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EXHIBIT 10.32
AGREEMENT FOR PURCHASE OF PRODUCTS
OEM AGREEMENT
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AGREEMENT FOR PURCHASE OF PRODUCTS
CONTENTS
PARTIES AND SIGNATURES
Article I DEFINITIONS
1.0 Terms Defined
Article II CONFIDENTIALITY PROVISIONS
2.0 Confidential Information
2.1 Disclosure between the Parties
2.2 Confidential Information of Third Parties
2.3 Return of Confidential Information
Article III PRODUCT
3.0 Product Description
3.1 Time Schedule / Milestone Plan
3.2 Approval of Samples
3.3 Incompatibilities
3.4 Special Products
3.5 Product Changes
3.6 Private and/or Co-Label
3.7 Private Labeling, Trademarks
3.8 Custom Software
3.9 Support for Product Adaptation
Article IV PRICES
4.0 Product Availability for Purchase
4.1 Price Warranty
4.2 Price List
4.3 Forecast
4.4 Discounts
4.5 Purchase Commitment
Article V PURCHASING TERMS AND CONDITIONS
5.0 Order Servicing
5.1 Change Order
5.2 Delivery Terms
5.3 Schedule Commitments
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5.4 Packing
5.5. Receiving and Inspection
5.6 Title and Risk of Loss
5.7 Marketing Rights, Licences
Article VI SALES SUPPORT
6.0 Sales Support
Article VII PAYMENT
7.1 Payment Terms
7.2 Invoicing
Article VIII WARRANTY
8.1 Warranty
8.1 Year 2000 Compliance Warranty
8.3 Warranty Exclusions
Article IX REPAIR SERVICE
9.0 Repairs not covered under Warranty
Article X TRAINING
10.1 Training
Article XI DOCUMENTATION
11.0 Specifications or Drawings
11.1 Documentation
11.2 Use of Information
11.3 Reproduction of Documentation
Article XII COMPLIANCE
12.0 Compliance
Article XIII TERM AND TERMINATION
13.0 Term of Agreement
13.1 Termination of Agreement
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Article XIV EMERGENCY MANUFACTURING RIGHTS/ESCROW AGREEMENT
14.0 Emergency Manufacturing Rights
Article XV GENERAL PROVISIONS
15.0 Performance
15.1 Transferability
15.2 Disclaimer of Agency
15.3 Publicity
15.4 Notices
15.5 Governing Law
15.6 Arbitration
15.7 Non-Waiver
15.8 Execution of Further Documents
15.9 Other Remedies
15.10 Effects of Headings
15.11 Intellectual Property
15.12 Product Liability
15.13 Markings
15.14 Contingency
15.15 Developments by Siemens
15.16 Validity
15.17 Limitation of Liability
15.18 Export Control Laws and Regulations
ATTACHMENTS:
Attachment A Product Structure
Attachment B Furnished and Related Materials
Attachment C Product Specifications
Attachment D Time Schedule / Milestone Plan
Attachment E Price Lists
Attachment F Forecast
Attachment G Bar-Coding
Attachment H Siemens Deliverables
Attachment I Environmental Regulations
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AGREEMENT FOR PURCHASE OF PRODUCTS
THIS AGREEMENT, having an Effective Date as at Section 13.0, is hereby
entered into between ACCELERATED NETWORKS, INC., a California corporation,
having a principal place of business at 301 Science Drive, Moorpark, California
93021 (hereinafter referred to as Company), and, SIEMENS AG, 81359 Munich,
Hofmannstr. 51, Germany (hereinafter referred to as Siemens). Company and
Siemens are hereinafter individually referred to as "Party" and collectively as
"Parties".
WHEREAS, Siemens desires to purchase Products (hereinafter described
under Section 1.4 ) and thereafter desires to have Product delivered for
Siemens', to use in Siemens products that may be offered for resale to third
parties, and
WHEREAS, Company is interested in selling Product to Siemens.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, it is agreed as follows:
(a) The Articles and Attachments contained in this Agreement
constitute the entire agreement between the Parties;
(b) No modifications or waiver of any of the provisions, or any
future representation, promise, or addition shall be binding upon
the Parties unless agreed to in writing;
(c) This Agreement supersedes and cancels any prior agreements
between the Parties with respect to the subject matter contained
herein.
IN WITNESS WHEREOF, the Parties hereto have as of the Effective Date
duly executed this Agreement, including Attachments A through I which are
incorporated herein and made a part hereof, by the respective representatives
thereunto duly authorized.
ACCELERATED NETWORKS, INC. SIEMENS ATIENGESELLSCHAFT
By: /s/ Suresh Nihalani By: /s/ Martin Stolz
Suresh Nihalani Martin Stolz
Title: Chief Executive Officer Title: President, Division AN
Date: May 8, 2000 Date: May 5, 2000
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ARTICLE I
DEFINITIONS
1.0 TERMS DEFINED
For the purpose of this Agreement, the terms when employed in capital
letters, either in the singular or plural form are defined to mean the
following:
1.1 "Catalog" means any document that describes Company Products that are
generally available for sale through normal distribution channels.
1.2 "Customer" means an end-user of Product who, at the time of acquisition of
the Product, has taken possession of the Product for its end use and does not
intend to further distribute the Product.
1.3 "Effective Date" means the date as specified in Section 13.0.
1.4 "Product" means the Product(s) specified in Attachment A including all
generally sold, (i) standard spare parts, (ii) improvements, upgrades,
corrections, modifications, alterations, revisions, or updates, to the specified
Products made by Company during the Term of this Agreement.
1.5 "Prototype" means a completely built Product that is a pre-production
release of the ultimate production version. It is used for testing and
verification of design.
1.6 "Specifications" means the technical specifications for the Products,
including, but not limited to Functional Requirements Specifications, ,
Performance Specifications and Configuration Guidelines as set forth in
Attachment C and revised by the Company from time to time.
1.7 "Related Materials" means all and any kind of information, whether or not in
documentary form, used or useful in or relating to, the use, maintenance or
marketing of Product including, but not limited to user manuals, system manuals,
program manuals, test and diagnostic information, maintenance information, and
operating procedures, as more specifically set forth in Attachment B.
1.8 "Software" means the computer instructions, including but not limited to
firmware, in machine-readable language provided as part of a Product or
comprising a Product.
1.9 "Source Code" means human-readable source statements for the Software
including, without limitation, program listings, data definition models,
indices, structure tables, system flow charts, program flow charts, defined
terms, file layouts and program narratives.
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1.10 "Object Code" shall mean the machine-readable form of Software resulting
from the translation or processing of Source Code by computer equipment into
machine language or intermediate code, and which is in that form of computer
software programs which is not convenient to human understanding of the program
logic, but which is appropriate for execution or interpretation by computer.
1.11 "Spares" means any sub assembly generally provided by Company for field
replacement for Products including, but not limited to, components, boards,
fasteners, power supplies, cables, wiring, casings and other associated
materials as more specifically specified in Attachment A.
1.12 "Special Product" means any special feature or capability that is not a
part of the Company's generally offered Product, not contained in the general
Product Catalog and Price List, and generally built-to-order. Special Products
covered by this Agreement shall be specified in Attachment A.
1.13 "Standard Price List" means Company's published listing of its standard
prices for which Company will sell its Products as such list is updated from
time to time by the Company as stipulated in Article IV.
1.14 "Siemens Discounted Price List" means the price list at which Siemens will
purchase the Company's Product.
1.15 "Term of this Agreement" means the term of this Agreement, including any
renewal periods, as specified in Section 13.0.
1.16 "Subsidiary" means any company or other form of business organisation,
whether a separate legal entity or not, which is or becomes owned or controlled
directly or indirectly by a Party as to at least fifty-one (51) per cent of such
company's issued equity share capital, voting rights and/or the like, but such
company or business organisation shall be deemed to be a Subsidiary only as long
as such ownership or control exists.
1.17 "Epidemic Failure" shall be deemed to exist if five (5)% or more of the
installed Product delivered by Company within any six (6) month period are
Nonconforming Units due to the same or substantially similar cause.
1.18 "Nonconforming Unit" means any Product unit which deviates, in a material
manner affecting form, fit or function, from the corresponding Specification and
Environmental Regulations as per Attachment I either during the pre-delivery
inspection or at any later time, unless such deviation has been approved in
writing by Siemens.
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ARTICLE II
CONFIDENTIALITY PROVISIONS
2.0 CONFIDENTIAL INFORMATION
For the purpose of this Agreement, "Confidential Information" shall mean
any information and data of a confidential nature, including, but not
limited to, proprietary, developmental, technical, marketing, sales,
operating, performance, cost, know-how, business and process
information, computer programming techniques, and all record bearing
media containing or disclosing such information and techniques provided
such information is conspicuously marked as being Confidential.
2.1 DISCLOSURE BETWEEN THE PARTIES
2.1.1 All Confidential Information exchanged between the Parties
pursuant to this Agreement:
(a) shall not be distributed, disclosed, or disseminated in any
way or form by the receiving Party to anyone except its own
or its Subsidiaries' employees, who have a reasonable need
to know such Confidential Information to perform such
Party's obligations hereunder; and who have previously
entered into written confidentiality agreements containing
restrictions on the use and disclosure of third party
confidential information provided to either Party that are
at least as strict as those set forth in this Section
2.1.1.
(b) shall be treated by the receiving Party with the same
degree of care to avoid disclosure to any third party as
is used with respect to the receiving Party's own
information of like importance which is to be kept secret.
The receiving Party shall be liable for disclosure of
Confidential Information of the disclosing Party only if
such care is not used. The burden shall be upon the
receiving Party to show that such care was used; and
(c) shall not be used by the receiving Party for its own
purpose, except as otherwise expressly stated herein,
without the express written permission of the disclosing
Party; and
(d) shall remain the property of and be returned to the
disclosing Party (along with all copies, embodiments and
derivatives thereof) within thirty (30) days of receipt by
the receiving Party of a written
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request from the disclosing Party setting forth the
Confidential Information to be returned.
2.1.2 The obligations of the above paragraph shall not apply, however,
to any information which:
(a) is already in the public domain or becomes available to the
public through no breach of this Agreement by the receiving
Party;
(b) was in the receiving Party's possession prior to receipt
from the disclosing Party as proven by the receiving
Party's written records;
(c) is received independently on a non-confidential basis from
a third party free to disclose such information to the
receiving Party; or
(d) is independently developed by the receiving Party as proven
by its written records prior to receipt from the disclosing
Party; or
(e) is the subject of subpoena or court order.
2.1.3 Either Party shall have the right to refuse to accept any
Confidential Information under this Agreement.
2.1.4 Siemens shall be free to use and distribute Products and Related
Materials in which Company's Confidential Information is embedded
and disclosed; provided, Siemens shall not distribute or disclose
any Related Materials which are not meant to be generally
distributed, including without limitation, test, diagnostic and
maintenance information and which are conspicuously marked
"Confidential".
2.1.5 No license to the receiving Party, under any trademark, patent or
copyright, or applications which are now or may thereafter be
owned by the disclosing Party, is either granted or implied by the
conveying of Confidential Information to the receiving Party.
2.2 CONFIDENTIAL INFORMATION OF THIRD PARTIES
Neither Party shall communicate or otherwise disclose to the other,
during the Term of this Agreement, confidential or proprietary
information of third parties unless such third parties have consented to
such disclosure.
2.3 RETURN OF CONFIDENTIAL INFORMATION
Upon termination of this Agreement and request of the disclosing Party,
copies, derivatives and embodiments of the disclosing Party's
Confidential Information
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shall be returned within thirty (30) days to the disclosing Party by the
receiving Party, except to the extent such information is required by
Siemens to perform its support obligations with respect to the Products.
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ARTICLE III
PRODUCT
3.0 PRODUCT DESCRIPTION
Company shall sell Products to Siemens pursuant to this Agreement,
provided no Software shall be sold. Software shall be licensed to
Siemens pursuant to all the terms and conditions of this Agreement.
Company shall make available for Siemens' purchase (in the case of
hardware) and or license (in the case of Software), all improvements,
upgrades, enhancements, corrections, modifications, alterations,
revisions, updates, made to Product and Related Materials during the
Term of this Agreement on terms substantially as provided herein
provided that none of the foregoing shall include any products,
technology, information or the like developed or resulting from
Company's work for other parties and such are not made generally
available for sale by the Company.
3.1 TIME SCHEDULE / MILESTONE PLAN
The Parties agree to the Time Schedule/Milestone Plan according to
Attachment H. In accordance with this Attachment D, Siemens shall be
entitled to order Products with a first delivery date, at the latest, on
December 1, 2000.
3.2 APPROVAL OF SAMPLES
3.2.1 Company shall prepare and submit to Siemens, for its approval
samples ("Samples") of complete Product on or before the date
specified in Attachment D. Company must obtain Siemens' written
approval of the Prototype prior to proceeding with the
manufacture of those units. If Siemens reasonably determines that
the Samples does not meet the Specifications or other
requirements as mutually agreed herein, Siemens may, upon notice
describing such failure, reject such Samples and require Company
to prepare and submit a modified Samples for Siemens' approval.
3.2.2 Notwithstanding anything to the contrary herein or in any order
issued hereunder, any obligation of Siemens to purchase Products
shall be conditioned upon Siemens' prior written approval of
Sample. Any Sample not rejected by Siemens within thirty (30)
days of its delivery by Company will be deemed approved by
Siemens.
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If any Sample shall not be approved by Siemens in accordance with the
time schedule as per Attachment D due to a material failure of the
Sample to meet the Specification or other mutually agreed upon
requirements and Company has not curred such failure within thirty (30)
days following its receipt of written notice from Siemens describing the
failure in reasonable detail, then Siemens as its sole remedy shall be
entitled to terminate all orders for Product corresponding to such
Sample , if any, by giving written notice which shall become effective
upon receipt thereof by Company.
3.3 INCOMPATIBILITIES
Company may modify the Products provided that such modification does not
materially adversely affect form, design, fit or function as detailed in
the Specifications set forth in Attachment A. Company shall notify
Siemens of any modifications in writing at least sixty (60) days prior
to the first delivery of modified Products.
Company agrees to obtain written approval from Siemens prior to the
implementation of technical changes, enhancements, alterations,
improvements or other modifications to the Products materially affecting
form, design, fit or function, as detailed in the Specifications set
forth in Attachment C.. Company shall provide Siemens with information
at least ninety (90) days prior to delivery of Products with such
changes, enhancements, alterations, improvements or other modifications
to allow Siemens to evaluate,test and determine any necessary
modifications to its equipment or to the Product to ensure the continued
marketability of the modified Product by Siemens.
The Company and Siemens agree to establish a testing strategy that will
minimize the potentiality of Product incompatibility.
3.4 SPECIAL PRODUCTS
Special Products may be requested, quoted and developed from time to
time and added to this Agreement. Such Special Product, and associated
prices shall only become part of this Agreement on written approval of
both Parties. Once a Special Product becomes available in company's
Catalog, it shall no longer be considered a Special Product.
3.5 PRODUCT CHANGES
3.5.1 Company shall advise Siemens in writing of all changes to Product
that impact (a) reliability, (b) the Specifications, or (c) form,
fit or function in accordance with the procedures specified
herein.
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3.5.2 Company may at any time make changes in the Product, or modify
the drawings and Specifications relating thereto, or substitute
Product of later design to fill an order, provided the changes,
modifications or substitutions under normal and proper use do
not impact upon the Product's (a) reliability, (b) the
Specifications, or (c) form, fit or function. For such changes,
Company shall notify Siemens in writing not later than ninety
(90) days prior to the planned implementation of such change.
Except in the case of Mandatory Changes, Company shall send
copies of a written change modification to Siemens ninety (90)
days prior to the effective date of each change to Product which
impacts on form, fit, function, reliability, or Product
Specifications. Company shall provide Siemens' with samples of
the changed Product for testing. Siemens will either return the
Product to the Company or purchase the Product at Siemens
discount price within thirty (30) days.
If both Parties agree to such changes and such changes are
introduced into manufacturing, Company shall inform Siemens using
a change notification as to final technical version of change and
when first shipment may be expected.
3.5.3 "Mandatory Changes" are those changes required to correct an
extremely unsatisfactory condition requiring immediate action,
such as changes for safety or to meet existing Product
Specifications. In such cases Company shall promptly send Siemens
a written change notification. Company shall provide with each
change notification the following information: (a) Product change
number; (b) a detailed description of the change; (c) reason for
the change; (e) description of the impact of the change and (f)
proposed date for changes. Company shall provide Siemens with
samples of the changed Product for testing. Modifications of
Products necessary to comply with the Specification or to fulfil
any other obligation of Company under this Agreement shall be
implemented by Company at no cost to Siemens. In particular,
modifications of Products necessary to comply with applicable
laws and regulations, governmental regulation, environmental
standards, consumer protection and safety approvals shall be
implemented by Company in due time and at no cost to Siemens.
3.5.4 In the event that Siemens reasonably rejects such change to a
Product, Siemens shall advise Company of such determination as
soon as reasonably possible, but in no event more than thirty
(30) days from the date on which the sample of the changed
Product was received by Siemens. Siemens' failure to so notify
Company shall be deemed an acceptance of the change. Company
shall not furnish any such changed Products on any of Siemens
orders if the change has been reasonably rejected.
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At any time within one hundred eighty (180) days after Siemens'
receipt of Company's notice of modification, Siemens may issue
an end-of-life Purchase Order for the then current version of
the Products without any quantity limitation.
3.5.5 In furtherance to any other right and claim Siemens may have
under this Agreement, Siemens is entitled to request
modifications to the Specification, e.g., relating to the
improvement of performance, reliability, adaptations for addition
of country versions or serviceability of the Products. Such
modifications shall be implemented by Company without undue delay
provided that Company's enterprise has the technical and
personnel capacity necessary to implement such modification. The
Parties shall discuss in good faith and agree in writing the
impact, if any, of such modifications upon terms and conditions.
For all modifications, Company shall, either with the notice of
change or thirty (30) days prior to the effective date of the
modification, which ever comes first, at the latest provide
Siemens with appropriate updated copies of the pertinent modified
Documentation as set forth in ARTICLE XI.
3.6 PRIVATE and/or CO-LABEL
3.6.1 Siemens intends to private and/or co-label (hereinafter "Label"
or "Labeling") and market any Products purchased hereunder under
Siemens and/or Company trade names and trade dress. The Company
agrees to Label such Products, provided that (a) the costs
incurred by Company for changes to Products and for altered
materials mandated by such Labeling shall be reimbursed to
Company by Siemens, and that (b) the Parties shall mutually agree
to any other relevant terms and conditions of such Label
services, including the procedure for reimbursement of costs
associated with Siemens' Labeling.
3.6.2 Company may, in good faith, order label special Siemens' label
materials in quantities in excess of Siemens' orders, based upon
Siemens' forecasts, and Siemens shall reimburse Company for all
such materials and reasonable inventory costs associated, if such
materials are not utilized in Products for Siemens by the end of
the Annual Delivery Period as established in Section 4.3.
3.7 PRIVATE LABELING, TRADEMARKS
3.7.1 On Siemens request, Products shall bear a Siemens trademark or
other identifying name, logo or symbol or other identifying name,
logo or symbol used by Company.
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3.7.2 Unless designated otherwise by Siemens from time to time, any
Product supplied by Company to Siemens:
(a) shall bear Siemens trade name or trade mark, logo as
supplied by Siemens to Company; and
(b) shall be appropriately marked with a bar-code as per
Attachment G.
3.7.3 Siemens hereby grants to Company a license to apply the Siemens
Labeling to Products solely manufactured for and solely supplied
to Siemens. Siemens may change any such Siemens Labeling by
giving written instructions to Company, such instruction to be
deemed to constitute a modification of the Product.
3.7.4 The Parties agree that Siemens shall own all elements of Siemens
Labeling. Company agrees not to use Siemens Labeling for any
purpose other than this Agreement, nor to manufacture or sell to
third parties any products incorporating or otherwise using
Siemens Labeling other than Products to be supplied to Siemens,
unless otherwise explicitly agreed by Siemens in writing.
3.7.5 Siemens represents and warrants that use of the Siemens Labeling
for the Products to be manufactured and supplied by Company
hereunder will not infringe any third party rights. Company shall
inform Siemens without undue delay if a third party brings a
claim alleging such infringement in connection with the Siemens
Labeling. Company shall not admit, acknowledge or settle any such
claim without the prior written consent of Siemens. It is
understood that upon notification of a claim, and to the extent
possible under applicable law, Siemens shall at its expense
assume direct defence against such claim. At Siemens 's request,
Siemens shall provide reasonable assistance to such defence, such
assistance being at Siemens' cost.
3.7.6 Provided Company has complied with the provisions of this
Section, Siemens shall indemnify and hold harmless Company from
and against any and all liabilities, costs, expenses, loss and
damages arising out of or relating to any claim by any third
party of any infringement due to the use by Company of the
Siemens Labeling for the Products supplied to Siemens.
3.8 CUSTOM SOFTWARE
Custom Software as used herein shall mean Software requested by Siemens
and
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developed exclusively by Company for Siemens. Siemens and Company shall
mutually agree on the process for contracting the development of Custom
Software, the level of compensation and the rights of the Parties to
such Custom Software prior to the commencement of such development work
by Company.
3.9 SUPPORT FOR PRODUCT ADAPTATION
Siemens offers to support the adaptation work necessary to meet the
Specification of the Product as set forth in Attachment A. Siemens shall
provide deliverables (referred to as "Siemens Deliverables") to Company
in order to allow Company to perform this adaptation work. Such Siemens
Deliverables shall mean the items and information as set forth in
Attachment H which Siemens shall provide to Company. This support will
be paid by the Company according to the prices in Attachment E. On
request the Parties shall mutually agree on the amount of support in
addition to that already specified in Attachment H is to be provided by
Siemens.
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ARTICLE IV
PRICES
4.0 PRODUCT AVAILABILITY FOR PURCHASE
Company agrees to have the Product and Related Materials available for
purchase and/or license, in the case of Software, by Siemens during the
Term of this Agreement at prices as set forth herein including the
appropriate packaging suitable for air-freight, sea-freight or whatever
way of transportation has been agreed upon by the Parties and with
delivery lead times reasonable with respect to similar Products of
Company. Company agrees that during the Term of this Agreement it shall,
if requested by Siemens and at Siemens expense as mutually agreed,
maintain in inventory units of Product available for delivery to Siemens
above and beyond that being manufactured in response to Siemens'
purchase orders and scheduled for delivery hereunder. Siemens may order
and take delivery of such inventory in the event Siemens requires
additional quantities for sale or shipment. In the event of anticipated
labor disturbances, shortages of materials, or other conditions or
events which could adversely interrupt deliveries by Company hereunder,
Company agrees to advise Siemens as soon as reasonably possible and at
Siemens' request, use commercially reasonable efforts to manufacture,
sell, and deliver to Siemens, in advance, quantities originally
scheduled for delivery during such period when such interruptions are
anticipated.
The site and facilities where Company shall manufacture the Product is
Company's facility in Moorpark, CA or at other sites of which Company
shall advise Siemens.
Upon advance notice, with the concurrence of the Company which will not
be unreasonably withheld, and subject to the Confidentiality provisions
contained herein, Siemens employees, agents or representatives may visit
Company's manufacturing premises during normal business hours to observe
Company's performance of its obligations under this Agreement.
4.1 PRICE WARRANTY
Subject to Section 4.2, during the Term of this Agreement, the terms,
conditions and prices for Products and Related Materials under which
Siemens may purchase the Product shall be no less favorable to Siemens
than those which Company provides to any other OEM purchasing the same
Product, or Product with similar functionality, in like quantities over
like time periods under like terms, conditions, delivery times. Company
agrees that the list prices established for the sale of the Product to
Siemens are reasonable with respect to similar Products of Company.
Company agrees to remain competitive compared to other suppliers of
products substantially similar to Contractual Products. The Parties
shall discuss at least
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every three (3) months pricing whereby due consideration shall be given
to changes in market.
4.2 PRICE LIST
The Company's Standard Price List and the Siemens Discounted Price List
for Product, Spares, and Special Products, during the Term of this
Agreement are specified in Attachment E and included appropriate
packaging suitable for air-freight, sea-freight or whatever way of
transportation has been agreed upon by the Parties. The prices contained
in the Siemens Discounted Price List in Attachment E shall not be
increased except as mutually agreed in writing by the Parties. Company
will notify Siemens prior to any changes in the Company's Standard Price
List. Whenever a change to the Company's Standard Price List results in
a price reduction, Company will update the Siemens Discounted Price List
to reflect such price reduction(s) in the Company's Standard Price List.
Products added to the Agreement for purchase or license shall be at
prices as mutually agreed at the time of adding to the price list.
On a case by case basis, Parties may agree on Non Standard Prices for
specific customer projects, based on a volume commitment by Siemens.
4.3 FORECAST
Siemens shall forecast its anticipated Product requirements during the
Term of this Agreement. An initial first year's forecast will be part of
this Agreement, as shown in Attachment F. The forecasts will be
scheduled according to the Siemens' fiscal year which is based on a 12
month period ending in September of each year. This period of time
constitutes the Annual Delivery Period.
Forecasted quantities and delivery dates are subject to change and do
not constitute a binding commitment to buy on the part of Siemens.
However, Siemens shall, on a on-going quarterly basis, update the one
year forecast using its commercially reasonable best effort to provide a
forecast of expected demand for the succeeding 12 month period. In
addition, Siemens can only increase or decrease the forecasted quantity
for the actual month by fifty percent (50%).
SIEMENS is obliged to provide Company with first forecast and details of
its first order requirements as detailed in TIME SCHEDULE / MILESTONE
PLAN as set forth in Attachment D.Such forecasts are for information and
planning purposes only. For each Annual Delivery Period, Siemens will
provide the Company with its forecast of purchases for that period. In
the event that Siemens' orders vary from Forecast, Company shall have
the right to reduce or increase forecast quantities and, as applicable,
Company shall use its commercially reasonable best efforts to accept all
orders and meet the agreed upon lead-times.
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4.4 DISCOUNTS
4.4.1 Subject to Section 4.2, Company agrees to sell Product to Siemens
at discounts from Company's Standard Price List. The Siemens
discounted price is as shown in the Siemens Discounted Price List
in Attachment E.
Spare part prices and discounts are specified in Attachment E.
4.4.2 Special Products prices will be individually quoted. Special
Products may be added to the Price List if mutually agreed to in
writing by both Parties.
4.4.3 All prices are quoted in U.S. dollars and are F.O.B. Company
factory Simi Valley, including the appropriate packaging suitable
for air-freight, sea-freight or whatever way of transportation
has been agreed upon by the Parties and do not include, sales or
other taxes, import duties, shipping or insurance charges. Such
additional charges shall be separately stated on the applicable
invoice and paid by Siemens.
4.5 PURCHASE COMMITMENT
Siemens will place an order for 50 units of Product to meet
Siemens' estimation of its requirements for training, demo and
beta testing.
These Products will be purchased with a special discount for
non-revenue producing Product as established in Attachment E.
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ARTICLE V
PURCHASING TERMS AND CONDITIONS
5.0 ORDER SERVICING
The signing of this Agreement shall not be construed as an obligation by
Siemens to purchase Products. Siemens in its sole discretion may
purchase Product, Special Products, and Spares by issuing written
purchase orders to Company. Acceptance by Company of Siemens order under
the terms and conditions of this Agreement shall be indicated by written
acceptance. Company agrees to acknowledge all purchase orders within two
(2) business days and to accept all valid purchase orders within five
(5) business days.
So long as the original order complies with the Agreement, the Company
must accept the order and deliver the Product.
An order shall be deemed accepted unless rejected by Company within ten
(10) business days after receipt thereof. In case of rejection, Company
shall detail the reasons therefore, and if rejection is justified, the
Parties shall negotiate in good faith an alternative procedure. If
rejection is not justified, Siemens, at its option and in furtherance of
any other right under this Agreement or applicable law, may cancel the
respective order without incurring any liability.
Any additional or different terms or conditions expressed by Siemens or
Company in an order or acknowledgment shall be void unless expressly
agreed to in writing by the other party.
5.1 CHANGE ORDER
Subject to Section 5.2.4, Siemens shall have the right, by written
change order, to make changes in any one or more of the following: (a)
quantity of goods to be delivered; (b) method of shipping or packing;
(c) place of delivery; and (d) delivery schedules. In addition, if any
such change order causes an increase or decrease in the cost or the time
required for performance of the work under the order, an equitable
adjustment shall be made in price and/or delivery schedule, and the
order shall be modified accordingly.
Orders may not be cancelled after shipment. Once accepted, Company shall
not change an order without written approval by Siemens.
5.2 DELIVERY TERMS
5.2.1 Each delivery shall be accompanied by appropriate shipping
papers. All shipping documents and/or invoices must include the
order number and the identification numbers of the shipped
Products. In addition, Company
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agrees to send a land of origin certification with every
delivery for those Products that do not originate from within
the European Community.
5.2.2 Company shall make direct deliveries of Product to customers of
Siemens and Siemens' sales channels only upon prior written
instruction by Siemens.
5.2.3 Company shall provide to Siemens all appropriate dispatch data
(flight number, airway bill number, container number, container
contents) for all deliveries and shall notify Siemens by telefax
or E-mail prior to shipment.
5.2.4 Siemens may from time to time indicate to Company specific
carriers or means of transportation or routing, and Company shall
comply with such directions. If Siemens fails to indicate a
specific carrier, Company shall arrange appropriate
transportation.
5.3 SCHEDULE COMMITMENTS
5.3.1 The requested delivery dates applicable to each order will be set
forth in such order. Delivery dates will be confirmed by
Company's acknowledgement. Company agrees not to ship Product
prior to the agreed upon delivery date without Siemens' prior
written authorization. Delivery times for complete units of
Products shall be forty-five (45) calendar days after receipt of
order by Company unless an another period of time has been agreed
upon in writing.
5.3.2 Subject to the provisions contained in the Sections 4.3 FORECAST
and 15.14 CONTINGENCY, in the event Company exceeds the agreed
upon delivery date Siemens shall be entitled to payment by
Company of liqidated damages for such delay amounting to five
percent (5%) of the net selling price of the delayed item for
each week of delay beyond the agreed delivery date, such
liquidated damages not to exceed ten percent (10%) of the net
selling price of the delayed item. The payment of liquidated
damages shall not relieve Company from its obligation to deliver
Products or from any other obligation.
5.3.3 If an order is delayed pursuant to the above, Siemens shall have
the right to retain or return any or all Product received by or
paid for under such order. Company shall reimburse Siemens the
costs of shipping the Product returned and amounts, if any,
previously paid by Siemens for the Product; provided, however,
if such order is part of a blanket purchase order, Siemens shall
not have the right to return any Products previously delivered
in connection with any prior scheduled shipments delivered under
such blanket purchase order. Siemens shall pay for any Product
retained at the prices set forth in Attachment E, if applicable,
and quantity
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discounts, if any, shall be applied on the basis of the quantity
specified in the order.
Upon giving Company prior written notice at least fourty-five
(45) calendar days to the Delivery Date, Siemens may, at no cost
to Siemens, reschedule a Delivery Date with respect to the whole
or part of any delivery for up to ninety (90) days on the
following basis:
<TABLE>
<CAPTION>
DAYS PRIOR TO SCHEDULED DELIVERY CANCELLATION CHARGE
-------------------------------- -------------------
<S> <C> <C>
Less than 45 days Siemens Commits to Purchases
More than 60 Days None
Siemens shall not reschedule any purchase order more than once.
</TABLE>
5.4 PACKING
5.4.1 Company shall, at no charge, unless specified elsewhere in this
Agreement, package and pack Product in a manner which will
provide reasonable protection against damage (including static)
during shipment, handling and storage in reasonably dry unheated
quarters with temperatures and humidity levels within -30 to +65
degrees Celsius, and up to 95% relative humidity, respectively.
Corrugated shipping containers shall comply with requirements of
Rule 41 of the Uniform Freight Classification. Containers of any
type that are too heavy or too large to be palletized shall be
skidded to facilitate fork truck and/or mechanical handling.
5.4.2 Company shall mark all such packaging for identification purposes
in accordance with ARTICLE XII, COMPLIANCE. Company shall mark
Products in conformance with Company's published documentation.
Items which are intended to be field replaceable by Siemens shall
be serialized for tracking and control purposes. Serial numbers
shall be located to allow easy capture by craftspersons, without
the necessity of disassembly of the field replaceable item and/or
interruption of service to Siemens' Customers.
5.5 RECEIVING AND INSPECTION
5.5.1 There shall be no partial shipments unless authorized by Siemens
in writing. Company shall be responsible for Siemens' reasonable
direct out of pocket costs actually incurred as a result of any
unauthorized partial shipments. Siemens reserves the right to
make final inspection of Product, Spares, and Special Products
up to thirty (30) days after receipt by Siemens. After such
time, such Products, Spares and Special Products
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<PAGE> 23
will be deemed accepted by Siemens and Siemens' sole recourse
shall be limited to its warranty hereunder.
5.5.2 Siemens may, upon inspection, notify Company of any defect,
deficiency, or default and reject such goods. Goods so rejected
may be returned to Company under warranty and unless promptly
replaced may subject the Company to cancellation of the order.
All defective Product returned under warranty will be at
Company's expense.
5.5.3 Goods shipped in advance of delivery schedule or unauthorized
partial shipments, other than as provided for herein, may be
rejected or returned to Company at Company's expense.
5.5.4 Siemens shall be entitled to audit Company's quality and
inspection system, or all other related departments of Company,
at any time during normal business hours, either at Company's
manufacturing facilities or at the storage facilities of Company.
Upon respective request by Siemens, time and place of such review
will be agreed upon between the Parties reasonably in advance.
Upon Company's request, Siemens shall agree to be bound by
reasonable non-disclosure obligations in connection with such
observation and inspection.
Further details regarding quality are as set forth in Attachment
C.
5.5.5 If during the manufacturing process or otherwise prior to
delivery of Products to Siemens Company finds material deviations
from the requirements specified in Attachment C or less technical
reliability of the Products, Company shall immediately inform
Siemens hereof and take corrective actions such as improved
production methods, materials, parts, test procedures, test
facilities, etc. to ensure permanent remedies.
5.6 TITLE AND RISK OF LOSS
5.6.1 Unless otherwise specified herein, title to Products, shall pass
to Siemens with delivery of the Products to the destination point
specified under Section 4.4.3.
5.7 MARKETING RIGHTS, LICENCES
5.7.1 Siemens shall have the right, indirectly or directly, to use,
sell, lease, market, distribute or otherwise dispose of the
Products on a non-exclusive basis world-wide. Siemens shall be
entitled to exercise such rights at its sole discretion. In
particular, Siemens
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<PAGE> 24
(a) shall be entitled to have executed its rights via any of
its Subsidiaries or other sales channels (e.g.
distributors, agents);
(b) shall be free to establish its own price policy and
prices;
(c) shall be free to market the Products under any trade name
or trade mark it may choose, in particular Siemens' own
name, logo, trade mark, brand and serial numbers or the
like;
(d) shall be free to market Products as separate units or
integrated as part of a system solution.
5.7.2 For the purposes as set forth above, Company hereby grants to
Siemens the non-exclusive, non-transferable, world-wide and
perpetual licenses
(a) to use the Software free of charge in connection with
Products;
(b) to maintain the Software free of charge in connection with
Products;
(c) to sublicense the Software rights as per (a) to Siemens'
Subsidiaries and its other sales channels and to the
-Customers of Products;
(d) to allow Siemens' Subsidiaries and its other sales
channels the right to sublicense the Software rights as
per (a) above to their Customers of Products;
(e) to copy or have copied the Software for archive or
maintenance purposes only. Software may not be modified,
de-compiled, disassembled or reverse engineered, except in
accordance with the term and conditions in Section 14 -
EMERGENCY MANUFACTURING RIGHTS. Any such reproduction or
copies shall include any copyright, similar proprietary
notice or other notices of Company contained in the items
being reproduced.
5.7.3 The ownership in the Software shall remain with Company or
Company's licensors. All Software shipped by Siemens to its
customers shall include all copyrights, similar proprietary
notice or other notices of Company including license
restrictions.
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<PAGE> 25
ARTICLE VI
SALES SUPPORT
6.0 Upon Siemens request Company will offer to Siemens additional
sales support including local presence on request at the prices
listed in Attachment E. Realisation of such support will be
guaranteed by Company within three (3) business days at the
latest. In addition, Company will elaborate on compliance
statements for Siemens projects
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ARTICLE VII
PAYMENT
7.1 PAYMENT TERMS
7.1.1 Unless otherwise agreed to in writing by the Parties, the terms
for all orders shall be net forty-five (45) days after receipt of
invoice, provided, however, that payment shall not constitute
acceptance of the goods or impair Siemens right of inspection.
7.1.2 Siemens will not accept invoices for partial shipments unless
Siemens provided prior written approval to the Company.
7.2 INVOICING
7.2.1 All applicable Federal, State, and local taxes shall be stated
separately on Company invoice and paid by Siemens.
7.2.2 Company shall render its invoice within two (2) business days of
shipment.
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ARTICLE VIII
WARRANTY
8.1 WARRANTY
8.1.1 Company represents and warrants that the hardware of the
Products shall be newly manufactured solely from new parts,
shall materially comply with and perform in accordance with all
requirements and Specifications and Documentation as set forth
herein, and shall be free from material defects in design,
material and workmanship.
8.1.2 The warranty period shall last fifteen (15) months from the date
of retail sale by Siemens, Siemens' Subsidiaries or other sales
channels of Product to its end-customers but shall not exceed
eighteen (18) months from date of Company's delivery of the
Product to Siemens. Products shall be free from defects in
material and workmanship and shall in all respects conform in all
material respects to their final published Specifications,
including any modification thereof mutually agreed upon in
writing, included in Attachment C.
8.1.3 If any Product supplied by Company hereunder fails to conform to
this warranty, Company shall, at its option and sole cost and
expense, either repair or replace the same. This warranty is made
upon the express condition that:
(a) Company is given prompt written notice upon discovery of
any non-conformity, with explanation of the alleged
deficiencies;
(b) Siemens first secures a return material authorization
(RMA) and such Product is returned to Company's
manufacturing facilities, shipping prepaid, except as
otherwise agreed;
(c) The Product has not been altered, modified or changed in
any other manner than has been previously authorized in
writing by Company nor has Product been subject to misuse
or damage due to improper handling and/or operation;
(d) Repairs to the Product have not been made by anyone other
than Company, or at Company's authorized service facility;
and
(e) The Product was properly installed and maintained.
8.1.4 Company will repair or replace the hardware at Company's expense,
FOB Company Factory, Simi Valley, California within five (5)
business days of Company's receipt of the returned Productor will
supply replacement
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<PAGE> 28
Products to Siemens at Company's expense. For Software, Company
and Siemenswill enter into good faith negotiations for a separate
maintenance and support agreement that will also include warranty
repair of software. The Parties intend to complete and execute
this maintenance and support agreement by June 30, 2000. Prior to
completion of this separate maintenance and support agreement
Company will support warranty repair of the software based upon
the then current Company Warranty Repair Standards.
8.1.5 Upon occurrence of an Epidemic Failure, in order to ensure future
compliance of the respective Product with the requirements as set
forth herein, Company shall promptly analyse the cause of
nonconformity and submit a proposal satisfactory to Siemens how
to address and avoid the problem. Upon Siemens' approval, without
undue delay and at no cost to Siemens Company shall implement its
proposal.
8.1.6 No term, condition, understanding, or agreement purporting to
modify the terms of this warranty shall have any legal effect
unless made in writing and signed by authorized representatives
of both Parties.
8.1.7 Company shall make available, upon request by Siemens Quality
Assurance Department, repair data on defective Product returned
by Siemens for repair. Company shall maintain this data as a
repair history for a minimum of one (1) year.
8.2 YEAR 2000 COMPLIANCE WARRANTY
Company represents and warrants (the "Year 2000 Warranty") that (a) all
Calendar-Related processing by the Products and Special Products of Date
Data or of any System Date will not cause the Products to cease to
operate substantially in accordance with their Specifications, (b) all
data fields for the Date Data contained in the Products and Special
Products are four-digit fields capable of indicating century and
millennium, and (c) that Company has verified through its testing
procedures that no change in the System Date (including the change from
the year 1999 to the year 2000) will cause the Products or the Special
Products to cease to operate substantially in accordance with their
Specifications. Notwithstanding any provision to the contrary set forth
in this Agreement, Company makes no representation or warranty with
respect to the Products or Special Products operating in conjunction
with any computer software, computer firmware, computer hardware, or any
combination of the foregoing supplied by third parties. As used in this
Section 8.3, the following terms shall have the meanings set forth
below:
"Calendar-Related" refers to date values based on the Gregorian
calendar as defined in Encyclopedia Britannica, 15th edition,
1982, page 602, and to all uses of those date values described in
the Product Specifications.
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"Date Data" means any Calendar-Related data in the inclusive
range January 1, 1900 through December 31, 2050 that the Products
or Special Products use in any manner.
"System Date" means any Calendar-Related date value in the
inclusive range from January 1, 1985 through December 31, 2035
(including the transition between such values) that the Products
or Special Products will be able to use as their current date
while operating.
In the event that a Product or Special Product fails to comply with the
warranty provided in this Section 8.3 in any material respect, Company
shall use commercially reasonable efforts to modify or replace such
Product or Special Product, or applicable component thereof, to correct
such non-compliance. If Company is unable, through the use of
commercially reasonable efforts, to modify or replace the Product or
Special Product to correct the noncompliance, Company shall refund to
Siemens the price paid by Siemens for such non-compliant Product or
Special Product and Siemens may at its option cancel any purchase orders
for such Products without incurring any liability for such cancellation.
The remedy set forth in this Section 8.3 shall be Siemens' sole remedy
for breach of the Year 2000 Warranty.
Company also warrants and represents that it has assessed or is
currently assessing Year 2000 compliance issues as it relates to its
business operations; that it is actively resolving any internal Year
2000 non-compliance relating to its operations. Such compliance
includes, but is not limited to, systems critical to the procurement of
raw materials and components and/or the manufacture and shipment of
Products to Siemens; provided, such compliance does not include any
obligation to ensure that any third party's systems are Year 2000
compliant.
8.3 WARRANTY EXCLUSIONS
THE WARRANTY PROVIDED IN ARTICLE VII EXCLUDES ALL OTHER WARRANTIES,
WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, INCLUDING, WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY AND/OR FITNESS FOR A
PARTICULAR PURPOSE. COMPANY WILL NOT, IN ANY EVENT BE LIABLE FOR
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS OR
LOSS OF DATA OF ANY KIND OR TYPEOF SIEMENS ARISING FROM BREACH OF
WARRANTY.
SIEMENS' SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF THE FOREGOING
WARRANTY SHALL BE REPAIR AND/OR REPLACEMENT OF NON-CONFORMING UNITS OF
THE PRODUCTS FOR WHICH FULL DOCUMENTATION AND PROOF OF NON-CONFORMITY IS
PROVIDED TO COMPANY; PROVIDED, IN THE EVENT PRODUCTS COVERED BY WARRANTY
(INCLUDING EXTENDED WARRANTIES PURCHASED BY
29
<PAGE> 30
SIEMENS) EXPERIENCE AN EPIDEMIC FAILURE COMPANY SHALL REMEDY THIS AS PER
SECTION 8.1.5 OF THIS AGREEMENT.
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ARTICLE IX
REPAIR SERVICE
9.0 REPAIRS NOT COVERED UNDER WARRANTY
The Parties are currently negotiating a separate set of terms and
conditions of out-of-warranty services, emergency replacement services
and ongoing support.
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ARTICLE X
TRAINING
10.1 TRAINING
10.1.1 Company shall offer to Siemens, at the prices listed in
Attachment E, instructors and necessary instructional materials
of Company's standard format to train Siemens personnel in the
planning, configuring, installation, operation, and maintenance
of Product. Such training shall, at Siemens' option, be held at
Company's location or at Siemens' location. When such training is
held at Siemens' location, Siemens shall provide adequate
training facilities. However, Company agrees to provide at
Company's facility at no charge to Siemens a one-time training
program for up to 6 Siemens' employees for purposes of initial
technical support readiness and train-the-trainer readiness.
10.1.2 At the option of Siemens, Company shall at prices mutually agreed
to, provide Siemens with training materials, student manuals,
instructors' manuals, and any necessary assistance, covering
those areas of Siemens interests , sufficient in detail, format
and quantity to allow Siemens to develop and conduct a training
program.
10.1.3 Siemens shall be provided, at Siemens' cost, with updated
training materials to reflect any changes, modifications, and
enhancements to the Product. Training materials, courses, or
bulletins will be provided by Company, as deemed necessary by
Siemens, anytime significant changes to Product are made.
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ARTICLE XI
DOCUMENTATION
11.0 SPECIFICATIONS OR DRAWINGS
Specifications shall cover the Products provided hereunder and are
attached hereto as Attachment C..
11.1 DOCUMENTATION
11.1.1 Company agrees to furnish and convey to Siemens, in English, at
no charge, one (1) complete set of Product documentation as is
normally provided with the Product, and any succeeding changes
hereto, as described in the Section 3.5 PRODUCT CHANGES. A list
of such Product documentation is contained in Attachment B. Such
Product documentation shall include the right to reproduce such
Product documentation for use hereunder.
With each shipment by Company to Siemens, Company shall include
without charge one (1) copy of documentation for each Product
shipped.
11.1.2 Company further agrees to furnish documentation in an electronic
format conforming to one of the following specifications:
(a) Master Documentation Set on diskette or CD-ROM saved in
HTML (Hyper Text Markup Language) OR
(b) Master Documentation Set on diskette or CD-ROM saved in
SGML (Standard Generalized Markup Language), along with
Document Type Definitions (DTDs). Company will be charged
a fee by Siemens for converting the documentation to a
format compatible with our Customers' browsers (HTML) OR
(c) Company may provide Siemens with Uniform Resource Locator
(URL) to their electronic documentation on the World Wide
Web. OR
(d) Master Documentation Set on diskette or CD-ROM saved in a
current version of a commonly used word processing package
or in American Standard Code for Information Interchange
(ASCII). Company will be charged a fee by Siemens for
converting the documentation to a format compatible with
our Customers' browsers (HTML).
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11.1.3 Company must notify Siemens in writing of all updates to
documentation. Notification will be sent to Siemens AG, ICN WN AN
PLM P Heinrich Sailer, Hofmannstrasse 51, D-81359 Munich. This
notification will include the new issue number, date of change,
and reason for change. Siemens is responsible for notifying its
end-user Customers .
11.2 USE OF INFORMATION
All specifications, drawings, sketches, models, samples, tools, computer
programs, technical information, confidential business information or
data, written, oral or otherwise (all herein designated "Information")
obtained by either Party hereunder or in contemplation hereof shall remain
the property of the disclosing Party. Unless required to support the
existing Customer base, all copies of such Information in written, graphic
or other tangible form shall be returned to its owner upon request. Unless
such Information was previously known to be free of any obligation to keep
it confidential or has been or is subsequently made public by its owner or
a third party pursuant to Article II CONFIDENTIALITY PROVISIONS, it shall
be kept confidential, shall be used only in the filling of orders, or in
performing otherwise hereunder, and may be used for other purposes only
upon such terms as may be agreed upon in writing by both Parties.
11.3 REPRODUCTION OF DOCUMENTATION
Siemens may, in either electronic or paper media, do the following:
reproduce, prepare derivatives and distribute copies of documentation
supplied by Company under this Agreement for the purpose of allowing
Siemens and its Customer to market, use and maintain the Products supplied
by Company under this Agreement. All copies, so produced shall contain all
copyright and/or other proprietary notice contained in the original
Company supplied documentation. Siemens shall ensure that all such
derivatives and copies are accurate and shall be solely responsible for
any errors with respect thereto. Siemens shall indemnify Company for any
liability arising from such reproduction, preparation and distribution of
any such defective derivative or copied materials.
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ARTICLE XII
COMPLIANCE
12.0 COMPLIANCE
Company warrants that the Products shall comply with of all applicable
laws, requirements and regulations of the relevant PTT, security
authorities, government bodies, environmental standards, consumer
protection and safety laws in existence at the time of delivery of the
respective Product unit to Siemens as well as all laws, regulations,
standards and the like as listed in detail in Attachment I
[Environmental Regulations]. At Siemens' request, Company shall certify
compliance with such laws, regulations and standards.
Company agrees to comply with any and all laws, rules and regulations
governing design, manufacture, and testing of Product delivered to
Siemens.
Company shall be responsible to obtain and provide all conformity
certifications and type approvals required, if any, to sell, use, market
and otherwise dispose of Products. The Products delivered by Company
shall comply with the requirements of the Approval Authorities in the
country versions of Product as specified in Attachment A. Approval
Authority shall mean any body or bodies having responsibility for
approving the Products for connection to communications networks.
In the event that any of the approvals referred to herein have not been
obtained by thirty (30) days prior to serial delivery, Company agrees to
use its best efforts to obtain said approvals at the earliest possible
date.
Upon Siemens' request, Company shall modify the Products to become
compliant with applicable laws and regulations, governmental regulation,
environmental standards, consumer protection and safety laws of and also
with the requirements of the Approval Authorities in other countries
identified by Siemens. The details of such modifications will be agreed
between the Parties on a case by case basis.
Company agrees to provide a copy of all test results to Siemens upon
completion of the testing.
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ARTICLE XIII
TERM AND TERMINATION
13.0 TERM OF AGREEMENT
This Agreement shall enter into force on the 1st day of May 2000 having
been signed by both Parties and shall remain in effect for a period of two
(2) year(s). Thereafter the term of this Agreement shall be automatically
extended from year to year, unless terminated by either Party with six (6)
months prior written notice to a regular termination date. Expiration or
termination of this Agreement shall be without prejudice to any rights or
claims of either Party against the other and shall not relieve either
Party of any obligations which, by their nature, survive expiration or
termination of this Agreement."
13.1 TERMINATION OF AGREEMENT
13.1.1 Notwithstanding the provisions of Section 13.0 or any provision
limiting the remedy of a Party, if either Party hereto shall fail
to adequately perform or observe any of the material terms and
conditions to be performed or observed by it under this
Agreement, the other Party shall give written notice to the
defaulting Party specifying the respects in which the defaulting
Party has so failed to perform or observe the terms and
conditions of this Agreement, and in the event that any defaults
so indicated shall not be remedied by the defaulting Party within
thirty (30) days after such notice, the Party not in default may,
by written notice to the defaulting Party terminate this
Agreement or any outstanding order hereunder effective upon the
defaulting Party's receipt of such notice of termination. Failure
of either Party to so terminate this Agreement due to a breach on
the part of the other Party shall not prejudice its rights to
terminate for a subsequent breach on the part of the defaulting
Party..
13.1.2 In the event that Company shall (i) cease conducting business in
the normal course, (ii) become insolvent, (iii) make a general
assignment for the benefit of creditors, (iv) suffer or permit
the appointment of a receiver for its business or substantially
all of its assets, (v) avail itself or becomes subject to any
proceeding under the Federal Bankruptcy Act or any other statute
of any state relating to insolvency or the protection of rights
of creditors which proceeding is not dismissed within (120) one
hundred twenty days, or (vi) merges with a third party, or has
all or substantially all of its assets acquired by a third party,
or the majority of Company's share capital is acquired by a third
party, or a third party in any other way gains a direct or
indirect controlling interest in the Company, provided always
that any such third party is in the distribution and sale of
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<PAGE> 37
telecommunication products that are competitive with Siemens'
products and such event materially and substantially prevents
Company from carrying out its obligations hereunder, then Siemens
may, at its sole option and subject to the provisions of this
Agreement, terminate this Agreement for cause.
13.1.3 The provisions of Article II sections 2.1, 2.3, 3.7, Article VII,
Article VIII, , 11.2, Article XII excluding paragraph 5, 13.0,
Article XIV, 15.2, 15.3, 15.4, 15.5, 15.6, 15.9, 15.10, 15.11,
15.16, 15.17 which by their nature are intended to survive
expiration or termination of this Agreement, shall survive
expiration or termination of this Agreement for any reason. All
other rights and obligations shall cease upon termination of this
Agreement.
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ARTICLE XIV
14.0 EMERGENCY MANUFACTURING RIGHTS / ESROW AGREEMENT
14.1 EMERGENCY MANUFACTURING
14.1.1 Company hereby agrees to grant to Siemens a world-wide, perpetual,
non-exclusive, non-transferable, right to use, copy, market,
distribute, sublicense, modify, translate or otherwise dispose of
and/or have used, copied, marketed, distributed, sublicensed,
modified, translated or disposed of by Siemens or Siemens'
Subsidiaries and its other sales channels and to the
end-user-Customers of Products at no additional cost the Software
and/or any modification and/or any portion thereof in its Object
Code form, if one or more of the following conditions are
fulfilled:
(a) in case of any event which entitles Siemens to terminate
this Agreement prematurely according to Section 13.1.2
subparagraphs (i) through (v);
(b) in case Company notifies Siemens in writing of its
intention to cease to maintain and support the software,
or if no notice from Company is received by Siemens after
Company has received a thirty (30) day written notice from
Siemens to continue to maintain and support the software
and Company has refused or failed to do so within this
thirty (30) day timeframe.
14.2 ESCROW AGREEMENT
14.1.2 To ensure that SIEMENS may utilise its Emergency Manufacturing
Rights, Company shall upon request by Siemens at any time place in
escrow, in a manner reasonably acceptable to both Parties,
licensed Software from Company, including escrow instructions that
Siemens shall be entitled to use said Source Code / Object Code
(where applicable formatted and in commented C-Program source
language) only in case it confirms in writing to the Escrow agent
that it is entitled to exercise its Emergency Manufacturing Rights
as per Section 14.1. Company agrees to place a copy of the Source
Code /Object Code into escrow with a mutually agreed Escrow
Holder. If there is more than one Software program, Company may,
at its option, establish separate escrow accounts for each
Software's Source Code / Object Code. Company shall ensure that
the copy of the Source Code / Object Code that is deposited in
Escrow at any
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given time is the latest generally released version. Any Escrow
Account and costs associated therewith will be paid by Siemens.
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ARTICLE XV
GENERAL PROVISIONS
15.0 PERFORMANCE
Company and Siemens mutually agree to establish regular meetings to assess
performance under the Agreement and to mutually resolve issues or problems
that might arise. These meetings should be conducted quarterly and
whenever required.
15.1 TRANSFERABILITY
This Agreement shall be binding upon and shall inure to the benefit of any
corporation, or other legal entity with which Company or Siemens may be
merged or consolidated, or the successors to or assignee of the total
assets of either of them which relate to this Agreement.
Except as provided in the preceding paragraph, neither party may sell,
assign, transfer, delegate, or subcontract this contract or any rights or
obligations hereunder, in whole or in part, without the prior written
consent of the other party, which consent shall not be unreasonably
withheld.
15.2 DISCLAIMER OF AGENCY
This Agreement shall not constitute either Party the employee, legal
representation or agent of the other Party, nor shall either Party have
the right or authority to assume, create, or incur any liability or any
obligation of any kind, expressed or implied against, or in the name of or
on behalf of the other Party.
If Siemens is approached by any third party, not a Customer of Siemens,
with respect to any and all matters regarding Company's Products,
warranties, or terms and conditions of sale, Siemens will refer the third
party to the Company.
15.3 PUBLICITY
The parties will, upon completion of the Agreement and at appropriate
stages during its term agree upon joint press releases to be made to the
industry and general press.
Each Party shall use its commercially reasonable best efforts not to
disclose to any third party during the Term of this Agreement, the terms
and conditions of this Agreement, except as may be required by law, or by
governmental regulation, requirements or orders or as may be necessary to
establish or assert its right hereunder.
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15.4 NOTICES
Any and all written notices, communications and deliveries between Company
and Siemens with respect to this Agreement shall be effective on the date
of mailing if (I) sent registered or certified mail; (ii) if sent by
mutually recognized overnight courier to the respective address, subject
to change upon written notice, of the other Party as follows:
In the case of Siemens commercial, contractual and technical matters:
Siemens AG
Hofmannstrasse 51
D-81359 Munchen
Attention: Andrew Copland-Cale - ICN EK 1
Heinrich Sailer - ICN WN AN PLM P
In the case of Siemens deliveries:
Siemens AG
Brandteichstra(beta)e 25
D-17489 Greifswald
Attention: Director of Purchasing
In the case of Company:
Accelerated Networks, Inc.
301 Science Drive
Moorpark, CA 93021
Attention: Ron Hughes, Director of Contracts
with a copy to:
Brobeck, Phleger & Harrison LLP
38 Technology Drive
Irvine, CA 92618
Attention: Kevin DeBre
15.5 GOVERNING LAW
All disputes shall be settled in accordance with the provisions of this
Agreement, otherwise in accordance with the substantive law in force in
London, United Kingdomwithout reference to other laws. The application
of the United Nations Convention on Contracts for the International Sale
of Goods of April 11, 1980 shall be excluded.
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15.6 ARBITRATION
All disputes arising out of or in connection with the Agreement,
including any question regarding its existence, validity or termination,
shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce, Paris, ("Rules") by three arbitrators
in accordance with said Rules.
The seat of arbitration shall be London, United Kingdom. The procedural
law of this seat shall apply where the Rules are silent.
The language to be used in the arbitration proceeding shall be English.
Notwithstanding the foregoing, in the event of a threat of immediate,
irreparable harm, either may seek interlocatory injunction relief,
provided that the results of such relief may be changed by the
Arbitration procedure.
15.7 NON-WAIVER
No delay or failure to exercise any right or remedy or enforce any
provision of this Agreement shall operate as a waiver thereof. The
waiver of one breach or default hereunder shall not constitute the
waiver of any other or subsequent breach or default.
15.8 EXECUTION OF FURTHER DOCUMENTS
The Parties agree to execute, acknowledge, and deliver all such further
instruments, and do all such other acts, as may be necessary or
appropriate in order to carry out the intents and purposes of this
Agreement or perfect or protect any right or license granted under this
Agreement.
The Parties agree Attachment C is a preliminary Specification
document that will be modified by mutual agreement to the final
Specification. The Parties will both execute that final document and
incorporate it by reference into this Agreement replacing the
preliminary Specification that is Attachment C. The final Specification
will be completed and incorporated pursuant to the time line identified
in Attachment D. If the Parties are unable to mutually agree they will
resolve the dispute using Section 15.6 Arbitration provisions.
From time to time the Parties may add additional Product
Specifications to Attachment C during the term of this Agreement. In
that event the Parties will execute the final version of each new
Product Specification and incorporate it by reference into this
Agreement as an added Attachment C.
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15.9 OTHER REMEDIES
Any and all provisions for remedies agreed to in any specific provisions
or instances in this Agreement are not intended as exclusive remedies,
and each Party may pursue, in addition thereto, any remedies it may have
at law, or otherwise, or take such other action as it may determine.
15.10 EFFECT OF HEADINGS
The Article, Section, Paragraph, and Attachment headings appearing in
this Agreement are inserted only as a matter of convenience and in no
way define, limit, construe or describe the scope or intent of such
Article, Section, Paragraph, or Attachment nor in any way affect this
Agreement.
15.11 INTELLECTUAL PROPERTY
15.11.1 Company warrants that to the best of their knowledge in all
respects, other than those pertaining to the Siemens Labeling,
the Products shall not infringe upon nor violate any patent,
copyright, trade secret, mask work or any other proprietary or
protective right of any third party.
15.11.2 Siemens shall inform Company without undue delay if a third
party brings a claim alleging such infringement of such third
party's intellectual property rights by the Product supplied
by Company hereunder ("Claim").
15.11.3 Siemens shall not admit, acknowledge or settle any such Claim
without the prior written consent of Company.
15.11.4 It is understood that upon notification of a Claim, and to the
extent possible under applicable law, Company shall at its
expense assume direct defense against such Claim and Company
shall have sole control of the investigation, defense and
settlement of such Claim. At Company's request, Siemens shall
provide reasonable assistance to such defense, such assistance
being at Company's cost. At all times Company shall keep
Siemens informed about the status of the defense.
15.11.5 After notification of a Claim and at Siemens discretion,
Company may , at its cost and expense, either
(a) to procure from the third party entitled to dispose
of the respective proprietary or protective right the
right of use (license) required for the purposes of
this Agreement; or
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(b) to replace or modify such infringing Products or
parts thereof by non-infringing ones complying with
the Specifications; or
(c) if (a) and (b) are not economically feasible, to
accept return of affected Products, and to grant
Siemens a refund thereon.
15.11.6 Provided Siemens has complied with the provisions of this
Article, Company shall indemnify, defend, protect and hold
harmless Siemens, its Subsidiaries and other sales channels as
well as end-customers from and against any claim, liability,
damages, costs or expenses arising from, resulting out of or
in connection with such Claim.
15.11.7 Company will have no liability in case of the infringement of
a proprietary or protective right which results from
modifications made by Siemens to Products after delivery by
Company or from the combination of Products with other
products, unless such modification or combination is
contemplated by the Parties or has otherwise been authorised
by Company.
15.12 PRODUCT LIABILITY
Company shall indemnify and defend, protect and hold harmless Siemens,
its Subsidiaries and other sales channels from and against any third
party claim whatsoever (including, but not limited to related costs or
expenses) arising from or in connection with product liability
resulting from Products excluding, however, liability which results
from modifications made by Siemens to Products after delivery by
Company or from the combination of Products with other products, unless
such modification or combination is contemplated by the Parties or has
otherwise been authorised by Company. Sections 15.11.2 and 15.11.4 of
this Agreement shall apply mutatis mutandis.
15.13 MARKINGS
Company shall mark all Products furnished hereunder for identification
purposes as follows:
(a) Model/part number and serial number, if applicable
(a) Month and year of manufacture
(b) Bar-coding as per Attachment G
(c) Other identification which may be mutually agreed to by Parties
In addition, Siemens may provide Company with its own codes which
Company shall attach to the Products pursuant to Siemens' instructions.
15.14 CONTINGENCY
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Neither of the Parties shall be held responsible for any delay or
failure in performance hereunder caused by fires, strikes, embargoes,
requirements imposed by Government regulations, civil or military
authorities, act of God or by the public enemy or other similar causes
beyond such Party's control. However, Company's delay or failure to
perform shall not be excused by a default of any of its subcontractors
or suppliers unless such default arises out of causes reasonably beyond
the control of the Company. If such contingency occurs, the party
injured by the other's inability to perform may by giving written
notice elect to: (a) terminate a particular order or part thereof if
the contingency continues for a period of more than thirty (30) days as
to Product not already received; (b) suspend a particular order for the
duration of the delaying cause, buy or sell elsewhere Product to be
bought or sold hereunder, and deduct from any commitments the quantity
bought or sold or for which commitments have been made elsewhere; or
(c) resume performance under a particular order once the delaying cause
ceases with an option in the injured party to extend the period
hereunder up to the length of time the contingency endured. Unless
written notice is given within thirty (30) days after such injured
party is apprised of the contingency, (b) shall be deemed selected.
15.15 DEVELOPMENTS BY SIEMENS
Nothing contained in this Agreement shall prevent Siemens from
independently developing, either through the use of its own personnel
or through third parties, or acquiring from third parties, product
similar to Product or other types of product. No such product shall be
developed by Siemens using Company's Proprietary Information. Nothing
herein shall be construed to grant Company any rights in any such
similar product so developed or acquired or to the revenues or any
portion thereof derived by Siemens from the use, sale, lease, license
or other disposal of any such product. In such an event that a similar
product is developed by SIEMENS or an affiliated, SIEMENS agrees to
inform Company six (6) months prior to first shipment of such product
by Siemens to any Customer.
15.16 VALIDITY
In the event any provisions of this Agreement shall be deemed invalid
by any court of law, the invalidity of that provision shall not affect
the remaining portions of this Agreement and any ambiguity which arises
by reason of such invalidity shall be construed in accordance with the
overall intent of the Parties as exhibited by the remaining provisions
of this Agreement.
15.17 LIMITATION OF LIABILITY
Except for Company's obligation under Paragraph 15.11 and either
Parties obligations under ARTICLE II Section 2.1, in no event shall
either Party be liable to the other for any lost revenue, profits or
data or any special incidental,
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consequential or other such indirect damages, whether arising out of or
as a result of breach of contract, warranty, tort (including
negligence), strict liability or otherwise.
15.18 EXPORT CONTROL LAWS AND REGULATIONS
15.18.1 The Parties undertake to comply with all applicable export
control laws and regulations. Neither Party shall be obliged
to perform obligations under this Agreement if and to the
extent that performance is hindered by applicable export
control laws and regulations.
15.18.2 For purposes of supplies by Company to Siemens under this
Agreement, Company shall be responsible for obtaining any
necessary export-/reexport licenses and Company shall provide
Siemens with copies thereof within three (3) business days
following request by Siemens. Siemens shall be responsible for
obtaining any necessary import certificates and delivery
verifications.
15.18.3 Siemens will be responsible to adhere to any export control
regulations applicable with respect to Siemens' sales
activities for Products. Company shall provide Siemens with
official confirmation whether the Products are subject to any
export control regulations (e.g. according to German / EU or
USA law). In the event that Siemens intends to export Products
subject to an export control restriction, Siemens will inform
Company accordingly and Company will use reasonable efforts to
obtain any necessary re-export licenses from the authorities
governing Company.
15.18.4 Company will identify in the individual delivery documents
Products which include materials or technology originating
from the United States of America, and Siemens agrees that it
will comply with all export control laws and regulations of
the USA.
15.18.5 If any mandatory clearance or license necessary for the export
of Products have not been obtained by Company in Purchase
Order to guarantee timely delivery of Products within due
dates, the Parties will enter into negotiation in good faith
and decide on the actions and remedies to be taken and
consequences arising thereof.
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