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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the year ended December 31, 1999
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the transition period from ____________ to____________.
Commission File Number ( 000-25865 )
Copper Mountain Networks, Inc.
(Exact name of registrant as specified in its charter)
Delaware 33-0702004
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2470 Embarcadero Way, Palo Alto, California 94303
(650) 687-3300
(Address, including zip code, and telephone number, including area code, of
principal executive offices)
Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _____
----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of
the registrant, as of January 31, 2000 was approximately $2,118,985,000 (based
on the closing price for shares of the registrant's Common Stock as reported by
the Nasdaq National Market for the last trading day prior to that date).
Shares of Common Stock held by each officer, director and holder of 5% or more
of the outstanding Common Stock have been excluded in that such persons may be
deemed affiliates. This determination of affiliate status is not necessarily a
conclusive determination for other purposes.
The number of shares outstanding of the registrant's Common Stock, $.001 par
value, as of January 31, 2000 was 47,870,942.
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PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
Page
Number
--------
(a) Documents filed as part of the report:
(1) Report of Ernst & Young LLP, Independent
Auditors F-1
Balance Sheets at December 31, 1999 and 1998 F-2
Statements of Operations for 1999, 1998 and
1997 F-3
Statements of Stockholders' Equity for 1999,
1998 and 1997 F-4
Statements of Cash Flows for 1999, 1998 and
1997 F-6
Notes to Financial Statements F-7
Schedule II Valuation and Qualifying Accounts II-1
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable and therefore
have been omitted.
(2) Exhibits
Exhibit
Number Description of Document
------ -----------------------
3.1 Amended and Restated Certificate of Incorporation.(1)
3.2 Bylaws.(1)
4.1 Reference is made to Exhibits 3.1 and 3.2.(1)
4.2 Specimen Stock Certificate.(1)
10.1 Amended and Restated 1996 Equity Incentive Plan (the "1996
Plan").(1)
10.2 Form of Stock Option Agreement pursuant to the 1996 Plan.(1)
10.3 1999 Employee Stock Purchase Plan and related offering
documents.(1)
10.4 Employment Agreement between the Company and Steve Hunt, dated
July 31, 1996.(1)
10.5 Employment Agreement between the Company and Richard Gilbert,
dated March 22, 1998.(1)
10.6 Master Equipment Lease between the Company and Comdisco, Inc.,
dated September 30, 1997.(1)
10.7 Loan and Security Agreement between the Company and Silicon
Valley Bank, dated August 14, 1998.(1)
10.8 Loan and Security Agreement between the Company and Silicon
Valley Bank and MMC/GATX Partnership No. 1, dated October 4,
1996.(1)
10.9 Office Lease between the Company and Public Storage Properties
XVIII, Inc., dated June 14, 1996.(1)
10.10 Office Lease between the Company and R.G. Harris & Company, dated
August 12, 1997.(1)
10.11 Office Sublease between the Company and Stuart Leeb and
Associates, dated May 1, 1998.(1)
10.12 Office Lease between the Company and Palomar Enterprises, Inc.,
dated July 20, 1998.(1)
10.13 Warrant Agreement between the Company and MMC/GATX Partnership
No. 1, dated October 4, 1996.(1)
10.14 Warrant Agreement between the Company and Silicon Valley Bank,
dated October 4, 1996.(1)
10.15 Warrant Agreement between the Company and Comdisco, Inc., dated
October 29, 1997.(1)
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Exhibit
Number Description of Document
------ -----------------------
10.16 Warrant Agreement between the Company and Comdisco, Inc., dated
April 27, 1998.(1)
10.17 Warrant Agreement between the Company and Intel Corporation,
dated January 14, 1997.(1)
10.18 Warrant Agreement between the Company and Silicon Valley Bank,
dated August 14, 1998.(1)
10.19 Amended and Restated Investors' Rights Agreement by and among the
Company and certain stockholders of the Company, dated October 9,
1998.(1)
10.20 Right of First Refusal and Co-Sale Agreement by and among the
Company and certain stockholders of the Company, dated October 9,
1998.(1)
10.21 Voting Agreement by and among the Company and certain
stockholders of the Company, dated October 9, 1998.(1)
10.22 Founder Stock Purchase Agreement between the Company and Joseph
D. Markee, dated March 11, 1996.(1)
10.23 First Amendment to Founder Stock Purchase Agreement between the
Company and Joseph D. Markee, dated June 12, 1998.(1)
10.24 Founder Stock Purchase Agreement between the Company and Mark J.
Handzel, dated March 11, 1996.(1)
10.25 First Amendment to Founder Stock Purchase Agreement between the
Company and Mark J. Handzel, dated January 27, 1999.(1)
+10.26 General Agreement for the Procurement of Products and Services
and the Licensing of Software between the Company and Lucent
Technologies Inc., dated November 17, 1998.(1)
+10.27 OEM Purchase and Development Agreement between the Company an
3COM Corporation, dated November 24, 1998.(1)
+10.28 Development, Manufacturing and Supply Agreement between the
Company and Netopia, Inc., dated May 19, 1998.(1)
10.29 Warrant Agreement between the Company and Intel Corporation,
dated January 14, 1997.(1)
10.30 1999 Non-Employee Directors' Stock Option Plan.(1)
10.31 Form of Nonqualified Stock Option for use with 1999 Non-Employee
Directors' Stock Option Plan.(1)
10.32 Form of Indemnification Agreement(1)
+10.33 Equipment Purchase Agreement between the Company and NorthPoint
Communications, Inc. dated April 8, 1999.(1)
+10.34 Standard Full Service Gross Office Lease among the Company,
Pacific Sorrento Mesa Holdings, L.P., and Pacific Stonecrest
Holdings, L.P., dated March 31, 1999.(1)
+10.35 Equipment Purchase Agreement between the Company and NorthPoint
Communications, Inc. dated July 21, 1999.(2)
+10.36 Equipment Purchase Agreement between the Company and Rhythms
NetConnections, Inc. dated December 10, 1999.
10.37 Software License Agreement between the Company and Rhythms
NetConnections, Inc. dated December 10, 1999.*
+10.38 Customer Technical Support Services Agreement between the Company
and Rhythms NetConnections, Inc. dated December 10, 1999.
10.39 Employment Agreement between the Company and Joseph D. Markee,
dated March 12, 1999.(1)
23.1 Consent of Ernst & Young LLP, Independent Auditors.*
27 Financial Data Schedule.*
___________________________________________________________________________
* Previously filed with the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1999, filed on March 17, 2000.
(1) Filed as an exhibit to the Registrant's Registration Statement on Form
S-1 filed with the Securities and Exchange Commission (the
"Commission") on March 1, 1999 (File No. 333-73153), as amended by
Amendment No. 1 filed with the Commission on April 13, 1999, Amendment
No. 2 filed with the Commission on April 26, 1999, and Amendment No. 3
filed with the Commission on
2
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May 11, 1999.
(2) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1999.
+ Confidential treatment has been requested with respect to certain
portions of this exhibit. Omitted portions have been filed separately
with the Securities and Exchange Commission.
3
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
Date: April 20, 2000
Copper Mountain Networks, Inc.
By: /s/ RICHARD S. GILBERT
------------------------------
Richard S. Gilbert
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ RICHARD S. GILBERT President, Chief Executive April 20, 2000
- -----------------------------
Richard S. Gilbert Officer and Director (Principal
Executive Officer)
/s/ JOHN A. CREELMAN Vice President of Finance, Chief April 20, 2000
- -----------------------------
John A. Creelman Financial Officer and Secretary
(Principal Financial Officer and
Principal Accounting Officer)
/s/ JOSEPH D. MARKEE Chief Technical Officer and April 20, 2000
- -----------------------------
Joseph D. Markee Chairman of the Board
/s/ ROBERT L. BAILEY Director April 20, 2000
- -----------------------------
Robert L. Bailey
/s/ TENCH COXE Director April 20, 2000
- -----------------------------
Tench Coxe
/s/ ROGER EVANS Director April 20, 2000
- -----------------------------
Roger Evans
/s/ RICHARD H. KIMBALL Director April 20, 2000
- -----------------------------
Richard H. Kimball
/s/ RAYMOND V. THOMAS Director April 20, 2000
- -----------------------------
Raymond V. Thomas
/s/ ANDREW W. VERHALEN Director April 20, 2000
- -----------------------------
Andrew W. Verhalen
4
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EXHIBIT 10.36
*Confidential Treatment Requested
Under 17 C.F.R. (S)(S)200.80(b)(4),
200.83 and 240.24b-2
EQUIPMENT PURCHASE AGREEMENT
THIS EQUIPMENT PURCHASE AGREEMENT (the "Agreement") is entered into as
of December 10, 1999 (the "Effective Date"), by and between RHYTHMS LINKS, INC.,
a company duly organized and existing under the laws of the State of Delaware
("Customer"), and COPPER MOUNTAIN NETWORKS, INC., a company duly organized and
existing under the laws of the State of Delaware ("Copper Mountain").
RECITAL
WHEREAS, Copper Mountain desires to sell to Customer, and Customer
desires to purchase from Copper Mountain, a Digital Subscriber Line ("DSL")
networking system.
NOW, THEREFORE, Copper Mountain and Customer hereby agree as follows:
AGREEMENT
1. DEFINITIONS
"ACCEPTANCE" means Customer's final and irrevocable acceptance of the
Equipment in accordance with the terms of this Agreement.
"BLANKET PURCHASE ORDER" means the two non-cancelable Purchase Orders
issued prior to each calendar quarter by Customer as outlined in Exhibit B
attached hereto.
"DEFECTIVE" means the Equipment fails to operate substantially in
accordance with the specifications set forth in the documentation provided to
Customer under normal use and service.
"EQUIPMENT" means the Network Equipment and Subscriber Equipment being
purchased under this Agreement by Customer.
"FIRMWARE" has the meaning set forth in the Software License Agreement
between Copper Mountain and Customer entered into concurrently with the
execution of this Agreement (the "Software License Agreement").
"FORECAST" has the meaning set forth in Section 2.3.
"LINE CARDS" means the portion of the Network Equipment comprised of
the printed circuit board assemblies, which contain the line or port capacity of
the Network Equipment.
"MINIMUM VOLUME COMMITMENT" means the minimum volume commitment of
Equipment to be purchased by and delivered to Customer each quarter as set forth
on Exhibit B.
"NETWORK EQUIPMENT" means the infrastructure DSL networking equipment
(i.e., a high-performance, carrier-class platform) and related materials listed
in Exhibit A that will be used to implement the System.
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"PURCHASE ORDER" means a written purchase order submitted to Copper
Mountain by Customer setting forth the number of units of Network Equipment and
Subscriber Equipment to be purchased and the requested shipping date.
"PURCHASE PRICE" means the price of the Equipment to be paid by
Customer to Copper Mountain as set forth in Exhibit A, subject to the discount
set forth on Exhibit B.
"SPECIAL OR NON-STANDARD PARTS" means any component of the Equipment,
which is not contained within a standard product on the Price List.
"SUBSCRIBER EQUIPMENT" means the subscriber equipment that will be used
to connect subscribers within the System to the Network Equipment to provide
high-speed access to the Internet and other data services (e.g., CopperRockets).
"SYSTEM" means the Equipment and the System Software.
"SYSTEM SOFTWARE" means the Firmware furnished and licensed to Customer
under the Software License Agreement between Copper Mountain and Customer to be
executed concurrently with this Agreement.
"TERM" has the meaning set forth in Section 12.1.
"WARRANTY PERIOD" means [...***...] after shipment of the Equipment to
Customer and any extended warranty period associated with any additional
warranty coverage purchased by Customer from Copper Mountain with respect to the
Equipment.
2. PURCHASE OF EQUIPMENT
2.1 PURCHASE OF EQUIPMENT. In accordance with and subject to the
terms and conditions of this Agreement, Customer hereby orders and agrees
to purchase from Copper Mountain, and Copper Mountain hereby accepts and agrees
to sell to Customer, the Equipment. The System Software shall be licensed, not
sold, to Customer under the terms of the Software License Agreement.
Concurrently with the execution of this Agreement by the parties hereto, RLI
shall deliver to COPPER MOUNTAIN the form of guarantee set forth as Exhibit F
hereto, which shall be signed by a duly authorized officer or representative of
Rhythms NetConnections Inc.
2.2 [...***...] Customer acknowledges and agrees that, pursuant to
the terms hereof, Copper Mountain has [...***...] to Customer [...***...] for
the [...***...] upon [...***...] of the [...***...].
2.3 FORECASTS. On or before the 20th day of each month during the
Term, Customer shall submit a written forecast, or approve a forecast as
prepared mutually with Copper Mountain, to Copper Mountain (the "Forecast")
which shall set forth the estimated number of
* Confidential Treatment Requested
2
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units of Network Equipment to be purchased in each month during the twelve (12)
month period beginning with the month for which such Forecast is being delivered
(or such lesser period from the date of such forecast to the end of this
Agreement).
3. PURCHASE PRICE AND PAYMENT
3.1 PURCHASE PRICE. Customer shall pay to Copper Mountain the
Purchase Price for the Equipment as set forth on Exhibit A, less a discount as
set forth on Exhibit B. Both parties acknowledge that the Purchase Price shall
not include any maintenance or support above and beyond the warranty set forth
in Section 7.
3.2 PAYMENT SCHEDULE. Customer shall pay all invoices issued under
this Agreement within thirty (30) days from the date of invoice, and each
invoice shall be mailed by Copper Mountain to Customer within three (3) days of
the date of such invoice. Shipments, deliveries and performance of work will at
all times be subject to the approval of Copper Mountain. In the event that the
Customer has not met the payment schedule set forth in this Section 3.2, Copper
Mountain may at any time decline to make any shipments or deliveries or perform
any work except upon receipt of payment or upon terms and conditions or security
satisfactory to Copper Mountain. In no event shall Copper Mountain decline to
make any shipments or deliveries or perform any work, unless Copper Mountain has
notified Customer in writing of any overdue amounts and Customer has not paid
all overdue amounts to Copper Mountain within ten (10) days from the date of
such written notice.
3.3 TAXES. Customer shall pay any and all taxes (other than taxes
based upon Copper Mountain's net income, gross receipts, and/or personal
property), duties, assessments and other charges and expenses of any nature
whatsoever imposed by any government authority in connection with the delivery
of the Equipment to Customer or the payment of the Purchase Price.
3.4 LATE CHARGES; OFFSETS. Copper Mountain reserves the right to
charge Customer a late payment fee on any past due amounts at the rate of
[...***...] percent ([...***...]%) per month or the maximum amount permitted by
law, whichever is less.
4. ORDERS AND DELIVERY
4.1 PROCEDURE. Customer shall purchase Equipment from Copper Mountain
by submitting a Purchase Order to Copper Mountain.
4.2 ACCEPTANCE OF PURCHASE ORDERS. All Purchase Orders submitted by
Customer to Copper Mountain shall be subject to acceptance by Copper Mountain at
its offices in San Diego, California. Copper Mountain shall, within one (1)
business day of receipt of each Purchase Order, confirm receipt of such Purchase
Order with Customer by facsimile or electronic mail. Additionally, Copper
Mountain shall, within three (3) business days of receipt of each Purchase Order
provide the committed date of shipment for each such Purchase Order to customer
by facsimile or electronic mail. Purchase Orders shall not be binding on Copper
Mountain until such written confirmation has been given. In the event the
committed date of shipment is not acceptable to Customer, Customer will notify
Copper Mountain within one (1) business day after receipt of the proposed
shipment date to negotiate and determine a new shipment date agreeable
* Confidential Treatment Requested
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to both parties. In the event an acceptable shipment date cannot be determined
between both parties, the order may be unilaterally cancelled by Customer with
no penalties or charges being incurred.
4.3 CONTROLLING TERMS. All Equipment purchased by Customer from
Copper Mountain during the Term shall be subject to the terms and conditions of
this Agreement. Any terms or conditions appearing on the face or reverse side of
any Purchase Order, acknowledgment, or confirmation that are different from or
in addition to those required hereunder shall not be binding on the parties,
even if signed and returned, unless both parties hereto agree in a separate
writing to be bound by such different or additional terms and conditions.
4.4 CANCELLATION OR POSTPONEMENT BY COPPER MOUNTAIN. Copper Mountain
may cancel or postpone any Purchase Order placed with, and accepted by, Copper
Mountain if Customer fails to make any payment when due as provided in Section
3.2 or is in default as set forth in Section 12.2.
4.5 CANCELLATION BY CUSTOMER. Customer shall be allowed to cancel any
Purchase Order placed with, and accepted by, Copper Mountain if the cancellation
is received at least [...***...] days prior to the requested delivery date;
provided, however, that in the event of such cancellation Customer shall be
liable to Copper Mountain for payment of Copper Mountain's costs (cost plus
shipping and handling) for any Special or Non-Standard Parts purchased or which
Copper Mountain is obligated to purchase, such payment to be made to Copper
Mountain within [...***...] days after the date of such cancellation. In the
event of such cancellation involving Special or Non-Standard Parts, then Copper
Mountain shall deliver such Special or Non-Standard Parts to Customer.
4.6 POSTPONEMENT BY CUSTOMER. Customer shall be allowed to postpone
any Purchase Order placed with, and accepted by, Copper Mountain if the
postponement is received at least [...***...] days prior to the requested
delivery date; provided, however, that in no event shall any such postponement
delay shipment of the Equipment for more than [...***...] days from the
delivery date in the original Purchase Order. Additionally, in the event of such
postponement, Customer shall be liable to Copper Mountain for payment of Copper
Mountain's costs for any Special or Non-Standard Parts purchased or which Copper
Mountain is obligated to purchase, such payment to be made to Copper Mountain
within [...***...] days after the date of such postponement.
4.7 EQUIPMENT AVAILABILITY. Copper Mountain will use reasonable
efforts to fill all Purchase Orders within [...***...] days of the date such
Purchase Orders are accepted by Copper Mountain. If Equipment is not timely
shipped by Copper Mountain, Customer shall have the right to terminate any
Purchase Order without any liability to Copper Mountain and, in any event, on or
prior to the committed shipment date. Should Purchase Orders for Equipment
exceed Customer's current Forecast, Copper Mountain will allocate its available
inventory and make deliveries on a basis Copper Mountain deems equitable, in its
sole discretion, and without liability to Customer on account of the method of
allocation chosen or its implementation. However, Copper Mountain shall not be
liable to Customer or any third party for any damages due to Copper Mountain's
failure to fill any Purchase Order or for any delay in delivery or error
* Confidential Treatment Requested
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in filling any Purchase Order for any reason whatsoever, except to the extent
such damages result from the gross negligence or willful misconduct of Copper
Mountain.
4.8 DELIVERY. All Equipment delivered pursuant to the terms of this
Agreement shall be suitably packaged, marked for shipment and delivered by
common carrier of Copper Mountain's choice, FOB Copper Mountain's plant in San
Diego, California, or any other plant or warehouse designated by Copper
Mountain.
4.9 TITLE; RISK OF LOSS; SHIPPING COSTS. Title to (exclusive of the
rights retained under the Agreement in the Firmware, patents, copyrights, trade
secrets and intellectual property) and all risk of loss or damage for any
Equipment purchased hereunder shall pass to Customer upon delivery of such
Equipment by Copper Mountain to a common carrier for shipment to Customer as set
forth in Section 4.8 hereof. All freight, handling, insurance, duties, taxes and
shipping expense shall be borne by Customer.
5. ACCEPTANCE
The Equipment shipped to Customer under any Purchase Order shall be
deemed accepted by Customer unless a written notice of defect is received by
Copper Mountain within thirty (30) days following receipt of the Equipment by
Customer. Under no circumstances shall acceptance or lack thereof affect the
warranties set forth in Section 7. For Equipment that has been initially
accepted by Customer but not placed into service within such thirty-day period,
Customer will notify Copper Mountain immediately if the Equipment is found to be
Defective, and Customer shall have the right to return such Equipment that is
Defective to Copper Mountain using the customary RMA/DOA process used by the
parties.
6. DOCUMENTATION
On or before delivery of the Equipment to which such documentation
applies, Copper Mountain shall provide to Customer, at no additional charge, the
documentation for such Equipment. Customer shall use and reproduce such
documentation solely for the purpose of operating and maintaining the System.
Copper Mountain shall supply Customer with additional quantities of
documentation as Customer shall reasonably request from time to time.
7. WARRANTIES
(a) NETWORK EQUIPMENT LIMITED WARRANTY. During the applicable Warranty
Period for Network Equipment, Copper Mountain warrants to Customer that the
Network Equipment shall be free from material defects in workmanship and
materials under normal use and service and shall operate substantially in
accordance with the specifications set forth in the documentation provided to
Customer. This warranty does not apply to any item of Network Equipment that (a)
has been altered, modified, or improperly repaired by someone other than a
representative of Copper Mountain; (b) has been the subject of misuse,
negligence, accident, or improper storage or installation; or (c) has been used
or maintained in any manner other than in accordance with documentation provided
by Copper Mountain. Any installation of Upgrades by Customer in accordance with
the Software License Agreement (and any
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instructions set forth therein) shall not result in any termination of, or
adversely affect, any warranties by Copper Mountain relating to the Equipment.
(b) YEAR 2000 COMPLIANCE. Copper Mountain represents that the Equipment
is "Year 2000 Compliant," meaning that, as delivered to Customer:
A. The Equipment accurately processes data and time calculations
before and during the years 1999, 2000 and 2001;
B. All manipulation of time-related data yields the desired
results for valid date values within the application domain;
C. Date elements in the Equipment use four digit storage and
indicate century to eliminate the chance for errors;
D. If a date element exists without a century indication, the
correct century continues to be unambiguous and produces
accurate results; and
E. Firmware accurately processes date and time data when used in
conjunction with other Year 2000 compliant software Equipment.
Should any Equipment that is so identified as "Year 2000 Compliant" not be Year
2000 Compliant or should Copper Mountain otherwise breach the foregoing
representation, Copper Mountain shall, as Customer's sole and exclusive remedy,
repair or replace the Equipment so that it becomes Year 2000 Complaint or, if
Copper Mountain is unable to repair or replace the Equipment to make it Year
2000 Compliant, Copper Mountain will refund the purchase price of the Equipment
paid to Copper Mountain by Customer, provided that Customer returns the
Equipment to Copper Mountain as originally delivered by Copper Mountain (except
for normal wear and tear) and pursuant to Copper Mountain's then-current RMA
policy. The foregoing representation and remedy shall only apply to Equipment
returned prior to [...***...], or to Equipment returned before the Equipment is
no longer supported pursuant to Copper Mountain's standard support policies,
whichever event first occurs. In the event Customer believes a failure has
occurred due to the Equipment's failure to conform to this Year 2000 warranty,
Customer shall notify Copper Mountain and Copper Mountain shall, as soon as
practical after such notification, confirm if the Equipment is non-compliant and
begin appropriate corrective actions which shall be diligently pursued and
promptly accomplished by Copper Mountain at no additional cost to Customer.
7.2 WARRANTY CLAIMS FOR NETWORK EQUIPMENT. Before submitting any
warranty claim to Copper Mountain, Customer shall perform first echelon
diagnosis (including identification and isolation of Network Equipment problems
to the board level and removal and replacement of hardware, firmware and
software). Copper Mountain shall provide Customer with reasonably requested aid
in performing such diagnosis. At Copper Mountain's request, Customer shall
return allegedly Defective Network Equipment to Copper Mountain at Customer's
expense; if such Network Equipment is determined by Copper Mountain to be
Defective, Copper Mountain shall reimburse Customer within thirty (30) days
following receipt
* Confidential Treatment Requested
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of such Network Equipment for the expenses of shipping such Network Equipment to
Copper Mountain. If Copper Mountain does not request Customer to return
Defective Network Equipment to Copper Mountain, Copper Mountain shall repair or
replace such Network Equipment, in accordance with Section 7.3.
7.3 EXCLUSIVE REMEDIES FOR NETWORK EQUIPMENT. If, during the
applicable Warranty Period, Customer reports in writing a claim that any Network
Equipment is Defective in breach of the warranty in Section 7.1, Copper Mountain
shall, as Customer's sole and exclusive remedy for breach of this limited
warranty and at Copper Mountain's option, either (a) repair or replace the
Defective Network Equipment, or (b) if Copper Mountain determines that it cannot
repair or replace such Network Equipment within [...***...] days following
receipt of Customer's warranty claim, Copper Mountain shall refund to Customer
that portion of the Purchase Price attributable to such Network Equipment.
Within seven business days after receipt of such warranty claim, Copper Mountain
shall communicate its decision to take such action to Customer and shall bear
all travel, lodging and related out-of-pocket expenses for required on-site
repair and replacement of Defective Network Equipment covered by the warranty in
Section 7.1. Any Network Equipment which is repaired by Copper Mountain pursuant
to this Section 7.3 shall be warranted for the remainder of the applicable
Warranty Period as provided in Section 7.1; provided, however, that any System
subcomponents replaced by Copper Mountain hereunder shall be warranted for
[...***...] months after shipment of such System subcomponents to Customer.
7.4 LIMITED WARRANTY FOR SUBSCRIBER EQUIPMENT. The sole and exclusive
warranty for Subscriber Equipment is set forth in this Article 7 and in Exhibit
D hereto. All warranties provided herein with respect to Subscriber Equipment
shall be transferable to any purchaser of such Subscriber Equipment from
Customer, but in no event shall warranty on such Subscriber Equipment exceed
[...***...] months from shipment to Customer.
7.5 DISCLAIMER OF WARRANTIES.
(a) EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7.1 AND EXHIBIT D,
COPPER MOUNTAIN MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO ANY
EQUIPMENT PROVIDED BY COPPER MOUNTAIN UNDER THIS AGREEMENT, INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
(b) Customer acknowledges that it has not relied on any
representations or warranties regarding the Equipment other than those in
Section 7.1 and Exhibit D.
* Confidential Treatment Requested
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7.6 END-USER WARRANTIES. Subject to Section 9 hereof, Customer shall
indemnify, defend and hold harmless Copper Mountain for and against any end user
warranty claim offered by Customer that is outside the warranties of Copper
Mountain in this Agreement or concurrently delivered with the Equipment
(including, but not limited to, consumer warranty claims arising outside the
applicable Warranty Period).
8. INFRINGEMENT CLAIMS
8.1 INDEMNIFICATION. Subject to Sections 8.3 and 9, Copper Mountain
shall defend and indemnify at its own expense and shall hold Customer harmless
from any damages, losses, liabilities, costs and expenses (including reasonable
attorney fees and expenditures and court costs) incurred by Customer in
connection with any claim that Customer's authorized and proper use of any
Equipment infringes a patent, copyright, trademark, trade secret or other
intellectual property of any third party, and shall pay any damages finally
awarded in an action against Customer as a result of, or in connection with, any
such claim and any amounts agreed to in settlement of such a claim, provided
that Customer (a) promptly notifies Copper Mountain in writing of the claim, (b)
gives Copper Mountain the sole authority to control the defense and settlement
of the claim, and (c) cooperates and, at Copper Mountain's request and expense,
assists in the defense of the claim. Settlement of any such claim by Copper
Mountain shall include a complete and unconditional release in favor of
Customer.
8.2 MITIGATION. If any infringement claim covered by Section 8.1
arises or in Copper Mountain's opinion is likely to occur, Copper Mountain may,
at its option, (a) procure for Customer the right to use the infringing
Equipment, (b) replace the infringing Equipment with non-infringing substitute
equipment of equal grade, functionality and quality, or (c) refund to Customer
the Purchase Price paid for the infringing Equipment. If Customer continues to
use Equipment after (a) receiving notice of a claim or a ruling that Customer's
use of such Equipment infringes a third party's rights, and (b) Copper Mountain
shall have taken all steps to replace such equipment with non-infringing
Equipment in accordance with Section 8.2 hereof, and Customer shall have refused
to comply with such replacement program, Customer shall be responsible for any
liability resulting from such continued use of the Equipment after such offer of
replacement.
8.3 EXCLUSIONS. Copper Mountain shall have no liability to Customer
for any claim described in Section 8.1 if the claim is based on or arises from
Customer's (a) improper or unauthorized use or modification of the Equipment, or
(b) combination or use of the Equipment with equipment, software, data or other
items not furnished by Copper Mountain (or authorized by Copper Mountain in
writing for such combination or use), if the claim would not have arisen but for
the combination. Customer shall indemnify and hold Copper Mountain harmless for
and against any and all liability, damages, losses, costs and expenses
(including attorney's fees) arising from any claim described in this Section
8.3.
8.4 ENTIRE LIABILITY. Section 8 sets forth Customer's exclusive
remedy and Copper Mountain's entire liability of any infringement claim relating
to the Equipment.
8
<PAGE>
9. LIMITATION OF LIABILITY
9.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR
ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES OF ANY KIND,
INCLUDING, BUT NOT LIMITED TO, ANY LOST PROFITS, LOST SAVINGS, OR LOST DATA,
ARISING FROM OR RELATING TO THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR CLAIMS FOR PERSONAL INJURY OR
PROPERTY DAMAGE AND/OR CLAIMS UNDER ARTICLE 8 HEREOF, THE TOTAL CUMULATIVE
LIABILITY OF EITHER PARTY TO THE OTHER PARTY FOR ANY CLAIMS OR CAUSES OF ACTION
ARISING FROM OR RELATING TO THIS AGREEMENT, COPPER MOUNTAIN'S DELIVERY OF THE
EQUIPMENT OR CUSTOMER'S USE OF THE EQUIPMENT (WHETHER IN CONTRACT, IN TORT OR
OTHERWISE) SHALL NOT EXCEED THE AGGREGATE AMOUNT PAID TO COPPER MOUNTAIN UNDER
THIS AGREEMENT.
9.2 Customer understands that Copper Mountain's pricing is predicated
on the limitations of Copper Mountain's liability set forth in Section 9.1 and
acknowledges that Copper Mountain would not enter into this Agreement without
such limitations.
10. CONFIDENTIALITY
The obligations of the parties with respect to "Confidential
Information" exchanged pursuant to this Agreement are as described in the Mutual
Non-Disclosure Agreement dated May __, 1999 between the parties attached hereto
as Exhibit E.
11. INTELLECTUAL PROPERTY RIGHTS
Except for the right to use the System contemplated by this Agreement,
the delivery of the Equipment to Customer (a) does not convey to Customer or any
third party any intellectual property rights in the Equipment or System Software
(including, but not limited to, any patent, trademark, trade secret or
copyright), and (b) does not grant to Customer or any third party any license
under any patents or patent applications of Copper Mountain. Customer shall not,
and shall not authorize any third party to, disassemble or analyze the physical
construction of any Equipment (or any component thereof) for any purpose.
Customer agrees not to remove or destroy any copyright, logo, trademark, trade
name, proprietary markings or confidentiality legends placed upon or contained
within the Equipment or System Software, its containers or any related materials
or documentation. Customer agrees to comply with all legends that appear on or
in the Equipment and/or System Software or related materials or documentation to
the extent consistent with this Agreement and the intended use and purpose of
the Equipment and System Software.
12. TERM AND TERMINATION
12.1 TERM. This Agreement shall commence on the Effective Date and
shall expire on December 31, 2000, unless terminated earlier as provided herein
(the "Term").
9
<PAGE>
12.2 TERMINATION FOR DEFAULT. Either party may terminate this
Agreement if the other party fails to perform any material obligation under this
Agreement and such failure is not cured within [...***...] days following
written notice of such failure to the defaulting party.
12.3 TERMINATION BY CUSTOMER. Customer may terminate this Agreement by
giving ninety (90) day written notice to Copper Mountain at Customer's sole
discretion.
12.4 EFFECTS OF TERMINATION. Upon termination of this Agreement for
any reason:
(a) for all Equipment for which Acceptance occurred before
termination, the full unpaid balance of the Purchase Price for such Equipment
shall become immediately due and payable so long as the termination did not
result from a default by Copper Mountain, and such Equipment has been received
by Customer and is not Defective;
(b) for all Equipment delivered to Customer before termination
for which Acceptance has not yet occurred, Customer may either (i) return such
Equipment (and related documentation) to Copper Mountain in its original
condition and at the expense of the defaulting party (in which case Customer
shall not be required to pay the unpaid balance of the Purchase Price for such
Equipment), or (ii) keep such Equipment and pay the unpaid balance of the
Purchase Price for such Equipment; and
(c) Copper Mountain shall have no further obligation to deliver
any Equipment to Customer other than Copper Mountain's satisfaction of its
warranty obligations under this Agreement and its obligation to replace
Defective or infringing Equipment.
12.5 SURVIVAL. The rights and obligations of the parties under
Sections 7.1 through 7.4 (solely for the duration of the applicable Warranty
Periods), 7.5, 7.6, 8, 9, 10, 11, 12.4, 12.5 and 16 shall survive termination of
this Agreement for any reason. Unless Copper Mountain terminates this Agreement
pursuant to Section 12.2, Section 13 shall also survive termination of this
Agreement for the time period specified therein.
13. SPARE PARTS
13.1 AVAILABILITY. Customer may purchase spare parts for the Equipment
from time to time upon the same terms and conditions as set forth in this
Agreement. Copper Mountain shall use its best efforts to make available spare
parts (or compatible substitutes for such spare parts) for the Network Equipment
(but not for third party components or equipment) for a period of five years
after the Effective Date. If Copper Mountain discontinues manufacturing the
Network Equipment before the end of such five-year period or discontinues
manufacturing Subscriber Equipment at any time, Copper Mountain shall notify
Customer at least six months in advance to permit Customer to procure a
sufficient stock of spare parts.
13.2 SUPPLY FOR REPAIRS. In the event that Customer requests that a
non-warranty service or repair be performed by Copper Mountain, Customer shall
be responsible for purchasing and maintaining an adequate supply of spare parts
as discussed in the Customer Technical Support Service Agreement (which has been
executed by the parties concurrently with this Agreement) in order to complete
non-warranty repairs in a timely fashion. If Customer fails
* Confidential Treatment Requested
10
<PAGE>
to maintain an adequate supply of spare parts, the time allowed for Copper
Mountain to complete non-warranty repairs shall be extended by the amount of
time needed for Copper Mountain to assemble and ship the necessary spare parts
to the location where the Network Equipment is installed and operated.
14. PRODUCT ADDITIONS
As Copper Mountain develops and offers for sale and licenses to its
customers additional or next generation Network Equipment products and
Subscriber Equipment products during the Term, Copper Mountain shall offer such
Network Equipment for sale and license to Customer under this Agreement. In such
case, the parties shall negotiate in good faith the pricing and other
appropriate terms and conditions relating specifically to such products in a
manner consistent with each party's obligations under this Agreement.
15. AUTHORITY
Each party represents and warrants to the other party that (a) such
party is duly organized, validly existing, and in good standing under the laws
of the place of its establishment or incorporation; (b) such party has taken all
action necessary to authorize it to enter into this Agreement and perform its
obligations under this Agreement; (c) this Agreement shall constitute the legal,
valid and binding obligations of such party; and (d) neither the execution of
this Agreement, nor the performance of such party's obligations hereunder, shall
conflict with, result in a breach of, or constitute a default under, any
provision of the Articles of Incorporation, business license, Bylaws or similar
organizational documents of such party, or of any law, rule, regulation,
authorization or approval of any government entity, or of any agreement to which
it is a party or by which it is bound.
16. GENERAL PROVISIONS
16.1 FORCE MAJEURE. Neither party shall be liable to the other party,
under this Agreement or otherwise, for any delay or lack of performance (other
than non-payment) resulting from an event of Force Majeure (as defined below).
If a Force Majeure event occurs, the party prevented from performing its
obligations under this Agreement shall inform the other party as soon as
possible and the time period for performance shall be extended by a period
equivalent to the delay caused by the Force Majeure event plus any additional
period reasonably necessary to allow the prevented party to resume performance
of its obligations. The prevented party shall inform the other party as soon as
possible after the Force Majeure event ends. If the Force Majeure event lasts
for more than [...***...] consecutive days after the initial notice of such
event, the parties shall attempt in good faith to solve the problem of further
performance of this Agreement through friendly consultation. If the parties
cannot solve the problem of further performance within an additional [...***...]
days, either party may terminate this Agreement without penalty. As used above,
an event of "Force Majeure" means any act of God, war, fire, typhoon, flood,
earthquake, natural disasters, governmental action, industrywide labor
disruptions, industrywide materials shortages, or any other event beyond the
reasonable control of the prevented party.
* Confidential Treatment Requested
11
<PAGE>
16.2 ASSIGNMENT. Neither party may assign this Agreement or any right
under this Agreement, nor delegate any obligation under this Agreement, without
the other party's prior written consent (which shall not be unreasonably
withheld), except that either party may, without the other party's consent, (a)
assign this entire Agreement in connection with a merger, reorganization, or
sale of all or substantially all of its assets to a third party; or (b)
subcontract portions of its obligations under this Agreement as long as the
assigning party remains responsible for such obligations. Any attempted
assignment or delegation in contravention of this Section 16.2 shall be void.
16.3 NON-WAIVER; SEVERABILITY. Any delay or failure by either party to
exercise any right or remedy under this Agreement shall not constitute a waiver
of such right or remedy thereafter or of any other right or remedy. If any
provision of this Agreement is determined to be unenforceable, the remaining
provisions shall remain in full force and effect.
16.4 NOTICES. All notices and other communications provided for
hereunder shall be in writing and shall be mailed by first-class, registered or
certified mail, postage paid, or delivered personally, by overnight delivery
service or by facsimile, computer mail or other electronic means, with
confirmation of receipt, addressed as follows:
If to Copper Mountain: Copper Mountain Networks, Inc.
10145 Pacific Heights Boulevard, Suite 100
San Diego, California 92121
Attn: John A. Creelman
Fax No: (619) 410-7281
If to Customer: Rhythms Links, Inc.
6933 S. Revere Parkway
Suite 200
Englewood, CO 80112
Attn: Tom Hartzell
Fax No: (303) 476-5701
Either party may by like notice specify or change an address to which
notices and communications shall thereafter be sent. Notices sent by facsimile,
computer mail or other electronic means shall be effective upon confirmation of
receipt, notices sent by mail or overnight delivery service shall be effective
upon receipt or upon refusal of delivery, and notices given personally shall be
effective when delivered or when delivery is refused.
16.5 PUBLICITY. Copper Mountain and Customer agree that neither party
shall originate any press release or other public announcement related to this
Agreement, written or oral, without the prior written consent of the other
party, except as required by law or a court order.
16.6 NONDISCLOSURE. Copper Mountain and Customer agree that either
party may disclose the existence of this Agreement, but neither party shall make
any disclosure relating to the terms of or performance under this Agreement to
any third party (other than their
12
<PAGE>
independent public accountants and attorneys) without the prior written consent
of the other party, except as required by law or a court order.
16.7 GOVERNING LAW AND VENUE. All matters arising in connection with
this Agreement or the enforcement or construction thereof shall be governed by
(without regard to conflict-of-laws provisions) and resolved in accordance with
the laws of the State of California. Copper Mountain and Customer each hereby
irrevocably (a) agrees that any suit, action or other legal proceeding arising
from or relating to this Agreement shall be brought in a court of competent
jurisdiction in San Francisco, California, which court shall have exclusive
jurisdiction over any controversy arising from or related to this Agreement; (b)
consents to the jurisdiction of such court in any such suit, action or
proceeding; and (c) waives any objection it may have to the laying of venue of
any such suit, action or proceeding in such court and waives any claim that any
such suit, action or proceeding has been brought in an inconvenient forum.
Service of process in any suit, action or proceeding may be made in any manner
permitted by law.
16.8 DISPUTE RESOLUTION. If any dispute arises between the parties
relating to the interpretation, breach or performance of this Agreement or the
grounds for the termination thereof, and the parties cannot resolve the dispute
within thirty (30) days of a written request by either party to the other party,
the parties agree to hold a meeting, attended by individuals with
decision-making authority regarding the dispute, to attempt in good faith to
negotiate a resolution of the dispute prior to pursuing other available
remedies. If, within sixty (60) days after such meeting, the parties have not
succeeded in negotiating a resolution of the dispute, such dispute shall be
submitted to final and binding arbitration under the then current commercial
rules and regulations of the American Arbitration Association (the "AAA")
relating to voluntary arbitrations. The arbitration shall be held in San
Francisco, California. The arbitration shall be conducted by one arbitrator, who
is knowledgeable in the subject matter at issue in the dispute and who will be
selected by mutual agreement of the parties or, failing such agreement, shall be
selected in accordance with AAA rules. Each party shall initially bear its own
costs and legal fees associated with such arbitration. The prevailing party in
any such arbitration shall be entitled to recover from the other party actual
attorneys' fees, costs and expenses incurred by the prevailing party in
connection with such arbitration. The decision of the arbitrator shall be final
and binding on the parties. The arbitrator shall prepare and deliver to the
parties a written, reasoned opinion conferring its decision. The arbitrator
shall have no power or authority to make any award that provides for punitive or
exemplary damages or other damages excluded by this Agreement, or that otherwise
departs from the plain meaning of this Agreement. Judgment on the award so
rendered may be entered in any court having competent jurisdiction thereof.
Notwithstanding the foregoing, Copper Mountain shall have the unequivocal right
to obtain timely injunctive from a court of law pursuant to Section 16.9.
16.9 INJUNCTIVE RELIEF. Both parties agree that unauthorized
duplication, distribution or disclosure of any Confidential Information received
by the other party will cause actual and material damage, and that such damages
are difficult to calculate. In addition, notwithstanding any of the provisions
of this Agreement, each party shall have the unequivocal right to obtain timely
injunctive relief to protect its intellectual property rights and/or other
Confidential Information.
13
<PAGE>
16.10 ATTORNEY'S FEES. The prevailing party in any litigation between
the parties relating to this Agreement shall be entitled to recover its
reasonable attorney's fees and court costs, in addition to any other relief it
may be awarded, from the other party.
16.11 CONSTRUCTION. The headings of sections and subsections of this
Agreement are for convenience only and shall not be construed to affect the
meaning of any provision of this Agreement. Any inconsistency between provisions
in this Agreement and the exhibits shall be resolved in favor of the main body
of this Agreement.
16.12 COUNTERPARTS. This Agreement may be executed in counterparts,
each of which will be deemed an original and which together shall constitute one
and the same agreement.
16.13 ENTIRE AGREEMENT; MODIFICATIONS. This Agreement, together with
the exhibits attached hereto, constitutes the entire agreement between the
parties and supersedes all prior oral or written negotiations and agreements
between the parties with respect to the subject matter hereof. No modification,
variation or amendment of this Agreement shall be effective unless made in
writing and signed by the parties.
IN WITNESS WHEREOF, Copper Mountain and Customer have each caused this
Agreement to be executed by their duly authorized representatives.
COPPER MOUNTAIN NETWORKS, INC. RHYTHMS LINKS, INC.
/s/ Richard S. Gilbert By: /s/ Rand Kennedy
- -------------------------------- --------------------------------
Richard S. Gilbert Name: Rand Kennedy
Chief Executive Officer Title: SVP Networks
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<PAGE>
EXHIBIT A
STANDARD COMMERCIAL PRICE LIST
Copper Mountain Networks
<TABLE>
<CAPTION>
Product Name and Description Version Part No List Price
================================================================= =========== ===================== ===============
<S> <C> <C> <C>
COPPER EDGE FAMILY
SYSTEMS
Copper Edge 150 System 1.0 800-010-10 $[...***...]
Chassis & Fan 1.0 810-001-10
SDSL Module-H (24 Port) 1.0 820-021-10
120VAC Power Module 1.0 810-010-10
Buffer Control Module 1.0 810-020-10
System Control Module/E 1.0 810-100-10
Documentation 1.0 155-100-10
Copper Edge 200 Basic System 2.0 200-010-10 $[...***...]
Chassis & Backplane 2.0 100-010-10
DC Power Module 2.0 100-510-10
Buffer Control Module 2.0 105-010-10
System Control Module 2.0 105-110-20
Alarm Module 2.0 100-130-10
Documentation 2.0 155-010-10
Copper Edge 200 CopperBay System 2.0 200-020-10 $[...***...]
Chassis & Backplane 2.0 100-010-10
DC Power Module 2.0 100-510-10
Buffer Control Module 2.0 105-010-10
CopperBay Control Module 2.0 105-120-10
Documentation (CD-ROM) 2.0 155-010-10
Alarm Module 2.0 100-130-10
CE150 SPARES (810)
Chassis & Fan for CE 150 1.0 810-001-10 $[...***...]
120 VAC Power Module for CE150 1.0 810-010-10 $[...***...]
Buffer Control Module for CE150 1.0 810-020-10 $[...***...]
System Control Module/E for CE150 - 200 1.0 810-100-10 $[...***...]
Fan Assembly for CE150 1.0 810-030-10 $[...***...]
CE150 OPTIONS (810)
Mount kit for 23" rack for CE150 1.0 810-220-10 $[...***...]
SDSL Module-H (24 port) 1.0 820-021-10 $[...***...]
CE150 System Software v1.0 1.0 811-001-00 $[...***...]
CE150 DOCUMENTATION (155)
CE150 Documentation (Spare Set) 1.0 155-100-10 $[...***...]
CE200 CHASSIS, POWER SUPPLIES (100)
Chassis & Backplan (+ fan tray & alarm panel) for CE 200 2.0 100-010-10 $[...***...]
Redundant DC Power Module for CE 200 2.0 100-510-10 $[...***...]
External AC Power Shelf and one Supply 2.0 100-610-10 $[...***...]
AC Power Supply for external shelf 2.0 100-611-10 $[...***...]
Alarm Panel for CE200 2.0 100-130-10 $[...***...]
Fan Assembly for CE200 2.0 100-020-14 $[...***...]
CE200 PROCESSOR, BUFFER (105)
System Control Module for CE 200 1.0 105-110-10 $[...***...]
System Control Module for CE 200-200/32 2.0 105-110-20 $[...***...]
</TABLE>
* Confidential Treatment Requested
<PAGE>
<TABLE>
<CAPTION>
Product Name and Description Version Part No List Price
================================================================= =========== ===================== ===============
<S> <C> <C> <C>
CopperBay Control Module for CE 200 1.0 105-120-10 $[...***...]
Buffer Control Module for CE 200 1.0 105-010-10 $[...***...]
CE200 SOFTWARE (111)
CE200 System Software v1.3 1.3 111-001-30 $[...***...]
CE200 System Software v1.4 1.4 111-001-40 $[...***...]
CE200 System Software v1.6 1.6 111-001-60 $[...***...]
CE200 System Software v2.0 2.0 111-002-00 $[...***...]
CE200 LINE CARDS / DSL MODULES (120)
SDSL 30x Module (24 port) 1.0 120-021-10 $[...***...]
IDSL Line Module (24 Port) 1.0 120-030-10 $[...***...]
CE200 WAN I/O (130)
V.35 WAN Module (2 port) 1.0 130-020-10 $[...***...]
HSSI WAN Module 1.0 130-030-10 $[...***...]
DS3 Frame Module 1.0 130-035-10 $[...***...]
DS3 ATM Module 1.0 130-040-10 $[...***...]
CE200 OTHER HARDWARE (140)
COPPERVIEW SOFTWARE (112)
CopperView Element Manager v1.3 1.3 112-301-13 $[...***...]
CopperView Element Manager v1.4 1.4 112-301-14 $[...***...]
CopperView Element Manager v1.6 1.6 112-301-16 $[...***...]
CopperView AMS v2.0 (1-9 nodes) 2.0 112-400-20 $[...***...]
CopperView AMS v2.0 (10-49 nodes) 2.0 112-400-20 $[...***...]
CopperView AMS v2.0 (50-149 nodes) 2.0 112-400-20 $[...***...]
CopperView AMS v2.0 (150-399 nodes) 2.0 112-400-20 $[...***...]
CopperView AMS v2.0 (400-999 nodes) 2.0 112-400-20 $[...***...]
CopperView AMS v2.0 (1000-2499 nodes) 2.0 112-400-20 $[...***...]
CV AMS node upgrade (1-9 to 10-49) 2.0 112-401-20 $[...***...]
CV AMS node upgrade (10-49 to 50-149) 2.0 112-401-20 $[...***...]
CV AMS node upgrade (50-149 to 150-399) 2.0 112-401-20 $[...***...]
CV AMS node upgrade (150-399 to 400-999) 2.0 112-401-20 $[...***...]
CV AMS node upgrade (400-999 to 1000-2499) 2.0 112-401-20 $[...***...]
CUSTOMER SERVICE (150)
DOCUMENTATION (155)
CE200 Documentation Set 1.0 155-010-10 $[...***...]
CopperView EMS documentation (hardcopy) 2.0 155-020-20 $[...***...]
DSL Troubleshooting Guide 1.0 155-030-10 $[...***...]
CABLES
DC Power Cable (10 feet) 1.0 160-010-10 $[...***...]
DSL Connector Cable (25 feet) 1.0 160-015-05 $[...***...]
DSL Connector Cable (10 feet) 1.0 160-015-10 $[...***...]
DSL Connector Cable (6 feet) 1.0 160-015-15 $[...***...]
DSL Connector Cable (3 feet) 1.0 160-015-20 $[...***...]
Ethernet Cable (10 feet) 1.0 160-020-10 $[...***...]
RS232 Craft Interface Cable (6 feet) 1.0 160-021-10 $[...***...]
V.35 Cable (25 feet) 1.0 160-030-10 $[...***...]
HSSI Cable (25 feet) 1.0 160-035-10 $[...***...]
OTHER (170)
CE200 Mount kit for 23" rack 1.0 170-010-10 $[...***...]
COPPERROCKET FAMILY
CopperRocket 201 SDSL 1.0 700-030-30 $[...***...]
CopperRocket 201 SDSL (RJ11-RJ45) 1.0 700-030-31 $[...***...]
CopperRocket 201 IDSL 1.0 700-050-10 $[...***...]
</TABLE>
* Confidential Treatment Requested
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
CopperRocket 201 IDSL (RJ11-RJ45) 1.0 700-050-11 $[...***...]
CopperRocket 201 SDSL CCA Board 1.0 700-930-30 $[...***...]
CopperRocket 201 IDSL CCA Board 1.0 700-950-10 $[...***...]
</TABLE>
* Confidential Treatment Requested
<PAGE>
EXHIBIT B
[...***...]
[...***...]
Customer hereby agrees to [...***...] for [...***...] of [...***...] percent
[...***...] of the [...***...] in the most [...***...] for the first quarter
contained in such Forecast, as delivered on the 20th of the month preceding the
current quarter. The [...***...] shall relate [...***...] and shall [...***...].
[...***...]
In [...***...] for the [...***...] of the [...***...] by Customer, Copper
Mountain [...***...] to Customer a [...***...] of [...***...] on [...***...],
with the [...***...] for which [...***...].
* Confidential Treatment Requested
<PAGE>
EXHIBIT C
INITIAL FORECAST
<PAGE>
EXHIBIT D
SUBSCRIBER EQUIPMENT WARRANTY
1. LIMITED WARRANTY
During the applicable Warranty Period for Subscriber Equipment, Copper
Mountain warrants to Customer that the Subscriber Equipment (excluding
Pre-Production Units) shall be free from material defects in material and
workmanship. This warranty is not transferable to any third party, other than
any subsequent purchaser, owner, lessee or licensee of Subscriber Equipment
arising in the ordinary course of Customer's business (a "permitted
transferee").
2. WARRANTY CLAIMS
All Subscriber Equipment returned under warranty must be returned to
the designated Copper Mountain authorized repair facility (an "Authorized
Service Center").
3. EXCLUSIVE REMEDY
If Customer or any permitted transferee returns Defective Subscriber
Equipment to an Authorized Service Center within the applicable Warranty Period
and Copper Mountain reasonably determines that such Subscriber Equipment is in
fact Defective, Copper Mountain shall, within [...***...] days following receipt
of such Defective Subscriber Equipment, as Customer's sole and exclusive remedy
for breach of warranty and at Copper Mountain's option, either (a) repair the
Defective Subscriber Equipment, (b) replace the Defective Subscriber Equipment
with a new or a rebuilt unit, which may contain refurbished parts of similar
quality and functionality, or (c) if Copper Mountain determines that it is
unable to repair or replace the Defective Subscriber Equipment, refund the
purchase price for the Defective Subscriber Equipment. After the applicable
Warranty Period, Customer must pay all shipping, parts and labor charges. Copper
Mountain's warranty service does not include customer instruction or the cost of
installation, removal or reinstallation of Subscriber Equipment. Copper
Mountain's obligations hereunder shall be completed, and the repaired or
replaced Subscriber Equipment reshipped at Copper Mountain's sole expense to the
Customer or such permitted transferee, within [...***...] days after initial
receipt of the Defective Subscriber Equipment.
4. EXCLUSIONS
The warranty set forth above does not apply to: (a) Subscriber
Equipment that has been installed, repaired, maintained or modified other than
in compliance with the documentation furnished to Customer; (b) Subscriber
Equipment that has been subjected to misuse (including use in conjunction with
electrically or mechanically incompatible hardware), abuse, accident, physical
damage, abnormal operation, improper handling, neglect, exposure to fire, water
or excessive moisture or dampness or extreme changes in climate or temperature;
(c) cosmetic damage; (d) Subscriber Equipment on which warranty stickers or
serial numbers have been
* Confidential Treatment Requested
<PAGE>
removed, altered, or rendered illegible; (e) damage as a result of fire, flood,
acts of God or other acts which are not the fault of Copper Mountain and which
the Subscriber Equipment is not specified to tolerate, including damage caused
by mishandling, shipping and blown fuses; or (f) any Subscriber Equipment that
has been invaded, repaired, modified or altered by anyone other than Copper
Mountain or a Copper Mountain Authorized Service Center.
<PAGE>
EXHIBIT E
MUTUAL NON-DISCLOSURE AGREEMENT
<PAGE>
MUTUAL NON-DISCLOSURE AGREEMENT
THIS AGREEMENT governs the disclosure of information by and between Copper
Mountain Networks, Inc. and Rhythms NetConnections, Inc. as of May____ , 1999
(the "Effective Date").
1. As used herein, "Confidential Information" shall mean any and all technical
and non-technical information provided by either party to the other, including
but not limited to (a) patent and patent applications, (b) trade secrets, and
(c) proprietary information - ideas, samples, media, techniques, sketches,
drawings, works of authorship, models, inventions, know-how, processes,
apparatuses, equipment, algorithms, software programs, software source
documents, and formulae related to the current, future, and proposed products
and services of each of the parties, and including, without limitation, their
respective information concerning research, experimental work, development,
design details and specifications, engineering, financial information,
procurement requirements, purchasing, manufacturing, customer lists, investors,
employees, business and contractual relationships, business forecasts, sales and
merchandising, marketing plans and information the disclosing party provides
regarding third parties.
2. If the Confidential Information is embodied in tangible material (including
without limitation, software, hardware, drawings, graphs, charts, disks, tapes,
prototypes and samples), it shall be labeled as "Confidential" or bear a similar
legend. If the Confidential Information is disclosed orally or visually, it
shall be identified as such at the time of disclosure and be confirmed in a
writing to the receiving party within thirty (30) days of such disclosure,
referencing the place and date of oral or visual disclosure and the names of the
employees of the receiving party to whom such oral or visual disclosure was
made, and including therein a brief description of the Confidential Information
disclosed.
3. Each party agrees that at all times and notwithstanding any termination or
expiration of this Agreement it will hold in strict confidence and not disclose
to any third party Confidential Information of the other, except as approved in
writing by the other party to this Agreement, and will use the Confidential
Information for no purpose other than evaluating or pursuing a business
relationship with the other party to this Agreement. Each party shall only
permit access to Confidential Information of the other party to those of its
employees or authorized representatives having a need to know and who have
signed confidentiality agreements or are otherwise bound by confidentiality
obligations at least as restrictive as those contained herein.
4. Each party shall immediately notify the other upon discovery of any loss or
unauthorized disclosure of the Confidential Information of the other party.
5. Each party's obligations under this Agreement with respect to any portion of
the other party's Confidential Information shall terminate when the party to
whom Confidential Information was disclosed (the "Recipient") can document that:
(a) it was in the public domain at the time it was communicated to the Recipient
by the other party; (b) it entered the public domain subsequent to the time it
was communicated to the Recipient by the other party through no fault of the
Recipient; (c) it was in the Recipient's possession free of any obligation of
confidence at the time it was communicated to the Recipient by the other party;
(d) it was rightfully communicated to the Recipient free of any obligation of
confidence subsequent to the
1
<PAGE>
EXHIBIT F
GUARANTY
Reference is made to the Equipment Purchase Agreement, dated as of
December , 1999, (the "Agreement") by and between Rhythms Links Inc., a Delaware
corporation ("RLI"), and Copper Mountain Networks, Inc., through its division
Copper Mountain Networks, a California corporation ("Copper Mountain").
The undersigned, Rhythms NetConnections Inc., a Delaware corporation
and the parent company of RLI, hereby guarantees the complete satisfaction of
(a) all monetary payments of RLI due to Copper Mountain under the Agreement in
accordance with the terms of, and subject to the terms and conditions set forth
in, the Agreement, and (b) any and all losses or damages of RLI arising under
the Agreement as a result of RLI's breach of any representations or warranties
in, or its failure to perform any of its obligations under, the provisions set
forth in the Agreement. The provisions of this Guaranty shall be solely for the
benefit of RLI and Copper Mountain and application for payment pursuant to this
Guaranty shall be made only after RLI shall have failed to make the applicable
payment required under the Agreement after the expiration of all applicable cure
periods specifically set forth in the Agreement relating to any such failure or
default. Nothing herein shall create or grant any right to any person or entity
(other than Copper Mountain) or impose any other duty or obligation upon the
undersigned except as expressly set forth herein.
This Guaranty is provided by the undersigned in satisfaction of the
delivery obligation of RLI set forth in Section 2.1 of the Agreement.
Dated: December 10, 1999
RHYTHMS NETCONNECTIONS INC.
By: /s/ Rand Kennedy
----------------------------------
Title: SVP Networks
-------------------------------
<PAGE>
EXHIBIT 10.38
*Confidential Treatment Requested
Under 17 C.F.R. (S)(S)200.80(b)(4),
200.83 and 240.24b-2
CUSTOMER TECHNICAL SUPPORT SERVICES AGREEMENT
THIS SERVICES AGREEMENT (the "Agreement") is entered into as of
December 10, 1999 (the "Effective Date"), by and between Rhythms Links Inc., a
company duly organized and existing under the laws of the State of Delaware
("Customer"), and COPPER MOUNTAIN NETWORKS, INC., a company duly organized and
existing under the laws of the State of Delaware ("Copper Mountain").
RECITALS
WHEREAS, concurrent with the execution of this Agreement, Customer and
Copper Mountain are entering into an Equipment Purchase Agreement (the "Purchase
Agreement") pursuant to which Customer is purchasing from Copper Mountain, among
other things, Digital Subscriber Line ("DSL") networking system equipment and
subscriber equipment (collectively, the "Equipment"); and
WHEREAS, Customer desires that Copper Mountain perform certain services
(the "Services") related to the implementation and operation of the Equipment,
for the fees and Level of Service set forth in Exhibit A and on the terms and
conditions in this Agreement.
NOW, THEREFORE, Copper Mountain and Customer agree as follows:
AGREEMENT
1. DEFINITIONS
All capitalized terms used but not otherwise defined in this Agreement
shall have the meanings given such terms in the Purchase Agreement.
2. SERVICES
2.1 PURPOSE OF THE AGREEMENT. This Agreement sets forth the terms and
conditions under which Services described in Exhibits A, B, C, D, F, G and H
shall be governed for all Copper Mountain Products purchased by Customer unless
such Copper Mountain products are excluded from this Agreement as described in
Exhibit E.
2.2 CHANGE ORDERS. Customer may, by submitting written orders
("Change Orders") to Copper Mountain, request modifications to this Agreement.
No Change Order shall be binding until accepted in writing by Copper Mountain;
such acceptance may be conditioned upon such adjustments to the Service Fees or
the schedule for performing the Services as Copper Mountain deems necessary or
appropriate. If Copper Mountain and Customer fail to agree to any Change Order,
this Agreement shall continue unmodified.
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3. LIMITATION OF SERVICES
3.1 THIRD-PARTY EQUIPMENT. Customer is solely responsible for third
party equipment. Neither this Agreement nor the Services provided hereunder
shall cover any (a) third party equipment (e.g., hardware, cabling, etc.)
provided by any party other than Copper Mountain or (b) Equipment modified by
any party other than Copper Mountain (except pursuant to, and in accordance
with, instructions issued by Copper Mountain) which impacts the performance of
the Equipment or Copper Mountain's ability to diagnose and troubleshoot the
Equipment. Copper Mountain shall invoice Customer at Copper Mountain's standard
rate for time and material (T&M) or rate for a site visit as described in
Exhibit A for any products provided or services rendered (e.g., a site visit)
that are the direct result of the failure or existence of third party equipment
or the unauthorized modification of the Equipment.
3.2 MAINTAINING PROPER ENVIRONMENT. Customer shall provide a proper
environment for the Equipment (e.g., temperature and humidity, stability and
reliability of power provisioning, and physical installation and access) in
accordance with Copper Mountain's published requirements. Any failure, service
interruption, or damage to the Equipment that results from adverse environmental
conditions unrelated to any inherent aspects of the Equipment (a) is not covered
by this Agreement, (b) may void any warranty provided by Copper Mountain, and
(c) may require additional services and/or replacement equipment at Customer's
expense.
4. SERVICE FEES AND PAYMENT TERMS
4.1 ADDITIONAL FEES. Copper Mountain may charge additional fees to
Customer, to be based upon mutual agreement, for work not included in the
Services, including, but not limited to, additional technical support as
described in Section 8.
4.2 ORDERS AND SERVICE FEES. Customer shall indicate the Level of
Service as described in Exhibit D to be provided for all products purchased from
Copper Mountain upon execution of this Agreement. The Level of Service may be
modified after the first year of service. Service fees are based on the Level of
Service to be provided as well as the Customer's equipment base at the beginning
of each calendar quarter. The Customers equipment base will include all
equipment shipped to the Customer as of the 1st day of each calendar quarter. If
the Agreement is executed after the first day of a calendar quarter then the fee
for the initial quarter will be pro rated based on the number of days which
remain in that quarter. Fees will not be refunded in the event that the
Agreement is terminated during any subsequent calendar quarter unless
termination is a result of Copper Mountain's non-performance or breach of its
obligations. Service fees will be calculated as follows:
Quarterly Service Fee = List Price of the cumulative embedded Network
Equipment base that was shipped to Customer as of the 1st day of each calendar
quarter that is
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one (1) year or greater multiplied by the Service Fee for the Level of
Service [e.g., Gold Service Plan] divided by four (4).
4.3 PAYMENT TERMS. Seller shall invoice Customer upon execution of
this Agreement and on the 1st day of each calendar quarter thereafter. All
payments are due 30 days from the date of invoice.
4.4 LATE CHARGES; OFFSETS. Copper Mountain reserves the right to
charge Customer a late payment fee on any past due amounts at the rate of
[...***...] percent ([...***...]%) per month or the maximum amount permitted by
law, whichever is less.
5. TRAINING
Customer will be required to have designated trained staff at an
appropriate experience level to support Products covered by this Agreement
including Tier 1 and Tier 2 support staff as described in Exhibit B. The
appropriate experience level includes knowledge of the Product and technology as
well as an understanding of networking and telecommunications in order to
resolve common and/or known problems.
6. CUSTOMER RESPONSIBILITIES
6.1 GENERAL RESPONSIBILITIES. The Purchase Agreement and this
Agreement assign to Customer responsibility for certain matters relating to the
use of the Equipment generally. Copper Mountain shall not be liable for any
delay in performing or completing the Services due to Customer's failure to
fulfill its responsibilities in a timely and satisfactory manner.
6.2 ACCESS TO THE EQUIPMENT. Customer shall ensure that Copper
Mountain has access to the Equipment, including, but not limited to, a high
speed modem, a telephone line for dial-up access and an operator ID and password
If on-site access is required to service or repair the Equipment, Customer shall
ensure that Copper Mountain has physical site access to the Equipment as
necessary to perform such service or repair.
6.3 THIRD PARTY EQUIPMENT CONNECTED TO THE EQUIPMENT. Customer shall
take all reasonable and necessary precautions to ensure that (a) equipment
connected to the Equipment conforms to electrical and environmental standards,
and (b) all interfaces to the Equipment (e.g., power, DSL, WAN, etc.) employ
appropriate protective measures to provide a stable operating environment. If,
in Copper Mountain's reasonable opinion based upon generally accepted industry
standards, additional measures should be taken at a particular site, Customer
shall take all reasonable and necessary steps to implement such measures or
Copper Mountain will not remain responsible for problems arising from the
environmental problems Copper Mountain specifies in writing to Customer with
respect to the designated Equipment at that site.
* Confidential Treatment Requested
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6.4 SUPPORTED RELEASE OF OPERATING SYSTEM. Customer is not required to
---
install every new release of the Operating System Software as it becomes
available from Copper Mountain; provided, however, the Customer shall maintain a
supported release version of either the current software release or one of the
[...***...] preceding generic/software releases not known to contain errors or
bugs. In the event that Customer wishes support for software releases other than
the current software release or one of the [...***...] preceding
generic/software releases not known to contain errors or bugs, then
modifications to this Agreement will be contingent upon successful negotiation,
on a case by case basis, of mutually acceptable modifications to this Agreement.
7. WARRANTIES
7.1 SERVICES WARRANTY. Copper Mountain represents and warrants to
Customer that the Services shall be performed in a workmanlike manner and in
accordance with reasonable commercial standards, and any Services rendered will
not adversely affect the Year 2000 Compliance of any Equipment. Any claim by
Customer against Copper Mountain with respect to this warranty must be made
within a period of [...***...] after the performance of the relevant Services.
Copper Mountain's sole warranty obligation, and Customer's exclusive remedy, for
any breach of this warranty shall be to have Copper Mountain perform the
Services at no charge to Customer or have Copper Mountain perform remedial
Services to correct the continuing problem.
7.2 DISCLAIMERS.
7.2.1.1. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7.1, COPPER
MOUNTAIN MAKES NO WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE SERVICES,
INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
7.2.1.2. Customer acknowledges that it has not relied on any
representations or warranties regarding the Services other than those in Section
7.1.
7.3 ADDITIONAL TECHNICAL SUPPORT. Additional technical assistance and
equipment repairs made outside the applicable Warranty Periods shall be
provided, if available, at Copper Mountain's then-current standard rates and
charges under the terms and conditions of a separate agreement and at the sole
discretion of Copper Mountain. Copper Mountain reserves the right to decline to
accept orders for or provide Additional Technical Support Services on third
party equipment at Customer locations where the cost of implementation of such
services is deemed by Copper Mountain in its sole discretion to be cost
prohibitive. Additional Technical Support Services at such Customer locations by
Copper Mountain will be contingent upon successful negotiation, on a case by
case basis, of a mutually acceptable Services compensation agreement.
* Confidential Treatment Requested
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8. LIMITATION OF LIABILITY
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY
CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES OF ANY KIND, INCLUDING
BUT NOT LIMITED TO ANY LOST PROFITS, LOST SAVINGS, OR LOST DATA, ARISING FROM OR
RELATING TO THIS AGREEMENT, EVEN IF THE PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. THE TOTAL CUMULATIVE LIABILITY OF EITHER PARTY TO
THE OTHER PARTY FOR ANY CLAIMS OR CAUSES OF ACTION ARISING UNDER OR RELATING TO
THIS AGREEMENT OR PERFORMANCE OF THE SERVICES (WHETHER IN CONTRACT, IN TORT OR
OTHERWISE) SHALL NOT EXCEED THE AGGREGATE AMOUNT PAID TO COPPER MOUNTAIN UNDER
THIS AGREEMENT.
8.1 Customer understands that Copper Mountain's pricing is predicated
on these limitations of Copper Mountain's liability and acknowledges that Copper
Mountain would not enter into this Agreement without such limitations.
9. CONFIDENTIALITY
Customer acknowledges that all technical documentation and information
delivered to Customer by Copper Mountain in the performance of Services under
this Agreement which Copper Mountain reasonably designates as proprietary shall
be considered "Confidential Information". Customer shall not duplicate or
disclose to any third person, and shall not use for any purpose other than
operation and maintenance of the Equipment, any Confidential Information without
the prior written consent of the duly authorized officer of Copper Mountain as
described in Section 15.3 - Notices. The foregoing restrictions shall not apply
to any Confidential Information that Customer can demonstrate: (a) was or is
wholly and independently developed by Customer or lawfully received by Customer
free of restriction from another source having the rights to furnish such
Confidential Information; (b) has become generally available to the public
without breach of this Agreement; or (c) at the time of disclosure to Customer
was known to Customer free of restriction, as evidenced by documentation in
Customer's possession.
10. TAXES
Copper Mountain shall pay all taxes, export duties, and other charges
and expenses imposed by any government authority within the United States in
connection with the performance of the Services or the payment of the Service
Fees (other than taxes on Copper Mountain's net income, gross receipts and/or
personal property).
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11. TERM AND TERMINATION
11.1 TERM. This Agreement shall have an initial Term of one (1)
calendar year commencing with the effective date (hereinafter "Initial Term").
This Agreement shall become effective as of the Effective Date and unless
earlier terminated pursuant to Sections 12.1, 12.2 or 14, shall terminate upon
Copper Mountain's completion of the Services and Customer's payment in full of
the Service Fees to Copper Mountain, and shall include services ordered and not
yet completed as of last day of the Initial Term. Any such uncompleted services
ordered during the initial term shall be considered to be covered under the
terms of this Agreement.
11.2 TERMINATION FOR DEFAULT. Either party may terminate this
Agreement if the other party fails to perform any material obligation under this
Agreement in a timely manner and such failure is not cured within [...***...]
days after the non-defaulting party gives notice of such failure to the
defaulting party.
11.3 EFFECTS OF TERMINATION. Upon termination of this Agreement for
any reason:
11.3.1.1. Customer shall remain obligated to pay all unpaid and
undisputed Service Fees for Services completed before termination, and such
undisputed fees shall become immediately due and payable;
11.3.1.2. Copper Mountain may invoice Customer for, and Customer
shall pay to Copper Mountain, fees based on Copper Mountain's then-current
standard rates and charges for Services begun, but not completed, before
termination, provided that such fees shall not exceed the Service Fees that
would have been due for such Services had the Services been completed before
termination, and the termination of any uncompleted work is mutually agreeable
to both parties; and
11.3.1.3. Copper Mountain shall have no further obligation to
perform any Services under this Agreement.
12. SURVIVAL.
The rights and obligations of the parties under Sections 4.3, 7.1
(solely for the duration of the applicable Warranty Period), 7.2, 9, 10, 12.3,
12.4, 13 and 15 shall survive termination of this Agreement for any reason.
13. AUTHORITY
Each party hereby represents and warrants to the other party that (a)
such party is duly organized, validly existing and in good standing under the
laws of the place of its establishment or incorporation; (b) such party has
taken all action necessary to authorize it to enter into this Agreement and
perform its obligations under this Agreement; (c) this Agreement shall
constitute the legal, valid and binding obligations of such party; and (d)
neither the execution of this Agreement, nor the performance of such party's
obligations hereunder, shall conflict with, result in a breach of, or constitute
a default under, any provision of the Articles of Incorporation, business
license, Bylaws or similar organizational documents of such party, or of any
law, rule, regulation, authorization or approval of any government entity, or of
any agreement to which it is a party or by which it is bound.
* Confidential Treatment Requested
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14. FORCE MAJEURE
Neither party shall be liable to the other party, under this Agreement
or otherwise, for any delay or lack of performance (other than non-payment)
resulting from an event of Force Majeure (as defined below). If a Force Majeure
event occurs, the party prevented from performing its obligations under this
Agreement shall inform the other party as soon as possible and the time period
for performance shall be extended by a period equivalent to the delay caused by
the Force Majeure event plus any additional period reasonably necessary to allow
the prevented party to resume performance of its obligations. The prevented
party shall inform the other Party as soon as possible after the Force Majeure
event ends. If the Force Majeure event lasts for more than [...***...]
consecutive days after the initial notice of such event, the parties shall
attempt in good faith to solve the problem of further performance of this
Agreement through friendly consultation. If the parties cannot solve the problem
of further performance within an additional [...***...] days, either party may
terminate this Agreement without penalty. As used above, an event of "Force
Majeure" means any act of God, war, fire, typhoon, flood, earthquake, natural
disasters, governmental action, labor disruptions, industry-wide materials
shortages, or any other event beyond the reasonable control of the prevented
party.
15. GENERAL PROVISIONS
15.1. ASSIGNMENT. Neither party may assign this Agreement or any right
under this Agreement, nor delegate any obligation under this Agreement, without
the other party's prior written consent (which shall not be unreasonably
withheld), except that either party may, without the other party's consent, (a)
assign this entire Agreement in connection with a merger, reorganization, or
sale of all or substantially all of its assets to a third party; (b) assign part
or all of this Agreement to one or more of its affiliates; and/or (c)
subcontract portions of its obligations under this Agreement as long as the
assigning party remains responsible for such obligations. Any attempted
assignment or delegation in contravention of this Section 15.1 shall be void.
15.2. NON-WAIVER; SEVERABILITY. Any delay or failure by either party to
exercise any right or remedy under this Agreement shall not constitute a waiver
of such right or remedy thereafter or of any other right or remedy. If any
provision of this Agreement is determined to be unenforceable, the remaining
provisions shall remain in full force and effect.
15.3. NOTICES. All notices and other communications provided for
hereunder shall be in writing and shall be mailed by first-class, registered or
certified mail, postage paid, or delivered personally, by overnight delivery
service or by facsimile, computer mail or other electronic means, with
confirmation of receipt, addressed as follows:
* Confidential Treatment Requested
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<PAGE>
If to Copper Mountain: Copper Mountain Networks, Inc.
10145 Pacific Heights Blvd Suite 100
San Diego, California 92121
Attn: John A. Creelman
Fax No: (619) 410-7281
If to Customer: Rhythms Links
6933 S. Revere Parkway
Suite 200
Englewood Colorado 80112
Attn: Tom Hartzell
Fax No.: (303) 476-5701
Either party may by like notice specify or change an address to which notices
and communications shall thereafter be sent. Notices sent by facsimile, computer
mail or other electronic means shall be effective upon confirmation of receipt,
notices sent by mail or overnight delivery service shall be effective upon
receipt or when delivery is refused, and notices given personally shall be
effective when delivered or when delivery is refused.
15.4. PUBLICITY. Copper Mountain and Customer agree that neither party
shall originate any press release or other public announcement related to this
Agreement, written or oral, without the prior written consent of the other
party, except as required by law or a court order.
15.5. NONDISCLOSURE. Copper Mountain and Customer agree that either
party may disclose the existence of this Agreement, but neither party shall make
any disclosure relating to the terms of or performance under this Agreement to
any third party (other than their accountants and attorneys) without the prior
written consent of the other party, except as required by law or a court order.
15.6. GOVERNING LAW AND VENUE. All matters arising in connection with
this Agreement or the enforcement or construction thereof shall be governed by
(without regard to conflict-of-laws provisions) and resolved in accordance with
the laws of the State of California. Copper Mountain and Customer each hereby
irrevocably (a) agrees that any suit, action or other legal proceeding arising
from or relating to this Agreement shall be brought in a court of competent
jurisdiction in San Francisco, California. which court shall have exclusive
jurisdiction over any controversy arising from or related to this Agreement; (b)
consents to the jurisdiction of such court in any such suit, action or
proceeding; and (c) waives any objection it may have to the laying of venue of
any such suit, action or proceeding in such court and waives any claim that any
such suit, action or proceeding has been brought in an inconvenient forum.
Service of process in any suit, action or proceeding may be made in any manner
permitted by law.
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15.7. DISPUTE RESOLUTION. If any dispute arises between the parties
relating to the interpretation, breach or performance of this Agreement or the
grounds for the termination thereof, and the parties cannot resolve the dispute
within thirty (30) days of a written request by either party to the other party,
the parties agree to hold a meeting, attended by individuals with
decision-making authority regarding the dispute, to attempt in good faith to
negotiate a resolution of the dispute prior to pursuing other available
remedies. If, within sixty (60) days after such meeting, the parties have not
succeeded in negotiating a resolution of the dispute, such dispute shall be
submitted to final and binding arbitration under the then current commercial
rules and regulations of the American Arbitration Association (the "AAA")
relating to voluntary arbitrations. The arbitration shall be held in San
Francisco, California. The arbitration shall be conducted by one arbitrator, who
is knowledgeable in the subject matter at issue in the dispute and who will be
selected by mutual agreement of the parties or, failing such agreement, shall be
selected in accordance with AAA rules. Each party shall initially bear its own
costs and legal fees associated with such arbitration. The prevailing party in
any such arbitration shall be entitled to recover from the other party actual
attorneys' fees, costs and expenses incurred by the prevailing party in
connection with such arbitration. The decision of the arbitrator shall be final
and binding on the parties. The arbitrator shall prepare and deliver to the
parties a written, reasoned opinion conferring its decision. The arbitrator
shall have no power or authority to make any award that provides for punitive or
exemplary damages or other damages excluded by this Agreement, or that otherwise
departs from the plain meaning of this Agreement. Judgment on the award so
rendered may be entered in any court having competent jurisdiction thereof.
Notwithstanding the foregoing, Copper Mountain shall have the unequivocal right
to obtain timely injunctive from a court of law pursuant to Section 15.9.
15.8. ATTORNEY'S FEES. The prevailing party in any litigation between
the parties relating to this Agreement shall be entitled to recover its
reasonable attorney's fees and court costs, in addition to any other relief it
may be awarded, from the other party.
15.9. INJUNCTIVE RELIEF. Both parties agree that unauthorized
duplication, distribution or disclosure of any Confidential Information received
by the other party will actually and materially damage the injured party, and
such damages are difficult to calculate. In addition, notwithstanding any of the
provisions of this Agreement, both parties shall have the right to obtain timely
injunctive relief to protect their intellectual property rights. NOTE: Rhythms'
forecast is considered Confidential Information.
15.10. CONSTRUCTION. The headings of sections and subsections of this
Agreement are for convenience only and shall not be construed to affect the
meaning of any provision of this Agreement. Any inconsistency between provisions
in this Agreement and the exhibits shall be resolved in favor of the main body
of this Agreement.
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15.11. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original and which together shall be the same
agreement.
15.12. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement, together with
the exhibits attached hereto, constitutes the entire agreement between the
parties and supersedes all prior oral or written negotiations and agreements
between the parties with respect to the subject matter hereof. No modification,
variation or amendment of this Agreement shall be effective unless made in
writing and signed by the parties. Any additional or different terms stated in
any purchase order or other document delivered to Copper Mountain by Customer in
connection with this Agreement shall have no effect.
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IN WITNESS WHEREOF, Copper Mountain and Customer have each caused this
Agreement to be executed by their duly authorized representatives.
COPPER MOUNTAIN NETWORKS, INC. RHYTHMS LINKS INC.
By: /s/ Richard S. Gilbert By: /s/ Rand Kennedy
------------------------------------ --------------------------
Name: Richard S. Gilbert Name: Rand Kennedy
---------------------------------- -------------------------
Title: President and CEO Title: SVP Networks
--------------------------------- -----------------------
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EXHIBIT A
SERVICE FEES
The following are the Service Fees and Level of Service to be provided for all
Copper Mountain Equipment purchased by the Customer. Any Equipment excluded from
this Agreement shall be described in Exhibit E.
- -----------------------------------------------------------
SERVICE PLAN % OF LIST PRICE AS
OF SHIP DATE
- -----------------------------------------------------------
GOLD [...***...]%
- -----------------------------------------------------------
SILVER [...***...]%
- -----------------------------------------------------------
BRONZE [...***...]%
- -----------------------------------------------------------
- -------------------------------------------------------------------------------
OTHER SERVICES PRICE
- -------------------------------------------------------------------------------
TIME AND MATERIAL $[...***...] per Hour
- -------------------------------------------------------------------------------
ON-SITE $[...***...] per Hour, minimum of
[...***...] hours plus Travel and
Expenses
- -------------------------------------------------------------------------------
OUT OF WARRANTY REPAIR OR [...***...]% of the list price. The warranty
REPLACEMENT for the refurbished item is [...***...] days.
- -------------------------------------------------------------------------------
* Confidential Treatment Requested
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EXHIBIT B
DEFINITIONS
Unless otherwise defined in the Agreement, all capitalized terms used herein
shall have the meanings set forth in this Exhibit B or as set forth in the
Equipment Purchase Agreement as the case may be.
AR means Assistance Request. A Customer AR results from a failure of the Product
to perform to expectations or a need for an answer to a technical question.
ARM means Assistance Request Management.
CALL RECEIPT means Seller's process of ensuring that the Customer Assistance
Request is referred to the appropriate Seller technical support group
responsible for an answer to a technical question. This task involves answering
the telephone (or electronic inquiry), gathering pertinent Customer and
technical data, determining whether the Customer will be billed for the service
provided, and transferring the request to the appropriate group for analysis.
CUSTOMER NOTIFICATION BULLETINS mean the proactive activity of alerting the
Customer of potential Product conditions or configurations which could have a
negative affect on Customer operations.
INITIAL RESPONSE TIME means the time it takes for the Customer to reach a
Subject Matter Expert once the Customer contacts the Seller Call Receipt group.
LICENSED SOFTWARE PRODUCT means the Software that Customer has been granted a
license to use by Seller.
MAJOR USA HOLIDAYS (or Company-designated day of observance)
New Years Day
Memorial Day
Independence Day
Labor Day
Thanksgiving Day
Day Following Thanksgiving
Christmas Day
MANAGEMENT NOTIFICATION means the internal Seller process that sets the minimum
standards by which Seller management will become aware of a problem. The intent
of escalating
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a problem is 1) to bring additional resources together to resolve it, 2) to
apprise management of the situation, or 3) to acknowledge notification by
contacting the Customer.
ON-SITE ASSISTANCE means technical assistance provided by Seller at Customer's
site at Customer's request, and as agreed to by Seller.
PERFORMANCE METRICS means the commitments that the Seller agrees to Respond,
Restore, and Resolve Customer's request for Customer Technical Support called in
through the Seller's Call Receipt function. Customer requests that do not go
through the Seller's Call Receipt function will be excluded from the Performance
Metrics.
PRODUCT means Copper Mountain Network Equipment and/Firmware, Seller Licensed
Software, and Third Party Software that are embedded and active with respect to
Copper Mountain equipment and/or software at Customer sites at the time this
Agreement is executed.
PROBLEM MANAGEMENT means the procedures and actions performed or required to be
performed by Seller upon written or oral request of Customer to investigate and
manage the resolution of a reported condition in a manner that provides the
Customer with a single interface.
PROBLEM RESOLUTION means the analysis of the technical data to determine at
least a short-term resolution. Depending upon the analysis results, the response
to the Customer may be in the form of technical advice, a procedure performed by
Seller support personnel, a software product update, or a hardware fix.
Technical questions regarding operation/use of Product is handled under this
task.
RESOLVE means that a permanent solution to the problem has been provided and is
acceptable to the Customer. Resolution to problems requiring a software design
change means either that a final correction to the problem has been made
Generally Available to Customer or that Seller has notified Customer that the
Product will not be repaired. Resolution to problems requiring a hardware design
change will be provided according to standard customer agreements on Product
change notices.
RESOLVE TIME means elapsed time between the time the Customer contacts Seller
through the Seller's Call Receipt function and the time the Customer is supplied
with an acceptable permanent solution.
RESPOND means a Seller's Subject Matter Expert has contacted the Customer
regarding a particular Assistance Request.
RESTORE means that the Product or major feature of the Product is temporarily
operative, although a permanent resolution may not have been provided. Restore
may mean that a software fix has been provided to temporarily correct the
problem, or a workaround has been implemented.
SELLER means Copper Mountain
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SERVICE PERFORMANCE REPORTS (SPR) mean reports that validate the agreed to
Respond, Restore, and Resolve Customer's request for Customer Technical Support.
SERVICE RESTORATION TIME means the elapsed time between the time Customer
contacts Seller through the Seller's Call Receipt function and the time the
system is returned to operational service.
SEVERITY LEVEL means the condition of the system when the Customer makes an
Assistance Request.
SEVERITY LEVEL ONE means the condition which exists when the system is
inoperative and Customer's inability to use the Product has a critical effect on
Customer's operations. The condition is generally characterized by complete
system failure and requires immediate correction. In addition, any condition
that may critically impact human safety is considered a Severity Level One
problem.
SEVERITY LEVEL TWO means a condition which exists when the system is partially
inoperative, but the system is still usable by the Customer. The inoperative
portion of the Product severely restricts the Customer's operations but has a
less critical effect than a Severity Level One condition.
SEVERITY LEVEL THREE means the condition which exists when the system is usable
by the Customer, but with limited impact on Customer operations. The condition
is not critical to overall Customer operations and does not severely restrict
such operations.
SEVERITY LEVEL FOUR means the condition which exists when the system is usable
and a means of circumventing the condition has been found. This condition does
not materially affect Customer's operations.
SOFTWARE RELEASE is a new revision of a Product including problem, error and/or
bug fixes and/or enhancements.
SOFTWARE PRODUCT DEFECT means an error condition that causes the Licensed
Software to fail to operate in compliance with Seller's documented
specifications available at time of Licensed Software Product sale.
SOFTWARE PRODUCT UPDATES means changes to the original Licensed Software and
Third Party Software to correct defects or provide features not originally
included in Seller's documented specifications available at the time of the
Licensed Software sale. Software Product Updates include both corrections and
accommodations requested by Customer as well as corrections and accommodations
requested by other customers. Software Product Updates may be distributed
through point issue releases or other on-line delivery mechanism.
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<PAGE>
SUPPORT SERVICES means Seller's assistance at Seller's location analyzing the
applicable Software or Network Equipment/Firmware problem and handling service
calls reported by Customer through the Call Receipt function. Support Services
may be purchased by Customer pursuant to the provisions set forth in this
Agreement.
THIRD PARTY SOFTWARE means software not initially designed or developed by
Seller but embedded in Seller's Product.
TIER 1 SUPPORT means the first level of technical support which has a working
knowledge of the Product and technology as well as an understanding of
networking and telecommunications in order to resolve common and or known
problems. Tier 1 technical support communicates with customers to gather all
appropriate technical information needed and then attempt to find a solution.
TIER 2 SUPPORT means the second level of technical customer support to which
Tier 1 escalates issues that cannot be resolved at Tier 1. Tier 2 level support
is comprised of Product experts who have at least 18 to 24 months of Tier 1
support or related experience.
TIER 3 SUPPORT means technical support that addresses issues escalated from Tier
2 when either the source of the issue cannot be identified or the issue is
identified and must be addressed by the manufacturer of the Product.
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<PAGE>
EXHIBIT C
DESCRIPTION OF SUPPORT SERVICES
1.0 PRODUCTS
--------
1.1 All Copper Mountain Products purchased by the customer shall be
included in the Support Services unless described in Exhibit E.(1)
Support Services will be provided in accordance with the General
Support Services as described in Exhibits A, B, C, D, F, G, and H and
Levels of Service and Fees as described in Exhibit A as ordered by the
Customer. Customer will ensure that all products are in good operating
condition at current specified revision levels as of the Effective Date
of this Agreement.
1.2 Unless otherwise agreed by Seller in writing and specified in Exhibit
E, Software Support Services shall only be available for the
[...***...] not known to contain errors or bugs. Copper Mountain plans
to release [...***...] new software releases per year, however, it is
under no obligation to due so.
2.0 GENERAL SUPPORT SERVICES
2.1 The following Support Services will be supplied to Customer in
accordance with the Level of Service ordered and described in the
order.
A. CALL RECEIPT AND ROUTING - The Seller will provide a call receipt and
routing function for use by the Customer. Customer may access
twenty-four (24) hours a day, seven- (7) days a week telephone support
for all Severity Level problems by calling [...***...]. The Seller
will maintain an entitlement database to determine Customer
entitlements (i.e., Service Level) and how the call should be routed.
B. EMAIL - Customer may Email questions or support requests to the Support
Center using the address [email protected]. Email sent to that
---------------------------
address is forwarded to all members of Copper Mountain's support
organization. A support engineer will log the request and send Customer
an acknowledgement of the request within one (1) business day.
C. RETURN MATERIAL PROCEDURE
After Copper Mountain identifies a failed component, Copper Mountain
shall issue a Return Materials Authorization ("RMA") number to Customer
and shall deliver, in its discretion, either a new or refurbished
functionally-equivalent replacement unit to Customer. If Customer fails
to return the defective unit to Copper Mountain within [...***...]
days, Copper Mountain shall issue an invoice at discounted price for
the unit shipped to Customer. Any defective unit returned to Copper
Mountain shall be the property of Copper Mountain. Copper Mountain
shall repair, if possible, any defective unit returned by Customer
which (a) is outside of the scope of the warranty
- ---------
(1) Insert Products/Releases not covered under this Agreement in Exhibit D.
* Confidential Treatment Requested
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<PAGE>
provided by Copper Mountain, (b) has been damaged by events unrelated
to the System, or (c) has been abused, misused, or used under
environmental conditions outside those set forth in the specifications
for the System, and shall invoice Customer the costs incurred to repair
such defective unit (but in any event not more than the discounted
price of the replacement unit shipped to Customer).
D. ASSISTANCE REQUEST DATABASE ACCESS - Pursuant to this Agreement and
subject to availability, Customer will be given access to automated
trouble reporting tools. Customized trouble reporting features are
fee-based.
E. CONSULTATIVE SUPPORT - Seller will deliver technical assistance
and advice by telephone from Seller's location for AR's initiated by
Customer via the Call Receipt function.
F. DIAGNOSTIC SUPPORT - Seller shall support Customer in analyzing
Customer problems, including isolation of problems to one of the
following areas:
1. Problems arising as a result of Products or their associated
materials or documentation and
2. Other problems not directly related to Products, such as
Customer operations problems, data base problems, as well as
any other interfacing system problems.
G. THIRD PARTY SOFTWARE SUPPORT - If a condition is caused by the Third
Party Software covered by this Agreement, Seller shall support Customer
in analyzing Customer Third Party Software problems.
H. WORKING LOCATION - Seller's working location is remote from Customer's
Product site. As described in C.2.N and at Customer's request, and as
agreed to by Seller, Seller will provide on-site assistance in
resolving a problem. Such assistance will be billed at a minimum of
[...***...] hours a day at the then current Seller's Time and Material
(T&M) rate for non-warranty related problems. Reasonable travel and
living expenses incurred by Seller in accordance with Seller's
Corporate Travel Policy will also be billed. There will be no fees or
charges for warranty related problems.
I. SEVERITY LEVEL AND PRIORITIZATION - Seller shall perform Problem
Management in accordance with the Severity Level condition identified
by Customer in accordance with Section 5.0 hereof. The priority for
problem resolution will be based on the Severity Level of outstanding
reported conditions. Severity Level One- (1) conditions on production
systems will receive top priority support.
J. PROBLEM MANAGEMENT - Seller shall perform procedures and actions upon
written or oral request of Customer to investigate and develop the
resolution of a reported condition in a manner that provides Customer a
single interface. This service is performed for all Copper Mountain
Products unless excluded in Exhibit E.
K. MANAGEMENT NOTIFICATION - Seller will observe the following escalation
procedures:
* Confidential Treatment Requested
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(1) Severity Level One - In the event of a Severity Level One
condition that is still not restored [...***...] after the
condition is reported, Seller will notify Seller's supervisory
management or next level of expertise of the un-restored
condition. If the condition is still un-restored within
[...***...] after the condition is reported, the next higher
level of Seller supervisory management or level of expertise
will be notified of the un-restored condition.
(2) Severity Level Two - In the event of a Severity Level Two
condition that is still un-restored [...***...] after the
condition is reported, Seller will notify Seller's supervisory
management or next level of expertise of the un-restored
condition.
L. SERVICE PERFORMANCE REPORTS (SPR) - Seller will provide reports of
Seller's performance against the objectives stated in this contract on
a quarterly basis.
M. CUSTOMER NOTIFICATION BULLETINS - Seller will provide Customer
Notification Bulletins to Customer on an as available basis.
N. ON-SITE ASSISTANCE - At Customer's request, a Seller's customer Support
engineer may be dispatched to a Customer's site for resolution of a
Severity Level One condition that is un-restored within [...***...]
after the condition has been reported and after all efforts to solve
the condition by the replacement of known working hardware or software
have failed to resolve the condition. . Copper Mountain shall invoice
Customer for any products provided or services rendered (e.g., a site
visit) that are the direct result of the failure or existence of third
party equipment or the unauthorized modification of the Equipment.
On-Site Assistance will be billed at minimum of [...***...] hours a day
at the then current Seller Time and Material (T&M) rate. Reasonable
travel and living expenses incurred by Seller in accordance with Seller
Corporate Travel Policy will also be billed. Customer will not be
billed for resolution of any warranty-related problems.
O. UPGRADES. At Customer's request, a Seller's customer support engineer
may be dispatched to Customer's Network Operation's Center to assist
with major software or hardware upgrades. On-site assistance will be
limited to a maximum of [...***...] working days per on-site request
and any additional technical support shall negotiated according to the
terms of Section 8 -Additional Technical Support.
* Confidential Treatment Requested
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<PAGE>
3.0 CUSTOMER RESPONSIBILITIES
-------------------------
3.1 Customer Responsibilities include:
A. MAINTAINING APPROPRIATE TRAINING LEVEL - Customer will be
required to have designated trained staff at an appropriate
experience level to support Products covered by this Agreement
including Tier 1 and Tier 2 support staff as described in
Exhibit B. The appropriate experience level includes knowledge
of the Product and technology as well as an understanding of
networking and telecommunications in order to resolve common
and/or known problems.
B. PROVIDING INFORMATION TO CALL RECEIPT:
(1) Identification of the condition and its isolation to
a particular component of the system believed to be
the Seller's responsibility.
(2) Collection of sufficient supporting documentation
from the Product for inclusion in the AR database.
(3) Determination that there are no outstanding
conforming Software Product updates that correct the
condition.
(4) The calling Customer personnel shall provide the
following information, if applicable:
(a) Caller's name, Location, and Company;
(b) Callback Telephone Number;
(c) Remote Dial Access to Customer System;
(d) System name and Location;
(e) Processor Location, Type, and Serial Number;
(f) Nature of the Question or Situation;
(g) The Calling Party's Alternate Contact;
(h) Description and History of Problem and
Efforts to solve it by Customer.
(i) Contract number or other proof of coverage
as requested by Seller.
C. PROVIDING PROBLEM DIAGNOSTIC MATERIALS - If Customer reports a
condition, Customer will be responsible for providing adequate
support material to enable the diagnosis of the condition.
Such support materials shall include, but not be limited to, a
description of the circumstances, a dump of system logs or
buffers, a listing of data base contents, and console
printouts as required by Seller.
D. MAINTAINING THE PRODUCT:
(1) Make no modifications other than those approved by
Seller. This includes updates from manufacturers of
Third Party Software that have not been validated by
Seller.
(2) Seller acknowledges Customer may elect not to install
the latest Software Product Updates, and that Seller
will support the previous [...***...] Product
Upgrades not known to contain errors or bugs as part
of this Agreement.
(3) Follow all Seller's and relevant Third Party Software
manufacturer's applicable installation, operation,
administration, and maintenance instructions.
* Confidential Treatment Requested
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<PAGE>
(4) Provide the proper environment and electrical and
telecommunications connections as specified by
Seller.
(5) Install most recent Class A Change Notices.
E. ASSISTING SELLER PERSONNEL PROVIDING ON-SITE ASSISTANCE
(1) Have a Customer representative at the equipment
location during any on-site Seller service activity.
Customer may be subject to additional incurred time
and material charges if Customer fails to have a
representative at the equipment location at the
agreed upon time.
(2) Provide adequate communication facilities and work
space for Seller.
(3) Provide test equipment and maintenance documentation
sufficient for maintenance of products not covered by
this Agreement that interface with the Products
covered under this Agreement.
(4) Ensure that work done at the site by Customer does
not interfere with Seller's performance of On-Site
Assistance.
F. TIER 1 AND TIER 2 SUPPORT
The customer is responsible for providing Tier 1 and Tier 2
-----------------------
support.
4.0 SUPPORT SERVICES EXCLUSIONS
---------------------------
4.1 Unless expressly agreed to by Seller, Support Services to be provided
under this Agreement do not include:
A. Performing preventive maintenance to System;
B. Repair of Product due to normal Product attrition;
C. Making corrections to user-defined reports;
D. Making specification changes or performing Services connected
with relocation of the Product;
E. Service which is impractical for Seller to render because of
changes not authorized by Seller in the hardware
configuration, Seller's Product or the Product environment in
which Seller's Product operates; and
F. Modification, repair or replacement of Product, repair of
damage, or increase in Seller service time caused by:
(1) Failure to continually provide a suitable operational
environment with all facilities prescribed by the
applicable document including, but not limited to,
the failure to provide, or the failure of, adequate
electrical power, air conditioning, or humidity
control;
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<PAGE>
(2) The use of the Product in a manner not in accordance
with its specifications, operating instruction or
license-to-use;
(3) Accident or disaster, which shall include, but not be
limited to, fire, flood, earthquake, water, wind and
lightning; transportation; neglect or misuse; pest
damage; or power failures or surges from sources
external to the Product;
(4) Modifications, maintenance, or repair performed by
other than Seller or by Customer or others not in
compliance with Seller's published instructions.
(5) Attachment of unspecified or non-approved products to
the Product, including updates from manufacturers of
Third Party Software that have not been verified by
Seller, or failure of a processor or other equipment
or software not maintained by Seller, or failure of
removable or rotating storage media.
G. Problem Management as defined below:
(1) Database Problems - If the condition is determined to
be the result of corruption of the Licensed Software
Product data base, and such corruption is not the
direct result of the Product, the condition will be
referred back to Customer for resolution. At
Customer's request, and at Seller's option, Seller
may prepare a proposal for billable corrective action
to correct Customer's database. However, if
corruption is the result of, or caused by another of
Seller's Products, Seller shall initiate Problem
Management regardless of whether such Licensed
Software Product is covered under this Agreement.
(2) Hardware/Firmware Problems - When a condition has
been isolated to a problem in hardware or firmware
not covered under this Agreement or caused by Seller
or its Products, the condition will be referred back
to Customer for disposition under whatever
arrangements Customer may have for such hardware or
firmware.
(3) Other/Interfacing Problems - If the condition is
determined to be caused by systems other than the
Products covered under the existing Order, including,
but not limited to, systems which interface with the
Product, the condition will be referred to Customer
for corrective action unless such other system has
been furnished by Seller, in which case, Seller shall
initiate Problem Management. However, if a defect is
identified with Licensed Software or Products covered
by the Order which is documented or advertised to
interface or work with other systems, hardware,
Products or Licensed Software, Seller shall conduct
restoral and correction procedures as required for a
defect and not as Problem Management.
(4) Additional Services - Additional services, including
but not limited to custom feature development,
training, planning sessions, and other value-added
services, are not included in the fees paid under
this Agreement.
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<PAGE>
At the request of Customer, Seller, at its option, may perform Support Services
in the excluded conditions listed above, at Seller's rates and terms in effect
at the time of such request.
5.0 PERFORMANCE METRICS FOR SUPPORT SERVICES
----------------------------------------
5.1 The Performance Metrics described in this section shall apply to
Products covered under the Bronze, Silver and Gold Service Levels. The
problem must be reproducible at either Seller's location or on
Customer's system verifiable by Seller. The Severity Level of any
problem shall be determined by Customer; however, if during analysis
Seller determines that the severity level of the problem claimed by
Customer to be inaccurate, the Severity Level may be changed by Seller
with Customer notification. Customer requests which do not go through
the Seller's Call Receipt function will be excluded from the
Performance Metrics.
5.2 INITIAL RESPONSE
During the term of this Agreement, and upon expiration of any Product
warranty, Seller agrees to respond to Customer's request for Support
Service called in through the Seller's Call Receipt function as
described under General Support Services for the Silver and Gold
Service Levels within [...***...], twenty-four (24) hours a day, seven
(7) days a week, for all Severity Levels reported in the Assistance
Request database during the ARM coverage period. Problems may be worked
outside of ARM Coverage Period at Customer request and Customer will be
billed Seller Time & Material rates. Response time will be validated
through the use of the Service Performance Report (SPR) on a quarterly
basis. Customer requests which do not go through the Seller's Call
Receipt function will be excluded from the Performance Metrics.
5.3 SERVICE RESTORATION
1. Severity Level One - Service for Severity Level One shall be
restored within [...***...]. Restoral time will be validated
quarterly, through the use of the Service Performance Report
(SPR).
2. Severity Level Two - Service for Severity Level Two shall be
restored within [...***...]. Restoral time will be validated
quarterly through the use of the Service Performance Report
(SPR).
5.4 RESOLVE
1. Severity Level One through Four - SERVICE ARs - A permanent
solution for Severity Level One through Four ARs by means of
either a documented work-around or via a maintenance release
shall be provided to Customer within [...***...]. Resolution
time will be validated quarterly through the use of the
Service Performance Report (SPR).
2. Severity Level One through Four - Software Design Changes - A
permanent solution for Severity Level One through Four Defect
ARs requiring a Software design change shall be
* Confidential Treatment Requested
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provided to Customer within [...***...] days. Resolution time
will be validated quarterly, through the use of the Service
Performance Report (SPR).
3. Severity Level One through Four - Hardware Design Changes - A
permanent solution for Severity Level One through Four
requiring a hardware design change will be provided according
to standard customer agreements on product change notices.
6.0 PERFORMANCE METRICS
-------------------
The following table represents the Performance Objectives and
Commitments to the Metrics listed in Section 5.0. Commitments are
expressed as a percentage of assistance requests meeting the
performance metric.
<TABLE>
<CAPTION>
- ---------------------------------------------------------- -------------- ---------------- --------------- --------------------
METRIC BRONZE SILVER GOLD OBJECTIVE
- ---------------------------------------------------------- -------------- ---------------- --------------- --------------------
<S> <C> <C> <C> <C>
Initial Response percentage less than [...***...]; [...***...] [...***...]% [...***...]% [...***...]%
[...***...]
- ---------------------------------------------------------- -------------- ---------------- --------------- --------------------
Restore Severity Level 1 AR less than [...***...] [...***...] [...***...]% [...***...]% [...***...]%
- ---------------------------------------------------------- -------------- ---------------- --------------- --------------------
Restore Severity Level 2 AR less than [...***...] [...***...] [...***...]% [...***...]% [...***...]%
- ---------------------------------------------------------- -------------- ---------------- --------------- --------------------
Resolve AR(1) less than [...***...] [...***...] [...***...]% [...***...]% [...***...]%
- ---------------------------------------------------------- -------------- ---------------- --------------- --------------------
Resolve SW Design AR less than [...***...] [...***...] [...***...]% [...***...]% [...***...]%
- ---------------------------------------------------------- -------------- ---------------- --------------- --------------------
</TABLE>
(1) ARs not requiring a design change
* Confidential Treatment Requested
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EXHIBIT D
LEVEL OF SERVICE
- ------------------------------------ ---------------- -------------------------
DESCRIPTION BRONZE SILVER AND GOLD
- ------------------------------------ ---------------- -------------------------
Call Receipt and Routing [...***...] [...***...]
- ------------------------------------ ---------------- -------------------------
Working Location [...***...] [...***...]
- ------------------------------------ ---------------- -------------------------
Initial Response [...***...] [...***...]
- ------------------------------------ ---------------- -------------------------
Service Restoration [...***...] [...***...]
- ------------------------------------ ---------------- -------------------------
Problem Resolution [...***...] [...***...]
- ------------------------------------ ---------------- -------------------------
Maintenance and new Software [...***...] [...***...]
Releases (2)
- ------------------------------------ ---------------- -------------------------
Problem Escalation and Notification [...***...] [...***...]
- ------------------------------------ ---------------- -------------------------
Performance Objectives [...***...] [...***...]
- ------------------------------------ ---------------- -------------------------
Service Performance Reports [...***...] [...***...]
- ------------------------------------ ---------------- -------------------------
Customer Notification Bulletins [...***...] [...***...]
- ------------------------------------ ---------------- -------------------------
Web Access [...***...] [...***...]
- ------------------------------------ ---------------- -------------------------
- ------------------------------- -------------- ---------------- ---------------
BRONZE SILVER GOLD
- ------------------------------- -------------- ---------------- ---------------
"Spare in the Air Hardware" [...***...] [...***...] [...***...]
Replacement
- ------------------------------- -------------- ---------------- ---------------
On Site Assistance [...***...] [...***...] [...***...]
- ------------------------------- -------------- ---------------- ---------------
Factory Repair Time [...***...] [...***...] [...***...]
- ------------------------------- -------------- ---------------- ---------------
ARM Coverage (3) [...***...] [...***...] [...***...]
[...***...] [...***...]
- ------------------------------- -------------- ---------------- ---------------
Out-of-Hours Fee (4) [...***...] [...***...] [...***...]
- ------------------------------- -------------- ---------------- ---------------
Training Discounts [...***...] [...***...] [...***...]
- ------------------------------- -------------- ---------------- ---------------
Performance Commitments [...***...] [...***...] [...***...]
- ------------------------------- -------------- ---------------- ---------------
(1) Assistance Requests not requiring a design change.
(2) Provided for current and [...***...] back releases only.
(3) Problems may be worked outside of Coverage Period at Customer request
and Customer will be billed Seller Time & Material rates.
(4) Hourly rate charged for each call outside of contracted Coverage
period.
(5) As specified by Exhibit C 2.1 N
* Confidential Treatment Requested
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EXHIBIT E
PRODUCTS NOT COVERED UNDER AGREEMENT
The terms and conditions of this Agreement shall govern all Copper Mountain
products purchased by Customer unless such products are excluded from this
Agreement as detailed below:
ALL SUBSCRIBER EQUIPMENT
For those installations of Subscriber Equipment where ownership of the
Subscriber Equipment and the related Software License will transfer to an end
user, Seller agrees to implement the following support infrastructure and
service levels within [...***...] days of the Effective Date of this Agreement:
1. 800# support for end user assistance and trouble calls
2. Establishment of a web site for end user support and FAQ
3. Next-day advanced replacement of defective Subscriber
Equipment
4. Email support for end user assistance
5. Escalation procedures
* Confidential Treatment Requested
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EXHIBIT F
SOFTWARE PRODUCT UPDATE SERVICES
Seller agrees to provide the Software Product Update Services listed below:
1.0 DEFECT REPORTING
----------------
Any defects found in the Licensed Software Product may be reported by
calling the Seller's Call Receipt function. An assistance request will
be entered into the AR tracking database and referred to Seller's
technical support.
2.0 SOFTWARE PRODUCT UPDATES
------------------------
Seller will correct defects in the Licensed Software Product and Third
Party Software Product in accordance with the Support Services as
described in Exhibit C. Seller will correct defects as follows:
a) Seller may when and if available provide Software Product
Updates to the standard Software Product to correct defect
conditions. If necessary, Seller shall provide documentation
to enable Customer to train its personnel in the operation of
the Licensed Software Product modified by such release. Seller
shall make modifications to the documentation to clarify
issues or items not clear to Customer, as required.
(b) Fees paid under this Agreement cover only Product Updates made
Generally Available during the term of this Agreement.
(c) Due to the nature of Licensed Software, Software Product
Updates may require all previous Software Product Updates for
the particular generic/software release as prerequisites
unless noted in Exhibit E. It may not be possible to install
some of the Software Product Updates unless the previous
Software Product Updates have been installed.
(d) If the condition is isolated to the related documentation for
the Product, the fix will be given to Customer as part of the
defect correction or Product Update procedure. A permanent fix
will be published in the following release of the related
documentation.
3.0 NOTIFICATION OF CORRECTIONS
---------------------------
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Seller agrees to notify the Customer of the availability of a
resolution or work-around to a defect reported by Customer.
Communication format and venue will be based upon mutual agreement.
4.0 CUSTOMER CORRECTIVE MAINTENANCE RESPONSIBILITY
----------------------------------------------
Customer agrees to install the corrections or replacements provided
under this Agreement within a reasonable period of time. Customer's
failure to install emergency fixes, work-arounds, patches or releases
will cause the Licensed Software Product to be considered non-standard
until all such fixes are installed, unless Customer has previously
notified Seller of problems with such emergency fixes, work-arounds,
patches or releases.
In those instances where a fix, work-around, patch or release is found
to contain a problem, Seller will still be responsible for support of
the last Software release not known to contain problems, as well as for
support of the previous [...***...] Software releases not known to
contain problems.
* Confidential Treatment Requested
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EXHIBIT G
COPPER MOUNTAIN PERFORMANCE REPORTING
1. Performance Reporting
---------------------
The purpose of the performance reporting is to continuously improve the quality
of Copper Mountain service to the Customer at the highest possible level, as
well as to identify areas for improvement within the Customer's technical
support structure and operations.
This report is prepared for the Customer's in three major areas:
. Detailing list of all Assistance Request (AR) called into the
Technical Assistance Center
. Product reports identifying status (i.e. closed, restored. escalated,
open) by Severity level and AR Type (i.e. service, enhancement,
defect)
. AR Summary by product
With Customer customized performance reports, the Customer will receive a
detailed listing of call by AR number made during the contract period. This may
include at a minimum:
. Open Date
. Close Date
. Status
. Confirmed Severity
. Originator
. Location
. AR Type
. Description
. Resolution
Copper Mountain has a firm commitment to exceeding the Customer's expectations,
based upon Customer's definition of quality. Customer feedback is encouraged to
maintaining high quality service and Copper Mountain invites Customer inputs and
comments on a regular basis.
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EXHIBIT H
COVERAGE
1. COVERAGE
(a) Copper Mountain Networks will provide to Customer, and the Customer will
pay for, on the terms and conditions set forth in this Agreement,
maintenance service for the Products identified on the face of this
Agreement and on any Supplement(s) and on subsequent orders for maintenance
signed by Customer and accepted by Copper Mountain Networks. Such orders
when accepted by Copper Mountain Networks shall become part of this
Agreement.
(b) Maintenance service shall be provided in accordance with the options
selected on the face of this Agreement and as amended in supplements to
this Agreement.
(c) Any equipment purchased from Copper Mountain Networks by Customer and
co-located with similar equipment covered under this Agreement, including
equipment acquired subsequent to the effective date of this Agreement,
shall upon expiration of any applicable warranty be included in maintenance
provided under this Agreement subject to the effective maintenance charges
for such equipment, and the period of maintenance for such equipment shall
be coterminous with the period of maintenance for the covered equipment.
Maintenance work requested to be performed at a time or in a manner beyond
the coverage selected by Customer or maintenance work required as a result
of an action or condition listed in Section 6 "Maintenance Not Covered" may
be provided subject to additional charges.
2. OWNERSHIP/LICENSEE Customer warrants that it is the owner of any equipment
covered by this Agreement or that it has the product owner's authorization to
enter into this Agreement. Customer further warrants that it is the Licensee of
the software programs covered by this Agreement and that the software programs
are properly registered with Copper Mountain Networks.
3. CUSTOMER'S RESPONSIBILITIES Throughout the term of this Agreement Customer
agrees to:
(a) Follow all Copper Mountain Networks' or relevant equipment manufacturer's
applicable installation, operation, administration, and maintenance
instructions.
(b) Provide the proper environment, electrical and telecommunications
connections as specified by Copper Mountain Networks or relevant equipment
manufacturer.
(c) Provide access to the products to enable Copper Mountain Networks to
perform maintenance.
(d) Provide adequate communications facilities, workspace, and storage space
for Copper Mountain Networks spare parts, if required.
(e) Maintain a procedure external to the software program(s) and host computer
for reconstruction of lost or altered files, data or programs to the extent
deemed necessary by the Customer.
(f) Customer shall provide test equipment and maintenance documentation
sufficient for maintenance of the Copper Mountain Subscriber Equipment
products that are listed in Exhibit E of this Agreement.
(g) Assure that work done at the site by Customer or by others shall not
interfere with Copper Mountain Networks' performance of maintenance
services.
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4. MOVES AND MODIFICATIONS Customer may move or modify any Product being
maintained, but must promptly notify Copper Mountain Networks of such move or
modification. Customer agrees to pay additional charges if the move or
modification increases Copper Mountain Networks' costs or expenses of providing
maintenance services. If in the opinion of Copper Mountain Networks the move or
modification might create a safety hazard or product malfunction, Copper
Mountain Networks may either terminate this Agreement as to that product if such
action is mutually agreeable to both parties or, with the Customer's concurrence
and at its expense, eliminate the risk of such safety hazard or product
malfunction and continue to provide maintenance services. Copper Mountain
Networks reserves the right to inspect any moved or modified product.
5. RELOCATION, MODIFICATION OR IMPROPER USAGE OF SOFTWARE Copper Mountain
Networks shall be under no obligation to continue provision of service for
software under this Agreement if:
(a) The software program(s) has been modified without the prior written
approval of Copper Mountain Networks;
(b) The original software program identification marks have been removed or
altered;
(c) The software program(s) is moved from the street address where it was
initially installed without the prior notification to Copper Mountain
Networks;
(d) System software (i.e., core operating system utilities and libraries,
drivers, etc.) are not supported by Copper Mountain Networks.
(e) Host computer does not conform to the update level necessary to support the
software or has been modified other than by Copper Mountain Networks
personnel, so as not to conform to the specifications for which the
software was designed;
(f) The software program is being used by Customer in violation of Customer's
software license.
6. MAINTENANCE NOT COVERED This Agreement does not cover maintenance required to
repair damages, malfunctions or service failures caused by:
(a) Customer's failure to follow Copper Mountain Networks' or relevant
manufacturer's installation, operation, administration, and maintenance
instructions;
(b) Attachment of covered products to non-Copper Mountain Networks equipment,
or failure of a host computer, other equipment or software not maintained
by Copper Mountain Networks, or of removable rotating storage media;
(c) Abuse, misuse or negligent acts by anyone other than Seller or its
authorized representatives; or
(d) Power failure or surges from sources external to covered equipment,
lightening, fire, flood, pest damage, accident, actions of third parties
and other events outside Copper Mountain Networks' reasonable control or
not arising under normal operating conditions;
(e) Repairs or maintenance by non-Copper Mountain Networks authorized personnel
that are not performed in compliance with Copper Mountain's published
procedures and instructions.
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