Exhibit 10.24
Volume Purchase Agreement
VOLUME PURCHASE AGREEMENT
This agreement ("Agreement") dated June 30, 2000 ("Effective Date") between
GLENAYRE ELECTRONICS, INC., a Colorado corporation with its principal offices at
5935 Carnegie Boulevard, Charlotte, North Carolina 28209, USA ("GEI") and
MULTI-LINK TELECOMMUNICATIONS, INC., a Colorado corporation ("Customer") with
its principal offices at 4704 Harlan Street, Suite 420, Denver, Colorado, 80212,
consists of the General Terms and Conditions ("GTC") below and the following
exhibits ("Exhibits"): A - Definitions; B - Equipment and Software Current List
Pricing; C - Customer Existing Equipment and Customer Premises; D - Payment
Instructions; E - Software License; F - Warranty; and G - Unified Messaging
Product Requirements.
General Terms and Conditions
GEI manufactures and/or supplies voice storage and forwarding products and
provides services related to the design, installation, maintenance and support
of such products. Customer desires to purchase equipment and related services
and license related software from GEI.
In consideration of the covenants and promises in the Agreement, Customer and
GEI agree as follows:
1. Definitions. Capitalized terms used in the Agreement and not defined within
have the meanings set forth in Exhibit A.
2. Purchase of Equipment and Services and Licensing of Software.
2.1. During the Term and in accordance with the terms and conditions of the
Agreement, GEI agrees to sell Equipment and services and to license
Software to Customer. All such items which may be purchased or
licensed by Customer under the Agreement are listed in Exhibit B
(Equipment and Software Current List Pricing) which may be modified
from time to time by GEI in its reasonable discretion. For each item
of Software supplied to Customer by GEI, GEI grants to Customer the
licenses set forth in Exhibit E (Software License) subject to the
terms and conditions also set forth therein.
2.2. Customer agrees to purchase Equipment and services and to license the
Software by issuing signed purchase orders itemizing the description,
price, quantity (including number of users or ports, if applicable,
for Software licenses), price, Designated System (if applicable),
Customer Premises, Site location, "ship-to" location, and proposed
delivery time for each item of Equipment, Software or service ordered.
All purchase orders shall indicate that items are purchased or
licensed pursuant to the terms and conditions of this "Volume Purchase
Agreement dated June 15, 2000, Contract #4742vpa." GEI shall
acknowledge and accept each purchase order by signing an order
acknowledgement. All orders shall be governed by the terms and
conditions of the Agreement. Any provision in a purchase order that
conflicts with or attempts to modify the Agreement shall have no
effect. Neither party is obligated to notify the other party that such
terms and conditions do not apply. Any modification to a term as set
forth in the Agreement must be agreed to, in a separate writing,
signed by each party's authorized personnel.
2.3. Customer Purchase Commitments.
(a) Initial Purchase. Upon the execution of the Agreement, Customer
shall issue to GEI a purchase order for the Equipment and
<PAGE>
Software for Five Hundred Thousand Dollars of voice mail
equipment ("Initial Order"). Customer shall issue subsequent
purchase order(s) ("Subsequent Order(s)") for an additional One
Million Dollars of Equipment and Software (Subsequent Order(s)
together with the Initial Order collectively referred to as the
"Initial Purchase"). All Initial Purchase items shall be priced
at the standard list price then in effect in GEI's Price Book for
such Equipment or Software. The orders for the Initial Purchase
shall be non-cancelable and shall indicate a delivery date for
all items of the Initial Purchase within twelve (12) months of
the Effective Date of the Agreement; provided, however, for
Subsequent Order(s), Customer shall have ninety (90) days after
GEI has commercially released a unified message product
fulfilling the requirements of Exhibit G (or some other
requirements as may be mutually agreed in a signed writing) to
issue Subsequent Order(s) to GEI and GEI shall deliver such
Subsequent Order(s) as soon as commercially reasonable based on
resource availability (or such later date as may be mutually
agreed). Customer shall pay for the Initial Purchase items as
follows: (a) upon issuing the order for the Initial Order,
Customer shall make a payment of Eight Hundred Thousand Dollars
($800,000) in immediately available U.S. funds; and (b) the
remaining amounts due for Initial Purchase items shall be paid by
Customer within thirty (30) days of the date of the invoice
therefor, such invoice to be issued by GEI upon shipment of the
items.
(b) Additional Purchase Commitments. In addition to the Initial
Purchase, Customer agrees to issue to GEI a purchase order for
delivery of an additional One Million Dollars ($1,000,000) (net
of discounts and taxes) of messaging systems within thirty-six
(36) months of the Effective Date, and shall use its best efforts
to complete this order within thirty (30) months of the Effective
Date.
(c) Product Forecast. Customer anticipates that, in addition to the
Initial Purchase, its purchases under the Agreement will be a
minimum of $3.5 to $8.5 million during the next five (5) years.
To allow GEI to more efficiently meet Customer's needs, at the
beginning of each calendar quarter, Customer shall provide GEI
with a six-month rolling good-faith forecast of its anticipated
Equipment and Software requirements.
(d) Exclusivity. During the Term, Customer shall purchase all of its
requirements for voice mail, voice-activated dialing, fax mail
and unified messaging applications from GEI. If Customer desires
to commercially deploy an application subject to the exclusivity
provision in the previous sentence ("Application") and GEI does
not currently offer such Application, Customer shall send GEI
written notice describing the requested Application and the time
frame for its deployment of such Application and requesting
release from the aforementioned exclusivity provision due to
GEI's inability to supply such Application. Within thirty (30)
days after GEI's receipt of such notice, GEI shall notify
Customer whether GEI offers such Application or intends to make
the requested Application commercially available within the time
frame set forth in Customer's deployment schedule. If GEI does
not notify Customer within the aforementioned 30-day period that
GEI intends to offer such Application, GEI shall be deemed to
have waived its exclusivity right for the Application specified
in Customer's request. Notwithstanding the foregoing, GEI
acknowledges and agrees that Customer shall have no exclusivity
obligations for unified messaging applications unless GEI
complies with the requirements set forth in Exhibit G, unless
otherwise mutually agreed in a writing signed by both parties.
2.4. For a fee agreed upon in advance, GEI, at Customer's request, may
reconfigure any Equipment or Software.
2
<PAGE>
2.5. Delay or Cancellation of Order.
(a) Delay of Order. At no charge to Customer, GEI shall permit
Customer to request a one-time delay of all or any part of a
purchase order for Equipment, Software or services for no greater
than thirty (30) days from its originally scheduled shipment
date. If Customer requests delay for the same Equipment, services
or Software more than one time or the requested delay date
exceeds thirty (30) days from its originally scheduled shipment
date, then the request shall be treated as a cancellation and
shall be subject to the terms and conditions of Paragraph 2.5(b).
(b) Cancellation of Order.
(i) Early Cancellation. At no charge to Customer, GEI shall
permit Customer to cancel all or part of a purchase order
for Equipment, Software or services, provided (a) Customer
requests such cancellation in writing, (b) GEI receives the
written cancellation request at least one hundred twenty
(120) days prior to the scheduled shipping date; and (c) GEI
receives such written cancellation request by Customer no
greater than thirty (30) days from the date GEI received the
purchase order which is being partially or fully canceled by
Customer's cancellation request.
(ii) Late Cancellation. If Customer fails to comply with the
requirements set forth in Subparagraph 2.5(b)(i), GEI shall
charge and Customer agrees to pay a restocking fee of
fifteen percent (15%) of the price of all Equipment,
services or Software that is canceled plus all costs
incurred by GEI due to GEI's return of (or inability to
return) Equipment or Software supplied by third party
vendors.
(iii)For avoidance of doubt, Customer acknowledges that this
Paragraph 2.5(b) is not applicable to the Initial Purchase,
which is non-cancelable.
3. Delivery and Installation.
3.1. Shipment. GEI shall (a) arrange shipping and insurance and shall bill
Customer separately for the cost of such items and (b) ship each item
of Equipment and Software FOB GEI's location that supplied or
assembled the Equipment or Software. Title to Equipment shall not pass
to Customer until full payment for the Equipment is received by GEI.
In no event shall GEI be obligated to be the importer of record for
Equipment or Software.
3.2. Delivery; Expenses for Same. GEI will deliver and install Software on
Equipment and/or Customer Existing Equipment at Customer Premises and
deliver to Customer the Documentation. Customer shall take such
actions as GEI informs Customer are reasonably necessary for
installation of Software and Equipment, including those set forth in
Sections 3.3, 3.4, 3.5 and 3.6.
3.3. Site Information. At least thirty (30) days prior to the date of the
scheduled installation date, Customer shall provide GEI with complete
and accurate information concerning the Site and any equipment
installed on Customer Premises. This information shall be in a format
with the type of information as reasonably required by GEI, and such
additional information as GEI may reasonably request. Customer shall
bear the cost of all additional services or modifications to the
services that are necessary because it has failed to provide such
adequate or accurate information.
3
<PAGE>
3.4. Site Preparation. At least fifteen (15) days prior to the scheduled
installation date for a Site, Customer shall complete and return to
GEI the pre-installation checklist. Customer shall complete all of the
action necessary to prepare Customer Premises for the installation of
Equipment and Software prior to the scheduled installation date.
3.5. Dates of Delivery and Installation. If Customer reasonably determines
that Customer will be unable to prepare Customer Premises or install
Customer Existing Equipment prior to the scheduled delivery and
installation date, then Customer shall have the right to specify a new
delivery and installation date for the Software and the Equipment (not
more than thirty (30) days later than the mutually agreed-upon
installation date) by providing GEI with written notice at least
fifteen (15) days prior to the original delivery or installation date,
as the case may be. Customer shall pay to or reimburse GEI for all
reasonable travel and related expenses incurred by GEI due to or in
association with the installation of the Software and Equipment.
3.6. Availability of Equipment and Facilities. Customer shall grant to GEI
such access to Customer Premises and make available all copies of any
software, and all Customer Existing Equipment and Equipment and take
such action as may be necessary to ensure that all Customer Existing
Equipment required for installation and operation of the Software and
the Equipment are installed and operable at Customer Premises on the
date scheduled for delivery of the Software and the Equipment.
Customer shall be responsible for the security of each Site and all
equipment. Customer agrees that it shall comply with all government
laws and regulations relating to any Site and agrees that it shall
have obtained all necessary licenses and permits with respect to a
Site or otherwise prior to GEI delivering any Equipment and Software
to any such Site.
3.7. Installation. Except as otherwise provided herein, GEI shall, at its
expense, provide all necessary installation tools and test equipment
normally used in the installation of Equipment and Software. If
installation of Software and/or Equipment is delayed as a result of
the unavailability, incompletion or improper installation or operation
of Customer Existing Equipment and such delay continues for more than
five (5) days after GEI gives Customer notice of such delay, then
Customer shall reimburse GEI for all reasonable costs and expenses
(including reasonable personnel expenses) incurred by GEI as a result
of any such delay in installation. Installation is deemed as completed
upon the earlier of (i) thirty (30) days from delivery of each
Software or piece of Equipment to Customer Premises; or (ii) upon GEI
sign-off that the installation certification test is completed.
3.8. Acceptance. Customer may conduct acceptance testing of Software.
Customer shall have thirty (30) days from installation to conduct such
acceptance testing, and report to GEI, in writing any Defects found by
Customer. Customer may reject Software, in writing, during such thirty
(30)-day acceptance test period solely on the basis of such Software
failing to substantially conform to the Documentation. If Customer
does not properly reject such Software within the foregoing thirty
(30)-day acceptance period, then Customer is deemed to have accepted
such Software. Acceptance of Software shall not be unreasonably
withheld and shall be deemed to have taken place on the earliest to
occur of: (a) thirty (30) days have elapsed since the date of delivery
and installation of such Software pursuant to Article 3, without
Customer having given to GEI a written notice of a Defect, or (b)
Customer notifies GEI in writing that Customer accepts such Software,
or (c) immediately upon Customer's commercial use of such Software and
Equipment in a fashion whereby Customer is or would be entitled to
receive any revenue from such use. If Customer rejects any Software
during the thirty (30)-day period after installation of such Software,
it shall provide written notice to GEI of the Defect in sufficient
detail to permit GEI to replicate the Defect, whereupon GEI shall have
a reasonable period of time within which to remedy the Defect and
resubmit such Software. Customer shall have a fifteen (15)-day period
commencing on the date of such resubmission within which to accept or
reject such Software in accordance with the procedures set forth
4
<PAGE>
above. If GEI cannot remedy the Defect after repeated efforts over a
period of at least sixty (60) days after the Software is first
delivered to Customer pursuant to Section 3.8, then either party may
terminate that purchase order and the associated Equipment and
Software shall be returned, whereupon neither party shall bear any
further liability or obligation for such Equipment or Software.
3.9. Changes. At any time during the performance of any services by GEI
under the Agreement, Customer may, by written notice to GEI, request
that GEI make change(s) to such services. Upon receipt of such notice,
GEI shall promptly advise Customer in writing whether GEI can
reasonably make such change(s) and, if GEI determines that it could
reasonably make such change(s), how the change(s) requested by
Customer would, if implemented, affect: (a) the services; (b) the
performance of the Equipment or Software; (c) any agreed-upon
performance milestones; and (d) the cost of such services. After
reviewing GEI's response, Customer shall give GEI written notice
stating whether GEI should proceed with such change(s). If Customer
instructs GEI to proceed with such change(s), then GEI shall (a)
promptly proceed to make such change(s); and (b) be relieved of any
obligations affected by such change(s) as detailed in GEI's response
to Customer's request for change(s). Customer shall pay GEI as if the
Agreement had been performed as agreed prior to the change(s), and
shall pay or be given a credit for any additional or less amount, as
the case may be, which GEI proposed in its response to Customer's
requested change(s).
3.10. Returns and Shortages.
(a) Shortages. Customer shall make any claim for shortages (items
invoiced but not delivered) promptly upon discovery. In no case
shall Customer make such claims later than twenty-one (21) days
after the delivery date.
(b) Returns for Non-Defective Items. Customer may return
non-defective Equipment or Software only if (i) the shipment does
not correspond to Customer's purchase order or (ii) Customer
orders the wrong Equipment or Software and GEI agrees to exchange
the delivered Equipment or Software for different GEI Equipment
or Software. To return Equipment or Software, Customer shall
first obtain a return authorization, including a tracking number
and return address. Each item of Equipment or Software being
returned by Customer shall have affixed to it a label showing the
tracking number of the return authorization. Customer shall not
return Equipment and Software under this Paragraph 3.10(b) unless
the returned items are in undamaged condition, in the original
configuration, and where appropriate, in the original packing.
Customer shall return Equipment or Software authorized for return
under this Paragraph 3.10(b) before the later of (i) twenty-one
(21) days after the item is delivered or (ii) the installation
date, if such installation is being performed by GEI. GEI shall
be responsible for shipping, insurance and other expenses
incurred in returning Equipment or Software not corresponding to
Customer's purchase order; otherwise, Customer shall be
responsible for such charges.
(c) Credits. Provided Customer complies with the requirements set
forth in Paragraph 3.10(b), GEI shall issue credits for returned
items as follows: (a) for items returned under Subparagraph
3.10(b)(i), GEI shall issue Customer a credit for the net sales
price of the returned Equipment or Software plus the original
shipping and insurance as shown on the applicable invoice; or (b)
for items returned under Subparagraph 3.10(b)(ii), GEI shall
issue Customer a credit for the net sales price of the returned
Equipment or Software less a restocking fee of fifteen percent
(15%) of the net sales price of the Equipment and Software
returned and less any costs incurred by GEI associated with
returning the Equipment or Software to third party vendors. If
Customer fails to comply with the requirements set forth in
Paragraph 3.10(b), GEI shall have no obligation to issue a credit
for non-defective returned Equipment or Software and Customer
shall pay the full invoice amount.
5
<PAGE>
(d) Defective Equipment and Software. The return of defective items
supplied under the Agreement by GEI shall be in accordance with
such terms and conditions set forth in the Warranty.
4. Prices and Payment Terms.
4.1. License Fees. GEI shall invoice Customer, and Customer agrees to pay
to GEI, the license fees of the Software and Documentation in the
amounts and at the times specified in the Agreement. The current fees
for Software licenses are indicated on Exhibit B; however, GEI
reserves the right to modify GEI's license fees for such items at any
time and from time to time without notice.
4.2. Equipment. GEI shall invoice Customer, and Customer agrees to pay to
GEI, the prices for the Equipment determined in accordance with the
Agreement. The current prices for items of Equipment are indicated on
Exhibit B; however, GEI reserves the right to modify GEI's prices for
such items at any time and from time to time without notice.
4.3. Customization Fees. If Customer requests GEI to customize any
Software, then Customer and GEI shall enter into a separate agreement
which sets forth the terms, conditions and pricing related to such
customization.
4.4. Payment Terms.
(a) Invoicing. GEI shall invoice Customer for all items purchased or
licensed under the Agreement upon shipment and for any services
and associated expenses, upon performance of the service.
Customer shall pay such invoices within thirty (30) days from the
invoice date.
(b) Credit Limits. The payment terms set forth in Paragraph 4.4(a)
are based upon Customer's financial status as made known to GEI
by Customer as of the Effective Date. To keep GEI advised of its
financial status, Customer shall provide GEI with audited
financial statements prepared in accordance with generally
accepted accounting principles ("GAAP") (or if unaudited, an
accompanying certification by Customer's then current Chief
Financial Officer that such financial statements have been
prepared in accordance with GAAP). GEI shall have the right at
any time to (i) request additional assurances or information
concerning Customer's financial status; and (ii) set credit
limits and require payment in advance of shipment during any
period in which Customer exceeds such credit limits. GEI's
obligations and Customer's rights under the Agreement are
conditioned upon Customer's payment of all amounts when due. GEI
reserves the right to vary such payment terms, including, without
limitation, requiring at any time upon prior notice, Customer to
make payment pursuant to a letter of credit in accordance with
the payment instructions set forth in Exhibit D.
(c) GEI's obligations and Customer's rights under the Agreement are
conditional upon Customer's payment of the fees and charges in
strict accordance with the terms set forth herein. If Customer
fails to pay any invoice when due, GEI may, without prejudice to
any other remedy, postpone shipments, alter payment terms,
terminate the Agreement and charge interest on all overdue
amounts at the rate of 1.5% per month compounded monthly (or if
less, the maximum rate allowed by law). Upon demand, Customer
shall pay all such interest charges and all reasonable collection
fees, including reasonable legal expenses.
4.5. Payment Dispute Process. If Customer disputes any invoice amount in
good faith, then Customer shall do the following ("Payment Dispute
Procedure") within thirty (30) days of Customer's receipt of such
6
<PAGE>
invoice: (a) pay GEI the undisputed amount of the invoice; and (b)
provide GEI's Credit Department a detailed written description of the
disputed amount and the basis for Customer's dispute with such amount.
GEI may charge a service fee equal to the lesser of (i) one and one
half percent (1-1/2%) per month or (ii) the highest interest rate
legally permitted on any unpaid amounts, unless such amounts are
ultimately determined not due in accordance with the Payment Dispute
Procedure. Customer shall cooperate with GEI in resolving disputed
invoice amounts and then promptly paying amounts due. Customer shall
reimburse GEI for all reasonable collection expenses. If Customer
fails to follow the Payment Dispute Process as set forth in this
Section 4.5 for any invoice, then such invoice shall be considered an
undisputed invoice.
4.6. Taxes. Prices and fees represented herein and on all notifications
issued by GEI pursuant to the Agreement are exclusive of all
government excise, sales, service, use, occupational, or like taxes
and, accordingly, are subject to an increase equal in amount to any
tax GEI may be required to collect or pay upon the licensing, delivery
or installation of Equipment, Software or services or other items
provided under the Agreement. Customer is responsible for payment of
any taxes resulting from or imposed due to GEI's performance under the
Agreement, except taxes based on GEI's net income.
5. Discounts.
5.1. Volume Purchase Discount. Provided Customer is not delinquent on any
of its obligations under the Agreement at the time of placing an
order, GEI shall give Customer a discount off then current price of
GEI-manufactured infrastructure Equipment and GEI-owned Software
(excluding Initial Purchase items). The amount of the discount shall
be based upon the net purchase price of such products (including
Initial Purchase items) that Customer has previously purchased and
paid for during the then current Term. The following table sets forth
the volume purchase levels and the applicable discounts available:
Purchase Volume % Discount Off GEI Published List Price
--------------- ---------------------------------------
Less than $1,000,000 0
$1,000,001 - $2,000,000 25
$2,000,001 - $3,000,000 35
$3,000,001 - $4,000,000 40
Over $4,000,000 45
5.2. Exceptions. The volume purchase discounts set forth above do not apply
to the purchase or licensing of any of the following: (a) Initial
Purchase items; (b) services, including those provided under a
Glenayre Care Agreement, which shall be priced at GEI's standard list
price in effect at the time the service is ordered; (c) Special
Offers, which shall be priced at the price in effect at the time the
item is ordered as set forth in GEI's then-current Price Book; (d)
spare card kit packages and assemblies and other spare parts, as
specified and priced in GEI's then-current Price Book; (e) printers,
video screens, modems, and other similar items which are not
manufactured by GEI, all of which shall be sold at a discount of 5% of
the Price in GEI's then-current Price Book; (f) items that are not
then released for commercial production and (g) products are listed as
non-discountable in GEI's then current Price Book (including OEM
Hardware and Third Party Software).
5.3. Levels. As Customer's net purchases increase during each one-year
period of the Term, Customer shall be eligible for the higher level
discounts. The discount level for an order shall be determined based
upon the net purchase price of the items of Equipment and Software
licenses that Customer has previously purchased and paid for as of the
date Customer submits a purchase order to GEI.
7
<PAGE>
6. Training and Support.
6.1. Training. Upon Customer's request and payment of the applicable fees,
GEI shall provide the training services requested by Customer at a
mutually agreeable location and time.
6.2. Maintenance and Support. For the warranty period applicable for each
item of Equipment or Software, GEI will provide Customer with
pre-installation completion and warranty Defect support, subject to
and in accordance with the terms and procedures set forth in Section 7
and the Warranty. If Customer desires additional support, Customer
shall enter into GEI's then-standard maintenance agreement, as in
effect from time to time (the "Maintenance Agreement"). Customer
acknowledges that if the parties are unable to reach accord on the
terms and provisions of the Maintenance Agreement, then Customer shall
be responsible for all such maintenance and support except as set
forth specifically in the Agreement for warranty Defects and
pre-installation completion.
6.3. Reimbursement of Expenses. Customer shall reimburse GEI for all
reasonable expenses incurred by GEI in providing training and support
services beyond those described in this Article 6, as invoiced by GEI.
7. LIMITED WARRANTY; LIMITATION ON REMEDIES.
7.1. Warranty. Subject to the terms and conditions of the Agreement, the
Software and Equipment is warranted in accordance with the terms and
conditions set forth in the Warranty, a copy of current warranty is
set forth in Exhibit F. GEI does not represent or warrant that
Customer's use of the items provided under the Agreement by GEI shall
be uninterrupted or error-free or that all program defects in the
Software shall be corrected.
7.2. Limitations; Remedies. GEI's entire liability and Customer's exclusive
remedy as to Defects, or any other performance or nonperformance by
GEI of its obligations under the Agreement shall be the warranties and
remedies as set forth in this Article 7, regardless of the theory of
claim or form of action. THE WARRANTIES MADE IN SECTION 7.1 ARE THE
ONLY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, THAT ARE MADE
BY GEI, AND GEI DISCLAIMS ALL OTHER WARRANTIES INCLUDING, BUT NOT
LIMITED TO, ANY WARRANTY OF MERCHANTABILITY, TITLE, NON-INFRINGEMENT
OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO THE SOFTWARE, THE
EQUIPMENT OR ANY OTHER ITEMS OR SERVICES PROVIDED HEREUNDER. NEITHER
GEI NOR ANYONE ELSE WHO HAS BEEN INVOLVED IN THE CREATION, PRODUCTION
OR DELIVERY OF EQUIPMENT, SOFTWARE OR SERVICES PROVIDED HEREUNDER
SHALL BE LIABLE FOR DAMAGES ARISING FROM ANY MODIFICATIONS MADE BY
CUSTOMER OR ANY THIRD PARTY.
7.3. No Other Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY, IN NO
EVENT SHALL GEI OR ANYONE ELSE WHO HAS BEEN INVOLVED IN THE CREATION,
PRODUCTION OR DELIVERY OF EQUIPMENT, SOFTWARE OR SERVICES PROVIDED
HEREUNDER BE LIABLE TO CUSTOMER OR ANY THIRD PARTY FOR INDIRECT,
CONSEQUENTIAL, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES (INCLUDING
DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF
BUSINESS INFORMATION, AND THE LIKE) ARISING FROM OR RELATED TO THE
DELIVERY, USE OR PERFORMANCE OF THE EQUIPMENT OR SOFTWARE OR THE
AGREEMENT REGARDLESS OF TYPE OF CLAIM, WHETHER IN CONTRACT, TORT,
STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY, WHETHER SUCH
PARTY OR ITS AGENTS HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
8
<PAGE>
7.4. Limitation on Liability. IN NO CASE SHALL GEI'S AGGREGATE LIABILITY
FOR ALL MATTERS ARISING OUT OF THE SUBJECT MATTER OF THE AGREEMENT,
WHETHER IN CONTRACT, TORT OR OTHERWISE, EXCEED THE AMOUNT ACTUALLY
RECEIVED BY GEI DURING THE PRECEDING 12-MONTH PERIOD PURSUANT TO THE
AGREEMENT.
7.5. Customer Acknowledgement. Customer acknowledges that the limitations
of liability and remedies set forth herein represent bargained-for
allocations of risk, and GEI's prices and fees reflect the allocations
of such risk. However, if any one or more of such restrictions shall
either taken by itself or themselves together be adjudged to go beyond
what is reasonable in all the circumstances but would be adjudged
reasonable if any particular restriction or restrictions were deleted
or if any parts of the working thereof were deleted, restricted or
limited in a particular manner then the said restrictions shall apply
with such deletions, restrictions or limitations as the case may be.
8. INDEMNIFICATION.
8.1. Infringement.
(a) Defense. In the event of any claim or allegation against Customer
of infringement or misappropriation of United States patent,
copyright, trade secret, or mask work rights by reason of the use
by Customer of the Licensed Programs as permitted under the
Agreement and provided that Customer provides GEI prompt and
timely written notice of the claim or allegation, GEI will, at
its expense, defend such claim, and pay any costs, expenses and
damages actually awarded in connection therewith, including the
fees and expenses of the attorneys engaged by GEI for such
defense. GEI shall have the sole and exclusive authority to
defend and/or settle any such claim or action.
(b) Certain Actions in Response to Infringement. Upon GEI's sole
determination, or after the entry of any judgment or order not
subject to further appeal, that the use of the Licensed Programs
by Customer in unmodified form infringes upon the rights of any
third party and that such use of any Licensed Programs must
cease, GEI, at its election shall, at its own cost and expense,
either (a) procure for Customer the right to continue the use of
such Licensed Programs; (b) modify the Licensed Programs in such
a way that the use thereof does not infringe upon the rights of
third parties; or (c) terminate the Agreement by notice to
Customer and refund to Customer a pro-rata amount of the license
fees paid by Customer for the infringing (or potentially
infringing) Licensed Program based on a 5-year amortization
schedule.
8.2. Limitation of Indemnification for GEI.
(a) No Liability. GEI shall have no liability or obligation under the
Agreement with respect to any infringement claim (or defense
thereof) if such infringement is caused by (i) compliance with
designs, guidelines, plans or specifications of Customer or any
third party (including any customized version of the Licensed
Programs); (ii) a modification made by any party other than GEI;
(iii) use of a Licensed Program in an application or environment
other than as specified in the Documentation; (iv) use of a
non-current version; or (v) the combination, operation or use of
any Licensed Programs with other product(s) not supplied by GEI.
Customer agrees to indemnify and hold harmless GEI from and
against all liabilities, obligations, costs, expenses and
judgments, including court costs, reasonable attorneys fees and
expert fees, arising out of any of the circumstances stated in
this Paragraph 8.2(a).
9
<PAGE>
(b) Entire Liability. This Article 8 states GEI's entire liability
and obligation, whether statutory, contractual, express, implied
or otherwise, for claims of intellectual property infringement.
8.3. By Customer. Except to the extent GEI is obligated to indemnify
Customer under Section 8.1, and without limiting any other obligation
of Customer to indemnify GEI under the Agreement, (i) Customer shall
indemnify, defend and hold GEI harmless from any and all claims,
damages, losses, liabilities, costs and expenses (including reasonable
attorney's fees) arising out of or in connection with Customer's use
of the items supplied under the Agreement by GEI and (ii) Customer
shall have the sole and exclusive authority to defend and/or settle
any such claim or action.
9. Ownership Rights.
9.1. Ownership. Except as explicitly provided otherwise in the Agreement,
all right, title and interest, including all copyright, trademark,
trade secret and patent rights in the Software, Equipment,
Documentation and any other items supplied by GEI under the Agreement
shall be owned exclusively by GEI or its third-party licensors or
suppliers.
9.2. No Decompilation. Customer shall not decode, reverse engineer,
reprint, transcribe or reproduce, in whole or in part, any Software or
Documentation supplied under the Agreement for any reason, including,
but not limited to, in an attempt to obtain the source code of any
Software supplied by GEI to Customer.
10. Confidential Information.
10.1. Confidentiality. Customer and GEI shall each safeguard the other's
Confidential Information in the same manner as it safeguards its own
valuable Confidential Information. The parties each agree that the
amount of license or other fees payable under the Agreement, and the
payment terms, shall be deemed Confidential Information for purposes
of this Article 10. Each party acknowledges that the disclosing
party's Confidential Information constitutes such party's valuable
Confidential Information and trade secrets. Each party expressly
agrees and acknowledges that it is entering into the Agreement, and
providing the receiving party with copies of its Confidential
Information under the Agreement, in reliance upon the receiving
party's foregoing promise of confidentiality. Neither party shall use,
disclose, make or have made any copies of the disclosing party's
Confidential Information in whole or in part, except as provided
herein, without the prior express written authorization of the
disclosing party.
10.2. Exceptions. Any provisions herein concerning non-disclosure and
non-use of Confidential Information of the disclosing party shall not
apply to any such information which (a) is already known to the
receiving party when received; (b) is or becomes publicly known
through publication or otherwise and through no wrongful act of the
receiving party; (c) is received from a third party without similar
restriction and without breach of the Agreement; (d) is approved for
release or use by written authorization of the disclosing party; or
(e) is required to be disclosed by law or order of a regulatory or
judicial authority, provided the disclosing party is given a
reasonable opportunity to seek a protective order or similar judicial
constraint.
10.3. Secure Handling. Customer shall require that the Software and the
Documentation be kept on Customer Premises and be maintained in a
manner so as to reasonably preclude unauthorized persons from having
access thereto.
10.4. Proprietary Legends. Customer shall not remove any copyright notice
or other proprietary or restrictive notice or legend contained or
10
<PAGE>
included in any material provided by GEI, and Customer shall reproduce
and copy all such information on all copies made under the Agreement.
10.5. Obligations of Parties Having Access. Customer shall limit use of and
access to the Confidential Information to such Customer Personnel as
are directly involved in the operation or maintenance of Customer
Existing Equipment, Software or Equipment.
11. Term And Termination.
11.1. Term. The Agreement shall commence on the Effective Date and continue
for a period of five (5) years, unless sooner terminated pursuant to
Section 12.1 ("Term").
11.2. Term of the Licenses. The licenses granted under the Software License
are effective upon installation and shall continue until the first to
occur of the following: (a) Customer attempts to assign, transfer or
sublicense the Software or the Documentation without GEI's prior
written consent; (b) Customer or a third party acting at Customer's
direction moves the Equipment or Customer Existing Equipment or
Software from Customer Premises, unless GEI is notified; (c) Customer
sells the related Equipment without GEI's prior written consent; or
(d) Customer ceases to use the Software with the Equipment or Customer
Existing Equipment. Upon termination of such licenses and at GEI's
request, Customer shall promptly return or destroy all Confidential
Information. If such Confidential Information is destroyed, Customer
shall certify within ten (10) days to GEI in writing that all
Confidential Information has been destroyed.
12. Termination.
12.1. The Agreement shall be terminated:
(a) with the consent of both parties hereto;
(b) by GEI if Customer fails (i) to pay any amount due under the
Agreement in accordance with the Agreement or (ii) to comply with
any obligations under the Software License or the Warranty, and,
if the failure can be cured, Customer does not cure the failure
within five (5) days after written notice from GEI or (iii) to
comply with any obligation set forth in the Agreement, other than
those specified in Subparagraph 12.1(b)(i) and (ii), and Customer
does not cure the failure within thirty (30) days after written
notice from GEI;
(c) by Customer if GEI fails to comply with any material obligation
set forth in the Agreement, and GEI fails to cure the failure
within thirty (30) days after written notice from Customer; or
(d) by GEI, immediately, and without any notice to Customer, if (i)
Customer makes an assignment for the benefit of its creditors or
admits its insolvency or fails to pay its debts generally as they
become due, (ii) a proceeding is commenced by or against Customer
for relief under any bankruptcy, insolvency or other similar law,
unless the proceeding is commenced involuntarily against Customer
and is dismissed within sixty (60) days after the commencement,
(iii) a receiver or trustee is appointed for Customer or any
substantial part of its assets and is not discharged within sixty
(60) days after the appointment; (iv) a proceeding is instituted
for the dissolution or the full or partial liquidation of
Customer and is not dismissed or discharged within sixty (60)
days after the commencement; or (v) Customer discontinues its
voice mail and/or prepaid calling system business, as the case
may be.
11
<PAGE>
12.2. Obligations on Termination. Upon any termination of the Agreement, all
copies of the Software and Documentation supplied by GEI and all works
in progress shall immediately be delivered to GEI. All amounts payable
by Customer shall be immediately payable in full. Termination of the
Agreement shall not affect the rights or liabilities for any amounts
then currently due under the Agreement for products and services
actually provided.
13. Notice. All notices, consents and requests under the Agreement shall be in
writing and shall be deemed to have been delivered and received (i) on the
date of personal delivery, (ii) three business days after being mailed if
by first class mail, (iii) on the next or second business day after proper
delivery to a commercial courier service that guarantees delivery on the
next or second business day (unless the return receipt or the courier's
records evidence a later delivery), or (iv) on the date of receipt (if it
is a business day, otherwise on the next business day) by facsimile, in
each case addressed as follows:
TO GEI: with a copy to:
Glenayre Electronics, Inc. Glenayre Electronics, Inc.
11360 Lakefield Drive 5935 Carnegie Boulevard
Duluth, Georgia 30155 Charlotte, North Carolina 28209
Attention: Executive Vice President, Attention: Legal Department
Products Facsimile: (704) 553-0524
Facsimile: (770) 623-0210
(a) For Payment Disputes
Glenayre Electronics, Inc.
5935 Carnegie Boulevard
Charlotte, North Carolina 28209
Attention: Credit Department
Facsimile: (770) 553-9338
TO Customer:
Multi-Link Telecommunications, Inc.
4704 Harlan Street
Denver, Colorado 80212
Facsimile: (303) 831-1988
14. Miscellaneous.
14.1. Representations. Each party hereto represents and warrants that the
Agreement is valid and legally binding upon it and to the best of its
knowledge, is enforceable in accordance with its terms. By submitting
a purchase order to GEI, Customer represents and warrants that it (a)
has the financial capability to pay the price and all related charges
for all items ordered and (b) shall maintain that financial capability
until that amount is fully paid. For this purpose, "financial
capability" means sufficient assets, after deducting liabilities, to
pay that amount without becoming insolvent (as defined under any
applicable law).
14.2. Force Majeure. Neither party shall be responsible for delays or
failures in performance resulting from causes beyond the control of
such party, including without limitation, any act of God, fire,
casualty, delay or disruption in transportation, flood, earthquake,
war, strike, lockout, epidemic, destruction or shut-down of production
facilities, shortage or curtailment, riot, insurrection, governmental
acts or directives, or financial requirements or manufacturing
limitations imposed by third-party manufacturers, suppliers, or
vendors.
12
<PAGE>
14.3. Dispute Settlement. Except as otherwise provided in Section 14.3, if
a dispute arises out of or related to the Agreement, the parties shall
(a) agree to negotiate in good faith to settle the dispute in an
amicable manner and (b) if the parties are unable to agree within
sixty (60) days of dispute settlement discussions, the disputes
arising out of or in connection with the Agreement shall be referred
to and finally resolved by arbitration under the rules of the American
Arbitration Association. The place of arbitration shall be Charlotte,
North Carolina. The language of arbitration shall be in English. The
number of arbitrators shall be one. Notwithstanding the preceding,
nothing herein in Section 14.3 shall restrict the right of either
party to apply to a court of competent jurisdiction for a temporary
restraining order, preliminary injunction, or other equitable relief
to preserve the status quo or prevent irreparable harm, and for the
right of GEI to bring suit in federal court regarding violation of its
copyright or other proprietary rights.
14.4. Permits and Authorizations. Customer is solely responsible for
obtaining any government licenses and authorizations required to
operate its business and for complying with the rules and regulations
of the government and regulatory agencies. Neither GEI nor any of its
employees or agents are an agent for, nor a representative of Customer
in matters pertaining to the rules and regulations of any such
governmental agency.
14.5. Export Provisions. Customer shall comply with all export laws of the
United States and Canada and agrees to not, whether directly or
indirectly (including facilitating a third party), export or re-export
any Equipment, Software, Documentation or other GEI Confidential
Information to any country in violation of the laws of the United
States or Canada. Customer agrees to indemnify GEI against any
liability incurred by GEI due to Customer's violation of this Section
14.5.
14.6. Publicity. Each party shall obtain the other party's prior written
consent before issuing any press release or otherwise making any
public announcement concerning the Agreement.
14.7. Assignment. The Agreement shall not be assigned by Customer without
GEI's advance written consent. The Agreement shall be binding upon and
inure to the benefit of the parties, their successors and permitted
assigns.
14.8. Survival. After expiration or termination of the Agreement, all
provisions relating to payment shall survive until completion of
required payments. In addition to those provisions which specifically
provide for survival beyond expiration or termination, all provisions
contained in this Article 14 and all provisions, if any, regarding
ownership, indemnification, warranty, liability and limits thereon,
and confidentiality and/or protection of proprietary rights and trade
secrets shall survive indefinitely or until the expiration of any time
period specified elsewhere in the Agreement with respect to the
provision in question.
14.9. No Amendments. No amendment to the Agreement shall be effective
unless it is in a writing signed by a duly authorized representative
of each party. The term "Agreement", as used herein, includes any
future written amendments, modifications, or supplements made in
accordance herewith.
14.10. No Nuclear, Aircraft or Life-Support Applications. None of the items
supplied by GEI are designed or intended for use as a component in the
maintenance or operation of a nuclear facility, aircraft or air
traffic system or a life-support or medical-monitoring system. If
Customer uses any of the GEI-supplied items in such an application,
Customer agrees to indemnify and hold GEI harmless against any claim
arising out of that application.
14.11. Waiver. No term or provision hereof shall be deemed waived and no
breach excused, unless such waiver or consent shall be in writing and
signed by the party claimed to have waived or consented. Any consent
13
<PAGE>
by any party to, or waiver of, a breach by the other, whether express
or implied, shall not constitute a consent to, waiver of, or excuse
for any other different or subsequent breach.
14.12. Severability. If any provision of the Agreement is held illegal,
void or unenforceable, to any extent, in whole or in part, as to any
situation or person, the balance shall remain in effect and the
provision in question shall remain in effect as to all other persons
or situations, as the case may be.
14.13. Governing Law. The Agreement shall be deemed to have been made in
the State of North Carolina and shall be governed by and construed in
accordance with the laws of the State of North Carolina, exclusive of
its rules governing choice of law and conflict of laws.
14.14. Entire Agreement. The Agreement constitutes the entire agreement
between the parties hereto concerning the subject matter of the
Agreement and supersedes and replaces all prior and contemporaneous
agreements and representations between such parties concerning such
subject matter. No person is authorized for either party to make any
agreement or representation not expressly contained in the Agreement.
No change, termination, modification, or waiver of any term or
condition of the Agreement shall be valid unless in a writing signed
by each party hereto. The section headings contained in the Agreement
are for convenience of reference and shall not in any way affect the
meaning or interpretation of the Agreement. The Agreement shall not
create any rights in, or be enforceable by, persons other than the
parties hereto, their successors and permitted assigns. If there is a
conflict between the GTC and the terms and conditions of any Exhibit,
the GTC shall control, except that terms applicable to Third Party
Software shall control with respect to such Third Party Software
(including Article 10 of the Software License). However, to the extent
possible, the GTC and the Exhibits shall be construed as complementary
to each other. The Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute the same instrument.
IN WITNESS WHEREOF, each party has caused the Agreement to be executed by its
duly authorized representative, effective as of the Effective Date.
GLENAYRE ELECTRONICS, INC. MULTI-LINK TELECOMMUNICATIONS, INC.
By: By:
----------------------------------- ---------------------------------
Name: Name:
--------------------------------- -------------------------------
Title: Title:
-------------------------------- ------------------------------
14
<PAGE>
EXHIBIT A
Definitions
1. DEFINITIONS. In addition to terms elsewhere defined in the Agreement, the
following terms shall have the following meanings:
1.1. "Confidential Information" means the confidential and valuable
information of the respective parties which the parties desire to
protect against disclosure or competitive use and which is in written
or tangible form and designated either orally or in writing as
proprietary or confidential or is disclosed visually or orally and is
designated either orally or in writing as being proprietary or
confidential. GEI's Confidential Information includes the Software and
Documentation.
1.2. "Customer Existing Equipment" means the Local Area Network (LAN) and
central processing units (CPUs), including all terminals, and other
components thereof, situated at Customer Premises and identified on
Customer's purchase order or on Exhibit C.
1.3. "Customer Personnel" means all persons engaged from time to time as
officers, employees, agents or independent contractors of Customer.
1.4. "Customer Premises" means Customer's computer room facilities at a
Site and identified in Exhibit C.
1.5. "Defect" means any material error, problem, or defect in the Licensed
Programs which renders the Licensed Programs inoperable or causes the
Licensed Programs to fail to perform substantially in accordance with
the Specifications.
1.6. "Designated System" means the computer system located on Customer
Premises and designed by Customer on its purchase order as the
computer system executing the Oracle application or if not designated,
the computer system on which the Oracle application was originally
installed.
1.7. "Documentation" means the Specifications, drawings, user manuals and
other documents pertaining to the Software or Equipment.
1.8. "Existing Equipment" means Customer's equipment purchased prior to the
Effective Date and identified in Exhibit C.
1.9. "Equipment" means OEM Hardware, GEI-Manufactured Hardware and other
hardware components supplied by GEI to Customer pursuant to the
Agreement.
1.10. "GEI-Manufactured Hardware" means GEI-manufactured hardware and
devices (from new parts, or new and used parts, and in some cases
previously installed hardware and devices, each of which is warranted
by GEI as if new) (but excluding Software), if any, supplied under the
Agreement by GEI to Customer.
1.11. "Licensed Programs" means the object code (i.e., machine-readable)
form of the Software programs developed and owned by GEI and supplied
under the Agreement by GEI to Customer for use in voice mail and
prepaid calling systems, but excludes Third Party Software.
1.12. "OEM Hardware" means the third party manufactured hardware and
devices (from new parts, or new and used parts, and in some cases
previously installed hardware and devices, each of which is warranted
15
<PAGE>
by the manufacturer as if new) (but excluding Software), if any,
supplied under the Agreement by GEI to Customer.
1.13." Price Book" means the then current (as of the date of the purchase
order) GEI-published document that contains GEI's standard prices in
effect for the country for which the Software or Equipment is to be
supplied.
1.14. "Site" means each Customer-controlled location to which Equipment or
Software is to be delivered or installed.
1.15. "Software" means the object code form of the software contained in
the Equipment and the object code form of software otherwise supplied
by GEI to Customer and shall include Licensed Programs and Third Party
Software.
1.16. "Software License" means GEI's then current software license for the
applicable Software, a copy of which is set forth in Exhibit E.
1.17. "Specifications" means the functional specifications relating to the
design and performance of the applicable Software or Equipment.
1.18. "Term" shall have the meaning set forth in Section 11.1 of the GTC of
the Agreement.
1.19. "Third Party Software" means any Software other than Licensed
Programs, including Software contained in OEM Hardware, software
originally supplied by Oracle Corporation and Sun Microsystems.
1.20. "Warranty" means Glenayre's then current North American Warranty, a
copy of which is set forth in Exhibit F.
2. Terms defined in Incoterms (1990) and used in the Agreement shall apply to
the Agreement. The term "including" means including without limitation. All
references in the Agreement to "dollars" and "$" mean United States
dollars. All payments under the Agreement shall be in United States
dollars.
16
<PAGE>
Exhibit B
Pricing
SEE ATTACHED
(Pricing current as of the Effective Date)
17
<PAGE>
Exhibit C
Customer Existing Equipment and Customer Premises
NOT APPLICABLE
18
<PAGE>
Exhibit D
Payment Instructions
LETTER OF CREDIT ("LC") INSTRUCTIONS
Bank: Customer shall advise/confirm LC through:
Branch Banking and Trust Company
International Division
7025 Albert Pick Road, Suite 101
Greensboro, NC 27409
USA
S.W.I.F.T.: BRBTUS33AGSO TELEX: 6843145 BBTHP UW
TELE: 336-605-1560 FAX: 336-605-5830
Beneficiary of LOC:
Glenayre Electronics, Inc.
5935 Carnegie Boulevard
Charlotte, NC 28209
USA
TELE: 704-553-0038 FAX: 704-553-9338
Amount: The amount must match the full amount stated in GEI's applicable
Quotation and include all applicable taxes and duties. Excess drawings under the
LC for air freight, inland freight, handling and insurance charges shall be
permitted.
Currency: United States Dollars
Term: Full payment of draft amount payable at sight at the counter of one of
GEI's advising banks.
Partial Shipments: Allowed
Type of LC: Irrevocable, confirmed and non-transferrable.
Expiry Date: The LC must be valid for at least 45 days past the last payment
milestone.
Presentation: GEI shall have at least 21 days after shipment in which to submit
the required documents.
Required Documents (Quantity): Commercial Invoices (3); Packing List (3),
Trucking Waybill/Delivery Receipt (1).
Description of Goods: Telecommunications equipment.
Charges: All charges, including those for confirmation, shall be to Customer's
account.
Shipment From: USA and Canada
Shipping Terms: EXW Named Place: GEI's Factory
Additional Terms: GEI will not accept an LC in which Customer's action is
required before GEI can be paid. The LC must be payable immediately upon
presentation of the required documents to the bank. The exact terms of each LC
are subject to approval by GEI's credit department. Customer shall submit the LC
to GEI's credit department no later than the time at which Customer submits the
applicable purchase order.
19
<PAGE>
Exhibit E
Software License
1. RECITALS. To enable the Customer to operate Software supplied by Glenayre
Electronics, Inc. ("GEI") to the Customer, GEI wishes to grant to the
Customer and the Customer wishes to acquire from GEI a non-exclusive,
non-transferable right to use computer software in object code form only,
to practice inventions protected by issued patents or pending applications,
and to use materials, subject to the provisions of this License Agreement.
The Software Licenses, the Documentation Licenses and the Patent Licenses
granted by GEI under this License Agreement are referred to collectively as
the "Licenses".
2. SOFTWARE LICENSES. GEI grants to the Customer a non-exclusive,
non-transferable license or sublicense to use, in object code form only,
the Software for the Customer's own internal data processing computing and
related needs (the "Software Licenses"). The Software Licenses are
effective upon installation of the Software and/or the Equipment and are
specifically limited to the Customer's use of the Software in the
applicable piece of Customer Existing Equipment or Equipment located on the
Customer's Premises. The Software Licenses do not include any rights with
respect to the source code form of the Software.
3. DOCUMENTATION LICENSES. GEI may provide the Customer with materials,
including drawings, diagrams, specifications, documentation, training
manuals and user manuals, for the use and servicing of the Equipment and
the Software (the "Documentation"). GEI licenses or sublicenses the
Customer the non-exclusive right to use the GEI-owned Documentation and any
third party-owned Documentation provided to Customer by GEI, provided that
the Documentation are used in conjunction with the use and servicing of
Equipment and Software (the "Documentation Licenses"). GEI and the third
parties reserve all rights in their respective Documentation.
4. NO TRANSFER OF SOFTWARE OR DOCUMENTATION. The Customer shall not assign,
transfer or sublicense the Software or the Documentation, whether
separately or as part of an equipment sale, without GEI's prior written
consent.
5. ACKNOWLEDGMENT OF PATENT RIGHTS. The Customer acknowledges that various
components of the Equipment and Software are the subject of one or more GEI
patents or pending patent applications or third party patents or pending
patent applications under which GEI is licensed.
6. LIMITED, NON-EXCLUSIVE LICENSE UNDER PATENTS. GEI grants the Customer a
non-exclusive right (the "Patent License") to practice the inventions
protected by GEI's patents or pending patent applications or third party
patents or pending patent applications that are embodied in either the
Equipment or Software.
7. TERMINATION OF LICENSES. The Licenses shall terminate if: (a) the equipment
containing the Software or Software is moved by the Customer from the
Customer Premises; (b) the equipment containing the Software is sold; or
(c) the Software is no longer used in connection with the equipment.
8. PROPRIETARY INFORMATION
8.1. "Proprietary Information" means any scientific, technical or business
information relating to GEI's products or business that is valuable to
GEI and not generally known to those outside GEI, or relating to the
third party's products or business that is valuable to the third party
and not generally known to those outside the third party.
20
<PAGE>
8.2. The Customer acknowledges that:
(a) the Software and all materials supplied in connection with the
Software, including flow charts, object code and input data formats,
contained Proprietary Information that has been developed by GEI or
third parties at great expense and considerable effort of skilled
professions, and is entrusted by GEI to the Customer under this
License Agreement for use only as specifically set out in this License
Agreement;
(b) to carry out the terms and conditions of this License Agreement, GEI
may have to disclose to the Customer certain Proprietary Information;
and
(c) GEI and the third parties claim and reserve all rights in the
Software, and all materials supplied or produced in connection with
the Software, as an unpublished copyrighted work.
8.3. The Customer acknowledges the Proprietary Information has substantial
value and that any use or disclosure of Proprietary Information by the
Customer or its personnel in a manner not authorized by this License
Agreement would likely cause GEI and the third parties irreparable
damage that could not be fully remedied by monetary damages. So, the
Customer:
(a) shall maintain all Proprietary Information in strict confidence
and shall neither use, copy or disclose, nor permit any Customer
personnel to use, copy or disclose, the Proprietary Information
for any purpose not specifically authorized under this License
Agreement;
(b) shall ensure that the Software and all copies of it and
Documentation, when not in use, are kept in a secure place,
subject to restricted access only by those persons authorized to
use and maintain the Equipment and Software;
(c) shall not decode, reverse engineer, reprint, transcribe or
reproduce (other than a single archival copy of the Software), in
whole or in part, the Software and Documentation, without GEI's
prior written consent;
(d) shall not in any way modify or enhance the Software without GEI's
prior written consent;
(e) shall not assign, timeshare or rent the Software; and
(f) grants to GEI the right to obtain injunctive or other equitable
relief from a court of competent jurisdiction to prevent
unauthorized or unlawful action.
8.4. Except as more specifically limited by the terms applicable to Third
Party Software, the Customer may make a reasonable number of copies of
the object code version of the Software for backup purposes only.
8.5. The Customer's rights under this License Agreement shall terminate
upon breach of any of the provisions set out in Section 8. The
provisions of Paragraph 8.3 shall survive termination of this License
Agreement. The Customer shall promptly return all copies of the
Proprietary Information, including the Software and all Documentation
provided for the Software, if: (a) this License Agreement is
terminated for any reason; or (b) the Customer ceases control,
possession or use of the equipment containing the Software, the
Software or the Documentation.
21
<PAGE>
8.6. To assist GEI in the protection of the proprietary rights of GEI and
the third parties, the Customer shall permit representatives of GEI to
enter the Customer's premises and inspect the Equipment and Software
and audit the relevant records at any reasonable time.
9. REVISED VERSIONS OF THE SOFTWARE. The Customer agrees that if GEI provides
revised versions of the Software, the revised versions shall be covered by
the provisions of this License Agreement.
10. CERTAIN THIRD PARTY LICENSED PROGRAMS AND TERMS. The Customer acknowledges
that the items supplied by GEI may be or contain Software owned by third
parties ("Third Party Software"). The Customer's continuing right to use
Third Party Software and associated documentation is conditioned upon the
Customer's agreement to abide by: (a) shrink wrapped or other agreements
between the Third Party Software vendor and the Customer; (b) specifically
indicated terms and conditions in this Agreement; and (c) terms and
conditions that may from time to time be supplied by the Third Party
Software vendors or GEI; provided, however, except as necessary to comply
with applicable law, no subsequent change in the terms and conditions
applicable to Third Party Software shall affect the Customer's license to
use the Third Party Software previously supplied to the Customer by GEI if
the Third Party Software is not thereafter updated or otherwise modified
(including any new version or release level).
10.1. Oracle Terms.
(a) Upon GEI's delivery of the Programs, Customer is granted a
nontransferable, nonexclusive license to use the Programs in
accordance with the terms set forth herein. "Programs" shall mean
the Oracle computer software in object code form, the Oracle user
guides and manuals for use of the Oracle software and any
GEI-provided updates of the Oracle software and Oracle
documentation. In no event shall Customer have any title rights
or other ownership interests in the Programs or any rights in the
Programs except those explicitly set forth herein. In no event
shall title to the Programs pass to the Customer or any other
person.
(b) Use of the Programs is restricted to object code, solely for the
purpose of executing for the Customer's own business purposes of
use of the OMC or OpenMEDIA applications only on the applicable
system(s) designated by Customer on the purchase order
("Designated System(s)") and limited to the number of Ports upon
which license fees were paid by Customer to GEI. The Programs may
not be used to build or modify reports or applications.
(c) Customer is prohibited (a) from transferring the Programs from
the Designated System(s), except for temporary transfer in the
event of computer malfunction and (b) from assigning, timesharing
or renting the Programs.
(d) Customer shall not reverse engineer, disassemble or decompile the
Programs. Customer shall not duplicate the Programs except for a
single back-up or archival copy.
(e) Oracle shall have no liability for any damages, whether direct,
indirect, incidental or consequential arising from Customer's use
of the Programs, to the extent permitted by applicable law.
22
<PAGE>
(f) Customer, upon termination of the sublicense, shall destroy or
return to GEI the Programs (and the back-up copy) and Programs
documentation (and all copies of the Programs and documentation)
within twenty (20) days of the termination of the sublicense.
(g) Customer shall not publish any benchmark tests run on the
Programs or otherwise disclose any evaluation of the Programs to
any third party.
(h) Customer shall comply with relevant export laws and regulations
of the United States to assure that neither the Programs, nor any
direct product thereof, are exported, directly or indirectly, in
violation of United Stated law.
(i) With regard to any rights or obligations affecting the Programs
or the Customer's use of the Programs, Oracle shall be considered
a third party beneficiary of Agreement between GEI and the
Customer, to the extent permitted by law.
10.2. If there is a conflict between the terms and conditions of this
Software License (excluding this Section 10) and the terms and
conditions of or provided pursuant to this Section 10, the terms and
conditions of or provided pursuant to Section 10 shall control with
reference to Third Party Software.
23
<PAGE>
Exhibit F
Warranty
1. Licensed Programs.
1.1. Subject to the terms and conditions of this Warranty, Glenayre
Electronics, Inc. ("GEI") warrants that, for the Warranty Period (as
defined hereinafter) all GEI-owned Software ("Licensed Programs")
licensed to the Customer shall be free of Defects and conform to their
Specifications in all material respects; provided, however, that GEI
does not warrant that the use of the Licensed Programs will be
uninterrupted or error-free. The Warranty Period for Licensed Programs
shall be 90 days from its shipment date or installation date, if
installed by GEI. This warranty is made solely to the Customer.
1.2. The Customer's exclusive remedy and GEI's sole liability for the
warranty set forth in Section 1.1 of this Warranty shall be for GEI to
attempt through reasonable efforts to correct the Defect, if such
Defect is reported to GEI within the Warranty Period and the Customer,
at GEI's request, provides GEI with sufficient information (which may
include access to the Licensed Programs by GEI) to reproduce the
Defect. GEI shall have no liability with respect to any failure of the
Licensed Programs to perform as warranted under this Section 1.1 if
such failure results from any changes or modifications made to the
Licensed Programs by the Customer or any third party or from a
combination or use of the Licensed Programs with other products or
devices not supplied by GEI.
1.3. In the event that GEI cannot, after repeated efforts, remedy such
failure, GEI shall refund any all license fees received by GEI from
the Customer hereunder for the defective Licensed Program and
terminate the Licenses for the defective Licensed Program, provided
that the Customer has returned all copies of the defective Licensed
Programs and associated Documentation.
1.4. The Customer acknowledges that GEI does not represent or warrant that
the services provided by GEI under this Warranty will ensure
uninterrupted or error-free operation, nor that all software program
Defects will be corrected.
2. GEI-Manufactured Hardware.
2.1. Subject to the terms and conditions of this Warranty, GEI warrants
that, for the Warranty Period (as defined hereinafter), the
GEI-Manufactured Hardware shall conform to their Specifications in all
material respects; provided, however, that GEI does not warrant that
the use of the GEI-Manufactured Hardware will ensure uninterrupted or
error-free service. The Warranty Period shall be one (1) year from its
shipment date or installation date, if installed by GEI. This warranty
is made solely to the Customer.
2.2. The Customer's exclusive remedy and GEI's sole liability under the
warranty set forth in Section 2.1 shall be, at GEI's option, the
repair or replacement of the GEI-Manufactured Hardware. GEI shall have
no liability with respect to any failure of the GEI-Manufactured
Hardware to perform as warranted under this Section 2.1 if such
failure results from any changes or modifications made to the
GEI-Manufactured Hardware by the Customer or any third party or from a
combination or use of the GEI-Manufactured Hardware with other
products or devices not supplied by GEI.
2.3. In the event that GEI cannot, after repeated efforts, repair the
defect, GEI shall refund any the amounts paid by the Customer for the
defective GEI-Manufactured Hardware.
24
<PAGE>
3. OEM Hardware. The OEM Hardware is covered by the original equipment
manufacturer's warranty. To the extent permitted, GEI shall pass through
the terms of any warranty received from the original equipment
manufacturer. GEI does not make, and hereby disclaims, all warranties and
representations regarding the OEM Hardware.
4. Third Party Software. The Third Party Software is covered by the third
party's licensors. To the extent permitted, GEI shall pass through the
terms of any warranty received from the licensor of the Third Party
Software. GEI does not make, and hereby disclaims, all warranties and
representations regarding the Third Party Software.
5. Development Products. GEI disclaims any and all warranties for all items
not yet released to GEI's general customer base, including, but not limited
to, items which are still in development in its current (as of the shipment
date) Price Book, or as otherwise identified as unreleased items to the
Customer.
6. Return under Warranty.
6.1. If an item warranted by GEI herein shall fail to function as warranted
in normal use within the applicable Warranty Period:
(a) The Customer shall promptly notify GEI of the problem and the
serial number of the defective item;
(b) GEI shall, at its option, either resolve the problem over the
telephone, or provide the Customer with a Return Authorization
("RA") Number and the address of a GEI Service Center to which
the Customer may ship the defective item;
(c) if the problem is not resolved over the telephone, the Customer
shall attach a label showing the RA Number to each returned item,
and shall include a description of the fault. The Customer shall,
at its cost, properly pack the item to be returned, prepay the
insurance and shipping charges, and ship the item to the
specified GEI Service Center;
(d) GEI shall either repair or replace the returned item. The
replacement item may be new or refurbished; if refurbished, it
shall be equivalent in operation to a new item. If a returned
item is replaced by GEI, the Customer agrees to return the item
free and clear of all liens or other encumbrances and that the
returned item shall become GEI's property;
(e) GEI shall, at its cost, ship the repaired item or replacement to
the Customer. If the Customer has requested express shipping, the
Customer shall pay GEI an expediting fee.
6.2. Each item which is repaired or replaced by GEI under this Warranty
shall be covered under all of the provisions of this Warranty for the
remainder of the applicable Warranty Period or sixty (60) days from
the date of repair or replacement, whichever is longer.
7. Advance Replacements.
7.1. If an item warranted by GEI herein shall fail to function as warranted
in normal use within the applicable Warranty Period and the Customer
has maintained a satisfactory credit standing with GEI, GEI may supply
to the Customer, upon Customer's request, an advance replacement part
requested by the Customer.
25
<PAGE>
7.2. Subject to Paragraph 7.1, if stock is available at t GEI service stock
location, GEI shall ship the advance replacement parts within 48 hours
of the Customer's request. If stock is not available, GEI will make
every reasonable effort to locate and provide the advance replacement
parts to the Customer within ten (10) business days.
7.3. The Customer shall return the defective item to GEI within twenty (20)
days from the date of shipment of the advance replacement parts;
failing which, GEI shall invoice the Customer for the full current
list price of the advance replacement part, and the Customer shall pay
the invoice within thirty (30) days.
8. Telephone Technical Assistance. During the applicable Warranty Period, GEI
shall provide the Customer with over-the-telephone technical fault
analysis.
9. Upgrades.
9.1. During the applicable Warranty Period, GEI shall, at no charge,
provide the Customer with non-feature software updates to the Licensed
Programs and non-feature to the software contained in the
GEI-manufactured equipment (if such equipment is returned to GEI's
facility for repair). Such software updates shall be to those revision
level updates deemed necessary by GEI. Non-feature software updates
and revision level updates do not generally include additional
equipment, such as hardware memory, which enable the upgrades to
function in the existing equipment of the Customer. The Customer may
purchase this additional equipment from GEI.
9.2. Upgrades to items not manufactured or developed by GEI shall be
provided as part of the services only if the original manufacturer or
third party licensor provides such upgrades free of charge; if not,
the Customer may purchase these upgrades.
10. Default and Termination.
10.1. GEI may immediately terminate this Warranty and all of its
performance under this Warranty, upon notification to the Customer, if
the Customer:
(a) makes any unauthorized modifications;
(b) assigns or transfers the Customer's rights or obligations under
this warranty without the prior written consent of GEI;
(c) becomes bankrupt or insolvent, or is put into receivership; or
(d) has not paid GEI all amounts for services, advance replacement
parts supplied under this Warranty, or other additional charges
within thirty (30) days of receipt of written notice from GEI.
10.2. If this Warranty is terminated by GEI, the Customer shall remain
liable for all amounts due to GEI.
11. Force Majeure. GEI shall not be responsible for failure to discharge its
obligations under this Warranty due to events beyond GEI's reasonable
control.
12. Limitations and Qualifications Of Warranty. This Warranty does not apply to
any damage, defect or failure caused by or costs associated with:
12.1. replacement or provision of operating supplies and materials such as
magnetic tapes and optical disk media.
26
<PAGE>
12.2. repair of failure caused by any changes made to the network or system
configurations including changes to both hardware and software that
were not previously approved in writing by GEI or purchased from GEI.
12.3. any item having been installed, modified, adapted, repaired,
maintained, transported or relocated by any person other than GEI
personnel, a GEI authorized service agent or GEI approved technician
without GEI's prior written consent;
12.4. failure to conform with the Equipment Operating Instructions in the
applicable GEI Documentation;
12.5. external causes, including external electrical stress or lightning,
or use in conjunction with incompatible equipment or software, unless
such use was with GEI's prior written consent;
12.6. repair of failures due to the Customer's alteration, modifications,
or unauthorized use.
12.7. cosmetic damage;
12.8. accidental damage, negligence, neglect, mishandling, abuse or misuse,
other than by GEI personnel, a GEI authorized service agent or GEI
approved technician; or
12.9. repair or failures due to acts of God, or reasons otherwise outside
GEI's control, including, but not limited to, repair or failures due
to the Public Switched Telephone Network, or any cables, wires,
modems, lines or other material used in the connectivity and use
thereof.
13. LIMITATION.
13.1. THE WARRANTY STATED IN THIS DOCUMENT IS THE CUSTOMER'S EXCLUSIVE
WARRANTY. GLENAYRE SPECIFICALLY DISCLAIMS ALL OTHER WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE AND OF MERCHANTABILITY.
13.2. GEI SHALL NOT BE LIABLE IN TORT, INCLUDING LIABILITY IN NEGLIGENCE OR
STRICT LIABILITY, AND SHALL HAVE NO LIABILITY AT ALL FOR INJURY TO
PERSONS OR PROPERTY. GEI'S LIABILITY FOR FAILURE TO FULFILL ITS
OBLIGATIONS UNDER THIS WARRANTY OR ANY OTHER LIABILITY UNDER OR IN
CONNECTION WITH ITEMS OR SERVICES PROVIDED BY GEI SHALL BE LIMITED TO
THE AMOUNT OF SUCH ITEM OR SERVICE. THE REMEDIES STATED IN THIS
WARRANTY ARE THE CUSTOMER'S EXCLUSIVE REMEDIES AGAINST GEI.
13.3. EVEN IF GEI HAS BEEN ADVISED OF THE POSSIBILITY OF THEM, GEI SHALL
NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL
DAMAGES, INCLUDING LOST PROFITS AND REVENUES, FAILURE TO REALIZE
EXPECTED SAVINGS, ANY CLAIM AGAINST A CUSTOMER BY A THIRD PARTY, OR
ANY OTHER COMMERCIAL OR ECONOMIC LOSSES OF ANY KIND.
27
<PAGE>
Exhibit G
UNIFIED MESSAGING PRODUCT REQUIREMENTS
Below is a listing of the features required and must be set forth in the
Glenayre Unified Messaging Product Roadmap. If these features are not available
today, GEI must agree to develop these within a reasonable length of time.
1) System should store Voice, Fax and Email Messages in one "Virtual" mailbox
such that the subscriber of the service is only required to access one client to
receive all message types Voice, Fax, and email. While the client may have some
limitations in that not all of the message may be accessible from the client,
the message must still be handled, e.g., subscriber may not be able to hear a
power point presentation utilizing TTS, but could still forward, delete, save,
etc., the message.
2) Subscribers may access the mailbox through a telephone or through the
Internet utilizing either a telephony client or a Internet client such as HTML,
JAVA, Outlook, etc. When accessing a message utilizing a client, any changes to
the message status should also be stored and made available when the same
messages is access by another type of client at a later time.
3) The MVP will go out through the Internet and query multiple email accounts
looking for messages either (a) periodically, (b) when instructed by the
subscriber or (c) when subscriber logs on.
4) System must have a "filter" (Black List, White List) that allows/disallows
certain sender's messages in the Unified Mailbox.
5) Subscribers accessing through the Internet should be able to use a browser
that looks and feels like Microsoft Outlook(R) or some similar GUI.
6) When accessing through the Internet, subscribers should be able to play voice
mail, view faxes and emails.
7) When accessing through the telephone, subscribers should be able to hear
email headers through a text/speech translator and then, if desired, hear the
whole email message through the same translator.
8) A fourth pager notification digit should be added to the MVP(R) pager
notification protocol for emails, along side voice and fax messages. This may
need to be a little creative, since I suspect people will not want to know when
they receive every email - perhaps it should just count emails when it notifies
voice or fax messages and simply give the number of new emails currently in the
mailbox ?
Microsoft and Outlook are trademarks or registered trademarks of
Microsoft Corporation.
MVP is a registered trademark of Glenayre Electronics, Inc.
28
