EXHIBIT 10.28
CONFIDENTIAL
**** Confidential treatment has been requested for portions of this agreement.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [*****]. A complete version of this
agreement has been filed separately with the Securities and Exchange Commission.
CONTRACT FOR THE DESIGN, DEVELOPMENT AND PURCHASE
OF TERRESTRIAL REPEATER EQUIPMENT
By and Between
XM SATELLITE RADIO INC.
and
XXXXXX ELECTRONICS CORPORATION
CONFIDENTIALITY NOTICE
----------------------
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and Xxxxxx Electronics Corporation and shall not be
published or disclosed to any third party without the express written consent of
a duly authorized representative of XM Satellite Radio Inc. and Xxxxxx
Electronics Corporation.
CONFIDENTIAL
TABLE OF CONTENTS
CONTRACT FOR THE DESIGN, DEVELOPMENT AND PURCHASE
OF TERRESTRIAL REPEATER EQUIPMENT
Terms and Conditions
Exhibit A - Design Specifications
Exhibit B - Statement of Work (SOW)
Exhibit C - Pricing, Milestones and Payment Plan
Exhibit D - Delivery Requirements and Schedule
Exhibit E - Test Plans and Procedures
Exhibit F - Quality Assurance Plan
Exhibit G - Key Contractor Personnel
Exhibit H - Technical Materials Escrow Agreement
Page i
CONFIDENTIAL
CONTRACT
FOR THE DESIGN, DEVELOPMENT AND PURCHASE
OF TERRESTRIAL REPEATER EQUIPMENT
By and Between
XM SATELLITE RADIO INC.
and
XXXXXX ELECTRONICS CORPORATION
TERMS AND CONDITIONS
Page ii
CONFIDENTIAL
TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION................................................. 1
1.1 Certain Definitions........................................................ 1
1.2 Other Terms................................................................ 9
1.3 Integration and Construction............................................... 10
1.4 Headings; Number and Gender................................................ 10
2. SCOPE OF WORK................................................................ 11
2.1 General Scope.............................................................. 11
2.2 Statement of Work.......................................................... 11
2.3 Weight and Size of Standard Repeaters...................................... 11
3. STRATEGIC RELATIONSHIP....................................................... 14
3.1 Roof Rights................................................................ 14
3.2 Marketing Support.......................................................... 14
3.3 Alignment of Interests..................................................... 14
4. EFFECTIVE DATE OF CONTRACT ("EDC"); CONDITIONS PRECEDENT; TERM............... 15
4.1 Effective Date of Contract and Conditions Precedent........................ 15
4.2 ATP........................................................................ 15
4.3 Term....................................................................... 15
5. PRICING...................................................................... 16
5.1 Contract Price............................................................. 16
5.2 Changes in Contract Price.................................................. 16
5.3 Most-Favored Customer...................................................... 16
5.4 Taxes...................................................................... 17
6. INVOICING AND PAYMENT........................................................ 18
6.1 Invoicing.................................................................. 18
6.2 Escrow Account and Payment................................................. 20
6.3 Set Off.................................................................... 21
6.4 Late Payment............................................................... 21
6.5 Withholding of Payment..................................................... 22
7. DELIVERY AND TIME FOR PERFORMANCE............................................ 23
7.1 Repeater Category Selection................................................ 23
7.2 Time and Place of Delivery................................................. 23
7.3 Rescheduling of Production................................................. 25
7.4 Packing, Tracking and Shipping............................................. 25
7.5 Liquidated Damages for Late Delivery of Repeaters.......................... 27
7.6 Incentive for Timely Delivery of the Prototype Repeaters................... 28
7.7 Performance Award.......................................................... 28
7.8 Suspension of Work by Customer............................................. 29
7.9 Excusable Delay Defined.................................................... 29
7.10 Contract Adjustments....................................................... 30
8. TESTING CRITERIA AND ACCEPTANCE.............................................. 31
8.1 Testing.................................................................... 31
8.2 Acceptance of Repeaters.................................................... 31
8.3 Acceptance of the Network Management System................................ 33
8.4 Acceptance of Non-Repeater Deliverables.................................... 35
8.5 Title and Risk of Loss..................................................... 36
Page iii
CONFIDENTIAL
9. PROJECT MANAGEMENT........................................................... 38
9.1 Contractor Personnel....................................................... 38
9.2 Material Subcontractors.................................................... 39
9.3 Subcontractor Relations.................................................... 39
9.4 Customer Third-Party Services and Products................................. 40
9.5 Quality Assurance.......................................................... 40
9.6 Accountability............................................................. 40
10. CHANGES IN SCOPE OF WORK..................................................... 41
10.1 Changes Requested by Customer.............................................. 41
10.2 Changes Requested by Contractor............................................ 41
10.3 Pricing of Changes......................................................... 42
11. SECURITY INTEREST............................................................ 43
12. ACCESS TO WORK............................................................... 44
12.1 Access to Work............................................................. 44
12.2 Documentation.............................................................. 44
12.3 Electronic Access.......................................................... 44
12.4 Meetings................................................................... 44
12.5 Financing Entities......................................................... 45
13. TECHNICAL MATERIALS ESCROW................................................... 46
14. INTELLECTUAL PROPERTY RIGHTS................................................. 50
14.1 Ownership of Intellectual Property Rights.................................. 50
14.2 Joint Inventions........................................................... 50
14.3 Intellectual Property Rights License Grant................................. 51
14.4 Third-Party Intellectual Property Rights................................... 51
14.5 Contractor Restriction on Use of Foreground Intellectual Property Rights... 52
15. CONFIDENTIALITY.............................................................. 53
15.1 Confidentiality Obligations................................................ 53
15.2 Exceptions................................................................. 53
15.3 No License................................................................. 54
15.4 Return of Confidential Information......................................... 54
15.5 Inconsistent Legends....................................................... 55
16. RECORDS RETENTION............................................................ 56
17. REPRESENTATIONS AND WARRANTIES............................................... 57
17.1 Work Standards............................................................. 57
17.2 Design and Performance Warranties.......................................... 57
17.3 Documentation.............................................................. 59
17.4 Inducements................................................................ 59
17.5 Viruses.................................................................... 59
17.6 Disabling Code............................................................. 59
17.7 Year 2000.................................................................. 60
17.8 Compliance with Applicable Law............................................. 60
17.9 Warranty Disclaimer........................................................ 60
17.10 Warranty Period............................................................ 60
17.11 Remedies (Repeaters)....................................................... 61
17.12 Remedies (Network Management System)....................................... 63
17.13 Pattern Defect............................................................. 63
Page iv
CONFIDENTIAL
18. CONTRACTOR'S ADDITIONAL REPRESENTATIONS AND WARRANTIES........................ 65
19. CUSTOMER'S REPRESENTATIONS AND WARRANTIES..................................... 67
20. INSURANCE..................................................................... 68
20.1 General.................................................................... 68
20.2 Specific Insurance Requirements............................................ 68
20.3 Certificates of Insurance.................................................. 70
21. INDEMNIFICATION............................................................... 71
21.1 Indemnity by Contractor.................................................... 71
21.2 Indemnity by Customer...................................................... 71
21.3 Intellectual Property Infringement Indemnification......................... 71
21.4 Indemnification Procedures................................................. 72
21.5 Waiver of Subrogation...................................................... 73
22. LIABILITY..................................................................... 74
22.1 General Intent............................................................. 74
22.2 Liability Restrictions..................................................... 74
22.3 Contractor Responsibility for Certain Claims............................... 74
23. DISPUTE RESOLUTION............................................................ 76
23.1 Informal Dispute Resolution................................................ 76
23.2 Arbitration................................................................ 76
23.3 Litigation................................................................. 78
23.4 Continued Performance...................................................... 79
24. DEFAULT AND CORRECTION PLAN................................................... 80
24.1 Material Breach............................................................ 80
24.2 Key Tasks.................................................................. 81
25. TERMINATION................................................................... 82
25.1 Termination for Customer's Convenience..................................... 82
25.2 Termination For Contractor's Default....................................... 84
25.3 Termination for Customer's Default......................................... 86
25.4 Termination/Expiration Assistance.......................................... 89
26. OPTIONS....................................................................... 90
26.1 Option to Purchase Additional Repeaters.................................... 90
26.2 Network Management System - Video Wall..................................... 90
26.3 Annual Maintenance of [*****].............................................. 91
26.4 Contract Adjustments....................................................... 91
27. CONTRACTOR GUARANTEE.......................................................... 92
28. GENERAL....................................................................... 93
28.1 Assignment................................................................. 93
28.2 Entire Agreement........................................................... 94
28.3 Amendments................................................................. 94
28.4 Waiver of Breach of Contract............................................... 94
28.5 Remedies Cumulative........................................................ 94
28.6 Severability............................................................... 94
28.7 Applicable Law............................................................. 95
28.8 Notices.................................................................... 95
28.9 Relationship of the Parties................................................ 96
Page v
CONFIDENTIAL
28.10 Media Releases............................................................. 96
28.11 Calculation of Interest.................................................... 96
28.12 Survival................................................................... 96
28.13 No Third-Party Beneficiaries............................................... 97
28.14 Consents and Approvals..................................................... 97
28.15 Lender Requirements........................................................ 98
28.16 No Solicitation............................................................ 98
28.17 Time of the Essence........................................................ 98
28.18 Covenant of Good Faith..................................................... 98
28.19 Counterparts............................................................... 98
Page vi
CONFIDENTIAL
CONTRACTFOR THE DESIGN, DEVELOPMENT AND PURCHASE OF
TERRESTRIAL REPEATER EQUIPMENT
THIS CONTRACT FOR THE DESIGN, DEVELOPMENT AND PURCHASE OF TERRESTRIAL
REPEATER EQUIPMENT (the "Contract") is made this 14th day of February 2000 (the
"Execution Date") by and between XM SATELLITE RADIO INC. ("Customer"), a
Delaware corporation with offices located at 0000 00/xx/ Xxxxxx, X.X., Xxxxx 00,
Xxxxxxxxxx, X.X. 00000, and XXXXXX ELECTRONICS CORPORATION, a Delaware
corporation by and through its division, Xxxxxx Network Systems ("Contractor"),
having a place of business at 00000 Xxxxxxx Xxxxxx Xx., Xxx Xxxxx, XX 00000. As
used in this Contract, "Party" means either Customer or Contractor and "Parties"
means Customer and Contractor.
WHEREAS, Customer is implementing a satellite system designed to provide
digital audio radio services to the continental United States; and
WHEREAS, Customer anticipates providing the business referred to above
through two (2) geostationary satellites, a network of terrestrial repeaters
located in various cities within the continental United States and end-user
receivers; and
WHEREAS, Contractor has represented that it (together with its
Subcontractors) is qualified to design, develop, engineer, manufacture, and
deliver the terrestrial repeaters required for such networks and has the
necessary skill and experience to perform such other services as described in
this Contract in a cost-effective, professional and timely manner; and
WHEREAS, the Parties have reached agreement on the terms and conditions of
procurement by Customer from Contractor of the design, development, engineering,
and manufacturing services related to the terrestrial repeaters and to the other
services and activities as set forth and further defined in this Contract.
NOW THEREFORE, in consideration of the mutual promises and undertakings
contained herein, the Parties, intending to be legally bound, hereby agree as
follows:
1. DEFINITIONS AND CONSTRUCTION
1.1 Certain Definitions.
(a) "Acceptance" means, with respect to any item to be delivered
hereunder, written notification from Customer to Contractor stating that such
item has satisfied the testing and acceptance criteria applicable to that item
in accordance with Article 8 (Testing Criteria and Acceptance).
(b) "Affiliate" means, with respect to an entity, any other entity
Controlling or Controlled by or under common Control with such entity.
(c) "Amendment to this Contract" or "Amendment" means a written agreement
modifying the terms of this Contract executed in accordance with Article 28.3
(Amendments).
Terms and Conditions Page 1
CONFIDENTIAL
(d) "Approval" means written approval. This term is as defined, whether or
not capitalized in this Contract.
(e) "Associates" means, with respect to an entity, its directors,
officers, employees agents, consultants, and assigns.
(f) "Background Intellectual Property Rights" means all Intellectual
Property Rights in or to the Work that came into existence prior to and/or apart
from this Contract.
(g) "Business Day" means any day other than the following: a Saturday,
Sunday, and any other day on which national banks are authorized to be closed in
New York City, New York.
(h) "Calendar Day" means any day.
(i) "Change Directive" means a written directive executed by Customer
directing Contractor to proceed with a change in the Work pending final
determination of the appropriate change, if any, in the Contract Price and/or
any applicable delivery dates hereunder.
(j) "Change Order" means a written document, executed by both Customer and
Contractor, setting forth a change in the Work and agreement between Customer
and Contractor as to the change in the Contract Price and/or any applicable
delivery dates hereunder associated with such change in the Work.
(k) "Confidential Information" means all information, of any nature and in
any form, whether written, oral or recorded or transmitted electronically or by
tape or other similar manner, regarding the business, finances, operations,
prospects, plans, or affairs of the Furnishing Party (including its Affiliates,
Subcontractors, or Consultants), and all data, processes, materials, and
software in source code and object code form, related documentation, and other
technical data that is confidential and embodies trade secrets or other
proprietary information of the Furnishing Party, which information is designated
in writing by the Furnishing Party as confidential; provided, however, that if
disclosed orally, such information must be confirmed and designated in writing
in summary form as confidential within five (5) Business Days of the time at
which oral disclosure took place. This Contract is deemed Confidential
Information of each Party.
(l) "Consultant" means a person or organization retained by Customer to
provide Customer with technical advice and related services and identified by
Customer to Contractor.
(m) "Contract" means the written instrument herein dated the day and year
first written above, including any Amendments made pursuant to Article 28.3
(Amendments), and Change Orders made pursuant to Article 10 (Changes in Scope of
Work), embodying the agreement between Contractor and Customer and including the
Terms and Conditions, attachments and Exhibits (and attachments thereto),
annexed hereto and made a part of this Contract.
(n) "Contractor Facility" means each facility at or from which Contractor
or its Subcontractors perform the Work.
(o) "Control" and its derivatives mean, with respect to an entity, the
legal, beneficial, or equitable ownership, directly or indirectly, of fifty
percent (50%) or more of the capital stock (or
Terms and Conditions Page 2
CONFIDENTIAL
other ownership interest if not a corporation) of such entity ordinarily having
voting rights or the power to direct the management policies of such entity,
whether through the ownership of voting stock, by contract, or otherwise.
(p) "Correction Plan" means a plan submitted by Contractor that details
the means by which Contractor shall correct a failure to perform any material
duty or obligation under this Contract.
(q) "Customer Competitor" means any existing or future Satellite Digital
Radio Services (SDARS) licensee, including CD Radio. "Customer Competitor" shall
not include Contractor, Contractor's Affiliates or WorldSpace Satellite Company
(to the extent Customer sublicenses the Foreground Intellectual Property Rights
to WorldSpace).
(r) "Customer's Designated Representative" means Xxxx Xxxxxxxxxx, Senior
Vice President of Engineering and Operations, or his successor or designee in
writing.
(s) "Customer Personnel" means Customer's employees, Consultants or
representatives, or Customer's Consultants' employees.
(t) "Data and Documentation" means that data and documentation to be
supplied by Contractor pursuant to the requirements of Exhibit B (Statement of
Work).
(u) "Defect" and its derivatives (such as "defective") means any failure
of any Repeater, the Network Management System or other deliverable item to
operate in conformance with its applicable specifications as set forth in
Exhibit A (Design Specifications) or in accordance with its applicable
acceptance criteria as set forth in Article 8 (Testing Criteria and Acceptance).
This term is as defined, whether or not capitalized in this Contract.
(v) "Delivery Requirements" means the delivery requirements for the
Repeaters and other deliverables set forth in Exhibit D (Delivery Requirements
and Schedule).
(w) "Detailed Delivery Schedule" means the detailed schedule for delivery
of the Repeaters and other deliverables as may be set forth in Exhibit D
(Delivery Requirements and Schedule)
(x) "Effective Date" or "EDC" has the meaning set forth in Article 4.1
(Effective Date of Contract and Conditions Precedent).
(y) "Enclosure Kit" means, in the case of Standard Repeaters, the Repeater
enclosure with all equipment contained therein, the enclosure door with air
conditioning unit and the plinth (the enclosure and enclosure door with air
conditioning unit to be shipped in separate containers for a total of two (2)
containers) and the plinths to be shipped, at Contractor's option, in a separate
container or in bulk), and, in the case of High-Power Repeaters, the Repeater
enclosure, including controller rack, coupler, transmit filter and all other
equipment contained therein.
(z) "Escrowed Materials" has the meaning set forth in Article 13
(Technical Materials Escrow).
Terms and Conditions Page 3
CONFIDENTIAL
(aa) "Excusable Delay" has the meaning set forth in Article 7.9 (Excusable
Delay Defined).
(bb) "Execution Date" means the date first set forth above.
(cc) "Financing Agreements" means any and all documents and agreements
executed in connection with the debt or equity financing to be obtained by
Customer from Financing Entities to provide all or a substantial portion of the
funds to finance the Work, and all security instruments, mortgages, assignments
and related documentation executed or delivered to secure repayment of such
financing.
(dd) "Financing Entity" means any financial institution, bank, corporation,
partnership or other entity (other than Contractor, its Affiliates or
competitors of Contractor or Affiliates of such competitors), providing all or a
substantial portion of the debt or equity financing to Customer to provide funds
to finance the Work and any insurance companies or financial institutions
providing commercial credit insurance in support of such financing.
(ee) "Foreground Intellectual Property Rights" means all Intellectual
Property Rights in or to the Work which are not Background Intellectual Property
Rights (including those Intellectual Property Rights in and to the Work first
conceived of or first reduced to practice in the performance, execution and/or
completion of the Work).
(ff) "Furnishing Party" means the Party who furnishes Confidential
Information to the other Party.
(gg) "High-Power Installation Testing" has the meaning set forth in Article
8.2 (Acceptance of Repeaters).
(hh) "High-Power Redundant Repeater" means a High-Power Repeater that
utilizes an omni-directional antenna and has a back-up high-power amplifier
(HPA), as further described in Exhibit A (Design Specifications).
(ii) "High-Power Repeater" means a terrestrial repeater that has an RF
power of 2000 Xxxxx evenly divided between two (2) MCM carriers, as further
described in Exhibit A (Design Specifications). High-Power Repeater refers
collectively to both High-Power Redundant Repeaters and High-Power Sectored
Redundant Repeaters.
(jj) "High-Power Sectored Redundant Repeater" means a High Power Repeater
that utilizes paneled/phased-array antennas typically in a 120 degree
application (e.g., an installation consisting of three paneled/phased-array
antennas) and has a redundant high-power amplifier (HPA), as further described
in Exhibit A (Design Specifications).
(kk) "Including" and its derivatives (such as "include" and "includes")
means including without limitation. This term is as defined, whether or not
capitalized in this Contract.
(ll) "Installation Site" means a building rooftop or other site (e.g.,
antenna site) located in any of various cities throughout continental United
States at which a Repeater is to be installed.
Terms and Conditions Page 4
(mm) "Intellectual Property Rights" means any and all common law and
statutory proprietary rights, including Patent Rights, Trademark Rights, Trade
Secret Rights and Copyrights Rights (each term as defined below), existing from
time to time under the intellectual property Laws of the United States, any
state or foreign jurisdiction or international treaty regime. The term "Patent
Rights" means any and all common law and statutory rights existing from time to
time under the Laws of the United States, any state or foreign jurisdiction or
international treaty regime with respect to patents, patent applications, and
patent registrations. The term "Trademark Rights" means any and all common law
and statutory rights existing from time to time under the Laws of the United
States, any state or foreign jurisdiction or international treaty regime with
respect to trademarks, service marks, trade names and trade dress. The term
"Trade Secret Rights" means any and all common law and statutory rights existing
from time to time under the Laws of the United States, any state or foreign
jurisdiction or international treaty regime with respect to trade secrets and
data rights. The term "Copyright Rights" means any and all common law and
statutory rights existing from time to time under the Laws of the United States,
any state or foreign jurisdiction or international treaty regime with respect to
copyrights, mask work rights, moral rights and rights in visual works.
(nn) "Joint Intellectual Property Rights" means Foreground Intellectual
Property Rights conceived or reduced to practice jointly by one or more
employees or contractors of both Parties.
(oo) "Joint Inventions" means Joint Intellectual Property Rights for which
patent protection may be sought.
(pp) "Jointly Owned" means, with respect to Joint Intellectual Property
Rights, an equal, undivided interest in and to the Joint Intellectual Property
Rights, as well as in and to patent applications and patents thereon in all
countries, without any obligation of accounting to the other Party.
(qq) "Key Contractor Personnel" has the meaning set forth in Article 9.1
(Contractor Personnel).
(rr) "Key Tasks" has the meaning set forth in Article 24 (Default and
Correction Plan).
(ss) "Klystron Kit" means two (2) Klystron power amplifier ("KPA") units.
(tt) "Law" or "Laws" means any and all laws, including rules, regulations,
codes, injunctions, judgments, orders, ordinances, decrees, rulings, licenses,
authorizations, approvals or consents and charges thereunder, of any federal,
state, local or municipal government of any country (and all agencies thereof)
having jurisdiction over any portion of the Work or the performance of any
portion of the Work.
Terms and Conditions Page 5
--------------------------------------------------------------------------------
***** Certain information on this page has been with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions.
--------------------------------------------------------------------------------
CONFIDENTIAL
(uu) "Losses" means all losses, liabilities, damages, royalty payments and
claims, and all related costs and expenses (including reasonable legal fees and
disbursements and costs of investigation, expert fees, litigation, settlement,
judgment, interest, and penalties).
(vv) "Lowest Replaceable Unit" or "LRU" means each and any of the
individual block components composing each Repeater as specified in Exhibit A
(Design Specifications) and Exhibit B (Statement of Work).
(ww) "Material Adverse Effect" means any material adverse change in (i)
the legality, validity, or enforceability of this Contract or (ii) the ability
of Customer or Contractor to perform this Contract.
(xx) "Material Subcontract" has the meaning set forth in Article 9.2
(Material Subcontractors).
(yy) "Milestone" means a portion of the definitive, measurable Work, which
shall be completed in accordance with this Contract including Exhibit C
(Pricing, Milestones and Payment Plan) and upon completion of which a payment is
to be made in accordance with such Exhibit C.
(zz) "Milestone Payment" means any of those payments listed as specific
milestone payments in Exhibit C (Pricing, Milestones and Payment Plan).
(aaa) "Milestone Achievement Criteria" has the meaning set forth in
Exhibit C (Pricing, Milestones and Payment Plan).
(bbb) "Network Management System" or "NMS" means the system, comprising
hardware and Software, to be developed by Contractor to monitor the operation
and maintenance of the Repeaters, which system is further described in Exhibit A
(Design Specifications) and Exhibit B (Statement of Work).
(ccc) "Nominal Order" means Customer's initial order to purchase from
Contractor 1,578 Repeaters (excluding Prototype Repeaters) consisting of [*****]
High-Power Repeaters and [*****] Standard Repeaters.
(ddd) "Notice of Defects" means a written notice executed by Customer and
delivered to Contractor identifying any Defects in the Work setting forth in
reasonable detail a description of the Defect.
(zz) "PA Kit" has the meaning set forth in Article 2.3 (Weight and Size
of Repeaters).
(eee) "Pattern Defect" has the meaning set forth in Article 17.13 (Pattern
Defect).
(fff) "Payment Escrow Account" has the meaning set forth in Article 0
(Escrow Account and Payment).
(ggg) "Payment Escrow Agent" has the meaning set forth in Article 0
(Escrow Account and Payment).
Terms and Conditions Page 6
CONFIDENTIAL
(hhh) "Performance Award" has the meaning set forth in Article 7.7
(Performance Award).
(iii) "Permitted Lien" means any lien, security interest, mortgage,
assignment, pledge, encumbrance or charge of any kind in favor of the Financing
Entities under the Financing Agreements.
(jjj) "Prototype Repeater" means the terrestrial repeaters, as further
described in Exhibit A (Design Specifications) and Exhibit B (Statement of
Work), that Contractor shall develop for the test network to be established in
Pittsburgh, Pennsylvania. Each Prototype Repeater shall include all working and
fully operational LRUs.
(kkk) "Project Completion Date" means the date upon which the Network
Management System, the last Repeater and all other deliverable items required to
be provided hereunder have been delivered and have achieved Acceptance.
(lll) "Regional Inventory Storage Facility" means a facility to be
maintained by Customer, or its designee(s), for storing an inventory of Lowest
Replaceable Units or other components for the Repeaters for use by Customer, or
its designee(s), in performing maintenance and repairs on installed Repeaters.
As of the Effective Date of Contract, a Regional Inventory Storage Facility will
be located in each of the following six (6) cities: San Francisco, California;
Los Angeles, California; Dallas/Ft. Worth, Texas; New York, New York;
Washington, DC; and Atlanta, Georgia.
(mmm) "Repeater" means collectively any Prototype Repeater, Standard
Repeater, High-Power Repeater, or other terrestrial repeater, the LRUs and other
components, parts and sub-parts contained therein, and any Software, all as
required to be delivered by Contractor to Customer hereunder.
(nnn) "Repeater Design Verification Testing" has the meaning set forth in
Article 8.2 (Acceptance of Repeaters).
(ooo) "Repeater In-Factory Testing" has the meaning set forth in Article
8.2 (Acceptance of Repeaters).
(ppp) "Rooftop Assembly" has the meaning set forth in Article 2.3 (Weight
and Size of Repeaters).
(qqq) "Rooftop Testing" has the meaning set forth in Article 2.3 (Weight
and Size of Repeaters).
Terms and Conditions Page 7
(rrr) "Software" means the machine readable computer code or embedded
code, used to instruct a processor to perform a task or series of tasks in
object code form including firmware, files, databases, interfaces, documentation
and other materials related thereto necessary to make each deliverable item
achieve its applicable specifications, as such Software may be revised, updated,
corrected and enhanced from time-to-time and provided to Customer pursuant to
this Contract.
(sss) "Staging Area" means each site to which Contractor shall deliver
Repeaters. The cities in which the Staging Areas shall be located are as
specified in Exhibit D (Delivery Requirements and Schedule).
(ttt) "Standard Non-Redundant Repeater" means a Standard Repeater that
utilizes an omni-directional antenna and has no redundant/back-up LRUs, as
further described in Exhibit A (Design Specifications).
(uuu) "Standard Repeater" means a terrestrial repeater that has an RF
power of 200 Xxxxx evenly divided between two (2) MCM carriers, as further
described in Exhibit A (Design Specifications). Standard Repeater collectively
refers to both Standard Non-Redundant Repeaters and Standard Sectored Non-
Redundant Repeaters.
(vvv) "Standard Sectored Non-Redundant Repeater" means a Standard Repeater
that utilizes paneled/phased-array antennas typically in a 120 degree
application (e.g., an installation consisting of three paneled/phased-array
antennas) and has no redundant/back-up LRUs, as further described in Exhibit A
(Design Specifications).
(www) "Start of Production Date" means July 1, 2000, as such date may be
adjusted by the Parties in accordance with this Contract.
(xxx) "Statement of Work" or "SOW" means the Work described in Exhibit B
to this Contract which shall be provided and performed by Contractor.
(yyy) "Subcontract" means a contract awarded by Contractor to a
Subcontractor or a contract awarded by a Subcontractor for a portion of the
Work.
(zzz) "Subcontractor" means a person, firm, corporation, or business
entity that has been awarded a Subcontract.
(aaaa) "Technical Materials" means the detailed technical, engineering and
design information and specifications of any kind relating to the Prototype
Repeaters, Standard Repeaters, High-Power Repeaters, each LRU, and the Network
Management System, including Background and Foreground Intellectual Property,
specifications, functional specifications, interface specifications, hardware
and circuit diagrams, schematic diagrams, third-party supplier information
(including name, address, and parts numbers), and associated documentation.
(bbbb) "Terrestrial Repeater Network System" means the two (2)
geostationary satellites and the system of terrestrial repeater networks located
in various cities within the continental United States owned and operated by
Customer.
Terms and Conditions Page 8
CONFIDENTIAL
(cccc) "Virus" means: (i) program code, programming instruction or set of
instructions intentionally constructed with the ability to damage, interfere
with or otherwise adversely affect the performance or operation of any
deliverable item, including the Repeaters, any LRU, the Network Management
System, computer programs, embedded code or chips, data files or operations; or
(ii) other code typically designated to be a virus (including, for example,
"worms," "Trojan horses" and similar items).
(dddd) "Work" means all services (including design, development,
engineering, manufacturing, testing and management services), labor, equipment,
materials, articles, matters, acts (including tests to be performed), and things
to be furnished by Contractor, including Repeaters, and rights to be transferred
by Contractor in the performance of this Contract, all as described in Exhibit B
(Statement of Work) and Exhibit E (Test Plans and Procedures). "Work" also
includes Contractor's warranty obligations set forth herein and any services and
things to be furnished pursuant to any options that may be exercised by Customer
hereunder.
(eeee) "Year 2000 Compliant" means, with respect to the Work, including
Repeaters, that the Work (i) is capable of properly accepting, recording,
storing, processing, displaying and outputting calendar dates falling before, on
or after January 1, 2000, (ii) is either capable of (A) accepting, recording,
storing, processing, displaying and outputting data containing a four-digit year
date format without any loss of functionality and in a manner that correctly
interprets the data or (B) responding to two-digit year inputs in a way that
resolves any ambiguity as to the century in a disclosed, defined and pre-
determined manner, (iv) includes date data century recognition calculations that
accommodate same century and multi-century formulae and date values and date
data interface values that reflect the century, and (v) is capable of accounting
for the fact that the year 2000 is a leap year, as well as identifying
subsequent leap years.
1.2 Other Terms.
Other terms in this Contract are defined in the context in which they are
used and shall have the meanings there indicated.
1.3 Integration and Construction.
(a) The documents listed below in this Article 1.3 (Integration and
Construction), including any Exhibits, attachments, and schedules, as amended
from time to time in accordance with Article 28.3 (Amendments), constitute this
Contract and shall be deemed to constitute one fully integrated agreement
between the Parties. In the event of any conflict or inconsistency among the
provisions of the various documents of this Contract, such conflict or
inconsistency shall be resolved by giving a descending level of precedence to
the documents in the order set forth below:
(1) Terms and Conditions
(2) Exhibit A - Design Specifications
(3) Exhibit B - Statement of Work (SOW)
Terms and Conditions Page 9
CONFIDENTIAL
(4) Exhibit C - Pricing, Milestones and Payment Plan
(5) Exhibit D - Delivery Requirements and Schedule
(6) Exhibit E - Test Plans and Procedures
(7) Exhibit F - Quality Assurance Plan
(8) Exhibit G - Key Contractor Personnel
(9) Exhibit H - Technical Materials Escrow Agreement
(b) Exhibits X, X, X, X, X, X, X and H are attached to and incorporated
into these Terms and Conditions.
1.4 Headings; Number and Gender.
The article headings are for convenience of reference only and shall not be
considered in interpreting the text of this Contract. Words in the singular
include the plural and vice versa, and words imputing the masculine gender
include the feminine and neuter genders where the context so requires.
Terms and Conditions Page 10
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
2. SCOPE OF WORK
2.1 General Scope.
(a) In accordance with the requirements of this Contract, Contractor shall
furnish and perform and Customer shall purchase the Work.
(b) Without limiting the generality of the foregoing, Contractor shall
furnish the following in accordance with this Contract:
(1) Seven (7) Prototype Standard Repeaters;
(2) One (1) Prototype High-Power Repeater;
(3) [*****] Standard Repeaters;
(4) [*****] High-Power Repeaters;
(5) Training;
(6) Data and Documentation; and
(7) Network Management System.
2.2 Statement of Work.
The Statement of Work attached hereto as Exhibit B includes descriptions of
certain of the Parties' roles and responsibilities with respect to the design,
development, manufacture, delivery and testing of the Repeaters. Any role or
responsibility not specifically described in Exhibit B (Statement of Work) that
is implied by or required for the proper performance of any role or
responsibility expressed in the Statement of Work shall be deemed included as
part of such expressed role or responsibility.
2.3 Weight and Size of Standard Repeaters.
This Article 2.3 (Weight and Size of Standard Repeaters) applies only to
Standard Repeaters.
(a) The Parties acknowledge and agree that the weight and dimensions for
the Standard Repeaters as set forth in Exhibit A (Design Specifications) are
heavier and larger than the Parties originally anticipated under the ATP and
that each of the Parties has agreed to undertake certain responsibilities
relating to the increased weight and dimensions to facilitate the installation
of the Standard Repeaters by Customer's Terrestrial Repeater Network System
integrator at Installation Sites.
Terms and Conditions Page 11
(b) Regarding Standard Repeaters, upon completion of the Repeater In-
Factory Testing pursuant to Article 8.2(a)(2), Contractor shall disassemble the
Repeaters so that the disassembled Repeaters may be shipped in multiple
containers. The Standard Repeaters shall be disassembled into two (2) separate
kits as follows:
(1) The Enclosure Kit; and
(2) The "PA Kit" which shall consist of the power amplifier (to be
shipped separately), the filter and the coupler (to be shipped
together).
(c) Contractor shall ship the plinths to the Staging Areas in accordance
with Article 7.4 (Packing, Tracking and Shipping) as reasonably directed by
Customer, or its designee, so that the plinths arrive at the Staging Areas on or
before five (5) Business Days prior to the arrival of the balance of the
Enclosure Kits to the Staging Areas to facilitate the early site preparation
work being performed by Customer's Terrestrial Repeater Network System
integrator. Contractor shall ship the Enclosure Kits (less the plinths) to the
Staging Areas in accordance with Article 7.2 (Time and Place of Delivery) and
Article 7.4 (Packing, Tracking and Shipping).
(d) Contractor shall ship the PA Kits in accordance with Article 7.4
(Packing, Tracking and Shipping) directly to the Installation Sites. Customer
shall inform Contractor in writing on a weekly basis of the Installation Sites
where an Enclosure Kit has been installed by Customer's Terrestrial Repeater
Network System integrator. Customer shall arrange for such installation to
include the assembly of the Repeater enclosure on the plinth and the
reattachment of the enclosure door to the enclosure (without connection of the
air conditioning unit). Within five (5) Business Days of Contractor's receipt of
such notice, Contractor shall deliver the PA Kit to the Installation Site and
perform all work necessary to reassemble the PA Kit with the Enclosure Kit (the
"Rooftop Assembly") to allow the Repeater to function in accordance with the
requirements set forth in Exhibit A (Design Specifications).
(e) To ensure that the Repeater functions in accordance with the
requirements set forth in Exhibit A (Design Specifications), Contractor shall,
immediately upon completion of the Rooftop Assembly, conduct Rooftop Testing.
Such Rooftop Testing shall be performed by Contractor in accordance with Exhibit
E (Test Plans and Procedures) (to be developed hereunder) and Article 8.2
(Acceptance of Repeaters) and shall be completed within the five (5) Business
Day period set forth above.
(f) Contractor shall be responsible for the difference, if any, in the
cost of a load spreader required to install the Repeater, at its actual weight,
over and above the cost that would have been incurred for a load spreader
required to install a 180 kg. Repeater. Such amount shall be determined without
any xxxx-up or additional charge to Contractor and shall be treated as a credit
pursuant to Article 6.1(b). If Customer believes a credit is due under this
paragraph, then Customer shall provide, along with the written notice to
Contractor required by Article 6.1(b), such supporting documentation as may be
reasonably required to determine the amount of such credit.
(g) Contractor shall be responsible for the difference, if any, in the
cost required to ship the Enclosure Kit, at its actual weight, from the Staging
Areas to the Installation Sites over and
Terms and Conditions Page 12
CONFIDENTIAL
above the cost that would have been incurred for shipping a 180 kg. Standard
Repeater from the Staging Areas to the Installation Sites. Such amount shall be
determined without any xxxx-up or additional charge to Contractor and shall be
treated as a credit pursuant to Article 6.1(b). If Customer believes a credit is
due under this paragraph, then Customer shall provide, along with the written
notice to Contractor required by Article 6.1(b), such supporting documentation
as may be reasonably required to determine the amount of such credit.
(h) The Parties believe that the need for structural analysis at the
Installation Sites due to the increased weight of the Standard Repeaters will be
greatly minimized if a proper load spreading device is used. Based on this
belief, Customer agrees to assume the costs associated with such structural
analyses; provided, however, if, after the first fifty (50) Installation Sites
are selected by Customer's Terrestrial Repeater Network System integrator, it is
determined that a structural analysis was required on in excess of seventy (70%)
of such Installation Sites, the Parties agree to meet and discuss, in good
faith, an equitable division of the costs associated with the increased need for
such structural analyses.
Terms and Conditions Page 13
CONFIDENTIAL
3. STRATEGIC RELATIONSHIP
3.1 Roof Rights.
In the event Customer desires to locate a Repeater on the roof of a
building owned, leased or managed by Contractor, Customer shall make such
request to Contractor in writing, indicating the location of such building.
Contractor shall promptly respond in writing to Customer's request to indicate
whether Contractor is willing to grant such roof rights to Customer, in which
event the Parties shall negotiate reasonable terms and conditions applicable to
such roof rights.
3.2 Marketing Support.
Where requested by Customer, Contractor will provide reasonable technical
marketing support to Customer, in accordance with Exhibit B (Statement of Work),
including in support of Customer's business opportunities consistent with
Contractor's other obligations.
3.3 Alignment of Interests.
Contractor agrees to cooperate with Customer and to take no materially
adverse position (in trade associations, regulatory bodies, the press, and
otherwise) with respect to the FCC spectrum assigned and designated for use by
Customer.
Terms and Conditions Page 14
CONFIDENTIAL
4. EFFECTIVE DATE OF CONTRACT ("EDC"); CONDITIONS PRECEDENT; TERM
4.1 Effective Date of Contract and Conditions Precedent.
(a) This Contract shall be effective as of October 22, 1999 ("Effective
Date or "EDC").
(b) Contractor shall have no obligation to commence the Work until
Contractor's receipt of Milestone Payment No. 1.
4.2 ATP.
The Parties acknowledge and agree that, as of the Execution Date of this
Contract, (i) all Contractor effort in respect of the Work pursuant to the ATP
shall be deemed performed under this Contract; (ii) there are no unfulfilled
obligations or claims under the ATP; (iii) in the event the ATP has not expired
or terminated as of the Execution Date of this Contract, the ATP is hereby
terminated; and (iv) the provisions of this Contract shall govern the rights and
obligations of the Parties with respect to matters arising under the ATP.
4.3 Term.
The term of this Contract shall commence on EDC and continue until all the
Work is completed in accordance with this Contract, unless terminated earlier in
accordance with Article 25 (Termination) (the "Term").
Terms and Conditions Page 15
CONFIDENTIAL
5. PRICING
5.1 Contract Price.
In consideration of Contractor's performance of the Work in accordance with
this Contract, Customer shall pay Contractor the amounts determined in
accordance with Exhibit C (Pricing, Milestones and Payment Plan) (collectively
the "Contract Price") and in accordance with the payment conditions and
Milestones set forth therein, as may be adjusted pursuant to this Contract. For
the Work provided or to be provided under this Contract, Customer shall not be
obligated to pay Contractor any amounts in addition to the Contract Price,
except as otherwise specifically provided in this Contract.
5.2 Changes in Contract Price.
Except pursuant to Article 10 (Changes in Scope of Work), Exhibit C
(Pricing, Milestones and Payment Plan), or as otherwise expressly set forth in
this Contract, the Contract Price is not subject to any escalation or to any
adjustment or revision.
5.3 Most-Favored Customer.
(a) If Contractor provides services to, or performs work for, another
customer that are similar to the Work (in nature, scope, volume and duration) to
be provided and performed hereunder, and the prices charged to such customer are
lower than the prices charged to Customer under this Contract, the prices
charged to Customer shall be equitably adjusted to provide to Customer the
benefit of such lower prices. Such adjustment shall be retroactive to the first
date on which the lower charges to such other customer became effective.
(b) Customer may from time to time conduct an audit to examine and assess
Contractor's compliance with the provisions of paragraph (a) above, provided
Customer engages an external auditor, at Customer's expense, to conduct such
audit. Contractor shall cooperate with the audit initiated by Customer and
shall provide the information reasonably requested by Customer to verify its
compliance with paragraph (a) above, provided (i) Contractor shall only provide
such information, including pertinent financial information, to Customer's
designated external auditor and (ii) such external auditor shall execute a
confidentiality agreement reasonably satisfactory to Contractor.
(c) In the event the external auditor determines that Contractor is
providing services to, or is performing work for, another customer that are
similar to the Work (in nature, scope, volume and duration) and the prices
charged for such services or work for the other customer are lower than the
prices charged to Customer hereunder, the external auditor shall provide notice,
in writing, to both Contractor and Customer of its determination and shall
include with such notice any supporting documentation of such pricing
discrepancy. Such documentation provided to Customer shall be sufficiently
redacted to conceal the identity of Contractor's other customer and shall only
include such information as is directly pertinent to the determination made by
the external auditor. Upon receipt of notice of such pricing discrepancy,
Contractor shall promptly implement the lower price adjustment and provide
Customer with appropriate credits in accordance with paragraph (a) above.
5.4 Taxes.
Terms and Conditions Page 16
CONFIDENTIAL
(a) Contractor shall be responsible for any sales, use, excise, value-
added, services, consumption and other taxes payable by Contractor on any goods
or services used or consumed by Contractor in providing the Work where such tax
is imposed on Contractor's acquisition or use of such goods or services and the
amount of such tax is measured by Contractor's costs in acquiring such goods or
services.
(b) Customer shall be responsible for any applicable sales and use taxes
on any deliverable item, including Repeaters. Contractor shall include on each
invoice, as a separate line item, any such applicable sales and/or use taxes and
Contractor shall remit all such taxes to the appropriate taxing authorities
without any xxxx-up or other additional charge to Customer. All other excise,
value-added, services, consumption, export, import and other taxes, duties, fees
or charges shall be included in the Contract Price.
(c) Contractor agrees to act as the "Importer of Record" for all the Work,
if required or as applicable. This includes arranging for a customs broker to
record the entry of the goods. As "Importer of Record," Contractor will be
responsible for remitting to customs all appropriate duty and excise tax and all
such duty and excise taxes are included in the Contract Price.
(d) Each Party shall consult and cooperate with the other to minimize the
other's tax liability to the extent legally permissible.
(e) Each Party shall cooperate with the other in the settlement of any
claim for taxes asserted by applicable taxing authorities.
Terms and Conditions Page 17
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
6. INVOICING AND PAYMENT
6.1 Invoicing.
(a) Contractor shall invoice Customer monthly for all Milestones completed
in accordance with the applicable Milestone Achievement Criteria and all other
applicable requirements of this Contract during the period covered by the
invoice and any other charge permitted by this Contract; provided, however, with
respect to [*****] Milestones set forth in Table 3.2 of Exhibit C (Pricing,
Milestones and Payment Plan), Contractor may invoice Customer [*****] for
Milestones completed during the applicable invoicing period. The invoice shall
show details and supporting documentation as to amounts invoiced as reasonably
required by Customer. Each invoice shall state the number of shipped Enclosure
Kits and/or Accepted Repeaters and shall be accompanied by Contractor's written
certification that the Milestone(s) to which the invoice relates was/were fully
and successfully completed in accordance with the Milestone Achievement Criteria
set forth in Exhibit C (Pricing, Milestones and Payment Plan). Such
certification for Enclosure Kits shall also specify the applicable waybill
number. Each invoice shall also be accompanied by conditional releases of claims
and waivers of liens, in form and substance reasonably satisfactory to Customer,
executed by Contractor and all Subcontractors with respect to the portion of
Work for which payment is sought. With respect to invoices for shipped Enclosure
Kits and Accepted Repeaters, each such invoice shall also specify the pertinent
bar-coded serial number for the LRUs of each such shipped Enclosure Kit and/or
the LRUs of each such Accepted Repeater, pursuant to Article 7.4(b) (Labeling
and Electronic Tracking).
(b) In the event a Party determines a credit is due Customer pursuant to
this Contract, such Party shall notify the other Party in writing. To the extent
the Parties agree on the amount of the credit, if any, due to Customer,
Contractor shall provide Customer with such credit against amounts then due and
owing; if no further payments are due to Contractor, Contractor shall pay the
amount of such credit to Customer within thirty (30) Calendar Days after such
credit becomes due. To the extent the Parties do not agree on the amount of the
credit due to Customer, the matter shall be resolved pursuant to Article 23
(Dispute Resolution).
(c) Contractor shall deliver a copy of each invoice and all details and
supporting documentation to:
XM Satellite Radio Inc.
0000 00xx Xxxxxx, XX
Xxxxx 00
Xxxxxxxxxx, XX 00000
Tel: 000-000-0000
Fax: 000-000-0000
Attention: Chief Financial Officer
Copy to: Xxxxx Xxxxxxx
Terms and Conditions Page 18
CONFIDENTIAL
Vice President, Terrestrial Repeater Program
Terms and Conditions Page 19
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
6.2 Escrow Account and Payment.
(a) On or before [*****], Customer shall establish an interest-bearing
escrow account (the "Payment Escrow Account") with a bank or other financial
institution of Customer's choice, and Customer, Contractor and the agent (the
"Payment Escrow Agent") for the Payment Escrow Account shall enter into an
escrow agreement pursuant to which Customer shall pay amounts into the Payment
Escrow Account in accordance with the schedule of escrow payments set forth in
Exhibit C (Pricing, Milestones and Payment Plan). Customer shall maintain such
escrow account until the earlier to occur of the following: (i) all amounts
required to be deposited therein by Customer have been drawn down by Contractor,
(ii) termination of this Contract and payment of Customer's obligations
hereunder, or (iii) July 31, 2001. The costs of establishing and maintaining the
Payment Escrow Account shall be shared equally by the Parties. Customer shall be
entitled to retain all interest and income earned on amounts deposited into the
escrow account.
(b) Customer shall pay Contractor [*****] Milestone Payment No. 1 within
five (5) Business Days after the Execution Date provided Contractor first
furnishes Customer with an invoice therefor. Subject to Article 6.5 (Withholding
of Payment), with respect to [*****] Milestone Payment Nos. 2-5 set forth in
Table 3.1 of Exhibit C (Pricing, Milestones and Payment Plan) and [*****]
Milestone Payments 1-2 in Table 3.3 of Exhibit C, Customer shall pay Contractor
within thirty (30) Calendar Days after receipt from Contractor of an invoice in
accordance with the requirements of Article 6.1 (Invoicing). With respect to the
[*****] Milestone Payments set forth in Table 3.2 of Exhibit C, and subject to
Article 6.5 (Withholding of Payment), within three (3) Business Days after
receipt of an invoice (and required supporting documentation) meeting the
requirements of Article 6.1 (Invoicing) and, with respect to Accepted Repeaters,
Article 8.2 (Acceptance of Repeaters), Customer shall authorize the Payment
Escrow Agent to permit Contractor to draw down from the Payment Escrow Account
the amount invoiced. With respect to invoices for any other charges hereunder,
Customer shall pay Contractor within thirty (30) Calendar Days after receipt
from Contractor of an invoice in accordance with the requirements of Article 6.1
(Invoicing). Notwithstanding the foregoing, all payments made under the
Authorization to Proceed (ATP), executed by the Parties and dated October 22,
1999, shall be credited in full against the Milestone Payments set forth in
Exhibit C (Pricing, Milestones and Payment Plan) until such ATP payments have
been exhausted. Contractor may deliver its invoices and supporting documentation
to Customer via facsimile.
(c) To secure Contractor's interest in Customer's payment of its
obligations hereunder, Customer hereby grants to Contractor a security interest,
which Customer represents and warrants is and shall at all times be a first
priority security interest, in Customer's right, title and interest in and to
amounts deposited by Customer into the Payment Escrow Account (but not interest
or income thereon). Customer hereby agrees to take, at Contractor's expense, all
such actions as may be reasonably requested by Contractor to create, perfect,
maintain and preserve
Terms and Conditions Page 20
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
such security interest, including the execution and delivery of such uniform
commercial code financing statements, continuation statements, if any, and
similar documents or instruments as may be required by applicable law as
Contractor may reasonably request. The security interest created herein shall
terminate upon the earlier to occur of the following: (i) all amounts required
to be deposited therein by Customer have been drawn down by Contractor, (ii)
termination of this Contract and payment of Customer's obligations hereunder, or
(iii) July 31, 2001. Upon termination of such security interest, Contractor
shall release and terminate such security of record by filing termination
statements or similar documents in accordance with applicable law. Customer
hereby acknowledges and agrees that the provisions of this paragraph constitute
a security agreement under the provisions of the uniform commercial code in
effect in the jurisdiction applicable to this transaction pursuant to which
Customer has granted a security interest in the Payment Escrow Account.
Notwithstanding the foregoing, Contractor agrees that any security interest
granted hereunder shall be structured in a manner reasonably satisfactory to the
Financing Entities.
(d) Customer shall make, or shall instruct the Payment Escrow Agent to
make, as applicable, payments on account of invoices by wire transfer to the
following bank account (or to such other account as Contractor shall request by
written instruction to Customer signed by Contractor's Chief Executive Officer
or President):
Bank: Allfirst (to the account of Xxxxxx Network Systems)
Address: Xxxxxxxxx, XX 00000
Account No.: [*****]
ABA No.: [*****]
(e) No payment by Customer shall constitute an Acceptance of any Work not
in accordance with this Contract.
(f) Customer shall have no obligation to pay or be responsible in any way
for payment to a Subcontractor. Contractor shall pay each Subcontractor all
undisputed amounts in accordance with the applicable Subcontract.
6.3 Set Off.
In the event Contractor has not paid Customer any amount due and payable to
Customer under this Contract, or if Customer is entitled to a credit under this
Contract (for example, for overcharges that have been paid by Customer),
Customer shall have the right to set off such amount against payments due to
Contractor.
6.4 Late Payment.
For any payment under this Contract that is overdue, the Party entitled to
such payment shall also be entitled to interest on such payment for each
Calendar Day the payment is overdue
Terms and Conditions Page 21
CONFIDENTIAL
until the date payment is made, such interest to be calculated in accordance
with Article 28.11 (Calculation of Interest), unless expressly provided
otherwise in this Contract.
6.5 Withholding of Payment.
If Customer, in good faith, does not agree that a Milestone associated with
an invoice has been completed in accordance with this Contract or that such
invoice is otherwise inaccurate, (i) Customer shall pay or authorize payment of,
as the case may be, the undisputed part of such invoice in the time period
required by this Contract and (ii) Customer shall have the right to withhold
payment or authorization of payment, as the case may be, of the disputed portion
of such invoice provided Customer gives to Contractor written notice stating in
reasonable detail the reason for withholding such amount within ten (10)
Business Days after receipt by Customer of the applicable invoice. Upon receipt
of such notice, the Parties shall initiate Dispute Resolution in accordance with
Article 23 (Dispute Resolution).
Terms and Conditions Page 22
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
7. DELIVERY AND TIME FOR PERFORMANCE
7.1 Repeater Category Selection.
(a) On or before [*****], Customer shall provide to Contractor, in
writing, a baseline estimate of the distribution of the Nominal Order over the
four (4) categories of Repeaters (i.e., an estimate of how many of the total
number of Standard Repeaters will be Standard Non-Redundant Repeaters and
Standard Sectored Non-Redundant Repeaters and an estimate of how many of the
total number of High-Power Repeaters will be High-Power Redundant Repeaters and
High-Power Sectored Redundant Repeaters) (the "Initial Baseline Estimate").
(b) On or before [*****], Customer shall provide to Contractor, in
writing, an update of the Initial Baseline Estimate, which updated Initial
Baseline Estimate will reflect the definitive distribution of the Nominal Order
over the four (4) categories of Repeaters (the "Definitive Baseline Estimate").
For each category of Repeater, the Definitive Baseline Estimate may differ from
the Initial Baseline Estimate by up to plus or minus [*****]. By way of
illustration and as an example only, if the Initial Baseline Estimate requires
Contractor to manufacture and deliver [*****] Standard Sectored Non-Redundant
Repeaters, Customer may increase or decrease that estimate in the Definitive
Baseline Estimate by up to [*****], such that the Definitive Baseline Estimate
may range from and including [*****] to and including [*****] Standard Sectored
Non-Redundant Repeaters.
7.2 Time and Place of Delivery.
(a) Set forth in Exhibit D (Delivery Requirements and Schedule) are
Customer's Delivery Requirements. The Parties acknowledge that as of the
Effective Date of Contract, however, Customer is unable to establish a detailed
Delivery Schedule for the Enclosure Kits that specifies the timing, quantity and
type of Enclosure Kits to be delivered to each Staging Area in the case of
Standard Repeaters and Installation Sites in the case of High-Power Repeaters.
Accordingly, the Parties are attaching to Exhibit D (Delivery Requirements and
Schedule) a model Delivery Schedule, which model Delivery Schedule shall be
completed and updated from time to time as Customer is able to refine its
Enclosure Kit delivery requirements. As Customer completes and updates the model
Delivery Schedule, it shall provide a copy to Contractor and each such completed
and updated Delivery Schedule shall be called the Detailed Delivery Schedule, be
added to Exhibit D and become a part of and modify this Contract; provided,
however, (i) except as expressly provided in this Contract, including Article
7.3 (Rescheduling of Production), for each month, the total number of Enclosure
Kits to be delivered in such month shall not exceed the total quantity of
Enclosure Kits set forth in the Delivery Requirements for such month and (ii) in
no month will the total number of Enclosure Kits for Standard Sectored Non-
Redundant Repeaters and Enclosure Kits for High-Power Sectored Redundant
Repeaters included in Customer's Monthly Delivery Notice (as defined in
paragraph (b) below) to
Terms and Conditions Page 23
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Contractor exceed in the aggregate [*****] for such month ((i) and (ii) together
the "Delivery Schedule Restrictions"). With respect to any calendar month, the
Detailed Delivery Schedule shall apply to that month provided Customer furnished
the Detailed Delivery Schedule to Contractor not less than thirty (30) Calendar
Days prior to the beginning of such month.
(b) Unless and until a Detailed Delivery Schedule is established with
respect to the Nominal Order, Customer shall provide prior written notice to
Contractor of not less than thirty (30) Calendar Days prior to the beginning of
each month in which Enclosure Kits are to be delivered by Contractor pursuant to
this Contract (each a "Monthly Delivery Notice"). Such notice shall specify the
quantity of Enclosure Kits to be delivered to each of the specified Staging
Areas in the case of Standard Repeaters and Installation Sites in the case of
High-Power Repeaters in such month; provided, however, the notice shall comply
with the Delivery Schedule Restrictions set forth in paragraph (a) above.
(c) Contractor shall use its best commercial efforts to deliver the
Enclosure Kits in accordance with the Delivery Requirements set forth in Exhibit
D (Delivery Requirements and Schedule) and, as applicable, the Detailed Delivery
Schedule and each Monthly Delivery Notice provided by Customer pursuant to
paragraph (b) above. In the case of Standard Repeaters, Contractor shall deliver
the PA Kits in accordance with Article 2.3(d) above and in accordance with the
Delivery Requirements set forth in Exhibit D (Delivery Requirements and
Schedule). In the case of High-Power Repeaters, within thirty (30) Calendar Days
after receipt of the Detailed Delivery Schedule or Monthly Delivery Notice
provided by Customer pursuant to paragraph (b) above, Contractor shall (i) ship
to, and install at, the Installation Sites identified in such schedule or notice
the Enclosure Kit and Klystron Kit and (ii) successfully complete High-Power
Installation Site Testing of the complete High-Power Repeater installed at such
Installation Sites. Contractor shall deliver the Network Management System and
other deliverables to be provided pursuant to this Contract in accordance with
the Delivery Requirements set forth in Exhibit D (Delivery Requirements and
Schedule). The Parties acknowledge and agree that the delivery times set forth
in Exhibit D (Delivery Requirements and Schedule), as may be amended, are firm
and time is of the essence.
(d) In the event Contractor is prepared to deliver Enclosure Kits earlier
than required by the Delivery Requirements set forth in Exhibit D (Delivery
Requirements and Schedule) or, as applicable, the Detailed Delivery Schedule or
a Monthly Delivery Notice, Contractor shall promptly provide prior notice to
Customer as to the quantity of Enclosure Kits available for early delivery by
Contractor and the proposed delivery dates therefor. Customer shall, within five
(5) Business Days following receipt of Contractor's notice, provide written
notice to Contractor of Customer's agreement with or rejection of the early
delivery of such Enclosure Kits, which agreement or rejection shall be in
Customer's sole discretion. If Customer agrees to accept early delivery of such
Enclosure Kits, Customer shall also specify in its notice to Contractor the
Staging Area(s) and Installation Site(s) to which such Enclosure Kits should be
delivered.
Terms and Conditions Page 24
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(e) Contractor shall deliver the Enclosure Kits, in the case of Standard
Repeaters, to the loading dock or other such delivery receiving area of each
Staging Area as specified in the Detailed Delivery Schedule or each Monthly
Delivery Notice, as applicable, and in the case of High-Power Repeaters, to the
Installation Site specified in the Detailed Delivery Schedule or each Monthly
Delivery Notice, as applicable. Contractor shall deliver the PA Kits to each of
the Installation Sites as specified in Customer's notice as provided in Article
2.3(d). Contractor shall deliver the Klystron Kits as set forth in paragraph (c)
above. Contractor shall deliver all other deliverables to the persons and at
the address indicated in Article 28.8 (Notices), except as may otherwise be
required and directed by Customer or specified in the Detailed Delivery
Schedule.
7.3 Rescheduling of Production.
(a) Subject to paragraph (c) below and also in recognition of the
potential for changes in Customer's business or logistical requirements,
Contractor agrees to accommodate a rescheduling of the Start of Production Date
for the Nominal Order of Repeaters to allow for a delay of the start of
production of the Repeaters and an extension of the Start of Production Date for
a period, at Customer's election, of one (1) to three (3) months, provided:
(1) Customer provides Contractor with prior written notice of its
desire to delay the Start of Production Date, such notice to be
given by no later than [*****]; and
(2) Customer takes delivery of the entire Nominal Order by no later
than the last day of the [*****] month following the original
Start of Production Date.
(b) Subject to paragraph (c) below, upon thirty (30) Calendar Days prior
notice, Customer may direct Contractor to defer delivery of up to [*****] of the
total number of Repeaters to be delivered in any month during the Term, provided
that Customer agrees to take delivery of such deferred Repeaters by no later
than the last day of the [*****] month following the Start of Production Date.
(c) Contractor shall in no event be required to manufacture or deliver to
Customer in excess of [*****] Repeaters in any month during the Term of this
Contract.
(d) In the event Customer exercises its right under this Article 7.3
(Rescheduling of Production) to delay the Start of Production Date, the
applicable delivery dates hereunder and dates of Key Tasks shall be adjusted on
a day-for-day basis, and the date of July 31, 2001 set forth in paragraphs (a)
and (c) of Article 0 (Escrow Account and Payment) shall be adjusted on a day-
for-day basis.
7.4 Packing, Tracking and Shipping.
(a) Packing. All deliveries pursuant to this Contract shall be preserved,
-------
packed and crated by Contractor to ensure safe delivery to their destinations
without damage due to shipment.
Terms and Conditions Page 25
CONFIDENTIAL
(b) Labeling and Electronic Tracking.
--------------------------------
(1) On or before February 4, 2000, the Parties will agree upon
appropriate labeling and electronic asset-tracking requirements
and procedures. Such requirements and procedures will include at
a minimum the labeling of Repeaters and LRUs with bar-coded
serial numbers consistent with the Parties' business requirements
and asset tracking practices. Contractor shall label each
Repeater and LRU, container and packing documentation in
accordance with such requirements and procedures.
(2) Contractor shall notify Customer at least thirty (30) Calendar
Days in advance of any administrative changes with respect to any
Repeater or LRU, such as changes in product part numbers or
descriptions, product discontinuances or substitutions, and newly
compatible or substitute components.
(c) Shipping. Unless otherwise instructed by Customer, Contractor shall:
--------
(1) Arrange for the transportation and shipment of the Repeaters and
other deliverables required to be delivered by Contractor
pursuant to this Contract, such shipments to be made using fully
licensed, bonded and insured common carriers, which carriers
shall have substantial experience in the shipment of electronic
equipment;
(2) Fully insure each Repeater against all risks, in accordance with
Article 20 (Insurance), and maintain such insurance until the
following times: in the case of Standard Repeaters, (i) until
delivery of the Enclosure Kits to the loading dock or other such
delivery receiving area of each Staging Area and (ii) during the
period of Rooftop Assembly and Rooftop Testing until Acceptance;
in the case of PA Kits, until Acceptance of the Standard Repeater
in which the PA Kit is incorporated; and in the case of High-
Power Repeaters, until Acceptance of such Repeaters;
(3) Enclose packing documentation with each shipment and, when more
than one package is shipped, identify the one that contains the
memorandum;
(4) Render invoices in duplicate or as otherwise specified by
Customer;
(5) Verify that bills of lading match corresponding shipping
invoices; and
(6) Forward applicable bills of lading and shipping notices with
items shipped.
Terms and Conditions Page 26
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
CONFIDENTIAL
7.5 Liquidated Damages for Late Delivery of Repeaters.
(a) The Parties acknowledge and agree that failure to meet the Liquidated
Damages Schedule, as defined and set forth below, on or before the last day of
the month in which delivery of Enclosure Kits is required pursuant to that
Schedule will cause substantial financial loss to, or damage sustained by,
Customer. The Parties further acknowledge and agree that the following
liquidated damages are believed to represent a genuine estimate of the loss (due
to non-productive time and increased cost of money) that would be suffered by
Customer by reason of any such delay (which losses are difficult or impossible
to calculate with reasonable certainty).
(b) Notwithstanding the Delivery Requirements set forth in Exhibit D
(Delivery Requirements and Schedule) and for purposes of calculating liquidated
damages only, in the event the sum of Enclosure Kits for Standard Repeaters
Contractor delivers to Staging Areas plus Enclosure Kits with Klystron Kits for
High-Power Repeaters Contractor ships to Installation Sites is less than the
total number required by the monthly schedule set forth below (the "Liquidated
Damages Schedule"), then, for each such Enclosure Kit in the case of Standard
Repeaters and Enclosure Kit together with Klystron Kit in the case of High-Power
Repeaters not so delivered or shipped, as applicable, Contractor shall pay
Customer, as liquidated damages and not as a penalty, the daily amounts set
forth in the Liquidated Damages Schedule for each Calendar Day following the
last day of the month in which such Enclosure Kit in the case of Standard
Repeaters and Enclosure Kit together with Klystron Kit in the case of High-Power
Repeaters was to be delivered or shipped, as applicable, in accordance with the
Liquidated Damages Schedule below until the date such Enclosure Kit in the case
of Standard Repeaters and Enclosure Kit together with Klystron Kit in the case
of High-Power Repeaters is delivered or shipped, as applicable.
--------------------------------------------------------------------------------
Liquidated Damages Schedule
--------------------------------------------------------------------------------
Month Total Quantity of Enclosure Daily Amount of the
Kits and Enclosure Kits with Liquidated Damages for Each
Klystron Kits Subject to Enclosure Kit Delivered/
Liquidated Damages for Late Shipped after the Last Day
Delivery/ of such Month
Shipment if not delivered/
shipped by the last day of
such Month
--------------------------------------------------------------------------------
[*****] [*****] [*****]
--------------------------------------------------------------------------------
(c) The monthly quantities of Enclosure Kits subject to liquidated damages
shall not include (i) any Enclosure Kits in excess of the Nominal Order as may
be ordered by Customer pursuant to Article 0 (Options) and (ii) any Enclosure
Kits Customer requires to be delivered or shipped, as applicable, on an
accelerated schedule as against the Delivery Requirements set forth in Exhibit D
(Delivery Requirements and Schedule), provided that, in any event, the
liquidated
Terms and Conditions Page 27
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
CONFIDENTIAL
damages associated with the quantities set forth in the Liquidated Damages
Schedule shall continue to apply with respect to any Enclosure Kits
delivered/shipped late, as determined under such Liquidated Damages Schedule.
(d) The total amount of liquidated damages for which Contractor may be
liable under paragraph (b) above shall not exceed Three Million Dollars
($3,000,000) in the aggregate.
(e) Customer may deduct any liquidated damages from any amounts due
Contractor, or Customer may require Contractor to pay any liquidated damages
that exceed amounts due Contractor, within thirty (30) Calendar Days after such
request.
(f) As soon as Contractor anticipates or becomes aware of a delay in the
delivery of any Enclosure Kit in the case of Standard Repeaters and/or shipment
of Enclosure Kit together with Klystron Kit in the case of High-Power Repeaters,
Contractor shall, as promptly as possible in the circumstances, notify Customer
by telephone, to be followed by written notice, of such anticipated or actual
delay in the delivery/shipment of any such Enclosure Kit. Such notice shall
indicate the cause of the delay and the expected delivery date of the Enclosure
Kit in the case of Standard Repeaters and shipment date for Enclosure Kit
together with Klystron Kit in the case of High-Power Repeaters. Following
delivery of such notice, Contractor shall provide frequent (e.g., daily) updates
as to the status of and timeframe for delivery/shipment. Such notice of
anticipated or actual delay shall in no way reduce Contractor's liability for
liquidated damages, nor shall it reduce, eliminate, or modify any other rights
or remedies available to Customer pursuant to this Contract or at law or equity.
7.6 Incentive for Timely Delivery of the Prototype Repeaters.
In the event that Contractor achieves timely delivery and Acceptance of all
of the Prototype Repeaters in accordance with the requirements of this Contract
on or before [*****], Customer shall award to Contractor an additional amount of
[*****].
7.7 Performance Award.
(a) In Customer's reasonable discretion, Customer may pay to Contractor a
monetary award in recognition of Contractor's exceptional performance under this
Contract (the "Performance Award"). Such Performance Award may be in an amount
up to, but shall not exceed, the sum of [*****] (the "Available Award Amount").
(b) In making its determination as to whether Contractor shall receive a
Performance Award, Customer shall give consideration to certain factors with
respect to Contractor's performance hereunder, including the following:
(1) Contractor's delivery of high quality Repeaters, Network
Management System and other deliverables;
(2) Contractor's timely performance;
(3) Contractor's efforts and success in recovering from its failure
to meet the applicable delivery dates hereunder;
Terms and Conditions Page 28
CONFIDENTIAL
(4) Contractor's flexibility, creativity, support, accommodation and
reasonableness in working with Customer and its third-party
service providers (including the Terrestrial Repeater Network
System integrator) to meet the applicable delivery dates
hereunder or Customer's accelerated program requirements and to
adapt to changes in the requirements of Customer's program;
(5) Contractor's demonstrated commitment to Customer's program; and
(6) Contractor's exceptional performance hereunder.
(c) Customer shall make its determination as to whether to make a
Performance Award to Contractor promptly after the Project Completion Date.
Contractor acknowledges and agrees that it is within Customer's sole reasonable
discretion to award any or all of the Available Award Amount and Contractor has
no contractual or legal right to receive a Performance Award. Customer shall pay
to Contractor the Performance Award, if any, within sixty (60) Calendar Days
after the Project Completion Date.
7.8 Suspension of Work by Customer.
Customer, in its sole discretion, may suspend performance of the Work, in
whole or in part, upon written notice to Contractor, and Contractor shall
suspend performance of the Work to the extent specified in such notice within
twenty-four (24) hours thereof. If, within four (4) months of Customer's notice
to suspend the Work, Customer fails to notify Contractor to resume performance
of the Work suspended, Contractor may, at any time thereafter, terminate the
Contract, but only to the extent the Work was suspended, upon ten (10) Business
Days written notice to Customer and shall be entitled to the remedies set forth
in Article 25.3(c) only to the extent of the Work so terminated. In the event
of a suspension under this Article 7.8 (Suspension of Work by Customer), the
Parties shall work together to minimize the impact of such suspension on the
Contract Price, applicable delivery dates hereunder and Contractor's performance
hereunder (and Customer's liability in the event of termination) and Contractor
shall be entitled to an equitable adjustment in the Contract Price and
applicable delivery dates hereunder.
7.9 Excusable Delay Defined.
(a) With respect to Contractor's performance of its obligations under this
Contract, an "Excusable Delay" shall be any delay in the performance of the
Work, in whole or in part, caused by an event that is beyond the reasonable
control of Contractor, its Subcontractors or their respective Affiliates,
including (i) war (whether declared or undeclared), outbreak of national
hostilities, invasion or sabotage; (ii) fire, earthquake, flood, hurricane,
tornado, cyclone, monsoon, epidemic, explosion, or quarantine restriction; (iii)
strike or work slow-down (other than by the employees of Contractor or any
Subcontractor at any Contractor Facility) not reasonably within Contractor's
control; (iv) freight embargoes; (v) acts of God; (vi) governmental action in
its sovereign capacity; and (vii) Customer's failure to perform its obligations
hereunder; provided, however, that no delay shall be an Excusable Delay unless
Contractor gives Customer prompt written notice of the delay and the reasons
therefor and such
Terms and Conditions Page 29
CONFIDENTIAL
delay could not have been either (x) avoided by Contractor, its Subcontractors
or their respective Affiliates through the exercise of reasonable foresight or
reasonable precautions or (y) circumvented by Contractor, its Subcontractors or
their respective Affiliates through the use of reasonable efforts to establish
work-around plans, alternate sources, or other means. Upon Customer's written
request, Contractor shall provide Customer a Correction Plan. Contractor shall
also provide Customer prompt written notice when the event constituting an
Excusable Delay has ended.
(b) In the event Customer disputes any Excusable Delay asserted by
Contractor, Customer shall notify Contractor in writing within ten (10) Business
Days from the date of notice thereof and, if the Parties have not resolved the
dispute within ten (10) Business Days of Contractor's receipt of written notice
from Customer, the dispute shall be resolved pursuant to Article 23 (Dispute
Resolution).
7.10 Contract Adjustments.
In the event of an Excusable Delay under Article 7.9 (Excusable Delay
Defined), there shall be an equitable adjustment to the applicable delivery
dates hereunder. Contractor acknowledges and agrees the occurrence of an
Excusable Delay shall not entitle Contractor to an increase in the Contract
Price, except for those Excusable Delays caused by Customer's failure to perform
its obligations hereunder, in which case there shall be an equitable adjustment
to the Contract Price.
Terms and Conditions Page 30
CONFIDENTIAL
8. TESTING CRITERIA AND ACCEPTANCE
8.1 Testing.
Contractor shall develop and provide test plans and procedures in
accordance with Exhibit B (Statement of Work) for Prototype Repeaters on or
before February 28, 2000 and for all other Repeaters (i.e., production
Repeaters) on or before March 31, 2000. Upon Customer's approval of the
applicable test plans and procedures in accordance with Exhibit B, such test
plans and procedures shall be attached hereto and incorporated herein as Exhibit
E (Test Plans and Procedures). Contractor shall test each LRU, Repeater, the
Network Management System and other deliverable items to be provided hereunder
in accordance with such Exhibit E (Test Plans and Procedures).
8.2 Acceptance of Repeaters.
(a) A Repeater shall be deemed to have achieved Acceptance only upon the
occurrence of the following events with respect to such Repeater ("Repeater
Acceptance Criteria"):
(1) With respect to Standard and High-Power Repeaters (including all
Prototype Repeaters), successful completion of Repeater design
verification testing and review ("Repeater Design Verification
Testing") in accordance with the requirements of Exhibit E (Test
Plans and Procedures) (to be developed hereunder). Within five
(5) Business Days following successful completion of the Repeater
Design Verification Testing, Contractor shall provide to Customer
its written certification, in accordance with Exhibit E, that the
Repeater Design Verification Testing has been successfully
completed, together with all test data, results and reports
generated as a result of such Repeater Design Verification
Testing. Unless subsequent design Defects or Pattern Defects are
detected, once the Design Verification Testing has been
successfully completed in accordance with Exhibit E and
Contractor has provided its written certification pursuant to the
preceding sentence, such Repeater Design Verification Testing
shall be deemed to apply to each Repeater of the same type
thereafter delivered by Contractor to Customer pursuant to this
Contract and such Testing need not be re-performed on an
individual basis for each Repeater of the same type;
(2) With respect to Standard Repeaters only (including Prototype
Repeaters), successful completion of (i) a functionality test of
each LRU incorporated in the Repeater and (ii) an overall,
integrated system functionality test of the Repeater. Such
functionality testing shall be performed by Contractor in
accordance with Exhibit E (Test Plans and Procedures) (to be
developed hereunder) prior to shipment of the Repeater from a
Contractor Facility ("Repeater In-Factory Testing"). Contractor
shall deliver with the applicable invoice, its written
certification that Repeater In-Factory Testing has been
successfully completed, together with all test data, results and
reports generated as a result of such In-Factory Testing.
Contractor's certification shall also indicate the pertinent
Repeater's serial or other tracking number, as
Terms and Conditions Page 31
CONFIDENTIAL
well as the serial or other tracking number of each LRU
incorporated within that Repeater; and
(3) With respect to Standard Repeaters (including Prototype
Repeaters) delivery of the Enclosure Kit and PA Kit relating to
such Repeater as provided in Article 7.2 (Time and Place of
Delivery) and successful completion of the Rooftop Assembly in
accordance with Article 2.3 (Weight and Size of Repeaters) and
successful completion of Rooftop Testing in accordance with
Exhibit E (Test Plans and Procedures) (to be developed
hereunder). Contractor shall provide to Customer with the
applicable invoice its written certification that the Rooftop
Testing has been successfully completed, together with all test
data, results and reports generated as a result of such Rooftop
Testing. Contractor's certification shall also include the
pertinent Repeater's serial or other tracking number, as well as
the serial or other tracking number of each LRU incorporated
within that Repeater.
(4) With respect to High-Power Repeaters, delivery of the High-Power
Repeater's kits (i.e., the Enclosure Kit and Klystron Kit) to the
Installation Site, assembly of such kits at the Installation Site
and successful completion of testing at the Installation Site
("High-Power Installation Site Testing") in accordance with
Exhibit E (Test Plans and Procedures) (to be developed
hereunder). Contractor shall provide to Customer with the
applicable invoice its written certification that the High-Power
Installation Site Testing has been successfully completed,
together with all test data, results and reports generated as a
result of such Testing. Contractor's certification shall also
include the pertinent Repeater's serial or other tracking number,
as well as the serial or other tracking number of each LRU
incorporated within that Repeater.
(b) Customer may, at its election and expense, have its Associates,
Consultants, or other designees attend the Repeater Design Verification Testing,
any Repeater In-Factory Testing, any Rooftop Testing and any High-Power
Installation Site Testing. Attendance by Customer shall be for purposes of
monitoring and observation and shall be on a non-interference basis; provided,
however, Customer may ask questions, make suggestions, or otherwise comment on
the proceedings. Contractor shall notify Customer reasonably in advance of the
time and place for any such testing activities and Customer shall promptly
inform Contractor of its intent to attend the testing. Contractor shall make
arrangements for Customer's entrance and access into Contractor Facility(ies)
for purposes of attending the testing. Customer attendance at any such test
shall in no way be construed or deemed to represent Customer's acceptance of the
items being tested or Customer's waiver of any claims or rights hereunder.
(c) For each Repeater, Customer or its designee shall provide Contractor
written notification of its acceptance or rejection of such Repeater within five
(5) Business Days after receipt of Contractor's written certification that the
Rooftop Testing or High-Power Installation Site Testing, as applicable, has been
successfully completed in accordance with Exhibit E (Test Plans and Procedures)
and provision of all certifications required by paragraph (a) above. Customer
shall accept each Repeater if the Repeater meets the Repeater Acceptance
Criteria as set forth in paragraph (a) above. In the event Customer provides to
Contractor a notice of
Terms and Conditions Page 32
CONFIDENTIAL
Customer's Acceptance of a Repeater, the Accepted Repeater shall be deemed
Accepted as of the date of such notice.
(d) In the event Customer rejects a Repeater, Customer shall provide
Contractor with a Notice of Defects. If Contractor disputes the contents of a
Notice of Defects, Contractor shall notify Customer in writing of the basis for
its dispute within five (5) Business Days of receipt of Customer's Notice of
Defects.
(e) Where Customer fails to provide Contractor written Acceptance or
Notice of Defects within the five (5) Business-Day Period specified in paragraph
(c) above, that Repeater shall be deemed to have achieved Acceptance as of the
date Contractor delivered the certifications required by paragraph (a) above.
(f) In the event Contractor does not dispute such Notice of Defects,
Contractor shall promptly (but within no more than forty-eight (48) hours after
receipt of the applicable Notice of Defects) ship the conforming replacement for
the defective Repeater or defective LRU, as applicable, and all delivery dates
hereunder shall remain in effect. The replacement Repeater shall be subject to
the Repeater Acceptance Criteria and procedures set forth in this Article 8.2
(Acceptance of Repeaters). Any Repeater repaired or reconstructed with a
replacement LRU shall also be subject to the Repeater Acceptance Criteria and
procedures set forth in this Article 8.2 (Acceptance of Repeaters) (except the
requirements of paragraph (a)(1) shall not apply). Such procedures shall be
repeated until such time as Contractor delivers a Repeater that meets the
Repeater Acceptance Criteria set forth herein. Contractor shall be responsible,
at its expense, for packing, crating and shipping the defective Repeater or
defective LRU for return to Contractor. Contractor shall be responsible for
costs related to delivering any replacement Repeaters or LRUs to the appropriate
Staging Area or Installation Site, as appropriate, including the costs of
packing, crating, transportation, shipping and insurance. Upon receipt of a
returned defective Repeater, Contractor may elect to correct its Defects, if
possible, and deliver such corrected Repeater to Customer in satisfaction of a
subsequent Repeater delivery requirement, subject to the Repeater Acceptance
Criteria and procedures set forth in this Article 8.2 (Acceptance of Repeaters).
8.3 Acceptance of the Network Management System.
(a) Contractor shall test the Network Management System to be provided
hereunder in accordance with Exhibit E (Test Plans and Procedures).
(b) The Network Management System shall be deemed to have achieved
Acceptance only upon the occurrence of the following events with respect to such
System ("NMS Acceptance Criteria"):
(1) Successful completion of NMS design verification testing ("NMS
Design Verification Testing"), which testing shall be performed
by Contractor in accordance with the requirements of Exhibit E
(Test Plans and Procedures). Within five (5) Business Days
following successful completion of the NMS Design Verification
Testing, Contractor shall provide to Customer its written
certification that the NMS Design Verification Testing has been
successfully
Terms and Conditions Page 33
CONFIDENTIAL
completed, together with all data, results and reports generated
as a result of such NMS Design Verification Testing, also as
specified in Exhibit E.
(2) Successful completion of system functionality test for the
Network Management System to be performed by Contractor in
accordance with Exhibit E (Test Plans and Procedures) prior to
shipment of the Network Management System (the "NMS In-Factory
Testing"). Contractor shall also deliver with the Network
Management System its written certification that the NMS In-
Factory Testing has been successfully completed, together with
all test data, results and reports generated as a result of such
NMS In-Factory Testing;
(3) Delivery of the Network Management System to the place and in the
manner specified in Exhibit D (Delivery Requirements and
Schedule), as may be amended in accordance with Article 7.2 (Time
and Place of Delivery); and
(4) Successful completion of an overall, integrated system
functionality test of the Network Management System following
delivery of the System to Customer at the designated location and
successful installation by Contractor (the "NMS Acceptance
Testing"), which testing shall be performed by Customer or its
designee in accordance with Exhibit E (Test Plans and
Procedures); provided, however, that Contractor may, at its
election and expense, have its representative present during such
NMS Acceptance Testing.
(c) Customer shall provide Contractor written notification of its
Acceptance or rejection of the Network Management System within fourteen (14)
Calendar Days after delivery of the Network Management System and provision of
all certifications required by paragraph (b) above. Customer shall accept the
Network Management System if the System meets the NMS Acceptance Criteria set
forth in paragraph (b) above. In the event Customer provides to Contractor a
notice of Customer's Acceptance of the Network Management System, the accepted
System shall be deemed accepted as of the date of such notice.
(d) In the event Customer rejects the Network Management System, Customer
shall provide Contractor with a Notice of Defects. If Contractor disputes the
contents of a Notice of Defects, Contractor shall notify Customer in writing of
the basis for its dispute within fourteen (14) Calendar Days of receipt of
Customer's Notice of Defects.
(e) Where Customer fails to provide Contractor written Acceptance or
Notice of Defects within the said fourteen (14) Calendar-Day Period specified in
paragraph (c) above, the Network Management System shall be deemed accepted as
of the date Contractor delivered and installed the Network Management System in
accordance with this Article 8.3 (Acceptance of the Network Management System).
(f) In the event Contractor does not dispute such Notice of Defects,
Contractor shall repair or replace the defective Network Management System
promptly after receipt of the Notice of Defects and all delivery dates hereunder
shall remain in effect. The repaired or replaced Network Management System
shall be subject to the NMS Acceptance Criteria and procedures
Terms and Conditions Page 34
CONFIDENTIAL
set forth in this Article 8.3 (Acceptance of the Network Management System) and
such procedure shall be repeated until such time as Contractor delivers a
Network Management System that meets the NMS Acceptance Criteria set forth
herein. Contractor may repair the defective NMS at the location in which the NMS
is installed, subject to advance notice to Customer so that Customer may make
reasonable arrangements for access by Contractor. In the event the NMS is not
repaired on site, Customer shall be responsible for packing and crating the
Network Management System and making such System available to the common carrier
or other shipper that delivered such System to Customer for return to
Contractor, all at Contractor's expense, including the costs of de-installation,
packing, crating, transportation, shipping and insurance. Contractor shall also
be responsible for costs related to delivering the replacement or repaired NMS
to Customer, including the costs of packing, crating, transportation, shipping,
insurance and re-installation of the NMS.
8.4 Acceptance of Non-Repeater Deliverables.
(a) Customer shall provide Contractor written notification of its
acceptance or rejection of each item to be furnished by Contractor to Customer
pursuant to this Contract, but excluding Repeaters and the Network Management
System (each, a "Non-Repeater Deliverable"), within fourteen (14) Calendar Days
after Customer has received such item from Contractor. Customer shall accept
each Non-Repeater Deliverable if such item is in a condition fully conforming to
the provisions of this Contract. In the event Customer provides Contractor a
written notice of Acceptance with respect to such Non-Repeater Deliverable, such
item shall be deemed accepted as of the date of such notice.
(b) In the event Customer rejects a Non-Repeater Deliverable, Customer
shall provide Contractor with a Notice of Defects. If Contractor disputes the
contents of a Notice of Defects, Contractor shall notify Customer in writing of
the basis for its dispute within fourteen (14) Calendar Days of receipt of
Customer's Notice of Defects.
(c) Where Customer fails to provide Contractor written Acceptance or a
Notice of Defects within the fourteen (14) Calendar-Day Period specified in
paragraph (a) above, that Non-Repeater Deliverable shall be deemed accepted as
of the date Contractor furnished such item to Customer in accordance with
Article 7.2 (Time and Place of Delivery).
(d) In the event Contractor does not dispute such Notice of Defects,
Contractor shall promptly correct any Defects in the Non-Repeater Deliverable
and all delivery dates hereunder shall remain in effect. Upon correcting such
Defect(s), Contractor shall re-submit the Non-Repeater Deliverable to Customer
and the provisions of this Article 8.3 (Acceptance of Non-Repeater
Deliverables) shall apply again.
8.5 Title and Risk of Loss.
(a) For each item of Work, title, free and clear of all liens and
encumbrances of any kind (except for Permitted Liens), shall pass to Customer as
provided below:
Terms and Conditions Page 35
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
CONFIDENTIAL
(1) For each Enclosure Kit, upon shipment from Contractor's Facility
in accordance with the Milestone Achievement Criteria applicable
to [*****] set forth in Exhibit C (Pricing,
Milestones and Payment Plan);
(2) For each PA Kit, upon Customer's Acceptance of the Repeater in
which such PA Kit is incorporated in accordance with Article 8.2
(Acceptance of Repeaters);
(3) For each Klystron Kit, upon Customer's Acceptance of the Repeater
in which such Klystron Kit is incorporated in accordance with
Article 8.2 (Acceptance of Repeaters);
(4) For the Network Management System, upon Customer's Acceptance of
the NMS in accordance with Article 8.3 (Acceptance of the
Network Management System); and
(5) For any Non-Repeater Deliverables, upon Customer's Acceptance in
accordance with Article 8.4 (Acceptance of Non-Repeater
Deliverables).
(b) For each item of the Work, risk of loss or damage shall pass to
Customer as provided below:
(1) For each Enclosure Kit for a Standard Repeater, upon delivery to
the loading dock or other such delivery receiving area of the
applicable Staging Area in accordance with Article 0 (Delivery
and Time for Performance) until such time that Contractor
performs the Rooftop Assembly and Rooftop Testing, during which
time the risk of loss or damage shall pass back to Contractor and
then the risk of loss or damage shall again pass to Customer upon
completion of the Rooftop Assembly and Rooftop Testing by
Contractor;
(2) For each PA Kit for a Standard Repeater, upon delivery to the
appropriate Installation Site in accordance with Article 2.3
(Weight and Size of Repeaters) and Acceptance of the Repeater in
which such PA Kit is incorporated in accordance with Article 8.2
(Acceptance of Repeaters);
(3) For each High-Power Repeater, upon delivery to the appropriate
Installation Site in accordance with Article 0 (Delivery and Time
for Performance) and Acceptance of such Repeater in accordance
with Article 8.2 (Acceptance of Repeaters);
(4) For the Network Management System, upon Acceptance in accordance
with Article 8.3 (Acceptance of the Network Management System);
and
(5) For Non-Repeater Deliverables, upon delivery of such item to
Customer, all deliveries in accordance with this Contract.
Terms and Conditions Page 36
CONFIDENTIAL
9. PROJECT MANAGEMENT
9.1 Contractor Personnel.
(a) As of the Effective Date, Contractor shall appoint:
(1) a project executive with responsibility for Customer's account
and who shall (i) be an officer of Contractor and (ii) have
authority to act for and bind Contractor in connection with all
aspects of this Contract (the "Contractor Project Executive");
(2) a business line manager with responsibility for Customer's
account and who shall be the primary executive level contact
point for Customer communications ("Contractor Business Line
Manager");
(3) a project manager whose primary responsibility shall be to
Customer's account and who shall (i) remain dedicated to managing
Contractor's responsibilities under this Contract, (ii) serve as
the single point of accountability for Contractor's performance
under this Contract, (iii) serve as the point of contact for all
Customer communications, (iv) have authority to act for
Contractor in connection with all aspects of this Contract, and
(v) have day-to-day authority for undertaking to ensure Customer
satisfaction (the "Contractor Project Manager"); and
(4) a technical manager whose primary responsibility shall be to
Customer's account and who shall (i) serve as the point of
accountability for technical, design and operational issues,
working in coordination with the Contractor Project Manager and
(ii) have authority to act for Contractor with respect to
technical issues (the "Contractor Technical Manager").
(b) The individuals filling the positions identified in paragraph (a)
above shall be deemed to be "Key Contractor Personnel." The Key Contractor
Personnel that have been approved as of the Effective Date are listed in Exhibit
G (Key Contractor Personnel).
(c) In the event of any conflict between the commitments and
responsibilities to Customer and the commitments or responsibilities to any
other customers, the Contractor Business Line Manager, Contractor Project
Manager and Contractor Technical Manager shall each give priority to his or her
commitments and responsibilities to Customer.
(d) Before assigning an individual to any position described in Exhibit G
(Key Contractor Personnel), whether as an initial assignment or a subsequent
assignment, Contractor shall notify Customer of the proposed assignment, shall
introduce the individual to appropriate Customer representatives, and shall
provide Customer with a resume and other information about the individual as
reasonably requested by Customer. If Customer in good faith objects to the
proposed assignment, the Parties shall attempt to resolve Customer's concerns on
a mutually agreeable basis. If the Parties have not been able to resolve
Customer's concerns after engagement of senior management within five (5)
Business Days, Contractor shall not assign the
Terms and Conditions Page 37
CONFIDENTIAL
individual to that position and shall propose to Customer the assignment of
another individual of suitable ability and qualifications. Key Contractor
Personnel may not be transferred or re-assigned until a suitable replacement has
been approved by Customer. Contractor shall conduct an exit interview with all
Key Contractor Personnel who terminate their employment with Contractor to
review their confidentiality and non-disclosure obligations as provided herein.
9.2 Material Subcontractors.
(a) Contractor has represented that in the performance of the Work, it
will be necessary for Contractor to enter into the Subcontracts ("Material
Subcontracts") listed below:
--------------------------------------------------------------------------------
Name of Material Subcontractor Description of Work
--------------------------------------------------------------------------------
Unique Broadband Systems High-Power Amplifier (HPA)
development and manufacture
--------------------------------------------------------------------------------
Unique Broadband Systems Transcoder development and manufacture
--------------------------------------------------------------------------------
Unique Broadband Systems Filters
--------------------------------------------------------------------------------
(b) Contractor shall provide Customer a copy of the technical content of
all Material Subcontracts (with financial details redacted). Customer shall
treat the information contained in such Subcontracts confidentially and shall
execute any reasonable confidentiality agreement requested by the relevant
Subcontractor.
(c) In the event Contractor desires to replace a Material Subcontractor,
Contractor shall provide Customer with reasonable prior notice thereof, and
shall consult with Customer concerning the selected replacement.
(d) Customer's consultation with Contractor concerning any Material
Subcontractor shall not relieve Contractor from any obligations or
responsibilities under this Contract.
9.3 Subcontractor Relations.
(a) Nothing in this Contract shall be construed as creating any
contractual relationship between Customer and any Subcontractor, including
Material Subcontractors. Contractor acknowledges and agrees that it is the prime
contractor under this Contract and as such, assumes full responsibility and
liability for the performance of all suppliers, Subcontractors, or third parties
used by Contractor hereunder to the same extent as if such obligations were
performed by Contractor. Further, Contractor is fully responsible to Customer
for the acts or omissions of Subcontractors and all persons used by Contractor
or a Subcontractor in connection with performance of the Work. Any failure by a
Subcontractor to meet its obligations to Contractor shall not constitute a basis
for Excusable Delay, except as expressly permitted in Article 7.9 (Excusable
Delay Defined), and shall not relieve Contractor from meeting any of its
obligations under this Contract. Without limiting the generality of the
foregoing, Contractor shall be responsible for discharging any liens (including
Subcontractor mechanic liens) or encumbrances placed by any Subcontractor on any
component or part purchased by Customer hereunder.
(b) Contractor shall include in each of the Material Subcontracts and
shall use commercially reasonable efforts to include in all other Subcontracts,
that any such Subcontract
Terms and Conditions Page 38
CONFIDENTIAL
include provisions substantially similar to Article 12 (Access to Work), Article
14 (Intellectual Property Rights), Article 15 (Confidentiality), and Article 23
(Dispute Resolution).
9.4 Customer Third-Party Services and Products.
Contractor agrees that during the Term of this Contract it shall provide
all necessary and reasonable cooperation with the agents, Consultants,
subcontractors and third-party suppliers of Customer as requested by Customer to
achieve functional compatibility of the Repeaters with Customer's Terrestrial
Repeater Network System.
9.5 Quality Assurance.
Contractor shall perform the Work in accordance with Exhibit F (Quality
Assurance Plan) and all applicable industry standards, including applicable US
Federal Communications Commission (FCC) regulations, NEBS (1, 2 and 3),
Underwriters Laboratory, EIA/TIA, Bellcore, ANSI, IEEE, ATM-Forum, NESC, ITU-T,
NEC, and ISO 9000 requirements, all as may be amended from time to time.
9.6 Accountability.
Notwithstanding anything to the contrary contained in this Contract,
Customer's participation in, or approval of, the design or testing of Repeaters
hereunder shall not be construed or interpreted as Customer having
accountability for the Repeaters to perform in accordance with this Contract.
Without limiting the generality of the preceding sentence, Contractor shall
remain responsible for designing, developing, manufacturing, and delivering
Repeaters that are compliant with this Contract.
Terms and Conditions Page 39
CONFIDENTIAL
10. CHANGES IN SCOPE OF WORK
10.1 Changes Requested by Customer.
(a) Subject to Article 7.2 (Time and Place of Delivery) and paragraphs
(b), (c) and (d) below, Customer shall be entitled to direct, during the
performance of this Contract, any change within the general scope of this
Contract, including any change that will add, delete, or change the Work, affect
the design or construction of any Repeater, the time for performance of the Work
and/or the delivery dates hereunder.
(b) Any changes directed by Customer as described in paragraph (a) above
shall be submitted in writing to Contractor. Contractor shall respond to such
directed change in writing to Customer within fourteen (14) Calendar Days after
receipt of such directed change and shall include in such response the details
of the impact of such change in the Work on the Contract Price and/or the
delivery dates hereunder.
(c) If Customer and Contractor agree upon the change in the Contract Price
and/or the delivery dates hereunder caused by the change in Work, Contractor
shall proceed with the performance of this Contract as changed immediately upon
the execution by both Parties of a Change Order reflecting such change.
(d) If the Parties cannot agree on a change to the Contract Price and/or
the delivery dates hereunder, as occasioned by the additions or changes in the
Work directed by Customer pursuant to paragraph (a) above, Customer may issue a
Change Directive for such additions or changes. Contractor shall proceed with
the Work in accordance with the Change Directive and Customer may dispute the
reasonableness of Contractor's determination with respect to the appropriate
change to the Contract Price and/or the delivery dates hereunder pursuant to
Article 23 (Dispute Resolution). Pending resolution of such dispute, Customer
shall pay Contractor a reasonable amount. If it is determined by written
agreement of the Parties or pursuant to Article 23 (Dispute Resolution) that
Contractor is entitled to an amount other than the amount paid by Customer,
Customer shall pay to Contractor the amounts of the shortfall or Contractor
shall refund to Customer the amount of the excess, as the case may be, with
interest on such amount running from the date of initial payment by Customer to
the date of additional payment or refund, as the case may be, at the interest
rate set forth in Article 28.11 (Calculation of Interest).
10.2 Changes Requested by Contractor.
(a) Subject to paragraphs (b) and (c) below, Contractor may request,
during the performance of this Contract, any change within the general scope of
this Contract, including any change that will add or delete Work, cause a
revision to the delivery dates hereunder or affect any other requirement of this
Contract.
(b) Any changes as described in paragraph (a) above requested by
Contractor shall be submitted in writing to Customer at least thirty (30)
Calendar Days prior to the proposed date of the change. If such Contractor-
requested change causes an increase or decrease or other impact on the Work,
Contract Price, or delivery dates hereunder or other terms of this Contract,
Terms and Conditions Page 40
CONFIDENTIAL
Contractor shall submit, with such request, a written proposal identifying such
change and the impact thereof on the Contract Price, delivery dates hereunder,
or other terms of this Contract.
(c) Customer may accept or reject such request in Customer's sole
discretion. Customer shall notify Contractor in writing, within fourteen (14)
Calendar Days after receipt of the requested change proposal. If Customer agrees
with and accepts Contractor's requested change and such impact thereof,
Contractor shall proceed with the performance of this Contract as changed upon
the execution by both Parties of a written Change Order reflecting such changes.
If Customer does not agree to the requested change, Contractor shall continue
performance in accordance with this Contract without regard to such requested
change.
10.3 Pricing of Changes.
(a) When calculating the change in the Contract Price caused by changes in
the Work pursuant to this Article 10 (Changes in Scope of Work), such
calculation shall be consistent with general administrative and overhead rates
then in effect at the time of the change and Contractor's labor rates, which
labor rates shall be subject to the most favored customer provisions of Article
5.3 (Most Favored Customer).
(b) Any adjustment made pursuant to this Article 10 (Changes in the Scope
of Work) shall be set forth in an Amendment to this Contract in accordance with
Article 28.3 (Amendments).
Terms and Conditions Page 41
CONFIDENTIAL
11. SECURITY INTEREST
(a) To secure Customer's interest in the Work arising from Customer's
payment of NRE Milestone Payment Nos. 1, 2, 3, 4 and 5 and all amounts due
Customer under this Contract in the event of Contractor's default, Contractor
hereby grants to Customer a security interest, which Contractor represents and
warrants is and shall at all times be a first priority security interest, in
Contractor's right, title and interest in, to and under this Contract and the
Work. Contractor hereby agrees to take, at Customer's expense, all such actions
as may be reasonably requested by Customer to create, perfect, maintain and
preserve such security interest, including the execution and delivery of such
uniform commercial code financing statements, continuation statements, if any,
and similar documents or instruments as may be required by applicable law as
Customer may reasonably request.
(b) The security interest created herein shall terminate upon Acceptance
of the Work by Customer. Upon termination of such security interest, Customer
shall release and terminate such security of record by filing termination
statements or similar documents in accordance with applicable law.
(c) Contractor hereby acknowledges and agrees that the provisions of this
Article 11 (Security Interest) constitute a security agreement under the
provisions of the uniform commercial code in effect in the jurisdiction
applicable to this transaction pursuant to which Contractor has granted a
security interest in the collateral described in paragraph (a) above.
Terms and Conditions Page 42
CONFIDENTIAL
12. ACCESS TO WORK
12.1 Access to Work.
Contractor shall provide Customer Personnel access to all Work (including
Work-in-progress, documentation, and testing) at each Contractor Facility on a
non-interference basis during business hours.
12.2 Documentation.
(a) Subject to Article 12.1 (Access to Work), Customer Personnel will at
all times have access to (i) the Data and Documentation and (ii) Work-in-
progress, technical and schedule data and documentation relevant to the Work. To
facilitate Customer's rights hereunder, Contractor will allow Customer Personnel
access to all indices related to the materials referenced in this paragraph (a).
(b) Where the materials described in paragraph (a) are necessary for
evaluation of designs, performance considerations, assessment of test plans and
test results, or for any other purpose connected with the design, qualification,
testing, acceptance, or operation of the Work, or any part thereof, Contractor
will, subject to Article 15 (Confidentiality), make available to Customer
Personnel copies of such documentation on the reasonable request of Customer
Personnel.
(c) Any data provided by a Party to the other Party in electronic form
shall be embodied in, or be in a form compatible with, commercially available
software.
12.3 Electronic Access.
With respect to electronically generated information, Contractor will
provide Customer with a copy of and/or electronic access (via the Internet,
Contractor's email, or as agreed upon) to such information as is necessary to
keep Customer advised, on a current basis, of program issues, decisions, and
problems.
12.4 Meetings.
(a) Contractor shall hold progress meetings in accordance with the
requirements of Exhibit B (SOW).
(b) Customer Personnel shall be entitled, at Customer's expense, to
participate in the meetings (including in person, or through teleconference,
video conference or internet) of Contractor and of Contractor with any
Subcontractor(s) where such meetings (or portions of such meetings) are related
to the Work, and shall have the right to participate in and make
recommendations, but not to control, give directions or assign actions, in all
such meetings. Contractor shall provide Customer with reasonable prior written
notice of the date and time of scheduled meetings.
Terms and Conditions Page 43
CONFIDENTIAL
(c) In the event a meeting is convened at a Contractor Facility or another
Contractor or Subcontractor controlled site, Contractor shall make appropriate
arrangements to ensure the entry of Customer Personnel to the meeting place.
12.5 Financing Entities.
Each Financing Entity shall have access to the Work in the same manner and
to the same extent as Customer Personnel under this Article 12 (Access to Work).
Terms and Conditions Page 44
CONFIDENTIAL
13. TECHNICAL MATERIALS ESCROW
(a) Within thirty (30) Calendar Days following the Execution Date,
Contractor, Customer and Escrow Agent will enter into a written escrow agreement
substantially in the form attached hereto in Exhibit H (Technical Materials
Escrow Agreement) pursuant to which Contractor will deposit with Escrow Agent
all the Technical Materials available at that time (the "Escrowed Materials").
Customer shall pay the applicable escrow fees to Escrow Agent. Contractor
represents and warrants that the Escrowed Materials shall, immediately upon the
Start of Production Date, be sufficient for an individual reasonably experienced
in the design and manufacture of terrestrial repeaters or similar electronic
equipment technology to understand and utilize such materials to construct,
manufacture, support and/or maintain the Repeaters, Network Management System
and other deliverables as contemplated herein. During the Term, Contractor will
maintain such Escrowed Materials current and provide updates thereto to Escrow
Agent as appropriate. Escrow Agent will make the Escrowed Materials available to
Customer upon Customer's notice to Escrow Agent that one of the following has
occurred:
(1) the institution by Contractor of insolvency, receivership or
bankruptcy proceedings;
(2) a general assignment by Contractor for the benefit of creditors;
(3) the appointment of a receiver for Contractor;
(4) the filing by creditors of Contractor of a petition in bankruptcy
against Contractor that is not stayed or dismissed within sixty
(60) Calendar Days; or
(5) Customer's termination of this Contract for cause in accordance
with Article 25.2 (Termination for Contractor's Default).
(items (1) through (5) hereinafter referred to as the "Release
Conditions").
(b) In accordance with Exhibit H (Technical Materials Escrow Agreement),
Escrow Agent will give written notice to Contractor prior to the delivery of the
Escrowed Materials to Customer. Notwithstanding the provisions of Article 23
(Dispute Resolution) of this Contract, disputes concerning whether or not the
Release Condition set forth in paragraph (a)(5) (i.e., with respect to Article
25.2 (Termination for Contractor's Default)) has occurred shall be subject
exclusively to the arbitration provisions and processes set forth below.
Disputes and remedies relating to Article 25.2 (Termination for Contractor's
Default) other than as set forth in the preceding sentence will remain subject
to Article 23 (Dispute Resolution).
(1) In the event Customer is of the opinion that the Release
Condition set forth in paragraph (a)(5) above has occurred, and
Customer has given notice to Escrow Agent in accordance with the
Technical Materials Escrow Agreement that Customer desires
release of the Escrowed Materials from escrow upon the occurrence
of that Release Condition, Escrow Agent shall deliver a notice to
that effect to Contractor in accordance with the requirements of
the Technical Materials Escrow Agreement.
Terms and Conditions Page 45
CONFIDENTIAL
(2) If Contractor is of the opinion that it has a reasonable basis to
challenge Customer's request for release of the Escrowed
Materials, it shall deliver a notice ("Notice of Objection")
setting out its objections to Customer's request to Customer and
Escrow Agent simultaneously in accordance with the time limits
set forth in the Technical Materials Escrow Agreement.
(3) Upon receipt of the Notice of Objection by Customer, an expedited
arbitration process ("Escrow Arbitration") shall immediately be
commenced for the purpose of establishing whether or not the
alleged Release Condition pursuant to paragraph (a)(5) above has
occurred. Customer shall be entitled to select any of the
following arbitrators as the sole arbitrator ("Arbitrator")
conducting the Escrow Arbitration:
-----------------------------------------------------------------
Arbitrator 1 Arbitrator 2 Arbitrator 3
Xxxxxxx X. Xxxxxxxx Xxxxxxxx X. Xxxxx Xxxx X. Xxxxx
The Xxxxxxxx Group LLP MarksADR, LLC Steptoe & Xxxxxxx
Washington, DC Washington, DC Washington, DC
-----------------------------------------------------------------
(4) If none of these three individuals is immediately available to
conduct the Escrow Arbitration, Customer may ask any one of the
said three individuals to appoint another individual as
Arbitrator. However, under no circumstance shall any person be
appointed as Arbitrator of the Escrow Arbitration unless the
person: (A) has not previously been engaged by Customer,
Contractor or any affiliate of either one of those two parties in
any capacity (other than as a mediator or arbitrator for a third-
party dispute); (B) has not had any relationship with Customer,
Contractor or any affiliate of either of those two parties (other
than as a mediator or arbitrator of a third-party dispute); and
(C) has had a significant degree of prior experience in
conducting commercial arbitration.
(5) respect to the Escrow Arbitration:
(i) If Contractor and Customer ("Arbitration Parties")
cannot agree on a procedural matter on a timely basis
to ensure completion of the arbitration within thirty
(30) Calendar Days after Customer's selection of the
Arbitrator, the matter shall be resolved expeditiously
by the Arbitrator at the request of either Arbitration
Party;
(ii) The Arbitrator's fees shall be paid for equally by the
Arbitration Parties, unless otherwise ordered or
directed by the Arbitrator;
(iii) The procedural rules and rules of evidence adopted for
the Escrow Arbitration shall be determined by the
Arbitrator with a view to affording both Arbitration
Parties a fair hearing and always
Terms and Conditions Page 46
CONFIDENTIAL
observing the strict timeframe for the completion of
the Escrow Arbitration set out herein;
(iv) Article 28.7 (Applicable Law) shall apply to the
Escrow Arbitration;
(v) The Escrow Arbitration hearing(s) shall take place at
such time(s) and place(s) in Washington, DC as the
Arbitrator determines;
(vi) The Arbitrator shall have all of the powers required
to determine whether or not the pre-conditions for
the conduct of the Escrow Arbitration have been met,
to conduct the Escrow Arbitration, and he or she
shall be empowered to make any necessary procedural
or substantive rulings and may proceed with the
Escrow Arbitration if an Arbitration Party refuses to
participate or co-operate in the conduct of the
Escrow Arbitration.
(vii) The Arbitrator's decision ("Award") shall be in
writing, shall be accompanied by written reasons,
shall be made within thirty (30) Calendar Days after
the date that the Arbitrator is appointed to conduct
the Escrow Arbitration, and shall be evidenced by a
dated certificate bearing the signature of the
Arbitrator issued within the same timeframe
specifying whether or not the Release Condition
specified in Customer's request for the release of
the Escrowed Materials has occurred ("Escrow
Arbitration Award Certificate");
(viii) The Arbitrator's Award shall be final and binding on
the Arbitration Parties; and
(ix) The Arbitration proceedings are private and
confidential, unless an appeal is taken to a court of
competent jurisdiction.
(c) In any event, if it is determined that a Release Condition did not
occur, Customer shall promptly return the Escrowed Materials to Escrow Agent;
provided, however, Customer may retain any portion of the Technical Materials
for which Customer has ownership or license rights as granted pursuant to
Article 14 (Intellectual Property Rights).
(d) In the event a Release Condition has occurred (including as determined
pursuant to Escrow Arbitration above), Customer shall be entitled to use, or
have used, the Escrowed Materials as necessary to support and maintain its
purchased Repeaters, Network Management System and other deliverables hereunder
and to construct or manufacture, or have constructed or manufactured, such
Repeaters, Network Management System and other deliverables. Such use shall
include the right to copy, disclose, modify, enhance, upgrade, revise, and
create derivative works of such Escrowed Materials. Customer shall be entitled
to permit its Associates, Consultants, and third-party service providers to use
the Escrowed Materials on behalf of Customer. With respect to Customer
disclosures to third parties, Customer agrees to disclose the Escrowed Materials
only to third parties that are working for Customer pursuant to a
Terms and Conditions Page 47
CONFIDENTIAL
confidentiality agreement. Subject to Article 14 (Intellectual Property Rights),
Customer will immediately return the Escrowed Materials, including all copies
thereof, to Escrow Agent when Customer no longer requires the Escrowed Materials
for the purposes permitted hereunder.
Terms and Conditions Page 48
CONFIDENTIAL
14. INTELLECTUAL PROPERTY RIGHTS
14.1 Ownership of Intellectual Property Rights.
(a) All Background Intellectual Property Rights of Contractor shall remain
the sole and exclusive property of Contractor.
(b) All Background Intellectual Property Rights of Customer shall remain
the sole and exclusive property of Customer.
(c) Notwithstanding the definition of "Joint Intellectual Property
Rights", all Foreground Intellectual Property Rights first conceived or first
reduced to practice solely by Contractor or Customer as part of the Work or
otherwise pursuant to the Statement of Work, shall become Joint Intellectual
Property Rights and shall be Jointly Owned.
14.2 Joint Inventions.
(a) An assignment of rights in all Joint Inventions shall be executed in
the names and for the benefit of both Contractor and Customer, or their
designees.
(b) With respect to Joint Inventions first conceived or reduced to
practice by Contractor as part of the Work, Contractor shall have the first
right of election to file patent applications in any country, including the
selection of the attorney or agent to prepare the patent application, and
Customer shall have a second right of election. Each Party in turn shall make
its election at the earliest practicable time, and shall notify the other Party,
in writing, of its decision.
(c) With respect to Joint Inventions first conceived or reduced to
practice by Customer as part of the Work, Customer shall have the first right of
election to file patent applications in any country, including the selection of
the attorney or agent to prepare the patent application, and Contractor shall
have a second right of election. Each party in turn shall make its election at
the earliest practicable time, and shall notify the other Party, in writing, of
its decision.
(d) The expenses for preparing, filing and securing each Joint Invention
patent application subject to paragraphs (b) or (c) above, and for issuance of
the respective patent, shall be borne by the Party that prepares and files the
application. The other Party shall furnish the filing Party with all documents
or other assistance that may be necessary for the filing and prosecution of each
application. Where such Joint Invention application for patent is filed by
either Party in a country that requires the payment of taxes, annuities or
maintenance fees on a pending application or on an issued patent, the Party that
files the application shall, prior to filing, request the other Party to
indicate whether it will agree to pay one-half of such taxes, annuities or
maintenance fees. If, within sixty (60) Calendar Days of receiving such
request, the non-filing Party fails to assume in writing the obligation to pay
its proportionate share of such taxes, annuities or maintenance fees, or if
either Party subsequently fails to continue such payments within sixty (60)
Calendar Days of demand, it shall forthwith relinquish to the other Party,
providing that said other Party continues such payments, its share of the title
to such application and patent, subject, however, to retention of an
irrevocable, fully paid-up, non-exclusive, non-assignable, non-sublicensable
license in favor of the relinquishing Party and its
Terms and Conditions Page 49
CONFIDENTIAL
Affiliates to make, have made, use, lease and sell, apparatus and/or methods
under said application and patent.
(e) With respect to Joint Inventions first conceived or reduced to
practice jointly by Customer and Contractor, the Parties shall determine, on a
case-by-case basis, the priority of election rights with respect to the filing
of patent applications and responsibility for expenses therefor.
14.3 Intellectual Property Rights License Grant.
(a) Contractor hereby grants to Customer a non-transferable, perpetual,
irrevocable, fully paid-up, royalty-free, non-exclusive, world wide license in
and to Contractor's Background Intellectual Property Rights solely as necessary
for Customer, its Affiliates or their respective designee(s) (only on Customer's
or its Affiliates' behalf): (i) to use, copy, modify and/or prepare derivative
works of the Work in connection with Customer's business as such is constituted
from time to time; and (ii) to make, use, sell, import and export, operate,
maintain, modify, prepare derivative works of, offer, market, display, reproduce
and license the Repeaters, Network Management System and other deliverables
hereunder and related equipment and services similar to such Repeaters, Network
Management System and other deliverables hereunder, all in connection with
Customer's business as such is constituted from time to time. Customer may
sublicense its Affiliates and Customer and its Affiliates' respective designees,
and Customer may not otherwise sublicense the rights granted under this
paragraph (a) without the express written authorization of Contractor. Subject
to Article 13 (Technical Materials Escrow) and notwithstanding anything to the
contrary contained in this paragraph (a), the license in and to Contractor's
Background Intellectual Property Rights shall not extend to the manufacturing
for the marketing or sale by Customer or its Affiliates of Repeaters, the
Network Management System and the other deliverable items hereunder, to any
unrelated third parties.
(b) Customer hereby grants to Contractor a royalty-free, non-exclusive,
world wide license to use Customer's Background Intellectual Property Rights and
Customer's Foreground Intellectual Property Rights solely as necessary for
Contractor's performance and/or execution of the Work, and solely as necessary
to make, use, have made, sell, import and export the Repeaters, Network
Management System and other deliverables hereunder on Customer's behalf.
Contractor may not otherwise sublicense the rights granted under this paragraph
without the express written authorization of Customer, which authorization may
be granted or withheld at Customer's sole discretion.
14.4 Third-Party Intellectual Property Rights.
(a) Each Party hereby represents and warrants to the other that it will
not knowingly design or otherwise incorporate any third-party Intellectual
Property Rights into the Work, without: (i) a license to do so from the third
party; and (ii) the express written authorization of the other Party. Customer
hereby authorizes Contractor to incorporate into the Work the repeater design
developed by Unique Broadband Systems, Inc. pursuant to the Interim Services
Agreement by and between Customer and Unique Broadband Systems, Inc. dated
August 9, 1999 to the extent Contractor obtains license rights from Unique
Broadband Systems, Inc. to so incorporate such design.
Terms and Conditions Page 50
CONFIDENTIAL
(b) In the event that either Party has secured a license to any third-
party Intellectual Property Rights that are designed or otherwise incorporated
into the Work, that Party shall offer to the other Party any such license rights
that it is legally or contractually permitted to offer at terms no less
favorable than its own license grant.
14.5 Contractor Restriction on Use of Foreground Intellectual Property Rights.
Notwithstanding any provision herein to the contrary, without the prior
written approval of Customer, which approval Customer may grant or withhold in
its sole discretion, neither Contractor, nor any Affiliate of Contractor, nor
any other entity in which Contractor has an ownership interest, shall: (i) (A)
license, lease or otherwise transfer, furnish or convey any of the Foreground
Intellectual Property Rights to, (B) provide any equipment or services that use
or require any of the Foreground Intellectual Property Rights to, or (C)
otherwise provide any other benefits of use of the Foreground Intellectual
Property Rights to, any existing or future Customer Competitor; or (ii)
directly, or indirectly through any third party, contact, negotiate with or
contract with any person, corporation, partnership, limited liability company or
other entity for the purpose of (A) licensing, leasing or otherwise
transferring, furnishing or conveying any of the Foreground Intellectual
Property Rights to, (B) providing any equipment, services or other materials
that use or require any of the Foreground Intellectual Property Rights to, or
(C) otherwise providing any other benefits of use of the Foreground Intellectual
Property Rights to, any existing or future Customer Competitor.
Terms and Conditions Page 51
CONFIDENTIAL
15. CONFIDENTIALITY
15.1 Confidentiality Obligations.
(a) Any Confidential Information shall be maintained in strict confidence
by the Receiving Party. Except as provided in this Article 15 (Confidentiality),
the Receiving Party shall not use, or disclose in any manner to any third party,
Confidential Information of the Furnishing Party without the prior express
written consent of the Furnishing Party. The obligation of confidentiality shall
not be limited in time except to the extent the Receiving Party can establish
one of the exceptions set forth in Article 15.2 (Exceptions) below by clear and
convincing evidence.
(b) Access to and use of the Furnishing Party's Confidential Information
shall be restricted to those employees and persons within the Receiving Party's
organization (including its Consultants, attorneys, Subcontractors,
shareholders, representatives, and Financing Entities) with a need to use such
Confidential Information for the purpose of performing this Contract or any
transaction contemplated hereby or, in the case of Customer, obtaining debt or
equity financing. The Receiving Party's Consultants, Subcontractors,
shareholders and representatives and the Financing Entities may be included
within the meaning of "persons within the Receiving Party's organization,"
provided that such persons have executed a non-disclosure or confidentiality
agreement no less stringent than this Article 15 (Confidentiality). In addition,
all information provided is to be subject to the provisions of paragraph (c)
below.
(c) Each Party shall use the other's Confidential Information solely for
the purpose of performing this Contract or any transaction contemplated hereby
or, in the case of Customer, obtaining debt or equity financing.
(d) Data and Documentation shall be deemed Confidential Information and
shall be subject to the obligations of this Article 15 (Confidentiality) with
respect thereto.
15.2 Exceptions.
(a) Subject to paragraph (b) below, the obligations set forth in Article
15.1 (Confidentiality Obligations) shall not apply to information that is:
(1) Already known to or otherwise in the possession of the Receiving
Party at the time of receipt from the Furnishing Party and that
was not so known or received in violation of any confidentiality;
(2) Publicly available or otherwise in the public domain prior to
disclosure by the Receiving Party or becomes publicly available
or otherwise in the public domain after receipt by the Receiving
Party without breach of this Contract;
(3) Rightfully obtained by the Receiving Party from any third party
without restriction and without breach of any confidentiality
obligation by such third party;
Terms and Conditions Page 52
CONFIDENTIAL
(4) Developed by the Receiving Party independent of any disclosure
hereunder, as evidenced by written records; or
(5) Disclosed pursuant to the order of a court or administrative body
of competent jurisdiction or a government agency or required to
be released pursuant to Law, or as the Receiving Party may
reasonably determine advisable or necessary under the Securities
Act of 1933, as amended, the Securities Act of 1934, as amended,
NASDAQ, NYSE or any other national securities exchange, provided
the Receiving Party shall notify the Furnishing Party prior to
such disclosure and shall cooperate with the Furnishing Party in
the event the Furnishing Party elects to contest legally, request
confidential treatment, or otherwise avoid such disclosure.
(b) The burden shall be on the Receiving Party to demonstrate the
applicability of one or more of the foregoing exceptions by documentary evidence
in the event the Furnishing Party questions the applicability of any such
exceptions.
15.3 No License.
Except as expressly provided in this Contract, nothing in this Contract
shall be construed as granting the Receiving Party, whether by implication,
estoppel, or otherwise, any license or any right to use any Confidential
Information received from the Furnishing Party, or use any Intellectual Property
Right now or hereafter owned or controlled by the Furnishing Party.
15.4 Return of Confidential Information.
All Confidential Information disclosed pursuant to this Contract is
considered loaned for use solely in connection with this Contract. All
Confidential Information in tangible form of expression that has been disclosed
to or thereafter created, whether by copy or reproduction, by the Receiving
Party shall be and remain the property of the Furnishing Party, except to the
extent the Receiving Party has ownership or license rights in such Confidential
Information pursuant to Article 14 (Intellectual Property Rights). All such
Confidential Information and any and all copies and reproductions thereof shall,
within thirty (30) Calendar Days of written request by the Furnishing Party, be
either promptly returned to the Furnishing Party or destroyed at the Furnishing
Party's direction, except to the extent the Receiving Party has ownership or
license rights in such Confidential Information pursuant to Article 14
(Intellectual Property Rights). In the event of such requested destruction, the
Receiving Party shall provide to the Furnishing Party written certification of
compliance therewith within thirty (30) Calendar Days of such written request.
Terms and Conditions Page 53
CONFIDENTIAL
15.5 Inconsistent Legends.
This Article 15 (Confidentiality) shall control in lieu of and
notwithstanding any proprietary or restrictive legend or statements inconsistent
with this Article that may be printed on or associated with any particular
information disclosed pursuant to this Contract.
Terms and Conditions Page 54
CONFIDENTIAL
16. RECORDS RETENTION
Contractor will maintain and provide access upon request to the records,
documents and other information required to meet Customer's access to work and
audit rights under this Contract until the later of (i) three (3) years after
expiration or termination of this Contract, (ii) all pending matters relating to
this Contract (e.g., disputes) are closed, or (iii) such records, documents and
other information are no longer required to meet Customer's records retention
policy as such policy may be adjusted from time to time, which Customer record
retention policy shall not exceed seven (7) years.
Terms and Conditions Page 55
CONFIDENTIAL
17. REPRESENTATIONS AND WARRANTIES
17.1 Work Standards.
Contractor represents and warrants that it shall perform the Work hereunder
in a manner to ensure that such Work is 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 Work
similar to the Work performed hereunder. Contractor agrees that it shall use
adequate numbers of qualified individuals with suitable training, education,
experience, and skill to perform the Work.
17.2 Design and Performance Warranties.
(a) Contractor hereby represents and warrants for the benefit of Customer
as follows:
(1) that the Work shall be free from Defects in design, material and
workmanship;
(2) that the Network Management System and each Repeater shall
conform to and operate in accordance with this Contract,
including without the need for any additional equipment, software
or other materials, except as expressly specified in Exhibit A
(Design Specifications) or Exhibit B (Statement of Work);
(3) that the Network Management System and the Repeaters shall
perform at normal levels with no more than the levels of standard
and preventive maintenance as may be specified in Exhibit B
(Statement of Work);
(4) that the Network Management System, Repeaters and LRUs provided
hereunder (excluding as warranty replacements) shall be new and
of recent manufacture, not refurbished;
(5) that each replacement Repeater, LRU or other component, part or
sub-part supplied by Contractor in the performance of its
warranty obligations hereunder shall conform to the requirements
of this Contract as if it were an original part;
(6) subject to paragraphs (b) and (c) below, that it shall maintain
the availability of LRUs, components, parts and sub-parts for a
period of seven (7) years after the Project Completion Date and
that replacement Repeaters and such replacement LRUs, parts and
sub-parts shall be made available as needed in accordance with
the requirements of Article 17.11 (Remedies (Repeaters));
(7) that all upgrades to the Network Management System, Repeaters and
LRUs shall be backward compatible to the then-existing Repeaters
in use by Customer; and
Terms and Conditions Page 56
CONFIDENTIAL
(8) that the Technical Materials shall, at all times, be sufficient
for an individual reasonably experienced in the design and
manufacture of terrestrial repeaters or similar electronic
equipment technology to understand and utilize such materials to
support and/or manufacture the Repeaters.
(b) In the event Contractor (and not its suppliers or Subcontractors) is
the manufacturer of any LRUs, components, parts and sub-parts of the Repeaters,
Contractor shall continue to manufacture, and make available to Customer, such
LRUs, components, parts and sub-parts for a period of seven (7) years as set
forth in paragraph (a)(6) above; provided such items shall be available to
Customer, without additional charge, during the Warranty Period in accordance
with Article 17.11 (Remedies (Repeaters)).
(c) In the event an LRU, component, part or sub-part is manufactured or
otherwise available by an entity other than Contractor, including Contractor's
suppliers and Subcontractors, Contractor shall:
(1) Use best commercial efforts to include in each supplier agreement
or Subcontract an obligation that the supplier or Subcontractor
provide to Contractor reasonable advance notice of its decision
to cease production, or otherwise limit or eliminate the
availability, of the LRU, component, part or sub-part that such
supplier or Subcontractor provides, including due to obsolescence
of such item;
(2) Upon receipt of notice from a supplier or Subcontractor pursuant
to paragraph (c)(1) above, Contractor shall promptly, but in no
event later than the third (3/rd/) Business Day following the
date of receipt of such notice from its supplier or
Subcontractor, provide written notice to Customer of the
impending unavailability of the LRU, component, part or sub-part
related to the Repeaters, such notice to also include any other
pertinent information related to the availability of such items
prior to the impending date of unavailability;
(3) Advise Customer, in writing and at no charge to Customer, of
commercially available alternatives to the LRUs, components,
parts or sub-parts of the Repeaters, which commercially available
alternative is technically and functionally compatible with the
Repeaters and will cause the Repeaters to function in accordance
with requirements specified in this Contract. Contractor shall
so advise Customer from time to time during the Term of this
Contract as it becomes aware of such alternatives, but also at
the time Contractor gives notice to Customer pursuant to
paragraph (c)(2) above of the impending unavailability of an LRU,
component, part or sub-part;
(4) In the event there is no viable commercially available
alternative to replace the unavailable LRU, component, part or
sub-part, at Customer's request, Contractor shall design,
engineer, develop and manufacture (or have manufactured) a viable
alternative or other work-around solution to the unavailable LRU,
component, part or sub-part, subject to the Parties'
Terms and Conditions Page 57
CONFIDENTIAL
negotiation and agreement as to reasonable terms and conditions
and charges therefor (except where such situation arises prior to
the expiration of the applicable Warranty Period for the
Repeaters).
(d) The warranties provided under this Article 17.2 (Design and
Performance Warranties) do not cover defects or damage resulting from (i) the
use of any Work in any manner which is not normal or customary; (ii) misuse,
accident or neglect including dropping or spills of liquid; (iii) improper
testing, operation, maintenance, installation or adjustment (unless performed by
or on behalf of Contractor); or (iv) any alteration or modification of any kind
(unless performed by or on behalf of Contractor).
17.3 Documentation.
Contractor represents and warrants that all Documentation provided by
Contractor pursuant to this Contract shall be accurate, complete and written in
a manner understood by Customer, and shall be updated from time to time to
reflect any changes in the Work or to the Repeaters.
17.4 Inducements.
Contractor represents and warrants that it has not violated any applicable
laws or regulations or any Customer policies of which Contractor has been given
notice regarding the offering of unlawful inducements in connection with this
Contract. If at any time during the Term of this Contract, Customer determines
that the foregoing warranty is inaccurate, then, in addition to any other rights
Customer may have at law or in equity, Customer shall have the right to
terminate this Contract for cause without affording Contractor an opportunity to
cure.
17.5 Viruses.
Contractor represents and warrants that it shall use its best commercial
efforts to ensure that no Viruses are coded or introduced into the Work or in
any systems used to perform the Work. Contractor agrees that, in the event a
Virus is found to have been introduced into the systems used to perform the
Work, Contractor shall use its best commercial efforts at no additional charge
to eliminate the effects of the Virus and, if the Virus causes a loss of
operational capability or efficiency of any Repeater, to use best efforts to
mitigate and restore such losses.
17.6 Disabling Code.
Contractor represents and warrants that, without the prior written consent
of Customer, Contractor shall not insert into the Work any code that would have
the effect of disabling or otherwise shutting down the NMS or any Repeater.
Contractor further represents and warrants that, with respect to any disabling
code that may be part of any code (embedded or otherwise) to
Terms and Conditions Page 58
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
CONFIDENTIAL
be delivered hereunder, Contractor shall not invoke such disabling code at any
time, including upon expiration or termination of this Contract for any reason,
without Customer's prior written consent.
17.7 Year 2000.
Contractor represents and warrants that the Work and all items to be
delivered hereunder, including Repeaters, are and shall continue to be Year 2000
Compliant.
17.8 Compliance with Applicable Law.
Contractor represents and warrants that it shall perform its obligations in
a manner that complies with all applicable Laws, including export, import and
foreign controls, the Foreign Corrupt Practices Act, the U.S. Export
Administration Act, and requirements of the FCC (including RF human exposure
emission requirements and harmful interference standards), EPA, and OSHA, all as
may be amended from time to time. If Contractor is charged with the failure to
comply with any of such laws, Contractor shall promptly notify Customer of such
charges in writing.
17.9 Warranty Disclaimer.
EXCEPT AS SPECIFICALLY SET FORTH IN THIS CONTRACT, NEITHER PARTY MAKES ANY
OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY WARRANTY OF
INTELLECTUAL PROPERTY NON-INFRINGEMENT.
17.10 Warranty Period.
(a) Subject to Article 17.11 (Remedies (Repeaters)) and Article 17.12
(Remedies (Network Management System)), Contractor shall be liable to Customer
for a breach of the warranties set forth in Article 17.2 (Design and Performance
Warranties) only if written notice of such alleged breach is given to Contractor
prior to the expiration of the [*****] period following the Project Completion
Date (the "Warranty Period").
(b) Upon Customer's written notice given to Contractor at least thirty
(30) Calendar Days prior to the expiration of the applicable Warranty Period for
each Repeater, Customer may elect to extend the Warranty Period for each
Repeater for an additional [*****] period, subject to payment by Customer of the
charges for such optional extended coverage as set forth in Exhibit C (Pricing,
Milestones and Payment Plan). In the event Customer notifies Contractor of its
interest in purchasing from Contractor additional extended warranty coverage for
any period following the expiration of the [*****] optional warranty coverage
period specified in the preceding sentence, Contractor shall propose, in writing
within thirty (30) Calendar Days following the date of Customer's notice, a
price for such extended warranty coverage, such price to take into account the
actual annual failure rates in the deployed Repeaters experienced prior to
Customer's request for additional extended warranty coverage.
Terms and Conditions Page 59
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
CONFIDENTIAL
17.11 Remedies (Repeaters).
(a) In the event a Repeater requires maintenance or repair, Customer, or
its designee(s), shall perform such maintenance or repair.
(b) Customer, or its designee(s), shall maintain, at the Regional
Inventory Storage Facilities, an inventory of the Lowest Replaceable Units with
respect to Repeaters, such inventory to be utilized by Customer, or its
designee(s), to maintain or repair Repeaters. Customer, or its designee(s),
shall be responsible, at Customer's expense, for returning to Contractor, in a
reasonably prompt manner, any defective LRU, provided that Contractor, at
Contractor's expense, shall provide Customer with all necessary and appropriate
packing and crating materials. In the event Contractor tests the returned LRU
and is able to demonstrate, to Customer's reasonable satisfaction, that the
returned LRU is in good working order in accordance with its specifications (or,
"no trouble found" ("NTF")), Customer shall pay Contractor the amount of [*****]
for each returned LRU demonstrated to be NTF and shall reimburse Contractor for
the actual costs incurred by Contractor with respect to the round-trip shipment
of the LRU, as established by supporting shipping invoices.
(c) During the Warranty Period for each Repeater (as such period may be
extended), Contractor shall provide the following items or perform the following
services at no additional charge to Customer:
(1) Training in accordance with Exhibit B (Statement of Work);
(2) Subject to paragraph (d) below, an initial written inventory plan
for inventories of replacement LRUs to be maintained by Customer,
or its designee(s), pursuant to paragraph (b) above. Contractor
shall propose such inventory plan to Customer on or before the
ninetieth (90th) Calendar Day following EDC, and shall reasonably
consider incorporating Customer's reasonable comments thereto.
In no event shall Contractor's proposed inventory plan provide
for a sparing level that is less than the preliminary sparing
level set forth in Exhibit B (Statement of Work). Such plan
shall specify the total number of LRUs to be maintained in
Customer's inventory of spare LRUs, which Customer shall
reasonably allocate among each of its Regional Inventory Storage
Facilities. The total sparing level proposed by Contractor shall
be sufficient so that appropriate LRUs are immediately available
to Customer, or its designee, as they perform maintenance and
repair on the Repeaters. Such inventory plan shall also specify
the environmental and maintenance requirements for the proper
storage of such LRUs;
(3) Replacement LRUs as may be actually required by Customer to
repair defective Repeaters, even if the number of LRUs provided
by Contractor exceeds the sparing levels indicated in the
inventory plan;
(4) Re-stock of the LRU inventory on an as-needed basis to maintain
the sparing levels indicated in the inventory plan, as it may be
updated from time to time;
CONFIDENTIAL
(5) On-going consultation services and advice to Customer, or its
designee(s), on the proper methods of performing maintenance and
repair functions for the Repeaters, including telephonic trouble-
shooting of defective units and, if necessary, on-site diagnostic and
remedial services;
(6) Repair or disposal of a defective LRU returned to Contractor by
Customer or its designee(s). If Contractor repairs the returned LRU
such that the LRU performs in accordance with its applicable technical
specifications, Contractor may use such repaired LRU for inventory re-
stocking purposes; and
(7) Replacement of Repeaters, if it is reasonably determined by Customer,
or its designee(s), after consultation with Contractor, that repair of
a Repeater cannot be accomplished using the LRUs or other components
or parts available at the Regional Inventory Storage Facility. In such
event, Customer may, at its option:
(i) require Contractor to ship a replacement Repeater, at its
expense, within twenty-four (24) hours after receipt of
notice of such determination so that the replacement
Repeater shall arrive at the interior of its designated
place of installation as soon as commercially practicable,
but in no event later than fourteen (14) Calendar Days
after the date of Customer's notice to Contractor; or
(ii) require Contractor to ship a replacement Repeater within
twenty-four (24) hours after receipt of notice of such
determination and use air shipment for delivery of such
replacement Repeater so that the replacement Repeater is
received by Customer as soon as commercially possible,
provided that Customer shall reimburse Contractor for the
incremental difference in the shipping charges incurred by
Contractor for air shipment over Contractor's reasonable
expenses for surface delivery; or
(iii) assemble a complete Repeater using the LRU's in stock at
Customer's Regional Inventory Storage Facilities. Customer,
or its designee, shall install the replacement Repeater and
arrange for the return of the replaced Repeater to
Contractor, subject to reimbursement by Contractor to
Customer for the costs of shipping (including packing,
crating, shipping, transportation and insurance).
(d) Following implementation of the inventory plan specified in paragraph
(c)(2) above, Customer may, from time to time, propose changes to the inventory
plan, provided such changes are based upon the actual failure rates experienced
with respect to Repeaters or LRUs. Contractor shall revise the inventory plan
to incorporate and accommodate Customer's proposed reasonable changes and shall
promptly implement the revised inventory plan. Similarly, following Customer's
initial allocation of spare LRUs among the Regional Inventory Storage
Facilities, Contractor may, from time to time, propose changes to the manner in
which Customer
Terms and Conditions Page 61
CONFIDENTIAL
allocates such spare LRUs, provided such proposed changes are based upon actual
LRU replacement requirements experienced with respect to the Repeaters. Customer
shall revise the method of allocating spare LRUs among the Regional Inventory
Storage Facilities to incorporate Contractor's proposed reasonable changes and
shall promptly implement the revised allocation scheme.
(e) Customer may, in addition to the remedies provided by Contractor
hereunder and at no additional charge to Customer,
(1) seek recourse pursuant to such other warranties as may be
provided by the original equipment manufacturers (O.E.M.),
Subcontractors, or other warranties on any materials or equipment
furnished by Contractor, all in accordance with the respective
terms of such warranties; and
(2) request Contractor and/or its Subcontractors to provide, and
Contractor shall provide, reasonable on-site support at
Customer's facilities or other system-related sites as necessary
to complete the Work ("Field Support"), including to assist
Customer in the identification and remediation of significant
systems engineering problems relating to the Work and with
respect to installed Repeaters.
17.12 Remedies (Network Management System).
Contractor shall maintain, repair or replace the Network Management System
during the Warranty Period so that the Network Management System shall at all
times be fully operational in accordance with all applicable specifications and
warranties and available for use by Customer at all times. If circumstances
arise where Contractor is unable to maintain or repair the NMS, or any part or
portion thereof, so that it operates in accordance with the above standard,
Contractor shall replace such item at Contractor's expense. Subject to Article
14 (Intellectual Property Rights), Customer shall own any such replacement item.
For purposes hereof, Contractor shall be deemed to be unable to maintain or
repair the NMS, or any part or portion thereof, if it fails more than three (3)
times during any three (3) consecutive month period during the Warranty Period.
17.13 Pattern Defect.
(a) In addition to the other warranties and remedies set forth herein, in the
event that any LRU is determined to have a Pattern Defect during the applicable
Warranty Period, as may be extended, Contractor will promptly modify the design,
material and/or manufacturing process such that the Pattern Defect is eliminated
and deliver, at its expenses (including packing, crating, transportation,
shipping and insurance) replacements for all affected LRUs to eliminate such
Pattern Defect. During the period that any LRU is determined to have a Pattern
Defect, Contractor shall regularly advise Customer of the status of remedial
efforts being undertaken with respect to such problem. A "Pattern Defect" will
be determined to exist in any LRU when three percent (3%) or more of the total
number of Repeaters purchased hereunder experience failures with respect to such
LRUs within any rolling three (3) month period, due to the same Defect in
design, material or manufacturing process carried out by Contractor or its
Subcontractors
Terms and Conditions Page 62
CONFIDENTIAL
(b) Customer, or its designee, at Customer's expense, shall install the
replacement LRU and shall pack and crate for return to Contractor the replaced
LRU, provided that Contractor, at Contractor's expense, shall provide Customer
with all necessary and appropriate packing and crating materials.
Terms and Conditions Page 63
CONFIDENTIAL
18. CONTRACTOR'S ADDITIONAL REPRESENTATIONS AND WARRANTIES
(a) Contractor additionally represents and warrants:
(1) Contractor is a corporation duly organized, validly existing and
in good standing under the Laws of Delaware;
(2) it has all requisite power and authority to own and operate its
material properties and assets and to carry on its respective
business as now conducted in all material respects;
(3) it is duly qualified to transact business and is in good standing
in each jurisdiction in which the failure to so qualify would
have a Material Adverse Effect;
(4) it is, or at the time of performance of the Work will be, fully
licensed and authorized to perform the Work in each jurisdiction
in which the Work is to be performed;
(5) it has all requisite corporate power and authority to enter into
this Contract and to carry out the transactions contemplated by
this Contract;
(6) the execution, delivery, and performance of this Contract and the
consummation of the transactions contemplated by this Contract
have been duly authorized by all requisite corporate action of
Contractor;
(7) this Contract is a valid and binding obligation of Contractor,
enforceable in accordance with its terms, except Contractor makes
no representation or warranty as to the enforceability of
remedies due to applicable bankruptcy, insolvency, moratorium,
reorganization, or similar laws relating to or affecting the
enforcement of creditor's rights or by reason of general
principles of equity;
(8) in the event Contractor becomes a party to any legal,
administrative, arbitral, investigatory or other proceeding or
controversy pending or, to the best of its knowledge, threatened,
which reasonably would be expected to have a Material Adverse
Effect, Contractor will notify Customer as soon as practicable;
and
(9) it is not subject to any contractual or other obligation that
would prevent it from entering into this relationship and the
execution and delivery of this Contract by Contractor and the
performance by Contractor of its obligations hereunder will not
result in or constitute a breach or violation of, or a default
under, any provision of any lease, license, contract, agreement
or any other document to which it is a party or by which it is
bound.
Terms and Conditions Page 64
CONFIDENTIAL
(b) Contractor represents that it is not a party to any legal,
administrative, arbitral, investigatory or other proceeding or controversy
pending or, to the best of its knowledge, threatened, which reasonably would be
expected to have a Material Adverse Effect.
Terms and Conditions Page 65
CONFIDENTIAL
19. CUSTOMER'S REPRESENTATIONS AND WARRANTIES
(a) Customer represents and warrants:
(1) it is duly organized, validly existing and in good standing under
the Laws of the State of Delaware;
(2) it has all requisite power and authority to own and operate its
material properties and assets and to carry on its respective
business as now conducted in all material respects;
(3) it is duly qualified to transact business and is in good standing
in each jurisdiction in which the failure to so qualify would
have a Material Adverse Effect;
(4) it has all requisite corporate power and authority to enter into
this Contract and to carry out the transactions contemplated by
this Contract;
(5) the execution, delivery, and performance of this Contract and the
consummation of the transactions contemplated by this Contract
have been duly authorized by the requisite corporate action of
Customer and do not conflict with any other agreement or
obligation to which it is a party or which binds its assets;
(6) this Contract is a valid and binding obligation of Customer,
enforceable in accordance with its terms, except Customer makes
no representation or warranty as to the enforceability of
remedies due to applicable bankruptcy, insolvency, moratorium,
reorganization, or similar laws relating to or affecting the
enforcement of creditor's rights or by reason of general
principles of equity; and
(7) in the event Customer becomes a party to any legal,
administrative, arbitral, investigatory or other proceeding or
controversy pending, or to the best of its knowledge threatened,
which reasonably would be expected to have a Material Adverse
Effect, Customer will notify Contractor as soon as practicable.
(b) Customer represents that as of the Effective Date, except as otherwise
set forth in the filing of the Registration Statement on Form S-1 by XM
Satellite Radio Inc. with the U.S. Securities and Exchange Commission on July
23, 1999, Registration No. 333-38619, Customer is not a party to any legal,
administrative, arbitral, investigatory or other proceeding or controversy
pending or, to the best of its knowledge, threatened, which reasonably would be
expected to have a Material Adverse Effect.
Terms and Conditions Page 66
CONFIDENTIAL
20. INSURANCE
20.1 General.
(a) Contractor shall purchase and maintain primary insurance coverage from
a company or companies licensed to do business in each state in which the Work
shall be performed and such company or companies shall carry at least an A.M.
Best's rating of A-/VIII; provided, however, Contractor's insurer, Lloyds of
London, shall be deemed to meet the foregoing standard notwithstanding that
Lloyds of London may not be so rated in each state in which the Work may be
performed. Such insurance shall protect Contractor from claims set forth below
that may arise out of or result from Contractor's operations under the Contract,
whether due to sole or passive negligence or arising from a Subcontractor or by
anyone directly or indirectly employed by any of them or by anyone for whose
acts any of them are liable:
(1) claims for damages because of bodily injury, occupational
sickness or disease, or death of its employees arising under
workers' or workmen's compensation, disability benefit and/or
other employee benefit acts;
(2) claims for damages because of bodily injury, sickness or disease,
or death of any persons other than its employees;
(3) claims for damages insured by usual personal injury liability
coverage;
(4) claims for damages, other than to the Work itself, because of
injury to or destruction of tangible property, including loss of
use resulting therefrom; and
(5) claims for damages because of bodily injury or death of any
person or property damage arising out of the ownership,
maintenance or use of any motor vehicle.
(b) Compliance by Contractor with the foregoing insurance requirements
shall not limit Contractor's liability or relieve it of liability under this
Contract or any Law.
20.2 Specific Insurance Requirements.
The insurance required by this Article 20 (Insurance) shall be written for
not less than the limits of liability specified in this Contract, or required by
Law, whichever is greater. Before commencement of the Work and until the last
payment made hereunder (except that product liability coverage shall continue in
force until two years after the date of the last payment made hereunder),
Contractor shall procure, deposit, and maintain for Customer's benefit,
insurance satisfactory to Customer, as set forth in this Article 20.2 (Specific
Insurance Requirements).
(a) Worker's Compensation as required by the Worker's Compensation Laws of
the state(s) in which the Work is performed and Employer's Liability Insurance
in an amount not less than $100,000/$500,000/$500,000 each accident, bodily
injury by accident/policy limit, bodily injury by disease/each employee, bodily
injury by disease.
Terms and Conditions Page 67
CONFIDENTIAL
(b) Commercial General Liability Insurance, including products liability
insurance, covering Bodily Injury, Personal Injury, Property Damage, and
Advertising Injury, as follows:
(1) Minimum Limits: Such insurance shall be written for a combined
single limit not less than the following:
General aggregate per project $2,000,000
Products-Completed Operations Aggregate $2,000,000
Personal & Advertising Injury $1,000,000
Each occurrence $1,000,000
(2) This insurance shall be written on an occurrence basis and on a
coverage form at least equal to that provided under ISO CG 00 01,
latest available edition, without overly restricting endorsements
that reduce coverage.
(c) Automobile Liability Insurance covering Bodily Injury and Property
Damage as follows:
(1) Minimum Limits: The Combined Single Limit for Bodily Injury and
Property Damage shall be not less than $1,000,000 per accident.
(2) This insurance shall be written on a coverage form at least equal
to that provided under ISO CA 00 01, latest available edition,
without restricting endorsements that reduce coverage and shall
cover all owned, operated and hired vehicles of Contractor and
non-ownership protection for all employees of Contractor engaged
in the performance of this Contract.
(d) Excess Liability Insurance, written on an occurrence basis, in the
amount of not less than a combined single limit for Bodily Injury and Property
Damage and Personal and Advertising Injury of $25,000,000 per occurrence or each
offense/$25,000,000 in the aggregate following the form and amounts of the
primary insurance described in paragraphs (a), (b) and (c) of this Article 20.2
(Specific Insurance Requirements).
(e) Contractor shall procure cargo/transit insurance adequate to cover the
value of the Work. Contractor shall assume the risk of goods in transit. Such
coverage shall be written on an "all risk" basis.
(f) All insurance maintained by Contractor shall provide:
(1) A Certificate of Insurance signed by the insurance broker stating
the limits of liability and coverage effective dates shall be
filed in triplicate with Customer before operations are begun.
Such certificates not only shall name the types of policies
provided, but also shall refer specifically to this Contract and
Article. If the initial insurance expires prior to completion of
the Work, renewal certificates shall be furnished by the date of
expiration.
(2) Customer, its Affiliates and Associates shall be included in the
Commercial General Liability and Excess Liability policies as
"additional insureds" with
Terms and Conditions Page 68
CONFIDENTIAL
the understanding that the liability
to pay premiums shall be the sole obligation of Contractor and
not that of any other insured.
(3) Except in the case of Worker's Compensation Insurance, proceeds
for first party losses, if any, shall be adjusted by and payable
to the party purchasing the insurance, except property insurance
purchased by Contractor for the benefit of Contractor,
Subcontractors and Customer, which shall be adjusted with and
payable to Contractor, Subcontractors and Customer, as their
interest may appear.
(4) The insurer thereunder waives all rights of subrogation against
Customer, its Affiliates and Associates, as well as any rights of
setoff and counterclaim and any other right to deduction whether
by attachment or otherwise.
(5) Such insurance shall be primary without any right of contribution
of any other insurance carried by or on behalf of Customer, its
Affiliates and Associates.
(g) Contractor shall require each of its Subcontractors to procure and
maintain, until the completion of that Subcontractor's work, adequate insurance
in a form similar to the above.
20.3 Certificates of Insurance.
Certificates of Insurance in the "XXXXX" form shall be provided to Customer
on or before the Execution Date plus ten (10) Business Days; provided, however,
the words "endeavor to" must be deleted from the cancellation section of the
form. These Certificates, as well as insurance policies required by this
Article 20 (Insurance), shall contain a provision that coverage shall not be
canceled or allowed to expire until at least ninety (90) Calendar Days' prior
written notice has been given to Customer; provided, however, ten (10) Calendar
Days notice is permitted if the insurance is cancelled for non-payment reasons.
Such Certificates shall also indicate that the Commercial General Liability and
Excess Liability insurance policies have been endorsed to name Customer, its
Affiliates and Associates as additional insureds as respects work performed by
Contractor on their behalf.
Terms and Conditions Page 69
CONFIDENTIAL
21. INDEMNIFICATION
21.1 Indemnity by Contractor.
Subject to Article 21.4 (Indemnification Procedures), Contractor shall
indemnify, defend and hold harmless Customer and its Affiliates and their
respective Associates, from any and all Losses arising from, in connection with,
or based on allegations of, any of the following:
(a) any claims made by third parties for injury to person (including death)
or loss or damage to tangible property arising out of any error, omission or
negligent act of Contractor or its Subcontractors; and
(b) any claims arising out of or related to occurrences Contractor is
required to insure against pursuant to Article 20 (Insurance).
21.2 Indemnity by Customer.
Subject to Article 21.4 (Indemnification Procedures), Customer shall
indemnify, defend and hold harmless Contractor and its Affiliates and their
respective Associates, from any and all Losses arising from, in connection with,
or based on allegations of any of the following:
(a) any claims made by third parties for injury to person (including death)
or loss or damage to tangible property arising out of any error, omission or
negligent act of Customer; and
(b) any third-party allegations of infringement of any Intellectual
Property Right, alleged to have occurred because of systems, designs,
instructions, specifications or other resources provided by Customer directly or
indirectly to Contractor for incorporation into the Repeaters, Network
Management System or other deliverables; provided, however, Customer's total
liability to Contractor or any third party with respect to such indemnity shall
not, in the aggregate, exceed Seven Million, Five Hundred Thousand Dollars
($7,500,000).
21.3 Intellectual Property Infringement Indemnification.
(a) Contractor shall indemnify, defend, and hold harmless Customer from any
and all Losses arising from, in connection with, or based on any allegations
made by third parties (including Subcontractors of Contractor) that Customer's
possession or use of the Work, or any part thereof, infringes any third-party
Intellectual Property Right; provided, however, (i) Contractor's total liability
to Customer or any third party with respect to such intellectual property
infringement indemnity shall not exceed (A) Seven Million, Five Hundred Thousand
Dollars ($7,500,000) with respect to claims related to Work performed by
Contractor or any of its Subcontractors (except Unique Broadband Systems)
hereunder and (B) One Million Dollars ($1,000,000) with respect to claims
related to Work performed by Contractor's Material Subcontractor Unique
Broadband Systems under this Contract, and (ii) Contractor's total aggregate
liability under (i) shall not exceed Seven Million, Five Hundred Thousand
Dollars ($7,500,000). Notwithstanding the foregoing, Contractor shall not be
liable under this paragraph (a) to the extent Losses are caused by (i) the
contributory infringement by Customer as described in paragraph (b) of Article
21.2 (Indemnity by Customer) or are based on claims related to work or
deliverable items furnished by Unique Broadband Systems pursuant to the Interim
Services Agreement with Customer, dated August 9, 1999; or (ii) modifications to
the Work by any
Terms and Conditions Page 70
CONFIDENTIAL
person other than Contractor or its Subcontractors unless otherwise directed by
Contractor or its Subcontractors; or (iii) Customer's use of the Work in
combination with items not provided by Contractor or its Subcontractors unless
such non-deliverables are identified in Exhibit A (Design Specifications) as
items with which the deliverables hereunder will be used in combination.
(b) If the use of the Work or any part thereof is enjoined, Contractor
shall, or, if in Contractor's reasonable opinion the Work or any part thereof is
likely to be enjoined, Contractor may, in either case at its expense, either
procure for Customer the right to use the Work or infringing part thereof, as
the case may be, or substitute an equivalent product reasonably acceptable to
Customer, or modify the Work or infringing part thereof to render them non-
infringing without materially affecting their utility or functionality. If
Contractor determines that none of these alternatives is reasonably available or
feasible, Contractor shall meet with Customer to address the matter and reach an
equitable solution reasonably acceptable to Customer.
(c) Contractor's obligations under this Article 21.3 (Intellectual
Property Infringement Indemnification) shall be subject to Article 21.4
(Indemnification Procedures).
21.4 Indemnification Procedures.
(a) Promptly after receipt by the indemnified Party 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 the
indemnified Party will seek indemnification pursuant to this Article 21
(Indemnification), the indemnified Party shall notify the indemnifying Party of
such claim in writing. Failure to so notify the indemnifying Party shall not
relieve the indemnifying Party of its obligations under this Contract except to
the extent it can demonstrate it was prejudiced by such failure. Within fifteen
(15) Calendar Days following receipt of written notice from the indemnified
Party 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, the indemnifying
Party shall notify the indemnified Party in writing if the indemnifying Party
elects to assume control of the defense or settlement of that claim (a "Notice
of Election").
(b) If the indemnifying Party delivers a Notice of Election relating to
any claim within the required notice period, so long as it is actively defending
such claim, the indemnifying Party shall be entitled to have sole control over
the defense and settlement of such claim; provided that (i) the indemnified
Party 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; (ii)
where the indemnified Party is so represented, the indemnifying Party shall keep
the indemnified Party 's counsel informed of each step in the handling of any
such claim; (iii) the indemnified Party shall provide, at the indemnifying
Party's request and expense, such assistance and information as is available to
the indemnified Party for the defense and settlement of such claim; and (iv) the
indemnifying Party shall obtain the prior written approval of the indemnified
Party before entering into any settlement of such claim or ceasing to defend
against such claim. After the indemnifying Party has delivered a Notice of
Election relating to any claim in accordance with the preceding paragraph, the
indemnifying Party shall not be liable to the indemnified Party for any legal
expenses incurred by the indemnified Party in connection with the defense of
that claim; provided, however, the indemnifying Party shall be liable to the
indemnified Party for
Terms and Conditions Page 71
CONFIDENTIAL
such legal expenses if the indemnified Party chooses to participate in the
defense and settlement of such claim because the indemnified Party reasonably
concluded that the indemnifying Party had a conflict of interest and could not
adequately represent the indemnified Party. In addition, the indemnifying Party
shall not be required to indemnify the indemnified Party for any amount paid or
payable by the indemnified Party in the settlement of any claim for which the
indemnifying Party has delivered a timely Notice of Election if such amount was
agreed to without the prior written consent of the indemnifying Party.
(c) If the indemnifying Party does not deliver a Notice of Election
relating to any claim within the required notice period or fails actively to
defend such claim, the indemnified Party shall have the right to defend and/or
settle the claim in such manner as it may deem appropriate, at the cost and
expense of the indemnifying Party. Provided that the indemnified Party acts in
good faith, it may settle such claim on any terms it considers appropriate under
the circumstances without in any way affecting its right to be indemnified
hereunder. The indemnifying Party shall promptly reimburse the indemnified Party
for all such costs and expenses.
21.5 Waiver of Subrogation.
If a Party insures against any loss or damage it may suffer in respect of
which it is required to indemnify the other Party, its Affiliates and their
respective Associates pursuant to this Article 21 (Indemnification), it shall be
a condition that the insuring Party arrange for the insurer to waive its right
of subrogation against such other Party and such other Party's Affiliates and
their respective Associates. Each Party shall be entitled to require proof from
time to time that the other Party has complied with its obligations under this
Article 215 (Waiver of Subrogation). In the event a Party does not comply with
such obligations, the indemnities referred to in Articles 21.1 (Indemnity by
Contractor), 21.2 (Indemnity by Customer) and 21.3 (Intellectual Property
Infringement Indemnification) shall extend to any claim that may be made by an
insurer pursuant to an alleged right of subrogation.
Terms and Conditions Page 72
CONFIDENTIAL
22. LIABILITY
22.1 General Intent.
Subject to the specific provisions of this Article 22 (Liability), 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 Contract.
22.2 Liability Restrictions.
(a) SUBJECT TO PARAGRAPH (c) BELOW, IN NO EVENT, SHALL A PARTY BE LIABLE IN
CONTRACT, WARRANTY, STRICT LIABILITY, TORT OR OTHERWISE FOR INDIRECT,
CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES ARISING OUT OF, RESULTING
FROM , OR IN ANY WAY CONNECTED TO THE PERFORMANCE OR BREACH OF THIS CONTRACT,
EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES IN
ADVANCE.
(b) SUBJECT TO PARAGRAPH (c) BELOW, EACH PARTY'S TOTAL CUMULATIVE LIABILITY
TO THE OTHER PARTY HEREUNDER, WHETHER IN CONTRACT, WARRANTY, STRICT LIABILITY,
TORT OR OTHERWISE, SHALL BE LIMITED TO AN AMOUNT EQUAL TO TEN MILLION DOLLARS
($10,000,000).
(c) The limitations set forth in paragraphs (a) and (b) above shall not
apply with respect to claims that are the subject of indemnification pursuant to
Articles 21.1(a), 21.1(b) and 21.2(a). In addition, the limitations set forth in
paragraph (b) above shall not apply with respect to the Parties' respective
liabilities specified in Article 25 (Termination). In addition, the limitations
set forth in paragraph (a) above shall not apply to the liquidated damages
remedy set forth in Article 7.5 (Liquidated Damages for Late Delivery of
Repeaters).
(d) Each Party shall have a duty to mitigate damages for which the other
Party is responsible.
22.3 Contractor Responsibility for Certain Claims.
(a) In the event any Subcontractor asserts a claim of non-payment against
Customer, Contractor shall assume full responsibility for such claims and shall
reimburse Customer for any settlements or judgments incurred by or assessed
against Customer with respect to such claims and all related costs and expenses
(including reasonable legal fees and disbursements), provided that Contractor is
(i) given prompt notice of such claims (provided that failure to so notify
Contractor shall not relieve Contractor of its responsibilities hereunder except
to the extent it can demonstrate it was prejudiced by such failure) and (ii)
permitted (but without obligation) to control the defense of such claims.
(b) With respect to any claims made by third parties arising out of
Contractor's breach of the warranties set forth in Article 17.8 (Compliance with
Applicable Law) and any claims by Customer or any third party with respect to a
breach of the warranties and representations set
Terms and Conditions Page 73
CONFIDENTIAL
forth in Article 18 (Contractor's Additional Representations and Warranties),
Contractor shall assume full responsibility for such claims and shall reimburse
Customer for any settlements or judgments incurred by or assessed against
Customer with respect to such claims and all related costs and expenses
(including reasonable legal fees and disbursements), provided that Contractor is
(i) given prompt notice of such claims ((provided that failure to so notify
Contractor shall not relieve Contractor of its responsibilities hereunder except
to the extent it can demonstrate it was prejudiced by such failure) and (ii)
permitted (but without obligation) to control the defense of such claims.
(c) Notwithstanding anything to the contrary herein, any liability arising
pursuant to paragraphs (a) or (b) above shall not be subject to the limitation
on Contractor's liability set forth in Article 22.2(b) hereof.
Terms and Conditions Page 74
CONFIDENTIAL
23. DISPUTE RESOLUTION
Any dispute, claim, or controversy between the Parties arising out of or
relating to this Contract ("Dispute"), including any Dispute with respect to the
interpretation, performance, termination, or breach of this Contract or any
provision thereof shall be resolved as provided in this Article 23 (Dispute
Resolution).
23.1 Informal Dispute Resolution.
Prior to the initiation of formal dispute resolution procedures, the
Parties shall first attempt to resolve their Dispute informally, in a timely and
cost-effective manner, as follows:
(a) If, during the course of the Work, a Party believes it has a Dispute
with the other Party, the disputing Party shall give written notice thereof,
which notice will describe the Dispute and may recommend corrective action to be
taken by the other Party. Contractor's Project Manager shall promptly consult
with Customer's Project Manager in an effort to reach an agreement to resolve
the Dispute.
(b) In the event agreement cannot be reached within five (5) Calendar Days
of receipt of written notice, either Party may request the Dispute be escalated,
and the respective positions of the Parties shall be forwarded to an executive
level higher than that under paragraph (a) above for resolution of the Dispute,
which in the case of Contractor, shall be the Contractor Business Line Manager
identified in Article 9.1 (Contractor Personnel) above.
(c) In the event agreement cannot be reached under paragraphs (a) or (b)
above within a total of ten (10) Calendar Days after receipt of the written
notice described in paragraph (a) above, either Party may request the Dispute be
escalated, and the respective positions of the Parties shall be forwarded to the
Chief Executive Officer (CEO) of each Party, and such executives shall meet (in
person or via telephone or video conference) during such time to resolve the
Dispute.
(d) In the event agreement cannot be reached under paragraphs (a), (b) or
(c) above within a total of twenty (20) Calendar Days after receipt of the
written notice described in paragraph (a) above, either Party may proceed with
arbitration in accordance with Article 232 (Arbitration).
23.2 Arbitration.
(a) Subject to the provisions of Article 23.1 (Informal Dispute Resolution)
and Article 23.3 (Litigation), any Dispute shall be resolved by mandatory and
binding arbitration in accordance with the then-effective Center for Public
Resources Rules for Nonadministered Arbitration of Business Disputes, as may be
amended from time to time (the "CPR Rules"), which are incorporated herein by
reference. Notwithstanding the foregoing, to the extent any provision of this
Article 23.2 (Arbitration) modifies, adds to, or is inconsistent with any
provision of the CPR Rules, the provisions of this Article shall control.
Terms and Conditions Page 75
CONFIDENTIAL
(b) The arbitration shall be conducted by a three-arbitrator tribunal (the
"Tribunal"). Within thirty (30) Calendar Days after the commencement of the
arbitration, each Party shall appoint one arbitrator, and those two arbitrators
shall together appoint the third arbitrator as provided in CPR Rule 5.2. Each
arbitrator appointed by the Parties shall be knowledgeable and experienced in
contracting for technical systems and shall have senior management and/or
legal/judicial experience.
(c) Unless otherwise limited by the Tribunal or the agreement of the
Parties, the Parties shall be permitted to take discovery, if and as needed, by
deposition upon oral examination, requests for production of documents and
things, and requests for entry upon land for inspection and other purposes, as
those discovery methods are described and defined in the Federal Rules of Civil
Procedure; provided, however, that any limitations in the Federal Rules on the
number, timing, or sequence of such discovery requests shall not apply. The
scope of permissible discovery shall generally be as described in Federal Rule
of Civil Procedure Rule 26(b)(1), but the Parties shall use their best efforts
to focus and limit their discovery in accordance with the nature of the dispute
and the need for expedited resolution. The Tribunal may expand or limit the
scope of permissible discovery, establish the time period within which discovery
responses must be served, and expand or limit the type and number of discovery
methods and requests as it shall determine is appropriate in the circumstances,
taking into account the needs of the Parties and the desirability of making
discovery expeditious and cost-effective. The Tribunal may issue orders to
protect the confidentiality of proprietary information, trade secrets, and other
similar information disclosed in discovery and may order that discovery not be
had or that discovery may be had only on specific terms and conditions.
(d) Time is of the essence in the initiation and completion of the
arbitration. The arbitral hearing shall be commenced and conducted
expeditiously. Unless the Tribunal orders otherwise, the Dispute should be
submitted to the Tribunal for decision within three (3) months after the
commencement of the arbitration, and the final award shall be rendered within
one (1) month thereafter. The Parties and the Tribunal shall use their best
efforts to comply with this schedule, and the Tribunal may impose any remedy it
deems just for any Party's effort to unnecessarily delay, complicate or hinder
the proceedings.
(e) The arbitration shall be held in Washington, D.C., USA.
(f) Any arbitration proceeding held pursuant to this Article shall be
governed by the United States Arbitration Act, 9 U.S.C. (S)(S) 1 et seq., and
judgment upon the award rendered by the Tribunal may be entered in any court
having jurisdiction thereof.
(g) The Tribunal's award may grant any remedy or relief that the Tribunal
deems just and equitable and within the scope of this Contract, including
specific performance or other equitable relief. Notwithstanding the foregoing,
the Tribunal shall have no power or authority to amend or disregard any
provision of this Article 23.2 (Arbitration) or any other provision of this
Contract; in particular, but without limiting the generality of the foregoing,
the Tribunal shall not have the power or authority to exclude the right of a
Party to terminate this Contract when a Party would otherwise have such right.
The Tribunal also shall have no power or authority to award punitive or
exemplary damages to any Party.
Terms and Conditions Page 76
CONFIDENTIAL
(h) The non-prevailing Party, as determined by the Tribunal, shall pay the
costs of the arbitration and the prevailing Party's fees and expenses incurred
with respect to the arbitration, including reasonable attorneys' fees as
determined by the Tribunal. In the event of an arbitration involving multiple
claims with different Parties prevailing on each claim, the Tribunal shall
apportion the expenses and fees between or among the Parties in such manner as
it deems reasonable, taking into account the circumstances of the case, the
nature of the claims, and the result of the arbitration.
(i) At any time more than ten (10) Calendar Days before the commencement
of the hearing, any Party defending against any claim may serve upon the adverse
Party an offer to allow an award to be entered against the defending Party on
any claim for the money or property or to the effect specified in the offer. If
within ten (10) Calendar Days after the service of the offer, the adverse Party
serves written notice that it accepts the offer, either Party may file the offer
and acceptance with the Tribunal, which will thereupon promptly enter an award
on the claim as provided in the offer. An offer not accepted shall be deemed
withdrawn and shall not be admissible into evidence except with respect to a
determination of fees and expenses. If the award finally made on the claim is
not equal to or more favorable than the offer, then for the purpose of
apportioning expenses and fees pursuant to this Article 23.2 (Arbitration), the
Party making the offer shall be deemed the Prevailing Party with respect to such
claim.
(j) If at the time any Dispute arises, the Center for Public Resources no
longer provides rules or services with respect to the arbitration of business
disputes, then the Parties hereto agree that the arbitration shall be conducted
before the American Arbitration Association ("AAA"). Such arbitration shall be
conducted pursuant to the AAA's Commercial Arbitration Rules then effective,
provided, however, that in the event of any inconsistency with the AAA rules and
this Article, the provisions of this Article shall control.
23.3 Litigation.
(a) Notwithstanding the provisions of Article 23.1 (Informal Dispute
Resolution) and Article 23.2 (Arbitration) above, if the Dispute requires that
immediate equitable relief or relief in aid of arbitration be obtained, either
Party shall have the right to bring suit at any time to obtain preliminary or
temporary injunctive relief, including specific performance, but requests for
permanent injunctive relief shall be arbitrated pursuant to Article 23.2
(Arbitration).
(1) Any such suit shall be brought in a court of competent
jurisdiction in the State of Delaware and the Parties hereby
waive any objection to venue in such court. The Parties hereby
irrevocably consent to personal jurisdiction in the state and
federal courts in the State of Delaware concerning any Dispute
between the Parties. If, for any reason, the state and federal
courts of Delaware do not have or refuse to exercise jurisdiction
over the Dispute, then litigation as permitted herein may be
brought in any court of competent jurisdiction in the United
States of America, or if there is no such court, in any other
nation.
(2) In the event a Party files a lawsuit pursuant to this Article
23.3 (Litigation), the Prevailing Party is entitled to an award
of its costs and fees, including
Terms and Conditions Page 77
CONFIDENTIAL
reasonable attorney's fees, incurred with respect to the lawsuit.
The defendant in such litigation shall be regarded as the
Prevailing Party if either the court denies the equitable relief
sought on the merits or the court otherwise decides that
equitable relief is not warranted or the matter should be
resolved by arbitration.
(b) In the event an entity or person not subject to the provisions of this
Article 23 (Dispute Resolution) commences any litigation or proceeding against
any Party hereto in which the other Party hereto is an indispensable party, the
Party against which the litigation or proceeding is brought may join or attempt
to join the other Party in such litigation or proceeding notwithstanding the
provisions of Article 23.2 (Arbitration). For the purposes of this provision,
the other Party is an indispensable party in the lawsuit or proceeding if (i) in
its absence, complete relief could not be accorded among those already a party
to the lawsuit or proceeding; (ii) its absence may as a practical matter impair
or impede its ability to protect its interests relating to the subject of the
lawsuit or proceeding; or (iii) its absence may leave the Party against which
the litigation or proceeding is brought subject to a substantial risk of
incurring double, multiple, or otherwise inconsistent obligations by reason of
the interest of the other Party relating to the subject of the lawsuit or
proceeding.
(c) Nothing in this Contract precludes a Party prevailing on any claim,
whether in arbitration or litigation, from initiating litigation in any
appropriate forum to enter or enforce a judgment based on the Tribunal's or
court's award on that claim.
23.4 Continued Performance.
Pending final resolution of any Dispute, each Party shall, unless directed
otherwise by the other Party in writing, fulfill all of its obligations under
this Contract, including the obligation to take all steps necessary during the
pendency of the Dispute to ensure the Work will be performed within the time
stipulated or within such extended time as may be allowed under this Contract,
provided Customer shall continue to make payments of undisputed sums therefore
in accordance with this Contract (including the dispute resolution provisions
hereof).
Terms and Conditions Page 78
CONFIDENTIAL
24. DEFAULT AND CORRECTION PLAN
24.1 Material Breach.
(a) In the event Contractor fails to complete a Key Task on or before the
date identified or referenced in Article 0 (Key Tasks) or fails to perform a
material obligation hereunder (in either case a "Failure"), Customer shall be
entitled to deliver to Contractor a written demand that it correct such Failure.
Contractor shall acknowledge receipt of Customer's demand within one (1)
Business Day and shall submit to Customer, for Customer's review, comment and
approval, a Correction Plan within ten (10) Business Days after the date of
Customer's demand (or such longer time as Customer may establish, including as a
result of Contractor's reasonable request for an extension of time to provide a
Correction Plan).
(b) If the Correction Plan does not set forth a reasonable manner in
which, or reasonable date by which, Contractor will correct or offset the
Failure, Customer may reject the Correction Plan upon written notice to
Contractor, which notice shall include, in reasonable detail, the deficiencies
in the Correction Plan noted by Customer, and other relevant comments.
Contractor shall revise the Correction Plan, including by incorporating
Customer's reasonable comments, and shall re-submit the revised Correction Plan
to Customer for its approval within seven (7) Business Days after receipt of
Customer's comments. This process may be repeated until such time as Contractor
provides a Correction Plan acceptable to Customer.
(c) If Customer approves the Correction Plan (or revision thereof) or does
not reject the Correction Plan (or revision thereof) within thirty (30) Calendar
Days after receipt thereof, this Contract shall be deemed modified in accordance
with the Correction Plan (or revision thereof) and the Failure shall be deemed
cured so long as Contractor complies with the terms of such Correction Plan (or
revision thereof). Nothing herein shall be construed to release Contractor from
its obligation to make liquidated damages payments as applicable in accordance
with Article 7.5 (Liquidated Damages for Late Delivery of Repeaters).
(d) In the event Contractor does not submit a Correction Plan to Customer
within fifteen (15) Business Days after receipt of a demand therefor, or if
Contractor fails to submit a revised Correction Plan within seven (7) Business
Days after receipt of Customer's notice of rejection of the original Correction
Plan, or if Contractor fails to provide an acceptable Correction Plan within
three (3) iterations thereof (including the first draft), or if Contractor fails
to complete the Customer-approved Correction Plan within thirty (30) Calendar
Days after Customer's approval of the Correction Plan (or such period as
otherwise specified in the Correction Plan), Customer shall be entitled to
terminate this Contract in accordance with the provisions of Article 25.2
(Termination for Contractor's Default).
Terms and Conditions Page 79
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
24.2 Key Tasks.
(a) For purposes of this Agreement, each of the following shall be a "Key
Task":
--------------------------------------------------------------------------------
Completion Date: Key Task:
--------------------------------------------------------------------------------
[*****] [*****]
--------------------------------------------------------------------------------
(b) A Key Task shall be deemed "completed" when each item of such Key Task
has been completed in accordance with the requirements of this Contract.
Terms and Conditions Page 80
CONFIDENTIAL
25. TERMINATION
25.1 Termination for Customer's Convenience.
(a) Customer may, upon written notice to Contractor, at any time, reduce
the Nominal Order to the amounts indicated in paragraphs (d) and (e) below and
Contractor shall immediately cease performance of the Work on the date specified
in the notice to the extent reduced in the manner and to the extent specified
below. Notwithstanding the foregoing, as long as Contractor provides the Work in
accordance with the requirements of this Contract, Customer intends to obtain
the Nominal Order of Repeaters from Contractor, except for reasons due to
changes in its financial, technical or business needs.
(b) In the event of partial termination of the Work in accordance with
this Article 25.1 (Termination for Customer's Convenience), Customer's notice of
termination will specify the portion of the Work terminated and the remaining
provisions of this Article 25.1 (Termination for Customer's Convenience) shall
apply to such terminated portion. All other portions of the Work shall continue
unaffected.
(c) Upon receipt of a notice of termination, as provided in paragraph (a)
above, Contractor shall take the following actions:
(1) stop Work under this Contract on the date and to the extent
specified in the notice of termination, except those services
that are reasonably necessary to be provided in connection with a
termination of this Contract;
(2) place no further orders or Subcontracts for materials, services,
or facilities to the extent they relate to the performance of the
Work terminated;
(3) terminate Subcontracts to the extent they relate to the
performance of the Work terminated;
(4) settle all outstanding liabilities and all claims arising out of
any termination of Subcontracts for materials, services, or
facilities provided Customer pays amounts due under paragraph (e)
below;
(5) take such action as may be reasonably necessary, or as Customer
may direct, for the protection and preservation of the property
related to this Contract that is in the possession of Contractor
or any Subcontractor and in which Customer has or may acquire an
interest; and
(6) complete wind-down activities within thirty (30) Calendar Days of
the effective date of termination.
Terms and Conditions Page 81
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(d) From EDC up to and including [*****], Customer may reduce the Nominal
Order to no less than [*****] Repeaters ([*****] High Power Repeaters and
[*****] Standard Repeaters) with no impact on the unit pricing therefor (as set
forth in Exhibit C (Pricing, Milestones and Payment Plan)) or the Delivery
Requirements set forth in Exhibit D (Delivery Requirements and Schedule).
(e) Beginning [*****] and continuing throughout the Term of this Contract,
Customer may reduce the Nominal Order without impact on the unit pricing
therefor as follows:
(1) to no less than [*****] Repeaters ([*****] High-Power and [*****]
Standard Repeaters), in which case Customer shall pay Contractor
for Contractor's costs (if any) actually incurred, with respect
to that part of the Nominal Order terminated, for termination of
work-in-progress and termination of contracts for material
supplies, plus [*****] of such costs (Customer's maximum
liability for such costs (including the [*****] markup) shall not
exceed [*****] for termination effective on or before [*****],
[*****] for termination effective on or before [*****], [*****]
for termination effective on or before [*****] and, [*****] for
termination effective any date on or after [*****]); and
(2) to zero (that is, cancel the entire Nominal Order), in which case
Customer shall pay Contractor (i) the amounts set forth in
paragraph (1) above, (ii) plus the amounts set forth in the
following table, (iii) less the sum of any amounts paid pursuant
to the ATP and amounts paid under this Contract in respect of NRE
Milestone Payment Nos. 1-5:
------------------------------------------------------------
Termination Date Amount
------------------------------------------------------------
[*****] [*****]
------------------------------------------------------------
[*****] [*****]
------------------------------------------------------------
Feb. 1, 2000-Mar. 31, 2000 $8.0 million
------------------------------------------------------------
Apr. 1, 2000 and thereafter $14.0 million
------------------------------------------------------------
(f) Contractor agrees to use best commercial efforts to minimize costs
described in paragraph (e)(1) above. Contractor will provide Customer with
documentation and audit rights with respect to such costs.
(g) Contractor shall submit an invoice to Customer for amounts due under
this Article 25.1 (Termination for Customer's Convenience) within sixty (60)
Calendar Days after the effective date of termination specified in the notice
thereof. Contractor shall be entitled to payment by Customer of undisputed
amounts in such invoice within thirty (30) Calendar Days after Customer's
receipt of the invoice. Payment of such amount by any Financing Entity on behalf
of Customer shall relieve Customer from its obligation to make such payment.
(h) Payment of the amount payable by Customer to Contractor pursuant to
this Article 25.1 (Termination for Customer's Convenience) shall constitute a
total discharge of Customer's
Terms and Conditions Page 82
CONFIDENTIAL
liabilities to Contractor for termination pursuant to this Article 25.1
(Termination for Customer's Convenience).
(i) Upon payment in full of all amounts outstanding under this Contract,
Customer may require Contractor immediately to transfer to Customer in the
manner and to the extent directed by Customer, title to and possession of any
items comprising all or any part of the Work terminated (including all Work-in-
progress, parts and materials, and all inventories, Subcontracts and associated
warranties) free and clear of all liens and encumbrances of any kind.
Contractor shall, upon direction of Customer, use commercially reasonable
efforts to protect and preserve property in the possession of Contractor or its
Subcontractors in which Customer has an interest arising out of this Contract
and shall facilitate access to and possession by Customer of items comprising
all or part of the Work terminated; Customer shall be responsible for costs
reasonably incurred by Contractor in protecting and preserving such property.
In the event Customer neither takes possession of, nor directs Contractor to
protect and preserve the Work, Customer shall be responsible for costs
reasonably incurred by Contractor in storing the Work. Upon Customer's request,
Contractor shall make a reasonable, good-faith effort to sell such items and to
remit any sales proceeds to Customer, less a deduction for costs of disposition
reasonably incurred by Contractor for such efforts provided the selling price
shall be subject to Customer's prior written approval.
25.2 Termination For Contractor's Default.
(a) Customer may terminate this Contract upon service of written notice of
default to Contractor at any time after the occurrence of any of the following:
(1) Contractor fails to deliver the Prototype Repeaters in accordance
with the applicable delivery dates hereunder, and Contractor
fails to cure such breach within thirty (30) Calendar Days of
such delivery dates;
(2) Any of the conditions set forth in paragraph (d) of Article 24
(Default and Correction Plan);
(3) Contractor commits a material breach of any of its duties or
obligations hereunder and, except as provided in paragraph (a)(4)
below, Contractor fails to cure such breach within thirty (30)
Calendar Days of notice thereof; or
(4) with respect to a breach that cannot with due diligence be cured
within thirty (30) Calendar Days notice thereof, Contractor fails
to proceed promptly and diligently to correct the breach (in
which case Contractor shall notify Customer, in writing, within
ten (10) Calendar Days of receipt of notice of the breach,
describing in reasonable detail the reason such breach cannot be
cured in such thirty (30) Calendar-Day period and setting forth a
Correction Plan to cure such breach) or fails to cure the breach
within sixty (60) Calendar Days of notice of breach or as
otherwise agreed in such plan; or
(5) the breach is not subject to cure with due diligence within sixty
(60) Calendar Days notice of the breach; or
Terms and Conditions Page 83
CONFIDENTIAL
(6) Contractor commences a voluntary proceeding concerning itself
under any applicable bankruptcy, insolvency, reorganization,
adjustment of debt, relief of debtors, or similar law
("Insolvency Law"); or any involuntary proceeding commences
against Contractor under an Insolvency Law and the petition has
not been dismissed within ninety (90) Calendar Days after
commencement of the proceeding; or a receiver or custodian is
appointed for or takes charge of all or a substantial portion of
the property of Contractor and such custodian or receiver has not
been dismissed or discharged within sixty (60) Calendar Days; or
Contractor has taken action toward the winding-up, dissolution,
or liquidation of Contractor or its business; or Contractor has
been adjudicated insolvent or bankrupt or an order for relief or
any other order approving a case or proceeding under any
Insolvency Law has been entered; or Contractor has made a general
assignment for the benefit of creditors or becomes unable to pay
its debts generally as they become due. Should Contractor become
a debtor in any bankruptcy proceeding, Contractor shall move to
assume or reject this Contract within forty-five (45) Calendar
Days after the entry of any order for relief; or
(7) Contractor has purported to assign or transfer this Contract in
violation of the provisions of Article 28.1 (Assignment) and
Contractor fails to cure such unauthorized purported assignment
or transfer within thirty (30) Calendar Days after receiving
written notice from Customer of the unauthorized purported
assignment or transfer.
(b) In the event Customer terminates this Contract pursuant to paragraph
(a) above, (i) Customer shall be entitled to have the Work completed by another
party or parties and Contractor shall be liable to Customer for damages
resulting from such termination, including any reasonable re-procurement costs
and commercially reasonable costs of "cover" incurred in connection therewith in
excess of the Contract Price, such damages to be actually incurred and invoiced
to Contractor in reasonable detail, and for all liquidated damages then due
pursuant to Article 7.5 (Liquidated Damages for Late Delivery of Repeaters), and
(ii) Customer shall be liable to Contractor for unpaid amounts invoiced
hereunder for Milestones completed in accordance with this Contract through the
effective date of termination. Nothing contained in this Contract shall be
construed so as to obligate Customer to exercise such right to terminate for
Contractor's benefit.
(c) Each Party shall submit an invoice to the other Party for amounts due
under this Article 25.2 (Termination for Contractor's Default) within sixty (60)
Calendar Days after the effective date of termination specified in the notice
thereof, which invoice shall state the amounts due from such other Party. Each
such invoice shall be deemed accepted by the Party receiving such invoice,
unless written notice disputing such invoice is provided to the Party furnishing
the invoice within fifteen (15) Business Days after receipt of such invoice. The
amounts payable by a Party under this Article 25.2 (Termination for Contractor's
Default) shall be verified at such Party's request and expense by a nationally
recognized firm of certified public accountants appointed by such Party and
reasonably acceptable to the other Party. Each Party's right to verification
shall be without prejudice to the rights of either Party under Article
23(Dispute
Terms and Conditions Page 84
CONFIDENTIAL
Resolution). Each Party shall be entitled to payment of all undisputed amounts
within thirty (30) Business Days after the other Party's receipt of such
invoice.
(d) Customer may require Contractor to transfer to Customer in the manner
and to the extent directed by Customer, title to and possession of any items
comprising all or any part of the Work terminated (including all Work-in-
progress, parts and materials, and all inventories, Subcontracts and warranties)
free and clear of any liens and encumbrances of any kind. Contractor shall, upon
direction of Customer and at Customer's expense, protect and preserve property
in the possession of Contractor or its Subcontractors in which Customer has an
interest arising out of this Contract and shall facilitate access to and
possession by Customer of items comprising all or part of the Work terminated,
such expenses to be reimbursed in accordance with the terms of Exhibit C
(Pricing, Milestones and Payment Plan). In the event Customer neither takes
possession nor directs Contractor to protect the Work, Customer shall be
responsible for costs reasonably incurred by Contractor in restoring the Work.
Upon Customer's request, Contractor shall make a reasonable good-faith effort to
sell such items and to remit any sales proceeds to Customer, less a deduction
for costs of disposition reasonably incurred by Contractor for such efforts,
provided the selling price shall be subject to Customer's prior written
approval.
(e) If, after termination of this Contract under the provisions of
paragraph (a) above, it is determined by dispute resolution, pursuant to Article
23 (Dispute Resolution), or admitted in writing by Customer, that Contractor was
not in default under the provisions of paragraph (a), or that any delay giving
rise to the default was excusable under the provisions of Article 7.9 (Excusable
Delay Defined), such termination shall be considered a Termination for
Convenience by Customer and the provisions of Article 25.1 (Termination for
Customer's Convenience) shall apply.
25.3 Termination for Customer's Default.
(a) Contractor may terminate this Contract upon service of written notice
of default to Customer at any time after the occurrence of any of the following
events of default:
(1) Customer fails to pay undisputed amounts due hereunder and fails
to cure such nonpayment within thirty (30) Calendar Days of
written notice thereof; or
(2) Customer commences a voluntary proceeding concerning itself under
any applicable bankruptcy, insolvency, reorganization, adjustment
of debt, relief of debtors, or similar law ("Insolvency Law"); or
any involuntary proceeding commences against Customer under an
Insolvency Law and the petition has not been dismissed within
ninety (90) Calendar Days after commencement of the proceeding;
or a receiver or custodian is appointed for or takes charge of
all or a substantial portion of the property of Customer and such
custodian or receiver has not been dismissed or discharged within
sixty (60) Calendar Days; or Customer has taken action toward the
winding-up, dissolution, or liquidation of Customer or its
business; or Customer has been adjudicated insolvent or bankrupt
or an order for relief or any other order approving a case
Terms and Conditions Page 85
CONFIDENTIAL
or proceeding under any Insolvency Law has been entered; or
Customer has made a general assignment for the benefit of
creditors or becomes unable to pay its debts generally as they
become due. Should Customer become a debtor in any bankruptcy
proceeding, Customer shall move to assume or reject this Contract
within forty-five (45) Calendar Days after the entry of any order
for relief; or
(3) Customer has purported to assign or transfer this Contract in
violation of the provisions of Article 28.1 (Assignment) and
Customer fails to cure such purported unauthorized assignment or
transfer within thirty (30) Calendar Days after receiving written
notice.
(b) Upon the occurrence of an event of default under paragraph (a) above,
Contractor shall take the following actions:
(1) stop Work immediately under this Contract and all obligations of
Contractor shall terminate hereunder, except those services that
are reasonably necessary to be provided in connection with a
termination of this Contract;
(2) place no further orders or Subcontracts for materials, services,
or facilities to the extent they relate to the performance of the
Work;
(3) terminate orders and Subcontracts to the extent they relate to
the performance of the Work;
(4) settle all outstanding liabilities and all claims arising out of
such termination of orders and Subcontracts for materials,
services, or facilities provided Customer pays amounts due under
paragraph (c) below; and
(5) take such action as may be reasonably necessary, for the
protection and preservation of the property related to this
Contract that is in the possession of Contractor or any
Subcontractor and in which Customer has or may acquire an
interest.
(c) In the event Contractor terminates this Contract as provided in
paragraph (a) above, Contractor shall be entitled to payment of the following
amounts: (i) all unpaid amounts hereunder for Milestones completed in accordance
with this Contract through the effective date of termination; (ii) all unpaid
amounts for Work-in-progress on any Milestone that has not been completed as of
the effective date of termination, with the payment equal to a percentage of the
applicable Milestone Payment that is equal to the percentage of Work actually
completed on the applicable Milestone; (iii) reasonable wind-down expenses
incurred by Contractor as a result of early termination, including costs
associated with terminating Subcontractor and other supplier agreements; and
(iv) an amount equal to Contractor's profit reasonably allocable to the Work
completed and the Work-in-progress as of the effective date of termination,
provided (A) profits shall be reasonably allocable only to the extent Contractor
can reasonably demonstrate the amount of profit it would have earned had the
Work under the Contract been completed (excluding Work related to any
unexercised option hereunder) and the portion of total profits
Terms and Conditions Page 86
CONFIDENTIAL
claimed is in direct proportion to the amount of Work completed and Work-in-
progress as of the effective date of termination compared to the total amount of
Work under the Contract (excluding Work related to any unexercised option
hereunder) and (B) such allocable profits have not been, or will not be,
otherwise recovered by Contractor hereunder (for example, through amounts
previously paid by Customer or amounts payable under (i) and (ii) above). In no
event shall the amounts payable pursuant to this Article 25.3 (Termination for
Customer's Default) exceed the Contract Price less amounts paid prior to
termination.
(d) In the event Contractor terminates this Contract as provided in
paragraph (a) above, the invoicing and payment provisions of paragraph (g) of
Article 25.1 (Termination for Customer's Convenience) shall apply.
(e) Payment of the amount payable by Customer to Contractor pursuant to
paragraph (c) above shall constitute a total discharge of Customer's liabilities
to Contractor for termination pursuant to this Article 25.3 (Termination for
Customer's Default).
(f) Upon payment in full of all amounts outstanding under this Contract,
Customer may require Contractor immediately to transfer to Customer in the
manner and to the extent directed by Customer, title to and possession of any
items comprising all or any part of the Work terminated (including all Work-in-
progress, parts and materials, and all inventories, Subcontracts and warranties)
free and clear of any liens and encumbrances of any kind, and Contractor shall,
upon direction of Customer, protect and preserve property in the possession of
Contractor or its Subcontractors in which Customer has an interest arising out
of this Contract and shall facilitate access to and possession by Customer of
items comprising all or part of the Work terminated; Customer shall be
responsible for costs reasonably incurred by Contractor in protecting and
preserving such property. In the event Customer neither takes possession nor
directs Contractor to protect the Work, Customer shall be responsible for costs
reasonably incurred by Contractor in storing the Work. Upon Customer's request
and at Customer's expense, Contractor shall make a reasonable, good-faith effort
to sell such items and to remit any sales proceeds to Customer less a deduction
for costs of disposition reasonably incurred by Contractor for such efforts.
(g) Except as expressly stated in this Article 25.3 (Termination for
Customer's Default), Contractor shall have no right to terminate or suspend this
Contract.
25.4 Termination/Expiration Assistance.
(a) Commencing upon notice of termination and continuing through the
effective date of termination or expiration of this Contract, as applicable,
Contractor shall provide to Customer, or at Customer's request to Customer's
designee, the reasonable termination/expiration assistance requested by Customer
to allow the Work to continue without interruption or adverse effect and to
facilitate the orderly transfer of the Work to Customer or its designee;
provided, however, that Customer has paid all outstanding invoices. Such
assistance shall include the following:
(1) Contractor shall continue to perform all warranty services as set
forth in Article 17 (Representations and Warranties) with respect
to all materials and equipment furnished by Contractor hereunder;
Terms and Conditions Page 87
CONFIDENTIAL
(2) Contractor shall assign, to the extent assignable, to Customer
all O.E.M. (Original Equipment Manufacturers') component
warranties, and Subcontractors', or other warranties on all
materials or equipment furnished by Contractor hereunder. Where
non-assignable, Contractor shall use its best commercial efforts
to obtain for Customer's benefit all such warranties; and
(3) except in the case of termination pursuant to Article 25.1
(Termination for Customer's Convenience), upon Customer's
request, Contractor shall assign to Customer or its designee the
Material Subcontracts, as well as any and all Subcontracts
requested by Customer, provided that such Material Subcontracts
and other Subcontracts are assignable.
(b) Customer shall pay Contractor for termination/expiration assistance in
accordance with the pricing set forth in Exhibit C (Pricing, Milestones and
Payment Plan), provided, however, that in the event Contractor terminates the
Contract due to Customer's failure to pay undisputed amounts, Contractor shall
be entitled to payment in advance for termination/expiration assistance.
Terms and Conditions Page 88
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
26. OPTIONS
26.1 Option to Purchase Additional Repeaters.
(a) In addition to the total number of Repeaters Contractor shall deliver
and Customer shall purchase pursuant to this Contract, Customer may, at its sole
option and discretion, elect to purchase additional Repeaters from Contractor
for delivery following the Project Completion Date.
(b) Customer may exercise this option to purchase additional Repeaters at
any time commencing at EDC and continuing up to and including the [*****]
anniversary of the Project Completion Date (the "Repeater Option Period").
(c) The unit price for optional Repeaters shall be determined in
accordance with Exhibit C (Pricing, Milestones and Payment Plan).
(d) Upon exercise of any such option, (i) the Parties shall mutually agree
upon a reasonable delivery schedule and (ii) Customer shall indicate in writing
the number of Standard Repeaters and High-Power Repeaters to comprise the total
number of optional additional Repeaters ordered. The warranty terms, including
the applicable Warranty Period, set forth in Article 17 (Representations and
Warranty) shall also apply to any optional Repeaters purchased by Customer;
provided, however, the Warranty Period shall commence upon acceptance by
Customer of each optional Repeater in accordance with Article 8 (Testing
Criteria and Acceptance).
26.2 Network Management System - Video Wall.
At any time commencing at EDC and continuing up to and including the
[*****] anniversary of EDC (the "NMS Video Wall Option Period"), Customer may,
at its sole option and discretion, elect to purchase a full-motion "video wall"
for use in conjunction with the Network Management System. The charge for such
"video wall" is set forth in Exhibit C (Pricing, Milestones and Payment Plan).
The warranty coverage, including the applicable Warranty Period, for the full-
motion "video wall" shall be consistent with the warranty coverage applicable to
the Network Management System, as set forth in Article 17.12 (Remedies (Network
Management System)); provided, however, the Warranty Period shall commence upon
Customer's acceptance of the full-motion "video wall." If Customer elects to
exercise this option, Customer shall provide written notice thereof to
Contractor and the Parties shall mutually agree upon a reasonable delivery
schedule for the optional "video wall" as well as applicable test plans and
procedures and acceptance criteria.
Terms and Conditions Page 89
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
26.3 Annual Maintenance of NMS.
On or before [*****], Contractor shall provide Customer with a proposal for
annual maintenance of the NMS, such proposal to include a firm fixed price not
to exceed [*****], a description of services, standards of performance and
response times, payment plan and renewal procedures.
26.4 Contract Adjustments.
Should Customer exercise any of the options described in this Article 0
(Options), the Parties shall execute Amendment(s) as soon as is reasonably
possible after option exercise to incorporate the schedule adjustments, price
adjustments, payment schedule adjustments, and changes to the Exhibits and other
terms and conditions as made necessary by such exercise. Except as otherwise
provided in this Article 0 (Options), the terms of this Contract shall apply to
any such options.
Terms and Conditions Page 90
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
27. [*****]
The Parties recognize that this program may be [*****] and that some form
[*****] may be requested from Contractor in connection with such [*****].
In the event that Customer desires Contractor to [*****], Customer will submit a
detailed description of such [*****] for Contractor's review and consideration.
Contractor agrees to promptly review such request and notify Customer if [*****]
after considering the terms thereof, the status of the program, the risks
associated with the [*****] and financial, economic and other information as
Contractor may deem reasonable or desirable.
The parties further agree that the above statements do not [*****] or the terms
thereof.
Terms and Conditions Page 91
CONFIDENTIAL
28. GENERAL
28.1 Assignment.
(a) Contractor shall not, without the prior written approval of Customer
and except on such terms and conditions as shall be reasonably acceptable to
Customer, assign, mortgage, charge, or encumber this Contract or any part
thereof, any of its rights, duties, or obligations hereunder, or the Work to any
person or entity, provided that: (i) nothing in this Article shall be construed
as limiting Contractor's right to enter into Subcontracts in respect of the Work
and (ii) Contractor shall have the right to assign or transfer this Contract or
all of its rights, duties, or obligations hereunder to: (x) any Affiliate of
Contractor, or (y) any corporation in connection with the sale, transfer or
assignment of all or substantially all of Contractor's assets or capital stock,
whether by way of merger, consolidation or otherwise, subject to the following
conditions: (A) in the case of a transfer to an Affiliate, the net worth of such
Affiliate is not less than the net worth of Contractor immediately prior to such
transfer and, in the reasonable discretion of Customer, such Affiliate has the
experience, resources, and personnel required to perform the Work in accordance
with this Contract; (B) in the case of a transfer or assignment contemplated in
clause (y), immediately after giving effect to such transaction or series of
related transactions, the net worth of Contractor (or in the event Contractor is
not the continuing person, the net worth of the person or entity formed by such
consolidation or into which Contractor is merged or to which its properties are
transferred substantially as an entirety) shall be no less than the net worth of
Contractor immediately before such transaction or series of related
transactions, and in the case of the sale of all or substantially all of the
assets of Contractor, the assignee or transferee, in the reasonable discretion
of Customer, has the experience, resources and personnel required to perform the
Work in accordance with this Contract; and (C) the assignee, transferee or
successor to Contractor has expressly assumed all the obligations of Contractor
and all terms and conditions applicable to Contractor under this Contract
pursuant to an assumption agreement (between Contractor and assignee or
transferee) in form and substance reasonably satisfactory to Customer.
(b) Customer shall not, without the prior written approval of Contractor,
assign, transfer, mortgage, charge, or encumber this Contract, any part thereof,
or any of Customer's rights, duties or obligations hereunder, provided that
Contractor hereby agrees that Customer may make any assignment or transfer of
this Contract to (i) any or all Financing Entities in connection with obtaining
financing for the payment of Contractor's invoices and any and all other fees,
charges or expenses payable under this Contract under any Financing Agreement,
(ii) as part of any collateral pool in favor of other senior lenders providing
financing to Customer in connection with completion of the Terrestrial Repeater
Network System facility and related equipment and (iii) any Affiliate of
Customer provided that in the case of a transfer to an Affiliate, the Affiliate
has sufficient financial resources to fulfill its obligations under this
Contract. Customer hereby agrees that, prior to entering into any contract or
agreement to sell or transfer this Contract, the acquirer shall agree to assume
this Contract and all of Customer's rights, duties and obligations hereunder
pursuant to an assumption agreement (between Customer and assignee or
transferee) in form and substance reasonably satisfactory to Contractor.
Terms and Conditions Page 92
CONFIDENTIAL
(c) The assigning Party shall reimburse the other Party for all reasonable
expenses incurred by the other Party (and invoiced in reasonable detail) in
obtaining advice from its external financial and legal advisors relating to the
assigning Party's proposed assignment or transfer.
(d) This Contract shall be binding on the Parties and their successors and
permitted assigns. Except as otherwise expressly agreed in writing, assignment
of this Contract shall not relieve the assigning Party of any of its obligations
nor confer upon the assigning Party any rights except as provided in this
Contract.
28.2 Entire Agreement.
This Contract contains the entire agreement between the Parties regarding
the Work hereunder and supersedes all communications, negotiations, and other
agreements either written or oral, relating to the Work and made prior to EDC,
unless the same are expressly incorporated by reference into this Contract.
Without limiting the generality of the foregoing, this Contract supersedes and
replaces the Authorization to Proceed, executed by Customer and Contractor on
October 22, 1999, and the rights, liabilities and obligations of the Parties
with respect to the Work performed under such Authorization to Proceed shall be
governed by this Contract and deemed performed hereunder.
28.3 Amendments.
Except as otherwise expressly permitted in Article 7.2 (Time and Place of
Delivery), this Contract, including any and all its Attachments, Exhibits and
Schedules, may not be modified except by written instrument of subsequent date
signed by a duly authorized representative of Contractor and a Senior Vice
President or the President of Customer.
28.4 Waiver of Breach of Contract.
A waiver of any provision or any breach of a provision of this Contract
shall not be binding upon either Party unless the waiver is in writing, signed
by a duly authorized representative of the Party, as applicable, and such waiver
shall not affect the rights of the Party not in breach with respect to any other
or future breach. No course of conduct by a Party shall constitute a waiver of
any provision or any breach of a provision of this Contract unless a written
waiver is executed in accordance with the provisions of this Article 28.4
(Waiver of Breach of Contract).
28.5 Remedies Cumulative.
All remedies provided for in this Contract shall be cumulative and in
addition to and not in lieu of any other remedies available to either Party at
law, in equity and/or otherwise.
28.6 Severability.
In the event any one or more of the provisions of this Contract shall for
any reason be held to be invalid or unenforceable, the remaining provisions of
this Contract shall be unimpaired and the invalid or unenforceable provision
shall be replaced by a mutually acceptable provision,
Terms and Conditions Page 93
CONFIDENTIAL
which, being valid and enforceable, comes closest to the intention of the
Parties underlying the invalid or unenforceable provision.
28.7 Applicable Law.
Except as provided in Article 23 (Dispute Resolution), this Contract and
performance under it shall be governed by, construed and enforced in accordance
with the Laws in force in the State of New York, without regard to conflict of
laws provisions thereof other than Section 5-1401 of the General Obligations Law
of the State of New York or to the United Nations Convention on Contracts for
the International Sale of Goods.
28.8 Notices.
(a) All notices, requests, demands, and determinations under this
Contract, including any required under Article 28.1 (Assignment) (other than
routine operational communications) shall be in writing and shall be deemed duly
given (i) if delivered by hand, when delivered, (ii) if delivered by express
courier, two (2) Business Days after being given to an express courier with a
reliable system for tracking delivery, or (iii) if delivered by facsimile, when
sent by facsimile (confirmed by the specific individual to whom the facsimile is
transmitted) with a copy sent by another means specified in this Article 28.8
(Notices), and addressed as follows:
If to Customer:
XM Satellite Radio Inc.
0000 00xx Xxxxxx, XX
Xxxxx 00
Xxxxxxxxxx, XX 00000
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Copy to:
Xxxx X. Xxxxxxxxxx
Senior Vice President
Engineering and Operations
If to Contractor: Xxxxxx Electronics Corporation
c/o Hughes Network Systems
00000 Xxxxxxx Xxxxxx Xx.
Xxx Xxxxx, XX 00000
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
Attention: Xxxx Xxxxxx
Terms and Conditions Page 94
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
CONFIDENTIAL
Copy to:
Site Counsel
00000 Xxxxxxx Xxxxxx Xx.
Xxx Xxxxx, XX 00000
(b) A Party may from time to time change its address or designee for
notification purposes by giving the other Party prior written notice of the new
address or designee and the date upon which it will be effective.
28.9 Relationship of the Parties.
(a) Contractor, in performing the Work hereunder, is acting as an
independent Contractor, and Contractor has the sole right and obligation to
supervise, manage, contract, direct, procure, perform, or cause to be performed,
all Work to be performed by Contractor under this Contract.
(b) None of the provisions of this Contract or of any of its Attachments,
Exhibits or Schedules shall be construed to mean that either Party is appointed
or is in any way authorized to act as an agent of the other Party or that there
exists a joint venture, partnership, agency or formal business organization of
any kind between the Parties.
28.10 Media Releases.
All media releases, public announcements, and public disclosures by either
Party relating to this Contract or the subject matter of this Contract,
including promotional or marketing material (both internal and external), but
not including announcements intended solely for internal distribution or to meet
legal or regulatory requirements beyond the reasonable control of the disclosing
Party, shall be coordinated with and approved by the other Party prior to
release.
28.11 Calculation of Interest.
Except as otherwise specified in this Contract, any interest due to either
Party under this Contract shall be calculated at the annual rate equal to the
three (3) month London Interbank Offer Rate (LIBOR) for U.S. Dollars plus
[*****].
28.12 Survival.
The following Articles, and the provisions contained therein, shall be
deemed to survive the termination (for any reason) or expiration of this
Contract, and, accordingly, such Articles shall remain applicable and
enforceable in accordance with their terms:
(a) Article 1 (Definitions);
(b) Article 7.5 (Liquidated Damages for Late Delivery of Repeaters);
Terms and Conditions Page 95
CONFIDENTIAL
(c) Article 7.9 (Excusable Delay Defined);
(d) Article 8.5 (Title and Risk of Loss);
(e) Article 13 (Technical Materials Escrow);
(f) Article 14 (Intellectual Property Rights);
(g) Article 15 (Confidentiality);
(h) Article 17 (Representations and Warranties);
(i) Article 18 (Contractor's Additional Representations and Warranties);
(j) Article 19 (Customer's Representations and Warranties);
(k) Article 21 (Indemnification);
(l) Article 23 (Dispute Resolution);
(m) Article 24 (Termination);
(n) Article 28.7 (Applicable Law);
(o) Article 28.11 (Calculation of Interest); and
(p) Article 28.18 (Covenant of Good Faith).
28.13 No Third-Party Beneficiaries.
This Contract is entered into solely between, and may be enforced only by,
Customer and Contractor and their permitted assigns, and this Contract shall not
be deemed to create any rights in third parties, including suppliers and owners
of a Party, or to create any obligations of a Party to any such third parties.
28.14 Consents and Approvals.
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 Contract, such action shall not be unreasonably
delayed or withheld. An approval or consent given by a Party under this Contract
shall not relieve the other Party from responsibility for complying with the
requirements of this Contract, nor shall it be construed as a waiver of any
rights under this Contract, except as and to the extent otherwise expressly
provided in such approval or consent.
28.15 Lender Requirements.
(a) The Parties recognize Customer may obtain financing for the amounts
due in respect of this Contract and the construction of its Terrestrial Repeater
Network and related equipment
Terms and Conditions Page 96
CONFIDENTIAL
facilities and services through external sources. Contractor shall provide to
any Financing Entity any project information or certification that such
Financing Entity reasonably requires (subject to confidentiality agreements
governing such project information).
(b) Contractor agrees to work cooperatively with Customer in connection
with Customer's efforts to obtain financing for the Work, including the
financing described in Article 27 (Contractor Guarantee).
(c) Contractor agrees to execute such documents as may be reasonably
required by any Financing Entity, including such documents, instruments,
contracts, agreements and amendments to this Contract that may be required in
connection with Customer's assignment of this Contract to such Financing Entity
under terms that are customary in the secured financing of Work of this nature,
provided Contractor's rights and obligations with respect to the Contract Price,
time of performance and/or other economic terms under this Contract are not
materially adversely affected by any such amendment to this Contract or, in the
event of such material adverse effect, the Parties execute a Change Order
resolving such material adverse effect.
28.16 No Solicitation.
During the period of performance of the Work and for one (1) year following
the Project Completion Date, neither Party shall, directly or indirectly,
solicit for employment, employ or engage for consulting services any employee or
consultant of the other Party, or any individual who was an employee or
consultant of the other Party during the six (6) month period immediately
preceding such hiring or solicitation.
28.17 Time of the Essence.
Time is of the essence in this Contract, including with respect to the
resolution of any Disputes between the Parties under Article 25 (Termination).
28.18 Covenant of Good Faith.
Each Party agrees that, in respective dealings with the other Party under
or in connection with this Contract, it shall act in good faith.
28.19 Counterparts.
This Contract may be executed in two (2) or more counterparts, which taken
together constitute one single contract between the Parties.
Terms and Conditions Page 97
CONFIDENTIAL
IN WITNESS WHEREOF, the Parties have made and executed this Contract
effective as of the Effective Date of this Contract.
XM SATELLITE RADIO INC. XXXXXX ELECTRONICS CORPORATION
By: /s/ Xxxx X. Xxxxxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
------------------------------ ------------------------------
(Signature) (Signature)
Name: Xxxx X. Xxxxxxxxxx Name: Xxxxx X. Xxxxxxxx
------------------------------ ------------------------------
(Print) (Print)
Title: Senior Vice President-- Title: Vice President
Engineering and Operations ------------------------------
------------------------------
Terms and Conditions Page 98
*****Confidential treatments has been requested for portions of this agreement.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [*****]. A complete version of this
agreement has been filed separately with the Securities and Exchange Commission.
CONTRACT
FOR
THE DESIGN, DEVELOPMENT AND PURCHASE OF
TERRESTRIAL REPEATER EQUIPMENT
BY AND BETWEEN
XM SATELLITE RADIO INC.
AND
XXXXXX ELECTRONICS CORPORATION
EXHIBIT A
TECHNICAL SPECIFICATIONS
CONFIDENTIALITY NOTICE
----------------------
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and Xxxxxx Electronics Corporation, and shall not be
published or disclosed to any third party without the express written consent of
a duly authorized representative of XM Satellite Radio Inc. and Xxxxxx
Electronics Corporation.
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
[*****] This entire Exhibit A has been redacted for confidentiality reasons.
CONFIDENTIAL
*****Confidential treatments has been requested for portions of this agreement.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [*****]. A complete version of this
agreement has been filed separately with the Securities and Exchange Commission.
CONTRACT
FOR
THE DESIGN, DEVELOPMENT AND PURCHASE OF
TERRESTRIAL REPEATER EQUIPMENT
By and Between
XM SATELLITE RADIO INC.
and
XXXXXX ELECTRONICS CORPORATION
EXHIBIT B
STATEMENT OF WORK (SOW)
CONFIDENTIALITY NOTICE
----------------------
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and Xxxxxx Electronics Corporation, and shall not be
published or disclosed to any third party without the express written consent of
a duly authorized representative of XM Satellite Radio Inc. and Xxxxxx
Electronics Corporation.
CONFIDENTIAL
EXHIBIT B
STATEMENT OF WORK
TABLE OF CONTENTS
1. INTRODUCTION.......................................................... 1
1.1 Purpose and Scope.................................................. 1
1.2 Applicable Documents............................................... 1
1.3 Glossary........................................................... 2
1.4 Responsibility..................................................... 2
2. SCHEDULE.............................................................. 2
3. EQUIPMENT AND TOOLS................................................... 2
3.1 Introduction....................................................... 2
3.2 Repeater Description............................................... 2
3.3 Standard Prototype Repeaters....................................... 3
3.4 High-Power Prototype Repeater...................................... 3
3.5 Standard Production Repeaters...................................... 3
3.6 High-Power Production Repeaters.................................... 3
3.7 Network Management System.......................................... 4
3.8 Test Equipment..................................................... 4
3.9 Special Tools...................................................... 4
4. DATA AND DOCUMENTATION................................................ 4
4.1 General............................................................ 4
4.2 Deliverable Documents.............................................. 5
4.3 Language........................................................... 8
4.4 Documents Categories............................................... 8
4.5 System Documentation............................................... 9
4.6 Maintenance Documentation.......................................... 10
4.7 Operations Documentation........................................... 10
4.8 Quality Assurance and CADM Documentation........................... 10
4.9 Progress Reporting................................................. 10
5. SERVICES.............................................................. 11
6. PROGRAM MANAGEMENT................................................... 12
6.1 Responsibilities................................................... 12
6.2 Program Management Plan............................................ 12
6.3 Data and Documentation Management.................................. 14
7. MEETINGS.............................................................. 14
7.1 General............................................................ 14
7.2 Contractor Review Meetings......................................... 14
7.3 Program Kick-Off Meeting........................................... 15
7.4 Final Design Review Meeting (FDR).................................. 15
7.5 Design Verification Testing Review (Prototype Repeaters)........... 16
7.6 Design Verification Testing Review (Production Repeaters).......... 17
CONFIDENTIAL
7.7 Subcontractor Status and Design Reviews............................ 17
7.8 Progress Meetings.................................................. 17
7.9 Contract Review Meetings........................................... 17
7.10 Attendance at Meetings............................................. 18
7.11 Action Item Control................................................ 18
8. PRODUCT ASSURANCE REQUIREMENTS........................................ 19
8.1 Scope.............................................................. 19
8.2 Product Assurance Program Objectives............................... 19
8.3 Quality Assurance Plan............................................. 19
8.4 Planning........................................................... 19
8.5 Design Control..................................................... 20
8.6 Document Control................................................... 20
8.7 Purchasing......................................................... 21
8.8 Traceability....................................................... 22
8.9 Compliance with Laws, Regulations and Certificates................. 22
9. TESTING ACTIVITIES.................................................... 22
9.1 Test Plans and Procedures.......................................... 22
9.2 Test Reports....................................................... 23
9.3 Access to Testing Activities....................................... 23
10. TRAINING............................................................. 23
11. WARRANTY SUPPORT..................................................... 24
12. NMS MAINTENANCE...................................................... 25
CONFIDENTIAL
Revision Log
--------------------------------------------------------------------------------
Rev Author Summary of changes to previous versions Date Approval
--------------------------------------------------------------------------------
- Initial Release
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONFIDENTIAL
EXHIBIT B
STATEMENT OF WORK
1. INTRODUCTION
1.1 Purpose and Scope.
(a) This Statement of Work (SOW) defines the Work to be performed by
Contractor in support of Customer's Terrestrial Repeater Network System program.
This Work includes the design, development, engineering, manufacture, testing,
and delivery of Prototype Standard and High Power Repeaters and Production
Standard and High Power Repeaters, together with the Network Management System
(NMS) and other deliverable equipment, hardware, software, services and
documentation. Contractor shall complete this Work in accordance with the terms
and conditions of the Contract and the requirements specified herein.
(b) Defined terms herein shall have the meaning set forth in the Contract,
unless otherwise specified herein.
(c) In the event that Customer elects to exercise any option set forth in
the Contract, Contractor shall provide or perform such option as required by the
Contract.
1.2 Applicable Documents.
The following documents are applicable to this Statement of Work to the
extent specified in the Contract. Unless otherwise specified, the latest issue
of each of the following documents shall be applicable.
(a) Exhibit A (Design Specifications);
(b) ISO9001-1994, Quality Systems - Model for Quality Assurance in
Design/Development, production, Installation and Servicing International
Standards Organization;
(c) DARS System: Waveform Requirements - Transport Layer (DARS-FHG-FDSC-
602-110000), Edition 05, Revision 01) XM-SYS-0-0001-RD Revision 1.1;
(d) DARS System: Waveform Requirements - Satellite Physical Layer
(DARS-FHG-FDSC-608-110000, Edition 03, Revision 01) XM-SYS-0-0004-RD Revision 0;
and
(e) DARS System: Waveform Requirements - Terrestrial Physical Layer
(DARS-FHG-FDSC-601-110000, Edition 00, Xxxxxxxx 00), XX-XXX-0-0000-XX Revision
0.
CONFIDENTIAL
1.3 Glossary.
A glossary of acronyms and other terms is attached hereto as Attachment
No. 1 to this Exhibit B (Statement of Work).
1.4 Responsibility.
Contractor is fully responsible for the performance of all other tasks
identified herein, unless otherwise expressly stated herein. Contractor shall
also deliver the Data and Documentation data specified herein.
2. SCHEDULE
The Contract shall be performed in accordance with Exhibit D (Delivery
Schedule) and the Milestone schedules set forth in Exhibit C (Pricing,
Milestones and Payment Plan).
3. EQUIPMENT AND TOOLS
3.1 Introduction.
(a) This Section 3 (Equipment and Tools) defines the hardware and
equipment to be delivered by Contractor hereunder, including the Repeaters, the
NMS and related hardware, Software and other deliverable items.
(b) The Work to be performed with respect to such hardware and equipment
deliverables includes:
(1) Design, development, engineering, manufacture, testing, and
delivery of all such deliverables identified in the Contract;
(2) provision of warranty support and training.
3.2 Repeater Description.
(a) The Repeaters shall provide terrestrial re-broadcasting of Customer's
DARS programming and include the following key subsystems:
(1) A High-Powered Amplifier (HPA) subsystem, which amplifies the
signal received from Customer's satellites for re-transmission by
each Repeater;
(2) A Signal Processing System (SPS), which converts the QPSK signal
received from Customer's satellites into the MCM signal, which
signal is then re-transmitted by each Repeater;
(3) A controller which monitors the operations of the amplifier, the
SPS, environmental sensors, etc., and interfaces with the NMS in
reporting the status of the various components; and
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(4) A transmit filter which limits the out-of-band emissions of the
transmitter.
(b) The Repeaters and the NMS each shall be capable of satisfactory
operation for a period of seven (7) years commencing upon the Project Completion
Date.
(c) Contractor shall design, develop, engineer, manufacture, test, and
deliver the types of Repeaters specified below to meet the technical and
operational requirements of the Contract.
3.3 Standard Prototype Repeaters.
Contractor shall design, develop, engineer, manufacture and test (in
accordance with Exhibit E (Test Plans and Procedures)) seven (7) Prototype
Standard Repeaters and shall deliver such fully-operational Prototype Standard
Repeaters to the location(s) specified in Exhibit D (Delivery Schedule), all in
conformance with the requirements of Exhibit A (Design Specifications).
3.4 High-Power Prototype Repeater.
Contractor shall design, develop, engineer, manufacture and test (in
accordance with Exhibit E (Test Plans and Procedures)) one (1) Prototype High-
Power Repeater and shall deliver such fully-operational Prototype High-Power
Repeater to the location specified in Exhibit D (Delivery Schedule), all in
conformance with the requirements of Exhibit A (Design Specifications).
3.5 Standard Production Repeaters.
Contractor shall design, develop, engineer, manufacture and test (in
accordance with Exhibit E (Test Plans and Procedures)) [*****] Standard
Repeaters and shall deliver such Standard Repeaters to the location(s) specified
in Exhibit D (Delivery Schedule), all in conformance with the requirements of
Exhibit A (Design Specifications). Of this total number of Standard Repeaters,
Customer shall notify Contractor, in accordance with Article 7.1 (Repeater
Category Selection) of the Contract, how many Standard Repeaters shall be
Standard Non-Redundant Repeaters and how many shall be Standard Sectored Non-
Redundant Repeaters.
3.6 High-Power Production Repeaters.
Contractor shall design, develop, engineer, manufacture and test (in
accordance with Exhibit E (Test Plans and Procedures)) [*****] High-Power
Repeaters and shall deliver such High-Power Repeaters to the location(s)
specified in Exhibit D (Delivery Schedule), all in conformance with the
requirements of Exhibit A (Design Specifications). Of this total number of High-
Power Repeaters, Customer shall notify
CONFIDENTIAL
Contractor, in accordance with Article 7.1 (Repeater Category Selection) of the
Contract, how many High-Power Repeaters shall be High-Power Redundant Repeaters
and how many shall be High-Power Sectored Redundant Repeaters.
3.7 Network Management System
Contractor shall design, develop, engineer, manufacture and test (in
accordance with Exhibit E (Test Plans and Procedures)) the fully operational NMS
and shall deliver and install such NMS to and at the location specified in
Exhibit D (Delivery Schedule), all in conformance with the requirements of
Exhibit A (Design Specifications).
3.8 Test Equipment.
(a) Contractor shall provide a list of test equipment for the purpose of
performance verification and field troubleshooting and maintenance of accepted
Repeaters.
(b) Routine calibration of the test equipment shall be performed in
accordance with the manufacturer's recommendations that are contained in the
operation and maintenance manuals for that equipment.
(c) Contractor shall, at its expense, provide all necessary test
facilities for fault diagnosis and repair of faulty Repeaters and LRUs, which
are returned to Contractor during the applicable warranty periods, as such
periods may be extended.
3.9 Special Tools.
Contractor shall identify all special tools required to operate, adjust,
tune, maintain, replace or repair the Repeaters or any LRUs. Where routine
calibration of special tools is required, adequate calibration instruction shall
be provided.
4. DATA AND DOCUMENTATION
4.1 General.
(a) Customer shall have access as needed to all non-financial Data and
Documentation and other information related to the Contract that is generated
under or in the performance of this Contract by Contractor and its
Subcontractors. Certain specific items of information shall be produced and
formally submitted to Customer by Contractor as specified herein.
(b) Contractor agrees to furnish and convey, at no charge, all Documents
pertaining to the Repeaters, the NMS and other items to be delivered under this
Contract as is necessary to permit Customer to use, operate and maintain the
Repeaters, NMS and other deliverable items. For purposes of this Statement of
Work, "Documents" includes specifications, drawings, procedures, reports
(including inspection, test or incident reports), certificates, training
documentation, user manuals, or other materials,
CONFIDENTIAL
documents, reports, lists, procedures, data, or similar items. All Documents
specified herein are a subset of Data and Documentation.
(c) Contractor shall deliver to Customer at least five (5) sets of such
Documents, and Customer may make copies of such Documents for its use, including
use in connection with the use, operation and maintenance of Repeaters
(including at each location to which such Repeaters may be deployed), the NMS
and other deliverable items; provided that all such copies shall contain the
legends placed on the original versions thereof.
(d) In addition to the rights set forth in paragraph (c), Contractor
hereby grants to Customer the right to modify and enhance such Documents.
Customer also has the right to make copies of such modifications and
enhancements and distribute the same. In the event Customer modifies the
Documents in a manner not directed or approved by Contractor, Contractor will
not be responsible for Customer's use of such Documents to the extent it is
modified by Customer. Contractor may review Customer's modifications and
enhancements to such Documents.
(e) Contractor shall supply Data and Documentation in each of the
following categories for the items to be delivered hereunder:
(1) System;
(2) Maintenance;
(3) Operations; and
(4) Quality Assurance (QA) and Configuration and Data Management
(CADM).
4.2 Deliverable Documents.
(a) All Data and Documentation to be delivered under the Contract to
Customer shall be in the version of tools and/or file formats specified in Table
4-A (Tool/File Format Requirements) below:
--------------------------------------------------------------------------------
Table 4-A
Tool/File Format Requirements
--------------------------------------------------------------------------------
Project Schedules MS Project 95
--------------------------------------------------------------------------------
Written Documents MS Word 97
--------------------------------------------------------------------------------
Spreadsheets MS Excel 97
--------------------------------------------------------------------------------
Presentations MS PowerPoint 97
--------------------------------------------------------------------------------
CONFIDENTIAL
--------------------------------------------------------------------------------
Diagrams Visio 5.0
--------------------------------------------------------------------------------
Graphics GIF or JPEG format
--------------------------------------------------------------------------------
(b) Contractor shall provide Customer with five (5) sets of each type of
Document specified in Table 4-B (Document Requirements List) related to the
Repeaters, the NMS and other deliverable items and services to be delivered or
provided pursuant to the Contract. Contractor shall be responsible for
maintaining the currency of the Documents, and shall forward copies of all
changes and revisions to Customer. The submission requirements of these
Documents shall be in accordance with Table 4-B (Document Requirements List). In
addition, Contractor shall provide Customer with one (1) copy of each Document,
upon its initial issue and at each formal re-issue, on suitable magnetic media
designated by Customer.
(c) The Documents shall include, at a minimum, those Documents described
in the following Table 4-B and shall be subject to the approval or review of
Customer, as specified in such Table.
-------------------------------------------------------------------------------------------------
Table 4-B
Document Requirements List
-------------------------------------------------------------------------------------------------
Item Submission Submission No of Comments
Requirements Criteria Copies
-------------------------------------------------------------------------------------------------
Management Plan EDC Approval 5
-------------------------------------------------------------------------------------------------
Interface Control EDC, FDR Approval 5 Detailed at EDC
Documents Final at FDR
-------------------------------------------------------------------------------------------------
Power and Thermal EDC, FDR Review 5 Detailed at EDC
Budgets Final at FDR
-------------------------------------------------------------------------------------------------
Unit Performance FDR Review 5
Requirements
-------------------------------------------------------------------------------------------------
Glossary EDC, FDR Information 5
-------------------------------------------------------------------------------------------------
Progress Report Monthly Information 5
-------------------------------------------------------------------------------------------------
Design Review 2 weeks before review Information 2
Notification
-------------------------------------------------------------------------------------------------
Design Review 1 week before review Review 5 See relevant
Documents section for
detailed
description
-------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
*****Confidential information on this page has been omitted and filed separately with the Securities
and Exchange Commission. Confidential treatment has been requested with respect to to the omitted
portions.
----------------------------------------------------------------------------------------------------
Table 4-B
Document Requirements List
----------------------------------------------------------------------------------------------------
Item Submission Submission No of Comments
Requirements Criteria Copies
----------------------------------------------------------------------------------------------------
Detailed Repeater system FDR Approval 5
specification(s) and
descriptions of all
Repeaters and the NMS to
be delivered hereunder
----------------------------------------------------------------------------------------------------
Interface Requirements 1 week before review Approval 5
----------------------------------------------------------------------------------------------------
Prototype Test Plan and [*****] Approval 5 Shall address Design
Procedures (including Verification, In-
for individual LRUs) Factory, Rooftop,
and High-Power
Installation Site
Testing of
Repeaters.
----------------------------------------------------------------------------------------------------
Production Test Plan and [*****] Approval 5 Shall address Design
Procedures (including Verification, In-
for individual LRUs) Factory, Rooftop, and
High-Power
Installation Site
Testing of Repeaters
Shall address Design
Verification, In-
Factory, and Site
Installation
Testing of NMS.
----------------------------------------------------------------------------------------------------
Notification of 2 weeks before test Approval 5
Acceptance Test start
----------------------------------------------------------------------------------------------------
Final Test Report Within one week of Approval 5
test completion
----------------------------------------------------------------------------------------------------
Notification of Shipment 15 days before Information 5
shipment
----------------------------------------------------------------------------------------------------
System documentation [*****] Approval 5
(user & maintenance
----------------------------------------------------------------------------------------------------
CONFIDENTIAL
--------------------------------------------------------------------------------------------------------
Table 4-B
Document Requirements List
--------------------------------------------------------------------------------------------------------
Item Submission Submission No of Comments
Requirements Criteria Copies
--------------------------------------------------------------------------------------------------------
manuals)
--------------------------------------------------------------------------------------------------------
Training Program FDR Approval 5
--------------------------------------------------------------------------------------------------------
QA Plan EDC, FDR Approval 5
--------------------------------------------------------------------------------------------------------
CADM Plan EDC, FDR Approval 5
--------------------------------------------------------------------------------------------------------
QA Procedures As Requested Information 0 These procedures will be
made available for review
at Contractor's facility
--------------------------------------------------------------------------------------------------------
List of Spares FDR Approval 5
--------------------------------------------------------------------------------------------------------
4.3 Language.
(a) All documents shall be in the English language.
(b) Contractor shall maintain consistency in nomenclature in all
documentation. Contractor shall use and update as necessary the standard
glossary of terms attached hereto.
4.4 Documents Categories.
All documents shall be classified into the following categories. Documents
for approval or review shall be submitted in five (5) copies plus a single copy
on suitable magnetic media and in a format as listed in Table 4-A (Tool/File
Format Requirements).
(a) Approval.
--------
(1) A Document requiring Customer approval shall be received,
reviewed and approved by Customer prior to its planned use and/or
implementation by Contractor.
(2) If Customer approves such Document, Customer shall sign the
Document and notify Contractor in writing of its approval within
ten (10) Business Days after its receipt of such Document from
Contractor. Such Document shall be deemed approved if Customer
fails to deliver its written approval or a notice of disapproval
(pursuant to paragraph (a)(3) below) to Contractor within such
ten (10) Business Day period.
CONFIDENTIAL
(3) If the Document is not approved by Customer, Customer shall
notify Contractor within ten (10) Business Days after its receipt
of the Document from Contractor of those parts of the Document
which cannot be approved, together with the reasons for the
disapproval, and instructions concerning the submission of the
revised Document.
(4) The use by Contractor of a document in the "Approval" category,
prior to receipt by Contractor of Customer's written approval,
shall be at Contractor's own risk and expense.
(b) Review.
------
(1) A Document required to be submitted by Contractor for review by
Customer, shall be delivered to Customer prior to its planned use
and/or implementation by Contractor.
(2) If Customer's review reveals inadequacies in the Document,
Customer shall, within ten (10) Business Days after receipt of
the Document by Customer, inform Contractor of such inadequacies
and the part(s) of the Document to be altered. Customer may also
recommend actions and give re-submission instructions according
to the character of the inadequacies.
(3) The use or implementation by Contractor of a document in the
"Review" category prior to the lapse of the ten (10) Business Day
period referenced above or prior to the incorporation of
Customer's comments or the completion of other corrective action
acceptable to both Parties shall be at Contractor's own risk and
expense.
(c) Information.
-----------
A Document required to be submitted for information purposes only shall be
sent to Customer promptly upon issuance and approval of the Document by
Contractor.
4.5 System Documentation.
(a) Ten (10) Business Days prior to commencement of In-Factory Testing of
the Prototype Repeaters, Contractor shall provide a complete set of
documentation for all deliverable items to be tested by Contractor. The "System
Documentation" shall include the following elements:
(1) An Operations Manual shall cover the functions of the Repeaters
and the NMS, describing and interrelating the major features, and
shall consist of a description, the operating parameters,
operations and maintenance, and recommended troubleshooting
procedures at system level.
CONFIDENTIAL
(2) Documentation for all Software and firmware contained within or
related to each Repeater and the NMS, together with listings of
self-documented source code. Software source code delivered on
magnetic medium may be substituted for software listings.
(3) For all equipment that includes a high-level graphic interface,
details concerning each elementary function that an operator can
perform by detailing the successive selection of Graphic Unit
Interfaces (GUIs).
4.6 Maintenance Documentation.
Contractor shall specify and describe routine and preventive maintenance
guidelines and procedures and troubleshooting procedures in the Operations
Manual. A corrective maintenance manual shall also be provided, in which the
failure and maintenance reporting procedures and philosophy are indicated.
4.7 Operations Documentation.
Ten (10) copies of "Station Operator's Manuals" shall be provided by
Contractor with respect to the Repeaters, NMS and other hardware, Software or
related equipment to be provided by Contractor hereunder, including:
(a) equipment configuration and functional settings;
(b) manual operation of Contractor-supplied equipment; and
(c) recommended maintenance schedules and procedures.
4.8 Quality Assurance and CADM Documentation.
The QA and CADM documentation shall consist of:
(a) A Quality Assurance Plan, as set forth in Exhibit F (Quality Assurance
Plan).
(b) Quality Assurance Reports, which reports shall be generated as
required by Exhibit F (Quality Assurance Plan), and shall include descriptions
of failures, repairs, re-tests, and the results of the required audits. The QA
report may be delivered as part of the weekly progress report.
(c) CADM Documentation, including a CADM Plan and Procedures which
describes Contractor's methodology of referencing documents, format of documents
and control of updating documents. A current list of the latest approved
versions of all Documentation issued shall be maintained and provided to
Customer.
4.9 Progress Reporting.
Contractor shall prepare and submit to Customer's Program Manager reports
on the progress of the program, at monthly intervals ("Progress Reports").
Contractor shall
submit five (5) sets of each Progress Report to Customer, which reports shall
include the following:
(a) progress made since the previous report;
(b) resolution of previous problems and action items;
(c) newly identified technical problems and action items;
(d) work plan for the upcoming month;
(e) overall schedule progression and the impact of problems on the
schedule;
(f) action items requiring Customer assistance;
(g) details on Subcontractor schedules;
(h) action items in progress; and
(i) tests planned for the upcoming month, including tests planned by any
Subcontractor.
5. SERVICES
(a) Testing. Contractor shall perform all required testing, including
-------
Design Verification, In-Factory , and Rooftop Testing for the Prototype and
Production Standard Repeaters; Design Verification, In-Factory, and High-Power
Installation Site Testing for the Prototype and Production High-Power Repeaters;
and Design Verification, In-Factory, and Site Installation Testing for the NMS,
as specified in Exhibit E (Test Plans and Procedures) (to be developed
hereunder).
(1) Rooftop Testing of the Standard Repeaters shall demonstrate
successful mating and operation of all LRUs and associated
hardware; successful operation of the Repeater controller and its
interface with the NMS; and successful operation of the complete
Repeater in accordance with Exhibit A (Design Specifications).
(2) High-Power Installation Site Testing of the High Power Repeaters
shall demonstrate successful mating and operation of the
Enclosure Kit and the Klystron Kit and associated hardware;
successful operation of the Repeater controller and its interface
with the NMS; and successful operation of the complete Repeater
in accordance with Exhibit A (Design Specifications).
(3) Site Installation Testing of the NMS shall demonstrate successful
integration and operation of the NMS with the Repeater network in
accordance with Exhibit A (Design Specifications).
CONFIDENTIAL
(4) Performance of all Rooftop Testing shall include Rooftop Assembly
of LRUs and all associated hardware. Performance of High-Power
Installation Site Testing shall include assembly of all
associated hardware.
(5) Performance of all testing and preparation and submission of
required test-related documentation shall be in accordance with
the Contract
(b) Training. Contractor shall provide training courses and materials as
--------
specified herein.
(c) Warranty Coverage. Contractor shall provide warranty services as
-----------------
specified in the Contract.
(d) Marketing Support. At Contractor's expense, Contractor shall provide,
-----------------
during the Term of the Contract, reasonable technical marketing support to
Customer by telephone during Contractor's normal business hours, in support of
Customer's business opportunities consistent with Contractor's other obligations
hereunder. In the event Customer requires other marketing support beyond
telephone support, Customer shall submit its request to Contractor for such
additional marketing support and Contractor shall provide such additional
support, subject to the Parties' mutual agreement on reasonable terms and
conditions to governs such additional marketing support.
6. PROGRAM MANAGEMENT
6.1 Responsibilities.
(a) Contractor shall manage all matters relating to the performance of this
Contract, and shall ensure that the personnel and facilities necessary for the
performance of the Contract are assigned and made available at the times and
places necessary to meet the schedule established by the Contract.
(b) Contractor shall designate a person responsible for Quality Assurance
for the duration of the Contract who has an independent reporting chain from the
project management. Customer shall have access to all QA aspects of the
Contract, without restriction on time or location of access.
6.2 Program Management Plan.
(a) Contractor shall provide a Program Management Plan. This Plan shall be
provided within ten (10) Calendar Days after EDC and shall thereafter be updated
as required to maintain a full description of the program structure and
management methods.
(b) The Program Management Plan shall provide a "Program Control System,"
which monitors all program activities and clearly identifies all milestones,
reporting
CONFIDENTIAL
dates, completion dates, deliveries, design reviews, and critical paths. This
Program Control System shall cover the period from EDC to the Project Completion
Date.
(c) The Program Management Plan shall include a schedule showing the
significant events of the program. The events on this schedule shall include
factory testing, expected delivery by Subcontractors of major subsystem
equipment, on-site acceptance testing, Milestones, and progress reports.
CONFIDENTIAL
6.3 Data and Documentation Management.
Contractor shall provide a "Configuration and Data Management Plan," which
shall detail the system to be adopted for Document management, defining the
issue status designation system for controlled Documents, and the registration,
handling, filing, and archiving system for controlled and uncontrolled, baseline
and non-baseline Documents. The plan shall also define the specified forms to be
used in the project management and to control the status of Documents. Within
this Configuration and Data Management Plan, reference shall be made to Customer
Document submission and review criteria, specified in Table 4-B (Document
Requirements List), and to the delivery requirements specified in Exhibit D
(Delivery Schedule). This Plan complements the Quality Assurance Plan (set
forth in Exhibit F) to ensure that up-to-date technical information is available
at all times.
7. MEETINGS.
7.1 General.
(a) Contractor shall keep Customer currently informed, and shall meet with
Customer to discuss and review the status and the progress of the Work being
performed. In particular, the meetings specified in this Section 7 (Meetings)
shall be arranged in accordance herewith.
(b) For all meetings, except as otherwise specified herein, Contractor
shall provide an agenda (at least two (2) Business Days in advance of each
meeting), all supporting material (as required in Table 4-B (Document
Requirements List)), and minutes of the meetings (to be delivered by Contractor
to Customer by no later than five (5) Business Days following the meeting for
Customer's approval).
7.2 Contractor Review Meetings.
(a) Contractor shall plan and execute major program reviews as follows
(each a "Review"):
(1) Program Kick-Off Meeting, to be held at Contractor's premises;
(2) Final Design Review (FDR), to be held at Contractor's premises;
(3) Design Verification Testing Review (Prototypes), to be held at
Contractor's premises; and
(4) Design Verification Testing Review (Production), to be held at
Contractor's premises.
(b) These Reviews shall be scheduled so as to allow a thorough and
comprehensive evaluation of the design, test readiness, and other significant
elements of the program, as applicable, and shall act as major decision
milestones before proceeding
CONFIDENTIAL
to the next phase of the program. Other technical and/or management Reviews
shall be scheduled when required at Contractor's premises, or at a venue to be
mutually agreed.
(c) Five (5) Business Days prior to each Review, Contractor shall provide
the whole of the Data and Documentation package to be discussed at or relevant
to such Review.
(d) "Successful Completion" of each Review shall be deemed to occur when
(1) Contractor has provided all required Data and Documentation to Customer, (2)
Customer has reviewed and approved the Data and Documentation, and (3) the
Parties have reviewed all Action Items and agreed to a closure plan therefor.
(e) The Data and Documentation provided shall be self-contained, of
sufficiently high quality and properly structured, such that it provides all of
the information necessary to a reviewer experienced in signal processing and
telecommunications systems, and having access to the Contract but not to reports
of previous presentations or other, non-contractual documents.
7.3 Program Kick-Off Meeting.
The objective of the Program Kick-Off Meeting is to review the Program
Management Plan, meet key personnel, review manufacturing facilities, and
finalize and delineate responsibilities between and among Contractor and the
Customer's network integration contractor.
7.4 Final Design Review Meeting (FDR).
(a) The objective of the FDR is to conduct a formal technical review of the
Repeaters and the NMS and any related hardware or software after the detailed
design of each item is completed. The FDR establishes:
(1) the completeness and integrity of the detailed design;
(2) that the design complies with all the requirements of this Contract
and of all applicable documents, and that the presented analyses
and/or test data demonstrate such compliance; and
(3) that the external interfaces of the Repeaters comply with the
interface control documents (ICDs).
(b) To this end, the FDR will cover the technical, operational and
maintenance material, which shall include the following:
(1) detailed overall description of the Repeaters, including
interconnections between racks, and grounding requirements;
CONFIDENTIAL
(2) a detailed Repeater system specification(s) and descriptions of
all Repeaters and the NMS to be delivered hereunder, which is
subject to the approval of Customer;
(3) detailed specifications, descriptions and final schematic drawings
of all LRUs, including the DSP Block Assembly, the RF Down-
Converter, the RF Up-Converter, the Power Amplifier, the Output
Filter, the Controller Assembly, and the NMS;
(4) complete overall and subsystem block and level diagrams for the
Repeaters, each LRU and the NMS;
(5) detailed analyses, showing compliance with Exhibit A (Design
Specifications);
(6) operation and maintenance plans;
(7) MTBF by LRU and overall Repeater availability and reliability;
(8) finalization of ICDs and detailed descriptions of all interfaces;
(9) tests plans, procedures, and schedules for all required testing,
including sufficient detail to permit evaluation of the proposed
test methods;
(10) updated project planning documentation for the remainder of the
Contract;
(11) QA Reports, detailing QA activities through FDR and schedule of
QA activities to the end of the program; and
(12) a list of all deliverable items.
7.5 Design Verification Testing Review (Prototype Repeaters).
(a) Contractor shall convene a meeting to review the results of the Design
Verification Tests conducted on the Prototype Repeaters in the factory
environment, prior to shipment to the designated installation sites specified in
Exhibit D (Delivery Schedule), with the purpose of verifying that these tests
have been completed satisfactorily and in accordance with the Test Plans and
Procedures (Exhibit E). This meeting shall be held at Contractor's premises.
Contractor shall supply Customer with five (5) copies of the test results, at
the completion of each applicable test.
(b) If deficiencies are observed with the test methods or results in
demonstrating compliance with the requirements, Customer will have the right to
request additional testing, with alternative test methods as appropriate, to be
performed by Contractor.
CONFIDENTIAL
(c) In addition to the requirements of Section 7.2(d), Successful
Completion of this Review shall be deemed to occur upon satisfactory completion
of all outstanding actions and solution of all discrepancies identified by
Customer. Customer shall provide notice to Contractor in writing upon such
Successful Completion of this Review.
7.6 Design Verification Testing Review (Production Repeaters).
(a) Contractor shall convene a meeting to review the results of the Design
Verification Tests conducted on the Repeaters (manufactured during the
production phase of the Contract) in the factory environment, prior to shipment
to the installation sites specified in Exhibit D (Delivery Schedule), with the
purpose of verifying that these tests have been completed satisfactorily in
accordance with the Test Plans and Procedures (Exhibit E). This meeting shall be
held at Contractor's premises. Contractor shall supply Customer with five (5)
copies of the test results, at the completion of each test.
(b) If deficiencies are observed with the test methods or results in
demonstrating compliance with the requirements, Customer will have the right to
request additional testing, with alternative test methods as appropriate, to be
performed by Contractor.
(c) In addition to the requirements of Section 7.2(d), Successful
Completion of this Review shall be deemed to occur upon satisfactory completion
of all outstanding actions and solution of all discrepancies identified by
Customer. Customer shall provide notice to Contractor in writing upon such
Successful Completion of this Review.
7.7 Subcontractor Status and Design Reviews.
Customer, at its discretion, may attend and observe all status and design
reviews which Contractor may require of its Subcontractors. Contractor shall
supply Customer with documentation on all matters relating to such reviews one
(1) week prior to each scheduled review.
7.8 Progress Meetings.
(a) Customer may, at its discretion, convene meetings to discuss and review
Repeater and NMS design and to discuss progress of the Contract at least twice
each month during the period from EDC through Project Completion Date (the
"Progress Meetings"). For all such Progress Meetings, Customer shall provide an
agenda to Contractor by no later than two (2) Business Days prior to the
scheduled meeting date.
(b) These Progress Meetings shall be organized either through
teleconferences, video conference, or in person at a location to be mutually
agreed.
7.9 Contract Review Meetings.
In addition to the Progress Meetings, Customer shall be advised by
Contractor of and shall have the option of attending, any regularly scheduled
internal meetings that Contractor may establish to assess progress and problems.
Customer shall be provided with the agenda relevant to these meetings two (2)
Business Days prior to the meetings
CONFIDENTIAL
taking place.
7.10 Attendance at Meetings.
In the event that a meeting is convened at Contractor's or any
Subcontractor's plant, Contractor shall make all necessary arrangements to
facilitate entry to the meeting place by Customer Personnel and Customer's
Associates.
7.11 Action Item Control.
(a) Contractor, in consultation with Customer, shall maintain a register of
all actions items identified in each meeting or Review and shall uniquely
identify each action item. This register shall include the action item
description, the person(s) responsible for the resolution of each action item,
the date the action item was raised, the completion due date, and the actual
completion date.
(b) Copies of this register shall be provided to Customer at the regular
Progress Meetings.
CONFIDENTIAL
8. PRODUCT ASSURANCE REQUIREMENTS
8.1 Scope.
This Section 8 (Product Assurance Requirements) defines the minimum product
assurance requirements for the Repeater and NMS. These requirements are the
principal elements that Contractor shall satisfy in the establishment and
implementation of the product assurance program under this Contract. The
requirements of this section shall also be applicable to Work performed by all
Subcontractors.
8.2 Product Assurance Program Objectives.
(a) A comprehensive product assurance program shall be established and
maintained to ensure that all Repeaters, the NMS, and other deliverable items,
including Software, are designed, manufactured, tested, stored and delivered to
meet the specified performance requirements of the Contract (the "Product
Assurance Program"). The Product Assurance Program shall include detailed
requirements, policies, objectives, plans and methods of implementation relative
to reliability, parts and materials, processes control, non-conforming material
control, configuration and data management, and safety which are to be applied
throughout the design, development, fabrication, integration, testing, storage,
delivery and operations phases of the Contract. Contractor's Product Assurance
Program shall ensure that these requirements are effectively implemented
throughout the duration of the Contract.
(b) The Product Assurance Program shall provide for the early and prompt
detection of actual and potential deficiencies, system incompatibilities,
marginal quality, trends, and any other conditions which could result in
unsatisfactory performance. It shall provide for the effective action to
correct all such conditions.
(c) The program shall provide full visibility of Contractor and
Subcontractor activities to Customer.
8.3 Quality Assurance Plan.
Contractor shall comply with the Quality Assurance Plan set forth in
Exhibit F.
8.4 Planning.
Contractor shall formally plan the Work, and implement internal controls,
so that:
(a) requirements are adequately defined to the participants;
(b) characteristics crucial to safe and proper functioning are identified;
(c) statutory and safety requirements are identified;
(d) Work is sub-divided into units and resources needed are defined;
CONFIDENTIAL
(e) interface responsibilities are defined;
(f) a program of work is established; and
(g) procedures to be followed are specified.
8.5 Design Control.
(a) Contractor shall document feasibility, outline and detailed designs as
appropriate to the circumstances. All designs, drawing and calculations shall
be checked and shall be traceable to information sources, assumptions choices
made, designer and verifier.
(b) Designs shall be reviewed by Contractor and any corrections needed
made, before submission to Customer. Such reviews shall include examination of
all interfacing features and of testing requirements.
(c) Changes to designs shall be controlled according to the CADM Plan.
(d) Practices in the development of Software shall conform to a recognized
code of practice and shall include:
(1) a software requirements definition;
(2) an architectural design document;
(3) standardized procedures and practices for detailed design;
(4) a test plan;
(5) a reporting system for performance and discrepancies;
(6) a program of reviews at key points;
(7) a history record; and
(8) timely preparation of user documentation.
(e) Records shall be maintained suitably for audit.
8.6 Document Control.
(a) Document procedures shall be supervised by Contractor's Configuration
Manager according to the CADM Plan, which is subject to Customer's approval
pursuant to Table 4-B.
(b) The CADM Plan shall cover:
CONFIDENTIAL
(1) methods of registration of Data and Documentation, both internally
generated and from outside sources;
(2) method of approval and issuing of Data and Documentation;
(3) method of revision of Data and Documentation and
withdrawal/cancellation of superseded items;
(4) system for requesting and approving changes to materials,
equipment, Software, and the overall program;
(c) The CADM Plan shall also reference:
(1) Document defining system architecture
(2) Documents defining the configuration items
(3) Document schedules; and
(4) The filing system.
(d) Changes to the Data and Documentation that do not affect any interface
with other Customer contractors, the applicable technical, performance or design
specifications, including as set forth in Exhibit A, or the Contract Price shall
be subject to Contractor's change control system; provided that Customer may
have access to the change control system and may ask questions and provide
suggestions and comments, all of which shall be reasonably addressed by
Contractor. All other Data and Documentation changes shall be referred to
Customer for approval.
(e) All submitted Data and Documentation affected by changes are to be re-
issued as a subsequent revision number.
(f) Copies of previously issued Data and Documentation shall be retained by
Contractor, and available to Customer upon request, for archival and reference
purposes, but suitably identified as superseded.
8.7 Purchasing.
Contractor shall be responsible for ensuring that any subcontracted
supplies conform to project requirements with particular regard to:
(a) The Design Specifications (Exhibit A);
(b) The Delivery Schedule (Exhibit D); and
(c) The Quality Assurance Plan (Exhibit F).
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
8.8 Traceability.
All equipment, including Repeaters, the NMS and LRUs, shall be bar-coded
with serial numbers and shall carry nameplates on which modification numbers can
be marked by service engineers when implemented, in order that all such
equipment in its current state is traceable to its record documents.
8.9 Compliance with Laws, Regulations and Certificates.
(a) Contractor shall perform the Work in accordance with site safety
practices and all applicable Laws.
(b) Measurement and test equipment shall have relevant calibration
certificates traceable to applicable standards, including those issued by
governmental authorities, and the calibration status of each piece of equipment
shall be readily visible when using equipment. Instruments used in tests shall
be identified on the test records.
9. TESTING ACTIVITIES
9.1 Test Plans and Procedures.
(a) Contractor shall perform testing of the Prototype and Production
Repeaters and the NMS in accordance with Test Plans and Procedures set forth in
Exhibit E (Test Plans and Procedures).
(b) Contractor shall deliver to Customer the Prototype Repeater Test Plan
and Procedures on or before [*****] and such plan and procedures shall address
Design Verification, In-Factory, Rooftop, and High-Power Installation Site
Testing.
(c) Contractor shall deliver to Customer the Production Repeater Test Plan
and Procedures on or before [*****] and such plan and procedures shall address
Design Verification, In-Factory, Rooftop, and Site Installation Testing.
(d) Contractor shall deliver to Customer the NMS Test Plan and Procedures
on or before [*****] and such plan and procedures shall address Design
Verification, In-Factory, and Site Installation Testing of the NMS.
(e) Finalization of all Test Plans and Procedures shall be subject to
Customer approval.
(f) The test plans and procedures for the Rooftop Testing shall be designed
to demonstrate successful mating and operation of all LRUs and associated
hardware; successful operation of the Repeater controller and its interface with
the NMS; and
CONFIDENTIAL
successful operation of the complete Repeater in accordance with Exhibit A
(Design Specifications).
(g) The test plans and procedures for the High-Power Installation Site
Testing shall be designed to demonstrate successful mating and operation of the
Enclosure Kit and the Klystron Kit and associated hardware; successful operation
of the Repeater Controller and its interface with the NMS; and successful
operation of the complete Repeater in accordance with Exhibit A (Design
Specifications)
(h) The test plans and procedures for the Site Installation Testing for the
NMS shall be designed to demonstrate successful integration and operation of the
NMS with the Repeater network in accordance with Exhibit A (Design
Specifications).
9.2 Test Reports.
Following completion of any required testing, Contractor shall prepare and
submit to Customer for approval, reports detailing the tests performed and the
results obtained and the related certifications, all in accordance with Exhibit
E (Test Plan and Procedures) and the Contract.
9.3 Access to Testing Activities.
Customer may, at its election and expense, have its Associates,
Consultants, or other designees attend each test as required to be performed by
Contractor pursuant to the Contract, including Design Verification Testing of
the Repeaters, each LRU and the NMS and any other testing conducted by
Contractor or its Subcontractors with respect to the Work to be performed
hereunder. Attendance by Customer shall be for purposes of monitoring and
observation and shall be on a non-interference basis; provided, however,
Customer may ask questions, make suggestions, or otherwise comment on the
proceedings. Contractor shall notify Customer reasonably in advance of the time
and place for any such testing activities and Customer shall promptly inform
Contractor of its intent to attend the testing. Contractor shall make
arrangements for Customer's entrance and access into Contractor Facility(ies)
for purposes of attending the testing. Customer attendance at any such test
shall in no way be construed or deemed to represent Customer's acceptance of the
items being tested or Customer's waiver of any claims or rights hereunder.
10. TRAINING
Contractor will provide training to Customer, Customer Personnel and
Customer's designees in accordance with the following:
(a) Contractor shall provide appropriate training on each aspect of the
Repeaters and NMS and other deliverables (including installation, operation,
maintenance, repair, provisioning, monitoring and control), using the training
approach as specified below. Contractor shall provide Customer, at no
additional tuition cost or expense (other than Customer's own travel expenses to
Contractor' training facility), three (3) one-week training sessions for no more
than twelve (12) trainees per session. Additional training desired by Customer
will be mutually agreed upon.
CONFIDENTIAL
(b) Contractor shall develop all training materials and shall provide such
training materials, together with documentary background material and other
course notes to each attendee at the beginning of each course.
(c) Contractor agrees to offer training courses during each one-week
session which address the following areas:
(1) overview, installation, administration and operations, testing,
maintenance, trouble-shooting, repair and safety procedures with
respect to the Repeaters, including assembly of an entire Repeater
using a pre-wired rack and applicable LRUs.;
(2) overview, installation, administration and operations, testing,
maintenance, trouble-shooting, repair and safety procedures with
respect to the NMS;
(3) "train the trainer" training, so that individuals reasonably
experienced in the electronic telecommunications equipment
operations or maintenance industries, or other related industries,
will be capable of performing operational and maintenance functions
related to the NMS, Repeaters or other deliverables in a safe,
efficient, and effective manner.
(d) Such training courses will be available at Contractor or other
designated training facilities and will consist of formal and informal classroom
instruction and actual hands-on training in laboratory or simulated or actual
installation environments. Contractor also reserves the right to subcontract the
training to a designated third party vendor, which subcontract shall be deemed a
Material Subcontract and shall be subject to the terms of Article 10.2 (Material
Subcontracts) of the Terms and Conditions.
(e) Contractor shall provide all remedial training and training on any
changes, updates and enhancements to the Repeaters, NMS or other deliverable
items as otherwise necessary for Customer, or its designee(s), to be capable of
performing all necessary services, including installation, operation,
maintenance, repair, provisioning, monitoring and control of the Repeaters and
the NMS.
11. WARRANTY SUPPORT
(a) Contractor shall perform warranty activities in accordance with the
Contract.
(b) As of the Effective Date of the Contract, the LRUs are those items set
forth in Table 11-A below.
(c) In accordance with Article 17.11 (Remedies (Repeaters)) of the Terms
and Conditions, Contractor shall submit for Customer's review and comment LRU
sparing levels, together with the associated availability calculations. The
sparing levels shall be sufficient to cover anticipated failure rates for
Repeaters and the individual LRUs, and
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
the sparing levels shall be updated in accordance with Article 17.11 (Remedies
(Repeaters)) of the Terms and Conditions to reflect actual failure rates.
(d) The preliminary sparing level is as set forth below. In no event shall
Contractor's proposed inventory plan provide for sparing levels of less than the
quantities set forth in this preliminary sparing level.
[*****]
*All Racks provided by Contractor to Customer pursuant to each Inventory
Plan shall be pre-wired and ready for LRU installation (in the event Customer
elects to assemble a replacement Repeater pursuant to Article 17.11 (Remedies
(Repeaters)) of the Terms and Conditions).
12. NMS MAINTENANCE
On or before [*****], Contractor shall provide Customer with a proposal for
annual maintenance of the NMS in accordance with Article 26 of the Terms and
Conditions.
* END OF DOCUMENT *
CONFIDENTIAL
**** Confidential treatment has been requested for portions of this agreement.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [*****]. A complete version of this
agreement has been filed separately with the Securities and Exchange Commission.
CONTRACT
FOR
THE DESIGN, DEVELOPMENT AND PURCHASE OF
TERRESTRIAL REPEATER EQUIPMENT
By and Between
XM SATELLITE RADIO INC.
and
XXXXXX ELECTRONICS CORPORATION
EXHIBIT C
PRICING, MILESTONES AND PAYMENT PLAN
CONFIDENTIALITY NOTICE
----------------------
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and Xxxxxx Electronics Corporation, and shall not be
published or disclosed to any third party without the express written consent of
a duly authorized representative of XM Satellite Radio Inc. and Xxxxxx
Electronics Corporation.
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 1
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
EXHIBIT C
PRICING, MILESTONES AND PAYMENT PLAN
TABLE OF CONTENTS
1. GENERAL................................................................ 3
2. CONTRACT PRICE......................................................... 3
2.1 Contract Price................................................... 3
2.2 Repeater Unit Pricing............................................ 3
2.3 Network Management System........................................ 6
3. MILESTONE PAYMENT PLAN AND MIlESTONE ACHIEVEMENT CRITERIA.............. 6
3.1 [*****] MILESTONES............................................... 6
3.2 [*****] MILESTONES............................................... 7
3.3 [*****] MILESTONES............................................... 8
3.4 ESCROW ACCOUNT AND PAYMENT....................................... 8
4. OPTION PRICING......................................................... 9
4.1 PRICING FOR OPTIONAL REPEATERS................................... 9
4.2 NMS VIDEO WALL................................................... 11
4.3 EXTENDED WARRANTY ON REPEATERS................................... 11
4.4 ANNUAL MAINTENANCE OF NMS........................................ 12
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 2
CONFIDENTIAL
EXHIBIT C
PRICING, MILESTONES AND PAYMENT PLAN
1. GENERAL
(a) This Exhibit C (Pricing, Milestones and Payment Plan) describes the
applicable charges for the Work. The Contract Price (as defined below) and other
charges indicated in this Exhibit C shall compensate Contractor for the Work to
be performed and provided pursuant to the Contract, including the resources used
therefor.
(b) The Contract Price will be paid for in accordance with Section 3
(Milestone Payment Plan and Milestone Achievement Criteria) below. All invoicing
and payment terms shall be in accordance with Article 6 (Invoicing and Payment)
of the Terms and Conditions.
(c) Contractor acknowledges that, except as may be otherwise provided in
the Contract, expenses and costs that Contractor incurs in the performance of
the Work (including expenses related to travel and lodging, document production,
and long-distance telephone) are included in the Contract Price. Accordingly,
such Contractor expenses are not separately reimbursable by Customer.
(d) All charges set forth herein are in United States Dollars and shall be
paid by Customer in the same currency.
(e) All capitalized terms used and not defined in this Exhibit C shall have
the same meanings given them in the Terms and Conditions or its other Exhibits.
2. CONTRACT PRICE
2.1 Contract Price.
(a) For the Work to be performed pursuant to the Contract, Customer shall
pay Contractor the firm fixed prices as set forth in, and in accordance with,
this Exhibit C (such firm fixed prices to be referred to collectively as the
"Contract Price").
(b) The Contract Price may be amended from time to time only in accordance
with the Terms and Conditions and this Exhibit C, including as a result of
Customer's exercise of the options specified herein.
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 3
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
2.2 Repeater Unit Pricing.
(a) Repeaters to be purchased pursuant to the Contract are priced on a per
unit basis in accordance with Table 2.2 below:
--------------------------------------------------------------
Table 2.2
--------------------------------------------------------------
Repeater Category Firm Fixed Price per Repeater
$/Repeater
--------------------------------------------------------------
Standard Non-Redundant [*****]
Repeater
--------------------------------------------------------------
Standard Sectored Non- [*****]
Redundant Repeater
--------------------------------------------------------------
High-Power Redundant Repeater [*****]
--------------------------------------------------------------
High-Power Sectored Redundant [*****]
Repeater
--------------------------------------------------------------
(b) The firm fixed prices set forth in Table 2.2 above include charges for
the following services and deliverables:
(1) costs for performance of all design, development, engineering and
manufacturing work, including non-recurring engineering costs;
(2) development, manufacture and delivery of all Repeaters (including
Prototype Repeaters) and Rooftop Assembly of Standard Repeaters
and assembly of High-Power Repeaters at the Installation Sites;
(3) custom ASIC chip development or, alternatively, development and
implementation of Field Programmable Gate Array (FPGA) for the
digital signal processing;
(4) taxes and duties (including all import duties and related
assessments, but excluding sales and use taxes, which Contractor
will invoice to Customer and collect and remit on behalf of
Customer without xxxx-up in accordance with Article 5.4(b) of the
Terms and Conditions);
(5) all testing required in accordance with the Terms and Conditions
and Exhibit E (Test Plans and Procedures);
(6) delivery of Enclosure Kits to the Staging Areas (including
packing, crating, shipping, handling, and insurance therefor) and
delivery of PA Kits to the Installation Sites and delivery of
High-Power Repeaters to
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 4
--------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------
the Installation Sites (including packing, crating, shipping,
handling, and insurance therefor);
(7) training as set forth in Exhibit B (Statement of Work);
(8) Data and Documentation;
(9) warranty coverage during the applicable Warranty Periods
(including sparing and Field Support) as set forth in the Terms
and Conditions;
(10) insurance coverage as required in accordance with Article 20
(Insurance) of the Terms and Conditions; and
(11) other services, responsibilities, equipment, products and
materials not specifically described in Exhibit B (Statement of
Work) that are incidental to and reasonably required for the
proper provision and performance of the Work.
(c) As set forth in paragraph (b) above, the Contract Price includes
charges related to the shipping of the Repeaters. Such charges are based upon
the following estimation: approximately [*****] of the Repeaters will be
delivered to the Eastern region of the United States, [*****] of the Repeaters
will be delivered to the Central region of the United States, and the remaining
[*****] of the Repeaters will be delivered to the Western region of the United
States. Customer may, at its option, elect to alter this allocation of delivery
of the Repeaters among the Eastern, Central and Western regions of the United
States without any impact to the per unit Repeater pricing set forth in Table
2.2 above; provided, however, if Customer requires a substantial change to these
delivery projections (i.e., [*****] or more change in the allocation of
Repeaters within the Eastern, Central and Western regions), Contractor and
Customer shall negotiate in good faith an equitable adjustment (either up or
down) to the component of the Contract Price allocable to shipping charges,
depending upon the net impact of the directed change. In order to validate any
adjustment to the portion of the Contract Price allocable to shipping,
Contractor shall provide Customer with access to all pertinent shipping
documentation and invoices, including such information utilized by Contractor in
formulating the initial charge for shipping expenses, and Customer may review
and audit such documentation.
(d) In the event the Nominal Order is decreased or increased by Customer in
accordance with the Terms and Conditions, then the firm fixed prices for each
category of Repeater set forth in Table 2.2 shall be adjusted as follows:
(1) the amount of [*****] shall be deducted from the per unit prices
for each category of Repeater (such sum represents the amount of
[*****] Milestone Payment No. 1 (i.e., [*****] of [*****])
amortized over the Nominal Order of Repeaters (i.e., 1578
Repeaters); and
(2) the amount of Milestone Payment No. 1 (i.e., [*****]) shall then
be amortized over the revised Nominal Order proportionately
(i.e., [*****] divided by the number of Repeaters in the revised
Nominal
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 5
--------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------
Order), which amount will then be added to the per unit price for
each Repeater (as reduced per paragraph (d)(1) above) and Table
2.2 shall be updated accordingly.
(e) In the event Customer requires Field Support following completion of
the Work or Field Support that is materially unrelated to the Work, Contractor
shall, upon Customer's request, provide such additional Field Support at the
rate of [*****] per day for each Contractor or Subcontractor technical support
personnel assigned to perform the Field Support. Customer shall pay such daily
rate and shall reimburse Contractor, at cost and without a xxxx-up, for the
direct reasonable expenses incurred by such personnel in performing additional
Field Support. Charges for additional Field Support shall be invoiced by
Contractor in accordance with the Terms and Conditions and shall be accompanied
by supporting documentation concerning the direct expenses (i.e., receipts).
2.3 Network Management System.
Customer shall pay Contractor a not to exceed price of [*****] for the Work
related to the design, development, construction, delivery and installation of
the Network Management System, including the provision of the NMS
servers/computers and other equipment, and operator training, as such Work is
more fully described in the Contract. Contractor shall propose a firm fixed
price for the NMS on or before [*****].
3. Milestone Payment Plan and MIlestone Achievement Criteria
3.1 [*****] Milestones.
(a) The Contract Price with respect to the [*****] for Repeaters shall be
earned by Contractor in installments based upon Contractor's satisfactory
completion of the [*****] Milestones set forth in Table 3.1 below in accordance
with the corresponding Milestone Achievement Criteria. Completed [*****]
Milestones shall be invoiced by Contractor and paid by Customer in accordance
with Article 6 (Invoicing and Payment) of the Terms and Conditions.
--------------------------------------------------------------------------------
Table 3.1
[*****] Milestone Payment Plan and Milestone Achievement Criteria
--------------------------------------------------------------------------------
[*****] Milestone Milestone Achievement Milestone Payment
Milestone Achievement Date Criteria
--------------------------------------------------------------------------------
1 On or before 5 Not Applicable [*****]
Business Days
following Execution
Date
--------------------------------------------------------------------------------
2 [*****] [*****] [*****]
--------------------------------------------------------------------------------
3 [*****] [*****] [*****]
--------------------------------------------------------------------------------
4 [*****] [*****] [*****]
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 6
--------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Table 3.1
[*****] Milestone Payment Plan and Milestone Achievement Criteria
--------------------------------------------------------------------------------
[*****] Milestone Milestone Achievement Milestone Payment
Milestone Achievement Date Criteria
--------------------------------------------------------------------------------
5 [*****] [*****] [*****]
--------------------------------------------------------------------------------
(b) With respect to [*****] Milestone Nos. 2, 3 and 5, the Milestone
Achievement Criteria shall be deemed to be achieved by Contractor upon
Contractor's delivery to Customer of Contractor's written certification that the
Milestone has been achieved, such certification to be accompanied by copies of
Contractor's purchase orders issued with respect to such Milestones (with
financial information redacted). The certification shall show the applicable
purchase order numbers, supplier names, quantity of material released in such
purchase orders, and quantity of Repeater units that such ordered materials
represent. Upon Customer's reasonable request, Contractor shall provide Customer
with additional related information.
(c) Subject to paragraph (d) below, [*****] Milestone Payment Nos. 1-5
(totaling [*****]) are included in the firm fixed unit price for each category
of Repeaters, as such prices are set out in Table 2.2 above. Accordingly, for
each of the 1,578 Repeaters included in the Nominal Order, a credit in the
amount of [*****] shall be given toward the price of each Repeater. The credit
shall appear on the applicable invoices as follows: [*****] for each shipped
Enclosure Kit and [*****] for each Accepted Repeater.
(d) In the event the Nominal Order is increased or decreased by Customer in
accordance with the Terms and Conditions, the Parties shall calculate a revised
credit amount with respect to each Repeater, such credit equal to the quotient
of the total amount of [*****] Milestone Payment Nos. 1-5 (i.e., [*****])
divided by the number of Repeaters in the revised Nominal Order. Such revised
credit shall be applied to the applicable invoices as follows: [*****] for each
shipped Enclosure Kit and [*****] for each Accepted Repeater.
3.2 Production Milestones.
(a) The Contract Price with respect to production and Acceptance of
Repeaters shall be earned by Contractor in installments based upon Contractor's
satisfactory completion of the [*****] Milestones set forth in Table 3.2 below
in accordance with the corresponding Milestone Achievement Criteria. Completed
[*****] Milestones shall be invoiced by Contractor and paid by Customer in
accordance with Article 6 (Invoicing and Payment) of the Terms and Conditions.
(b) Invoices for [*****] Milestones shall be subject to the credit and
revised credit described in paragraphs (c) and (d) of Section 3.1 ([*****]
Milestones) above.
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 7
--------------------------------------------------------------------------------
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Table 3.2
[*****] Milestone Payment Plan and Milestone Achievement Criteria
--------------------------------------------------------------------------------
[*****] Milestone Milestone Achievement Milestone Payment
Milestone Achievement Date Criteria
--------------------------------------------------------------------------------
[*****] [*****] [*****] [*****]
--------------------------------------------------------------------------------
3.3 [*****] Milestones.
(a) The Contract Price with respect to the [*****] shall be earned by
Contractor in installments based upon Contractor's satisfactory completion of
the [*****] Milestones set forth in Table 3.3 below in accordance with the
corresponding Milestone Achievement Criteria. Completed Milestones shall be
invoiced by Contractor in accordance with Article 6 (Invoicing and Payment) of
the Terms and Conditions.
--------------------------------------------------------------------------------
Table 3.3
[*****] Milestone Payment Plan and
Milestone Achievement Criteria
--------------------------------------------------------------------------------
Milestone Milestone Milestone Achievement Milestone Payment
Achievement Date Criteria
--------------------------------------------------------------------------------
[*****] [*****] [*****] [*****]
--------------------------------------------------------------------------------
3.4 Escrow Account and Payment.
(a) Set forth below is a schedule of payments to be made by Customer into
the Payment Escrow Account to be established, maintained and terminated pursuant
to Article 6.2 (Escrow Account and Payment) of the Terms and Conditions. With
respect to Escrow Payment Nos. 1-6 in Table 3.4, Customer shall make the
applicable payment into such account on or before ten (10) Business Days
following the date upon which Contractor furnishes Customer with an aged
materials report showing that Contractor has ordered the supplies required by
the applicable event in Table 3.4, but in no event earlier than the earliest
date of payment identified in Table 3.4. In the event the aged materials report
shows that Contractor has ordered less than the amount required for that event,
the amount Customer is required to pay into the Payment Escrow Account shall be
proportionately reduced. With respect to Escrow Payment Nos. 7-11 in Table 3.4,
Customer shall make the applicable payment into the Payment Escrow Account on or
before ten (10) Business Days following the date upon which Contractor furnishes
Customer with a report showing the cumulative number of Enclosure Kits shipped
by Contractor and received at the Staging Areas in the case of Standard
Repeaters and Installation Sites in the case of High-Power Repeaters, but in no
event earlier than the earliest date of payment identified in Table 3.4. In the
event the report shows that fewer Enclosure Kits have been received at the
Staging Areas/Installation Sites than the amount required for that event, the
amount Customer is required to pay into the Payment Escrow
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 8
CONFIDENTIAL
***** Certain information on this page has been omitted and filed
separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
Account shall be proportionately reduced. Contractor may withdraw funds
from such account in accordance with Article 6.2 of the Terms and
Conditions.
--------------------------------------------------------------------------------
Table 3.4
Schedule of Escrow Payments
--------------------------------------------------------------------------------
Escrow Event Earliest Date of Amount to be
Payment Payment Paid into Escrow
No.
--------------------------------------------------------------------------------
[*****] [*****] [*****] [*****]
--------------------------------------------------------------------------------
(b) In the event the per unit price of Repeaters set forth in Section
2.2 (Repeater Unit Pricing) above is increased, then the schedule of escrow
payments set forth in Table 3.4 above shall be increased as follows: the
increase in the Contract Price resulting from the increase in the per unit
price of Repeaters shall be spread proportionately over those payments of
Escrow Payment Nos. 7-11 remaining to be paid by Customer and the amount of
such payments shall be increased by the applicable proportion of the
increase in the Contract Price. Likewise, in the event the per unit price
of Repeaters set forth in Section 2.2 (Repeater Unit Pricing) above is
decreased, then the schedule of escrow payments set forth in Table 3.4
above shall be decreased as follows: the decrease in the Contract Price
resulting from the decrease in the per unit price of Repeaters shall be
spread proportionately over those payments of Escrow Payment Nos. 7-11
remaining to be paid by Customer and the amount of such payments shall be
decreased by the applicable proportion of the decrease in the Contract
Price.
(c) The Parties agree that the schedule of payments set forth in Table
3.4 above shall be adjusted on account of sales taxes as follows. Within
ten (10) Business Days following the end of each month, Contractor will
furnish Customer with a report setting forth the sales taxes applicable for
Repeaters shipped during the month just ended. Customer will deposit an
amount equal to such sales taxes into the Payment Escrow Account with the
next Escrow Payment due, except in the case of Escrow Payment No. 10,
within fifteen (15) Business Days of receipt of Contractor's report.
Customer will assist Contractor in identifying the ultimate destination of
the Repeaters on a weekly basis.
4. OPTION PRICING
4.1 Pricing for Optional Repeaters.
In the event Customer exercises its option to purchase additional
Repeaters in accordance with Article 26 (Options) of the Terms and
Conditions, the following pricing terms shall apply to such optional
Repeaters:
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 9
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
(a) Subject to paragraphs (b) and (e) below, the firm fixed price per
Repeater as set forth in Section 2.1(b) (Repeater Unit Pricing) above shall
apply with respect to any Customer order for optional Repeaters, provided such
order complies with the following requirements:
(1) Customer orders such optional Repeaters prior to [*****] (the
"Initial Option Period"); and
(2) each order for optional Repeaters is for at least [*****]
Repeaters.
(b) Contractor requires an adequate minimum Repeater production order for
each month following the Project Completion Date to assure a continuous supply
from Subcontractors of LRUs and other Repeater components, parts and subparts.
Accordingly, on a monthly basis beginning March 2000, Contractor will advise
Customer as to the minimum monthly Repeater production rates required to
maintain the Repeater manufacturing facilities on-line to accommodate Customer's
future orders of optional additional Repeaters (if any) without incurring
additional production costs. The minimum monthly production requirement will be
subject to mutual agreement by the Parties (which agreement shall not be
unreasonably withheld), but in no event will the minimum monthly production
requirement exceed [*****] Standard Repeaters per month. If a follow-on order
falls below the minimum monthly production requirement, Contractor will provide
Customer with proof of additional production costs (if any) relating to such
smaller order and the Parties will negotiate an equitable adjustment to the per
unit prices set forth in Table 2.2 to account for such additional costs.
(c) Contractor will use best commercial efforts to minimize any price
increase for Customer orders of less than [*****] optional Repeaters.
(d) In the event Customer orders optional Repeaters before the expiration
of the Repeater Option Period, but after the last day of the Initial Option
Period, Contractor shall use its best commercial efforts to propose the lowest
price possible for such optional additional Repeaters.
(e) As part of the initial procurement of LRUs and other Repeater
components, parts or sub-parts to be used with respect to the Nominal Order,
Contractor shall use commercially reasonable efforts to negotiate competitive
pricing terms and price protection on LRUs, components, parts and sub-parts with
its suppliers and Subcontractors, such competitive pricing terms or price
protections to apply, to the degree commercially reasonable, to subsequent
orders of optional Repeaters. Such competitive pricing terms shall include a
mechanism to limit the amount of any price increases in such LRUs, components,
parts or sub-parts from year to year following the Project Completion Date, such
mechanism to apply a commercially reasonable and appropriate economic index or
cost-of-living adjustment index to be determined by
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 10
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Contractor and its suppliers and Subcontractors. In any event, if a cost
increase occurs with respect to any order for optional Repeaters, the option
price for such optional Repeaters will be adjusted on a dollar-for-dollar basis
to account for increases in the costs of the LRUs, components, parts and sub-
parts. Customer will have the right to review all supplier and Subcontractor
documentation connected with any change to the Repeater unit prices set forth
herein with respect to any Customer order for optional Repeaters.
4.2 NMS Video Wall.
If Customer elects, at its sole discretion, to exercise the option set
forth in Article 26 (Options) of the Terms and Conditions to purchase the full-
motion "video wall" for use in conjunction with the Network Management System,
Contractor agrees to provide the optional "video wall" to Customer for a not to
exceed price of [*****], which firm fixed price includes design, development,
manufacture, delivery, installation, insurance and warranty coverage for such
optional video wall. Contractor shall propose to Customer a firm fixed price on
or before [*****].
4.3 Extended Warranty on Repeaters.
In the event Customer elects to exercise its option, pursuant to Article
17.10(b) of the Terms and Conditions, to extend the applicable Warranty Period
for any Repeater, Customer shall pay Contractor the amount of [*****] Dollars
for each Repeater for the [*****] month optional extended Warranty Period.
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 11
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
4.4 Annual Maintenance of NMS.
In the event Customer elects to exercise its option, pursuant to Article
26.4 (Annual Maintenance of NMS) of the Terms and Conditions, to purchase annual
maintenance of the NMS, Customer shall pay Contractor an annual amount not to
exceed [*****].
--------------------------------------------------------------------------------
Exhibit C - Pricing, Milestones and Payment Plan Page 12
CONFIDENTIAL
**** Confidential treatment has been requested for portions of this agreement.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [*****]. A complete version of this
agreement has been filed separately with the Securities and Exchange Commission.
CONTRACT
FOR
THE DESIGN, DEVELOPMENT AND PURCHASE OF
TERRESTRIAL REPEATER EQUIPMENT
By and Between
XM SATELLITE RADIO INC.
and
XXXXXX ELECTRONICS CORPORATION
EXHIBIT D
DELIVERY REQUIREMENTS AND SCHEDULE
CONFIDENTIALITY NOTICE
----------------------
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and Xxxxxx Electronics Corporation, and shall not be
published or disclosed to any third party without the express written consent of
a duly authorized representative of XM Satellite Radio Inc. and Xxxxxx
Electronics Corporation.
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
Exhibit D
Delivery Requirements and Schedule
Delivery Requirements
--------------------------------------------------------------------------------
Deliverable Item/Event Delivery Requirement
--------------------------------------------------------------------------------
[*****] [*****]
--------------------------------------------------------------------------------
* To be completed in accordance with the applicable Milestone Achievement
Criteria set forth in Article 3.1 of Exhibit C (Pricing, Milestones and Payment
Plan) on or before the applicable Delivery Requirement date set forth in the
table above.
** To be completed in accordance with the requirements of Article 2.3 (Weight
and Size of Standard Repeaters) and Article 7 (Delivery and Time for
Performance) of the Terms and Conditions.
*** To be completed in accordance with the requirements of Article 2.3 (Weight
and Size of Standard Repeaters), Article 7 (Delivery and Time for Performance)
and Article 8 (Testing Criteria and Acceptance) of the Terms and Conditions.
**** To be completed in accordance with the requirements of Article 7 (Delivery
and Time for Performance) and Article 8 (Testing Criteria and Acceptance) of the
Terms and Conditions.
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
FORM OF DELIVERY SCHEDULE
Contractor shall use its best commercial efforts to deliver the Work
to Customer in accordance with the requirements of the Contract. This
Delivery Schedule shall be updated from time to time in accordance with
Article 7 (Delivery and Time for Performance) of the Contract.
The delivery schedule for deliverable items pursuant to this Contract
are listed in the table below. Such items shall be delivered by Contractor
to the destinations indicated, during the range of dates specified in such
table (each a "Delivery Period"), as such Delivery Periods or other terms
of delivery may be adjusted in accordance with the Contract.
Contractor understands and agrees that, with respect to the applicable
Delivery Period for each deliverable item, whether such item is set out in
this Contract or subsequent Amendments to this Contract, time is of the
essence. Nothing in the foregoing sentence shall in any way modify either
the specific remedies for default specified elsewhere in this Contract,
including Article 7.3 (Liquidated Damages for Late Delivery of Repeaters)
and Article 25.2 (Termination for Contractor's Default).
------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
------------------------------------------------------------------------------------------
1. [*****] [*****] [*****]
------------------------------------------------------------------------------------------
2. ___ Standard Repeaters No earlier than ________ Staging Area __*
(Enclosure Kits for ___ 2000 and no later than
Standard Non-Redundant ________ 2000 Installation Site: ________*
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
------------------------------------------------------------------------------------------
CONFIDENTIAL
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
3. Enclosure Kits for ___ No earlier than Staging Area __
Standard Repeaters ________ 2000 and no
(Enclosure Kits for ___ later than ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
4. Enclosure Kits for___ No earlier than Staging Area __
Standard Repeaters ________ 2000 and no
(Enclosure Kits for ___ later than ________ Installation Site: _________
Standard Non-Redundant 2000
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
CONFIDENTIAL
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
5. Enclosure Kits for ___ No earlier than Staging Area __
Standard Repeaters ________ 2000 and no
(Enclosure Kits for ___ later than ________ Installation Site: ________
Standard Non-Redundant 2000
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
6. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
CONFIDENTIAL
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
7. Enclosure Kits for ___ No earlier than Staging Area __
Standard Repeaters ________ 2000 and no
(Enclosure Kits for ___ later than ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
8. Enclosure Kits for ___ No earlier than Staging Area __
Standard Repeaters ________ 2000 and no
(Enclosure Kits for ___ later than ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
CONFIDENTIAL
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
9. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
10. Enclosure Kits for ___ No earlier than Staging Area __
Standard Repeaters ________ 2000 and no
(Enclosure Kits for ___ later than ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
CONFIDENTIAL
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
11. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
12. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
CONFIDENTIAL
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
13. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
14. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
CONFIDENTIAL
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
15. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
16. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
CONFIDENTIAL
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
17. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
18. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2001 and no later than
(Enclosure Kits for ___ ________ 2001 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
CONFIDENTIAL
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
19. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
20. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2000 and no later than
(Enclosure Kits for ___ ________ 2000 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
CONFIDENTIAL
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
21. ___ Standard Repeaters No earlier than ________ Staging Area __
(Enclosure Kits for ___ 2000 and no later than
Standard Non-Redundant ________ 2000 Installation Site: ________
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
22. Enclosure Kits for ___ No earlier than ________ Staging Area __
Standard Repeaters 2001 and no later than
(Enclosure Kits for ___ ________ 2001 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------
***** Certain information on this page has been with the Securities and Exchange
Commission. Confidential treatment has been requested with respect to the
omitted portions.
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------
Deliverable Item Delivery Period Place of Delivery
-------------------------------------------------------------------------------------------------
23. Enclosure Kits for ___ No earlier than Staging Area __
Standard Repeaters ________ 2001 and no
(Enclosure Kits for ___ later than ________ 2001 Installation Site: ________
Standard Non-Redundant
Repeaters; Enclosure Kits
for ___ Standard Sectored
Non-Redundant Repeaters)
Enclosure Kits for ___
High-Power Repeaters
(Enclosure Kits for ___
High-Power Redundant
Repeater; Enclosure Kits
for __ High-Power Sectored
Redundant Repeater)
-------------------------------------------------------------------------------------------------------------
24. Additional entries for subsequent deliveries shall be added as needed and as this Delivery Schedule is
updated from time to time in accordance with the Contract.
-------------------------------------------------------------------------------------------------------------
25. [*****] [*****] [*****]
-------------------------------------------------------------------------------------------------------------
26. [*****] [*****] [*****]
-------------------------------------------------------------------------------------------------------------
27. [*****] [*****] [*****]
-------------------------------------------------------------------------------------------------------------
28. [*****] [*****] [*****]
-------------------------------------------------------------------------------------------------------------
29. [*****] [*****] [*****]
-------------------------------------------------------------------------------------------------------------
* Enclosure Kits for Standard Repeaters are to be delivered to Staging Areas
and Enclosure Kits with Klystron Kits for High-Power Repeaters to Installation
Sites.
The Staging Areas noted in the table above correspond to the Staging Area
to be located in the following cities:
---------------------------------------------------------------------------
Staging Area Location (by City)
---------------------------------------------------------------------------
[*****] [*****]
---------------------------------------------------------------------------
CONFIDENTIAL
CONTRACT
FOR
THE DESIGN, DEVELOPMENT AND PURCHASE OF
TERRESTRIAL REPEATER EQUIPMENT
BY AND BETWEEN
XM SATELLITE RADIO INC.
AND
XXXXXX ELECTRONICS CORPORATION
EXHIBIT E
TEST PLANS AND PROCEDURES
CONFIDENTIALITY NOTICE
----------------------
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and Xxxxxx Electronics Corporation, and shall not be
published or disclosed to any third party without the express written consent of
a duly authorized representative of XM Satellite Radio Inc. and Xxxxxx
Electronics Corporation.
CONFIDENTIAL
EXHIBIT E
TEST PLANS AND PROCEDURES
**** Confidential treatment has been requested for portions of this agreement.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [*****]. A complete version of this
agreement has been filed separately with the Securities and Exchange Commission.
CONFIDENTIAL
CONTRACT
FOR
THE DESIGN, DEVELOPMENT AND PURCHASE OF
TERRESTRIAL REPEATER EQUIPMENT
By and Between
XM Satellite Radio Inc.
and
XXXXXX ELECTRONICS CORPORATION
EXHIBIT F
QUALITY ASSURANCE PLAN
CONFIDENTIALITY NOTICE
----------------------
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and Xxxxxx Electronics Corporation, and shall not be
published or disclosed to any third party without the express written consent of
a duly authorized representative of XM Satellite Radio Inc. and Xxxxxx
Electronics Corporation.
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
[*****] This entire Exhibit F has been redacted for confidentiality reasons.
CONFIDENTIAL
[LOGO]
2
CONFIDENTIAL
**** Confidential treatment has been requested for portions of this agreement.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [*****]. A complete version of this
agreement has been filed separately with the Securities and Exchange Commission.
CONTRACT
FOR
THE DESIGN, DEVELOPMENT AND PURCHASE OF
TERRESTRIAL REPEATER EQUIPMENT
BY AND BETWEEN
XM SATELLITE RADIO INC.
AND
XXXXXX ELECTRONICS CORPORATION
EXHIBIT G
KEY CONTRACTOR PERSONNEL
CONFIDENTIALITY NOTICE
----------------------
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and Xxxxxx Electronics Corporation, and shall not be
published or disclosed to any third party without the express written consent of
a duly authorized representative of XM Satellite Radio Inc. and Xxxxxx
Electronics Corporation.
CONFIDENTIAL
***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.
EXHIBIT G
KEY CONTRACTOR PERSONNEL
Position Individual
[*****] [*****]
CONFIDENTIAL
CONTRACT
FOR
THE DESIGN, DEVELOPMENT AND PURCHASE OF
TERRESTRIAL REPEATER EQUIPMENT
By and Between
XM SATELLITE RADIO INC.
and
XXXXXX ELECTRONICS CORPORATION
EXHIBIT H
TECHICAL MATERIALS ESCROW AGREEMENT
CONFIDENTIALITY NOTICE
----------------------
This attached Contract and the information contained herein is confidential to
XM Satellite Radio Inc. and Xxxxxx Electronics Corporation, and shall not be
published or disclosed to any third party without the express written consent of
a duly authorized representative of XM Satellite Radio Inc. and Xxxxxx
Electronics Corporation.
TECHNICAL MATERIALS ESCROW AGREEMENT
Account Number: _______________
Recitals
This Technical Materials Escrow Agreement including any Schedules ("Escrow
Agreement") is effective this ______ day of __________, 1999 ("Effective Date"),
by and among DSI Technology Escrow Services, Inc. ("DSI"), a Delaware
corporation, XM Satellite Radio Inc., ("XM"), a Delaware corporation, and Xxxxxx
Electronics Corporation ("Contractor"), a Delaware corporation, by and through
its division, Xxxxxx Network Systems.
WHEREAS, Contractor and XM have entered into a Contract for the Design,
Development and Purchase of Terrestrial Repeater Equipment, dated _________,
1999 (the "Contract"); and
WHEREAS, pursuant to said Contract, Contractor has agreed to deposit in
escrow the Technical Materials, as defined and more specifically set forth in
the Contract, which are proprietary to Contractor (except as otherwise expressly
set forth in the Contract) ; and
The parties hereto agree as follows:
1. Definitions. Other than those terms defined herein, the defined terms
-----------
(initial caps) used herein have the same meanings as set forth in the
Contract.
2. Deposit Account. Following the execution and delivery of this Escrow
---------------
Agreement and the payment of the set-up and deposit account fees to DSI,
Contractor, XM and DSI shall open a deposit account ("Deposit Account").
The opening of the Deposit Account means that DSI shall establish an
account ledger in the name of Contractor and XM, calendar Contractor and XM
to receive renewal notices from DSI as provided in Section 9 below, and
request the Initial Deposit, as defined in Section 3 below ("Initial
Deposit") from Contractor unless and until an Initial Deposit has already
been delivered to DSI. Unless and until DSI receives such Initial Deposit,
DSI shall have no further obligation to Contractor and XM.
3. Initial Deposit. The Initial Deposit will consist of the Technical
----------------
Materials as such term is defined in the Contract as specified by an
accompanying document called a "Description of Deposit Materials"
hereinafter referred to as "Exhibit B". DSI shall issue a completed copy
of a signed and dated "Description of Deposit Materials" in the form of
Exhibit B of the foregoing items, to Contractor and XM within ten (10) days
of receipt of the Initial Deposit by DSI.
4. Deposit Changes. "Deposit" as used in this Escrow Agreement means and
----------------
includes the Initial Deposit and any Supplemental Deposit. "Supplemental
Deposit" means and includes the following items: any and all updates to the
Technical Materials as required to ensure that the Deposit contains the
Technical Materials that are applicable to the Prototype Repeaters,
Standard Repeaters, High-Power Repeaters, each Module, and the
Network Management System then-being utilized by XM. Contractor will
submit the Supplemental Deposit accompanied by an Exhibit B. DSI shall
issue a completed copy of a signed and dated "Description of Deposit
Materials" in the form of Exhibit B of the foregoing items to Contractor
and XM within ten (10) days of receipt of any Supplemental Deposit by DSI.
5. Deposit Inspection. Upon receipt of the Initial Deposit and each
------------------
Supplemental Deposit, if any, DSI will visually match the listed items to
the labeling of the material delivered by Contractor ("Deposit
Inspection"). DSI will not be responsible for the contents of any Deposit
or for validating the accuracy of Contractor's labeling of a Deposit.
6. Registration Account. Following the execution and delivery of this Escrow
--------------------
Agreement and the payment of the registration fee to DSI, DSI shall open a
registration account ("Registration Account") for Contractor and XM. The
opening of the Registration Account means that DSI shall establish an
account ledger in the name of Contractor and XM, calendar Contractor and XM
to receive renewal notices as provided in Section 9, and request payment of
the DSI escrow fee. Unless and until DSI receives the initial registration
fee payment, DSI shall have no obligation under this Escrow Agreement to
Contractor or XM.
7. Deposit Obligations of Confidentiality. DSI agrees to establish a
--------------------------------------
receptacle in which it shall place the Deposit and shall put the receptacle
under the control of one or more of its officers, selected by DSI, whose
identity shall be available to Contractor and XM at all times. DSI shall
exercise a professional level of care in carrying out the terms of this
Escrow Agreement.
DSI acknowledges that Contractor and XM have advised DSI that the Deposit
contains valuable confidential and proprietary information, data, material
and technology and that DSI has an obligation to preserve and protect the
confidentiality of the materials in the Deposit.
DSI shall, and shall cause its officers, employees, agents and
representatives to, maintain all data, material, information and technology
forming the Deposit in confidence and shall not disclose any of the same
nor make use of any of the Deposit for its own benefit or gain or for any
purpose or in any manner other than as contemplated by this Escrow
Agreement. Upon termination of this Escrow Agreement in accordance with
the terms hereof, the Deposit shall be disposed of in accordance with
Contractor's instructions or if instructions are not received by DSI within
thirty (30) days of termination, then DSI may destroy the Deposit and
confirm in writing to Contractor that it has destroyed the Deposit and the
date and method of destruction.
No right or license is granted to DSI to duplicate any item in the Deposit
for any reason whatsoever without the consent and agreement of Contractor.
8. Verification Rights. Contractor grants to DSI the right to inventory the
--------------------
Initial Deposit and each Supplementary Deposit, if any, for accuracy,
completeness and sufficiency. No other rights or licenses are granted to
DSI. XM shall have the right to cause a verification
of any Deposit Materials. If a verification is elected after the Deposit
Materials have been delivered to DSI, then only DSI, or at DSI's election
an independent person or company selected and supervised by DSI, may
perform the verification.
Either or both Contractor or XM may be present at DSI's facility to observe
any DSI inventory or audit of the Initial Deposit and each Supplementary
Deposit by DSI.
9. Term of Agreement. This Escrow Agreement shall have an initial term of one
-----------------
(l) year, commencing on the Effective Date and shall be continuously
renewable as long as the fees are paid. In the event of the non-payment of
fees owed to DSI, DSI shall provide written notice of delinquency to all
parties to this Escrow Agreement thirty (30) days prior to expiration of
the Contract. Any party to this Escrow Agreement shall have the right to
make the payment to DSI to cure the default. If the past due payment is not
received in full by DSI within thirty (30) days of the date of such notice,
then DSI shall have the right to terminate this Escrow Agreement at any
time thereafter by sending written notice of termination to all parties.
DSI shall have no obligation to take any action under this Escrow Agreement
so long as any payment due to DSI remains unpaid. Notwithstanding anything
to the contrary herein, this Escrow Agreement may not be terminated so long
as XM or Contractor pays the fees owed to DSI hereunder.
10. Expiry. If this Escrow Agreement expires or is otherwise terminated, all
------
duties and obligations of DSI to Contractor and XM, except DSI's
obligations of confidentiality pursuant to Section 7 hereof, will terminate
upon expiration or termination of this Escrow Agreement. DSI shall request
instructions from Contractor with respect to return or disposal of the
items in Escrow, and if DSI does not receive any instructions from
Contractor, DSI may dispose of (destroy) the Deposit in accordance with
Section 7.
11. Release of Deposit to XM. Upon written notice or request to DSI by XM to
-------------------------
audit, access or inventory or require any reporting/information regarding
the Escrow, DSI shall promptly advise Contractor in writing, by telecopier
and by over-night courier.
With respect to the Release Conditions specified in Article 13(a)(1)-(4) of
the Contract only, XM may notify DSI that one or more of the Release
Conditions (as such term is defined in the Contract) has occurred, and DSI
shall notify Contractor of the XM notice, by no later than three (3)
Business Days after receipt of such notification from XM. Ten (10)
Business Days after notification to Contractor, DSI shall deliver the
Deposit to XM, unless, in the interim, XM or a court order directs DSI not
to deliver the Deposit.
With respect to the Release Condition specified in Article 13(a)(5) of the
Contract only, XM may notify DSI that this Release Condition has occurred,
and DSI shall notify Contractor of the XM notice by no later than three (3)
Business Days after receipt of such notification from XM. Ten (10)
Business Days after notification to Contractor, DSI shall deliver the
Deposit to XM, unless, in the interim, XM or a court order directs DSI not
to deliver the Deposit or Contractor delivers a written notice of its
objection to DSI concerning the release of the Deposit within such ten (10)
Business Day period.
In the event that a written notice of objection is received by DSI from
Contractor within
the ten (10) Business Days following the delivery of XM's notice that a
Release Condition as set forth in Article 13(a)(5) of the Contract has
occurred, DSI shall not release the Deposit to XM unless and until any
dispute relating to whether or not such Release Condition has occurred has
been resolved (either by written agreement of the parties or arbitral
award) such that it is determined that the Release Condition set forth in
Article 13(a)(5) has occurred. Any such dispute shall not be subject to
Article 13 (Disputes) of this Escrow Agreement, but shall instead be
governed by the escrow arbitration provisions set forth in Article 13
(Technical Materials Escrow) of the Contract, and DSI shall be bound by any
resulting award as evidenced by a copy of the certificate of the
arbitrator.
Following delivery of the Deposit to XM, in the event it is determined by
XM or by court order or arbitral award that the Release Condition did not
occur as stated by XM, XM will return the Deposit to DSI as long as DSI's
fees are received pursuant to Section 19.
DSI shall not deliver any items in Escrow to any person other than XM,
without the prior written consent and agreement of Contractor.
12. Return to Escrow. Following release from Escrow, and pursuant to Section
----------------
19, XM shall return the Deposit to Escrow in accordance with the terms of
the Contract.
13. Disputes. Except as otherwise provided in Section 11 above, any and all
--------
disputes arising at any time under this Escrow Agreement or relating to
this Escrow Agreement, or the interpretation or performance (or non-
performance) of the terms of this Escrow Agreement, shall be finally
resolved and settled by arbitration in accordance with the [International]
Arbitration Rules of the American Arbitration Association ("AAA").
Contractor and XM shall each select one impartial arbitrator, and a third
impartial arbitrator will be selected unanimously by said two (2)
arbitrators. If there are three (3) arbitrators selected in accordance with
the foregoing, the arbitration shall proceed. If said two (2) arbitrators
are unable to select the third arbitrator within ten (10) Business Days of
their selection by the parties, the third impartial arbitrator shall be
selected by the AAA. Unless otherwise agreed to by Contractor and XM,
arbitration will take place in Washington, DC. The decision of a majority
of the arbitrators shall be final and binding and may be enforced by any
court having proper jurisdiction. Pending the final determination of the
arbitrators, either Party shall have the right to obtain such equitable
relief to preserve the status quo and to protect its proprietary matter,
including obtaining injunctive relief.
The arbitrators may, subject to their signing a non-disclosure of
Confidential Information Agreement agreeing not to disclose the contents of
the Escrow, review the items Deposited in Escrow as is reasonably necessary
for the arbitrators to reach a decision regarding the matter in dispute and
submitted to arbitration by the parties. The arbitrators shall not have the
right, power, or authority to grant any rights or licenses with respect to
the Deposit to any persons whomsoever or to require that the same be
delivered or made available to any person other than XM. The arbitrators
shall determine who shall bear (and in what proportions) the cost of the
proceedings including reasonable attorneys fees and costs.
14. Indemnification. DSI shall be responsible to perform its obligations under
---------------
this Escrow Agreement and to act in a reasonable and prudent manner with
regard to this escrow arrangement. Provided DSI has acted in the manner
stated in the preceding sentence, Contractor and XM each agree to defend
and indemnify DSI and hold DSI harmless from and against all claims,
actions and suits, whether in contract or in tort, and from and against any
and all liabilities, losses, damages, costs, charges, penalties, counsel
fees, and other expenses of any nature (including, without limitation,
settlement costs) incurred by DSI as a result of performance of this Escrow
Agreement except in the event of a judgment or award which specifies that
DSI breached this Escrow Agreement.
15. Audit Rights. DSI agrees to keep records of the activities undertaken and
------------
materials prepared pursuant to this Escrow Agreement. Contractor will be
entitled upon reasonable notice and during normal business hours during the
term of this Escrow Agreement through independent outside auditors, or in-
house auditors, to inspect and audit the records of DSI with respect to
this Escrow Agreement.
16. Designated Representative. Contractor and XM each agree to designate one
--------------------------
individual to communicate with DSI respectively in relation to the
performance of their obligations as set forth in this Escrow Agreement and
to notify DSI in writing immediately in the event of any change:
The XM representative is:
XM Satellite Radio Inc.
0000 00xx Xxxxxx, XX
Xxxxx 00
Xxxxxxxxxx, XX 00000
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
The Contractor representative is:
Xxxxxx Electronics Corporation
c/o Hughes Network Systems
00000 Xxxxxxx Xxxxxx Xx.
Xxx Xxxxx, XX 00000
Tel. No.: 000-000-0000
Fax No.: 000-000-0000
Attention: Xxxx Xxxxxx
Copy to:
Site Counsel
00000 Xxxxxxx Xxxxxx Xx.
Xxx Xxxxx, XX 00000
Or to such other addresses as may be indicated by the respective party by
notice given in the same manner.
18. General.
--------
(a) DSI may act in reliance upon any written instruction, instrument, or
signature believed to be genuine and unless otherwise notified, may
assume that any employee or attorney representing either Contractor or
XM giving any written notice, request, advice or instruction in
connection with or relating to this Escrow Agreement has been duly
authorized by its respective employer (or client) to do so. DSI is not
responsible for failure to fulfill its obligations under this Escrow
Agreement due to causes beyond DSI's control.
(b) This Escrow Agreement is to be governed by and construed in accordance
with the substantive and procedural laws of the State of New York.
(c) This Escrow Agreement, including any Schedules, constitutes the entire
agreement between the parties concerning the subject matter hereof,
and supersedes all previous communications, representations,
understandings, and agreements (other than the Contract) either oral
or written, between the parties.
(d) Contractor and XM acknowledge that DSI has no knowledge of the terms
and conditions contained in the Contract and that DSI's only
obligations shall be as set forth herein or in any other writing
signed by DSI, Contractor and XM.
(e) If any provision of this Escrow Agreement is held by any court to be
invalid or unenforceable, that provision will be severed from this
Escrow Agreement and any remaining provisions will continue in full
force.
(f) All notices under this Escrow Agreement shall be in writing and shall
be sent by telefax (with a copy deposited at the same time in the mail
or sent by express courier postage or courier fees prepaid), or by
registered or certified mail (postage prepaid), or by express courier
service (courier fees prepaid) to:
If to Contractor:
Xxxxxx Electronics Corporation
00000 Xxxxxxx Xxxxxx Xx.
Xxx Xxxxx, XX 00000
Attention: Xxxx Xxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Copy to: Site Counsel
00000 Xxxxxxx Xxxxxx Xx.
Xxx Xxxxx, XX 00000
If to Customer:
XM Satellite Radio Inc.
0000 00/xx/ Xxxxxx, XX, Xxxxx 00
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to DSI:
DSI Technology Escrow Services, Inc.
Attn: Contract Administration
0000 Xxx Xxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
or to such other address as may be specified in accordance with this
section. Notice shall be deemed to have been given at the expiration of two
(2) Business Days after it is sent by telefax and confirmed, and/or five
(5) Business Days from the date it is deposited postage prepaid with the
postal service or given to an express courier service.
19. Fees. All service fees, including annual renewal fees, will be due in full
-----
within thirty (30) days after receipt of the invoice therefor. If invoiced
fees are not paid within thirty (30) days of the receipt of the invoice,
DSI may terminate this Escrow Agreement following sending notices in
accordance with Section 9 above. If a payment is not timely received by
DSI, DSI shall have the right to accrue and collect interest thereon at the
rate of one and one-half percent per month (18% per annum) from the 31st
day on which payment is due, for all late payments.
Attached hereto, is the current Fee Schedule of DSI (Exhibit C).
All service fees and annual renewal fees shall be those specified in DSI's
Fee and Service Schedule in effect at the time of renewal or request for
service, except as otherwise agreed. For any increase in DSI's standard
fees, DSI shall notify Contractor at least ninety (90) days prior to the
anniversary date of this Escrow Agreement. For any service not listed on
the Fee and Service Schedule, DSI shall provide a quote prior to rendering
such service.
Date: Date: Date:
Xxxxxx Electronics Corporation XM Satellite Radio Inc. DSI Technology Escrow
Services, Inc.
By: ___________________ By: _________________ By:________________
________________________ ______________________ ____________________
(Print Name) (Print Name) (Print Name)
_________________ ____________________ __________________
Title Title Title
CONFIDENTIAL
EXHIBIT A
DESIGNATED CONTACT
Account Number ______________________
Notices, deposit material returns and
communications to Depositor Invoices to Depositor should be
should be addressed to: addressed to:
Company Name:__________________________ _______________________________
Address:_______________________________ _______________________________
_______________________________ _______________________________
_______________________________ _______________________________
Designated Contact:____________________ Contact:_______________________
Telephone:_____________________________ _______________________________
Facsimile: P.O.#, if required:____________
Notices and communications to Invoices to Preferred
Preferred Beneficiary should be addressed to: Beneficiary should be addressed
to:
Company Name:__________________________ _______________________________
Address:_______________________________ _______________________________
_______________________________ _______________________________
_______________________________ _______________________________
Designated Contact:____________________ Contact:_______________________
Telephone:_____________________________ _______________________________
Facsimile:_____________________________ P.O.#, if required:____________
Requests from Depositor or Preferred Beneficiary to change the designated
contact should be given in writing by the designated contact or an authorized
employee of Depositor or Preferred Beneficiary.
Contracts, deposit materials and notices to Invoice inquiries and fee
DSI should be addressed to: remittances to DSI should be
addressed to:
DSI DSI
Contract Administration Accounts Receivable
Xxxxx 000 Xxxxx 0000
0000 Xxx Xxxx Xxxxx 000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000 (000) 000-0000
Facsimile: (000) 000-0000 (000) 000-0000
Date:_________________________________
CONFIDENTIAL
EXHIBIT B
DESCRIPTION OF DEPOSIT MATERIALS
Depositor Company Name __________________________________________________
Account Number___________________________________________________________
Product Name _______________________________ Version____________________
(Product Name will appear on Account History report)
DEPOSIT MATERIAL DESCRIPTION:
Quantity Media Type & Size Label Description of Each Separate Item
(Please use other side if additional space is
needed)
________ Disk 3.5" or ____
________ DAT tape ____mm
________ CD-ROM
________ Data cartridge tape ____
________ TK 70 or ____ tape
________ Magnetic tape ____
________ Documentation
________ Other ______________________
PRODUCT DESCRIPTION:
Operating System________________________________________________________
Hardware Platform_______________________________________________________
DEPOSIT COPYING INFORMATION:
Is the media encrypted? Yes/No If yes, please include any passwords and the
decryption tools.
Encryption tool name_______________________________ Version__________________
Hardware required_________________________________________________________
Software required_________________________________________________________
I certify for Depositor that the above described DSI has inspected and accepted
the above
Deposit Materials have been transmitted to DSI: materials (any exceptions are
noted above):
Signature___________________________ Signature____________________
Print Name _________________________ Print Name___________________
Date________________________________ Date Accepted________________
Exhibit B#___________________
Send materials to: DSI, 0000 Xxx Xxxx Xx., Xxxxx 000, Xxx Xxxxx, XX 00000
(000) 000-0000
CONFIDENTIAL
EXHIBIT C
Fee & Services Schedule
------------------------------------------------------------------------------
NEW ESCROW AGREEMENT ANNUAL FEE SETUP FEE
Preferred $1,350 $1,050
ADDITIONAL BENEFICIARY (if desired)
Preferred $650/ea. $1,000
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
SERVICE OPTIONS FEES
-------------------------------------------------------------------------------
Unlimited deposit or replacement plus
one additional storage unit $300/yr./1/
-------------------------------------------------------------------------------
Individual deposit updates or replacements $200/ea.
-------------------------------------------------------------------------------
DeposiTrack updates $300/ea./1/
-------------------------------------------------------------------------------
Remote vaulting $500/yr.
-------------------------------------------------------------------------------
Release filing fee No Fee/2/
-------------------------------------------------------------------------------
Custom contracts No Fee/3/
-------------------------------------------------------------------------------
Additional storage units $100/ea.
-------------------------------------------------------------------------------
Technical verification (estimates based on $200/hr.)
Verification Level I $800/1/
--------------------
Verification Level II $1,200 - $1,600
---------------------
Verification Level III $3,200 - $6,400
----------------------
--------------------------------------------------------------------------------
_________________
/1/ Included in the Comprehensive Preferred annual fee.
/2/ Copying expenses in excess of $300 will be chargeable.
/3/ A one-time fee of $500 may be assessed for contract modifications that
change DSI's standard processes.
