.
2) Serial number of product returned by customer or installer. Format same as
item serial number.
3) Required if item is to be added to database.
4) The customer's identifier for their repair order.
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Warranty Eligibility System
5) Data substitution was made.
6) Item serial number of product the repair organization returned to a customer,
product withdrawn from an installation pool and added to an order, item sent in
by customer on a spares exchange. Format same as item serial number.
7) A five character used to distinguish product for determining warranty, which
is assigned by the product manager in agreement with WES.
8) Replacing serial number's product identification number assigned by product
manager which consists of the comcode. Left justified.
9) Location which originates the transaction.
LUCENT TECHNOLOGIES, INC. - PROPRIETARY
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EXHIBIT G
Escrow Agreement
This Escrow Agreement is entered into and effective as of February _____,
1998 ("Effective Date") by and among BroadBand Technologies, Inc. ("BBT") having
its principal place of business at 0000 Xxxxxxx Xxxxx Xxxxx, Xxxxxx, Xxxxx
Xxxxxxxx 00000-0000, and Lucent Technologies Inc. ("Lucent"), having its
principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxx Xxxxxx
00000, and Fort Xxxx Escrow Services, Inc. ("Escrow Agent"), having its
principal place of business at 0000-X Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
00000-0000.
WHEREAS, BBT has granted a license to Lucent to use certain computer
software and manufacturing information pursuant to the terms and conditions of
that certain SDBAS Supply Agreement between BBT and Lucent, dated as of February
4, 1998 (the "Supply Agreement"); and
WHEREAS, the uninterrupted availability of the computer software and
manufacturing information is critical to Lucent in the conduct of its business;
and
WHEREAS, BBT has agreed to deposit in escrow a copy of the source code form
of all computer programs and a copy of the manufacturing information used in the
design and manufacture of Material and Parts (as such terms are defined in the
Supply Agreement), including the Technical Information (as such term is defined
in the Supply Agreement), all relevant commentary, explanations and other
documentation (collectively the "Software and Manufacturing Information"), as
well as any corrections, enhancements, and periodic updates to such Software and
Manufacturing Information, to be held by Escrow Agent in accordance with the
terms and conditions of this Escrow Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
Section 1.0 Deposit.
(a) This agreement replaces and supercedes the escrow agreement between
BBT, Lucent and Escrow Agent dated July 31, 1996 (the "Prior Agreement"), which
is considered canceled. Escrow Agent is instructed to return to BBT all
information deposited by BBT under the Prior Agreement. BBT shall immediately
deposit the returned materials with Escrow Agent pursuant to this Escrow
Agreement.
(b) To the extent not already deposited pursuant to Section 1.0(a), BBT
shall deposit with Escrow Agent a copy of the Software and Manufacturing
Information within thirty (30) days after the Effective Date. BBT also agrees to
deposit with Escrow Agent, at such times as they are made, a copy of all
revisions to the Software and Manufacturing Information encompassing all
corrections, modifications, updates or enhancements made to the Software and
Manufacturing Information by or on behalf of BBT as soon as
practicable after such corrections, modifications, updates or enhancements have
been developed and accepted by the customer. Simultaneous with the delivery to
Escrow Agent of the Software and Manufacturing Information or any revisions
thereof, BBT shall deliver to Escrow Agent and to Lucent a written statement
specifically identifying all items deposited and stating that Software and
Manufacturing Information or revisions, as the case may be, so deposited are
completed and accurate. Promptly after any such revision is deposited with
Escrow Agent, both BBT and the Escrow Agent shall give written notice thereof to
Lucent.
(c) For each Material and its corresponding Parts, BBT shall create a
separate complete package of Software and Manufacturing Information used in the
design and manufacture of such Material and corresponding Parts and deposit all
such packages with the Escrow Agent. Each package shall be clearly labeled to
indicate the Material and Parts to which the package relates. Similarly, BBT
shall package and label all corrections, enhancements and periodic updates
according to the Material and Parts to which such corrections, enhancements and
periodic updates relate.
Section 2.0 Term.
Except as provided in this section, this Escrow Agreement shall remain in
effect from the Effective Date through the later of: (a) the expiration or
earlier termination of all continuing sale and/or support obligations of BBT
pursuant to the SDBAS Supply Agreement entered into by BBT and Lucent as of
February 4, 1998, or (b) the expiration or earlier termination of that certain
Procurement Agreement dated as of July 1, 1996, between Xxxx Atlantic Corp. and
BBT ("the Companion Agreement"). Termination hereof is automatic upon delivery
of all (but not less than all) of the deposited Software and Manufacturing
Information to Lucent in accordance with the provisions hereof.
Section 3.0 Default.
A default by BBT shall be deemed to have occurred under this Escrow
Agreement upon the occurrence of any of the following:
(a) if BBT has availed itself of, or been subjected to by any third party,
a proceeding in bankruptcy in which BBT is the named debtor, an assignment by
BBT for the benefit of its creditors, the appointment of a receiver for BBT, or
any other proceeding involving insolvency of the protection of, or from,
creditors, provided, however, if the action is initiated by a party other than
BBT, BBT shall have sixty (60) days to terminate the proceedings before a
default shall be deemed to have occurred; or
(b) if BBT has ceased fro at least thirty (30) days its on-going business
operations or sale, licensing, maintenance or other support of the Materials or
Parts; or
(c) if BBT materially fails to supply Materials or Parts under the Supply
Agreement or the Companion Agreement.
Section 4.0 Notice of Default.
(a) Lucent shall give written notice to Escrow Agent and BBT of the
occurrence of a default hereunder. If the event of default is one described in
paragraph (b) or (c) of Section 3.0 hereof, Lucent shall specify in the written
notice to Escrow Agent and BBT the specific Materials which BBT has ceased to
sell, license, maintain or support (in the case of paragraph (b)) or which BBT
fails materially to supply (in the case of paragraph (c)).
(b) Unless within ten (10) business days BBT files with the Escrow Agent
its affidavit executed by a responsible executive officer stating that the
default has been cured or has not occurred, then the Escrow Agent shall upon the
eleventh (11th) business day deliver to Lucent in accordance with Lucent's
instructions: (1) the entire Software and Manufacturing Information then being
held by the Escrow Agent if the event of default is one described in paragraph
(a), or if BBT has ceased for at least thirty (30) days its ongoing business
operations under paragraph (b); or (2) the Software and Manufacturing
Information then being held by the Escrow Agent for Materials identified in
Lucent's notice under Section 4.0(a) to Escrow Agent and BBT if the default is
one described in paragraph (b) for other than a ceasing of business or one
described in paragraph (c) of Section 3.0.
(c) Nothing in this Agreement shall have any effect on the rights of Lucent
to use any Software and Manufacturing Information, which right is defined in
other agreement(s) between BBT and Lucent.
Section 5.0 Compensation.
As compensation for the services to be performed by Escrow Agent hereunder,
Lucent shall pay to Escrow Agent reasonable fees to be agreed upon before
execution of this document by Lucent and escrow agent.
Section 6.0 Liability.
Escrow Agent shall not, by reason of its execution of its Agreement, assume
any responsibility or liability for any transaction between BBT and Lucent,
other than the performance of its obligations, as Escrow Agent, with respect to
the Software and Manufacturing Information held by it in accordance with this
Agreement. Escrow Agent will not be liable for special, indirect, incidental or
consequential damages hereunder.
Section 7.0 Tests.
Upon written notice to BBT and Escrow Agent, Lucent shall have the right to
conduct tests of the Software and Manufacturing Information held in escrow, no
more than quarterly, under the supervision of BBT, to confirm that it is the
current Software and Manufacturing Information for the Materials and Parts
specified in the Supply Agreement and the Companion Agreement.
Section 8.0 Confidentiality.
Except as provided in this Agreement, Escrow Agent agrees that it shall not
divulge or disclose or otherwise make available to any third person whatsoever,
or make any use whatsoever, of the Software and Manufacturing Information,
without the express prior written consent of BBT.
Section 9.0 Address.
All notices or other communications required or contemplated herein shall
be in writing, sent by certified mail, return receipt requested, addressed to
another party at the address indicated below or as same may be changed from time
to time by notice similarly given:
If to BBT: BroadBand Technologies, Inc.
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxx
If to Lucent: Lucent Technologies Inc.
Xxxx 0X-000
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 000000
Attention: Xxxxx Xxxxx
If to Escrow Agent: Fort Xxxx Escrow Services, Inc.
0000-X Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000-0000
Attention: Contractor
Administrator
Section 10.0 Indemnity.
Lucent and BBT shall, jointly and severally, indemnify and hold harmless
Escrow Agent and each of its directors, officers, agents, employees and
stockholders ("Escrow Agent Indemnities") absolutely and forever, from and
against any and all claims, actions, damages, suits, liabilities, obligations,
costs, fees, charges, and any other expenses whatsoever, including reasonable
attorneys' fees and costs, that may be asserted against any Escrow Agent
Indemnitee in connection with this Agreement or the performance of Escrow Agent
or any Escrow Agent Indemnitee hereunder.
Section 11.0 Disputes and Interpleader.
In the event of any dispute between any of Escrow Agent, Lucent and/or BBT
relating to delivery of the Software and Manufacturing Information by Escrow
Agent or to any other matter arising out of this Agreement, Escrow Agent may
submit the matter to any court of competent jurisdiction in an interpleader or
similar action. Any and all costs incurred by Escrow Agent in connection
therewith, including reasonable attorneys' fees and costs, shall be borne 50% by
each of Lucent and BBT. Escrow Agent shall perform any acts ordered by any court
of competent jurisdiction, without any liability or obligation to any party
hereunder by reason of such act.
Section 12.0 Bankruptcy.
BBT and Lucent acknowledge that this Agreement is an "agreement
supplementary to" the Supply Agreement as provided in Section 365(n) of Xxxxx
00, Xxxxxx Xxxxxx Code (the "Bankruptcy Code"). BBT acknowledges that if BBT as
a debtor in possession or a trustee in Bankruptcy in a case under the Bankruptcy
Code rejects the Supply Agreement or this Agreement, Lucent may elect to retain
its rights under the Supply Agreement and this Agreement as provided in Section
365(n) of the Bankruptcy Code. Upon written request of Lucent to BBT or the
Bankruptcy Trustee, BBT or such Bankruptcy Trustee shall not interfere with the
rights of Lucent as provided in the Supply Agreement and this Agreement,
including the right to obtain the Software and Manufacturing Information from
Escrow Agent.
Section 13.0 Counterparts; Governing Law.
This Agreement may be executed in counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same Agreement. This Agreement shall be construed
and enforced in accordance with the laws of the State of New York.
Section 14.0 No Waiver.
No failure on the part of any party hereto to exercise, and no delay in
exercising any right, power or single or partial exercise of any right, power or
remedy by any party will preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. No express waiver or assent by any
party hereto to any breach or default in any term or condition of this Agreement
shall constitute a waiver of or an assent to any succeeding breach of or default
in the same or any other term or condition hereof.
Section 15.0 Assignment.
Neither this Escrow Agreement, nor any rights, liabilities or obligations
hereunder may be assigned by any party without the prior written consent of
Lucent and BBT.
IN WITNESS WHEREOF, Lucent, BBT and Escrow Agent have executed this Escrow
Agreement by their authorized representatives.
Dated: February ___, 1998
LUCENT TECHNOLOGIES INC.,
by
------------------------------------
BROADBAND TECHNOLOGIES, INC.,
by
------------------------------------
FORT XXXX ESCROW SERVICES, INC.
by
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