SALES CONTRACT OF PAS-TM- SYSTEM FOR XIAN TELECOMMUNICATION BUREAU
Contract Serial No.: UTXAO-199908-1-01 Project Serial No.: XI'AN-PAS
Buyer: Seller:
Xian Telecommunication Bureau UTStarcom (China) Co., Ltd.
Address: Address:
No. 28 Lianhu Road Fl. 11, Beihaiwantai Building
Xian No. 6 Chaoyangmenbeidajie
Dongcheng District, Beijing 100027
Tel.: 029-3288900 Tel.: 010-65542030
Fax: 029-3288900 Fax: 010-66542058
Taxpayer's Registration Number: 110108600045544
Bank of Account Establishment and Account No.:
Bank of Industry and Commerce, Chaoyang Branch, Ritan Subbranch
Account Number: [*]
This Contract is made between and by the Seller and the Buyer. In
accordance with the provisions of this Contract, the Buyer agrees to buy and the
Seller agrees to sell the following commodities:
1. Scope of the Contract:
PAS personal wireless cut-in system equipment (including hardware and
software) and related materials and services. Please see the attachment
for details.
2. Contract Price
The total price of the 'equipment' and 'services' is as follows:
[*]
The rate of conversion was based on the median price of the foreign
exchange rate of RMB827.74/USD100 published by the Bank of China on
August 20, 1999.
3. Country of Production and Name of Manufacturer: UTStarcom (Hangzhou)
Telecom Co., Ltd.
4. Schedule of Delivery: The goods shall be delivered in four
installments, and the last installment of which shall arrive at the
site designated by the Buyer no later than [*].
5. Site of Hand over of the Goods: Goods and Materials Supply Center
of Xian Telecommunications Bureau
(Person of Contact: Li Ximin, No. 6 Renhouzhuangbeilu, Xian)
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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6. Site of Delivery of the Goods: Goods and Materials Supply Center of
Xian Telecommunications Bureau (Person of Contact: Li Ximin, No. 6
Renhouzhuangbeilu, Xian)
7. Packaging
The goods shall be packed in solid wooden boxes, good for long-distance
transportation and proof from rain, moisture, earthquake and rust. The
Seller shall be held responsible totally for any damage resulted from
poor packaging or any damage related to dust caused by inadequate and
improper protective measures.
8. Packing Marks
The Seller shall use fast ink to clearly mark on each packaging case
the number, size, gross weight and such signs as 'this side up',
'please handle with care' and 'keep from moisture' along with packing
marks.
9. Transportation
Any cost and risk occurred prior to the official hand-over of the goods
at the site of delivery designated by the Buyer shall be borne by the
Seller.
10. Terms of Payment
The terms of payment for the equipment are as follows:
10.1 The Buyer shall make a prepayment to the Seller, equal to [*]
of the total Contract price for such equipment within [*]
upon execution of the Contract in the amount of [*]. If the
prepayment is delayed, the schedule of delivery for the
last installment of the goods shall be postponed
correspondingly.
10.2 Within [*] upon delivery of the goods, the Buyer shall, pay
the Seller [*] of the total Contract price for such
equipment in the amount of [*].
10.3 Within [*] upon qualification of an initial testing of the
equipment, the Buyer shall pay [*] of the total Contract
price in the amount of [*].
10.4 Within [*] upon the date of final testing (which should
begin within [*] after the initial test), the Buyer shall
pay [*] of the total Contract price for such equipment in
the amount of [*].
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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11. Guarantee for Good Repair
11.1 The Seller guarantees that the devices provided will be
free from faults both in technology and materials. The
period of guarantee for good repair provided by the Seller
for the equipment and materials is [*] beginning from the
date of qualification for the system's initial testing.
During the period of such guarantee for good repair, the
Buyer may opt to have the foregoing unqualified equipment
and materials under guarantee repaired or replaced. If the
Buyer decides that some parts should be returned to the
Seller, then the Seller shall bear the transportation cost
for the returned parts or in the case of repaired or
returned parts, the transportation cost to the site of
installation.
11.2 Any damages caused by carelessness, improper handling,
accidents or misuse shall not be included in the list below
of guarantee for good repair under the provisions of
Article 11.1.
11.2.1 Any damage caused by a third party's wiring,
repair or replacement other than the Seller and
its agent;
11.2.2 Any third party's improper installation, storage,
operations and maintenance other than the Seller
and its agent; and
11.2.3 Any removal from the site of installation, or
components that are easy to wear and tear such
wire fuses, luminous tubes, electric brushes for
electric motors.
12. Inspection and Claims
12.1 Within three (3) business days upon arrival of the goods at
the destination, the Buyer shall open the boxes with the
Seller present at the site. The representatives of the parties
shall make an inventory of the goods and affix their
signatures.
12.2 If, due to the improper packaging on the part of the Seller,
some parts are found missing or damaged, the Buyer shall make
a detailed record at the site of installation, or may
commission China Commodities Inspection Bureau to have another
inspection, or the representatives of the Buyer and the Seller
may draft and execute a memorandum. Such certificates or
memorandum may serve as appropriate documents to make up for
the missing parts or repair the damages ones, which shall be
implemented according to the terms of guarantee set forth in
Article 11.
13. Installation and Debugging
It is the responsibility of the Seller to supervise and guide the
installation of the equipment and it is the responsibility of the Buyer
to install the equipment. In order to guarantee the progress of
installation and its quality for such equipment as well as to lay down
the preparatory work for such project pursuant to the schedule set
forth in the Contract, the Buyer shall have adequate contingent of
qualified installation personnel while the Seller shall also have
adequate and qualified personnel for the guidance of the project and
the debugging of the system.
14. Test and Acceptance
14.1 The Seller shall be responsible for the installation design,
supervision and guidance of the equipment and the debugging of
the system. During the course of installation and opening, the
Buyer shall assist the Seller in technical management and
other related work. The installation of equipment and the
opening of access shall be carried out in accordance with the
schedule of progress set forth in the attachment.
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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14.2 With regard to the specific contents and requirements of the
inspection and acceptance, the Seller shall submit them to the
Buyer in writing for approval [*] before the test and
acceptance work starts. Initial test shall be conducted within
[*] after the opening and number release of the system, and
the period of time for acceptance upon testing shall not
exceed [*] (except for the postponement caused by the Seller).
If the testing results are up to the test and acceptance
standards mentioned above, they shall be deemed as being
qualified for the initial test. If the initial test fails to
meet the standards, the Seller shall be responsible for the
adjustment and a new
round of test shall be conducted until the 'equipment' reaches
the quality index set forth for such work. But minor problems
shall not affect the validity of an initial test certificate.
14.3 The final test shall start within [*] upon execution of the
initial test certificate by the parties. If the final test
meets the test and acceptance standards, the parties shall
sign the final test certificate within [*]. During the [*]
trial operation, the Seller shall ensure the normal operation
of the equipment. If, during the period of a final test, the
Seller is held accountable for any malfunction occurred as a
result of failure to meet the standards during the foregoing
trial operations, the final test shall start anew at that
time. The final test shall only be completed until all the
standards of test and acceptance for the equipment are met.
14.4 The test and acceptance of the system shall be based on the
provisions for terminal equipment illustrated on the book of
general technical standards for telephone exchange equipment ,
the 'compilation subscribers' cut-in network documents and
technical provisions' and 'the book of general technical
standards for cut-in network equipment' (Provisional
Regulations) set forth by the former Ministry of Post and
Telecommunications on cut-in network equipment and other
acceptance conditions agreed upon by the parties.
15. After-Sale Services
15.1 The Seller shall provide maintenance services [*] for [*]
after the final test, and, moreover, [*] technical support
shall be provided. A technical support center will be set up
in Xian to ensure that any emergency calls shall be answered
promptly and technical personnel dispatched to the site within
[*].
15.2 During the period of maintenance for the system, the Seller
shall provide such services pursuant to the provisions of
Article 11.1.
15.3 Upon expiration of the maintenance period for the equipment,
the Seller shall continue providing services for the repair of
such equipment in case of malfunction, and the Seller further
guarantees that backup or substitute equipment be provided at
a preferential price.
16. Force Majeure
The Seller shall not be held liable for any losses, damages or delay of
delivery of or functional damages to the goods caused, whether directly
or indirectly, by such act which is beyond the scale of reasonable
control by the Seller and which is not limited to the laws and
regulations imposed by the authorities of any government. If the
delivery of goods under this Contract is delayed for more than two
months
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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due to any one of the above-mentioned reasons, either the Seller
or the Buyer shall be entitled to terminate this Contract by notifying
the other party in writing.
17. Arbitration
The parties shall implement this Contract rigorously in accordance with
the relevant laws and regulations of the People's Republic of China.
Any dispute arising from or in connection with the execution of the
Contract shall be settled through consultation on the basis of mutual
understanding and friendliness. If such consultation fails to reach an
agreement, any party may apply for an arbitration at Xian Arbitration
Commission. The arbitral cost shall be covered by the losing party.
18. Limited Liability
18.1 In case the Seller breaches the Contract or the Buyer suffers
from any losses or damages under this Contract due to the
Seller's fault, the total aggregated amount for such breach,
losses or damages that the Seller is liable for shall be lower
than the following:
18.1.1 The actual value afflicted upon the Buyer by such
losses or damages.
18.1.2 The total amount paid to the Seller.
18.2 The Seller shall not be responsible for any indirect or
supplementary losses or damages arising out of this Contract.
19. Patents
The Sellers guarantees that the 'equipment' does not infringe upon any
third party's patents or ownership. If a third party lodges a claim
upon the 'equipment' used by the Buyer, the Buyer has the right to
refuse it, and then notify the Seller immediately. The Seller shall
take the responsibility to solve such problems, and the Buyer shall be
bear any legal and economic responsibilities. The Seller shall
compensate any direct losses caused therefrom to the Buyer.
20. Confidentiality
Unless permitted by the Seller in writing, the Buyer agrees that it
shall not disclose any technical document or data related to this
Contract including this Contract to any party that has nothing to do
with this Contract, nor shall it transfer any equipment out of the
People's Republic of China. These confidential principles shall apply
to any other party related to this Contract. Likewise, the
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Seller shall also observe the provisions of this Article with regard
to the confidential information about the Buyer or its subscribers.
21. Validity and Termination of the Contract and Supplementary Provisions
21.1 This Contract shall come in force upon affixation of the
parties' official seals and signatures of their
representatives.
21.2 This Contract shall be terminated upon completion of the
parties' responsibilities and obligations.
21.3 Any amendment to this Contract shall be based on the written
document executed by the representatives of the parties and
affixed with their official seals.
21.4 All notices dispatched by the parties in the course of
executing this Contract shall be in the reliable forms of
telexes, faxes or letters.
22. Supplementary Note:
This Contract is written in four originals, each party in possession of
two copies. This Contract consists of 22 Articles and the documents
listed in the attachments. These documents listed in the attachments
are attached thereafter its text and shall be treated as an inseparate
part of this Contract with equal legal power.
Buyer: Seller:
Xian Telecommunications Bureau UTStarcom (China) Co., Ltd.
Legal Representative or Representative: Legal Representative or Representative:
(Signature) (Signature)
Date: August 23, 1999 Date: August 23, 1999
WIRELESS MUNICIPAL TELEPHONE (PAS-TM-)
OF
XIAN TELECOMMUNICATION BUREAU
TABLE OF CONTENTS
(1) Contract
(2) Appendix 1 Total Price and List of Equipment (Omitted)
(3) Appendix 2 Memorandum
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(4) Appendix 3 PAS-TM-Technical Proposal for the Wireless Municipal
Telephone of Xian Telecommunications Bureau (Omitted)
(5) Appendix 4 Schedule of Progress and the Parties' Responsibilities
(6) Appendix 5 Training Program (Omitted)
(7) Appendix 6 Technical Manual of Wireless Municipal Telephone
(PAS-TM-) (Omitted)
(8) Appendix 7 Reply to the Price Inquiry with regard the PAS Project in
Xian (Omitted)
APPENDIX II
MEMORANDUM
Party A: Party B:
Xian Telecommunications Bureau UTStarcom (China) Co., Ltd.
No. 28, Lianhu Road Fl. 11, Beihaiwantai Building
Xian No. 6 Chaoyangmenbeidajie
Dongcheng District, Beijing 100027
This memorandum consists of three parts and nineteen (19) clauses.
I. Supply and Maintenance of PAS Handsets
The price of a PS handset currently provided by Party B to Party A
is [*], and the PS models are comprised of two kinds, 702-S and 702-P.
Party B is committed to decrease the supply price of a handset by [*]
within [*] on the basis of the current price, and [*] within [*]. Moreover,
Party B guarantees that, within [*], the maintenance will be provided [*],
and that after [*], [*] maintenance of handsets and services for component
and spare parts be provided. Party B plans to set up a maintenance and repair
center in Xian in cooperation with the Telecommunications Bureau in the near
future. (The explanation of this section is aimed at PS handsets provided by
Party B in both Chinese and English.)
Party B shall open up the air interface protocol for handsets within
[*] upon execution of the Contract. Party A may independently purchase PS
handsets directly from the manufacturers, and by the time, there will be
three Japanese manufacturers, [*] that will provide STEPHII standard handsets
to Party B's subscribers.
II. Explanation on the Equipment Given as [*] (See the list for details)
1. When the local wireless telephone network in Xian enters into
the stage of network adjustment and optimization, Party B
shall [*] to Party A (including interface boards in
relation to the corresponding RPC) to cover the vast border
area in Xian. The goods will arrive by the end of the year.
2. Party B is committed to provide a set of data application
business without any charge, whereby [*] can log
on simultaneously when the second-generation data application
business of PAS system is commercialized (the rate of speed
for communication is [*], and the system is scheduled to
open within [*]). At the time of opening, Party
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B shall provide Party A [*] a set of first-generation data
application equipment used in the PAS system, the capacity of
which can [*] to log on in the interconnected network.
3. Party B shall contribute [*] to Party A [*] of RPC and other
backup device. The backup device shall be used to maintain
equipment in the future. The goods will arrive by the end of
the year.
4. Party B shall give Party A [*] a set of [*], and the schedule
of delivery is set by the end of the year.
5. 110 and 119 Alarm Signal System: The function of such
system involves the coordination and cooperation of 110 and
119 centralized monitoring center, including the necessity
for the monitoring center to set up a data bank and a
retrieval system correspondingly in relation the PAS system
in Xian. In the meantime, the network management center of
the PAS system can provide the related information of 110
and 119 alarm signal telephones to the monitoring center,
which will eventually determine the location of the
subscriber through the retrieval data bank. The interface
standards between PAS network management center and the
monitoring center will be provided to Party A within a
month upon execution of the Contract. The said system will
be jointly developed by Party A and Party B in their
concerted efforts and provided to Party A for use [*]
(including software and hardware).
6. With regard to RP antenna adversity system, Party B is
committed to provide the Bureau 10 sets of such equipment to
conduct tests at selected points within three (3) months upon
execution of the Contract.
7. Based on the terms of network operations, Party B
undertakes to give Party A [*] of COT (containing the
function of indicating the caller's number) and [*] of RPC
and [*] of RP. All the equipment contributed [*] shall have
frames.
8. Party B is committed to Party A that [*] shall be given [*],
and their models are of 702-S and 702-P.
9. The collocation of soft- and hardware for the system's
indicator of calling subscriber's number has been included in
the quoted price. Depending on the operation of the network,
Party B is committed to increase the software and hardware of
the calling subscriber's indicators [*] if the current
collocation does not meet the subscribers' requirements.
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III. Other Items
1. Party B is committed to provide [*] technical training for 60
people from Party A, 30 of whom shall have their technical
training program in China, 12 outside of China and 18 at
overseas manufacturers for practical experience. The training
cost includes round trip airline tickets of the personnel and
other related expenses such as transportation and
accommodation.
2. Party B is committed to fulfil the goals set forth in Article
1.3 of Appendix 3. If such goals cannot be achieved, Party B
is committed to provide equipment to Party A [*] to meeting
the foregoing requirements.
3. Party B is committed to co-operate with Party A in further
optimizing the reliability of operations for S-ATC equipment.
Party B undertakes to meet the Bureau's following requirement
within three months after the opening of the system:
(1) The service unit is equipped with [*] CPU cards, and
may expand into [*] cards.
(2) The capacity of storage is no less than [*].
(3) The RAID memory unit will have the backup of [*], and
the disk controller will have the backup of [*].
(4) The use of LAN-SWITCH (and equipment with [*] single
mould optical fiber interface to facilitate remote
backup). Party B will join Party A in its further
efforts to improve the stability of the whole
network.
4. Party B is committed to continuously optimize the network
infrastructure of S-ATC, ATC and COT. When the network
subscribers reach [*] or within a period of [*], Party B will
replace S-ATC, ATC and COT with the equipment having Party B's
latest technology.
5. Party B guarantees to Party A that adequate indoors base
stations and directive antennas will be provided during the
engineering period, and that adjustments be made based on the
actual needs for area coverage.
6. Party B guarantees that sales of PAS will only be made
available to Party A in the Xian area, and that no other
subscribers shall be provided.
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7. Party B will [*] concerning new businesses that are
not listed in this Contract but will be provided to the
Bureau; however, it will charge the related hardware cost.
Party A: Party B:
Xian Telecommunications Bureau UTStarcom (China) Co., Ltd.
Legal Representative or Legal Representative or
Representative: (Signature) Representative: (Signature)
Date: August 23, 1999 Date: August 23, 1999
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.
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APPENDIX IV
SCHEDULE OF PROGRESS FOR THE PROJECT
AND
THE PARTIES' RESPONSIBILITIES
I Proposed Schedule of Progress for the Project
[*]
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II The Parties' Responsibilities
Party A: Xian Telecommunications Bureau
Party B: UTStarcom (China) Co., Ltd.
In order to guarantee the success of cooperation between and
by the parties during the implementing stage of the project, the
parties hereby clearly define the following matters in connection with
the project:
I. The parties' responsibilities;
II. Survey, design and preparation of the project;
III. Materials and interface for the installation of the
project;
IV. Testing and trial operations of the system; and
V. Supplementary facilities.
I. The Parties' Responsibilities
1.1 Prior to the start of the project, Party A must be
equipment with the necessary conditions available for
installation. If such conditions are unavailable or
inadequate, Party B shall rearrange the schedule of
progress for the project and set a new date to start
the operations.
1.2 Party A shall be responsible to supply stable direct
and alternate power sources, and transfer them to the
locations designated at the project site. In addition,
Party A shall guarantee the quality and capacity of
electric supply.
1.3 Party B shall supply the equipment necessary for the
project, and guarantees that the quality of such
equipment is up to the technical standards.
1.4 The installation of all the equipment provided by
Party B shall be completed jointly by the parties.
Party B shall be responsible for the debugging and
opening of the system, and Party A shall provide
assistance and coordination. Any wiring, installation,
setup or debugging that involve Party A's facilities
shall be Party A's responsibilities whereby Party B
will provide assistance and coordination.
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1.5 Any matters occurred during the course of this project
and not defined in this appendix shall be solved
through discussions by the parties.
II. Survey, Design and Preparation of the Project
Party B shall be responsible for the project survey
and the network plan whereas Party A shall coordinate with
Party B in its survey and network plan as well as relevant
data and information in connection with such work.
2.1 Party A shall provide equipment rooms at the central
office's and the far-end terminals as well as the
site for construction. In addition, it will provide
Party B detailed information with regard to the
equipment rooms (including draft of the locations and
information about the environmental conditions and
available facilities). Party B shall work out a
master plan, make proposals and requests in
connection with Party A's preparatory conditions on
equipment rooms.
2.2 Party A shall be responsible to provide a map (at the
scale of [*]) outing the service area under the
project. Party B shall conduct on-the-site wireless
survey based on such map and determine the exact
locations for the corresponding base stations, and
provide a list of locations for base stations as well
as detailed schedule of installation.
2.3 Party A shall arrange engineering and technical
personnel concerned to assist and coordinate such
wireless survey.
2.4 Party A shall be responsible to coordinate with the
local authorities and institutions to fix the locations
for the installation of such base stations.
2.5 Party B shall be responsible to put forward specific
requirements for the preparation of the project, and
Party A shall be responsible to carry out such
preparatory work for the project and to timely feed
back the progress to Party B.
III. Materials and Interface for the Installation of the Project
3.1 Party A shall be responsible to provide the interface,
technical information and necessary technical
assistance for the switchboard.
3.2 If the [*] is adopted, Party A shall be responsible for
the connection of [*] from [*]
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to Party B's equipment. The adapter of [*] on the
side of Party B's equipment shall be provided and
installed by Party B. If the [*] is adopted, Party A
shall be responsible for the [*] to [*] and that from
[*] to [*], and shall also be responsible for the clock
line at the precision of [*].
3.3 Party A shall be responsible for the wiring of
connection from the [*] at the base stations [*] to [*].
The interface on the side of [*] shall be provided and
installed by Party A whereas the interface on the side
of [*] shall be provided and installed by Party B.
3.4 Party A shall be responsible to fasten the frame body
and extend the [*] power source and ground wire to the
main distribution frame [*] of Party B's equipment.
3.5 Party B shall be responsible for the installation of the
machine frame in the rack, power source line and ground
lines.
3.6 Party A shall be responsible for the remaining wiring at
the equipment rooms whereas Party B shall provide
assistance and coordination. If the [*] frame is used,
Party A shall provide [*]; Party A shall also be
responsible for the [*] among the main distribution
frames.
3.7 The manufacturing of fastening pieces and the
installation of the base stations as well as the
inspection of the related lines shall be Party A's
responsibility. The testing of the base stations and
fault correction shall be performed through the joint
efforts of the parties.
3.8 Party A shall be responsible to provide vehicles,
tools, materials and personnel required for the
installation of the project.
3.9 Party A shall be responsible to provide number
sources required for this network of wireless
connection.
IV. Testing and Trial Operations of the System
4.1 The testing of various parts of the system and
general combined debugging shall be completed by the
joint efforts of the parties. Party A shall conduct
testing in coordination with the tests on Party B's
equipment, confirm the results of such testing on the
function of the system, and provide necessary tools
for such
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testing. Party B shall be responsible for technical
guidance and support.
4.2 Party B shall provide a plan for trial operations as
well as maintenance and technical guidance during the
period of trial operations, and in the meantime,
provide training on maintenance for Party A's personnel
so as to enable them to master the knowledge for
maintenance. Party A shall work out the plan for trial
operations.
4.3 If faults or errors are discovered in the software or
hardware of the equipment or technical information
that result in failures to reach the standard and
targets set forth in the Contract, Party B shall be
responsible for the repair of such equipment, the
replacement of hardware materials and the upgrade of
software.
4.4 As Party A is Party B's key subscriber, Party B shall
make tract records on the operations and maintenance
of the equipment and keep them in the files for key
subscribers.
V. Supplementary Facilities
The supplementary facilities provided for the
implementation of the project are defined as follows:
5.1 The Bureau will provide supplementary facilities and
equipment for the installation of equipment such as
computer desks and chairs, sites for the storage of
tools, equipment and goods.
5.2 Party A shall provide PS handsets and telephone
numbers required for testing.
5.3 The communication facilities required for the project
such as IDD direct dial telephones and faxes for
domestic use shall be provided by Party A, and Party
B will use them in accordance with Party A's
management regulations. Party A shall provide
sockets, plugs and cables used for power sources of
general purpose and extend them to where the
equipment is located when the equipment is installed.
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Sales Contract of PAS-TM-System for Xian Telecommunication Bureau - UTStarcom (China) Co. Ltd. and Xian Telecommunication Bureau
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