SUPPLY AGREEMENT
BY AND BETWEEN
WINSTAR COMMUNICATIONS, INC.
AND
LUCENT TECHNOLOGIES INC.
Effective as of October 21, 1998
TABLE OF CONTENTS
DEFINITIONS
1.1. Certain Definitions..............................................1
1.2. Other Terms......................................................6
SCOPE AND STRUCTURE
2.1. General..........................................................6
2.2. Other Entities...................................................6
2.3. Strategic Relationship...........................................7
2.4. Existing Agreements..............................................9
2.5. International Aspects............................................9
TERM
3.1. Initial Term and Extension......................................10
3.2. Interim Extension...............................................10
PURCHASING AND ORDERING
4.1. Purchase Orders.................................................10
4.2. Administrative Changes..........................................12
4.3. Timing of Delivery..............................................12
4.4. Cancellation and Rescheduling of Purchase Orders................13
4.5. Termination of Purchase Orders..................................15
SHIPPING AND DELIVERY
5.1. Incorrect Delivery..............................................15
5.2. Purchase Order Tracking.........................................15
5.3. Packing.........................................................16
5.4. Labeling........................................................16
5.5. Calibration and Testing.........................................16
5.6. Shipping........................................................16
5.7. Title and Risk of Loss..........................................17
DELIVERY OF SERVICES
6.1. Transition/Ramp-up of Lucent Service Capabilities...............17
6.2. Use of Third Parties............................................17
6.3. Key Lucent Positions............................................18
6.4. Required Consents...............................................19
6.5. Implementation Plans, Milestones and Milestone Dates............19
ACCEPTANCE TESTING AND FINAL ACCEPTANCE
7.1. Acceptance Testing and Cure.....................................19
7.2. Acceptance......................................................19
PERFORMANCE STANDARDS
8.1. General.........................................................20
8.2. Failure to Perform..............................................20
8.3. Periodic Reviews................................................20
8.4. Measurement and Monitoring Tools................................21
SOFTWARE LICENSES AND PROPRIETARY RIGHTS
9.1. Licenses........................................................21
9.2. Proprietary Rights..............................................22
9.3. Source Code Availability........................................23
WINSTAR RESPONSIBILITIES
10.1. Facilities and Resources........................................24
10.2. Savings Clause..................................................24
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CHARGES
11.1. General.........................................................24
11.2. Taxes...........................................................25
11.3. Financing.......................................................26
11.4. Incidental Expenses.............................................27
INVOICING AND PAYMENT
12.1. Invoicing.......................................................28
12.2. Payment Due.....................................................29
12.3. Accountability..................................................29
12.4. Proration.......................................................29
12.5. Set Off.........................................................29
12.6. Disputed Charges................................................29
12.7. Encumbrances....................................................29
CONFIDENTIALITY
13.1. Confidential Information........................................30
13.2. Obligations.....................................................30
13.3. Exclusions......................................................30
13.4. No Implied Rights...............................................31
REPRESENTATIONS, WARRANTIES AND COVENANTS
14.1. Pass-Through Warranties.........................................31
14.2. Non-Infringement................................................32
14.3. Ownership or Use................................................32
14.4. Authorization...................................................32
14.5. Inducements.....................................................32
14.6. Work Standards..................................................32
14.7. Product Warranties..............................................33
14.8. Discontinued Lucent Products....................................35
14.9. Compliance......................................................35
14.10. Documentation.................................................35
14.11. Viruses.......................................................35
14.12. Disabling Code................................................35
14.13. Integration Test..............................................36
14.14. Year 2000.....................................................36
14.15. Disclaimer....................................................37
TERMINATION
15.1. Termination for Cause...........................................37
15.2. Termination by Lucent...........................................37
15.3. Termination Option for Lucent's Failure to Provide Financing....38
15.4. Disengagement Assistance........................................38
LIABILITY
16.1. General Intent..................................................38
16.2. Liability Restrictions..........................................38
16.3. Force Majeure...................................................39
INDEMNIFICATION
17.1. Indemnities by Lucent...........................................40
17.2. Indemnities by WinStar..........................................40
17.3. Infringement....................................................41
17.4. Indemnification Procedures......................................41
DISPUTE RESOLUTION
18.1. Informal Dispute Resolution.....................................42
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18.2. Litigation......................................................43
18.3. Continued Performance...........................................43
18.4. Governing Law...................................................44
INSURANCE REQUIREMENTS
GENERAL
20.1. Binding Nature and Assignment...................................44
20.2. Entire Agreement................................................45
20.3. Notices.........................................................45
20.4. Counterparts....................................................46
20.5. Relationship of Parties.........................................46
20.6. Severability....................................................46
20.7. Consents and Approval...........................................46
20.8. Waiver of Default...............................................46
20.9. Cumulative Remedies.............................................47
20.10. Survival......................................................47
20.11. Public Disclosures............................................47
20.12. Service Marks.................................................47
20.13. Third Party Beneficiaries.....................................48
20.14. Amendment.....................................................48
20.15. Interpretation................................................48
20.16. Incorporation by Reference and Order of Precedence............49
LIST OF SCHEDULES AND EXHIBITS
Schedule A Statement of Work
Exhibit A-1 Lucent Responsibility Matrix by Technology
Exhibit A-2 International
Exhibit A-3 WinStar/Lucent Market Deployment Responsibility Matrix
Exhibit A-4 Transition Plan
Exhibit A-5 Product Spec Principles
Exhibit X-0
Xxxxxxx X-0 Future Network Diagrams
Schedule B Performance Standards
Schedule C Pricing
Exhibit C-1 Lucent Product Price List
Exhibit C-2 WinStar Product Discounts
Exhibit C-3 Reference Pricing
Exhibit C-4 Switch Pricing
Exhibit C-5 Pricing for Lucent Services
Exhibit C-6 Pricing for Interoperability Testing Lab
Exhibit C-7 Pricing for Optical Networking Technologies
Exhibit C-8 Pricing for International Services
Schedule D Documentation and Specifications
Schedule E Testing and Acceptance
Schedule F Credit Agreement
Schedule G International Consideration
Schedule H Best of Breed
Schedule I Warranty Periods
Schedule J Key Lucent Positions
Schedule K Lucent Indicia Use Guidelines
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SUPPLY AGREEMENT
BY AND BETWEEN
WINSTAR COMMUNICATIONS, INC.
AND
LUCENT TECHNOLOGIES INC.
This Supply Agreement (the "Agreement"), effective as of October 21,
1998 (the "Effective Date"), is entered into by and between WINSTAR
COMMUNICATIONS, INC., a Delaware corporation with offices located at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("WinStar"), and LUCENT TECHNOLOGIES INC., a
Delaware corporation with offices located at 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxx Xxxxxx 00000 ("Lucent"). As used in this Agreement, "Party" means either
WinStar or Lucent, as appropriate, and "Parties" means WinStar and Lucent. The
Parties agree that the following terms and conditions shall apply to the
products and services to be provided by Lucent under this Agreement in
consideration of certain payments to be made by WinStar.
1. DEFINITIONS
1.1. Certain Definitions.
As used in this Agreement:
(a) "Acceptance" has the meaning set forth in Section
1.1.
(b) "Acceptance Criteria" mean the criteria used to
determine whether a Deliverable is ready for
Acceptance, as set forth more fully in Schedule E.
The Acceptance Criteria require, unless otherwise
mutually agreed in writing, that the Deliverable:
(i) Meets or exceeds the Specifications
applicable to such Deliverable, as
well as all applicable warranties;
(ii) Integrates in accordance with the approved
Network design, architecture and
technology;
(iii) Complies with applicable Documentation;
(iv) Complies with Applicable Standards; and
(v) Complies with all additional mutually
agreed-upon testing criteria and plans as
may be developed and agreed upon by the
Parties in accordance with the terms of
this Agreement.
(c) "Acceptance Test Period" for a Deliverable shall
mean the applicable period
Supply Agreement Confidential-WinStar/Lucent
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specified in Schedule E. In the event an Acceptance
Test Period for a particular Deliverable is not
specified in Schedule E and is not otherwise
mutually agreed upon, the Acceptance Test Period
shall be thirty (30) days from either Lucent
Certification, if installed or implemented by
Lucent, or delivery of the Deliverable, if not
installed or implemented by Lucent.
(d) "Affiliate" means, with respect to any entity, any
other entity Influencing, Influenced by or under
common Influence with such entity.
(e) "Agreement" has the meaning set forth in the
preamble to this Agreement.
(f) "Applicable Standards" means (i) all industry
standards (whether domestic or international)
applicable to the Deliverable, including NEBS (1, 2
and 3), Underwriters Laboratory, EIA/TIA, Bellcore,
ANSI, IEEE, ATM-Forum, NESC, ITU-T and NEC, all as
may be amended from time to time, and (ii) all
domestic and international federal, state and local
laws, regulations, ordinances, codes and
requirements applicable to the Deliverable, all as
may be amended from time to time.
(g) "Best of Breed" shall have the meaning set forth in
Schedule H. Best of Breed analyses shall be used for
all Products and Services to be provided or
implemented as part of the Network design and
architecture.
(h) "City-Specific Plan" means a plan that addresses the
timing (including Milestones), network, cost/budget,
functionality and scope of implementation (addition
or augmentation) for a particular network design.
(i) "Contract Year" shall have the meaning set forth in
Section 11.3(b).
(j) "Credit Agreement" shall refer to that certain
Credit Agreement, dated as of October 21, 1998 among
WinStar Network Expansion LLC, WinStar
Communications, Inc., the Lenders party thereto,
State Street Bank and Trust Company as collateral
agent, and Lucent Technologies Inc. as
administrative agent. A copy of the Credit Agreement
is attached hereto as Schedule F.
(k) "Custom Product" shall mean a Product that requires
engineering to WinStar's specific and unique
requirements.
(l) "Customer Colocation" means the existence of WinStar
customer equipment and associated software and
peripherals interconnected with a WinStar network
and located in WinStar's premises (whether owned,
leased or licensed by WinStar).
(m) "Customer Virtual Colocation" means the existence of
WinStar customer equipment and associated software
and peripherals interconnected with a WinStar
network and not located in WinStar's premises
(whether owned, leased or licensed by WinStar).
Supply Agreement Confidential-WinStar/Lucent
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(n) "Deliverable" means a Product or an end product of a
Service delivered by Lucent pursuant to this
Agreement and the applicable Schedules.
(o) "Developed Deliverable" has the meaning set forth in
Section 9.2.
(p) "Documentation" has the meaning set forth in Section
9.1(f).
(q) "Effective Date" has the meaning set forth in the
preamble to this Agreement.
(r) "Equipment" means the equipment, hardware, firmware,
cabling and embedded Software components that may be
purchased, or with respect to embedded Software,
licensed by WinStar from or through Lucent under
this Agreement. As of the Effective Date, the
categories of Equipment include the categories
identified as such in Schedule C.
(s) "Extended Warranty Period" has the meaning set
forth in Section (ss).
(t) "Influence" and its derivatives means (i) legal,
beneficial, or equitable ownership, directly or
indirectly, of more than an Interest of outstanding
capital stock (or other ownership interest, if not a
corporation) of an entity ordinarily having voting
rights or (ii) with respect to entities incorporated
or principally operating in the United States,
management or operational control over such entity.
(u) "Interest" means thirty-three and one third percent
(337%) with respect to entities incorporated or
principally operating in the United States, and five
percent (5%) with respect to all other entities.
(v) "Lucent" has the meaning set forth in the preamble
to this Agreement. With respect to the obligation to
fulfill Purchase Orders, "Lucent" shall also include
Lucent's distributors; provided, however, Lucent
shall remain fully responsible for the
performance of such distributors.
(w) "Lucent Certification" shall mean Lucent's written
certification to WinStar that (i) it has fully and
successfully tested the Deliverable in accordance
with the developed test plan (individually and as
integrated into the Network), (ii) the Deliverable
has met the Acceptance Criteria to Lucent's
satisfaction and (iii) the Deliverable is available
for WinStar's testing in accordance with the
applicable test plan.
(x) "Lucent Product" means any product created, sold
through, distributed or branded by Lucent or its
distributors, and shall include those products
identified in this Agreement and otherwise made
commercially available by Lucent or its
distributors.
(y) "Milestone" has the meaning set forth in Section
6.5(a).
Supply Agreement Confidential-WinStar/Lucent
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(z) "Milestone Date" has the meaning set forth in Section
6.5(a).
(aa) "Network" means the physical, transport and
application network layers of the communication
infrastructure used by WinStar to connect to its
domestic and foreign customers and central offices
in a variety of combinations. The demarcation points
of the Network shall be coincident with the WinStar
customer demarcation points. It is anticipated that
the Network will include domestic intra-city
networks, inter-city networks, international
networks and international intra-city networks.
(bb) "Network Architecture" means the overall design and
architecture specification for the Network,
including sizing and engineering requirements, from
which the Network Technology is developed.
(cc) "Network Element" means any product or transport
service necessary for the proper operation of the
Network, which will be set forth in the Network
Technology.
(dd) "Network Technology" means the Deliverable developed
from the Network Architecture by Lucent for review
and approval by WinStar, all as set forth in
Schedule A, that identifies the Product and
transport specifications for implementation as part
of the City-Specific Plans.
(ee) "Nonconformity" has the meaning set forth in
Schedule E.
(ff) "Out-of-Pocket Expenses" means reasonable and actual
out-of-pocket expenses incurred by a Party, but not
including that Party's overhead costs (or
allocations thereof), administrative expenses or
other xxxx-ups.
(gg) "Party" and "Parties" has the meaning set forth in
the preamble to this Agreement.
(hh) "Product" means Lucent Products and Third Party
Products.
(ii) "Purchase Order" has the meaning specified in
Section 4.1(a).
(jj) "Required Consents" means such third party consents
with regard to Third Party Products or other items
as may be required for Lucent's provision of
Services and Deliverables.
(kk) "Service" means the services provided by Lucent
pursuant to this Agreement and (i) described in any
Purchase Order, or (ii) not specifically described
in a Purchase Order, but implied by or required for
the proper performance and provision of services
included in a Purchase Order. As of the Effective
Date, the
Supply Agreement Confidential-WinStar/Lucent
- 4 -
Services that WinStar may purchase from Lucent
include those services identified as such in
Schedule A subject to the Transition Plan specified
therein, as well as those services described in
Schedule G.
(ll) "Software" means software, including applicable
documentation, that may be licensed by WinStar from
Lucent under this Agreement or that is developed by
Lucent as a Deliverable pursuant to this Agreement.
(mm) "Source Code" means both machine-readable and
human-readable copies of Software consisting of
instructions to be executed upon a computer in the
language used by its programmers (i.e., prior to
compilation or assembly) in a form in which the
program logic of the Software is deducible by a human
being, fully commented, and including all related
flow diagrams and all other documentation and manuals
which would allow WinStar to properly effect
modifications and support for Software Deliverables
provided under this Agreement.
(nn) "Specifications" means published engineering
specifications, including Network design standards
and Lucent's or the relevant Product manufacturers'
specifications for particular Products furnished
hereunder.
(oo) "Stock Product" shall mean a Product that is not a
Custom Product.
(pp) "Third Party Product" means any product that is not
a Lucent Product.
(qq) "Transition Plan" means the plan specified in
Schedule A regarding Lucent's time periods to begin
providing certain of the Services as specified in
the plan.
(rr) "Virus" means: (i) program code, programming
instruction or set of instructions intentionally
constructed with the ability to damage, interfere
with or otherwise adversely affect computer
programs, data files or operations; or (ii) other
code typically designated to be a virus.
(ss) "Warranty Period" means, for each Deliverable, the
applicable period set forth in Schedule I measured
from the earlier of Acceptance or thirty (30) days
following the date of Lucent Certification. Lucent
shall advise WinStar of the price, if any,
determined pursuant to the charging methodology and
process set forth in Schedule C and applicable to
WinStar's extension of the Warranty Period. WinStar
may extend the Warranty Period one or
Supply Agreement Confidential-WinStar/Lucent
- 5 -
more times in its sole discretion upon payment of
such price, which shall in no event exceed Lucent's
published standard rates applicable to commercial
accounts similar to WinStar's less the applicable
discount percentage set forth in Exhibit C-2 (the
aggregate of such extensions being referred to as
the "Extended Warranty Period").
(tt) "WinStar" has the meaning set forth in the preamble
to this Agreement.
(uu) "Year 2000 Compliant" means the ability of a
Deliverable provided or developed by Lucent pursuant
to this Agreement to (i) correctly process, provide,
interpret, manipulate and receive date data within
and between the twentieth and twenty-first centuries,
without causing logical or mathematical
inconsistencies, processing errors, loss of
functionality or performance, or other failures, and
(ii) interoperate with other technical systems
(including but not limited to hardware and software)
having the characteristics described in (i) and with
date data of the twentieth and twenty-first
centuries. With respect to any data that is
generated or provided in conjunction with the
Deliverables, such data shall contain such
information or be so formatted as to permit hardware
or software with the characteristics described in (i)
of the foregoing sentence to correctly process,
provide, interpret, manipulate and receive such data
within and between the twentieth and twenty-first
centuries, without causing logical or mathematical
inconsistencies, processing errors, loss of
functionality or performance, or other failures with
respect to such Deliverables.
1.2. Other Terms.
Other terms used in this Agreement are defined in the context
in which they are used and have the meanings there indicated.
2. SCOPE AND STRUCTURE
2.1. General.
(a) This Agreement sets forth the general terms and
conditions under which WinStar may purchase and
receive Deliverables and Services from Lucent and
financing the Network-related Third Party Products
and services purchased directly by WinStar.
(b) This Agreement is being made and entered into with
reference to the following:
Supply Agreement Confidential-WinStar/Lucent
- 6 -
(i) It is WinStar's objective to engage Lucent
to design and implement a Best of Breed
nationwide and global communications
Network;
(ii) By entering into this Agreement, WinStar
and Lucent desire to leverage Lucent's core
competencies in both products and services
in designing and implementing the Best of
Breed Network; and
(iii) Lucent desires to provide such products and
services and provide the requisite
financing to enable WinStar and Lucent to
achieve this mutual objective.
(c) The Parties acknowledge that this Agreement does not
grant to Lucent an exclusive privilege to sell or
otherwise provide to WinStar any or all of the
Deliverables or Services of the type described in
this Agreement. WinStar may contract with other
manufacturers and suppliers for the procurement of
comparable equipment, software, systems, deliverables
or services. Lucent is not restricted from selling
the types of products or services that may be
purchased and ordered by WinStar hereunder to other
parties, except as provided in Section 9.2.
2.2. Other Entities.
(a) As of the Effective Date, Lucent shall provide
Deliverables and Services to WinStar and any WinStar
Affiliates designated by WinStar from time to time in
its sole discretion. For the purposes of this
Agreement, Deliverables and Services provided to
WinStar's Affiliates shall be deemed to be
Deliverables and Services provided to WinStar, and
WinStar's Affiliates shall be entitled to the rights
of WinStar hereunder with respect to Deliverables and
Services purchased by such Affiliates. Payment for
Deliverables and Services to Affiliates either will
be guaranteed by WinStar or may be conditioned upon
the Affiliates' ability to pay.
(b) Except as may be otherwise provided by the terms and
conditions of the Credit Agreement, WinStar shall
have the right to assign, transfer, sell, alienate,
lease or sublicense Lucent Products to third parties
in conjunction with (i) the disposal of such
Products, (ii) Customer Colocations involving such
Products, or (iii) Customer Virtual Colocations
involving such Products, and pass through to such
third parties the rights (and the applicable warranty
exclusions) granted to WinStar under this Agreement
that are applicable to such Lucent Products, subject
to the following:
(i) Each third party shall agree in writing
that its license for any Software to which
Lucent maintains title under this Agreement
is revocable by Lucent in the event such
third party materially breaches the
licensing restrictions imposed upon WinStar
under this Agreement pursuant to Section
9.1;
(ii) Each such third party shall agree in
writing to confidentiality terms
Supply Agreement Confidential-WinStar/Lucent
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and conditions substantially similar to
those set forth in Article 13; and
(iii) With respect to rights granted to WinStar
under Article 14and passed through to such
third parties, the Parties will agree upon
a reasonable means of administering
Lucent's fulfillment of its obligations
with respect to such rights.
Where WinStar substantially complies with the
obligations set forth above, WinStar shall have no
liability to Lucent for any action or omission of
such third parties except for providing Lucent
reasonable assistance in bringing claims as against
the third party for reasonable claims.
(c) The Parties will proactively pursue entering into
mutual value-added reseller or similar relationships
as business needs dictate. Such relationships may
also include co-marketing activities where Lucent
would also sell WinStar products in conjunction with
Lucent products.
2.3. Strategic Relationship.
(a) Best of Breed Commitment and Preferred Supplier
Status. The Parties agree that a critical component
of the Parties success in working together under this
Agreement is sharing in the following objectives and
commitments: (i) the Network and associated services
will be Best of Breed; and (ii) subject to the
Parties following the Best of Breed selection process
set forth in Schedule H, Lucent will be WinStar's
preferred supplier to the extent Best of Breed
Network Elements exist from Lucent. Consistent with
this mutual objective and commitment, Lucent
understands that as part of the Best of Breed
analysis and subsequent recommendation, some of the
recommended Network Elements and services may consist
of Third Party Products and services, even where
Lucent has a competing product and service.
(b) Preferred Customer Status. In consideration of
WinStar's agreement to treat Lucent as a preferred
supplier, Lucent agrees to treat WinStar as a
preferred customer. This preferred customer status
shall include providing WinStar with any preferential
treatment that Lucent may provide to its other
significant customers, including, expediting orders,
providing access to new technologies, competitive
pricing and discounts, invitations to Lucent-run
conferences, customer events and educational
activities (including finance-related educational
events Lucent may provide), and potential business
referrals. Nothing herein will require Lucent to
violate any of its existing agreements.
(c) Lucent-provided Roof Rights and Building Access. If
requested by WinStar, Lucent shall grant to WinStar,
at no cost, roof and interior space and conduit
rights to buildings for which Lucent can obtain or
has such rights pursuant to industry standard terms.
In addition, Lucent shall assist WinStar in
obtaining such rights with respect to any other
buildings leased or occupied by Lucent. Nothing
herein shall obligate Lucent to violate any of its
existing real property lease agreements. Within
ninety (90) days of the Effective Date and
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semi-annually thereafter, Lucent shall provide
WinStar with a written list of all addresses of
current real estate properties owned, leased or
otherwise occupied by Lucent.
(d) Mutual Marketing Support. The Parties will provide
reasonable marketing support to the each other in
connection with the Network and associated business
opportunities of each Party. This shall include
WinStar's ability to use, subject to Section 20.12
and Schedule K, the Lucent name, logos and service
marks (including use of the "Xxxx Labs" and "Xxxx
Laboratories" names, logos and service marks in the
same manner that Lucent uses such names, logos and
service marks) in WinStar advertising and marketing
materials. Lucent will credit to an account of
WinStar on an annual basis one quarter of one percent
of the total purchase price for Lucent Products and
Services during the previous Contract Year. Said
credit will be accrued by Lucent and utilized for
co-branding and co-marketing activities related to
promoting WinStar in the marketplace.
(e) Technology Summit. Semiannually after the Effective
Date and during the Term, the Parties shall meet to
discuss their plans and objectives with respect to
the development and deployment of new
network-related solutions. As part of such
discussion (i) WinStar shall share with Lucent its
plans for potential future service offerings,
potential market demand and anticipated product
needs and (ii) Lucent shall share with WinStar its
plans regarding product enhancements and evaluations
as well as new products under development.
(f) Lucent Lab/Testing Facilities. Lucent shall provide
the testing and lab facilities as provided in
Schedule A and Exhibit C-6.
(g) Demonstration Products. From time to time and at
WinStar's reasonable request, Lucent shall, at no
charge, provide WinStar with limited quantities of
Lucent Products not previously introduced to the
market generally by Lucent for the purpose of
WinStar's evaluation (or demonstration) for a trial
period.
(h) Regulatory Assistance. If Lucent affirmatively
takes a position in the United States regulatory
environment, it will be in favor of a level playing
field and in support of competition. Lucent agrees
to meet and consult with WinStar regarding United
States regulatory issues, including with regard to
WinStar's licensed spectrum and Equal Access II
concerns. Outside of the United States, Lucent shall
assist and support all of WinStar's regulatory-
related efforts in connection with obtaining
required licenses, approvals or otherwise in
connection with WinStar's implementation of its
network.
(i) Government Business. Lucent and WinStar will develop
and implement a cooperation strategy to assist both
companies in obtaining Federal government business
(e.g., to respond to future GSA MAA proposals). In
particular, this shall include the following: (1)
provided it is legally capable of doing so, Lucent
will agree to be a subcontractor team member, at
WinStar's election, to WinStar Federal Services, LLC
on the GSA WITS2001 project and will assist
Supply Agreement Confidential-WinStar/Lucent
- 9 -
in the preparation and review of the proposal; and
(2) provided it is legally capable of doing so,
Lucent and WinStar will mutually investigate making
WinStar Federal Services, LLC a subcontractor on the
Lucent ViViD contract for the U.S. Navy.
2.4. Existing Agreements
As of the Effective Date, the Parties have entered into a
General Agreement (Contract No. LNS960531CRWIN) (the "GA"),
the Product Purchase Addendum to the General Agreement
(Contract No. LNS960609CRWIN) (the "PPA"), the Professional
Services Agreement (Contract No. LNS960819MTWIN) (the "PSA"),
and related Exhibits, Attachments and Lists to the foregoing,
all of which have been executed between the Parties (the GA,
PPA, PSA, Exhibits and Attachments collectively hereinafter
referred to as the "Existing Agreements"). Notwithstanding
the Existing Agreements, (a) all services and products
ordered by WinStar after the Effective Date (or after October
15, 1998 in the case of certain 5ESS purchase orders that may
be issued by WinStar to Lucent) shall be governed by the
terms of this Agreement, and (b) any unused portions of any
credits to which WinStar is entitled under the Existing
Agreements or any such other agreements between Lucent and
WinStar or its Affiliates shall be carried over to this
Agreement and apply to reduce amounts payable by WinStar
under this Agreement. The Parties shall also carry forward
and make available to WinStar any additional benefits that
were to be provided by Lucent under the Existing Agreements
and the Parties shall identify such benefits in Product
addenda hereto.
2.5. International Aspects.
The Parties agree that as of the Effective Date the terms of
this Agreement shall apply with respect to Lucent's provision
of products and services outside of the United States to
WinStar and WinStar's Affiliates, and such products and
services shall be deemed Products and Services, as
applicable. The Parties agree that they shall amend this
Agreement (in a writing signed by both parties and in a
manner consistent with the terms of this Agreement) to the
extent necessary to account for local law and practice issues
unique to such Products and Services and to the country in
which they are to be provided.
3. TERM
3.1. Initial Term and Extension
The term of this Agreement shall begin upon the Effective
Date and shall continue for a period of five years, unless
terminated earlier or extended in accordance with this
Agreement (the "Term"). Upon giving written notice to Lucent
no less than thirty (30) days prior to the then-existing
expiration date of this Agreement, WinStar shall have the
right to extend the Term of this Agreement for additional one
(1) year periods on the terms and conditions then in effect;
provided, however, that Lucent reserves the right to
renegotiate the pricing set forth in Schedule C of this
Agreement subject to Section 3.2.
Supply Agreement Confidential-WinStar/Lucent
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3.2. Interim Extension
In the event that WinStar provides notice to Lucent pursuant
to Section 3.1 of its desire to extend the Term, and Lucent
exercises its right to renegotiate pricing as described in
Section 3.1, the Term of this Agreement shall be deemed
extended upon the terms and conditions then in effect
(including with respect to the pricing set forth in Schedule
C) for any period of time during which the Parties are
renegotiating such pricing. In the event that such
renegotiation terminates in an agreement between the Parties
with respect to Schedule C pricing, the Term shall be
extended pursuant to Section 3.1, and such agreement between
the Parties will apply retroactively beginning upon the
immediately prior expiration of the Term. In the event that
such renegotiation terminates without an agreement between
the Parties with respect to Schedule C pricing, this
Agreement shall expire upon such termination of
renegotiations.
4. PURCHASING AND ORDERING
4.1. Purchase Orders.
(a) All purchases of Deliverables or Services shall be
made by means of orders (each, a "Purchase Order")
issued by WinStar to Lucent from time to time
pursuant to this Section, unless otherwise expressly
agreed by the Parties in writing. WinStar will not
be liable to Lucent for any charges, additional or
otherwise, for Deliverables or Services provided by
Lucent unless set forth in a Purchase Order, or
otherwise mutually agreed upon by the Parties in
writing.
(b) Lucent agrees to provide and deliver, and WinStar
agrees to purchase:
(i) Any Deliverable or Service listed in a
Schedule hereto that is specified by
WinStar in a Purchase Order that conforms
to Subsection (e) of this Section; and
(ii) Any other Deliverable or Service specified
by WinStar in a Purchase Order that
conforms to Subsection (e) of this Section
and is accepted by Lucent.
(c) With respect to any Purchase Order that is either
consistent with (i) the requirements of a
City-Specific Plan, or (ii) Lucent's ordering
intervals set forth in Schedule C for the Products
identified therein or Lucent's standard ordering
intervals for any other Products, then Lucent shall
be deemed to have accepted a Purchase Order
immediately upon receipt of such Purchase Order.
Otherwise, Lucent shall be deemed to have accepted a
Purchase Order on the tenth (10th) business day
following receipt of such Purchase Order pursuant to
Section 20.3 if Lucent has not notified WinStar in
writing of its rejection of the Purchase Order
pursuant to Section 20.3 prior to such time. In the
event of a disaster declared by WinStar, Lucent will
use commercially reasonable efforts to expedite the
acceptance of any Purchase Orders that are submitted
by WinStar as a means of mitigating the adverse
effects to WinStar of such
Supply Agreement Confidential-WinStar/Lucent
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disaster; provided, however, that the terms and
conditions of Section 4.3(c) shall not apply to such
Purchase Order.
(d) Estimates or forecasts furnished by WinStar to
Lucent shall not constitute Purchase Orders or
commitments for purchases.
(e) Purchase Orders placed under this Agreement may be
made by means of mail or fax pursuant to Section
20.3, or upon mutual agreement of the Parties,
electronic data interchange. No Purchase Order or
other ordering document which would otherwise modify
or supplement this Agreement or any Schedule shall
add to or vary the terms of this Agreement. All such
proposed variations or additions (whether submitted
by either Party) are objected to and deemed
material. Each Purchase Order shall contain, at a
minimum, the following information:
(i) The date of the Purchase Order;
(ii) A written reference to this Agreement;
(iii) Any applicable discounts as set forth in
Schedule C;
(iv) With regard to Products:
(1) The quantity and a brief written
description of each Product
ordered, including any applicable
part, accessory or product number;
(2) The unit price of each Product
ordered, calculated pursuant to
this Agreement, as well as
subtotals and Purchase Order totals
for Products; and
(3) The required delivery date and
place;
(v) With regard to other Deliverables or
Services:
(1) The quantity and a brief written
description of each Service ordered;
(2) The price of each Service ordered
(e.g., applicable rates or fixed
fees), calculated pursuant to this
Agreement, as well as subtotals and
Purchase Order totals for Services;
(3) In the case of a Deliverable, the
required delivery date, and in the
case of a Service, the required
performance date or dates; and
(4) In the case of a Deliverable, the
required place of delivery, and in
the case of a Service, the required
place of performance.
Supply Agreement Confidential-WinStar/Lucent
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(f) With respect Third Party Products provided by Lucent
pursuant to this Agreement, Lucent shall:
(i) Use commercially reasonable efforts to
effect a formal original-equipment
manufacturer ("OEM") or similar
relationship with the third-party sellers,
manufacturers, lessors or licensors of such
Third Party Products that is consistent
with Lucent's then-current OEM policies and
standards; and
(ii) To the extent Lucent does not have an OEM
or similar relationship with the third party
sellers, manufactures, lessors or licensors
of such Third Party Product: (1) pass
through to WinStar the benefits of any
rights and remedies it has with respect to
such Third Party Products to the extent that
Lucent is able pursuant to any agreements
between Lucent and the third-party sellers,
manufacturers, lessors or licensors of such
Third Party Products, and enforce such
warranties and indemnities on behalf of
WinStar as directed by WinStar; and (2) use
commercially reasonable efforts to obtain
terms and conditions that are favorable to
WinStar.
4.2. Administrative Changes.
Lucent will notify WinStar at least thirty (30) calendar days
in advance of any administrative changes with respect to any
Product set forth in Schedule A or previously provided by
Lucent to WinStar, such as changes in product part numbers or
descriptions, as well as newly compatible products or
components.
4.3. Timing of Delivery.
(a) Delivery dates for Deliverables and Services shall
be firm. Lucent will deliver Deliverables and
Services strictly in accordance with the terms and
conditions of this Agreement.
(b) If Lucent discovers any potential delay that
threatens the timely delivery or the full delivery
of Deliverables or Services with respect to a
Purchase Order, Lucent shall immediately notify
WinStar of such delay. If requested by WinStar,
Lucent shall provide a written plan for correction
of such delay.
(c) Subject to Sections 4.1(c), 10.2 and 16.3, if
Lucent fails to deliver such Deliverable or Services
in accordance with the scheduled delivery or
performance date set forth in the corresponding
Purchase Order, then after five (5) business days
following the scheduled delivery or performance date,
WinStar shall be entitled to deduct from the price of
such Deliverable or Service an amount equal to one
percent (1%) of the price of such Deliverable or
Service for each seven (7) calendar days of delay
after such grace period until actual delivery of such
Deliverable or performance of such Service, up to a
maximum deduction of one hundred percent (100%) of
the price for such
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Deliverable or Service (the "Delivery Pricing
Adjustment"). Notwithstanding the preceding
sentence, Lucent shall not be liable for a Delivery
Pricing Adjustment to the extent that Lucent can
demonstrate that its failure to deliver a
Deliverable or Service in accordance with the
scheduled delivery or performance date set forth in
the corresponding Purchase Order is reasonably
caused by the wrongful actions of WinStar or a
change, revision, modification, or special
requirement with respect to such Deliverable or
Service, or the delivery or performance date for
such Deliverable or Service, that is requested by
WinStar and approved by Lucent after Lucent has
accepted the Purchase Order corresponding to such
Deliverable or Service. In the event WinStar has not
otherwise terminated the Purchase Order as provided
in Subsection 4.5 below and WinStar elects to take
the Delivery Pricing Adjustment as provided above,
such adjustment shall be WinStar's sole and
exclusive monetary remedy with respect to the delay
attributable to the failure to complete the Purchase
Order; provided, however, in the event Lucent has
persistent delays over multiple Purchase Orders,
such Delivery Pricing Adjustment shall be in
addition to any other rights or remedies WinStar may
have under this Agreement or at law or in equity.
Lucent agrees not to make an economic determination
not to deliver a Deliverable or Service under a
particular Purchase Order due to the Delivery
Pricing Adjustment.
(d) If Lucent fails to make any delivery of a
Deliverable or performance of a Service within the
lesser of
(i) forty-five (45) calendar days after the
scheduled delivery or performance date set
forth in the corresponding Purchase Order,
and
(ii) such other time period as mutually agreed
by the Parties,
Then WinStar shall be entitled to terminate the
corresponding Purchase Order in accordance with
Section 4.5.
4.4. Cancellation and Rescheduling of Purchase Orders
(a) WinStar can cancel Purchase Orders for Stock
Products in whole or in part at no cost or liability
anytime prior to thirty (30) days prior to the
scheduled delivery date set forth in the Purchase
Order. Should WinStar cancel any Purchase Order for
Stock Products, in whole or in part, other than for
cause during the thirty (30) day period prior to the
scheduled delivery date, WinStar agrees to pay to
Lucent cancellation and reconfiguration charges equal
to the lesser of (i) Lucent's actual and reasonable
Out-of-Pocket Expenses associated with reconfiguring
and restocking the Stock Products canceled and (ii)
ten percent (10%) of the Purchase Order price for the
canceled Stock Products.
(b) WinStar can cancel Purchase Orders for Custom
Products in whole or in part at no cost or liability
anytime prior to sixty (60) days prior to the
scheduled delivery date set forth in the Purchase
Order. Should WinStar cancel any Purchase Order for
Custom Products, in whole or in part, other than for
cause
Supply Agreement Confidential-WinStar/Lucent
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during the sixty (60) day period prior to the
scheduled delivery date, WinStar agrees to pay to
Lucent cancellation and reconfiguration charges
equal to the lesser of (i) Lucent's Out-of-Pocket
Expenses associated with reconfiguring and
restocking the Custom Products canceled and (ii) the
following percentage of the Purchase Order price for
the particular canceled Custom Products based on the
number of calendar days of prior notice provided by
WinStar: (1) fifty percent (50%) if the notice is
within nine (9) days prior to or on the scheduled
delivery date set forth in the Purchase Order, (2)
twenty percent (20%) if the notice is less than
fifty-five (55) days but more than nine (9) days
prior to the scheduled delivery date set forth in
the Purchase Order, and (3) ten percent (10%) if the
notice is less than sixty (60) days but more than
fifty-five (55) days prior to the scheduled delivery
date set forth in the Purchase Order.
(c) WinStar may change the "ship to" destination of any
Purchase Order by submitting notice to Lucent in
writing at least ten (10) calendar days prior to
shipment. If such change is requested by WinStar
with less than forty-eight hours of notice prior to
shipment, Lucent will use all reasonable efforts to
implement such change. WinStar will be responsible
for unavoidable Out-of-Pocket Expenses that Lucent
reasonably incurs as a direct result of such change.
Lucent will provide WinStar with an estimate of such
Out-of-Pocket Expenses as soon as possible following
WinStar's notice.
(d) Purchase Orders shall not be subject to cancellation
after shipment except as expressly provided in this
Agreement.
(e) WinStar may reschedule any Purchase Order for Stock
Products at anytime prior to actual shipment.
WinStar can reschedule any Purchase Order with
respect to Stock Products at no cost or liability up
to ninety (90) days from the original scheduled
shipment date specified in the applicable Purchase
Order.
(f) WinStar may reschedule any Purchase Order for
Custom Products at no cost or liability at anytime
prior to the actual shipment; provided, however, if
the reschedule request is within thirty (30) days of
the scheduled delivery date set forth in the Purchase
Order, the rescheduled delivery date requested by
WinStar will be subject to Lucent's reasonable
approval, but in no event shall the rescheduled
delivery date be more than ten (10) days later than
WinStar's requested rescheduled delivery date. If
the new shipment date is within thirty (30) days of
the scheduled shipment date, then Lucent shall
arrange and pay for all additional transportation and
storage costs for the Purchase Order. If the new
shipment date is more than thirty (30) days after the
scheduled shipment date but less than ninety (90)
days after the scheduled shipment date, then such
reasonable additional storage Out-of-Pocket Expenses
incurred by Lucent shall be payable by WinStar.
Except as provided in the preceding sentence, WinStar
can reschedule any Purchase Order at no cost or
liability up to ninety (90) days from the original
scheduled shipment date specified in the applicable
Purchase Order.
(g) All references in this Section to the scheduled
delivery date specified in the
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Purchase Order shall be extended day-for-day by the
number of days Lucent is delayed in meeting the
scheduled delivery date.
4.5. Termination of Purchase Orders.
In the event that Lucent:
(a) Fails to correct the failure of a Deliverable to
comply with a representation, warranty or covenant
as set forth in this Agreement;
(b) Fails to achieve Acceptance with respect to a Lucent
Product as set forth in Section 7.2; or
(c) Fails to make delivery in a timely fashion as set
forth in Section 4.3(d) or 1.1(b);
Then WinStar may, by giving written notice to Lucent,
terminate the corresponding Purchase Order, in whole or in
part, for cause as of a date specified in the notice of
termination. In such event, WinStar may return any associated
Deliverables (if delivered) to Lucent, in which case Lucent
shall promptly refund (in the form of a credit for future
purchases) to WinStar all charges paid by WinStar to Lucent
for such Deliverables, and WinStar shall have no further
payment obligations to Lucent with respect to such
Deliverables.
5. SHIPPING AND DELIVERY
5.1. Incorrect Delivery.
(a) Early deliveries of Products may be refused due to
space or security considerations and returned or
stored at Lucent's expense and risk of loss.
(b) WinStar assumes no liability for Products produced,
processed, rendered or shipped in excess of the
amounts specified in any Purchase Order submitted
pursuant to this Agreement.
(c) If Lucent makes a proper shipment in a timely manner
and the WinStar facility is not prepared to receive
the shipment, WinStar will be responsible for
unavoidable Out-of-Pocket Expenses that Lucent
reasonably incurs as a direct result of WinStar's
failure to prepare. Lucent will provide WinStar with
an estimate of such Out-of-Pocket Expenses as soon
as possible following WinStar's notice.
5.2. Purchase Order Tracking.
Lucent shall be responsible for tracking the delivery of all
Products from receipt of the corresponding Purchase Order
until delivery of such Products to the WinStar- designated
place of delivery. Lucent will provide WinStar with current
status reports
Supply Agreement Confidential-WinStar/Lucent
- 16 -
and information on Purchase Orders and such other information
and reports as reasonably requested by WinStar regarding
Purchase Orders.
5.3. Packing.
All Products delivered to WinStar pursuant to this Agreement
shall be preserved, packaged and packed by Lucent to ensure
safe delivery to their destinations without damages due to
shipment.
5.4. Labeling.
(a) Lucent will label each component of any Product no
later than at the time of installation of such
component. Lucent will use reasonable and good faith
efforts to label each component of any Product, each
container and each set of packing documentation with
any WinStar-provided asset identification
information prior to the installation of such
component.
(b) Lucent will xxxx each shipping carton with (i) a
brief description of the contents and quantities of
the Products shipped within such shipping carton,
and (ii) the address of the delivery destination
specified on the applicable Purchase Order.
5.5. Calibration and Testing.
Lucent will calibrate and test Products shipped to ensure
that such Products meet the applicable Specifications.
5.6. Shipping
(a) Lucent will notify WinStar of Lucent's intent to
ship Products within a reasonable time prior to the
scheduled delivery date as specified in the Order at
the delivery destination address specified in a
Purchase Order, so as to permit WinStar to make
necessary arrangements for receipt of the shipment.
The foregoing notwithstanding, Lucent shall deliver
such Products consistent with the agreed upon
City-Specific Plan.
(b) Lucent will ship all Products to the delivery
destination specified by WinStar in the
corresponding Purchase Order. All shipments to
WinStar's premises shall be consistent with
WinStar's shipping and delivery processes and
procedures provided or identified to Lucent. Lucent
will (i) ship all deliveries complete, and (ii) not
ship any substitute item in place of a Product
specified in a Purchase Order that differs in form,
fit or function, unless otherwise agreed by WinStar
in writing.
(c) Unless otherwise instructed by WinStar, Lucent will:
(i) Enclose a packing memorandum with each
shipment and, when more
Supply Agreement Confidential-WinStar/Lucent
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than one package is shipped, identify the
one which contains the memorandum;
(ii) Verify that bills of lading match
corresponding shipping invoices; and
(iii) Forward applicable bills of lading and
shipping notices with items shipped.
(d) All shipments will be F.O.B. destination, unless
otherwise agreed in writing by WinStar. WinStar will
reimburse Lucent for actual, reasonable freight and
insurance costs on an Out-of-Pocket expenses basis;
provided, however that upon reasonable request by
WinStar, Lucent substantiates such costs by
providing WinStar with freight bills or other
written documentation that adequately verifies such
charges. Lucent will ship all items by means of a
common carrier or carriers designated by WinStar.
5.7. Title and Risk of Loss.
Risk of loss and title to any item shipped to WinStar will
pass to WinStar upon delivery into the interior of the
WinStar destination facility or as otherwise specified in
writing by WinStar. WinStar will notify Lucent as soon as
reasonably practicable of any claim with respect to loss
which occurs while Lucent has the risk of loss and shall
provide reasonable cooperation to facilitate the settlement
of any claim.
6. DELIVERY OF SERVICES
6.1. Transition/Ramp-up of Lucent Service Capabilities.
(a) Subject to the Transition Plan, Lucent shall perform
the Services ordered by WinStar hereunder.
(b) If Lucent fails to achieve the transition on or
before the completion date as set forth in the
Transition Plan for reasons other than the wrongful
actions of WinStar, then Lucent shall pay WinStar
for additional Out-of-Pocket Expenses incurred by
WinStar as a result of such failure.
6.2. Use of Third Parties.
(a) Lucent shall not subcontract any of its obligations
under this Agreement, without WinStar's prior written
consent, which shall not be unreasonably withheld.
WinStar shall have the right to revoke its prior
approval of a subcontractor and direct Lucent to
replace such subcontractor if (i) the subcontractor's
performance is deficient, (ii) there have been
misrepresentations by or concerning the
subcontractor, or (iii) good faith doubts exist
concerning the subcontractor's ability to render
future performance because of changes to the
subcontractor's ownership, personnel, management,
financial condition, or otherwise.
Supply Agreement Confidential-WinStar/Lucent
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(b) Lucent will remain responsible for obligations
performed by its subcontractors to the same extent as
if such obligations were performed by Lucent
employees. Lucent shall be WinStar's sole point of
contact regarding Deliverables and Services provided
by such subcontractors, including with respect to
payment. Lucent will not disclose Confidential
Information of WinStar to a subcontractor unless and
until such subcontractor has agreed in writing to
protect the confidentiality of such information in a
manner substantially equivalent to that required of
Lucent under this Agreement, and in all respects,
only on a "need-to-know" basis.
(c) Upon WinStar's request, Lucent shall provide
program management with respect to WinStar's
personnel and third party service providers
contracted directly by WinStar to perform services
related to the Deliverables and Services. In the
event Lucent intends to subcontract a particular
component of the Services to a third party, Lucent
shall notify WinStar and WinStar shall have the
option, in its sole discretion, to perform such
services itself or through its own subcontractor.
Such WinStar personnel and third parties shall not be
considered Lucent subcontractors for the purposes of
this Agreement.
6.3. Key Lucent Positions.
(a) "Key Lucent Positions" shall be the positions set
forth as such in Schedule J, as Schedule J is
amended from time to time by the mutual written
agreement of the Parties.
(b) Lucent shall fill such Key Lucent Positions and
shall cause each of the personnel filling the Key
Lucent Positions to devote substantially his or her
full time and effort to the provision of the
Services on-site at WinStar's facilities. WinStar
will provide reasonable facilities for the use of
the personnel in Key Lucent Positions.
(c) WinStar, with Lucent's written approval, which
approval shall not be unreasonably withheld, may
from time to time change the positions designated as
Key Lucent Positions under this Agreement provided
that the number of Key Lucent Positions shall not
exceed the number set forth in Schedule J as of the
Effective Date.
(d) Before assigning an individual to a Key Lucent
Position, whether as an initial assignment or a
subsequent assignment, Lucent shall notify WinStar of
the proposed assignment and shall provide WinStar
with a resume and other information about the
individual reasonably requested by WinStar. If
WinStar in good faith objects to the proposed
assignment, the Parties shall attempt to resolve
WinStar's concerns on a mutually agreeable basis. If
the Parties have not been able to resolve WinStar's
concerns within five (5) days, Lucent shall not
assign the individual to that position and shall
propose to WinStar the assignment of another
individual of suitable ability and qualifications.
(e) Personnel filling Key Lucent Positions may not be
transferred or re-assigned
Supply Agreement Confidential-WinStar/Lucent
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until a suitable replacement has been reasonably
approved by WinStar and the functions and
responsibilities of the individual being transferred
or reassigned have been properly transitioned to the
replacement.
6.4. Required Consents
(a) Lucent, with the cooperation of WinStar, but at
Lucent's expense, shall obtain any Required
Consents. In the event that such expense is not
commercially reasonable and Lucent cannot provide a
reasonable monetary or non-monetary alternative to
the third party, the Parties shall work together to
achieve an appropriate resolution.
(b) If a Required Consent is not obtained, then, unless
and until such Required Consent is obtained, Lucent
shall determine and adopt, subject to WinStar's
prior approval, such alternative approaches as are
necessary and sufficient to provide the Deliverables
and Services without such Required Consents.
6.5. Implementation Plans, Milestones and Milestone Dates.
For all Services that result in the creation of a
Deliverable:
(a) Lucent shall prepare for WinStar's review, comment
and approval, a detailed, task-level implementation
plan delineating milestones (each, a "Milestone"),
Milestone completion dates (each, a "Milestone
Date"), together with each Party's respective
responsibilities associated with the installation or
implementation work.
(b) If Lucent fails to achieve a Milestone on or before
the corresponding Milestone Date, (i) Lucent's
President of Global Commercial Markets (or in the
event such position no longer exists, an executive
with a similar level of responsibility) will meet
with WinStar in person at WinStar's facilities,
explain to WinStar the root cause for the delay, and
present to WinStar a plan to remedy such failure, and
(ii) Lucent will take appropriate preventive measures
so that the failure does not recur, and reasonably
demonstrate to WinStar that such measures have been
performed.
7. ACCEPTANCE TESTING AND FINAL ACCEPTANCE
7.1. Acceptance Testing and Cure.
As described more fully in Schedule E, each Deliverable shall
be subject to acceptance testing by WinStar. If a Deliverable
meets its Acceptance Criteria (including all applicable
Specifications), WinStar will notify Lucent that such
Deliverable has received Acceptance pursuant to Section 7.2.
If a Deliverable does not meet its Acceptance Criteria,
WinStar may notify Lucent of the failures of the Deliverable
to meet its Acceptance Criteria, and of WinStar's Acceptance
of such Deliverable pursuant to Section 7.2 upon the
condition that such failures will be corrected by
Supply Agreement Confidential-WinStar/Lucent
- 20 -
Lucent within a period of time specified by WinStar (such
acceptance a "Conditional Acceptance").
7.2. Acceptance.
A Deliverable shall be deemed to be accepted (the
"Acceptance") only upon the earliest of: (a) receipt by
Lucent of written notice by WinStar certifying that the
Deliverable conforms to its Acceptance Criteria; (b)
satisfaction of all conditions underlying a Conditional
Acceptance as described in Section 7.1, or (c) the expiration
of the Acceptance Testing Period for such Deliverable without
notice of non-acceptance or of the terms of a Conditional
Acceptance by WinStar. Notwithstanding anything to the
contrary herein, Acceptance of a Deliverable shall only occur
in accordance with the terms of this Agreement.
8. PERFORMANCE STANDARDS
8.1. General.
All Deliverables and Services provided by Lucent shall at all
times meet or exceed the quantitative and qualitative
performance standards identified in Schedule B (the
"Performance Standards"), including those Performance
Standards that are critical to WinStar's business functions
(the "Critical Performance Standards"). In addition, all
Services provided by Lucent shall at all times be consistent
with (i) WinStar's methods, operations and procedures as of
the Effective Date and in any event (ii) standards satisfied
by well-managed operations performing services similar to the
Services.
8.2. Failure to Perform.
(a) Lucent recognizes that its failure to meet Critical
Performance Standards may have a materially adverse
impact on the business and operations of WinStar.
Accordingly, in the event that Lucent fails to meet a
Critical Performance Standard for reasons other than
the wrongful actions of WinStar or circumstances that
constitute force majeure under this Agreement,
WinStar may elect in lieu of pursuing other monetary
remedies to recover as liquidated damages the amounts
calculated pursuant to Schedule B (the "Performance
Standard Credits").
(b) If Lucent fails to meet any Performance Standard,
Lucent shall (i) investigate and report on the root
causes of the problem; (ii) advise WinStar, as and
to the extent requested by WinStar, of the status of
remedial efforts being undertaken with respect to
such problems; (iii) correct the problem and begin
meeting the Performance Standards; and (iv) take
appropriate preventive measures so that the problem
does not recur.
Supply Agreement Confidential-WinStar/Lucent
- 21 -
8.3. Periodic Reviews.
Within three (3) months after the expiration of the first
year following the Effective Date and at least annually
thereafter, WinStar and Lucent shall review the Performance
Standards and shall make adjustments to them as appropriate
to reflect improved performance capabilities associated with
advances in the technology and methods used to provide the
Deliverables and perform the Services. The Parties expect and
understand that the Performance Standards will become more
stringent over time.
8.4. Measurement and Monitoring Tools.
Lucent shall use the measurement and monitoring tools and
procedures required to measure and report Lucent's
performance of the Services against the applicable
Performance Standards. Such measurement and monitoring will
permit reporting at a level of detail sufficient to verify
compliance with the Performance Standards and will be subject
to audit by WinStar. Lucent shall provide WinStar with
information and access to such tools and procedures upon
request, for purposes of verification.
9. SOFTWARE LICENSES AND PROPRIETARY RIGHTS
9.1. Licenses.
(a) Commencing upon delivery of Software pursuant to this
Agreement, Lucent grants WinStar and its Affiliates a
perpetual, transferable (as provided herein),
nonexclusive, fully-paid, royalty-free, irrevocable
(except as provided by Subsection (b) of this
Section) and world-wide right and license (or
sublicense in the case of Software owned by a third
party) to use, copy (as provided herein), access,
display, operate and process the Software provided to
WinStar pursuant to a Purchase Order (collectively,
the "Licenses"). These rights may be exercised
through officers, employees and agents for the sole
purpose of providing services to WinStar and its
Affiliates. WinStar may copy the Software for
back-up purposes and for uses that are in accordance
with this Agreement. Any such reproduction will
include any copyright or similar proprietary notice
contained in the Software being reproduced. WinStar
may not decompile, disassemble or reverse engineer
the Software.
(b) Lucent may revoke a particular License if and only
if WinStar fails to pay undisputed licensing fees
associated with such License, and such nonpayment is
not cured within thirty (30) calendar days after
written notice of such nonpayment provided by Lucent
to WinStar.
(c) If Lucent is unable to secure the rights specified
in Section 9.1 with respect to Software associated
with Third Party Products, it shall be excused from
that obligation, provided that it gives WinStar
prior written notice of such inability sufficiently
in advance so that WinStar may seek alternate means
of obtaining such rights.
Supply Agreement Confidential - WinStar/Lucent
22 -
(d) WinStar may, at no charge, relocate any Software to
another location for reuse with Equipment with which
it was originally delivered when such Equipment is
itself to be relocated consistent with this
Agreement. Such relocation or reuse shall not alter
the Licenses.
(e) WinStar shall have the right to transfer any of the
Licenses in the event WinStar sells the Equipment
with which such Software is utilized or any component
thereof, or in the event of an assignment or change
in control in accordance with Section 20.1. Such
transfers shall be subject to (i) the transferee
undertaking the restrictions and covenants of the
license, (ii) reasonable creditworthiness of the
transferee, and (iii) a limitation that the
transferee is not a direct competitor of Lucent in
the area of telecommunications equipment manufacture.
(f) Lucent agrees to furnish and convey, at no additional
charge to WinStar, such documentation, training
materials, manuals, appropriate designs, appropriate
drawings, and other media and material pertaining to
the use and operation of Deliverables as is necessary
to permit WinStar to use and maintain such items in
accordance with this Agreement (the
"Documentation"). Lucent will provide the
Documentation in both hard- and soft-copy formats.
WinStar may make a reasonable number of copies of the
Documentation; provided, however, that all such
copies shall contain the copyright legends placed on
the original versions by Lucent.
(g) In the event that a WinStar employee violates the
License restrictions set forth in this Section (a),
WinStar shall, at its own expense take such
reasonable actions as may be necessary to remedy
such violation and cooperate in all reasonable
respects to minimize the violation and any damage
resulting therefrom.
(h) WinStar acknowledges that, in the event it attempts
to decompile, disassemble or reverse engineer
Software other than any Developed Deliverable, Lucent
may proceed directly to court. If a court of
competent jurisdiction should find that WinStar has
attempted to decompile, disassemble or reverse
engineer such Software, WinStar agrees that without
any additional findings of irreparable injury or
other conditions to injunctive relief, it shall not
oppose the entry of an appropriate order restraining
it from any further attempt to decompile, disassemble
or reverse engineer such Software.
9.2. Proprietary Rights.
(a) Title to the Software shall remain in Lucent or its
suppliers except as otherwise provided herein.
(b) The Parties do not expect that Lucent will develop
custom Software in the course of performance under
this Agreement.
(c) Notwithstanding the foregoing, title to any Software
or Deliverables created by
Supply Agreement Confidential - WinStar/Lucent
23 -
WinStar or created by Lucent for WinStar pursuant to
mutually agreed-upon terms, conditions and fees set
forth in a Purchase Order shall vest in WinStar
(such Software and Deliverables the "Developed
Deliverables"). Developed Deliverables shall be
considered "works made for hire" for WinStar. To the
extent any Developed Deliverable is not deemed a
"work for hire" by operation of law, Lucent hereby
irrevocably assigns, transfers and conveys to
WinStar without further consideration all of its
right, title and interest in such Developed
Deliverable, including all rights of patent,
copyright, trade secret or other proprietary rights
in such materials. Lucent acknowledges that WinStar
and the assigns of WinStar shall have the right to
obtain and hold in their own name any intellectual
property rights in and to Developed Deliverables.
Lucent agrees to execute any documents or take any
other actions as may reasonably be necessary, or as
WinStar may reasonably request, to perfect WinStar's
ownership of any Developed Deliverables.
Concurrently with the delivery of Developed
Deliverables, Lucent will provide to WinStar the
Source Code for Software included within the scope
of the Developed Deliverables as well as all
documentation and other information necessary for
WinStar to exercise its rights granted by this
Agreement with respect to such Source Code. To the
extent that Lucent adds to or modifies such Source
Code as part of the Services, Lucent shall provide
such additions or modifications to the Source Code
and any associated documentation to WinStar
concurrently with the performance of such Services.
(d) WinStar grants to Lucent a worldwide, fully paid-up,
nonexclusive license during the Term to use, copy,
maintain, modify, enhance and create derivative works
of the Developed Deliverables (including the Source
Code applicable to such Developed Deliverables) for
the sole purpose of providing the Services pursuant
to this Agreement. For any items provided by WinStar
for Lucent's use hereunder, Lucent shall maintain the
confidentiality of such items in accordance with the
terms hereof. Lucent will not use Developed
Deliverables or any other items provided by WinStar
for the benefit of any entities other than WinStar
without the prior written consent of WinStar, which
may be withheld at WinStar's sole discretion. Except
as otherwise requested or approved by WinStar, upon
expiration or termination of this Agreement, Lucent
will cease all use of Developed Deliverables and
other items provided by WinStar and promptly return
all such items to WinStar.
9.3. Source Code Availability
10. WINSTAR RESPONSIBILITIES
10.1. Facilities and Resources
WinStar's responsibility for providing facilities, personnel
and other resources as necessary to permit Lucent to deliver
the Deliverables and Services shall be as set forth in this
Agreement. Lucent shall be responsible for providing all
other necessary
Supply Agreement Confidential - WinStar/Lucent
24 -
facilities, personnel and other resources.
10.2. Savings Clause
WinStar's failure to perform any of its responsibilities set
forth in this Agreement (other than WinStar obligations to
pay undisputed amounts under Article 11.3) shall not
constitute a material breach of the Agreement or otherwise be
deemed to be grounds for extra compensation to, or
termination by, Lucent. However, Lucent's nonperformance of
its obligations under this Agreement shall be excused if and
to the extent: (a) such nonperformance is a direct result of
WinStar's failure to perform its responsibilities, (b) Lucent
provides WinStar with reasonable notice of such
nonperformance, and (c) Lucent uses commercially reasonable
efforts to perform notwithstanding WinStar's failure to
perform.
11. CHARGES
11.1. General.
The charging mechanisms and pricing methodologies for
Products, other Deliverables and Services are set forth in
Schedule C. The Parties agree to supplement Schedule C in a
manner consistent with the other pricing terms of this
Agreement as necessary if and when WinStar purchases
Deliverables and Services for which pricing is not set forth
in Schedule C. WinStar will not be liable to Lucent for any
charges, additional or otherwise, for Deliverables or
Services provided by Lucent unless such charges are expressly
set forth in a Purchase Order, this Agreement (including its
Schedules) or as otherwise may be mutually agreed by the
Parties in writing.
11.2. Taxes.
The Parties' respective responsibilities for taxes arising
under or in connection with this Agreement shall be as
follows:
(a) Each Party shall be responsible for personal
property taxes on property it owns or leases, for
franchise and privilege taxes on its business, and
for taxes based on its net income or gross receipts.
(b) Lucent shall be responsible for sales, use, excise,
value-added, services, consumption, and other taxes
and duties payable by Lucent on any goods or
services that are used or consumed by Lucent in
providing the Deliverables and Services.
(c) WinStar shall be responsible for sales, use, excise,
value-added, services, consumption, and other taxes
existing as of the Effective Date that are assessed
on any particular Deliverable or Service received by
WinStar from Lucent. If and to the extent any such
tax is reduced or eliminated during the Term, Lucent
shall reduce or eliminate any charges for such
taxes, as appropriate.
Supply Agreement Confidential - WinStar/Lucent
25 -
(d) In the event that a sales, use, excise, value added,
services, consumption, or other tax is assessed on
the provision of any of Deliverable or Services, the
Parties shall work together to segregate the
payments under this Agreement into three (3) payment
streams:
(i) Payments for taxable Deliverables and
Services;
(ii) Payments where Lucent functions merely as a
payment agent for WinStar in receiving
goods, supplies, or services (including
leasing and licensing arrangements); and
(iii) Payments for other nontaxable Deliverables
and Services.
(e) The Parties agree to cooperate with each other to
enable each to more accurately determine its own tax
liability and to minimize such liability to the
extent legally permissible. Lucent shall use
commercially reasonable efforts to minimize WinStar's
taxes payable hereunder. Lucent's invoices shall
separately state the amounts of any taxes Lucent is
collecting from WinStar. Each Party shall provide and
make available to the other any resale certificates,
information regarding out-of-state or out-of-country
sales or use of equipment, materials or services, and
other exemption certificates or information
reasonably requested by either Party.
(f) Lucent shall promptly notify WinStar of, and
coordinate with WinStar the response to and
settlement of, any claim for taxes asserted by
applicable taxing authorities for which WinStar is
responsible hereunder. With respect to any claim
arising out of a form or return signed by a Party to
this Agreement, such Party shall have the right to
elect to control the response to and settlement of
the claim, but the other Party shall have all rights
to participate in the responses and settlements that
are appropriate to its potential responsibilities or
liabilities. If WinStar requests Lucent to challenge
the imposition of any tax, WinStar shall reimburse
Lucent for the reasonable legal fees and expenses it
incurs. WinStar shall be entitled to any tax refunds
or rebates granted to the extent such refunds or
rebates are of taxes that were paid by WinStar.
11.3. Financing.
(a) Lucent shall provide WinStar financing in accordance
with the Credit Agreement and otherwise in
accordance with the terms of this Agreement..
(b) Lucent agrees to provide financing (subject to the
terms and conditions set forth in the Credit
Agreement) for all Lucent Products and Services
purchased by WinStar under this Agreement plus up to
$2,600,000 per Contract Year for amounts drawn down
for WinStar provided RF engineering (with any excess
and any other WinStar provided products and services
to be treated as Other Products and Services as
defined below) (collectively, the "Lucent Content").
Lucent also agrees to provide financing for
non-Lucent Products and services associated with the
Network ("Other Products and Services"),
Supply Agreement Confidential - WinStar/Lucent
26 -
subject to the following annual total financing
percentage limitations set forth below. For purposes
of this Subsection (b) the following definitions
shall apply: (1) "Contract Year" shall refer to each
year of the Term of this Agreement, with the initial
Contract Year commencing on the Effective Date, (2)
"Total Contract Year Draw Down" shall refer to the
total dollar amount drawn down by WinStar under the
Credit Agreement during a Contract Year, and (3)
"Total Surcharge Amount" for each Contract Year
shall equal a total of U.S. $3,000,000.
(i) WinStar may use up to thirty-five percent
(35%) of the Total Contract Year Draw
Down during the first Contract Year for
Other Products and Services. During each of
the second, third, fourth and fifth
Contract Years (each, a "Subsequent
Contract Year"), WinStar may use up to
thirty percent (30%) of the Total
Contract Year Draw Down for Other Products
and Services.
(ii) At the end of each Contract Year, Lucent
shall provide for WinStar's review, and
subject to WinStar's confirmation, a
reconciliation statement that specifies the
percentage of the Total Contract Year Draw
Down that was used for Lucent Content and
for Other Products and Services and the
amount of the Total Surcharge Amount that
is due Lucent, if any, based upon the
following:
(1) If the actual percentage for Other
Products and Services is less or
equal to thirty percent (30%) for
the First Contract Year and less
than or equal to twenty-five
percent (25%) during any
Subsequent Contract Year, as the
case may be, there will be no
portion of the Total Surcharge
Amount due and payable by WinStar;
(2) Where the actual percentage for Other
Products and Services exceeds
thirty percent (30%) in the
First Contract Year or exceeds
twenty-five percent (25%) in a
Subsequent Contract Year, as the
case may be, the portion of the
Total Surcharge Amount due and
payable by WinStar shall be an
amount equal to six thousand dollars
(U.S. $6,000) per each one
hundredth of a percentage (1/100%)
in excess of thirty percent (30%)
for the First Contract Year and
twenty-five percent (25%) in a
Subsequent Contract Year, but in
each case no greater than the Total
Surcharge Amount.
(c) Subject to the terms set forth in Subsection (b)
above, this Agreement and the Credit Agreement,
Lucent shall provide financing and act as the paying
agent for any such other invoices for non-Lucent
Products and services (e.g., Third Party Products and
third party and WinStar provided services) delivered
to Lucent by WinStar. Lucent shall pay all such
delivered invoices in accordance with the payment
terms set forth on such invoice or as otherwise
directed by WinStar.
Supply Agreement Confidential - WinStar/Lucent
27 -
(d) Lucent shall continue to provide WinStar with
financing for Deliverables and Services during the
Disengagement Period as described in Section 15.4(a)
subject to the terms set forth in Subsection (b)
above.
(e) Should WinStar acquire any significant interest in
any company to which Lucent is currently providing
financing pursuant to an independent contractual
agreement, Lucent hereby consents and agrees, at no
cost to WinStar for such consent, to continue to
honor such contractual agreement if all the terms
and conditions of such agreement other than change
in ownership are met under WinStar's acquisition of
such significant interest.
11.4. Incidental Expenses.
(a) Lucent acknowledges that, except as provided in
Subsection (b) of this Section, expenses that Lucent
expects to incur in performing under this Agreement
(including document reproduction and long-distance
telephone) are included in Lucent's charges under in
this Agreement. Accordingly, such Lucent expenses
are not separately reimbursable by WinStar unless,
on a case-by-case basis for unusual expenses,
WinStar has agreed in advance and in writing to
reimburse Lucent for the expense.
(b) WinStar will reimburse Lucent for the verifiable
travel and travel-related Out- of-Pocket Expenses
incurred by Lucent that are necessary to provide the
Services to the extent that such Out-of-Pocket
Expenses are consistent with WinStar's expense
policies, provided that Lucent obtains WinStar's
consent in advance of incurring any such expenses.
11.5. Most Favored Customer.
12. INVOICING AND PAYMENT
12.1. Invoicing.
(a) Products. Upon shipment of Products pursuant to a
Purchase Order, Lucent will invoice WinStar for
amounts due pursuant to this Agreement for such
Products. Such invoice shall include: invoice date,
shipment number, Product part numbers and
descriptions, quantities, unit prices and total
amount due. That invoice shall also indicate the
corresponding Purchase Order for each invoiced
Product.
(b) Other Deliverables and Services. With respect to
Product-related engineering and installation
Services, Lucent will invoice WinStar upon
completion of the performance of such Services. With
respect to other Deliverables and Services, Lucent
shall render a single consolidated invoice for
charges due under this Agreement on a monthly basis
in arrears. Such invoice shall include invoice date,
quantities, unit prices and total amount due. Each
Supply Agreement Confidential - WinStar/Lucent
28 -
invoice shall also indicate the corresponding
Purchase Order for each line item and the
corresponding milestone for each Service that will
produce a Deliverable.
(c) On each invoice, Lucent shall include the
calculations utilized to establish any charges, and
each invoice shall show details and information as to
charges as may be reasonably specified by WinStar,
including as necessary to satisfy WinStar's internal
accounting; provided, however, that to the extent
that a firm pricing quotation previously delivered to
WinStar by from Lucent expressly provides such
calculations, details and information, Lucent may
cross-reference such quotation in the applicable
invoice in lieu of including such calculations,
details or information, as applicable, in such
invoice. Each invoice shall also (i) separately
state the amounts of any taxes Lucent is collecting
from WinStar and (ii) identify that the invoice is a
Lucent issued invoice.
(d) To the extent a credit may be due WinStar pursuant
to this Agreement, Lucent shall provide WinStar with
an appropriate credit against amounts then due and
owing; if no further payments are due to Lucent,
Lucent shall pay such amounts to WinStar within
thirty (30) calendar days.
12.2. Payment Due.
(a) Subject to the other provisions of this Article 12,
charges shall be due and payable by WinStar within
thirty (30) calendar days after receipt of a proper
invoice for such amount.
(b) All amounts due and payable to Lucent under this
Article 12 shall be paid, at WinStar's option, (i)
by check payable to the order of Lucent, (ii)
through draw-down of Lucent-provided financing under
the Credit Agreement, or (iii) by electronic funds
transfer to Lucent from account(s) designated by
WinStar.
12.3. Accountability.
Lucent shall maintain complete and accurate records of and
supporting documentation for the amounts billable to and
payments made by WinStar hereunder, in accordance with
generally accepted accounting principles applied on a
consistent basis. Lucent agrees to provide WinStar with
documentation and other information with respect to each
invoice as may be reasonably requested by WinStar to verify
accuracy and compliance with the provisions of this
Agreement. Upon WinStar's reasonable request, WinStar and its
authorized agents and representatives shall have access to
such records for purposes of audit during normal business
hours during the Term and during the period for which Lucent
is required to maintain such records.
12.4. Proration.
Periodic charges under this Agreement are to be computed on a
calendar month basis,
Supply Agreement Confidential - WinStar/Lucent
29 -
and shall be prorated for any partial month.
12.5. Set Off.
With respect to any amount to be paid by WinStar hereunder,
WinStar may set off against such amount any amount that
Lucent is obligated to pay WinStar hereunder.
12.6. Disputed Charges.
Subject to Section 12.5, WinStar shall pay undisputed charges
when such payments are due under this Article 12. WinStar may
withhold payment of particular charges that WinStar disputes
in good faith.
12.7. Encumbrances.
Except to the extent granted in the Credit Agreement or
otherwise expressly set forth in this Agreement, Lucent shall
not perfect a security interest, lien or other encumbrance
upon any Deliverable, Deliverable component or Service
provided pursuant to this Agreement.
13. CONFIDENTIALITY
13.1. Confidential Information.
Lucent and WinStar each acknowledge that they may be
furnished with, receive, or otherwise have access to
information of or concerning the other Party that such Party
considers to be confidential, proprietary, a trade secret or
otherwise restricted. As used in this Agreement and subject
to Section 13.3, "Confidential Information" means all
information, in any form, furnished or made available
directly or indirectly by one Party (the "Disclosing Party")
to the other (the "Receiving Party") that (i) concerns the
operations, affairs and businesses of the Disclosing Party,
the financial affairs of the Disclosing Party, and the
relations of the Disclosing Party with its customers,
employees and service providers, or (ii) is marked
confidential, restricted, proprietary, or with a similar
designation. The terms and conditions of this Agreement shall
be deemed Confidential Information.
13.2. Obligations.
The following obligations with respect to Confidential
Information shall survive the expiration or termination of
this Agreement for a period of seven (7) years or such longer
period as required by regulation, law or court order.
(a) Each Party's Confidential Information shall remain
the property of that Party except as expressly
provided otherwise by the other provisions of this
Agreement. Each Party shall each use at least the
same degree of care, but in any event no less than a
reasonable degree of care, to prevent unauthorized
disclosure of Confidential Information as it employs
to avoid unauthorized
Supply Agreement Confidential - WinStar/Lucent
30 -
disclosure of its own information of a similar
nature. Except as otherwise permitted hereunder, the
Parties may disclose such information to entities
performing services required hereunder where: (i)
use of such entity is authorized under this
Agreement, (ii) such disclosure is necessary or
otherwise naturally occurs in that entity's scope of
responsibility, and (iii) the entity agrees in
writing to assume the obligations described in this
Section 13.2. Any disclosure to such entity shall be
under the terms and conditions as provided herein.
(b) Each Party shall take reasonable steps to ensure
that its employees comply with this Section 13.2. In
the event of any disclosure or loss of, or inability
to account for, any Confidential Information of the
Disclosing Party, the Receiving Party shall
promptly, at its own expense: (i) notify the
Disclosing Party in writing; (ii) take such actions
as may be necessary and cooperate in all reasonable
respects with the Disclosing Party to minimize the
violation and any damage resulting therefrom.
13.3. Exclusions.
(a) "Confidential Information" shall exclude any
particular information that the Receiving Party can
demonstrate:
(i) At the time of disclosure, was in the public
domain or in the possession of the Receiving
Party;
(ii) After disclosure, is published or otherwise
becomes part of the public domain through
no fault of the Receiving Party;
(iii) Was received after disclosure from a third
party who had a lawful right to disclose
such information to the Receiving Party
without any obligation to restrict its
further use or disclosure;
(iv) Was independently developed by the
Receiving Party without reference to
Confidential Information of the Disclosing
Party; or
(v) Was required to be disclosed to satisfy a
legal requirement of a competent government
body; provided that, immediately upon
receiving such request and to the extent
that it may legally do so, the Receiving
Party advises the Disclosing Party promptly
and prior to making such disclosure in order
that the Disclosing Party may interpose an
objection to such disclosure, take action to
assure confidential handling of the
Confidential Information, or take such other
action as it deems appropriate to protect
the Confidential Information.
(b) Either Party may disclose the terms and conditions
of this Agreement to third parties that (1) have
expressed a bona fide interest in consummating a
significant financing, merger or acquisition
transaction between such third
Supply Agreement Confidential - WinStar/Lucent
31 -
parties and such Party, (2) have a reasonable
ability (financial and otherwise) to consummate such
transaction, and (3) have executed a nondisclosure
agreement that includes within its scope the terms
and conditions of this Agreement and also includes a
procedure to limit the extent of copying and
distribution of this Agreement. Each Party shall
endeavor to delay the disclosure of the terms and
conditions of this Agreement until the status of
discussions concerning such transaction warrants
such disclosure.
13.4. No Implied Rights.
Nothing contained in this Section shall be construed as
obligating a Party to disclose its Confidential Information
to the other Party, or as granting to or conferring on a
Party, expressly or impliedly, any rights or license to the
Confidential Information of the other Party.
14. REPRESENTATIONS, WARRANTIES AND COVENANTS
14.1. Pass-Through Warranties.
Without limiting any other representation, warranty or
covenant contained in this Article 14, Lucent may from time
to time provide certain Products and other items for which
Lucent is entitled to warranties and indemnities from the
manufacturers, lessors or licensors of such items. Lucent
shall pass through to WinStar the benefits of such warranties
and indemnities to the extent that Lucent is able pursuant to
any agreements between Lucent and such manufacturers, lessors
or licensors, and enforce such warranties and indemnities as
directed by WinStar.
14.2. Non-Infringement.
Lucent represents, warrants and covenants that it shall
perform its responsibilities under this Agreement in a manner
that does not infringe, or constitute an infringement or
misappropriation of, any patent, copyright, trademark, trade
secret or other proprietary rights of any third party.
14.3. Ownership or Use.
(a) Lucent represents, warrants and covenants that it is
either the owner of, or authorized to distribute,
sublicense and use, the Deliverables provided by
Lucent pursuant to this Agreement.
(b) Lucent represents, warrants and covenants that
WinStar shall receive marketable title to all
Products and Developed Deliverables provided
pursuant to this Agreement and shall be entitled to
the rights of possession and quiet enjoyment
thereto, free of any liens or encumbrances, except
as provided in the Credit Agreement.
Supply Agreement Confidential - WinStar/Lucent
32 -
14.4. Authorization.
(a) Each Party represents and warrants to the other that:
(i) It has the requisite corporate power and
authority to enter into this Agreement and
to carry out the transactions contemplated
by this Agreement; and
(ii) the execution, delivery and performance of
this Agreement and the consummation of the
transactions contemplated by this Agreement
have been duly authorized by the requisite
corporate action on the part of such Party.
(b) Lucent represents, warrants and covenants that it is
not subject to any contractual or other obligation
that would prevent it from entering into this
relationship.
14.5. Inducements.
Each Party represents, warrants and covenants that it has not
offered or provided any inducements in violation of law or
the other Party's policies, of which it has been given
notice, in connection with this Agreement.
14.6. Work Standards.
(a) Lucent represents, warrants and covenants that the
Services shall be rendered with promptness and
diligence and shall be executed in a workmanlike
manner, in accordance with the practices and high
professional standards used in well-managed
operations performing services similar to the
Services. Lucent represents and warrants that it
shall use adequate numbers of qualified individuals
with suitable training, education, experience, and
skill to perform the Services.
(b) If the Services prove not to be performed as
warranted within a nine (9) month period commencing
on the date of completion of the applicable Services,
Lucent shall correct the defect or non-conforming
Services at no additional cost or expense to
WinStar. In the event the Services cannot be
corrected within the applicable time periods
specifically identified in this Agreement or thirty
(30) days of WinStar's notice, whichever period is
shorter (or such additional period of time as may be
mutually agree upon), Lucent shall at WinStar's
option render a full refund or credit based on the
original charges for the Services.
14.7. Product Warranties.
(a) During the Warranty Period and any Extended Warranty
Periods for each Lucent Product, Lucent shall
perform the specific warranty and extended warranty
Services as may be set forth in Schedule A.
Supply Agreement Confidential - WinStar/Lucent
33 -
(b) During the Warranty Period and any Extended Warranty
Periods, Lucent represents, warrants and covenants
that Deliverables (other than Third Party Products)
provided under this Agreement shall be free from
defects in design, material and workmanship, and
shall operate in accordance with applicable
Acceptance Criteria, industry standards and intended
purposes during the Warranty Period and any Extended
Warranty Periods.
(c) Lucent represents, warrants and covenants that all
Lucent Product components (except for spare parts
provided in the course of repair or replacement,
which may be refurbished or re-manufactured)
provided hereunder shall be new, not refurbished or
re-manufactured.
(d) With respect to the Software associated with Lucent
Products, Lucent represents, warrants and covenants
that it shall provide to WinStar, at no additional
charge, error-fixes, corrections and revisions to the
Software that are necessary to maintain those
Deliverables in compliance with the Acceptance
Criteria or as otherwise generally provided to any
other customer of Lucent. Lucent will provide on-site
assistance (including installation and problem
resolution Services) necessary to correct
Nonconformities with such Software at no additional
charge to WinStar. Lucent shall also replace such
Software if the media is destroyed or damaged and as
a result such Software is unusable or fails to
operate in accordance with the applicable Acceptance
Criteria. The foregoing representations, warranties
and covenants shall also apply with respect to new
versions, upgrades and enhancements provided by
Lucent to the Software; provided that, if such new
versions, upgrades and enhancements are chargeable to
Lucent's other customers, WinStar must also pay a fee
pursuant to the applicable prices and pricing
methodologies contained in Schedule C.
(e) Lucent represents, warrants and covenants that it
shall provide updated Documentation reflecting any
changes to Deliverables (other than Third Party
Products).
(f) During the Warranty Period and any Extended Warranty
Periods, Lucent represents, warrants and covenants
that it shall provide telephone support to WinStar
in order to assist WinStar to locate and correct
functional or operational problems with Deliverables
(other than Third Party Products). Such support
shall be provided on a 24-hour, 7-days-per-week
basis. Lucent shall provide a toll-free number for
WinStar's calls to Lucent.
(g) Lucent represents, warrants and covenants that it
shall stock spare Equipment parts for Deliverables
other than Third Party Products and provide 24-hour
availability of such parts, unless Lucent's standard
published policies provide otherwise and specified
in a Product addendum herein.
(h) Lucent represents, warrants and covenants that it
will provide all upgrades to Deliverables components
(other than Third Party Products) during the
Warranty Period and Extended Warranty Periods (as
applicable) and that such upgrades shall be backward
compatible to within two (2) immediately
Supply Agreement Confidential - WinStar/Lucent
34 -
preceding revision levels for the Deliverables in
use by WinStar.
(i) During the Warranty Period and any Extended Warranty
Periods, Lucent represents, warrants and covenants
that it shall provide access to technical resources
to resolve any problem with Deliverables (other than
Third Party Products) that WinStar cannot resolve
through lower level support, including help desk
support and on-site service support for problems that
cannot be remotely diagnosed and cured. If on-site
support reveals that the problem originated with
WinStar or a third-party, Lucent may charge WinStar
reasonable time and material rates for the on-site
support.
(j) Subject to Section 20.9 of the Agreement, in the
event that any Deliverable fails to comply with the
representations, warranties or covenants contained in
this Section 14.7, WinStar will notify Lucent,
specifying the nature of the failure in reasonable
detail. Lucent shall correct the failure at no
additional charge to WinStar so that the Deliverable
complies with such representations, warranties and
covenants, in accordance with the Performance
Standards set forth in Schedule B. Lucent shall make
available to WinStar on-site personnel as necessary
to repair, replace or correct such Deliverable at no
additional charge to WinStar. The repair and replace
time intervals are set forth in Schedule A.
Notwithstanding the foregoing, if, after a reasonable
number of repeated efforts (but not more than three
(3) attempts or more than a total of three (3)
business days after WinStar's initial notification to
Lucent of noncompliance with a representation,
warranty or covenant), Lucent is unable to correct
the failure, then, at WinStar's option, Lucent shall
provide WinStar with a refund, pro-rated according to
the useful life, of amounts paid for any affected
Deliverable.
14.8. Discontinued Lucent Products
(a) Lucent shall notify WinStar at least one (1) year
before Lucent discontinues accepting Purchase Orders
from WinStar for a Lucent Product. Where Lucent
generally offers an equivalent Lucent Product (based
upon form, fit and function) this notification
period may vary but shall in no event be less than
six (6) months.
(b) Lucent shall, in addition to its obligations under
this Agreement (including with respect to the
Product warranties set forth in this Agreement),
make available ongoing Warranty Period and Extended
Warranty Period support during Extended Warranty
Periods upon the terms and conditions of this
Agreement for a period of five (5) years after such
Product's discontinued availability effective date.
14.9. Compliance.
Lucent represents, warrants and covenants that all
Deliverables delivered hereunder operate in conformance with
all applicable domestic and international laws and
Supply Agreement Confidential - WinStar/Lucent
35 -
regulations, including, FCC requirements and specifications
as well as safety and environmental laws and regulations.
Upon WinStar's request, Lucent will issue to WinStar written
statements of compliance that Deliverables provided to
WinStar comply with the foregoing representation, warranty
and covenant.
14.10. Documentation.
Lucent represents, warrants and covenants that all
Documentation provided by Lucent will (a) accurately reflect
the operations and capabilities of any corresponding
Deliverables, (b) be accurate, complete and written in a
manner understood by WinStar, and (c) be updated from time to
time to reflect the changes to the Deliverables.
14.11. Viruses.
Lucent represents, warrants and covenants that it will
exercise reasonable care in recommending Third Party Products
that are free of Viruses and that there are no Viruses coded
or introduced into (a) any Lucent Product or (b) other
Deliverable that is not a Third Party Product. Lucent agrees
that, in the event a Virus is found to have been introduced
into any such Lucent Product or other Deliverable that is not
a Third Party Product, Lucent shall use its best efforts, at
no additional charge, to assist WinStar in reducing the
effects of the Virus and, if the Virus causes a loss of
operational efficiency or loss of data, to assist WinStar to
the same extent to mitigate and restore such losses.
14.12. Disabling Code.
Lucent represents, warrants and covenants that, without the
prior written consent of WinStar, Lucent shall not insert
into any Deliverable any code which would have the effect of
disabling or otherwise shutting down all or any portion of a
Deliverable ("Disabling Code"). Lucent further represents,
warrants and covenants that, with respect to any Disabling
Code that may be part of any Deliverable, Lucent shall not
invoke such Disabling Code at any time, including upon
expiration or termination of this Agreement (in whole or in
part) for any reason, without WinStar's prior written
consent.
14.13. Integration Test.
Lucent represents, warrants and covenants that
(a) It is familiar with the intended use by WinStar of
the Network as described in this Agreement and that
the Network and its associated Deliverables are
suitable for and will satisfy such use and the terms
of this Agreement in all respects, including the
Network Architecture and design and Product
recommendations.
(b) The Network, if implemented in accordance with the
Network Architecture, is
Supply Agreement Confidential - WinStar/Lucent
36 -
designed to and will interface and interoperate in
accordance with the Network Architecture, Applicable
Standards and other corresponding Specifications in
this Agreement as a fully integrated system. If the
Network fails to so interface and interoperate
during the Term of this Agreement, Lucent shall
initiate corrective actions after receipt of notice
of the defect or failure and shall promptly cure
such defect at Lucent's sole cost and expense. This
warranty shall not apply to the extent that (i) the
Network is installed by a party other than Lucent
not in accordance with the Network Architecture or
(ii) such failure to operate directly results from a
failure or defect in Lucent or Third-Party Products
to operate in accordance with their specifications.
This warranty shall not be deemed to extend or limit
any warranty for any individual Product provided by
Lucent.
14.14. Year 2000.
Lucent represents, warrants and covenants:
(a) that it will exercise reasonable care in
recommending Third Party Products that are Year 2000
Compliant;
(b) that, during the longer of (i) the Warranty Periods
and Extended Warranty Periods and (ii) December 31,
2001, Lucent Products, and other Deliverables other
than Third Party Products, shall be Year 2000
Compliant; and
(c) to the extent that Lucent provides testing and
validation Services with respect to a Network (which
Services may be performed in Lucent's sole
discretion) and certifies that such Network is Year
2000 Compliant, that such Network is Year 2000
Compliant.
At WinStar's reasonable request, Lucent agrees to cooperate
and assist WinStar and its designated third party contractors
in connection with WinStar's other Year 2000 compliance
efforts.
14.15. Disclaimer
(a) The foregoing warranties will not extend to
defective conditions or non- conformities to the
extent resulting from the following, if not
consistent with the applicable Specifications and
Documentation: WinStar modification, misuse,
neglect, accident, abuse, improper wiring,
repairing, splicing, alteration, installation,
storage or maintenance.
(b) THE FOREGOING WARRANTIES ARE EXCLUSIVE AND IN LIEU
OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE. WINSTAR'S SOLE AND
EXCLUSIVE REMEDY FOR A BREACH OF THE PRODUCT
WARRANTY SET FORTH IN SECTION 14.8 HEREUNDER SHALL
BE LUCENT'S OBLIGATION TO
Supply Agreement Confidential - WinStar/Lucent
37 -
REPAIR, REPLACE, CREDIT OR REFUND AS PROVIDED HEREIN.
15. TERMINATION
15.1. Termination for Cause.
In the event that Lucent:
(a) Commits a material breach of this Agreement, which
breach is not cured within thirty (30) calendar days
after notice of breach from WinStar to Lucent,
(b) Commits a material breach of this Agreement which is
not capable of being cured within thirty (30)
calendar days and fails to (i) proceed promptly and
diligently to correct the breach, (ii) develop
within thirty (30) calendar days following written
notice of breach from WinStar a complete plan for
curing the breach, and (iii) cure the breach within
sixty (60) calendar days of notice thereof, or
(c) Commits numerous breaches of its duties or
obligations which collectively constitute a material
breach of this Agreement,
Then WinStar may, by giving written notice to Lucent,
terminate this Agreement or any affected Purchase Orders, in
whole or in part, for cause as of a date specified in the
notice of termination.
15.2. Termination by Lucent.
In the event that WinStar fails to pay Lucent when due
undisputed charges under a Purchase Order within thirty (30)
calendar days of notice from Lucent of the failure to make
such payment within the payment period described in Section
12.2, Lucent may, by giving written notice to WinStar,
terminate such Purchase Order as of a date specified in such
notice of termination.
15.3. Termination Option for Lucent's Failure to Provide Financing.
In the event Lucent fails to continue to provide financing
under the Credit Agreement at terms and conditions
satisfactory to WinStar, WinStar may upon notice to Lucent
elect to terminate this Agreement in whole or in part. Any
such termination shall be at no cost or liability to WinStar.
15.4. Disengagement Assistance.
(a) Upon termination or expiration of this Agreement,
WinStar may extend all or any portion of the
Agreement beyond the effective date of termination
one or more times as it elects, at its sole
discretion, provided that the total of all such
extensions shall not exceed twelve months (unless a
longer time period is mutually agreed upon)
following the original effective date of termination
Supply Agreement Confidential - WinStar/Lucent
38 -
(such period the "Disengagement Period").
(b) Upon termination or expiration of this Agreement,
Lucent agrees to provide WinStar and its designated
third party providers all reasonable assistance as
necessary to effect a smooth transition to a new
supplier. In the event this Agreement is terminated
by WinStar for cause pursuant to this Agreement,
Lucent shall bear WinStar's reasonable and
verifiable Out-of-Pocket Expenses incurred with
respect to transitioning to a new supplier.
16. LIABILITY
16.1. General Intent.
Subject to the specific provisions of this Article 16, it is
the intent of the Parties that each Party shall be liable to
the other Party for any actual damages incurred by the
non-breaching Party as a result of the breaching Party's
failure to perform its obligations in the manner required by
this Agreement.
16.2. Liability Restrictions.
(a) IN NO EVENT, WHETHER IN CONTRACT OR IN TORT
(INCLUDING BREACH OF WARRANTY, NEGLIGENCE AND STRICT
LIABILITY IN TORT), SHALL A PARTY BE LIABLE FOR
INDIRECT OR CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR
SPECIAL DAMAGES EVEN IF SUCH PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.
(b) Subject to Subsections (c) and (d) of this Section,
each Party's total liability to the other, whether
in contract or in tort (including breach of
warranty, negligence and strict liability in tort)
shall be limited to an amount equal to one hundred
fifty million U.S. Dollars (U.S. $150,000,000).
(c) The limitation set forth in Subsection (b) of this
Section shall not apply with respect to: (i) damages
occasioned by willful misconduct or gross negligence;
(ii) claims of breach of confidentiality, (iii)
claims subject to indemnification pursuant to the
Agreement, (iv) financing charges, fees or costs that
are assessed on any unused financing amounts
(including to the extent owed or paid by WinStar and
included as part of any damages to which WinStar is
or becomes entitled pursuant to law), (v) failure to
comply with applicable laws and regulations, (vi)
damages occasioned by the improper or wrongful
termination or abandonment of work by Lucent; and
(vii) any amounts paid by WinStar that are refundable
(either by credit or payment) by Lucent pursuant to
this Agreement..
(d) For the purposes of this Section 16.2, all amounts
payable or paid to third parties in connection with
claims that are eligible for indemnification
pursuant to this Agreement shall be deemed direct
damages.
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39 -
16.3. Force Majeure.
(a) No Party shall be liable for any default or delay in
the performance of its obligations under this
Agreement if and to the extent such default or delay
is caused, directly or indirectly, by fire, flood,
lightning, earthquake, elements of nature or acts of
God, riots, civil disorders, rebellions or
revolutions in any country, with respect to Lucent,
its sole suppliers or its subcontractors, or any
other cause beyond the reasonable control of such
Party; provided, however, that (i the non-performing
Party is without fault in causing such default or
delay, and (ii) such default or delay could not have
been prevented by reasonable precautions and cannot
reasonably be circumvented by the non-performing
Party through the use of alternate sources,
workaround plans or other means, including to the
extent contemplated by applicable disaster recovery
processes or procedures).
(b) In such event the non-performing Party shall be
excused from further performance or observance of the
obligation(s) so affected for as long as such
circumstances prevail and such Party continues to use
commercially reasonable efforts to recommence
performance or observance whenever and to whatever
extent possible without delay. In addition, in such
event, Lucent shall give priority status to WinStar
vis-a-vis other customers to recommence performance
or observance of its obligations. Any Party so
delayed in its performance shall immediately notify
the Party to whom performance is due by telephone (to
be confirmed in writing within two (2) business days
of the inception of such delay) and describe at a
reasonable level of detail the circumstances causing
such delay.
(c) If any event under Subsection (a) of this Section
above substantially prevents, hinders, or delays
Lucent's performance for more than thirty (30)
consecutive calendar days, then at WinStar's option:
(i) WinStar may terminate for convenience at no
charge to WinStar or modify any affected portion of
any Purchase Order, or terminate for convenience at
no charge to WinStar any affected portion of this
Agreement, and the charges payable hereunder shall be
equitably adjusted to reflect such termination; or
(ii) WinStar may terminate this Agreement without
liability to WinStar or Lucent as of a date specified
by WinStar in a written notice of termination to
Lucent. Lucent shall not have the right to any
additional payments from WinStar for costs or
expenses incurred by Lucent as a result of any force
majeure occurrence.
17. INDEMNIFICATION
17.1. Indemnities by Lucent.
Lucent agrees to indemnify, defend and hold harmless WinStar
and its Affiliates and their respective officers, directors,
employees, agents, successors, and assigns, from any and all
Losses and threatened Losses arising from, in connection with,
or based on allegations of, any of the following:
Supply Agreement Confidential - WinStar/Lucent
40 -
(a) Lucent's failure to observe or perform any duties or
obligations to third parties (e.g., duties or
obligations to subcontractors);
(b) Any claims of infringement of any patent, trade
secret, copyright or other proprietary rights,
alleged to have occurred based upon the provision of
Deliverables or performance of Services by Lucent,
except to the extent that such claims arise from (i)
modification of a Deliverable or any component
thereof by WinStar that is not recommended or
otherwise approved by Lucent, (ii) maintenance of a
Deliverable by WinStar other than in accordance with
the Specifications and the provisions set forth in
this Agreement that is not recommended or otherwise
approved by Lucent, or (iii) use of a Deliverable by
WinStar in combination with deliverables furnished by
third parties that is not recommended or otherwise
approved by Lucent;
(c) The death or bodily injury of any agent, employee,
customer, business invitee or any other person caused
by the tortious conduct of Lucent;
(d) The damage, loss or destruction of any real or
tangible personal property caused by the tortious
conduct of Lucent; or
(e) Any claim, demand, charge, action, cause of action,
or other proceeding asserted against WinStar but
resulting from an act or omission of Lucent in its
capacity as an employer of a person.
17.2. Indemnities by WinStar.
WinStar agrees to indemnify, defend and hold harmless Lucent
and its Affiliates and their respective officers, directors,
employees, agents, successors, and assigns, from any and all
Losses and threatened Losses arising from, in connection with,
or based on allegations of, any of the following:
(a) WinStar's failure to observe or perform any duties or
obligations to third parties (e.g., duties or
obligations to subcontractors);
(b) Any claims of infringement of any patent, trade
secret, copyright or other proprietary rights,
alleged to have occurred based upon misuse of
Deliverables by WinStar, including (i) modification
of a Deliverable or any component thereof by WinStar
that is not recommended or otherwise approved by
Lucent, (ii) maintenance of a Deliverable performed
by WinStar other than in accordance with the
Specifications and the provisions set forth in this
Agreement that is not recommended or otherwise
approved by Lucent, or (iii) use of a Deliverable by
WinStar in combination with deliverables furnished by
third parties that is not recommended or otherwise
approved by Lucent;
(c) The death or bodily injury of any agent, employee,
customer, business invitee or any other person caused
by the tortious conduct of WinStar;
(d) The damage, loss or destruction of any real or
tangible personal property
Supply Agreement Confidential - WinStar/Lucent
41 -
caused by the tortious conduct of WinStar; or
(e) Any claim, demand, charge, action, cause of action,
or other proceeding asserted against Lucent but
resulting from an act or omission of WinStar in its
capacity as an employer of a person.
17.3. Infringement.
If any Deliverable or other item used by Lucent to provide the
Services becomes, or in Lucent's reasonable opinion is likely
to become, the subject of an infringement or misappropriation
claim or proceeding, in addition to indemnifying WinStar as
provided in Section 17.1 and to the other rights WinStar may
have under this Agreement, Lucent shall, promptly at Lucent's
expense:
(a) Secure the right to continue using the Deliverable or
item, or
(b) If the action described in Subsection (a) cannot be
accomplished by Lucent, replace or modify the
Deliverable or item to make it non-infringing,
provided that any such replacement or modification
will not degrade the fit, form or function of the
affected Deliverables or Services, or
(c) If the action described in Subsection (b) of this
Section cannot be accomplished by Lucent, and only in
such event, provide WinStar with a full refund for
the affected Deliverables and Services.
17.4. Indemnification Procedures.
With respect to third-party claims, the following procedures
shall apply:
(a) Promptly after receipt of notice of the commencement
or threatened commencement of any civil, criminal,
administrative, or investigative action or
proceeding involving a claim in respect of which
Indemnitee will seek indemnification pursuant to
this Article 17, Indemnitee will notify Indemnitor
of such claim in writing. No failure to so notify
Indemnitor will relieve Indemnitor of its
obligations under this Agreement except to the
extent that it can demonstrate damages attributable
to such failure. Within fifteen (15) calendar days
following receipt of written notice from Indemnitee
relating to any claim, but no later than ten (10)
calendar days before the date on which any response
to a complaint or summons is due, Indemnitor will
notify Indemnitee in writing if Indemnitor elects to
assume control of the defense and settlement of that
claim (a "Notice of Election").
(b) If Indemnitor delivers a Notice of Election relating
to any claim within the required notice period,
Indemnitor shall be entitled to have sole control
over the defense and settlement of such claim;
provided that (i) Indemnitee shall be entitled to
participate in the defense of such claim and to
employ counsel at its own expense to assist in the
handling of such claim, and (ii) Indemnitor shall
obtain the prior written approval of Indemnitee
before entering into any
Supply Agreement Confidential - WinStar/Lucent
42 -
settlement of such claim or ceasing to defend against
such claim. After Indemnitor has delivered a Notice
of Election relating to any claim in accordance with
the preceding paragraph, Indemnitor shall not be
liable to Indemnitee for any legal expenses incurred
by Indemnitee in connection with the defense of that
claim. In addition, Indemnitor shall not be required
to indemnify Indemnitee for any amount paid or
payable by the Indemnitee in the settlement of any
claim for which the Indemnitor has delivered a timely
Notice of Election if such amount was agreed to
without the written consent of the Indemnitor.
(c) If Indemnitor does not deliver a Notice of Election
relating to any claim within the required notice
period, Indemnitee shall have the right to defend the
claim in such manner as it may deem appropriate, at
the cost and expense of Indemnitor. Indemnitor shall
promptly reimburse Indemnitee for all such costs and
expenses.
18. DISPUTE RESOLUTION
Any dispute between the Parties arising out of or relating to this
Agreement, including with respect to the interpretation of any
provision of this Agreement and with respect to the performance by
Lucent or WinStar, shall be resolved as provided in this Article 18;
provided, however, that any dispute arising out of the Best of Breed
process described in Schedule H shall not be subject to Sections 18.1
and 18.2, but rather shall be subject to the dispute resolution process
described in Schedule H.
18.1. Informal Dispute Resolution.
(a) Prior to the initiation of formal dispute resolution
procedures, the Parties shall first attempt to
resolve their dispute informally pursuant to this
Section. Upon the written request of a Party, each
Party shall appoint a designated representative who
does not devote substantially all of his or her time
to performance under this Agreement, whose task it
will be to meet for the purpose of endeavoring to
resolve such dispute.
(i) The designated representatives shall meet as
often as the Parties reasonably deem
necessary in order to gather and furnish to
the other all information with respect to
the matter in issue which the Parties
believe to be appropriate and germane in
connection with its resolution. The
representatives shall discuss the problem
and attempt to resolve the dispute without
the necessity of any formal proceeding.
(ii) During the course of discussion, all
reasonable requests made by one Party to
another for non-privileged information,
reasonably related to this Agreement, shall
be honored in order that each of the Parties
may be fully advised of the other's
position.
(iii) The specific format for the discussions
shall be left to the discretion of
Supply Agreement Confidential - WinStar/Lucent
43 -
the designated representatives.
(b) The Parties agree that disputes, controversies or
claims between them shall not be subject to the
provisions of this Section where:
(i) A Party makes a good faith determination
that a breach of the terms of this Agreement
by the other Party is such that a temporary
restraining order or other injunctive relief
is the only appropriate and adequate remedy;
or
(ii) Institution of formal proceedings earlier
than as set forth in Section 18.2(a) is
necessary to avoid the expiration of any
applicable limitations period or to preserve
a superior position with respect to other
creditors.
(c) If a Party files a pleading with a court seeking
immediate injunctive relief and this pleading is
challenged by the other Party and the injunctive
relief sought is not awarded in substantial part, the
Party filing the pleading seeking immediate
injunctive relief shall pay all of the costs and
attorneys' fees of the Party successfully challenging
the pleading.
18.2. Litigation.
(a) Formal proceedings for the resolution of a dispute
may be commenced after the earlier of:
(i) The designated representatives described in
Section 18.1 conclude in good faith that
amicable resolution through continued
negotiation of the matter does not appear
likely; or
(ii) Thirty (30) calendar days after the initial
written request to appoint a designated
representative pursuant to Subsection
18.1(a) above (this period shall be deemed
to run notwithstanding any claim that the
process described in this Section 18.1 was
not followed or completed).
(b) The Parties consent to the jurisdiction of the courts
of the State of New York and to jurisdiction and
venue in the United States District Court for the
Southern District of New York for all litigation that
may be brought with respect to the terms of, and the
transactions and relationships contemplated by, this
Agreement. The Parties further consent to the
jurisdiction of any state court located within a
district that encompasses assets of a Party against
which a judgment has been rendered for the
enforcement of such judgment or award against the
assets of such Party.
18.3. Continued Performance.
Each Party agrees to continue performing its obligations under
this Agreement while any dispute is being resolved except to
the extent the issue in dispute precludes
Supply Agreement Confidential - WinStar/Lucent
44 -
performance (dispute over payment shall not be deemed to
preclude performance).
18.4. Governing Law.
This Agreement and performance under it shall be governed by
and construed in accordance with the laws of the State of New
York without regard to its choice of law principles.
19. INSURANCE REQUIREMENTS
During the Term, Lucent shall have and maintain in force the following
insurance coverages:
(a) Worker's Compensation and Employer's Liability.
Lucent is required to comply with applicable federal
and state workers' compensation and occupational
disease statutes. If occupational diseases are not
compensable under those statutes, they shall be
covered under the employer's liability section of
Lucent's insurance policy. Employer's liability
coverage of at least $1,000,000 shall be required,
except in States with exclusive or monopolistic funds
that do not permit workers' compensation to be
written by private carriers.
(b) General Liability. Lucent shall carry general
liability insurance coverage for product liability of
at least $1,000,000 per occurrence; bodily injury
written on the comprehensive form or policy of at
least $1,000,000 per occurrence per person; property
damage of at least $1,000,000 per occurrence.
(c) Automobile Liability. Lucent shall carry automobile
liability insurance written on the comprehensive form
of policy. The policy shall provide for bodily
injury and property damage liability covering the
operation of all automobiles used in connection with
performing under the Agreement. Policies covering
automobiles operated in the United States shall
provide coverage of at least $1,000,000 per
occurrence for bodily injury and $300,000per
occurrence for property damage. The amount of
liability coverage on other policies shall be
commensurate with any legal requirements of the
locality and sufficient to meet normal and customary
claims.
The foregoing insurance coverages shall be primary and
non-contributing with respect to any other insurance or self
insurance that may be maintained by WinStar. Lucent shall
cause its insurers to issue certificates of insurance
evidencing that the coverages and policy endorsements
required under this Agreement are maintained in force and
that not less than thirty (30) calendar days written notice
shall be given to WinStar prior to any modification,
cancellation or non-renewal of the policies. The minimum
limits of coverage specified herein are not intended, and
shall not be construed, to limit any liability or indemnity
of Lucent under this Agreement.
Supply Agreement Confidential - WinStar/Lucent
45 -
20. GENERAL
20.1. Binding Nature and Assignment.
(a) This Agreement shall accrue to the benefit of and be
binding upon the Parties hereto and any purchaser or
any successor entity into which either Party has been
merged or consolidated or to which either Party has
sold or transferred all or substantially all of its
assets.
(b) Neither Party may, or shall have the power to, assign
this Agreement or delegate such Party's obligations
hereunder without the prior written consent of the
other, except that WinStar may assign its rights and
obligations under this Agreement without the approval
of Lucent to
(i) an entity which acquires all or
substantially all of the assets of WinStar,
(ii) to any Affiliate, or
(iii) to a successor in a merger or acquisition of
WinStar;
provided, however, that in the event that the
financing provided by Lucent under the Credit
Agreement is terminated as a result of such
assignment, then Lucent's consent to such assignment
shall be required if the entity has credit worthiness
less than that of WinStar.
20.2. Entire Agreement.
This Agreement, including any attached Schedules, constitutes
the entire agreement between the Parties with respect to the
subject matter in this Agreement, and supersedes all prior
agreements, whether written or oral, with respect to the
subject matter contained in this Agreement.
20.3. Notices.
All notices, requests, demands, and determinations under this
Agreement (other than routine operational communications),
shall be in writing and shall be deemed duly given (i) when
delivered by hand, (ii) one (1) business day after being
given to an express, overnight courier with a reliable system
for tracking delivery, (iii) when sent by confirmed facsimile
with a copy delivered by another means specified in this
Section, or (iv) four (4) business days after the day of
mailing, when mailed by United States mail, registered or
certified mail, return receipt requested, postage prepaid,
and addressed as follows:
Supply Agreement Confidential - WinStar/Lucent
46 -
If to WinStar: If to Lucent:
WinStar Communications, Inc. Lucent Technologies Inc.
0000 Xxxxxxxx Xxxx 0 Xxxx Xxxxxx Xx
Xxxxx Xxxxxx, Xxxxxxxx 00000 Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Senior VP, Network Operations Attn: President, Global
Commercial Markets
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
With a copy to: With a copy to:
WinStar Communications, Inc. Lucent Technologies Inc.
000 Xxxx Xxxxxx 000 Xxxx Xxxxxx Xx.
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxx, Xxx Xxxxxx 00000
Attn: General Counsel Attn: Vice President of Law
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
A Party may from time to time change its address or designee
for notification purposes by giving the other prior written
notice of the new address or designee and the date upon which
it will become effective.
20.4. Counterparts.
This Agreement may be executed in several counterparts, all of
which taken together shall constitute one single agreement
between the Parties hereto.
20.5. Relationship of Parties.
Lucent, in furnishing Deliverables and Services hereunder, is
acting as an independent contractor, and Lucent personnel
(including its subcontractors) shall not be considered or
represented as employees or agents of WinStar. Lucent is not
otherwise an agent of WinStar and has no authority to
represent WinStar as to any matters, except as expressly
authorized in this Agreement. Lucent is solely responsible
for: (a) performing its responsibilities under this
Agreement, (b) management and control of its personnel; (c)
the payment of all compensation owed to its personnel,
including payment of employment-related taxes, benefits, and
worker's compensation insurance; (d) the filing of all
required employment returns and reports; and (e) the
withholding and payment of all applicable federal, state, and
local taxes and other wage or employment assessments,
including but not limited to income tax, social security tax,
and unemployment insurance premiums for its personnel.
20.6. Severability.
In the event that any provision of this Agreement conflicts
with the law under which this Agreement is to be construed or
if any such provision is held invalid by an arbitrator or a
court with jurisdiction over the Parties, such provision shall
be deemed to be restated to reflect as nearly as possible the
original intentions of the Parties in accordance with
applicable law. The remainder of this Agreement shall remain
in full force and effect.
Supply Agreement Confidential - WinStar/Lucent
47 -
20.7. Consents and Approval.
Except where expressly provided as being in the sole
discretion of a Party, where agreement, approval, acceptance,
consent, or similar action by either Party is required under
this Agreement, such action shall not be unreasonably delayed
or withheld. An approval or consent given by a Party under
this Agreement shall not relieve the other Party from
responsibility for complying with the requirements of this
Agreement, nor shall it be construed as a waiver of any rights
under this Agreement, except as and to the extent otherwise
expressly provided in such approval or consent.
20.8. Waiver of Default.
No waiver or discharge hereof shall be valid unless in writing
and signed by an authorized representative of the Party
against which such amendment, waiver, or discharge is sought
to be enforced. A delay or omission by either Party hereto to
exercise any right or power under this Agreement shall not be
construed to be a waiver thereof. A waiver by either of the
Parties hereto of any of the covenants to be performed by the
other or any breach thereof shall not be construed to be a
waive of any succeeding breach thereof or of any other
covenant herein contained.
20.9. Cumulative Remedies.
Except as otherwise expressly provided herein, all remedies
provided for in this Agreement shall be cumulative and in
addition to and not in lieu of any other remedies available to
either Party at law, in equity or otherwise.
20.10. Survival.
Any provision of this Agreement which contemplates performance
or observance subsequent to any termination or expiration of
this Agreement (in whole or in part) shall survive any
termination or expiration of this Agreement (in whole or in
part, as applicable) and continue in full force and effect.
Without limiting the generality of the foregoing, WinStar
shall have the right to extend any Warranty Period pursuant to
Section 1.1(ss) and order spare parts and Products following
terminatio of this Agreement, and each Party's obligations
with respect to such Services and Products (including those
set forth in Sections 9.3 and 14.8) shall survive expiration
or termination of this Agreement (in whole or in part, as
applicable) and continue in full force and effect.
20.11. Public Disclosures.
All media releases, public announcements, and public
disclosures relating to this Agreement or the subject matter
of this Agreement, including promotional or marketing
material, but not including announcements intended solely for
internal distribution or disclosures to the extent required to
meet legal or regulatory requirements beyond the reasonable
control of the disclosing Party, shall be coordinated with and
shall be subject to approval by WinStar prior to release.
Supply Agreement Confidential - WinStar/Lucent
48 -
20.12. Service Marks.
(a) Lucent agrees that it shall not, without WinStar's
prior written consent, use the name, service marks or
trademarks of WinStar or its Affiliates.
(b) WinStar may use the names, tradenames, trademarks,
service marks, trade devices, logos, codes, brand
names or other symbols of Lucent or its Affiliates
(collectively, the "Lucent Indicia") subject to the
following terms and conditions:
(i) WinStar shall not use Lucent Indicia unless
and until approval is rendered pursuant to
Subsection (ii) of this Subsection (b).
(ii) WinStar shall submit all proposed usage of
Lucent Indicia for approval by Lucent on
such written or electronic forms as may be
developed by Lucent and provided to WinStar
from time to time. Lucent shall either
accept or reject WinStar's proposed usage of
Lucent Indicia in writing within three (3)
business days of receipt of WinStar's
request. If Lucent fails to provide such
written acceptance or rejection within such
three-day period, WinStar's proposed usage
shall be deemed approved by Lucent.
(iii) WinStar shall be entitled to use the Lucent
Indicia as proposed by WinStar to the extent
approved by Lucent pursuant to Subsection
(ii) of this Subsection (b); provided,
however, that such use conforms to the
guidelines set forth in Schedule K (the
"Lucent Indicia Co-Marketing Program
Guidelines"), except that for the purposes
of Schedule K, WinStar shall be deemed
enrolled in the Co-Marketing Program.
Without limiting the Lucent Indicia Use
Guidelines, the following shall also apply:
(1) WinStar may not conduct business as
Lucent under Lucent's name or logo;
(2) WinStar may not use any Lucent
Indicia or variations thereof to
identify WinStar or WinStar's
products or services except as
specifically permitted by the
Lucent Indicia Use Guidelines; and
(3) WinStar may not use any of the
Lucent Indicia in a manner that is
likely to confuse the public
concerning the relationship of the
Parties.
(iv) Except as otherwise required by, and without
limiting the terms of, this Agreement,
WinStar acknowledges that it has no
ownership or other interest in the Lucent
Indicia and shall make no claim with respect
to the ownership or other interest in such
Indicia. WinStar's rights to use the Lucent
Indicia shall not be exclusive; Lucent
expressly reserves the
Supply Agreement Confidential - WinStar/Lucent
49 -
right to contract with others to use the
Lucent Indicia.
20.13. Third Party Beneficiaries.
Except as otherwise provided in this Agreement, this Agreement
shall not be deemed to create any rights in third parties,
including suppliers and customers of a Party, or to create any
obligations of a Party to any such third parties.
20.14. Amendment.
This Agreement shall not be modified, amended or in any way
altered except by an instrument in writing signed by both
Parties.
20.15. Interpretation
(a) Terms other than those defined in this Agreement
shall be given their plain English meaning, and those
terms, acronyms and phrases known in the
telecommunications and information technology
services industries shall be interpreted in
accordance with their generally known meanings.
Unless the context otherwise requires, words
importing the singular include the plural and
vice-versa. Terms defined in the Credit Agreement
shall not be superceded by the same terms defined in
this Agreement.
(b) References to "Article", "Section", "Subsection" and
"Schedule" mean references to an article, section,
subsection or schedule of this Agreement, as
appropriate, unless otherwise specifically stated.
(c) The article and section headings in this Agreement
are intended to be for reference purposes only and
shall in no way be construed to modify or restrict
any of the terms or provisions of this Agreement.
(d) The words "include," "includes", and "including",
when following a general statement or term, are not
to be construed as limiting the general statement or
term to any specific item or matter set forth or to
similar items or matters, but rather as permitting
the general statement or term to refer also to all
other items or matters that could reasonably fall
within its broadest scope.
(e) All dollar amounts set forth herein are in United
States dollars.
20.16. Incorporation by Reference and Order of Precedence.
(a) All Schedules attached hereto are hereby incorporated
by reference into this Agreement. Subject to Section
20.14, any amendments to this Agreement (including
with respect to Schedules), and any additional
Schedules that are agreed upon by the Parties
subsequent to the Effective Date, shall likewise be
incorporated by reference into this Agreement.
Supply Agreement Confidential - WinStar/Lucent
50 -
(b) Any conflict among or between the documents making up
this Agreement will be resolved in accordance with
the following order of precedence (in descending
order of precedence):
(i) This Agreement;
(ii) The Schedules;
(iii) The Exhibits to the Schedules; and
(iv) Purchase Orders.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
undersigned officers, thereunto, duly authorized, as of the date first written
above.
WINSTAR COMMUNICATIONS, INC. LUCENT TECHNOLOGIES INC.
By: /s/ Xxxx Xxxxxx By: /s/ Xxxx Xxxxxxxx
----------------------- ---------------------
Name: Xxxx Xxxxxx Name: Xxxx Xxxxxxxx
----------------------- --------------------
Title: President and COO Title: President -- GSM
----------------------- --------------------
Date: October 21, 1998 Date: October 21, 1996
----------------------- --------------------
Supply Agreement Confidential - WinStar/Lucent
51 -
Schedule A
Statement of Work
1. General.
1.1. General.
This Statement of Work describes certain services, functions and
responsibilities of Lucent, including the design, architecture,
planning, program management and implementation of the Network.
The Services described in this Statement of Work are intended to
be comprehensive as to the categories of services to be performed
by Lucent, but may not necessarily be all inclusive in describing
the particular activities, resources or other details necessary
for the performance of those Services. Appropriate additional
implementation details and procedures for the Services described
herein will be included in documents subsequently developed under
this Agreement.
As more fully described herein, Lucent will have full
responsibility to:
(i) Develop the end-to-end design and architecture of the
Network;
(ii) Develop and design the end-to-end Network Technology,
including Network Elements specifications pursuant to
Best of Breed;
(iii) Plan and execute the implementation of the Network;
(iv) Consistent with the terms of this Agreement, acquire
(on WinStar's behalf) the requisite Network Elements
for the implementation of the Network;
(v) Install, integrate and test the Network Elements with
each other and with the appropriate OSS and BSS; and
(vi) Provide continued engineering support for the Network
as it may evolve and expand to include additional
WinStar business units and WinStar customers.
1.2. Current WinStar Topology, Network Building Blocks And Elements.
(a) Network Building Blocks. The current Network consists of
independent voice and data networks. The voice network is
entirely TDM based while the data network is a combination of
TDM and packet technologies. The network elements of the
voice and data networks are being physically colocated to
afford all of WinStar's customers the opportunity to access
all products and services in a seamless manner. The WinStar
network is comprised of the following major building blocks:
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-1 - Execution Version
(i) Central Offices. The Central Office is the service
node for all voice and data services. It houses a
voice switch, an ATM switch, frame relay switch,
microwave radios, transmission gear, host loop
carrier equipment, distribution frames and all
necessary power, network management devices, data
service gateways, HVAC and environmental controls.
Many Central Offices also serve as Hubs, as defined
below.
(ii) Hubs. An access node, primarily utilizing wireless
technology, consisting of microwave radios, host loop
carrier equipment, transmission gear, distribution
frames, network management devices and all necessary
power, HVAC and environmental controls. A Hub in many
cases is also a B-Site in that it serves WinStar
customers that reside in the Hub building.
(iii) B-Sites. A customer building, also known as a WinStar
Building that houses microwave radios, remote loop
carrier equipment, intra-building connectivity
facilities and/or gear to reach WinStar's customer
demarcation point and all necessary power. A B-Site
can also serve as a Hub in a reduced configuration.
(iv) Colos. WinStar can physically or virtually colocate a
subscriber loop or transmission/mux gear with LECs,
IXCs and CAPs. WinStar uses LECs and CAPs to access
unbundled loops and/or T1/T3 facilities for the
provisioning of service to WinStar customers.
(v) Data-Only Points. In other markets, there may be
WinStar services deployed that are not built around a
5ESS anchor. These other markets may also require a
Central Office environment with engineered access,
power, transmission and switching. Lucent will extend
EF&I services to these markets in a similar program
managed environment as is being provided in core
cities.
(b) Topology. The network topology currently consists of a
centralized switching platform that provides all
of the features, services and switching functionality for all
customers in a particular Network Serving Area. Each switch
delivers services to and from WinStar customers through
interconnect facilities to and from the LEC, IXCs and
Internet Peering Points to which WinStar has connections.
Today, Switches connect to Hubs in a hub-and-spoke topology.
Also, Hubs connect to B-Sites in a hub-and-spoke topology.
Exhibit A-6 sets forth the current Network topology.
(c) Switching. The voice network today consists of the Lucent
5ESS, typically deployed one per city and operated as the
centralized switching platform for the entire market. All
Switches provide local service through interconnect
arrangements with the incumbent LEC. All WinStar switches
provide long distance service to WinStar local customers and
most switches provide long distance services to WinStar
switched access long distance customers. The data
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-2 - Execution Version
network consists of a Newbridge 36170 ATM switch and a
Cascade 9000 frame relay switch in the Central Office.
(d) Interconnect. The Interconnect facilities are the physical
connections from WinStar's Switch to other carrier networks
for the provisioning of services to WinStar customers. These
facilities connect to the LECs, IXCs, Internet Peering
Points, Carrier Hotels (locations with a large concentration
of carrier POPs) and CAPs. The capacity of the interconnect
facilities varies from T-1 to multiple OC-12 and OC-48. The
interconnect network can consist of:
(i) Leased telco facilities on copper and/or fiber;
(ii) Point-to-point microwave radio facilities operating on
the 18, 23, 28 and 38 GHz bands; or
(iii) Fiber that has been procured through long-term IRUs
and uses optronics owned and operated by WinStar.
(e) Transmission. The transmission network provides connections
from the Switch to the Hubs, Colos and Switches in other
WinStar Network Serving Areas. The capacity of the
transmission facilities varies from T-1 to multiple OC-12 and
OC-48. The transmission network can consist of:
(i) Leased telco facilities on copper and/or fiber;
(ii) Point-to-point microwave radio facilities operating
on the 18, 23, 28, 38 GHz bands; or
(iii) Fiber that has been procured through long-term IRUs
and uses optronics owned and operated by WinStar.
(f) Access. The access network provides connections from B-Sites
to Hubs and Switches. While the preferred and most widely
used access medium is WinStar's Wireless FiberSM, the access
network can consist of any of the following:
(i) Dedicated, TDM-based, point-to-point microwave radio
facilities operated on primarily the 28 and 38 GHz
bands where WinStar owns licenses. WinStar does use
other radio bands if and when they are available or
appropriate. The geographical coverage areas, as
defined and authorized by the FCC where WinStar owns
38 GHz licenses, are called Licensed Serving
Areas("LSAs"). The geographical coverage areas
authorized by the FCC and where WinStar owns 28 GHz
licenses are called Basic Trading Areas("BTAs");
(ii) Dedicated, leased telco facilities on copper or fiber;
(iii) Colocation with LECs, ISCs or CAPs utilizing unbundled
loops; or
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-3 - Execution Version
(iv) Fiber that has been procured through long-term IRUs
and uses optronics owned and operated by WinStar.
The capacity of the access network is primarily 8xT1 or DS-3
in the case of microwave radio facilities. In the case of
leased facilities or WinStar fiber, the capacity varies from
T1 to OC-12 and OC-48.
(g) CTE/CPE. The CTE/CPE employed today consists of channel
banks, digital loop carrier equipment, DSUs, routers, bridges
and hubs. Most B-Sites have loop carrier equipment deployed
as a matter of course to provision voice services. Other
devices are selected and deployed at the time of customer
order based on the services to be offered to the customer.
1.3. WinStar Network Services
WinStar offers a wide range of communications services to its
customers, including: Local Voice, LD Voice, Network Transport,
Internet Services, LAN/WAN Integration, and other Professional
Services. This functionality may include
(a) Domestic Voice Functionality. Voice service products may or
may not be tariffed. Tariffed services must interoperate and
interwork with other like tariffed services, if offered, from
incumbent carriers in a service area. On a service-by-service
basis, non-tariffed enhanced services may or may not
interwork or interoperate with other non-tariffed like
offerings in a service area.
(i) Basic and Enhanced Voice,
(ii) CLASS,
(iii) Operator services,
(iv) Directory services,
(v) 911 services,
(vi) Local switching (Class 5), AIN,
(vii) LD switching (Class 4) and IN,
(viii) Least Cost Routing,
(ix) DXC Access integration,
(x) 800/888 services,
(xi) Information/900 services,
(xii) Centrex,
(xiii) ISDN,
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-4 - Execution Version
(xiv) Call center outsourcing services,
(xv) Network-based voicemail,
(xvi) Voice conference services,
(xvii) Voice network design,
(xviii) Outsourcing services,
(xix) CPE, and
(xx) PBX CTI.
(b) Domestic Data Functionality. Data service products may or may
not be tariffed. Tariffed services must interoperate and
interwork with other like tariffed services, if offered, from
incumbent carriers in a service area. On a service by service
basis, non-tariffed enhanced services may or may not
interwork or interoperate with other non-tariffed like
offerings in a service area.
(i) Point to Point Connectivity,
(ii) Internet Access,
(iii) UseNet groups,
(iv) Web hosting, e-commerce,
(v) VPN connectivity,
(vi) Email, Network Notes services,
(vii) IP telephony/fax,
(viii) Multimedia and video,
(ix) IP multimedia conferencing services,
(x) CPE,
(xi) WAN professional services,
(xii) LAN professional services,
(xiii) Security services,
(xiv) E Commerce,
(xv) Web/Intranet systems integration,
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-5 - Execution Version
(xvi) Private Peering,
(xvii) Customer Network Management,
(xviii) TCP/IP,
(xix) Frame Relay, and
(xx) X.25 / SNA integration.
1.4. Planned WinStar Network Evolution.
WinStar anticipates certain changes in the topology of the Network
as new technologies and Network Elements evolve. WinStar will work
closely with Lucent to plan and implement this evolution under the
principles of SNAP-D and Best of Breed so that the Network
continues to be efficient from a cost, products, services,
features, reliability and maintainability standpoint. Exhibit A-7
sets forth a view of the planned Network topology. While this
section and Exhibit A-7 set forth the anticipated network
evolution, the final architecture will depend on future
requirements, cost and availability of access and transmission
bandwidth, technologies and services.
It is the intent of the Parties to merge voice and data services
into common local infrastructure where these service share common
"Next Generation" Network Elements. In addition, a common
inter-city transport network is required to support combined voice
and data functionality. This integrated metropolitan and national
network will employ Best of Breed technology.
(a) Switching. The Network today consists of a centralized
switching topology connected to access nodes via transmission
facilities. This topology is expected to gradually evolve to
a more distributed switching architecture whereby many former
access nodes become service nodes.
(i) The building blocks formerly referred to as Switches,
and perhaps several of the Hubs, will become
Integrated Core Service Nodes ("ICSNs"). The ICSN may
contain many of the Network Elements as it did
before, however it will now be configured and
integrated in a manner that the provisioning of
service and utilization of transmission and access
facilities will become more efficient and seamless
relative to the voice, data and video services
provided. Also, it is anticipated that there will be
more than a single ICSN in a particular market, which
will offer additional efficiencies via more
localized, multiple interconnect facilities to other
carrier networks.
(ii) Hubs that do not qualify as ICSNs because of traffic
density or operating costs will become Integrated
Edge Service Nodes ("IESNs"). The IESN will be much
like the ICSN, but it will not have direct
interconnect facilities to other carrier networks and
the switching functionality will be less
sophisticated.
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-6 - Execution Version
(b) Interconnect. The interconnect facilities defined in the
previous section are expected to evolve in three major ways:
(i) Facilities will migrate from hard partitioning for
voice and data services to clear pipes over which
voice and data traffic will be transported via packet
technologies;
(ii) With the addition of new, distributed service nodes,
there will be multiple interconnection points to
other carrier networks from the numerous ICSNs as
opposed to a single interconnect point with the
centralized switching architecture; and
(iii) The Interconnect facilities will continue to use the
mediums as previously described but the use of
WinStar fiber procured through long-term IRUs and
using optronics owned and operated by WinStar is
expected to increase. Also, it is anticipated that
long-term trends in bandwidth requirements and
increased WinStar market share will drive the
capacity of these facilities much higher than today.
(c) Transmission. Fundamental to advanced services is the
deployment of Lucent Optical Networking solutions in the
Network (locally and nationally), switching and restoration
capabilities for multiple optical rings, and the appropriate
terminating equipment required to deliver services to WinStar
customers. Network bandwidth requirements are expected to
increase to multiple OC-192s in the coming years in order to
support rapidly expanding Internet Protocol (IP) traffic. IP
traffic is expected to be pervasive in the local loop, over
radio facilities and in the long haul network. The
Transmission network is expected to evolve in the following
ways:
(i) The topology will migrate from a hub-and-spoke
topology to a ring and/or mesh topology where it is
determined to be the most cost-effective and
efficient solution.
(ii) The transmission facilities will be configured in
such a way as to allow dynamic allocation of
bandwidth. Transmission facilities that are currently
partitioned for voice and data will gradually evolve
into simply "pipes" over which voice and data
services are transported seamlessly via packet
technologies.
(iii) The physical provisioning that is required today will
be greatly reduced and gradually replaced by logical
and virtual connections.
(iv) The transmission facilities will continue to use the
mediums as previously described but the use of
WinStar fiber procured through long-term IRUs and
using optronics owned and operated by WinStar is
expected to increase dramatically. Also, it is
anticipated that long-term trends in bandwidth
requirements and increased WinStar market share will
drive the capacity of these facilities much higher
than today.
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-7 - Execution Version
(d) Access. The Access network will evolve in the following ways:
(i) The access network medium will become increasingly
more dependent on wireless vs. leased telco
facilities as the number of B-Site and Hub leases
increases which in turn will greatly increase the
number of constructed wireless access points;
(ii) The wireless access medium will allow dynamic
allocation of bandwidth over the air interfaces via
packet technologies;
(iii) Increased bandwidth requirements and new technologies
for advanced services will cause the average wireless
bandwidth per building to increase from 8xT1 and DS-3
bandwidth to OC-3 speeds and higher;
(iv) New point-to-multipoint radio technologies will become
commercially available and offer "sharing" or
"trunking" of WinStar's wireless spectrum to multiple
B-Sites simultaneously with an air interface that has
evolved from TDM to packet technologies. The Access
network will become a hybrid wireless network
consisting of a combination of dedicated
high-capacity point-to-point radio and
point-to-multipoint radio technologies; and
(v) WinStar will continue to acquire spectrum in
different portions of the wireless spectrum, which
will create opportunities for new Access topologies
and schemas.
(e) CTE/CPE. The CTE/CPE employed today is expected to change
dramatically to integrated edge devices and customer premises
equipment, which will provide flow-through logical and
virtual provisioning as a much more graceful solution to the
current challenges of physical provisioning of broadband
integrated voice, data and video services. These edge
devices, unlike today's solutions, will be deployed as a
matter of course based on the expectation that cost-effective
solutions will be developed to justify doing so.
2. Network Architecture and Technology.
2.1. General.
Lucent's Network design will consist of two primary components
(Network Architecture and Network Technology), which will be
detailed and analyzed at two levels: overall and city-specific.
The city-specific level will be divided into four application
areas: domestic intra-city, domestic inter-city, international
intra-city and international inter-city. Following development of
the Network design, Lucent will develop city-specific project
plans that define the timing, cost, functionality and scope of the
implementation for each city.
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-8 - Execution Version
2.2. WinStar Engineering Requirements.
(a) WinStar will be responsible for identifying the short- and
long-term engineering requirements and business constraints
of the Network (overall and at a city-specific level),
including products supported, functionality, performance
standards and volume, based upon WinStar's engineering
product plans. Lucent will analyze and comment on these
requirements, including using commercially reasonable efforts
to identify any omitted services that are required or
related. After consideration of Lucent's review and comment,
WinStar will specify its final engineering requirements.
These requirements will include year one by quarter, year two
by half-year, and a target year three estimation.
(b) WinStar will provide information regarding WinStar-managed or
-controlled elements of the implementation along with
associated timing, cost and functionality requirements.
(c) The Network Architecture and Network Technology developed by
Lucent shall be capable of handling a margin of deviation
above or below the network capacity defined by market
projections and sales forecast volumes provided by WinStar.
Changes to the Network, Network Architecture or Network
Technology to accommodate volumes beyond this acceptable
margin of deviation shall be handled as a special project in
accordance with Section 5.4 of this Schedule A. In
particular, the acceptable margin of deviation shall be as
follows:
Timeframe Acceptable Deviation (+/-)
---------------------------- ------------------------------------------
First quarter of year one Ten percent (10%)
Second quarter of year one Twelve and one-half percent (12 1/2%)
Third quarter of year one Fifteen percent (15%)
Fourth quarter of year one Seventeen and one-half percent (17 1/2%)
First half of year two Twenty percent (20%)
Second half of year two Twenty-five percent (25%)
Year three Thirty percent (30%)
2.3. Baseline Analysis.
Within forty-five (45) days after the Effective Date, Lucent
will complete a baseline analysis of the existing state of the
Network. Initially, this analysis will include a documentation
of the architecture of the Network as of the Effective Date,
including current services supported, objective and actual
network performance, and operations criteria. Part of the
analysis will be a gap analysis, which is an assessment of
problems and issues with that architecture in light of
WinStar's short and longer-term target services, network
performance, and operating criteria. The remainder of the
analysis will be a set of multiple network architecture views
(generic, local and inter-city to support a broad product set
including voice, data and video), services offered, end-to-end
performance criteria, operations criteria (e.g. flow-through),
and service product features, functionality and estimated cost
points. WinStar agrees to provide timely internal information,
expertise and participation in order to meet the schedule.
Lucent
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-9 - Execution Version
will assign a chief architect (with a properly staffed
supporting team) to initiate the baseline analysis within one
week of the Effective Date.
2.4. Overall Network Architecture.
Within ninety (90) days after the Effective Date, Lucent will
develop and submit a Network Architecture, based upon WinStar's
final engineering requirements and in compliance with Applicable
Standards, to WinStar for review and potential approval. This
document will be the master specification for the Network and will
describe the final architecture anticipated for implementation
under the Agreement. Where appropriate, the Network Technology
specifications described below will be incorporated by reference.
The Network Architecture will include recommended technical
performance standards with regard to system and Network Element
performance (e.g., MTBF, reliability, recoverability, availability
and throughput) and will describe how all Network Elements
interface with each other, as well as all protocol conversions and
encapsulations. The specification will fully describe the Network
and endpoint and NOC access thereto, alternate access technologies
and co-location strategies. The Network Architecture will support
views of year one by quarter, year two by half-year, and a target
year three view. This document will be updated quarterly to
reflect changes in WinStar's business plan, Lucent and Third Party
Products, new technologies and evolving standards.
2.5. Overall Network Technology.
Lucent will develop a Network Technology plan that specifies the
Network Elements composing the Network, as designed in the
WinStar-approved Network Architecture. The Network Technology will
include:
(a) Public Network Specifications. For each public network
interface included in the Network Technology, Lucent will
submit a set of interface specifications as part of the
Network Technology. Each interface specification will
describe the interface standards and options to be
implemented for a specific public network, including network
management and data interfaces.
(b) Product Specifications. For each item of Equipment and
Software included in the Network design, Lucent will submit a
specification as part of the Network Technology. Lucent's
development of these specifications shall include the
following:
(i) Lucent will perform technical evaluations of required
Products, based on feature content,
cost-effectiveness (including impact of SNAP-D),
operational efficiency and availability, the Product
Spec Principles set forth in Exhibit A-5 and Schedule
B and migration considerations.
(ii) Lucent will perform validation, operations and
interoperability testing, as set forth below in
Section 4, and Lucent Certification of required
Products.
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-10 - Execution Version
(iii) Lucent will review and present to WinStar a
sufficient number of system options prior to deciding
on a technical cost-effective solution. The options
will cover popular industry solutions and suppliers.
2.6. City-Specific Network Architecture and Technology.
Lucent will develop Network Architecture and Network Technology
plans at a city-specific level, divided into four application
areas: domestic intra-city, domestic inter-city, international
intra-city and international inter-city. The city-specific Network
design and architecture developed by Lucent will include actual
sizing and deployment of specific Network Elements as determined
by WinStar's city-specific engineering requirements, as well as
preconditioning for growth and a SNAP-D plan, as appropriate. The
Parties agree to employ, where feasible and practical, pre-defined
equipment models in developing City-Specific Plans. Lucent will
perform validation, operations and interoperability testing and
acceptance of the city-specific plans, as set forth below. After
appropriate testing, the city specific Network Architecture and
Network Technology plans will be submitted to WinStar for review
and potential approval.
2.7. Systems Architecture and Design.
(a) To achieve an integrated end-to-end network solution for
WinStar, it will be necessary to integrate all Network
Elements with WinStar's Operations Support Systems and
Business Support Systems (OSS/BSS). These systems are used in
the day-to-day management and administration of WinStar's
business and support the following broad business functions:
(i) Network configuration management;
(ii) Network fault management;
(iii) Network performance management;
(iv) Network security management;
(v) WinStar customer provisioning;
(vi) WinStar customer billing; and
(vii) Management information reporting.
(b) Lucent will work collaboratively with WinStar to facilitate
the integration of Network Elements into WinStar's BSS/OSS
environment. Lucent will define network event data generated
by all Network Elements and will provide the data and
interface specifications to WinStar. All Network Elements
will be compliant with applicable industry standard network
management interfaces, including but not limited to SNMP and
TMN Q3.
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-11 - Execution Version
2.8. Engineering and Consulting Services.
(a) Review and Re-Optimizing. WinStar will assess the Network
design in terms of its internal five-year business model and
the "City Success Model." This assessment may lead to an
iterative process to resolve discrepancies and omissions. In
addition, Lucent (with WinStar's input, review and potential
approval) will continually review and re-optimize the Network
design (Architecture and Technology) per a mutually
agreed-upon schedule as new users are added, WinStar develops
new products, volumes change and technology evolves.
(b) Engineering Services. On an on-going basis, but consistent
with the transition plan described in Section 3.3 of this
Schedule A, Lucent's shall be responsible for engineering,
which shall include the following services, as applicable and
necessary for functions set forth in the Responsibility
Matrices at Exhibits A-1 and A-3:
(i) Network architecture, planning and engineering;
(ii) Providing technical expertise in network management
and transport technologies;
(iii) Performing ongoing technology assessment, developing
technology feasibility studies, and coordinating and
determining budgetary costs regarding the Network;
(iv) Evaluating, recommending, and analyzing design
aspects of Equipment, Software, network and circuit
changes and enhancements; (v) Switch and services
engineering;
(vi) Capacity planning and management;
(vii) Transmission and facilities engineering;
(viii) Wireless engineering;
(ix) Local access facilities and equipment engineering;
(x) In-building equipment and facilities engineering;
(xi) End user product/services engineering;
(xii) Inter-city network engineering;
(xiii) International network engineering;
(xiv) Mechanical/electrical site engineering;
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-12 - Execution Version
(xv) Managing documentation requirements of the Network;
and
(xvi) Providing overall technical consulting as requested by
WinStar.
(c) Documentation. Lucent's performance of engineering services
shall be supported through its use of the following
documentation and specifications. The structure and specific
content of the documentation shall be mutually agreed upon by
the Parties. However, it is expressly agreed that the
documentation shall include, at a minimum, the current
WinStar information content for these documents.
(i) EOS Generation. The Engineering Order Specification
defines WinStar functional and capacity requirements
used to order Network Elements. An EOS is required
prior to ordering Network Elements.
(ii) Installation Methods and Procedures. The
installation-related Methods and Procedures outline
the steps necessary to install a Network Element in
the Network.
(iii) Capacity Reports Generation. Capacity reports show
network and equipment utilization, including traffic
characteristics and utilization of ports, memory, CPU
and other system resources.
(iv) Network Trunking Design. The network trunking design
depicts how a WinStar switch is connected to other
networks for a given market.
(v) Circuit Service Orders. Circuit Service Orders
specify new or augmentation quantities of circuits
needed. Circuit Service Orders are also used to
communicate translations requirements associated with
new circuits.
(vi) Equipment Growth Orders. Equipment Growth Orders
specify hardware growth requirements.
(vii) Switch Services Engineering Plans. Switch Services
Engineering Plans, define new or existing city switch
engineering requirements. Typical SSE Plans include
central office configuration diagrams, central office
connectivity design, CLLI codes, points of contact
for ILEC and other service providers, Product
engineering requirements and a new technology
architectural description.
(viii) Office Data Administration and Translations
Requirements. The ODA specifies new switch
translations requirements. Translations Requirements
specify translations for existing systems.
(ix) Test Plans. Test Plans define actions needed to test
a new feature or system, as described more fully
below.
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-13 - Execution Version
(x) End User Product/Services Engineering Plans.
End-to-end Network Element functionality and
interoperability required to support WinStar-defined
end user products and services, including WinStar
customer provisioning guidelines for new services;
(xi) Network Administration and Network Optimization
Orders. Network Administration and Network
Optimization orders define actions needed to improve
network efficiency. Examples of network
administration and network optimization orders might
include an order to groom two customers with small
counts of DS0s into a single switch facility or to
move a trunk group from one switch SM to another in
order to balance switch traffic.
3. Planning Services and Program Management.
3.1. Program Management.
Lucent will be responsible for overall program management of the
functions performed by Lucent and WinStar, including functions
performed in designing, engineering and building the Network, but
not including on-going Network operations (e.g., NOC operations,
product maintenance and support). Lucent will manage the overall
master schedule for functions performed by Lucent, Lucent
subcontractors, WinStar and WinStar's third-party contractors in
accordance with Exhibits A-1 and A-3 (and Exhibit A-2
(International) as mutually agreed). As functions transition from
WinStar to Lucent in accordance with the transition plan, the
project plan will be modified to reflect the transition of
responsibility and accountability. Also in accordance with the
transition plan, Lucent will assume EF&I program management
responsibility for network components (e.g., B-sites, Hubs,
Central Office and transmission sites including customer
collocation). Lucent's performance of the overall program
management function does not imply responsibility for budget, cost
or performance of work functions not directly controlled by Lucent
or its subcontractors. The Lucent program management role, as the
single point of contact for the overall design, engineer, and
build function, will include:
(a) Typical activities such as program/project schedule
development and maintenance, roles and responsibility matrix
development and maintenance, action register administration,
high-level document control, change control, critical
item/jeopardy escalation process management and program
progress reporting;
(b) Managing and communicating with the various responsible
parties (i.e., Lucent and its subcontractors, WinStar and
WinStar-directed third party resources) as appropriate so
that the Implementation meets established objectives of time,
cost, functionality and service quality, as defined in the
relevant City-Specific Plan. WinStar will provide a single
point of contact to monitor status, resolve issues and make
commitments to Lucent with regard to each WinStar-performed
function or required input; and
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-14 - Execution Version
(c) Attending regularly scheduled progress reviews with
appropriate WinStar personnel to communicate project status
and resolve issues in cooperation with WinStar.
3.2. City Implementation Planning.
(a) WinStar will develop and provide to Lucent a roll-out
schedule that, among other things, indicates cities in which
WinStar will commence offering services, the scope of those
services, budget, scope, target markets (buildings to be
targeted) and timeframes.
(b) Lucent will develop and submit City-Specific Project Plans
for WinStar's review and potential approval. Each such
City-Specific Project Plan will be based upon the
corresponding city-specific Network Architecture and Network
Technology plans and will include specific disaster, recovery
and back-out procedures. The City-Specific Plans will
schedule and detail each of the responsibilities set forth in
the matrix in Exhibit A-3, as applicable to the particular
city (i.e., for augmentation of existing cities, only a
subset will be applicable). Lucent will also take into
account WinStar input regarding WinStar functions (e.g., site
acquisition, regulatory compliance, numbering/dial plans,
ILEC facilities negotiation and build-out of common space at
the customer building). The City-Specific Project Plans will
be updated as responsibilities are completed and Network
Elements are implemented so as to incorporate developing best
practices, Best of Breed solutions and issue resolution.
3.3. Transition Planning.
(a) Except as otherwise specified in Exhibit A-4, within
forty-five (45) days after the Effective Date, Lucent will
develop a transition plan with WinStar's input, review and
potential approval, consistent with the matrices set forth in
Exhibits A-1 and A-3; provided, however, Lucent will develop
a transition plan with WinStar's input, review and potential
approval for Network Engineering/Traffic Engineering within
fifteen (15) days of the Effective Date. This plan will
address transfer of responsibility for: network architecture
and technology, planning services, program management,
testing and implementation. The transition plan will identify
and schedule Lucent assumption of responsibility based upon
the following prerequisites:
(i) Lucent core competency and Best of Breed decisions
(e.g., Lucent RF engineering and radio and data
products respectively);
(ii) Understanding (detail) of WinStar expectations;
(iii) Lucent's evolving core competencies ; and
(iv) A joint (Lucent and WinStar) development of
appropriate business processes to transition those
responsibilities, which will include a process for
positive acknowledgement of responsibility transfer.
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-15 - Execution Version
(b) The Parties intend that certain functions, such as those
that, as of the Effective Date, are performed by WinStar's
Engineering and Network Construction & Deployment
departments, although not currently within Lucent's core
competence, will be assumed by Lucent during the Term.
(c) Certain functions, although necessary to the implementation
of the Network, will remain WinStar's responsibility. This
includes site acquisition, regulatory compliance,
numbering/dial plans, ILEC facilities negotiation, build-out
of common space at the customer building and management of
business relationships with WinStar customers.
(d) WinStar and Lucent agree to providing the required subject
matter expertise, time and resources required to complete the
transition plan on schedule.
4. Testing.
4.1. Test Beds.
(a) Test Facilities. Lucent will develop and maintain test
facilities to support the test and acceptance process
necessary to drive the technical evaluation and selection set
forth in this Section ("Test Facilities").
(i) The Test Facilities will include a functional replica
of the Network environment, including each Network
Element to be implemented per the Network design. At
no additional cost to WinStar, Lucent will provide
WinStar with at least one of each Lucent Product
purchased by WinStar for implementation into the Test
Facilities. Title in all such Test Facilities Network
Elements shall vest in WinStar, and WinStar shall be
entitled to continue to use such Elements in its Test
Facilities following termination or expiration of the
Agreement. The Test Facilities must be adequate to
support the following types of network testing:
(1) End-to-end integration testing;
(2) Network topology changes;
(3) Integration testing of new/individual Network
Elements within the existing Network (including
Lucent Products and Third-Party Products) and
with the OSS/BSS;
(4) Integration testing of WinStar customer CPE and
network applications within the then-current
Network;
(5) Performance, load, and stress testing;
(6) Trouble/fault isolation;
(7) Year 2000 compliance testing; and
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-16 - Execution Version
(8) Verify support of, and compliance with,
Applicable Standards.
(ii) The Test Facilities will be capable of supporting
concurrent testing on current and future
configurations/systems and will support testing by
WinStar and WinStar's customers and third-party
vendors (subject to such third-party vendors signing
a confidentiality agreement protecting Lucent's
intellectual property). The Test Facilities will also
be used for certifying new WinStar hardware/software
configurations as well as simulating Network trouble
conditions if necessary for real-time
trouble-shooting or maintenance support.
(iii) Lucent will install in the test beds a reasonable
number of new product evaluation units for the
purpose of testing such new products and technology.
(iv) Support connection for integration testing of the
WinStar Operations Support Systems ("OSS") and
Business Support Systems ("BSS") as individual and
integrated Network Elements and technology. Act as a
WinStar customer demonstration center where WinStar
customers can, on a pre-negotiated basis, observe
interoperability of their equipment and network
applications with WinStar Network Elements, OSS and
BSS.
(b) Test Bed Scheduling. Lucent will be responsible for
scheduling and coordinating the Test Facilities as required
to support the testing requirements of Lucent, WinStar
(including OSS, BSS and Year 2000 compliance), WinStar's
customers and third-party vendors.
(i) The Lucent test bed will be dedicated to WinStar.
(ii) WinStar will advise Lucent, on a monthly basis, of the
anticipated testing requirements. Lucent will take
these testing requirements into account in developing
the testing schedule for the next ninety (90) days.
(iii) WinStar will be responsible for supporting testing,
as reasonably required, when conducted by Lucent or
WinStar or in support of WinStar customers and
third-party vendors.
4.2. Test Plans.
Lucent will develop test plans and scripts for a structured,
hierarchical test program that will verify the functionality of
individual Network Elements and the ability of the Network
Elements to inter-operate with each other in the Network as
described in the WinStar-approved design specifications. The test
plans will include test conditions and the anticipated acceptable
outcome thresholds (e.g. with regard to interoperability,
manageability, engineering guidelines, product specs, Y2K, IEEE,
and NEBs compliance).
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-17 - Execution Version
4.3. Conduct of Lab Testing.
Lucent will perform lab testing according to the WinStar-approved
test plans, and will provide the results to WinStar as input to
the review and approval process. Lab testing will be performed to
validate the Network Architecture and Network Technology, to
validate additions and changes thereto, and for standards
compliance and interoperability with other Network Elements,
WinStar OSS and BSS, and WinStar customer CPE. This testing will
include:
(a) Product testing, performed through factory acceptance tests,
which demonstrate the ability of individual Network Elements
to provide the functionality described in the associated
design specifications. These tests should verify all
interface and standards compliance for the Network Elements,
employing simulation or stimulation devices.
(b) Network Element integration and validation testing, to verify
the ability of the Network Elements to interface with other
Network Elements in the Network, as appropriate. These tests
may include use of load generators to create synthesized data
streams.
(c) Inter-operability Testing, to verify the ability of all
components of the Network to interact and perform as a
system, ensuring interoperability and network integrity and
reliability. This testing may include stress loading devices
to generate sufficient levels of traffic to drive the Network
Elements towards operation at capacity to verify the ability
of the system to function under stress conditions.
(d) Integration and acceptance testing of all changes to the
Network.
(e) Load and recovery testing and support for WinStar in pilot
trials prior to deployment to the production environment.
(f) WinStar will provide reasonable access to OSS/BSS development
test or production environments, as appropriate, to
facilitate network and systems integration testing.
5. Implementation.
5.1. Procurement/Acquisition.
To the extent necessary to implement the Network Architecture and
Network Technology, Lucent will provision Lucent Products as
indicated in the attached Exhibit C-1 (or any successor thereto).
This responsibility shall include:
5.2. Installation.
Lucent will be responsible for the installation of Network
Elements in accordance with the City-Specific Plan, Network design
and the Product Standards. This includes:
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-18 - Execution Version
(a) Decomissioning of existing equipment and equipment disposal
per WinStar instructions.
(b) Overseeing proper performance of installation functions on
all Network Elements, including installing Lucent Products
and selecting the installation contractor (except where such
selection would interfere with Product warranty requirements)
and program managing the installation;
(c) Connecting customer building access equipment, cross-connects
and central office connections;
(d) Performing logical assignments in WinStar network facilities
provisioning databases (e.g., ASAP);
(e) Physical inventory and loading of inventory data into
appropriate WinStar databases and systems;
(f) Other installation services as may be mutually agreed to by
the Parties from time to time; and
(g) Performing required acceptance testing.
5.3. Support.
Lucent will be responsible for supporting the Lucent Products as
set forth in this Section and Section 14.7 of the Agreement during
the Warranty and Extended Warranty Periods. This responsibility
will include:
(a) Tendering complete documentation (including inventory
information) in association with replacement of Product
components.
(b) Providing advanced/accelerated replacement service (i.e.,
delivering a replacement Product, part or component on an
overnight basis) based upon an understanding that WinStar
will return the defective Product, part or component as soon
as practicable, unless Lucent's standard published policies
provide otherwise and are specified in a Product addendum to
the Agreement.
(c) Providing standard replacement service (as elected by
WinStar) that will provide replacement Products, parts or
components with a turn-around intervals of less than
twenty-four (24) calendar days. Lucent shall be responsible
for the costs of shipping to and from Lucent in connection
with the standard replacement service.
(d) Delivering a quarterly report that tracks root causes of
failures for all replacements of Products, parts or
components, with tallies of incidents that are similar in
nature or cause.
(e) Lucent will be responsible for recommending (and delivering
per WinStar's order) an adequate field supply and inventory
of spare parts for every Lucent
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-19 - Execution Version
Product under Warranty or Extended Warranty. The quantity and
positioning of the spares will be sufficient for Lucent to
meet applicable Service Levels. This shall also include:
(i) Lucent will be responsible for replenishing the spare
parts inventory with quality spare parts. These parts
shall either be new parts or have been certified by
Lucent's quality control as suitable for use in a
production environment.
(ii) Lucent will develop spare parts stocking plans based
on equipment concentrations, locations, and failure
rates. The parts stocking plan will establish
Recommended Spare Parts Lists for engineer-carried,
local, regional, and central stocked quantities of
all parts.
(f) Within thirty (30) days of the Lucent issuance of a new
upgrade or release for any Lucent Product, Lucent will notify
WinStar of the release and its functional content. Lucent
will also propose a test and implementation schedule. WinStar
may, at its option, defer or bypass the implementation.
Lucent and WinStar will work together to assure that WinStar
does not fall two (2) release levels behind the current
release, unless test results indicate instability or
diminished capacity as a result of the new release. In no
case should WinStar be permitted to operate on an unsupported
software release.
5.4. Disaster and Recovery.
Lucent's responsibility for disaster and recovery for the Network
shall be as follows:
(a) Provide WinStar with a comprehensive disaster recovery plan
for all Network Elements and connectivity; and
(b) Perform specific disaster recovery services as may be
mutually agreed upon by the Parties.
5.5. Training.
Lucent will provide, at no additional cost to WinStar, reasonable
numbers of WinStar-designated individuals with reasonable levels
of appropriate training in the installation, operation,
configuration, maintenance and repair of Lucent Products so that
WinStar may, at its option, use, operate, configure and maintain
those Products without Lucent's assistance. In addition, Lucent
shall provide similar training, at no additional cost to WinStar
(other than Out-of-Pocket Expenses incurred by Lucent and paid to
the third party vendor providing training, if applicable), for
those Third Party Products to be implemented into the Network that
Lucent is authorized or otherwise certified to provide training.
If Lucent utilizes a third party vendor to provide the training
identified in the preceding sentence, WinStar will reimburse
Lucent for its cost for such third party vendor on an
Out-of-Pocket Expenses basis.
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-20 - Execution Version
6. Special Projects
Lucent will support WinStar's need for ad hoc performance of large,
one-time projects that are related to the Network and individual case basis
requirements not otherwise included in the Services (each, a "Special
Project"). With regard to such Special Projects, the following Services
shall apply:
6.1. Program Management.
Lucent will assign a program manager and sufficient resources
within the program management office to assess and assemble the
Lucent team that will address the Special Project. Lucent will use
best reasonable efforts to support the deadlines specified by
WinStar with regard to Special Projects. Within one week of
notification of the Special Project, Lucent will either provide a
schedule that allows for those deadlines or suggest another
deadline and associated schedule or alternative method to meet the
requirement.
6.2. Products.
Lucent will provide Lucent Products required to meet the schedule
on an accelerated basis and propose an engineering plan that will
meet WinStar's business objectives as defined in the Special
Project request.
6.3. Services.
Lucent will perform services to support the Special Project as
defined in this Agreement and, as mutually agreed upon after
pricing, provide other services as required to meet the objectives
of the Special Project. Other services may include:
(a) Engineering Assessment. Provide a professional assessment of
a network to be purchased as to the interoperability with the
Network and the costs and interval for such interoperability
to be accomplished.
(b) Proposal Support. Provide technical support for large
proposals and evaluations of technology requested and the
applicability and suitability of Lucent Products and services
to meet the requirements set forth by an RFP-type document or
other such bid as may be received by WinStar.
(c) Engineering Design Services. Provide engineering analysis and
offer a design that meets the initiative in a cost-effective
manner.
(d) Other Support. Price and provide other support such as
implementation, testing or inside connectivity.
6.4. Personnel.
It is anticipated that Lucent will need to use personnel other
than those assigned to the Network project in order to meet
Special Project-related demands. If Lucent wishes to use the same
personnel from the Network project to meet the requirements for
Special
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-21 - Execution Version
Projects, the roll out of the Network and associated activities
must stay on the agreed-upon schedule unless otherwise agreed to
by WinStar.
6.5. Pricing.
Lucent shall provide preliminary pricing for Special Projects
within five (5) business days and final pricing within ten (10)
business days of notification of the Special Project.
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Schedule A to the Confidential - Winstar/Lucent
Supply Agreement - A-22 - Execution Version
Exhibit A-1
Lucent Responsibility Matrix by Technology
Technologies By Functional Services - Transition Planning
Functions/services
Ckt Premise
(Apply to initial deployment and growth/evolution) Switch Trans Access PWR Radio Data MDF Cable Rack wiring OSS CPE
Network architecture X X X X X X X X X X XXX
Xxxxxxxxxx selection/network design, testing X X X X X X X X X X XXX
Xxxx plan - Network Techn. & Tech Planning Y Y Y Y XXX XXX Y Y Y Y TBD
Equipment Engineering Y Y Y Y XXX XXX X X X X XXX
Xxxxxxxx X X X X XXX XXX X X X X XXX
Xxxxxxx X X X X XXX XXX Y Y Y Y TBD
Installation/Turnover Y Y Y Y XXX XXX Y Y Y Y TBD
Equipment/Site Integration Y Y Y Y XXX XXX Y Y Y Y TBD
Drawings Y Y Y Y XXX XXX Y Y Y Y TBD
Records Y Y Y Y XXX XXX Y Y Y Y TBD
Product Warranty Support Y Y Y Y XXX XXX Y Y Y Y TBD
Logical Assignments Provisioning XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX TBD
Traffic Eng/Capacity Planning XXX XXX XXX XXX XXX XXX XXX XXX XXX XXX TBD
LEGEND:
Y - Lucent Competency Targeted for Transition.
TBD - Transition Planning Process will analyze and determine
timeframe for implementation.
Exhibit A-1 to the Confidential - Winstar/Lucent
Supply Agreement - A-1-1 - Execution Version
Confidential --WinStar / Lucent
--------------------------------------------------------------------------------
Exhibit A-2
International Responsibility Matrix
The following is a listing of some of the international related services Lucent
shall provide. The Parties will develop a responsibility matrix for these
services and such other mutually agreed upon services as soon as practicable
following the Effective Date. The Parties intend to complete the responsibility
matrix as part of developing the associated international related pricing that
is to be developed within thirty (30) days following the Effective Date.
--------------------------------------------------------------------------------
Schedule A-2 to Confidential - Winstar/Lucent
Supply Agreement - A-2-1 - Execution Version
Confidential --WinStar / Lucent
--------------------------------------------------------------------------------
Pre-Implementation Consultancy Including: business planning;
network planning, architecture
design, and engineering; RF
engineering; operations planning
(build MOPs); interoperability
testing; and disaster recovery
planning
Services Including: licenses and permits;
site surveys; site acquisition; and
civil engineering and construction
Implementation Services Including: logistics (warehousing,
delivery and inventory); staging;
installation; testing; network
testing; interworking testing (an
ORT plan will be developed); program
management; and functional
end-to-end testing
Operations Services Including: training; maintenance
(dispatch, repair and replace);
field support; remote management
(Netcare, including IP Gateway);
operations (monitor, provision,
remote management, customer care,
global WinStar NOC monitoring,
Netcare services); staffing; and
civil construction
--------------------------------------------------------------------------------
Schedule A-2 to Confidential - Winstar/Lucent
Supply Agreement - A-2-2 - Execution Version
Exhibit A-3
Responsibility Matrix
ID Process Owner Inputs Outputs
----- -------------------------------- ------------------ ------------------------------------ -------------------------------------
1 Market Definition WinStar License Information Rate/Wire Center Priorities
Building Universe Product Descriptions
D&B (ABI) Tenant Data Demand Forecasts (2 years)
o Volume
o Number of Lines
2 Regulatory Approval WinStar Rate/Wire Center Priorities CLEC Authority
3* Dial Plan Lucent Rate/Wire Center Priorities Switch Dial Plan
Calling Plan
4 Preliminary City Plan Lucent Rate/Wire Center Priorities Claritas Data
Demand Forecasts (2 years) o Cluster Maps
Building Priorities o Building Data
Tandem Locations
Connectivity Analysis
Refined Rate Centers
Additional NXX Requirements
5 Interconnect Agreements WinStar Rate/Wire Center Priorities Interconnect Agreements
Interconnect Guidelines/Restrictions
6 Switch Analysis Lucent Connectivity Analysis Preliminary Switch Requirements
Demand Forecasts (2 years) Switch Building Requirements
7 Preliminary Field Survey WinStar/Lucent Building Clusters and Maps Hub Candidates (WinStar)
Tandem Locations o On-net coverage
Switch Building Requirements o Constructability
Broker Switch Site Candidates o Owner Interest
Switch Site Candidates (Lucent)
o Usable square footage
--------------------------------------------------------------------------------
Exhibit A-3 to the Confidential - Winstar/Lucent
Supply Agreement - A-3-1 - Execution Version
ID Process Owner Inputs Outputs
----- -------------------------------- ------------------ ------------------------------------ -------------------------------------
o Distance to Tandem
Connectivity Options (Lucent)
8 Switch Site Selection WinStar Rate/Wire Center Priorities Target Switch Sites (2 or 3 per area)
Site Candidates (RR and Broker)
Switch Building Requirements
Tandem Locations
Connectivity Options
9 Switch Site LOI WinStar Target Switch Sites Switch Site LOI (1 per area)
10 Switch Site Lease WinStar Switch Site LOI Switch Site Lease
CLLI/SS7 Point Code WinStar Switch Site Lease CLLI Codes
Application / Administration SS7 Point Codes
11* Dial Plan Administration Lucent Rate/Wire Center Priorities Calling Plans
Products Descriptions Dialing Plans
Demand Forecasts NPA/NXX's
12 Dialing/Calling Plan Review WinStar Switch Dialing Plans Dialing Plan Approval
Calling Plan (with Call Type)
13 NXX Application WinStar CLLI Code WinStar NXX Codes
Rate/Wire Center Priorities
14 Network Capacity Planning Lucent Demand Forecasts Network Trunking Forecast
Network Capacity Reports
15 Preliminary Connectivity Plan Lucent Switch Site LOI Preliminary Connectivity Plan
Switch Site Lease
Network Trunking Forecast
Tandem Locations
16 ILEC Planning WinStar/Lucent Interconnect Agreements POI (Lucent)
Switch Site LOI Trunking Plans (Lucent)
ASR's (from ILEC) (WinStar)
17 City Network Design Lucent City Serving Plan Network Topology
Demand Forecast Connectivity Plan (Switch to ILEC)
Trunking Forecast Facility Inventory
--------------------------------------------------------------------------------
Exhibit A-3 to the Confidential - Winstar/Lucent
Supply Agreement - A-3-2 - Execution Version
ID Process Owner Inputs Outputs
----- -------------------------------- ------------------ ------------------------------------ -------------------------------------
Switch Site LOI Equipment Inventory
Trunking Plan Budget
Local & Access Tandems
Capacity Requirements
Interconnection Guidelines/
Restrictions
18 Switch Site Survey WinStar/Lucent
19 Room Plans Lucent Site Visit Floor Plan
Cable Rack & Lighting Plan
20 Switch EOS Lucent Demand Forecast Switch EOS
Site Visit
Preliminary Switch Requirements
21 CO Site Construction WinStar/Lucent Site Visit (WinStar - Civil Construction/HVAC)
22 Switch Design/Manufacture Lucent Switch EOS Delivered Switch
Interconnection Agreements
23 ODA Questionnnaire Lucent NPA/NXX Calling Plans ODA Questionnaire
Switch Dialing Plan Translation Requirements
Transmission Facility Orders Integration Test Plan
ODA "Models
24 Transmission Area Lucent Demand Forecast Transmission Equipment Layout
Floor Plan Transmission EOS
Cable Rack & Lighting Plan
25 Central Office Plan Review WinStar Transmission Plan/EOS Central Office Plan Approval
Switch Plan/EOS
Connectivity Plan
26 Facilities and Trunk WinStar Interconnect Facility Orders ASR's to LEC
Provisioning Transmission Facility Orders FOC/CLR
ASR's from ILEC
FOC/DLR from ILEC
Trunking Plans
--------------------------------------------------------------------------------
Exhibit A-3 to the Confidential - Winstar/Lucent
Supply Agreement - A-3-3 - Execution Version
ID Process Owner Inputs Outputs
----- -------------------------------- ------------------ ------------------------------------ -------------------------------------
27 Ongoing Translations WinStar ODA Questionnnaire ODA Updates
LERG Update
28 CO Installation (Switch and Lucent Delivered Switch Completed Central Office
Transmission Room) Room Layout Installed Switch
Connectivity Plan
CO Plan Approval (WinStar - Civil Construction/HVAC)
Translation Requirements
Switch EOS
Switch Lease
29 Integration Testing Lucent Integration Test Plan Switch Integration Test Results
30 Hub Site Selection WinStar/Lucent Hub Candidates Target Hub List (2 or 3 hubs per
On-net coverage (WinStar) cluster to pursue)
Constructability (WinStar)
Owner Interest (WinStar)
Connectivity Options (Lucent)
31 Hub Site Leasing WinStar Target Hub List One Hub Lease per Cluster
32 Hub A&E Review WinStar/Lucent Hub Target List Hub Selection/Approval
Connectivity Plan
33 Backhaul Design Lucent Hub Lease Hub Connectivity Document
Switch Site LOI Hub Engineering Plans
Demand Forecast
Connectivity Plan
IRVs (if any)
34 Hub Engineering Package Lucent Hub Lease Hub Engineering Package
Backhaul Design
35 Hub Equipment Order WinStar Purchase Order FOC
Due Date
36 Hub Construction WinStar/Lucent Hub Lease Constructed Hub
Backhaul EPAC (WinStar - Civil Construction/HVAC)
--------------------------------------------------------------------------------
Exhibit A-3 to the Confidential - Winstar/Lucent
Supply Agreement - A-3-4 - Execution Version
ID Process Owner Inputs Outputs
----- -------------------------------- -------------------- ------------------------------------ ----------------------------------
37 Hub Acceptance Testing WinStar Constructed Hub OPS Acceptance
Backhaul EPAC
38 B-Site Selection WinStar Hub Candidates B-Site Target List
Building Data
39 B-Site Leasing WinStar B-Site Target List B-Site Leases
40 Connectivity Design WinStar (transition Hub Site Lease Connectivity EPAC
(B-Site to Hub) to Lucent) B-Site Target List
41 B-Site Construction WinStar/Lucent B-Site Lease Constructed B-Site
Connectivity EPAC (WinStar - Civil Construction/HVAC)
42 B-Site Ops Acceptance Testing WinStar Constructed B-Site B-Site OPS Acceptance
Connectivity EPAC
43 ORT Test Planning WinStar/Lucent Translation Requirements ORT Test Plan
Translation Updates
Dialing Plans
Product Descriptions
Switch Integration Test Results
44 ORT Testing WinStar ORT Test Plan ORT Results
- Defect Log (owners assigned)
- Resolution Estimates
45 Switch Ops Acceptance Test WinStar Integration Test Results Switch OPS Acceptance
46 General Availability WinStar Switch OPS Acceptance General Availability
Hub OPS Acceptance
B-Site OPS Acceptance
ORT Results
* Regarding items 3 and 11 above, Lucent intends to begin performing these
Services within six (6) months of the Effective Date of the Agreement.
In the event Lucent cannot perform these Services within such timeframe,
Lucent agrees to hire WinStar (or its designee) as a subcontractor to perform
these Services as part of a city-specific plan.
--------------------------------------------------------------------------------
Exhibit A-3 to the Confidential - Winstar/Lucent
Supply Agreement - A-3-5 - Execution Version
Exhibit A-4
Initial Transition Plan
1. General
All contracted services for engineering, furnishing and installation (E,
F&I) and Services for program management shall migrate to Lucent within six
(6) months of the Effective Date.
An initial ramp-up time period is specified for Lucent to fully provide
specific Services. During this period, WinStar personnel will assist Lucent
personnel in familiarization with currently employed practices and
procedures where they exist. This period varies by Service and specifically
includes the items listed below.
1.1. Checklist for Transition
For each of the Services set forth below, WinStar and Lucent will
develop a checklist for items to be transitioned from WinStar to
Lucent. As each service or network element is transitioned, there
will be a document developed by WinStar and Lucent which will be
signed by the appropriate WinStar Network Services VP and the
Lucent Program Management office indicating that the service has
been transitioned and Lucent has accepted responsibility for the
service.
1.2. Specific Transition Timeframes
An initial ramp-up time period is specified for Lucent to fully
provide specific Services. During this period, WinStar personnel
will assist Lucent personnel in familiarization with currently
employed practices and procedures where they exist. The transition
timeframes set forth below apply to all Network technologies with
the exception of radio, packet switching (data) and CPE.
Transition timeframes for these technologies will be mutually
agreed during the transition plan process defined in Section 3.3
of Schedule A.
(a) Engineering of Network Elements, including:
(i) WinStar fiber optic systems will be migrated within
thirty (30) days of the Effective Date. Fiber optic
systems include optronics deployed in metropolitan
areas and systems deployed for long haul
transmission. Fiber optic system engineering includes
evaluation of existing and future dark fiber routes
for loss budget, amplifier and repeater spacing
requirements, protection switching and capacity
growth.
(ii) WinStar Collocation at ILEC central office sites will
be migrated within sixty (60) days of the Effective
Date. Collocation at ILEC central offices includes
subscriber loop carrier equipment and digital loop
carrier equipment
(iii) WinStar Broadband Services only sites will be
migrated within ninety (90) days of the Effective
Date. Broadband Services sites may include
Exhibit A-4 to the Confidential - Winstar/Lucent
Supply Agreement - A-4-1 - Execution Version
packet switching or packet concentrating equipment,
multiplex or cross connect equipment, auto answer
modems, and UPS equipment and optronics.
(iv) WinStar B sites will be migrated within one hundred
and twenty (120) days of the Effective Date. B sites
may include rack mounted and roof mounted radio
equipment, multiplex equipment, subscriber loop
carrier equipment, digital loop carrier equipment,
packet switching, routing, or concentrating equipment
and UPS equipment.
(v) WinStar Hub sites will be migrated within one hundred
and twenty (120) days of the Effective Date. Hub
sites may include rack mounted and roof mounted radio
equipment, multiplex equipment or cross connect
equipment, subscriber loop carrier equipment, digital
loop carrier equipment, packet switching, routing, or
concentrating equipment, fiber optic equipment, UPS
equipment, battery plant and associated power and
stand-by power generating equipment.
(vi) WinStar Central Office and Transmission sites
including Customer Collocation will be migrated
within one hundred and twenty (120) days of the
Effective Date. Central Office sites may include
rack-mounted and roof-mounted radio equipment, voice
switching equipment, multiplex equipment or
cross-connect equipment, subscriber loop carrier
equipment, digital loop carrier equipment, packet
switching, routing or concentrating equipment, fiber
optic equipment, UPS equipment, battery plant and
associated power and stand-by power generating
equipment
(vii) WinStar Customer Termination Equipment Engineering
will be migrated within thirty (30) days of the
Effective Date. Customer Termination Equipment may
include multiplex equipment, subscriber loop carrier
equipment, digital loop carrier equipment, and packet
routing or concentrating equipment.
(viii) WinStar Customer Premise Equipment and Inside
Connectivity will be migrated within one hundred and
twenty (120) days of the Effective Date. Customer
Premises Equipment may include PBXs, telephone sets,
LANs, bridges, video conferencing equipment etc.
Inside connectivity is the method for connecting from
a B building common space demarcation point to a
demarcation point on the customer premise.
(b) Network Engineering/Traffic Engineering will be migrated as
set forth below. This shall include sizing of trunks for
interconnection to the XXX, 000 services, operator services,
SS7 and AIN and interconnection of hub-to-hub and
hub-to-switch inter-city connectivity, data services, etc.
For new cities (i.e., cities planned for implementation in
1999), Lucent will assume the responsibility within thirty
(30) days of the Effective Date. For existing cities, Lucent
will develop and present a schedule within sixty (60) days of
the Effective Date, with assumption of these Services in the
first city within seventy-five (75) days of the
Exhibit A-4 to the Confidential - Winstar/Lucent
Supply Agreement - A-4-2 - Execution Version
Effective Date. If Lucent cannot meet this responsibility
within the timeframes specified, it shall subcontract the
responsibility to WinStar. In such case, the payment to
WinStar for this responsibility shall be the amount set forth
in Exhibit C-5, prorated monthly (i.e., WinStar will pay
Lucent that amount for the Service and Lucent will pay
WinStar that same amount as a subcontractor).
(c) Documentation and entry of data into WinStar Systems to
support tracking and provisioning of Network Elements will
commence concurrently with the Lucent Engineering of each
Network Element. The initial ramp up time period for Lucent
provided documentation and entry into WinStar Systems will
exist concurrently with the ramp up time period specified for
Lucent provided Engineering for each Network Element. In
cases where documentation and entry of data into WinStar
Systems is provided for Network Elements for which Lucent is
not providing Engineering Services, the Lucent ramp up period
will be defined per the Transition Plan as specified in
Section 3.3 of Schedule A.
1.3. Other.
The Agreement and its Schedules anticipate that the Network will
evolve into a different and new structure with Network Elements
that have not been explicitly defined herein. If, during the
transition period, these new Network Elements are deployed in the
Network, Lucent agrees to support them at the time of transition
unless otherwise mutually agreed by the Parties. Engineering
Services for these elements will also be provided by Lucent at
that time.
Exhibit A-4 to the Confidential - Winstar/Lucent
Supply Agreement - A-4-3 - Execution Version
Exhibit A-5
Product Performance Specifications
1. 5ESS Switches
Switches will be deployed in phases. Phases are based on modular
capacity models.
1.1. Initial Deployment
The initial deployment will be based on two Switch Modules
("SMs") based on Lucent's pre-designed Model 2A. This phase
will be equipped to support the following capacity per SM:
(a) TR008 analog lines: 800
(b) TR303 lines: 2,400
(c) ISDN PRI DS0s: 3,048
(d) Digital DS0s for PBX customers: 1,032
(e) Software. The switch will include but will not be limited
to software for the following services:
(i) Local Services;
(ii) CENTREX;
(iii) CLASS Features;
(iv) Long Distance; and
(v) LNP.
1.2. First Growth Job
When additional capacity is needed the first two SMs will be
grown to the following size before additional SMs are
deployed:
(a) TR008 analog lines: 800
(b) TR303 lines: 7,500 @ 2.66 : 1 concentration
(c) Digital DS0s for PBX and ISDN: 5,000
(d) Interconnection DSOs: 2,000
(e) Spare DS0s: 500
--------------------------------------------------------------------------------
Schedule A-5 to Confidential - Winstar/Lucent
Supply Agreement - A-5-1 - Execution Version
1.3. Additional Growth
The switch will grow to support at a minimum the customers
below before a new switch is deployed:
(a) Total SMs: 10
(b) TR008 Analog Lines: 8,000
(c) TR303 Analog Lines: 105,000 @ 2.66 : 1 concentration
(d) Total Customer Digital Trunks: 37,000
(e) Interconnection Trunks: 20,000
(f) Unassigned ports: 15,000 DS0s
Total Ports (Lines or Trunks) used by WinStar
revenue-generating customers: 150,000
Assuming:
Lines used at 6 CCS
Trunks used at 28 CCS
--------------------------------------------------------------------------------
Exhibit A-5 to the Confidential - Winstar/Lucent
Supply Agreement - A-5-2 - Execution Version
Exhibit A-6
to
Schedule A
Combined Transmission Network
This Exhibit consists of a map of the continental United States showing
present locations of transmission equipment and locations where additional
equipment is required. It also contains diagrams of the architecture of the
transmission network, including the High Speed National Core, Stage 1 Remote
City Connections, State 2 Remote City Connections, Stage 3 City Data Hub
Expansion, the National Core Transport Network, the National Core Transmission
Network, Network Peering and Regional/City Core Access and Current Topology.
Exhibit A-7
to
Schedule A
Potential Future WinStar Network
This Exhibit consists of diagrams of the Transport Network (Packet
Technology) and the ATM Edge to Core (National Backbone ATM Fiber/TDM Core
Regional Networks).
Schedule B
Performance
1. General
1.1. Introduction.
This Schedule B sets out Performance Standards for Lucent's
performance of engineering and design Services.
1.2. Future Direction.
The Parties agree to work together to develop an affirmative
approach to incent Lucent to adopt a WinStar customer
satisfaction-focused approach to delivering the Services. The
Parties anticipate that this approach may involve gainsharing,
incentives or changes to WinStar's commitment to spending volume
and Lucent content.
2. Engineering Services.
Consistent with the transition plan, Lucent is required to provide
Engineering Services for the WinStar Network. The Services to be provided
include but are not limited to Base General Architecture, City Plans, Site
Plans, Switch EOS, ODA Development, Backhaul Design, Engineering Plan for
Hubs, Connectivity Design for Hubs, Network Capacity Plan, Future
Architecture, Baseline Evaluation of existing network and others that may
be required for implementation and ongoing serviceability of the WinStar
Network. A number of these Services are still under evaluation by both
Parties and a decision as to whether Lucent will provide those Services
will be made as part of the development of the transition plan.
2.1. Service Delivery.
Except as otherwise mutually agreed to by the Parties, Lucent will
deliver the Services within the following intervals:
(a) Architecture Services:
(i) RF Engineering (Individual Path) - one (1) working
day;
(ii) City-Specific Plans - forty (40) working days after
request and delivery of forecast;
(iii) Network Architecture - forty-five (45) days after the
Effective Date;
(iv) Gap assessment of Existing Network - two (2) months
after the Effective Date; and
(v) Network Technology - three (3) months after the
Effective Date.
(b) Other Engineering Services:
--------------------------------------------------------------------------------
Schedule B to the Confidential - Winstar/Lucent
Supply Agreement - B-1 - Execution Version
(i) Site Plans including Hub and Central Office -
two (2) weeks after request;
(ii) Switch EOS - two (2) weeks after request;
(iii) ODA Development - three (3) weeks after request;
(iv) Backhaul Design - three (3) weeks after request;
(v) Engineering Plan for Hubs - two (2) weeks after
delivery of base building drawings;
(vi) Connectivity Design for Hubs - two (2) weeks after
Hub selection;
(vii) Network Capacity Plan - one (1) week after need for
augment, network elements or connectivity is
determined; and
(viii) Documentation for Network Elements (with respect to
placement and connectivity within the Network) -
within three (3) business days of installation of the
Network Element.
2.2. Change Requests.
In the event that WinStar desires a change to generic individual
Engineering Packages for Network Elements, Lucent will provide
change documentation within thirty (30) days of request unless
otherwise mutually agreed.
3. Availability and Reliability
Network Elements made up of Lucent Products and Deliverables must perform
up to the manufacturer's specification. The end-to-end network availability
is an objective, not a specification, until WinStar approves the final
design produced by Lucent. An availability calculation will then be
performed by Lucent. Based upon the outcome of the calculations, Lucent
will recommend that the design be adjusted or that the outcome of the
calculation be accepted as the specification for the Network. This
recommendation will be submitted to WinStar for review and potential
approval.
3.1. Reliability Standards.
Reliability standards are defined for the following four major
network segments as shown in Figure 1. These standards encompass:
(a) Distribution: Distribution consists of the Network segment
starting at the customer demarcation point in the customer
space and ending at the Central Office. When CPE is provided
by Lucent, distribution objectives include the CPE.
(b) Switch: The Network's central office switches.
--------------------------------------------------------------------------------
Schedule B to the Confidential - Winstar/Lucent
Supply Agreement - B-2 - Execution Version
(c) Facility Entrance: The facility entrance network segment
includes Equipment such as analog-to-digital converters
(channel banks, loop carrier equipment), multiplexers,
Digital Cross Connects, etc.
(d) Interoffice: The interoffice transmission facility segment is
used to transmit calls from one central office switch to the
other.
[GRAPHIC OMITTED]
3.2. End-to-End Network Reliability Objective (Figure 1)
Since it is important from the customer's view that there be a
high probability of obtaining a path through the network, a high
level of end-to-end (customer to customer) network availability is
desirable. The end-to-end availability requirement in accordance
with Bellcore Standards is ninety-nine and ninety-three hundredths
percent (99.93%) from the customer viewpoint. This is
approximately three hundred and sixty-five (365) minutes per year
or one (1) minute per day of unavailability. The availability must
be met regardless of equipment failures or network congestion.
3.3. Distribution Network Segment (Figure 2).
The distribution network segment includes both the feeder and the
loop from the switch to the customer's home/office demarcation
point, including customer terminal equipment (e.g., DLC) and
inside wiring, excluding customer premise equipment (e.g., PBX or
key sets). The objective on the distribution segment availability
is ninety-nine and ninety-nine hundredths percent (99.99%). This
would give a maximum downtime objective of approximately
fifty-three (53) minutes per year per customer line.
--------------------------------------------------------------------------------
Schedule B to the Confidential - Winstar/Lucent
Supply Agreement - B-3 - Execution Version
[GRAPHIC OMITTED]
3.4. Circuit Switch Segment (Figure 3).
(a) The total switch down time objective is three (3) minutes per
year. In addition the total downtime for individual lines is
twenty-eight (28) minutes per year, and the total downtime
for individual trunks is also twenty-eight (28) minutes per
year.
(b) For a transmission through-path traversing the switch from a
line to a trunk, the maximum unavailability objective is the
sum of the line and trunk unavailability minus three (3)
minutes per year, since the total outage objective is
included in both the line and trunk objectives and need only
be considered once on a through-path. This results in a
through-path downtime objective (line to trunk, or customer
to interconnection trunk) of fifty-three (53) minutes per
year or one hundred of a percent (0.01%).
[GRAPHIC OMITTED]
3.5. Facility-Entrance Network Segment (Figure 4).
The facility-entrance network segment is allocated five
ten-thousandths of a percent (0.0005%) unavailability at each end
or a total of one-hundredth of a percent (0.01%) for both. This
results in about five (5) minutes per year unavailability.
--------------------------------------------------------------------------------
Schedule B to the Confidential - Winstar/Lucent
Supply Agreement - B-4 - Execution Version
[GRAPHIC OMITTED]
3.6. Interoffice Network Segment.
The interoffice transmission minimum availability objective is
ninety-nine and ninety-eight hundredths percent (99.98%). This
equates to ninety-nine and ninety-eight hundredths percent
(99.98%) availability at two hundred and fifty (250) miles.
3.7. Common Channel Signaling SS7 Network (Figure 5).
The common channel signaling SS7 network downtime objectives are
shown in Figure 5.
Each SS7 user (e.g. 5ESS) interface segment should be down (an
average of) no more than three (3) minutes per year.
Each network access segment should be down (an average of) no more
than two (2) minutes per year, and
The backbone network segment should be down a negligible amount of
time (that is, close to zero (0) minutes downtime per year). Note
that downtime for this segment includes failures that prevent use
of the backbone segment but do not by themselves disable any other
segment(s).
The above allocation assumes an ANSI-based reference architecture
with two-way diversity for the A-link sets and three- way
diversity for the B-/D-link sets. If three-way diversity is not
achievable in the backbone segment, the downtime of that segment
may no longer be negligible. Hence, the ten (10) minute end-to-end
objective may no longer be achievable.
--------------------------------------------------------------------------------
Schedule B to the Confidential - Winstar/Lucent
Supply Agreement - B-5 - Execution Version
[GRAPHIC OMITTED]
4. Other Services
It is recognized that evolution and development of the WinStar Network is
ongoing. As the Network grows and changes, Lucent will develop and WinStar
will approve new or revised Engineering Services and Design functions to
support it.
5. Standards and Remedies
Lucent recognizes that in providing services and network elements that such
tasks are to be performed within industry standards and products must be
Best of Breed. The reliability and availability of the Network and the
delivery of engineering Services are critical to WinStar's business.
5.1. Architecture Services.
With regard to Engineering Services for Base Generic Architecture,
Future Architecture, City Plans and baseline architecture of
existing networks as referred to in Section 2.1(a) of this
Schedule B, the following standards and remedies shall apply:
(a) Standard. Lucent shall deliver all Deliverables of such
Services within the timeframes specified.
(b) Remedy. If, for any reason, Lucent anticipates a delay in the
delivery of the service, it shall notify WinStar as soon as
possible. In addition:
(i) If Lucent's delivery of the Service is, or is
expected to be, delayed more than five (5) business
days, then the Lucent Vice-President of Network
Solutions shall notify the WinStar Senior
Vice-President of Engineering of the delay and of the
plan to cure such delay within (10) business days of
the original due date. The president of Lucent Global
Commercial markets will also be notified at this
time.
--------------------------------------------------------------------------------
Schedule B to the Confidential - Winstar/Lucent
Supply Agreement - B-6 - Execution Version
(ii) If Lucent cannot deliver the affected Service within
ten (10) days of the original due date, the Lucent
President of Global Commercial Markets will
personally visit the WinStar Chief Operating Officer
to explain the reason for the delay in service and to
confirm a new plan to deliver the service within
twenty (20) business days from the original due date.
WinStar and Lucent may mutually agree to extend the
timeframes for such Services. If WinStar and Lucent
cannot mutually agree to extend delivery dates for
the affected Service, WinStar shall be given the
option to terminate the affected service in its sole
discretion.
5.2. Other Engineering Services.
With regard to Engineering Services for site plans, switch EOS,
ODA development, backhaul design, engineering plan for Hubs,
Network capacity plan, connectivity designs for Hubs, RF
engineering, and documentation, as referred to in Sections 2.1(b)
of this Schedule B, the following standards and remedies shall
apply.
(a) Standard. Lucent shall deliver all Deliverables of
such Services within the timeframes specified. In particular,
Lucent shall achieve on-time delivery of ninety-five percent
(95%) of all services ordered in a given Service.
(b) Remedies. If, for any reason, Lucent anticipates a delay in
the delivery of the service, it shall notify WinStar as soon
as possible.
(i) If Lucent's on-time delivery falls below the
ninety-five percent (95%) threshold in any given
service category, the Lucent Vice-President of Network
solutions shall notify the WinStar Senior
Vice-President of Engineering of the delay and
deliver a plan to cure the affected Service within
five (5) Business days. The president of Lucent
Global Commercial Markets will also be notified at
this time.
(ii) If Lucent cannot cure the affected Service in the
five (5) day cure period then the Lucent President of
Global Commercial Markets will personally visit the
WinStar Chief Operating Officers to explain the delay
in Service. WinStar and Lucent may mutually agree to
extend the timeframes for the affected Services. If
WinStar and Lucent cannot Mutually agree to extend
delivery dates for the affected service, then WinStar
shall be given the option to terminate the affected
Service in its sole discretion.
5.3. Reliability and Availability
For failure to meet the switch reliability standards set forth in
Section 3.4 of this Schedule B or the end-to-end Network
reliability specification as calculated in Section 3.2 of this
Schedule B after the new Network Architecture and Technology plans
are provided by Lucent, the following standards and remedies shall
apply:
--------------------------------------------------------------------------------
Schedule B to the Confidential - Winstar/Lucent
Supply Agreement - B-7 - Execution Version
(a) Standards. Lucent shall meet or exceed the performance
metrics for the switch and end-to-end Network as set forth in
Sections 3.4 and 3.2 of this Schedule B, as measured on a
monthly basis.
(b) Remedies. If Lucent fails to meet a stated objective in any
given month then Lucent will notify WinStar and present a
plan to cure the affected Service in the following
measurement period.
(i) If Lucent's performance objective is not achieved for
two months of any given six month period, then Lucent
will place into escrow an amount equal to one percent
(1%) of the charges for all Products and Services
provided pursuant to this Agreement over the
preceding twelve (12) months. The president of Lucent
Global Commercial Markets will also be notified at
this time.
(ii) If Lucent does not achieve a performance metric in
any three (3) months in any given six (6) month
period, then the Lucent President of Global
Commercial Markets will personally visit the WinStar
Chief Operating Officer and provide a plan to improve
performance of the Network. Lucent will also forfeit
the escrow deposit described above to WinStar.
(iii) If Lucent cures the underlying problem so that the
Network achieves the affected performance metric for
six (6) consecutive months, the escrow deposit will
be released and returned to Lucent.
5.4. Limitations.
The following limitations shall apply to the remedies set forth in
this Schedule B:
(a) Credits to WinStar pursuant to this Section will be capped at
Two Million Dollars ($2,000,000) for any given calendar year.
(b) The remedies apply only to Lucent Products and Deliverables.
(c) The remedies will not apply in situations of third party
Equipment not performing to Specifications or third party
catastrophic outages (other than those that should have been
reasonably foreseen and accounted for by Lucent's design) or
where WinStar has failed to meet its responsibilities as
required for Lucent to perform the Service.
--------------------------------------------------------------------------------
Schedule B to the Confidential - Winstar/Lucent
Supply Agreement - B-8 - Execution Version
Schedule C
Charges
1. General
1.1. General
This Schedule C describes the charging methodologies and processes
for both Products and Services. For Products, Lucent's list
prices, WinStar's discounts, the Best of Breed process and SNAP-D
interact to produce prices for individual Products. For Services,
charges will be determined on a fixed price schedule, either
annually or per Network segment.
1.2. Definitions
(a) "Ramp-up Period" means:
(i) For addition of new cities to the Network, a time
period of twenty-four (24) months for switches and
fifteen (15) months for all other Network Elements,
both as measured beginning with cutover to production
traffic; or
(ii) For augmentation of cities already included in the
Network, the twelve-month period of time following
acceptance of the corresponding new capacity.
(b) "Target Volume" means the volume of projected traffic
forecast by the City Success Model (or other WinStar
forecast) during the Ramp-up Period.
(c) "SNAP-D Term" means a Ramp-up Period for a specific city or
Product, as applicable, but shall terminate before the
expiration of the Ramp-up Period if the corresponding Target
Volume is achieved earlier.
2. Pricing Process for Products
The pricing process implements five operations on the price offered by
Lucent for each Lucent Product. These include comparison to the market,
comparison to list prices with discounts, comparison to reference scales,
Best of Breed protection and SNAP-D.
2.1. Market-Competitive Pricing.
Lucent is committed to competitive market pricing on all Lucent
Products (price and extended warranty fees) deployed in the
Network.
--------------------------------------------------------------------------------
Schedule C to Confidential - Winstar/Lucent
Supply Agreement - C-1 - Execution Version
2.2. Price Lists and Discounts
(a) Price Lists. Exhibit C-1 sets forth a "Price List" for the
initial set of Lucent Products that may be purchased under
this Agreement and represents the price at which such
Products are offered to other customers. Future products may
be added to the Price List as they are brought out to market.
For such additions, WinStar may participate, at its election,
in early product trials or first office applications and will
be given a priority position to obtain Products once they
achieve general availability. Products will be retired from
the Price List as Lucent discontinues availability, provided
that replacement products with comparable functionality are
substituted on the Price List.
(b) Discounts. Exhibit C-2 sets forth the discounts applicable
throughout the Term to the initial set of Lucent Products.
Each "Initial Start-up Discount" designated on Exhibit C-2
will apply to WinStar's purchase of the corresponding
Product. The "Incremental Growth Discount" will apply to
WinStar's purchase of parts and components to augment the
capacity of the corresponding Product. As Products are added
to the Price List, corresponding discounts shall be provided
by Lucent that are at least as favorable as those set forth
on Exhibit C-2.
(c) Calculation. For each Lucent Product, the "Discount Price"
shall be the product of the applicable discount and the
corresponding price from the Price List.
2.3. Reference Scaling
(a) FOT, Access And Cross Connect.
(i) Exhibit C-3 sets forth the "Reference Price" for
three pricing categories: fiber optics technologies,
access and cross connect. The Reference Prices are
intended to be indicative of specific configurations
required for each product category.
(ii) For each Lucent Product that falls into one of these
pricing categories, the Reference Scale Price shall
be the lower of the Discount Price and the
corresponding Reference Price, assuming an
appropriately scaled product configuration.
Appropriately scaled product configuration means that
the Reference Price will be adjusted as agreed to by
the Parties to account for differences between the
configuration of the Reference Price model and the
Product actually purchased by WinStar.
(b) Switching. For each Lucent Product in the switching category,
Exhibit C-4 sets forth the applicable Start-up Price and
Incremental Price. Those prices will be adjusted as agreed to
by the Parties to account for differences between the
configuration of the Reference Price model in Exhibit C-4 and
the Product actually purchased by WinStar. For such products,
Sections (c), 2.5(a)(i) and 2.5(a)(ii) shall not apply.
(c) Other. For all other Products, the Reference Price shall be
the Discount Price.
--------------------------------------------------------------------------------
Schedule C to Confidential - Winstar/Lucent
Supply Agreement - C-2 - Execution Version
2.4. Best of Breed Pricing (XxX)
In accordance with the XxX process set forth in Schedule H, an
appropriate cost will be determined for the Best of Breed
solution. For each Lucent Product other than those in the
switching category, the XxX Xxxxx will be the lesser of that cost
or the Reference Scale Price.
2.5. SNAP-D Charging.
(a) For each Network Element that is a Lucent Product, Lucent
will identify two budget elements in the City-Specific Plan:
a "Start-up Price" and an "Incremental Price."
(i) The Start-up Price for each Lucent Product shall be
the corresponding XxX Xxxxx for that Product, less a
minimum of five percent (5%) for Lucent-branded
Products or a minimum of ten percent (10%) for
Lucent-created Products.
(ii) The Incremental Price for each Lucent Product shall
be the difference between the Start-up Price and the
XxX Xxxxx, divided by a standard measure of volume
that reflects the growth in traffic volume with
respect to that Product over the Ramp-Up Period
(e.g., port-months or voice minutes).
(b) The charges for each Lucent Product that is implemented as a
Network Element of a City-Specific Plan shall be invoiced to
WinStar as follows:
(i) Upon Product shipment, Lucent shall charge WinStar
the Start-up Price.
(ii) Each month during the corresponding Ramp-up Period,
assuming the Target Volume has not yet been achieved,
Lucent shall charge WinStar an amount equal to the
Incremental Price multiplied by the amount of
corresponding volume units actually attributable to
that month. If the Target Volume is achieved during
the course of a month, the charge for that month
shall be equal to the Incremental Price multiplied by
the difference between the volume at the close of the
preceding month and the Target Volume.
(iii) If, at the expiration of that Ramp-up Period, the
Target Volume has not been achieved, Lucent shall
charge WinStar an amount equal to the Incremental
Price multiplied by the difference between the Target
Volume and the actual volume.
(iv) Following the Ramp-up Period, the Parties shall
consider each such Product to have been fully
paid-for.
--------------------------------------------------------------------------------
Schedule C to Confidential - Winstar/Lucent
Supply Agreement - C-3 - Execution Version
Exhibit C-1
Lucent Equipment Price List
Complete list of Lucent Products to be provided by Lucent within ten
days of the Effective Date.
--------------------------------------------------------------------------------
Exhibit C-1 to the Confidential - Winstar/Lucent
Supply Agreement - C-1-1 - Execution Version
Exhibit C-2
WinStar Equipment Discounts
------------------------------------ ----------------------------------- -----------------------------------
Initial Startup Discount % Growth Window Discount %
Switching
------------------------------------ ----------------------------------- -----------------------------------
5ESS-2000 85% 85%
------------------------------------ ----------------------------------- -----------------------------------
VCDX 85% 85%
------------------------------------ ----------------------------------- -----------------------------------
Remote SM 78% 78%
------------------------------------ ----------------------------------- -----------------------------------
Note: Other 5ESS Equipment and software (such as adjunct processors, etc.)
carry various discount levels that are quoted separately from the 5ESS switch.
WinStar will have one (1) six-month growth window as described in Schedule C
5ESS SNAP-D pricing that will provide for eighty-five percent (85%) discount.
------------------------------------ ----------------------------------- --------------------------------------
Initial Start-Up Discount % Incremental Growth Discount %
SONET/OPTICAL NETWORKING/DWDM
------------------------------------ ----------------------------------- --------------------------------------
DDM-2000 OC-3 45% 45%
------------------------------------ ----------------------------------- --------------------------------------
DDM-2000 OC-12 45% 45%
------------------------------------ ----------------------------------- --------------------------------------
FT-2000 40% 40%
------------------------------------ ----------------------------------- --------------------------------------
WaveStar OLS 40G 30% 30%
------------------------------------ ----------------------------------- --------------------------------------
WaveStar OLS 400G 30% 30%
------------------------------------ ----------------------------------- --------------------------------------
WaveStar 2.5 G 30% 30%
------------------------------------ ----------------------------------- --------------------------------------
WaveStar 10G 30% 30%
------------------------------------ ----------------------------------- --------------------------------------
WaveStar Bandwidth Mgr. 30% 30%
------------------------------------ ----------------------------------- --------------------------------------
Access
------------------------------------ ----------------------------------- --------------------------------------
SLC Series 5 35% 35%
------------------------------------ ----------------------------------- --------------------------------------
SLC 2000 40% 40%
------------------------------------ ----------------------------------- --------------------------------------
SLC Connect Reach 30% 30%
------------------------------------ ----------------------------------- --------------------------------------
SLC Line Reach 35% 35%
------------------------------------ ----------------------------------- --------------------------------------
SLC-2000 MSDT 35% 35%
------------------------------------ ----------------------------------- --------------------------------------
SLC-Fiber Reach 40% 40%
------------------------------------ ----------------------------------- --------------------------------------
Anymedia FAST 25% 25%
------------------------------------ ----------------------------------- --------------------------------------
Digital Cross-connect
------------------------------------ ----------------------------------- --------------------------------------
DACS II 40% 40%
------------------------------------ ----------------------------------- --------------------------------------
DACS IV-2000 45% 45%
------------------------------------ ----------------------------------- --------------------------------------
Data
------------------------------------ ----------------------------------- --------------------------------------
Port Master (Remote Access) 50% 55%
------------------------------------ ----------------------------------- --------------------------------------
AC (Access Concentrator) 40% 45%
------------------------------------ ----------------------------------- --------------------------------------
MX1000 (ATM Edge) 40% 45%
------------------------------------ ----------------------------------- --------------------------------------
PC ACS (ATM Core Switch) 35% 40%
------------------------------------ ----------------------------------- --------------------------------------
PS 6400 (IP Core) 35% 40%
------------------------------------ ----------------------------------- --------------------------------------
PS ITS (IP Telephony) 40% 50%
------------------------------------ ----------------------------------- --------------------------------------
PS AS (Packet End Office) 40% 50%
------------------------------------ ----------------------------------- --------------------------------------
--------------------------------------------------------------------------------
Exhibit C-2 to the Confidential - Winstar/Lucent
Supply Agreement - C-2-1 - Execution Version
Exhibit C-3
Reference Pricing
1. DACS II, DACS IV-2000
1.1. DACS II.
The DACS II Digital Access and Cross-Connect System is configured
with eight (8) DS3 interfaces and two hundred and twenty-five
(225) DS1 interfaces. As configured, including software RTU, the
system price will be the lesser of the discounted price as
specified in the discount schedule (Exhibit C-1) or three hundred
and fifty thousand dollars ($350,000). This price is furnish only.
Growth will be discounted from list price per the contractual
discount schedule.
The standard ordering interval for DACS II is six (6) weeks from
receipt of purchase order.
1.2. DACS IV-2000.
The DACS IV-2000 Digital Access Cross-Connect System operates with
a VT1.5 non-blocking switch fabric. Configured with two hundred
and twenty-five (225) DS1, sixty-five (65) DS3, sixteen (16)
STS-1, one (1) OC-3 and one (1) OC-12 interfaces, including
software RTUs. The system price will be the lesser of the
discounted price as specified in the discount schedule (Exhibit
C-1) or four hundred and eighty thousand dollars ($480,000). This
price is furnish only. Growth will be discounted from list price
per the contractual discount schedule.
The standard ordering interval for DACS IV-2000 is four (4) weeks
from receipt of purchase order.
2. Access Network Solution
Lucent Technologies proposes four (4) different access solutions for
the Network:
1.3. SLC 2000 Connect Reach Models (Voice and Voice / Data).
Fully loaded SLC-2000 in the hub with SLC Connect Reach in the end
user node for voice (see Diagram 1, below) or for data and voice
(see Diagram 2, below) optimized to support small business
customers.
(i) SLC 2000 equipped to support 48 DSI distribution
trunks for a maximum of 48 single SLC Connect Reach
elements or 96 sub-tended elements or a subset of the
two.
(ii) SLC-2000 equipped with 12 DSI network trunks.
(iii) SLC-2000 price is $54,500.
--------------------------------------------------------------------------------
Exhibit C-3 to the Confidential - Winstar/Lucent
Supply Agreement - C-3-1 - Execution Version
(iv) SLC Connect Reach single element price is $3,300 for
24 POTS lines only; $2,700 for 16 POTS lines only;
$2,100 for 8 POTS lines only; $4,800 for 24 POTS lines
and data; $4,200 for 16 POTS lines and data; $3,600
for 8 POTS lines and data.
(v) Additional price per sub-tending SLC Connect Reach
element is $1,179; sub-tending SLC Connect Reach
elements must run in PBX mode.
(vi) A data equipped SLC Connect Reach supports Internet
access, IP, VPN and Frame Relay.
(vii) SLC Connect Reach provides an integrated router.
2.2. AnyMedia FAST / IRX Router Model.
AnyMedia FAST for voice with data access via IRX routers (see
Diagram 3, below):
(a) AnyMedia FAST equipped with 96 lines, wired for 192 lines,
expandable to 512 lines.
(b) Cost effective TR303 based telephony platform.
(c) AnyMedia FAST price; $14,500 with ringing included.
(d) Low cost data overlay option.
(e) IRX router configuration supports one V.35 customer and
one DS1 network interface at $1,400 per router.
2.3. AnyMedia FAST / ATM Access Model.
AnyMedia FAST for voice with data access via AC 10s (ATM
Access device) (see Diagram 4, below):
(a) AnyMedia FAST equipped with 96 lines, wired for 192 lines,
expandable to 512 lines
(b) Cost effective TR303 based telephony platform.
(c) AC10 ATM access device provides four Ethernet customer
interfaces and two DS1 ATM network interfaces.
(d) AC 10 cost $6,500.
(e) AC 120 ATM Access Concentrator at Hub site engineered to
support 60 DS1s.
(f) AC 120 concentrates data traffic at Hub site to reduce
back haul costs.
--------------------------------------------------------------------------------
Exhibit C-3 to the Confidential - Winstar/Lucent
Supply Agreement - C-3-2 - Execution Version
(g) AC 120 price: $75,000.
3. Optical Networking
3.1. Bandwidth Guarantee
For the New York City-to-Washington, DC route and for other
routes deployed before the availability of Lucent's OC-192
product, Lucent will:
(a) Provide up to four OC-48 systems to accommodate the
equivalent bandwidth of an OC-192 system for the route.
(b) Provide this solution at a price point equal to WinStar's
competitive alternatives for OC-192 systems
(c) At the time Lucent's OC-192 system becomes available, which
shall not be later than 3Q1999, Lucent will provide and
install said system (i.e., migrate the Network to the new
system) at no cost to WinStar. The OC-192 system will be
sufficiently similar to the existing service interfaces so
that WinStar and WinStar's customers are not required to
change interfaces, applications or systems in order to
connect to and use the new system.
(d) Lucent will either sell the existing OC-48 system(s) to
WinStar for other routes where applicable or take them back.
3.2. Fiber Optics Technology.
Lucent has configured the New York to Washington, DC route using
state of the art optical networking technology per WinStar's
network specifications. The attached Exhibit C-7 (spreadsheet,
system descriptions and network diagram) illustrate the major
components and associated prices for TDM equipment, optical
add/drop sites and optical amplifier sites. The total price for
the attached network proposal based on WinStar's technical
specifications is Six Million, Two Hundred and Ninety Thousand
Dollars ($6,290,000). Applying Lucent's Optical Network Bandwidth
Guarantee to these specifications yields a discounted price of
Five Million, Five Hundred Thousand Dollars ($5,500,000), which
will vary if WinStar's specifications change. This network
provides a DWDM backbone that supports capacity of up to foty (40)
OC-192 channels. This system supports a mix of OC-48 and OC-192,
as required by WinStar customer demand. In addition, Lucent
believes that there is a significant reduction in equipment (i.e.,
optical amplifiers and regeneration sites) possible as actual
fiber loss characteristics are determined.
--------------------------------------------------------------------------------
Exhibit C-3 to the Confidential - Winstar/Lucent
Supply Agreement - C-3-3 - Execution Version
Diagram 1: SLC Connect Reach Voice Model
SLC Connect Reach Voice Model
[DIAGRAM]
Lucent Technologies Proprietary
--------------------------------------------------------------------------------
Exhibit C-3 to the Confidential - Winstar/Lucent
Supply Agreement - C-3-4 - Execution Version
Diagram 2: SLC Connect Reach Voice & Data Model
SLC Connect Reach Voice & Data Model
[DIAGRAM]
Lucent Technologies Proprietary
--------------------------------------------------------------------------------
Exhibit C-3 to the Confidential - Winstar/Lucent
Supply Agreement - C-3-5 - Execution Version
Diagram 3: AnyMedia FAST / IRX Router Model
AnyMedia FAST / IRX Router Model
[DIAGRAM]
Lucent Technologies Proprietary
--------------------------------------------------------------------------------
Exhibit C-3 to the Confidential - Winstar/Lucent
Supply Agreement - C-3-6 - Execution Version
Diagram 4: AnyMedia FAST / ATM Access Model
AnyMedia FAST / ATM Access Model
[DIAGRAM]
Lucent Technologies Proprietary
--------------------------------------------------------------------------------
Exhibit C-3 to the Confidential - Winstar/Lucent
Supply Agreement - C-3-7 - Execution Version
Exhibit C-4
Switch Pricing
1. General
This SNAP-D quote for the 5ESS is predicated on Lucent Quick-Start
Model 2A agreed upon with WinStar Engineering on October 10, 1998. The
corresponding configuration is:
(a) Lines / Customer provisionable total lines = 6,144
(b) Trunks / Customer provisionable total trunks = 8,400
1.2. Configuration Parameters:
(a) The initial model switch configuration consists of one 3B21
Administrative Module at 5E13 Base Generic, or the then
available Generic, one CM2 Communications Module (two pairs),
and two SM-2000 Switching Modules containing the following:
(b) SM001 - This switching module contains all of the
miscellaneous functions as well as POTS line interfaces via
IDCU TR008, a mix of analog and ISDN lines via DNU-S TR303
and digital trunk interfaces via DNU-S STSX-1(8) and DLTU2.
(c) SM002 - This switching module provides a mix of analog and
ISDN lines via DNU-S TR303 and digital trunk interfaces via
DNUS-S STSX-1(8).
(d) ODA to meet WinStar's network requirement.
1.3. WinStar Benefits:
(a) Minimized up front investment;
(b) Includes an IDCU allowing WinStar the ability to transition
from TR008 to TR303;
(c) Full compliment of current WinStar software features
including Long Distance; and
(d) System is pre-conditioned to allow for quick growth of the
next SM-2000.
--------------------------------------------------------------------------------
Exhibit C-4 to the Confidential - Winstar/Lucent
Supply Agreement - C-4-1 - Execution Version
2. Terms
2.1. Pricing.
Prices for the 5ESS shall be as follows:
(a) Start-up Price shall be Nine Hundred and Sixty-Five Thousand
Dollars ($965,000), which includes the first forty (40) DS1s
to meet Winstar's requirement for the initial activation.
(b) There is no Incremental Price attributable to the first forty
(40) DS1s activated for each 5ESS. The Incremental Price
corresponding to each DS1 thereafter shall be Four Thousand
One Hundred and Fifty Dollars ($4,150).
2.2. Terms and Conditions:
(a) There will be a monthly true-up to determine numbers of DS1s
that have been activated
(b) At the end of twenty-four (24) months, if any remaining DS1s
have not been activated, WinStar will pay the balance of DS1
activation charges.
(c) WinStar must pay for the full value of the Switch (which is
the remaining non-activated DS1s from the initial four
hundred and forty-eight (448) DS1s) before any additional
STSX packs or additional SM2000 is added to the Switch.
(d) Model pricing is subject to change consistent with any
changes in the model configurations.
(e) Lucent shall provide one eighty-five percent (85%) discount
window per year per switch site for hardware and software
orders received over a six (6) month period designated by
WinStar. This provision applies for the duration of the
Agreement.
(f) The 5ESS implementation interval will be eighteen (18) weeks
from receipt of a WinStar Purchase Order to Turnover (i.e.,
not including the period between Turnover and Cutover, which
is approximately three (3) weeks).
(g) Spare 5ESS switch circuit packs, one (1) per pack code are
included in this proposal. Also included is a complement of
spare fuses and blank DAT tape cartridges.
(h) Previous Professional Services credit of One Hundred and
Twenty Thousand Dollars ($120,000) per new switch does not
apply to purchases of 5ESS pursuant to this Exhibit C-2.
--------------------------------------------------------------------------------
Exhibit C-4 to the Confidential - Winstar/Lucent
Supply Agreement - C-4-2 - Execution Version
2.3. Power and E&I
Additional amounts not included in the Start-up Price and
Incremental Price set forth above are as follows (with approximate
regional averages quoted therefor):
(a) Engineering and Installation $238,349
(b) Power (switch only) $162,256
(c) Framework $ 27,117
--------------------------------------------------------------------------------
Exhibit C-4 to the Confidential - Winstar/Lucent
Supply Agreement - C-4-3- Execution Version
Exhibit C-5
Pricing for Lucent Network-Related Services
------------------------------------------------------------------------------------------------------------------------------------
Line Item DESCRIPTION Price Price Price Price Price
Year 1 Year 2 Year 3 Year 4 Year 5
------------------------------------------------------------------------------------------------------------------------------------
001 Network
Architecture (Baseline) $ 680,000
------------------------------------------------------------------------------------------------------------------------------------
002 Overall Network Architecture $ 800,000 $ 680,000 $ 680,000 $ 680,000 $ 680,000
------------------------------------------------------------------------------------------------------------------------------------
003 Overall Network
Technology/Network Design $ 5,000,000 $ 3,250,000 $ 3,250,000 $ 3,250,000 $ 3,250,000
------------------------------------------------------------------------------------------------------------------------------------
004 Network Solution Development $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000
------------------------------------------------------------------------------------------------------------------------------------
005 Interoperability Lab / Technology
Selection $ 4,500,000 $ 8,000,000 $ 5,200,000 $ 5,200,000 $ 5,200,000
------------------------------------------------------------------------------------------------------------------------------------
006** City Plan (per New City) $ 150,000 $ 150,000 $ 150,000 $ 150,000 $ 150,000
------------------------------------------------------------------------------------------------------------------------------------
007** Existing City Traffic
Engineering/Capacity
Planning (per City per year) $ 75,000 $ 75,000 $ 75,000 $ 75,000 $ 75,000
------------------------------------------------------------------------------------------------------------------------------------
008 Equipment Engineering Included in Lucent Firm Price Quote
------------------------------------------------------------------------------------------------------------------------------------
009 Delivery Included in Lucent Firm Price Quote
------------------------------------------------------------------------------------------------------------------------------------
010 Staging Included in Lucent Firm Price Quote
------------------------------------------------------------------------------------------------------------------------------------
011 Installation/Turnover Included in Lucent Firm Price Quote
------------------------------------------------------------------------------------------------------------------------------------
012 Drawings Included in Lucent Firm Price Quote
------------------------------------------------------------------------------------------------------------------------------------
013 Records Included in Lucent Firm Price Quote
------------------------------------------------------------------------------------------------------------------------------------
015 Logical Assignments
Provisioning Included in Lucent Firm Price Quote
------------------------------------------------------------------------------------------------------------------------------------
014 Product Warranty Standard Warranty included in price of the product
------------------------------------------------------------------------------------------------------------------------------------
017 Program Management ($$
based on Business
Case Quantities)
------------------------------------------------------------------------------------------------------------------------------------
017a Program Management Office $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000
------------------------------------------------------------------------------------------------------------------------------------
017b New City CO (per site) $ 2,000 $ 2,000 $ 2,000 $ 2,000 $ 2,000
------------------------------------------------------------------------------------------------------------------------------------
017c Hub Site (per site) $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000
------------------------------------------------------------------------------------------------------------------------------------
017d B-Site (per site - less
than 1000) $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000
------------------------------------------------------------------------------------------------------------------------------------
017e B-Site (per site -
greater than 1000) $ 500 $ 500 $ 500 $ 500 $ 500
------------------------------------------------------------------------------------------------------------------------------------
017i Connectivity Included In PM line items above
------------------------------------------------------------------------------------------------------------------------------------
017j Growth (Augments) Included In PM line items above
------------------------------------------------------------------------------------------------------------------------------------
017k PM of WinStar Responsible
Functions Included In PM line items above
------------------------------------------------------------------------------------------------------------------------------------
020 Special Projects Pricing TBD (SOW based)
------------------------------------------------------------------------------------------------------------------------------------
The elements priced above are based on Schedule A Statement of Work. Not all
content of the Statement of Work is priced herein.
** This Price does not include RF engineering based on that
functionality residing with WinStar.
NOTE: 1 Price structure above to be extended to the international as
applicable.
--------------------------------------------------------------------------------
Exhibit C-5 to the Confidential - Winstar/Lucent
Supply Agreement - C-5-1- Execution Version
Exhibit C-6
Pricing for Interoperability Test Lab
1. Introduction
This Exhibit sets forth the functionality, scope, composition, staffing
and pricing for the Test Facilities to be provided by Lucent under this
Agreement. Further description of the use of the Test Facilities is set
forth in Section 4 of Schedule A.
2. Functionality
2.1. Functionality.
The Testing Facilities provided by Lucent pursuant to Section
4 of Schedule A shall encompass the following functionality:
(a) Architecture and Design Support. Functionality and
interoperability testing of Network Elements,
technical evaluation and selection of network
elements, WinStar customer tours, direct technical
interface with suppliers of Network Elements in
resolving all technical performance and
interoperability issues. Deliverables are engineering
standards, recommended standard installation
configurations and provisioning requirements. The
Test Lab will also serve as a testbed for Level 4
support in replicating problems found in the Network
for purposes of problem diagnosis and resolution.
(b) Network Operations Support. Development of High Level
Process Requirements and Functional Interface
Requirements between Network Management and Element
Management systems and the appropriate Network
Elements. Deliverables are requirements documents for
WinStar OSS/BSS systems, fault management rules to be
used to manage the network, and changes to Network
Elements as appropriate and necessary to support
WinStar OSS/BSS functionality.
(c) Network Verification Testing. Development of Network
Verification Tests to verify that a chosen set of
Network Elements that constitute a network
Architecture support products and services offered by
WinStar (customer products). Deliverable is a set of
Network Verification Tests that have been
successfully executed in the Interoperablility
Laboratory environment and criteria for successfully
executing such tests in a field environment.
(d) SME Access. Lucent will provide access to at least
twenty (20) virtual Subject Matter Experts (SMEs) in
other Lucent laboratory environments as required to
support technical efforts related to the activities
of the Interoperablity Laboratory.
(e) Technical Training. The testing facility staff will
provide access to the laboratory, including
configuration of Network Elements to support
WinStar's efforts to provide training in engineering,
construction, provisioning and maintenance. Testing
facility staff will participate in and support
training as required. Training classes will not
exceed a reasonable percentage of the normal work
week so as not to deter the prime purpose of the
laboratory.
--------------------------------------------------------------------------------
Exhibit C-6 to the Confidential - Winstar/Lucent
Supply Agreement - C-6-1 - Execution Version
2.2. Scope and Composition.
(a) The Testing Facilities will test Lucent Products and
Third-Party Products that are or may be used as
Network Elements in the Network, to include
interoperability of CPE as required to support
WinStar-provided products and services. Scheduling of
such testing is directly linked to the staffing level
and equipment availability of the testing facility.
(b) WinStar will specify and provide a site at which the
Testing Facility will be located. WinStar will be
responsible for all facility costs such as rent,
utilities, telephone service and comminications
WinStar will provide any required access to the
Network and the BSS/OSS data communications network
(DCN).
(c) WinStar will be responsible for supply of those
Third-Party Products deployed as Network Elements
that are not purchased through Lucent. Lucent will
coordinate the installation and maintenance of those
Elements in the testing facility. Lucent will supply
and maintain all other Equipment, Software and other
Services (including but not limited to a 5ESS switch,
racks, DC power equipment, cabling, test and analysis
equipment necessary to implement the Test Facilities.
Lucent will also make shared-use Equipment owned by
Lucent available whether on site or through remote
connectivity as required by the Test Facility.
2.3. Staffing.
(a) Initial Levels. Table 1 contains the Parties'
expectation for the staffing of the Test Facilities
over the Term, in numbers of on-site Lucent personnel
dedicated to the WinStar Test Facilities. It also
indicates an approximate breakdown of staff per area,
corresponding to the work activities described in
Section 2.1 of this Exhibit.
(b) Efficiencies. Lucent will advise WinStar of any
opportunities for efficiencies or adjustments in
staffing for the Testing Facilities that would permit
savings without sacrificing functionality. The
Parties will work together to adjust the staffing
levels as appropriate to support the design and
implementation of the Network over the Term, with
corresponding adustments in the billing to WinStar.
--------------------------------------------------------------------------------------------------
Table 1: Initial Staffing Levels (FTEs)
--------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 3 Year 4 Year 5
------------------------------------- ----------- ----------- ------------ ----------- -----------
Design Support 14 24 15 15 15
--------------------------------------------------------------------------------------------------
Network Operations Support 2 7 5 5 5
--------------------------------------------------------------------------------------------------
Network Verification Testing 2 1 1 1 1
--------------------------------------------------------------------------------------------------
Total 18 32 21 21 21
--------------------------------------------------------------------------------------------------
3. Pricing
3.1. Test Facilities Staff Pricing.
Table 2 sets forth the pricing levels attributable to the
staffing indicated in Table 1. These pricing levels represent
annual caps that correspond to staffing levels set forth in
Section 2.3 of this Exhibit. Notwithstanding the foregoing,
the Parties may mutually agree to adjust these levels pursuant
to Section 3.2 of this Exhibit.
--------------------------------------------------------------------------------------------------
Table 2: Pricing for Initial Staffing Levels ($K)
--------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 3 Year 4 Year 5
------------------------- ----------------- ------------- ------------- ------------ -------------
Totals 4,500,000 8,000,000 5,200,000 5,200,000 5,200,000
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exhibit C-6 to the Confidential - Winstar/Lucent
Supply Agreement - C-6-2 - Execution Version
3.2. Adjustments.
(a) Within sixty (60) days of the Effective Date, Lucent
will develop a set of blended rates applicable to the
staff of the Testing Facilities, divided into three
personnel categories (e.g., junior, mid-level and
senior technical personnel).
(b) In the event that WinStar requests a reduction in
staffing of the Testing Facilities (whether in
response to a Lucent notice of an efficiency
opportunity pursuant to Section 2.3(b) or otherwise),
Lucent will work with WinStar to accommodate that
request without loss of functionality. In cases where
Lucent believes that a reduction in Scope of Work or
functionality will result from the request, the
impact will be provided to WinStar within fifteen
(15) days of the request. When such a reduction in
staffing becomes effective, the charges set forth in
Section 3.1 shall be reduced by the blended rates
attributable to such person(nel).
--------------------------------------------------------------------------------
Exhibit C-6 to the Confidential - Winstar/Lucent
Supply Agreement - C-6-3 - Execution Version
Exhibit C-7
Pricing for Optical Networking Technology
1. Definitions
1.1. Lucent's DWDM Solutions:
The OLS 400G DWDM system utilizes a global platform approach to
provide complete optical networking solutions for WinStar. The DWDM
system supports up to 40 wavelengths of OC-192, 80 wavelengths of
OC-48, or a mix up to 400 Gb/sec per fiber. There are four components
to the solution as follows:
(a) OLS 400G DWDM End Terminal. This DWDM terminal terminates the four
fibers (two transmit and two receive) to support WinStar's initial
application as well as future growth to 400 Gb/sec. It provides
the multiplexing and demultiplexing of wavelengths from the high
speed DWDM line rate (400 Gb/sec) fibers to the individual SONET
TDM terminals. The SONET TDM terminals interface to the OLS 400G
DWDM End Terminal and each input is assigned an individual
wavelength (color) for multiplexing into the OLS 400G DWDM system.
A signal from a Lucent SONET terminal (FT-2000 OC-48 or WaveStar
10G OC-192 system) can directly feed the OLS 400G DWDM End
Terminal. The OLS 400G system also supports an open interface to
other vendors SONET TDM equipment via Lucent's Optical Translator
Unit or OTU.
In the WinStar specific network design, the OLS 400G DWDM End
Terminal is equipped with OC-48 OTUs for the through NYC to
Washing D.C. express wavelengths. The three Lucent FT-2000 OC-48
SONET terminals are equipped with Lucent Compatible Optics so that
OTUs are not required.
(b) OLS 400G DWDM Optical Add/Drop Terminal. The optical add/drop
sites contain the OLS 400G Optical Add/Drop Terminal, which allows
wavelengths to be dropped to or added from SONET OC-48 or OC-192
TDM terminals. All other wavelengths are expressed through the
Optical Add/Drop Terminal. This function in the DWDM network is
analogous to the Linear Add/Drop function in the SONET
environment.
(c) OLS 400G Optical Amplification Terminal. These sites contain the
stand-alone Optical Amplifiers where optical amplification is
required. These Erbium-doped amplifiers have the wide band
amplification pass bands required to support the fully equipped
OLS 400G system (same amp for all 80/40 wavelengths of OC48/OC192;
no additional amplifiers are required throughout the system
growth). These OLS 400G DWDM terminals can be upgraded in-service
to an OLS 400 G Optical Add/Drop Terminal if required.
(d) OLS 400G Regeneration Terminal. This terminal is used once in the
NYC/DC design. The purpose of this system is to fully regenerate
the DWDM signals once the limit of concatenated amplified spans
has been reached This is necessary to eliminate the build up of
signal degradation and second order effects in the amplification
process.
--------------------------------------------------------------------------------
Exhibit C-7 to the Confidential - Winstar/Lucent
Supply Agreement - C-7-1 - Execution Version
1.2. Lucent's SONET TDM Solutions:
(a) FT-2000 OC-48 SONET TDM Terminal. These are OC-48 SONET terminals,
which multiplex lower speed signals up to the OC-48 rate. They
contain optics that output the correct wavelength for direct input
into the OLS 400G DWDM Terminals.
(b) WaveStar 10G (OC-192) SONET TDM Terminal. These are OC-192 SONET
TDM terminals, which multiplex lower speed signals (DS3, XX0,
XX-0, Oc-12, Oc-48) up to the Oc-192 rate. These terminals are
quipped with OLS 400G DWDM System Compatible Optics that output
the correct wavelengths for input to the OLS 400G DWDM terminals.
2. Optronics Network Solution
2.1. Description.
The attached Diagrams 1, 3 and 4 represent the Lucent solution to
supporting WinStar's identified traffic requirements, as indicated in
Diagram 2. As described in Exhibit C-3, the solution relies upon OC-48
(see Diagram 3, the "OC-48 Solution") until Lucent is able to offer
the OC-192 solution (see Diagram 4, the "OC-192 Solution"). The detail
behind the diagrams is as follows:
(a) Diagram 1 sets forth the Span Engineering for the Lucent solution.
It is based upon the following:
(i) Assumptions.
(1) TrueWave Plus fiber to be used throughout this portion of
the Network;
(2) There are four (4) fibers between Jersey City and
Washington DC;
(3) 0.30 dB/km;
(4) 1.6 km/mile;
(5) 2 dB into/out of wavelength add/drop;
(6) 1.5 dB into/out of end terminal; and
(7) 1 dB loss per OA.
(ii) Engineering Rules. WaveStar OLS 400G OC-192 on TrueWave +
Release 1.0
--------------------------------------------------------------------------------
Exhibit C-7 to the Confidential - Winstar/Lucent
Supply Agreement - C-7-2 - Execution Version
[GRAPHIC OMITTED]
Diagram 1: Optronics Solution Span Engineering
(b) Diagram 2 represents WinStar's indication of its traffic support
requirements. The Lucent solution set forth in Diagram 1 was
developed by Lucent to be capable of accommodating this traffic
support.
[GRAPHIC OMITTED]
Diagram 2: WinStar Traffic Support Requirements
--------------------------------------------------------------------------------
Exhibit C-7 to the Confidential - Winstar/Lucent
Supply Agreement - C-7-3 - Execution Version
(c) Diagram 3 depicts the OC-48 Solution.
[GRAPHIC OMITTED]
Diagram 3: OC -48 Solution
(d) Diagram 4 depicts the OC-192 Solution.
[GRAPHIC OMITTED]
Diagram 4: OC -192 Solution
2.2. Component Pricing.
(a) Table 3 indicates the component-level list prices for Lucent
Products used in the optronics Network solution. These prices
will be adjusted as set forth in Schedule C (i.e., discounts,
reference scaling, XxX and SNAP-D) before being charged to
WinStar.
--------------------------------------------------------------------------------
Exhibit C-7 to the Confidential - Winstar/Lucent
Supply Agreement - C-7-4 - Execution Version
(b) Tables 4 and 5 indicate component level pricing for other Lucent
Products used in the optronics Network solution. This pricing is
the Discount Price and will be adjusted as set forth in Schedule
C (i.e., reference scaling, XxX and SNAP-D) before being charged
to WinStar.
----------------------------------------------------------------------------------------------------------------------------
Table 1: OC-48 Solution
Site Description # Systems Unit Price Total Price
----------------------------------------------------------------------------------------------------------------------------
New York City OLS 400G DWDM End Terminal 1 485,256 485,256
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w no lowspeed (for future service) 1 91,000 91,000
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w (2) 1+1 prot OC-3s 1 104,000 104,000
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w (4) 1+1 prot OC-3s & 24 prot DS3s 1 135,000 135,000
----------------------------------------------------------------------------------------------------------------------------
Jersey City OLS 400G DWDM Optical Add/Drop Terminal 1 567,212 567,212
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w (4) 1+1 prot OC-3s & 24 prot DS3s 1 135,000 135,000
----------------------------------------------------------------------------------------------------------------------------
Newark Jct OLS 400G DWDM Optical Add/Drop Terminal 1 567,212 567,212
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w (4) 1+1 prot OC-3s & 24 prot DS3s 1 135,000 135,000
----------------------------------------------------------------------------------------------------------------------------
Hopewell OLS 400G DWDM Optical Amplification Terminal 1 294,799 294,799
----------------------------------------------------------------------------------------------------------------------------
Philadelphia Jct OLS 400G DWDM Optical Regeneration Terminal 1 1,031,555 1,031,555
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w (2) 1+1 prot OC-3s 1 104,000 104,000
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w (4) 1+1 prot OC-3s & 24 prot DS3s 1 135,000 135,000
----------------------------------------------------------------------------------------------------------------------------
Wilmington Jct OLS 400G DWDM Optical Amplification Terminal 1 294,799 294,799
----------------------------------------------------------------------------------------------------------------------------
Elkton OLS 400G DWDM Optical Amplification Terminal 1 294,799 294,799
----------------------------------------------------------------------------------------------------------------------------
New Site A+A7 OLS 400G DWDM Optical Amplification Terminal 1 294,799 294,799
----------------------------------------------------------------------------------------------------------------------------
Baltimore Jct OLS 400G DWDM Optical Add/Drop Terminal 1 567,212 567,212
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w (2) 1+1 prot OC-3s 1 104,000 104,000
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w (4) 1+1 prot OC-3s & 24 prot DS3s 1 135,000 135,000
----------------------------------------------------------------------------------------------------------------------------
Washington DC OLS 400G DWDM End Terminal 1 485,256 485,256
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w no lowspeed (for future service) 1 91,000 91,000
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w (2) 1+1 prot OC-3s 1 104,000 104,000
-------------------------------------------------------------------------------------------------------
FT-2000 OC-48 e/w (4) 1+1 prot OC-3s & 24 prot DS3s 1 135,000 135,000
----------------------------------------------------------------------------------------------------------------------------
-------------------
$6,290,899
----------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exhibit C-7 to the Confidential - Winstar/Lucent
Supply Agreement - C-7-5 - Execution Version
--------------------------------------------------------------------------------------------------------------
Table 2: OC-192 Solution
Site Description # Unit Price Total Price
systems
--------------------------------------------------------------------------------------------------------------
New York City OLS 400G DWDM End Terminal 1 485,256 485,256
------------------------------------------------------------------------------------------------
WaveStar 10G (OC-192) e/w 1 OC-48, 8 OC3, 24 DS3, one 1 402,000 402,000
additional oc48 rail unused
--------------------------------------------------------------------------------------------------------------
Jersey City OLS 400G DWDM Optical Add/Drop Terminal 1 506,169 506,169
------------------------------------------------------------------------------------------------
WaveStar 10G (OC0192) e/w 4 1+1 protected OC3 three 1 360,000 360,000
additional oc48 rail unused
--------------------------------------------------------------------------------------------------------------
Newark Jct OLS 400G DWDM Optical Add/Drop Terminal 1 506,169 506,169
------------------------------------------------------------------------------------------------
WaveStar 10G (OC-192) e/w 4 1+1 protected OC3 three 1 360,000 360,000
additional oc48 rail unused
--------------------------------------------------------------------------------------------------------------
Hopewell OLS 400G DWDM Optical Amplification Terminal 1 294,799 294,799
--------------------------------------------------------------------------------------------------------------
Philadelphia OLS 400G Regeneration Terminal 1 970,512 970,512
Jct
------------------------------------------------------------------------------------------------
WaveStar 10G (OC-192) e/w 8 1+1 protected OC-3; 24 DS3 two 1 398,000 398,000
additional oc48 rail unused
--------------------------------------------------------------------------------------------------------------
Wilmington OLS 400G DWDM Optical Amplification Terminal 1 294,799 294,799
Jct
--------------------------------------------------------------------------------------------------------------
Elkton OLS 400G DWDM Optical Amplification Terminal 1 294,799 294,799
--------------------------------------------------------------------------------------------------------------
(New Site A) OLS 400G DWDM Optical Amplification Terminal 1 294,799 294,799
--------------------------------------------------------------------------------------------------------------
Baltimore OLS 400G DWDM Optical Add/Drop Terminal 1 506,169 506,169
Jct
------------------------------------------------------------------------------------------------
WaveStar 10G (OC-192) e/w 8 1+1 protected OC-3; 24 DS3 two 1 398,000 398,000
additional oc48 rail unused
--------------------------------------------------------------------------------------------------------------
Washington DC OLS 400G DWDM End Terminal 1 485,256 485,256
------------------------------------------------------------------------------------------------
WaveStar 10G (OC-192) e/w 1 OC-48, 8 OC3, 24 DS3 one 1 402,000 402,000
additional oc48 rail unused
--------------------------------------------------------------------------------------------------------------
-------------
$6,958,727
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exhibit C-7 to the Confidential - Winstar/Lucent
Supply Agreement - C-7-6 - Execution Version
--------------------------------------------------------------
Table 3: Linearized 10G (OC-192)
TDM SONET Terminal Pricing Models
--------------------------------------------------------------
Model List Price
--------------------------------------------------------------
10G 2F
--------------------------------------------------------------
Startup (1.3u high speed) $278,312
--------------------------------------------------------------
per 1xN DS3/EC1 (8 port) $1,615
--------------------------------------------------------------
per 1+1 OC3 (4 port SR) $6,357
--------------------------------------------------------------
per 1+1 OC3 (4 port LR) $9,200
--------------------------------------------------------------
per 1+1 OC12 (2 port SR) $15,454
--------------------------------------------------------------
per 1+1 OC12 (2 port LR) $25,000
--------------------------------------------------------------
per XX00 XXXX (1.3u) $38,788
--------------------------------------------------------------
10G 4F
--------------------------------------------------------------
Startup (1.3u high speed) $533,338
--------------------------------------------------------------
per 1xN DS3/EC1 (8 port) $1,615
--------------------------------------------------------------
per 1+1 OC3 (4 port SR) $6,357
--------------------------------------------------------------
per 1+1 OC3 (4 port LR) $9,200
--------------------------------------------------------------
per 1+1 OC12 (2 port SR) $15,454
--------------------------------------------------------------
per 1+1 OC12 (2 port LR) $25,000
--------------------------------------------------------------
per XX00 XXXX (1.3u) $38,788
--------------------------------------------------------------
Interface Packs
--------------------------------------------------------------
DS3 Prot. Switch Relay $2,400
--------------------------------------------------------------
OC48 1.3u $19,394
--------------------------------------------------------------
OC48 1.5u $24,546
--------------------------------------------------------------
OC48 OLS Compatible $40,000
--------------------------------------------------------------
OC3 1.3 4 port Long Reach $18,400
--------------------------------------------------------------
OC3 1.3 4 port Short Reach $12,714
--------------------------------------------------------------
OC12 1.3 2 port Long Reach $25,000
--------------------------------------------------------------
OC12 1.3 2 port Short Reach $15,454
--------------------------------------------------------------
DS3/EC1 8 port pack $10,000
--------------------------------------------------------------
DS3 Terminal Block $3,000
--------------------------------------------------------------
--------------------------------------------------------------
OC192 2 Fiber HS Shelf Common
Item Count List
OC192 Shelf/BP/Fan 1 $14,000
CTL/SYS50DM 1 $9,334
DCC/EIU 1 $5,600
PPROC/STS192 4 $32,000
Switch/STS576 2 $10,600
TMG 2 $4,000
OC192 1.5 2 $140,000
OC192 Software 1 $20,000
Basic cables 1 $462
Total HS $235,996
OC192 2 Fiber LS Shelf Common
OC48 Shelf/BP/Fan 1 $10,000
CTL/SYS50DM 1 $9,334
DCC/EIU 1 $5,600
SWITCH/STS576 2 $10,600
TMG 2 $4,000
Intershelf cables 1 $2,320
Basic Cables 1 $462
Total LS $42,316
--------------------------------------------------------------------------------
Exhibit C-7 to the Confidential - Winstar/Lucent
Supply Agreement - C-7-7 - Execution Version
------------------------------------------------------------------------------
Table 4: Linearized FT-2000 (OC-48)
TDM SONET Terminal Pricing Models
------------------------------------------------------------------------------
Model WinStar Price
------------------------------------------------------------------------------
FT-2000 OC-48 System
------------------------------------------------------------------------------
Startup 24,500
------------------------------------------------------------------------------
Optics
------------------------------------------------------------------------------
OLS compatible optics (T&R,1+1 protected) 67,000
------------------------------------------------------------------------------
Standard 1.3 optics (T&R, 1+1 protected) 39,200
------------------------------------------------------------------------------
Lowspeed packs
------------------------------------------------------------------------------
per 1XN DS3 ( 3 ports per card, includes allocated 868
protection pack cost &misc associated equip)
------------------------------------------------------------------------------
per 1XN EC1 (3 ports per card, includes allocated 911
protection pack cost & misc associated equip)
------------------------------------------------------------------------------
per 1+1 OC3 (includes allocated cost of Trib Overhead 5,095
Controller -TOHCTL)
------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exhibit C-7 to the Confidential - Winstar/Lucent
Supply Agreement - C-7-8 - Execution Version
--------------------------------------------------------------------------------------------------
Table 5: Equipment List: FT-2000 OC-48 Bay (up to 2 systems per bay)
--------------------------------------------------------------------------------------------------
Part No. Price
--------------------------------------------------------------------------------------------------
OC-48 System #1
--------------------------------------------------------------------------------------------------
ED8C902-30 X-0 0 Xxxxx Xxx/Xxxx Xxxx Xxxx includes the following: 14,697
E/W
J68974E1 L-7 2 F A/D Ring Term
J68974E1 L-36 Low Speed Protn Xx XXX00X
X00000X0 L-41 TG3 (DS1) Cp LAA18
J68974E1 L-70 Overhead Controller LAA21
J68974E1 L-46 System Controller LAA23B
J68974E1 L-50 System Memory 4 Mbyte LAA25
J68974E1 L-66 Line Controller (4Mg) A/D & ring LAA28
--------------------------------------------------------------------------------------------------
OC-48 System #2
--------------------------------------------------------------------------------------------------
ED8C902-30 X-0 0 Xxxxx Xxx/Xxxx Xxxx Xxxx includes the following: 14,697
E/W
J68974E1 L-7 2 F A/D Ring Term
J68974E1 L-41 TG3 (DS1) Cp LAA18
J68974E1 L-70 Overhead Controller LAA21
J68974E1 L-46 System Controller LAA23B
J68974E1 L-50 System Memory 4 Mbyte LAA25
J68974E1 L-66 Line Controller (4Mg) A/D & ring LAA28
--------------------------------------------------------------------------------------------------
Standard High Speed (OC48) Optics
--------------------------------------------------------------------------------------------------
J68974E1 X-00 XX-00 XXXX (X/X XXX-0) 000X0 7,000
J68974E1 L-83 1.3 Transmitter Standard Power 24dB 739B5 12,600
J68974E1 L-84 1.3 Transmitter High Power 27dB 739C5 18,900
J68974E1 L-104 1550 Transmitter 23dB 739J5 35,910
OLS Compatible High Speed (OC48) Optics
--------------------------------------------------------------------------------------------------
J68974E1 L-79 1.5 OLS compatible Receiver 839E5 9,500
J68974E1 L-251- 1.5 OLS compatible Transmitter 739E5 24,000
266
Lowspeed Cards
--------------------------------------------------------------------------------------------------
J68974E1 L-21 OC-3 Long Reach Interface - one port per card (LAA10) 2,310
J68974E1 L-23 IS3 Circuit pack - one port per card (LAA5) 1,575
J68974E1 L-33 OC-12 Optical Extension (T939A) 9,240
J68974E1 L-25 DS3 Interface - three ports per card (LAA2) 2,100
J68974E1 L-30 EC-1 Low Speed Interface - three ports per card (LAA4) 2,205
J68974E1 L-39 Tributary Overhead Controller (LAA26) 2,772
--------------------------------------------------------------------------------------------------
(continues)
--------------------------------------------------------------------------------
Exhibit C-7 to the Confidential - Winstar/Lucent
Supply Agreement - C-7-9 - Execution Version
--------------------------------------------------------------------------------------------------
Table 5: Equipment List: FT-2000 OC-48 Bay (continued)
--------------------------------------------------------------------------------------------------
Part No. Price
--------------------------------------------------------------------------------------------------
Software
--------------------------------------------------------------------------------------------------
X00000XX-0 X-0 X0.0 Xxxx -
X00000XX-0 L-M1R R.7.2 App RTU 2,310
--------------------------------------------------------------------------------------------------
J68974ES-2 L-P1R R 7.2 OS RTU 6,930
J68974ES-2 L-A R7.2 User/Service Manual -
--------------------------------------------------------------------------------------------------
Miscellaneous
--------------------------------------------------------------------------------------------------
Required FT-2000 bay, Shelf, Cable, and Miscellaneous Items
--------------------------------------------------------------------------------------------------
J68974E1 L-109 9824AG Line Buildout (1 per DS3 circuit) 25
J68974E1 L-107 -48V DC pwr input Ca overhead 33
J68974E1 L-116 lightguide buildout set ST's (choose 2 per optics) 23
J68974E1 L-126 lightguide buildout set FC's (choose 2 per optics) 33
J68974E1 L-136 lightguide buildout set SC's (choose 2 per optics) 33
J68974E1 L-117 lightguide buildout set STs for OC-3 (1.3 STD) 18
J68974E1 L-118 lightguide buildout set ST's for IS3 & OC12 33
ED8C900-20 G-102 DS3 to DSX3/4 gr.A,B,& C 100ft. (one per DS3/STS1) e/w 141
ED8C900-20 G-6BA (6) Straight BNC Connectors, near end factory install 88
ED8C900-20 G-6LA (6) Straight BNC Connectors, far end loose 29
ED8C805-50 G-1 Anchor Bolt 7' Fr. Zone 1&2 37
ED8C805-50 G-2 Anchor Bolt 7' Fr. Xxxx 0&0 00
XX0X000-00 X-0 XXXXX XXXXXXX 10' Lg 30
--------------------------------------------------------------------------------------------------
Optional Cables and Miscellaneous Items
--------------------------------------------------------------------------------------------------
ED7G001-22 G-53 TMG IN OR OUT 150 ft. 73
ED7G001-22 G-251 SER TLM (TBOS) intfc 150 ft. 75
ED7G001-22 G-351 ALMs & PAR TLM intfc 150 ft. 90
ED7G001-22 G-451 SONET Overhead Chs. 150ft. 98
ED7G001-22 G-652 X.25 Cable 150 ft 100
ED7G001-22 G-752 DTE Link (CIT) 150 ft. 100
ED8C120-50 G-89 Ft. of 1/4 in spiral wrap -
901011320 WRIST STRAP > 6 1/2 in. Circumference 24
845264118 Terminal ESD grounding 157
--------------------------------------------------------------------------------------------------
Documentation
--------------------------------------------------------------------------------------------------
107373094 FT-2000 OC-48 Installation Manual 113
--------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exhibit C-7 to the Confidential - Winstar/Lucent
Supply Agreement - C-7-10- Execution Version
Exhibit C-8
Pricing for International Services
The Parties have deferred agreement upon pricing for international
Services until thirty (30) days following the Effective Date. The
Parties agree that the pricing shall be developed consistent with the
pricing and pricing methodologies and processes (including most favored
customer, XXX and SNAP-D) set forth in this Agreement for the United
States based pricing.
--------------------------------------------------------------------------------
Exhibit C-8 to the Confidential - Winstar/Lucent
Supply Agreement - C-8-1 - Execution Version
Schedule D
Documentation and Specifications
Incorporated by reference
[This Schedule D incorporates current technical Documentation and Specifications
relating to cetain Lucent Products and Services, as well as Third Party Products
and Services, as in effect from time to time, that WinStar may elect to obtain
from Lucent and is comprised substantially of drawings, blueprints and similar
technical information. Because the specific Products and Services that WinStar
may elect to obtain from or through Lucent are not conclusive or exhaustive as
of the Effective Date, the Documentation and Specifications referred to in this
Schedule D will be modified from time to time as applicable.]
--------------------------------------------------------------------------------
Schedule D to Confidential - Winstar/Lucent
Supply Agreement - D-1 - Execution Version
Schedule E
Acceptance Testing
1. Acceptance Testing and Final Acceptance.
Lucent will develop and WinStar will approve standards for acceptance
procedures, testing and final acceptance. Until these procedures are
developed, it is agreed that the attachments in Schedule E will govern
acceptance criteria and will be the methodology employed for acceptance
unless or until new procedures are proposed by Lucent and accepted by
WinStar. "Nonconformity" shall mean failure to comply with the
Acceptance Criteria and such other criteria as are set forth in this
Agreement.
1.1. Acceptance Testing and Cure.
Lucent will perform joint testing as described in Schedule E
for each Hub, B site and Central Office it provides to WinStar
under this contract. Full documentation countersigned by each
party or their representatives will be provided to WinStar.
Lucent will maintain a copy of each site accepted for a period
of five (5) years.
1.2. Failure to Meet Acceptance Criteria.
In the event that a site or link does not pass the agreed upon
testing and acceptance, Lucent will begin immediately upon
notification to correct the cause for non-acceptance in the
following manner:
(a) B Sites. Unless otherwise agreed to by WinStar,
Lucent will identify and correct the defect within
two (2) working days. In the event that Lucent can
not resolve the defect within the specified time
frame, WinStar may, at its option, extend the time
for acceptance conformity or take action to resolve
the defect itself. If WinStar chooses to resolve the
defect, actual out of pocket costs to do so will be
deducted from the price Lucent bills WinStar for that
site.
(b) Hub Site. Lucent shall have five (5) working days to
resolve any defects or non conformity to acceptance
criteria as defined in Schedule E. Remedies for
failure to resolve shall be as described in (a) above
(including time extension).
(c) Central Office. Lucent shall have ten (10) working
days to resolve any defects or non-conformity to
acceptance criteria as defined in Schedule E.
Acceptance testing and final acceptance of the
Central Office will include all Network Elements in
the CO, i.e., Switch, DXC, etc. Remedies for failures
to resolve shall be as defined in Section (a) above
(including time extension).
1.3. WinStar's Responsibilities.
WinStar will bear responsibility to promptly perform test and
acceptance for Network Elements (NE's) which Lucent notifies
WinStar are ready for service. Failure to meet deadlines for
acceptance will be deemed as Acceptance.
--------------------------------------------------------------------------------
Schedule E to Confidential - Winstar/Lucent
Supply Agreement - E-1 - Execution Version
(a) B-Sites. Acceptance tests and walk through will be
performed within two (2) working days of
notification.
(b) Hub Sites. Acceptance tests and walk through will be
performed within five (5) working days of
notification.
(c) Central Office. Acceptance tests and ORT will be
performed within thirty (30) calendar days of
notification.
(d) WinStar Systems. Lucent will also be responsible to
update WinStar Systems with as built circuit and
Equipment placement as it relates to floor plans and
WinStar Provisioning Systems prior to acceptance.
1.4. Other Test and Acceptance.
As the WinStar Network grows and evolves, it is anticipated
that new technologies and Network Elements (NE's) will be
placed into the network. Prior to any purchase order being
placed for such Network Elements (NE's) and Services, Lucent
will propose and WinStar will approve a test and acceptance
procedure which will become an addendum to this contract.
1.5. Change Methodology.
If Lucent develops a new test procedure that enhances or
automates test and acceptance, it will submit a proposal to
WinStar who will provide approval or disapproval of the new
procedure. In no instance will any new acceptance criteria be
introduced that does not meet standard industry practices and
methods of evaluation for fitness for service or the
manufacturer's specification whichever is more stringent. No
new acceptance procedures will be instituted without prior
WinStar approval.
--------------------------------------------------------------------------------
Schedule E to Confidential - Winstar/Lucent
Supply Agreement - E-2 - Execution Version
Schedule F
Financing
Refer to the Credit Agreement
--------------------------------------------------------------------------------
Schedule F to Confidential - Winstar/Lucent
Supply Agreement - F-1 - Execution Version
Schedule G
International Considerations
1. General.
1.1. General.
(a) Purchase of Products and Services from Lucent by WinStar
International will be pursuant to this Agreement
(including XXX and SNAP-D), and all of the rights and
responsibilities will attach thereto, including but not
limited to financing and qualification of those purchases
for purposes of WinStar's minimum volume purchase
commitments, if any.
(b) Services and products delivered by Lucent to WinStar
International shall be considered "Services" and
"Products," respectively, for all purposes within the
scope of this Agreement.
(c) Internationally, Lucent will perform the Services of
Network Architecture and Technology, Planning and Program
Management, Testing, Implementation and Special Projects
as described in Schedule A, with appropriate modifications
to account for differences in the regulatory and technical
environments. In addition, Lucent's scope of
responsibility internationally will include:
(i) Planning and execution of the build-out of the
Network including site selection (including line of
site surveys), site acquisition, RF Engineering,
obtaining SS7 links and other interconnection
arrangements;
(ii) Provisioning of IP Gateways; and
(iii) Maintaining the network and providing monitoring and
the use of Lucent's Netcare facilities.
1.2. Operations.
(a) Start Up Phase. WinStar International is in the initial
stages of building portions of the Network in
international markets and has not yet begun an operational
phase. The first build is in Amsterdam, where a data
switch node and hub sites are under construction.
(b) Data-Only Strategy. Unlike WinStar's domestic operations,
WinStar International will not initially have a voice
product, but will focus on selling data products to medium
and large business customers. Therefore, the international
components of the Network will be packet-based instead of
circuit-based. There may be a voice product introduced in
the future, but the Parties expect such a product to be
packet-based (e.g., voice over IP or ATM).
--------------------------------------------------------------------------------
Schedule G to the Confidential - Winstar/Lucent
Supply Agreement - G-1 -
1.3. Service Offerings for Remote or International Cities
This section describes the set of WinStar's international
service offerings, as applicable to the scope of
responsibility assumed by Lucent internationally.
With an architecture that support a range of deployed
infrastructure, WinStar can offer a subset of its full
services suite globally with customization suited to local
conditions. In such cities functionality can include the
following:
(a) Point to Point Connectivity,
(b) Internet Access,
(c) Web hosting, e-commerce,
(d) VPN connectivity,
(e) Email, Network Notes services,
(f) IP telephony/fax,
(g) IP multimedia conferencing services,
(h) CPE,
(i) WAN professional services,
(j) LAN professional services,
(k) Security services,
(l) E Commerce,
(m) Web/Intranet systems integration,
(n) Customer Network Management,
(o) TCP/IP,
(p) ATM, and
(q) Frame Relay.
--------------------------------------------------------------------------------
Schedule G to the Confidential - Winstar/Lucent
Supply Agreement - G-1 -
Schedule H
Best of Breed (XXX)
1. General Principles
(a) Lucent believes that its telecommunications Products
and Services are superior and are second to no other
vendor.
(b) WinStar agrees to use Lucent as its preferred
supplier and to use Lucent Products and Services
provided that they are Best of Breed.
2. Definitions
(a) "Best of Breed" or "XXX" means Products and/or
Services that are commercially available and that
have the best functionality for the lowest price as
set forth in more detail in Section 4.
(b) The "XXX Highest Authority" or "BHA" means, in the
case of Lucent, the President - Global Commercial
Markets, and in the case of WinStar, the Chief
Operating Officer. The BHA for each company can be
changed by written notice to the other party by
Lucent or WinStar, as appropriate.
(c) The "XXX Intermediate Team" or "BIT" means Lucent's
Vice President of Network Solutions and WinStar's
Senior Vice President of Engineering. The XXX
Intermediate Team Member can be changed by written
notice to the other party by Lucent or WinStar, as
appropriate.
(d) The "XXX Review Team" or "BRT" has the meaning set
forth below (See Section 3.1 of this Schedule H). The
"TPM" are The Primary Members of the BRT.
3. How XXX works
3.1. The XXX Review Team
(a) Immediately upon execution of this Agreement,
Lucent's BHA will appoint two Lucent personnel (one
primary and one back up) to serve on the XXX Review
Team on behalf of Lucent, and WinStar's BHA will
appoint two WinStar personnel (one primary and one
back up) to serve on the XXX Review Team on behalf of
WinStar. If a vacancy occurs on the XXX Review Team,
a replacement will immediately be appointed by the
appropriate XXX Highest Authority. The two primary
members (TPM) of the XXX Review Team shall make all
determinations, except that if one or both of the
TPMs are unavailable for any reason, the back up
member for the absent TPM will have the authority to
make the determination required by XXX.
--------------------------------------------------------------------------------
Schedule H to Confidential - Winstar/Lucent
Supply Agreement - H-1 -
(b) Contemporaneously with any quote that is provided to
WinStar by Lucent, there will be a presentation made
to the XXX Review Team by the person or persons who
are submitting the quote; provided, however, that if
there already has been a XXX Review completed on the
Product(s) or Service(s) in question, no additional
XXX review will be required. The XXX Presentation
should address the criteria set forth in Section 4 of
this Schedule H. Within five business days of the XXX
Presentation, the XXX Review Team must make a
determination as to whether the Product(s) and/or
Service(s) are XXX. If they are XXX, then WinStar
shall approve the Purchase Order for the Product(s)
and/or Service(s) in question.
(c) If, on the other hand, one or more of the Product(s)
and/or Service(s) are found by the XXX Review Team to
fail the XXX test, then the person(s) who submitted
the quote must either:
(i) Try to adjust one or more of the criteria to
satisfy the XXX test (by, for example,
adjusting the purchase price downward) or
(ii) Decide to recommend a non-Lucent product.
(d) If, however, the XXX Review Team fails to act within
the five business day period or fails to reach a
consensus, then the matter must promptly be escalated
to the XXX Intermediate Team.
3.2. The XXX Intermediate Team (BIT)
BIT must make a XXX determination within five business days
from the day that the matter is referred to them by the XXX
Review Team. Within the five business day time period, the BIT
must have asked for materials and/or presentations from their
respective organizations to familiarize themselves with the
basis for the XXX dispute.
(a) If the BIT determines that the XXX test has been
satisfied their judgment is final, and WinStar shall
order the Product(s) and/or Service(s) in question.
(b) If, however, the BIT cannot reach consensus or does
not act within the five business days, the matter is
referred to the BHA.
3.3. The XXX Highest Authority (BHA)
(a) Within five business days from the date that the
matter is received from the BIT, the BHA must have
asked for materials and/or presentations from their
respective organizations to familiarize themselves
with the basis for the XXX dispute.
(b) The BHA must meet in person and must resolve the
dispute and decide the course of action that will be
taken. If the BHA cannot agree on a decision and
course of action within five business days of their
face to face meeting, then the decision of the
WinStar BHA shall be final and binding.
--------------------------------------------------------------------------------
Schedule H to Confidential - Winstar/Lucent
Supply Agreement - H-2 -
4. Determination of XXX
In determining whether Lucent Products and/or Services are XXX, there
are some overall basic principles that should be considered. These
principles, which are listed below, are not in any order of priority,
and during one analysis could carry a different weight than on a
previous analysis, when all of the circumstances of the decision are
considered. These principles or criteria are to be judged in terms of
what is commercially available from other vendors and the price(s) that
WinStar could obtain from such vendors.
(a) The technology and Network Elements selected must
interoperate with the appropriate PSTN, be scalable
and servicable in both size and function, and meet
international and domestic standards including, but
not necessarily limited to CCITT
Recommendation/Standards, ITUR Standards, FCC type
acceptance, NEBS, XXXX, X0X and other applicable
local codes and practices.
(b) Network Element(s) must support WinStar required
functionality and be consistent with the approved
architecture. End-to-end Network performance and
reliability should be considered as well as the
individual performance and functionality of
individual Network Elements.
(c) With respect to the performance of the Network
Elements, all of the following should be evaluated:
MTTR, MTBF, steady state specifications, environment,
capacity, growability, reliability, etc.
(d) Sufficient product must be available in sufficient
quantities at time(s) required.
(e) Optimal price performance over the life-cycle of the
Network Element including end-to-end network costs
for both capital and on-going operations.
(f) Care should be taken to ensure that the physical
size, weight, dimensions and environmental
requirements (e.g., HVAC and power) of any selected
elements does not cause a retrofit or upgrade in the
physical space and existing environmentals in which
it is to be placed.
(g) The length of warranty and other warranty terms
offered by other vendors is important to consider as
well as the repair/return policies that other vendors
provide.
--------------------------------------------------------------------------------
Schedule H to Confidential - Winstar/Lucent
Supply Agreement - H-3 -
Confidential -- WinStar/Lucent
--------------------------------------------------------------------------------
Schedule I
Warranty Periods
Lucent will provide a minimum warranty of one (1) year for all new Equipment
purchased from Lucent and of the longer of six (6) months or any remaining
period of the underlying Product warranty for repaired products and parts. The
actual warranty will be determined on a product-by-product basis and will be
stated in the product addendums, which will be attached to the Agreement.
If Lucent, in its sole discretion, agrees to purchase Third Party Products on
WinStar's behalf, it will flow through to WinStar the vendor's warranty in
accordance with the terms of the Agreement.
--------------------------------------------------------------------------------
Schedule I to Confidential -- Winstar/Lucent
Supply Agreement - I-1 -
Schedule J
Key Lucent Positions
1. Key Positions
The following positions shall be the Key Lucent Positions, provided
that they cover the body of responsibility set forth in Section 2 of
this Schedule J. In the event that these positions do not encompass all
such responsibility, additional Key Lucent Positions shall be
designated by WinStar with Lucent's input, to cover the remaining
responsibility.
(a) Program Management Director;
(b) Network Solutions Vice President;
(c) Director of Integration Test Laboratory;
(d) Director of Engineering; and
(e) Sales Director.
2. Key Positions Responsibilities
The Lucent Program Management Office (PMO) will have overall
responsibility for delivery of EF&I services under this agreement. In
addition to the PMO, other key Lucent management roles have been
identified as part of this agreement with specific Project Office
responsibilities. The high level functional responsibility of each of
these Project Office individuals is outlined in the following
organization chart.
It is Lucent's responsibility to staff each Project Office with
adequate resources to carry out the scope of this agreement. Each
Project Office Manager will issue weekly status update reports to
identified WinStar oversight personnel. Each Project Office Manager
will regularly meet with WinStar personnel and will also serve as the
single point of contact for status and escalations within their
respective areas of responsibility. WinStar retains the right to
approve the selection of the PMO executive appointed by Lucent.
2.1. Program Management Office
(a) Contracts
(b) Schedules
(c) Forecasts
(d) Sub Contractors
(e) Tracking & Reporting
--------------------------------------------------------------------------------
Schedule J to Confidential - Winstar/Lucent
Supply Agreement - J-1 -
2.2. Lucent Sales Team
(a) National Account Manager
(b) Sales Specialists
(c) Support Specialists
2.3. Network Services Management
(a) Network Planning
(b) Service Engineering
(c) High Level Design
(d) Detailed Design
(e) Diversity and Protection and Restoration
(f) Test Lab
(g) Operations Support/3rd Level Support
2.4. Element Configuration
(a) Initial Load Definition
(b) OS and Generic Upgrades
2.5. Installation Management
(a) Service Planning issues
(b) Site selection coordination
(c) Installation
(d) Network Facility Provisioning
2.6. Logistics
(a) Warehousing
(b) Shipping/Receiving
(c) Staging
2.7. IT Engineering
(a) Network Management Systems
--------------------------------------------------------------------------------
Schedule J to Confidential - Winstar/Lucent
Supply Agreement - J-2 -
(b) DNS
(c) E Commerce
(d) Customer Web Access
2.8. Performance Assurance
(a) Performance Quality assurance
(b) Performance Monitoring and Analysis
(c) Traffic control
(d) Performance Management Control
2.9. Premises Services
(a) Wire Management
(b) ILEC Coordination
(c) Riser Access
(d) CPE Support
--------------------------------------------------------------------------------
Schedule J to Confidential - Winstar/Lucent
Supply Agreement - J-3 -
Schedule K
Lucent Indicia Co-Marketing Program Guidelines
The following pages represent the guidelines for use of Lucent trade and
service marks.
--------------------------------------------------------------------------------
Schedule K to Confidential -- Winstar/Lucent
Supply Agreement - K-1 -
Introduction to Co-Marketing
Sharing Brand Equity Helps You Increase Your Revenue
Lucent Technologies is the world's leading provider of telecommunications data
and voice systems. Leveraging the Lucent brand can provide a significant
advantage for you -- our customer. Research shows that the Lucent and Xxxx Labs
brands communicate high quality and innovation to end-users. In fact, Lucent
has reached high brand awareness with business leaders and consumers in a very
short period of time.
Both a New and Long-Established Identity
While the Lucent name was created in 1996, Xxxx Laboratories -- a brand with a
powerful heritage -- is also identified with our Lucent name. More important,
Xxxx Labs continues to be an integral part of our company.
For more than a century, Xxxx Labs has developed many patents -- everything from
the invention of the transistor to the foundation of all digital technology
traces their origins to Xxxx Labs.
The Xxxx Labs heritage and the highly successful launch of our corporate name
make Lucent a powerful co-marketing partner to help you broaden your promotional
reach to generate additional revenue.
Everything you need to co-market with Lucent is right here in this handy
portfolio. See for yourself - read through the guidelines and tools you'll need
to get started.
Co-Marketing General Guidelines
How to Link Our Brand Strengths With Yours
When you leverage the powerful Lucent brand in your promotions, you create a
third "bigger" brand that benefits us both. Our goal is simple: every time you
publicize Lucent's role in your network, you enhance your own image. We call
this "Contribution Branding." The result: stronger customer loyalty and
potential new revenue.
Are You Eligible? And How Can You Enroll?
The program is available to you when you include a Co-Marketing Program
agreement in your contract. Your Lucent Customer Team Representative can
confirm your eligibility.
Just fill out a Lucent Co-Marketing Program Enrollment Form (which signifies
agreement to conform with all Co-Marketing Program guidelines) and FAX
everything to:
Lucent Co-Marketing Program Office
(000) 000-0000 or (000) 000-0000
Once your application is approved, it will be counter-signed and immediately
returned to you.
Creating a Co-Marketing Plan
Your Customer Team Representative can play a vital role in helping you structure
a beneficial co-marketing plan based on your marketing goals.
Promotions that Cut Through the Clutter
With co-marketing, you can use our Co-Marketing logo, Lucent brands and product
names in advertising or promotions, with a
phrase linking Lucent to your network. The Lucent Co-Marketing logo is unique
because it can include a "linking phrase" - embedded in the logo itself - that
identifies the specific advantage your network offers by using Lucent products
and services. The Lucent Co-Marketing logo and linking phrase can only be used
by participants in the Co-Marketing Program.
Using our logo with the linking phrase leverages the brand equity Lucent has
built to increase the impact of your promotions.
Ask your Customer Team Representative about existing authorized linkage
statements, or the possibility of creating your own customized statement.
Linking Phrase Requirements
You can use our brand as a means of competitive differentiation. But the Program
does not permit customers to position themselves directly against other Lucent
customers. Here are examples of (A) Correctly Worded Linking phrases and
(B) Incorrect Wording.
(A) Correctly Worded Linking Phrases
Linking phrases which are authorized include:
[Graphics Omitted]
All of the linking phrases shown above have one thing in common. They are
factual statements informing the end user your network is based on technology
from Lucent.
(B) Incorrect Wording of Linking Phrases
You cannot use phrases with the Lucent logo
which seek to establish a competitive advantage like these:
"Better digital quality Lucent network"
"Better sound by Xxxx Labs"
"The Best Network Supplied By"
The Incorrectly Worded linking phrases have this in common. They state a network
is "better" because of Lucent Using a linking phrase to claim superiority
because of Lucent product or services is not permissible.
Advance Creative Approval of Promotions Required
All advertising and promotions supported under the Co-Marketing Program must be
submitted for advance creative approval (including specific wording of the
linking phrase, correct use of the Lucent Co-Marketing logo, and other
Co-Marketing Program requirements).
Unique Co-Marketing Logos
If you receive approval for a unique linking phrase to use with the Lucent
Co-Marketing logo in your promotions, Lucent will provide you with small, medium
and large versions (color and black and white) of this unique logo in the
electronic format(s) of your choice. The Co-Marketing logo must never be altered
and must be reproduced from the Lucent supplied logo sheets or diskettes.
The following trademark acknowledgment must also appear within your trademark
notification copy:
"The Lucent logo is a registered trademark of Lucent Technologies."
Co-Marketing Logo Requirements
There are other important requirements for the way Lucent's
name and Innovation Ring are presented visually in advertising
and promotions to: 1) ensure that Lucent's identity
is consistent wherever it appears and 2) to protect
our trademark. (See Brand and Logo Usage Guidelines
booklet in this portfolio.)
Backgrounds - Incorrect Usage
o Do not position the logo within a contained space.
o Do not place the logo on a patterned background.
o Do not add any additional graphic elements or text to the logo.
o Do not alter parts of the logo in any way.
o Do not separate parts of the logo in any way.
Other Important Co-Marketing Requirements
o As part of our diverstiture agreement with AT&T and to avoid confusing your
customers, it is important that Lucent not be perceived through the
Co-Marketing Program as a partner in providing service. We provide the network
or network elements. You provide the service to your customers.
o The Lucent brand and Co-Marketing logo must not be used in any advertising or
promotions that disparagingly refer to other customers of Lucent Technologies.
o Advertising and promotions must not misrepresent features and/or benefits of
Lucent Technologies.
o Participation in the Co-Marketing Program should not be construed as approval
by Lucent of any brand, product or company name.
o All advertising and promotions must be in compliance with federal, state and
local law. By its advance approval of advertising and promotions under
Co-Marketing, Lucent does not assume responsibility for compliance of the
advertising or promotions with relevant laws or regulation.
o Lucent reserves the right to refuse approval of advertising and promotions.
Program Changes With Notice
Lucent Technologies reserves the right to amend the Co-Marketing Program at any
time. If changes are made, participants will be given 60 days' notice.
Ingredient Branding Program
Leverage the Lucent Brand in Your Promotion Efforts
Terms and Conditions
You may use the Lucent Co-Marketing logo and linkage statement in your
advertising and direct marketing program, provided you follow all Program
Guidelines.
Lucent will furnish all necessary Co-Marketing logo materials at no cost.
Getting Creative Approval
Before you run a Co-Marketing promotion with the Lucent name and Co-Marketing
logo and linkage statement, contact the Lucent Co-Marketing Program Office.
Simply, FAX final creative with a media list before it runs to:
Lucent Co-Marketing Program Office Within 90 days after your adversiting or
(000) 000-0000 or (000) 000-0000 promotion runs, send documentation to our
Co-Marketing Program agency addressed to:
A Creative Approval form we provide in this
portfolio must accompany your request. A Lucent Co-Marketing Program
signed copy of the form will be returned to you c/o TradeOne Marketing
within two business days. if we suggest a few 000 Xxxxx Xxxxxx
changes, they will accompany this form. Xxx Xxxx, XX 00000
What You Need to Send: For print: Send a complete full-page tearsheet
showing your name and date of the publication.
For print: FAX a final proof of your Co- Provide a list of publications in which the ad appeared.
Marketing ad showing all headlines and body
copy as it will appear. For broadcast: Send XXX/RAB, XXX/TVB,
and/or XXX/CAB certification forms from all
For television: FAX a storyboard of your stations carrying your commercials along with
complete television commercial including the scripts and storyboards.
Lucent name and Co-Marketing logo and
voiceover text. For outdoor: Send a picture of the outdoor
board and the outdoor company's list of outdoor
For radio: FAX complete commercial script. locations.
For direct mail: FAX a completed proof with NOTE: If you run the same ad/promotion
all headlines, text and artwork of the direct mail within a 6-month period, creative approval is
piece as it will appear. NOT needed again. But please forward materials
to TradeOne EVERY time you run an ad or
For outdoor: FAX a completed proof of your promotion and attach a copy of your Creative
board as it will appear with all copy and artwork. Review form.
What Media Can You Use?
Advertising: If you have any questions about the Lucent
Newspapers (general interest, daily, Sunday, Co-Marketing Program or wish to explore
weekly) additional Co-Marketing opportunities with
Magazines Lucent, speak with your Customer Team
Television (broadcast or cable) Representative.
Radio
Outdoor Good Luck and Good Marketing!
Direct Mail
Please Call for Approval To Use:
Trade Show Exhibits
Special Events
Seminars
Sales Incentives
Telemarketing
After Your Co-Marketing Promotion
Runs
Lucent Technologies [LOGO] Planning Form
Company Information
Co-Marketing Acct. No. ______ (Provided by Lucent Co-Marketing Program Office)
Company Name ________________________________________________________________
Form Completed By:
Name ____________________________________ Title _____________________________
Phone ____________________ Fax ____________________ E-mail __________________
Address _____________________________________________________________________
Proposed Activity
Program Theme ______________________ Product Group Promoted _________________
Program Description _________________________________________________________
_____________________________________________________________________________
Marketing Plan
Target Audience ____________________ Target Geography ______________________
Activity Dates: From / / to / /
Advertising Medium types:
(check all that apply)
/ / Newspaper / / Magazine / / Other ______________
/ / Radio / / Outdoor ________________________
/ / TV / / Direct Mail ________________________
Publications or Media: _____________________________________________________
(be specific)
Estimated Project Cost $ ____________
Strategic Objectives
Business Objective __________________________________________________________
_____________________________________________________________________________
How will the Co-Marketing Program contribute to this goal? __________________
_____________________________________________________________________________
Is there a promotional offer included? / / Yes / / No What is it? __________
What are the Incremental sales expected from this promotion? ____% $________
How will you measure program effectiveness? __________________________________
Will you share results with Lucent? / / Yes / / No
All creative must be submitted for creative review by Lucent prior to placement.
For Internal Use
Lucent Customer Representative Approval ____________________ Date ____________
Lucent CPO Approval ________________________________________ Date ____________
Fax or overnight
approval form to: Lucent Technologies Co-Marketing Contact: Xxxx Aikort
000 Xxxx Xxxxxx Xx.
Xxxx X0X00 Phone: (000) 000-0000
Xxxxxx, XX 00000 Fax: (000) 000-0000
Lucent Technologies [LOGO] Creative Approval Form
Company Information
Co-Marketing Acct. No._________(Provided by Lucent Co-Marketing Program Office)
Company Name__________________________________________________________
Form Completed By:
Name_______________________________Title_____________________________________
Phone_______________________Fax_____________________________E-mail____________
Address_______________________________________________________________________
Activity Description
Publication or Media Name (or attach a media list):__________________________
Advertising Medium Type: (check all that apply)
/ / Newspaper / / Magazine / / Outdoor
/ / Radio / / Direct Mail / / Other____________
/ / TV ________________________
Run Dates Expected: ____________________________________________________
(be specific)
Attach creative to this form for approval.
For Lucent Co-Marketing Use Only / / Approved / / NOT Approved
Reason __________________________________________________________________
________________________________________________________________________
________________________________________________________________________
_____________________________ _______________
Lucent Co-Marketing Signature Date
PLEASE NOTE:
o All creative bearing the Lucent Co-Marketing logo, name and/or other Lucent
product trademarks must be approved prior to placing the creative in any
media.
o When Lucent requires modifications to meet the approved guidelines, all
required revisions must be made and resubmitted to Lucent for final approval.
o Complete performance (e.g. tearsheet) must be submitted to Lucent Co-Marketing
Program (address below) upon completion of promotional activity.
Please mail or fax to:
LUCENT TECHNOLOGIES
ATTN: XXXX XXXXX
000 Xxxx Xxxxxx Xxxx, Xx. XXX00
Xxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
