Portions of this exhibit (indicated by brackets) have been omitted pursuant to a
request for confidential treatment.
AMENDMENT NO. 1 ("Amendment") dated as of October 24, 1996 to the
Purchase and Supply Agreement dated as of June 21, 1996, among Sprint Spectrum
L.P., a Delaware limited partnership (the "Owner"), QUALCOMM Personal
Electronics, a California general partnership (the "Vendor"), XXXXXXXX
Xxxxxxxxxxxx, a Delaware corporation, as a guarantor and Sony Electronics Inc.,
a Delaware corporation, as a guarantor (each guarantor together with the Owner
and the Vendor, the "Parties").
RECITALS:
WHEREAS, the Owner, the Vendor and the guarantors are parties to a
certain Purchase and Supply Agreement dated as of June 21, 1996 (the
"Contract"), and
WHEREAS, the Parties desire to amend the Contract.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, the Parties hereby agree as follows:
1. Definitions. Unless otherwise defined herein, all capitalized terms used in
this Amendment will have the meaning given to such terms in the Contract.
References to "Specifications" include the modifications to the Specifications
set forth in the Consent to Specification Deviation executed by the Parties and
dated September 24, 1996.
2. Agreements.
(a) The Owner hereby waives its rights to (i) only those liquidated
damages under Section 4 of the Contract which have accrued as of the date hereof
and are due with respect to the Products which were to be delivered by the
Vendor prior to the date hereof and (ii) terminate the Contract now or in the
future pursuant to the Contract's treatment under subsection 4.2(e) of Vendor
Product delivery delays that have occurred prior to the date hereof. Nothing
contained in this clause (a) shall in any way amend, waive or otherwise modify
the Owner's rights under the Contract as amended hereby in the event of any
Vendor delivery delay after the date hereof; provided, however, any delivery
delays that occurred prior to the date hereof shall not be taken into
consideration with respect to any future application of subsection 4.2(e) of the
Contract.
(b) Notwithstanding the terms of the Contract and any Purchase Orders
delivered to the Vendor prior to the date hereof, the Vendor shall have and hold
specifically for the Owner the following quantities of Specification compliant
Subscriber Units (and their Material Accessories) at its manufacturing facility
in San Diego, California no later than the dates set forth below:
Date Amount
10/27/96 30,000
11/10/96 70,000
12/01/96 60,000
12/05/96 20,000
12/10/96 20,000
It is agreed by the Parties that the quantities and dates set forth
above are firm and that no grace periods (including, but not limited to, the
Xxxxx Xxxxx Period) will apply to these dates and/or quantities. To the extent
the quantities of Products set forth above are manufactured and held as set
forth in this clause (b) and clause (c) below by the dates set forth above, the
Vendor may invoice the Owner for such manufactured, held and verified
Specification compliant Products at the prices set forth on Appendix 1 as
amended hereby. The 20,000 Subscriber Units to be manufactured and held on
December 10, 1996, as set forth above, will be divided between 10,000 "blue"
Subscriber Units and 10,000 "green" Subscriber Units and the Owner and the
Vendor will work together in good faith to promptly agree and establish color
samples for such colored Subscriber Units; provided, however, in the event the
Parties fail to promptly reach such agreement, then the color of such Subscriber
Units shall be as set forth in Exhibit A1 and their price shall not include the
price increase set forth in "Note 3" to Appendix 1. It is expressly understood
and agreed by the Parties that in the event the Vendor shall for any reason
(other than an event constituting a Force Majeure pursuant to subsection 11.17
of the Contract in which case the terms of subsection 11.17 shall apply) fail to
comply with any of the specific dates, quantities and other requirements set
forth in this clause (b) by not having and holding such quantities of
Specification compliant Subscriber Units (and their Material Accessories)
specifically for the Owner (as verified in accordance with clause (c) below)
at the Vendor's manufacturing facility in San Diego, California, then,
notwithstanding anything in the Contract to the contrary, the Owner will have
the right, based upon the Owner's needs and requirements, as determined in the
Owner's sole and absolute discretion and upon giving the Vendor written notice,
within three (3) Business Days following such failure or notice of failure by
the Vendor, of the Owner's election to proceed under either subclause (i) or
(ii) below, to:
(i) if the Owner does not need such Products, immediately (and without any grace
period whatsoever) cancel, without payment or penalty to either the Vendor or
the Owners, any such missing quantity by lowering the Total Minimum Commitment
by the amount of such missing and or unverified Products; provided, that in such
event the Owner will have the right and the Vendor will be obligated to treat
such canceled quantity of Products exactly as the additional thirty-five
thousand (35,000) Subscriber Units are being treated under subsection 5.2(g) of
the Contract as added pursuant to this Amendment; or
(ii) if the Owner does not need such Products, accept such Specification
compliant Products as and when provided and verified by Vendor; provided, that
the price of any such late Products will be reduced by (x) one-half of one
percent (1/2%) for each day late (without any grace period whatsoever) and (y)
on the thirtieth day late, an additional five percent (5%). In the event such
late Products are in excess of thirty (30) days late (starting at 5:00 p.m. San
Diego time on the scheduled dates set forth above), the Owner will again have
the right to cancel such late Products as set forth in subclause (i) above to
the extent such rights were not previously exercised by the Owner with respect
to such late Products.
(c) Any Products manufactured and held pursuant to clause (b) above
will be held by the Vendor in separately identifiable inventory, in individual
boxes or bulk storage boxes, at the Vendor's manufacturing facility in San
Diego, California specifically for the Owner and any such held quantities will,
on or before the delivery dates set forth above, be verified by the Vendor in
writing to the Owner identifying the quantity, location, model and serial
numbers of the Products so held and further identifying such Products as being
held for the Owner pursuant to the Contract (provided that the Vendor's
verification of the first thirty thousand (30,000) Subscriber Units to be
available on October 27, 1996, will be dated November 4, 1996). The Vendor will
provide the Owner and its personnel reasonable access to its facilities to
physically verify the availability and continued maintenance of delivered
Products held for the Owner; provided, that the Owner will exercise its rights
(to the extent not previously exercised) to physically verify the availability
and continued maintenance of any such Products already verified by the Vendor to
the Owner pursuant to and in accordance with the first sentence of clause (c)
within five (5) days after receipt of any such written verification from the
Vendor and provided further that nothing herein will prevent the Vendor from
sending an invoice to the Owner for any Vendor verified Products at any time (i)
after the Owner shall have notified the Vendor in writing of its intent not to
physically verify the availability and continued maintenance of such Products or
(ii) after expiration of such five day period if the Owner neither physically
verifies nor provides notice of the Owner's intention not to physically verify
(in which event the Owner shall be deemed to have verified for purposes of the
third sentence of clause 2(b) above). The Vendor will hold all such Products
until such time as the Owner provides written notice to the Vendor that it
desires to have all or any portion of such held Products delivered to the FOB
point for shipment; provided, that the Owner will provide the Vendor with three
(3) days prior written notice to individually box any Products held by the
Vendor in bulk storage based upon a Vendor individual box packaging ability of
five thousand (5,000) Subscriber Units (and their Material Accessories) per day.
If for any reason the Vendor shall not, on the date(s) scheduled for the
delivery thereof, deliver to the FOB point any Products held for the Owner which
have been paid for by the Owner, then (notwithstanding subsection 11.17 of the
Contract), the Owner will have the absolute right to the immediate refund of any
monies paid to the Vendor for any such held but undelivered Products, and such
right will be in addition to any and all rights (subject to subsection 11.17 of
the Contract) the Owner may otherwise have in Contract or in law in any such
event.
(d) The Vendor will have a release of software ready for conducting
phase 2 NSOTASP interoperability testing with the Owner's infrastructure vendors
on November 15, 1996. This release of Software is intended to have and this
phase of testing is intended to verify the following NSOTASP functionality: (a)
default factory configuration complies to section 3.1 of IS-683; (b) an NSOTASP
call can be successfully completed; (c) a PCS call can be originated using the
newly programmed mobile; (d) a PCS voice call can be terminated by the newly
programmed mobile; (e) programming lock works properly; (f) the parameters of an
activated mobile can be modified by an NSOTASP call; (g) no permanent data is
changed if the call is terminated before the "Commit;" (h) verify the PRL is
stored properly; and (i) mobile functions properly after downloading a list with
PRL with a size exceeding MAX_PR_LIST_SIZE. Following successful passing of all
these phase 2 tests, the Vendor will, within four weeks, be in a position to
conduct CDG testing with the Owner's infrastructure vendors. Any and all
Subscriber Units held at the Vendor's facilities will be promptly upgraded by
the Vendor to have such NSOTASP Software upon availability of NSOTASP Software
and within the time for implementing such feature, in each instance in
accordance with and pursuant to the terms and conditions of Section 4.5 of
Exhibit A-1 of the Contract. The Vendor may invoice the Owner and the Owner will
pay to the Vendor $3.85 for the upgrading of each such satisfactorily
OTASP-upgraded Subscriber Unit.
(e) The liquidated damages provisions of subsection 4.2(a) of the
Contract shall not apply to those 1996 forecasted Products which are
specifically subject to liquidated damages, price reduction and/or cancellation
pursuant to the provisions of subsection 2(b)(i) or 2(b)(ii) of this Amendment.
3. Amendment to Subsection 3.2(a). Subsection 3.2(a) of the Contract is
hereby amended by deleting the seventh sentence thereof commencing "For each of
the Initial Subscriber Units ..." in its entirety.
4. Amendment to Subsection 3.2(b). Subsection 3.2(b) of the Contract is
hereby amended by (i) changing the definition of "Total Minimum Commitment" in
the first sentence thereof from one million one hundred ninety five thousand
(1,195,000) Subscriber Units to "one million one hundred sixty thousand
(1,160,000)Subscriber Units" and (ii) changing the definition of "First Annual
Minimum Commitment" in the second sentence thereof from two hundred thirty five
thousand (235,000) Subscriber Units to "two hundred thousand (200,000)
Subscriber Units".
5. Amendment to Subsection 5.1. Subsection 5.1 of the Contract is hereby amended
by adding a new subsection 5.1(d) immediately after subsection 5.1(c) as
follows:
"(d) Notwithstanding anything stated herein (including, but
not limited to, Schedule 8 hereto) to the contrary, to the extent the
Owner shall have forecasted for the delivery of any Accessories, the
Owner may reduce the aggregate Accessory deliveries forecasted for the
first three (3) months of 1997, by an amount equal to no more than
[______] percent of the amount of Accessories purchased by the Owner
from the Vendor in 1996 (over and above any quantity reductions
available to the Owner for the first three (3) months of 1997 pursuant
to subsection 5.1); provided, that any such reduction shall be
distributed evenly over the first three (3) months of 1997."
6. Amendment to Subsection 5.2. Subsection 5.2 of the Contract is hereby amended
by adding a new subsection 5.2(g) immediately after subsection 5.2(f) as
follows:
"(g) Notwithstanding anything stated herein to the contrary,
at any time throughout the Initial Term the Owner may in its sole and
absolute discretion choose to order up to [_____________] additional
Specification compliant Subscriber Units (and their Material
Accessories) above the Total Minimum Commitment. If the Owner should
order any such additional Subscriber Units (and their Material
Accessories) for delivery at any time in 1996, any such order for such
additional Products will be deemed an Excess Purchase Order and to the
extent fulfilled by the Vendor, will be fulfilled at a price not in
excess of [_____________] percent less than the 1996 price set forth on
Appendix 1. If the Owner desires to order any such additional
Subscriber Units (and their Material Accessories) for delivery in 1997
or 1998 then, the Owner shall include such additional Subscriber Units
in the subject Forecast pursuant to the provisions of subsection 5.1 of
the Contract and the Vendor will be obligated to deliver such Products
to the Owner in accordance with the terms of the Contract (including
subsection 5.2 of the Contract) and at the prices as set forth on
Appendix 1."
7. Amendment to Schedules and Appendices. The Schedules and Appendices
to the Contract are hereby amended by (i) deleting the first page of Schedule 8
in its entirety and replacing in lieu thereof the revised page 1 of Schedule 8
attached hereto as Attachment 1 and (ii) deleting Appendix 1 in its entirety and
replacing in lieu thereof the revised Appendix 1 attached hereto as Attachment
2.
8. NO OTHER AMENDMENTS. EXCEPT AS EXPRESSLY AMENDED, MODIFIED AND SUPPLEMENTED
HEREBY, THE PROVISIONS OF THE CONTRACT ARE AND WILL REMAIN IN FULL FORCE AND
EFFECT AND, EXCEPT AS EXPRESSLY PROVIDED HEREIN, NOTHING IN THIS AMENDMENT WILL
BE CONSTRUED AS A WAIVER OF ANY OF THE RIGHTS OR OBLIGATIONS OF THE PARTIES
UNDER THE CONTRACT.
9. GOVERNING LAW. THIS AMENDMENT WILL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE LAWS AND
PRINCIPLES THEREOF WHICH WOULD DIRECT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION.
10. Descriptive Headings. Descriptive headings are for convenience only and will
not control or affect the meaning or construction of any provisions of this
Amendment.
11. Counterparts. This Amendment may be executed in any number of identical
counterparts, each of which will constitute an original but all of which when
taken together will constitute but one instrument.
IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
signed by their duly authorized representatives on the date first above written.
SPRINT SPECTRUM L.P.,
as Owner
By: /s/Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Chief Business Development
Officer
QUALCOMM Personal Electronics,
as Vendor
By: /s/Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Title: Vice President and General
Manager Sony/QUALCOMM
CDMA Sales
XXXXXXXX Xxxxxxxxxxxx,
as Guarantor
By: /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Senior Vice President and
General Manager Subscriber
Products
SONY ELECTRONICS INC.,
as Guarantor
By: /s/Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: President, Sony WTC
ATTACHMENT 1
SCHEDULE 8
First Forecast
Owner Product Requirements for Vendor Subscriber Units
with Accompanying Material Accessories
---------- --------------- --------------- ----------------
1st Supply 2nd Annual 3rd Annual
(6 mos) Supply Period Supply Period
1996 1997 1998
---------- --------------- --------------- ----------------
Jan -- 85,000 2,500
Feb -- 85,000 2,500
Mar -- 90,000 2,500
Apr -- 70,000 2,500
May -- 55,000 --
Jun -- 55,000 --
Jul -- 45,000 --
Aug -- 55,000 --
Sep -- 65,000 --
Oct 27 30,000 125,000 --
Nov 10 70,000 125,000 --
Dec 1 60,000 95,000 --
Dec 5 20,000
Dec 10 20,000
---------- --------------- --------------- ----------------
TOTAL 200,000 950,000 10,000
========== =============== =============== ================
GRAND TOTAL 1,160,000
========== =============== =============== ================
ATTACHMENT 2
APPENDIX 1
Pricing
Subscriber Units With Accompanying Material Accessories
- -------------------- ------------------------ -------------------------------
1996 1997 1998
- -------------------- ------------------------ -------------------------------
$[
- -------------------- ------------------------ -------------------------------
]
- -----------------------------------------------------------------------------
Additional Accessories
- ------------------------------------- ------------- --------------------------
Extra Non-Accompanying Accessories(1) Price Per
Accessory Available no later than
- ------------------------------------- ------------- --------------------------
Desktop Charger (w/AC Adapter) [
- ------------------------------------- ------------- --------------------------
- ------------------------------------- ------------- --------------------------
Hands Free Car Kit
- ------------------------------------- ------------- --------------------------
- ------------------------------------- ------------- --------------------------
Travel Charger
- ------------------------------------- ------------- --------------------------
- ------------------------------------- ------------- --------------------------
Cigarette Lighter Adapter
- ------------------------------------- ------------- --------------------------
- ------------------------------------- -------------- -------------------------
Data Adapter Cable
- ------------------------------------- ------------- --------------------------
- ------------------------------------- ------------- --------------------------
Standard Batter (Li-Ion)
- ------------------------------------- ------------- --------------------------
- ------------------------------------- ------------- --------------------------
Leather Case
- ------------------------------------- ------------- --------------------------
- ------------------------------------- ------------- --------------------------
PCMCIA Data Adapter
- ------------------------------------- ------------- --------------------------
- ------------------------------------- ------------- --------------------------
Mock Up Unit ]
- ------------------------------------- --------------- ------------------------
(1)The Accessories and the prices and dates therefore as set forth in this table
do not relate to Material Accessories which accompany Subscriber Units.
