EXHIBIT 10.14
THIRD ADDENDUM
TO
ACQUISITION AGREEMENT
THIS THIRD ADDENDUM TO ACQUISITION AGREEMENT (this "Third Addendum"), effective
as of June 20, 2000 (the "Third Addendum Date"), is entered into by and between
TRITON PCS EQUIPMENT COMPANY L.L.C., a Delaware limited liability company with
its principal place of business in Berwyn, Pennsylvania ("PURCHASER"), and
ERICSSON INC., a Delaware corporation with its principal place of business in
Richardson, Texas ("SELLER").
WHEREAS, PURCHASER and SELLER entered into the Acquisition Agreement, effective
as of March 11, 1998 (as supplemented and amended by the First Addendum, Second
Addendum and this Third Addendum, the "Acquisition Agreement").
WHEREAS, PURCHASER and SELLER desire to enter into this Third Addendum for
PURCHASER to obtain from SELLER (i) the changeouts of PURCHASER's three MSC
Classics and four MSC2000's, (ii) the equipment for 200 additional cell-cites,
(iii) one additional MSC5000+, and (iv) PURCHASER's requirements for Radio Base
Stations and Mobile Switching Centers within PURCHASER's market areas, all in
accordance with the terms and conditions of this Third Addendum.
NOW, THEREFORE, PURCHASER and SELLER hereby agree as follows:
1. Definitions. Except as provided in this Third Addendum, the defined terms
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used in this Third Addendum will have the same meanings ascribed to them in
the Acquisition Agreement.
2. Term of Addendum. The term of this Third Addendum shall commence on the
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Third Addendum Date and continue thereafter for a period of seven (7) years;
provided that the term of this Third Addendum (or its expiration or
termination for any reason) shall not change PURCHASER's obligations or
SELLER's rights under Section 6 of the Second Addendum.
3. Changeouts. From time to time during the term of this Third Addendum, at
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PURCHASER's option and request, SELLER will replace any of the following MSC
switches (already purchased by PURCHASER from SELLER) with a MSC5000+, in
accordance with the schedule set forth on Attachment A hereto: (i) three MSC
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Classics located at Norfolk, Richmond and Greenville, and (ii) four
MSC2000's located at Myrtle Beach, Tri-Cities, Fayetteville and Columbia
(each of the MSC Classics and MSC2000's to be replaced hereunder hereinafter
referred to as a "Replaced MSC"). With respect to each such replacement
MSC5000+, SELLER will, **** to PURCHASER, provide PURCHASER with the
following:
(a) such hardware and power plants as set forth in Attachment B hereto.
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(b) transfer of the license for the Optional Software Features already
purchased by PURCHASER from SELLER for the Replaced MSC to the
MSC5000+.
(c) transfer of the license for the Basic Software already purchased by
PURCHASER from SELLER for the Replaced MSC to the MSC5000+, with the
understanding and agreement that the license for the Basic Software of
such MSC5000+ will be for the Paid-Up SCC (as defined below).
**** Certain information on this page has been omitted from this filing and
filed separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the omitted
portions.
As used herein, "Paid-Up SCC" is defined as follows:
(i) MSC Classic - With respect to the Basic Software of the MSC5000+
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that replaces a MSC Classic, "Paid-Up SCC" means the Simultaneous
Call Capacity that is equivalent to the peak erlang capacity
utilized by PURCHASER in the replaced MSC Classic immediately
prior to replacement of such replaced MSC Classic with the
MSC5000+ hereunder; and
(ii) MSC2000 - With respect to the Basic Software of the MSC5000+ that
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replaces a MSC2000, "Paid-Up SCC" means the Simultaneous Call
Capacity that is equivalent to the peak erlang capacity utilized
by PURCHASER in the replaced MSC2000 immediately prior to
replacement of such replaced MSC2000 with the MSC5000+ hereunder.
With respect to each replacement MSC5000+, PURCHASER will pay to
SELLER the service fee in an amount equal to $**** for the
installation and commissioning of the replacement MSC5000+ as
described in Attachment C hereto. In addition, if and to the extent
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that PURCHASER requires any additional Simultaneous Call Capacity for
the MSC5000+ beyond the applicable Paid-Up SCC to meet its future
capacity needs, PURCHASER will pay to SELLER an additional license fee
equal to $**** per SCC.
In the event that MSC5000+ is no longer commercially available when
PURCHASER requests SELLER to replace a Replaced MSC as contemplated by
this Section 3, SELLER will provide PURCHASER with a MSC switch that
is equivalent to MSC5000+.
4. Transfer of Title. Upon replacement of each Replaced MSC by the MSC5000+
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as provided in this Third Addendum, PURCHASER hereby transfers and conveys
to SELLER the title and possession of such Replaced MSC, free and clear of
any and all mortgages, pledges, claims, liens, charges or any other
encumbrances. In connection therewith, PURCHASER will take such action and
execute such documents, instruments or conveyances as may be reasonably
requested by SELLER to so convey such title and possession to SELLER.
5. Purchase Commitment. In additional to the purchase commitment previously
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provided by PURCHASER to SELLER prior to the Third Addendum Date, PURCHASER
will purchase from SELLER, to be delivered no later than December 31, 2003
in accordance with the schedule set forth on Attachment A hereto, (i) the
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Equipment and Software, Installation and other related services for 200
additional Cell Sites (in addition to PURCHASER's Cell Sites existing as of
the Third Addendum Date) (the "Additional Cell Sites"), and (ii) one
additional MSC5000+ (in addition to the seven replacement MSC5000+ provided
in Sectin 3 of this Third Addendum) (the "New MSC"), including without
limitation the Equipment, Software and related services set forth in
Attachment B hereto, all in accordance with the same terms and conditions as
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those of the Acquisition Agreement (the Additional Cell Sites and the New
MSC (and its related Equipment and Software) hereinafter collectively
referred to as the "New Equipment").
6. Liquidated Damages for Delay of Replacement MSC.
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(a) If, and to the extent, due solely to the fault or negligence of SELLER,
Installation and Acceptance of any replacement MSC5000+ to be provided
by SELLER to PURCHASER under this Third Addendum does not occur upon the
schedule set forth on Attachment A hereto (as such period may be
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extended pursuant to Section 10.2(a) and Article 16 of the Acquisition
Agreement), PURCHASER shall be entitled to, and SELLER shall pay to
PURCHASER, damages in accordance with this Section 6.
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**** Certain information on this page has been omitted from this filing and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
(b) The parties agree that damages for delay are difficult to calculate
accurately and, therefore, agree to fix as liquidated damages, and not
as a penalty, an amount determined according to the table below.
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Weeks Late Liquidated Damages Percentage
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1 ****
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2 and beyond **** per week
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The amount of liquidated damages due and payable under this Section 6
shall be calculated by multiplying the applicable liquidated damages
percentage, for each week of delay or fraction of a week, determined in
accordance with the table above, by the installation and commissioning
service fee of $**** of the replacement MSC5000+ which has not completed
Acceptance Testing upon the date scheduled as set forth on Attachment A
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hereto as a result of such delay. The liquidated damages under this
Section 6 shall be PURCHASER's exclusive remedy for any delay by Seller
in delivering or installing any replacement MSC5000+ to be provided by
SELLER to PURCHASER under this Third Addendum. Liquidated damages shall
accrue under this Section 6 until such time as the delay period has
ended, and the liquidated damages that may accrue under this Section 6
until such time as the delay period has ended, and the liquidated
damages that may accrue under this Section 6 shall be limited in amount
to ***** of the installation and commissioning service fee of $****. The
parties agree that SELLER will pay all liquidated damages owed pursuant
to this Section 6 in cash.
7. Liquidated Damages for Delay of New Equipment.
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(a) If, and to the extent, due solely to the fault or negligence of SELLER,
Installation and Acceptance of any New Equipment provided by SELLER to
PURCHASER under this Third Addendum does not occur upon the schedule
set forth on Attachment A hereto (as such period may be extended
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pursuant to Section 10.2(a) and Article 16 of the Acquisition
Agreement), PURCHASER shall be entitled to, and SELLER shall pay to
PURCHASER, damages in accordance with this Section 7.
(b) The parties agree that damages for delay are difficult to calculate
accurately and, therefore, agree to fix as liquidated damages, and not
as a penalty, an amount determined according to the table below.
Weeks Late Liquidated Damages Percentage
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1 ****
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2 and beyond **** per week
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The amount of liquidated damages due and payable under this Section 7
shall be calculated by multiplying the applicable liquidated damages
percentage, for each week of delay or fraction of a week, determined
in accordance with the table above, by the aggregate of the total net
purchase price, on a Network Element by Network Element basis, of the
Equipment and Software, which comprise or are to comprise the New
Equipment and which has not completed Acceptance Testing upon the date
scheduled as set forth on Attachment A hereto as a result of such
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delay. The liquidated damages under this Section 7 shall be
PURCHASER's exclusive remedy for any delay by SELLER in delivering or
installing any New Equipment to be provided by SELLER to PURCHASER
under this Third Addendum. Liquidated damages shall accrue under this
Section 7 until such time as the delay period has ended, and the
liquidated damages that may accrue under this Section 7 shall be
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**** Certain information on this page has been omitted from this filing and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
limited in amount to **** of the cost of the aggregate Network Element
associated with, and resulting in, such delay. The parties agree that
SELLER will pay all liquidated damages owed pursuant to this Section 7
in cash.
8. Warranty and Remedy for Breach of Warranty.
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(a) Replacement MSC. The provisions of Article 13 of the Acquisition
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Agreement shall apply to each replacement MSC and the related
installation and commissioning services to be provided by SELLER to
PURCHASER under this Third Addendum, except that the warranty period
shall be the longer of (i) a period of **** from the date of Acceptance
of such replacement MSC5000+, or (ii) the then remaining warranty
period, if any, of the applicable Replaced MSC at the time of the
Acceptance of the such replacement MSC5000+.
(b) New Equipment. The provisions of Article 13 of the Acquisition Agreement
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shall apply to the New Equipment, except that with respect to any such New
Equipment, in the event of a breach of any of the warranties set forth in
paragraphs 13(a(a) and 13.2 of the Acquisition Agreement, the following
remedies will be available to PURCHASER.
(1) In the event that (i) the New Equipment fails to materially conform
with and perform the functions set forth in the Specifications or has
any defect in material or workmanship which impair service to
subscribers, System performance, billing, administration or
maintenance, and (ii) prior to the expiration of the applicable
warranty period, PURCHASER provides SELLER with a written notification
of such nonconformity or defect in material or workmanship, SELLER
shall, at its election and expense, repair or replace any such
defective New Equipment as soon as practicable, but in no event later
than thirty (30) days following SELLER's receipt of such written
notification from PURCHASER. In the event that SELLER fails to cure
such nonconformity or defect within such 30-day period, then PURCHASER
shall have the following sole and exclusive remedy:
(A) return the defective New Equipment to SELLER for a full refund of
the purchase price already paid by PURCHASER to SELLER for the
defective New Equipment, in which event, upon receipt of the
defective New Equipment, SELLER shall, as its sole and exclusive
liability for failure to cure the defective New Equipment within
the 30-day period, provide full refund to PURCHASER; or
(B) receive from SELLER the liquidated damages, and not as a penalty,
an amount calculated as follows:
(i) With respect to any Equipment or Software (other than a MSC
switch) that has a non-conformity or defect which SELLER
fails to cure within the 30-day cure period, the liquidated
damages, for each week beyond the 30-day cure period until
such non-conformity or defect is cured, will be equal to
**** of the net purchase price of such Equipment or
Software; provided that the total amount of such liquidated
damages shall not exceed the net purchase price of such
Equipment or Software.
(ii) With respect to any MSC switch that has a non-conformity or
defect which SELLER fails to cure within the 30-day cure
period, the liquidated damages, for each week beyond the 30-
day cure period until such non-conformity or defect is
cured, will be equal to **** of the net purchase price of
such MSC switch; provided
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**** Certain information on this page has been omitted from this filing and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
that the total amount of such liquidated damages shall not
exceed **** of the net purchase price of such MSC switch.
The parties agree that SELLER will pay all liquidated damages owed pursuant
to this Section 8(b) in cash.
Unless PURCHASER returns to SELLER the subject defective Equipment or
Software within thirty days following the expiration of the 30-day cure
period, PURCHASER shall be deemed to have exercised its sole and exclusive
remedy set forth in Section 8(b)(1)(B) above.
9. Entire Agreement. This Third Addendum, together with each schedule
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referred and attached hereto, constitutes the entire agreement between the
parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Third Addendum as of the
Third Addendum Date.
TRITON PCS
ERICSSON INC. EQUIPMENT COMPANY L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Printed Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Printed Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: VP & Key Account Manager Title: SR. VP of Engineering & IT
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**** Certain information on this page has been omitted from this filing and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
ATTACHMENT A
SCHEDULE
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Milestone Responsible Week
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New MSC5000+
Forecast MSC Triton 0
Network Eng. Finalized Triton 4
DT Requirements Finalized Triton 4
Purchase Order Triton 4
Location Ready Triton 11
Material Delivery Ericsson 12
Ready for NACN Testing Ericsson 22
Ready for Acceptance Ericsson 23
Begin RBS Integrations Ericsson 24
New RBS
Forecast Site Triton 0
Purchase Order Triton 6
Location Ready Triton 11
Material Delivery Ericsson 12
Ready for Acceptance Ericsson 13
ATTACHMENT B
MSC5000+
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Product # Description Price
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BASIC SOFTWARE
FAB125634/SCC4 BASIC SW RTU SCC (PER SCC) $****
HARDWARE AND POWER PLANTS $****
FAB125701 ▇▇▇ ▇▇▇▇ PLUS T1 Hardware With Plenum Cables
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-1 APZ 212 30 (80 MHz) (1024 Mword Data/Reference store)
-▇ ▇▇▇▇▇ (support I/O)
-▇ ▇▇▇▇▇ (support Charging)
-1 GSS-128k
-1CLM/GDM Cabinet
-2 S7V35
-1 Cabinet (empty for future)
-15 ETC-TI
-15 Digital
-1 CD-ROM G-Module - BYB 501 Installation Techniques
-1 G-Module Binder - BYB 501 Installation Techniques
All TSR Cables and Address boards needed at NPC for Construction and
Test are included.
Optional Sales Objects
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FAB125735 Optional DTI Cabinet
-1 DTI Cabinet with 64 channels
FAB125737 Optional I02B Subrack in DTI Cabinet
SPARES AND INSTALLATION MATERIAL
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FAB125702 Spares for ▇▇▇ ▇▇▇▇ PLUS T1
-Common ▇▇▇ ▇▇▇▇ Plus T1 Spares Kit
-CPG-APZ 212 30/2 (PBA-SPARES) 80MHz
FAB125703 Installation Mechanics for ▇▇▇ ▇▇▇▇ PLUS T1
FAB125707 Cables for DSX. Plenum Cables 75m Length
MISCELLANEOUS ITEMS FOR ▇▇▇ ▇▇▇▇ PLUS
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FAB 125712 On Site Maintenance Tool Kit
DOCUMENTATION FOR ▇▇▇ ▇▇▇▇ PLUS
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FAB125713 Version 6.0 ▇▇▇ ▇ ▇▇, ▇ and F Module for MSC/HLR
POWER PLANTS
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BMK850533/1006 -1 Main Cabinet
BMK850533/1007 -1 Extension Cabinet
BMY201129/2 -9 Rectifier Kit
BMY11012/1 -8 Distribution Kit
BGB95133/10 -72 10A TS-HOD Circuit Breaker
BGB95131/30 -2 30A HOD Circuit Breaker
24/BKCU1010054/138 -2 C&D Battery 990 A-H
INSTALLATION AND COMMISSIONING $****
**** Certain information on this page has been omitted from this filing and
filed separately with the Securities and Exchange Commission. Confidential
treatment has been requested with respect to the omitted portions.
ATTACHMENT C
INSTALLATION AND COMMISSIONING OF REPLACEMENT MSC5000+
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1. Responsibility Matrix. The following items of Attachment F to the
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Acquisition Agreement will apply to the installation and commissioning of
each replacement MSC5000+ for a Replaced MSC in connection with the
changeouts set forth in Section 3 of this Third Addendum.
Implementation and Testing of Switch (MSC)
400 Switch Engineering
410 Data Transcript
420 Switch Site Acquisition and Civil Construction
430 Switch Installation
440 Switch Network Element Testing
Implementation and Testing of Transmission (no optional services
provided by Ericsson)
600 Lease of Transmission and Data Communications Network
610 Transmission Engineering
620 Transmission Installation
630 Transmission Testing
640 Testing Data Communications Network
Integration and Acceptance
700 Integration of Ericsson's MSC, Network Elements & PSTN
710 System Demonstration (for Network Elements delivered by Ericsson)
In addition, the following responsibility matrix will apply to the
installation and commissioning of each replacement MSC5000+ for a Replaced
MSC in connection with the changeouts set forth in Section 3 of this Third
Addendum.
Task Triton Ericsson
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De-install Replaced MSC after cutover of replacement MSC5000+ X
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Remove Replaced MSC after de-installation X
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Transfer title to Ericsson of equipment replaced by MSC5000+ X
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Re-integrate MSC5000+ into all 3rd party and Ericsson supplied Network X
Elements supported on de-commissioned MSC.
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Provide sufficient and appropriate interfaces on 3rd party and other X
Ericsson supplied Network Elements to support network capacity during and
after changeout.
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Notify Triton of site issues that will prevent parallel changeout in a X
given facility.
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Modify facility to meet installation needs or identify and prepare an X
alternate site.
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Provide additional commercial power needed to support additional hardware. X
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Provide additional DSX racks, transmission equipment, and transmission X
links to support new MSCs.
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Re-integrate all Ericsson supplied cell-sites into new MSC. X
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2. Site Suitability and Installation Method. This section identifies each
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BUYER site's capability to concurrently support both the Replaced MSC and
the replacement MSC5000+ in connection with the changeouts set forth in
Section 3 of this Third Addendum, as of the Third Addendum Date, based
solely on the floorspace available in the switching room at such BUYER
site. Based on the foregoing, SELLER plans to employ the installation
method and cable type for the installation of each replacement MSC5000+, as
follows:
BUYER Suiteable for Raised Floor or Overhead Plenum or UL-listed
Site Multiple MSCs Ladder cables
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Greenville NO Overhead Ladder UL-listed
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Richmond NO Overhead Ladder UL-listed
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Norfolk YES Overhead Ladder UL-listed
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Myrtle Beach YES Raised Floor Plenum
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Fayetteville YES Raised Floor Plenum
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Tri-Cities YES Raised Floor UL-listed
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Columbia YES Raised Floor UL-listed
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Other factors under BUYER's control may impact a BUYER site's capability to
support multiple MSCs concurrently, such factors including without
limitation availability of sufficient AC power, and availability of
floorspace for additional transmission equipment. In the event that a
BUYER site is not capable of supporting multiple MSCs concurrently, it will
be necessary for SELLER to de-install the Replaced MSC prior to the
installation of the replacement MSC5000+.
