SUPPLEMENTAL AGREEMENT
This SUPPLEMENTAL AGREEMENT is made and entered into on September 14th, 2000.
BETWEEN:
ALCATEL NETWORKS CORPORATION, a corporation incorporated under the
laws of Canada, and having its main offices at 600 March Road, P.O.
Box 13600, Kanata, Ontario, Canada K2K 2E6
("Alcatel")
AND:
TELAXIS, a corporation incorporated under the laws of Massachusetts,
having its main offices at 20 Industrial Drive East, South Deerfield,
Massachusetts, U.S.A. 01373
("Telaxis")
Collectively known as the "Parties"
WHEREAS:
A. Alcatel (formerly known as "Newbridge Networks Corporation") and Telaxis
(formerly known as "Millitech Corporation") entered into a Reseller
Agreement dated the 7th day of August, 1998 (the "Reseller Agreement");
and
B. The Parties wish to expand and amend their existing relationship to
encompass Telaxis participation in Alcatel's Cross Polarized and
Co-Polarized product lines, including product development, product
improvements, and manufacturing.
NOW THEREFORE, in consideration of the mutual covenants contained herein, and
for other good and valuable consideration (the receipt and sufficiency of which
are hereby acknowledged) the parties hereto agree as follows:
1. Cross Polarized Product Line Development and Deliveries
------------------------------------------------------------
1.1 Telaxis shall deliver, at its discretion, approximately [****] units of
Vendor Product from the remaining backlog in Alcatel Fiscal Q3 and Fiscal
Q4, 2000 Q3/Q4-2000. The Vendor Product mix is set out in Table A below.
[****] Confidential Treatment Requested
<PAGE>
Table A
<TABLE>
<CAPTION>
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Bandplan OTRU OTU ORU
-------------------------------------------------------
<S> <C> <C> <C>
[****] [****] [****] [****]
-------------------------------------------------------
[****] [****] [****] [****]
------------------------------------------------------
[****] [****] [****] [****]
-------------------------------------------------------
[****] [****] [****] [****]
-------------------------------------------------------
[****] [****] [****] [****]
-------------------------------------------------------
[****] [****] [****] [****]
-------------------------------------------------------
TOTAL [****] [****] [****]
-------------------------------------------------------
</TABLE>
1.2 Delivery of the remaining approximately [****] units of Vendor Product in
backlog will be deferred to Alcatel fiscal Q1 and fiscal Q2 - 2001, with
the schedule of deliveries to be dispersed equally over the period of
January 1, 2001 through to June 30, 2001, unless otherwise agreed to by the
Parties.
1.3 Additional units of Vendor Product for delivery in 2000 and 2001 may be
added as mutually agreed to by the Parties.
1.4 Pricing of the approximately [****] units of product as noted above shall
be as follows:
OTRU US$[***]
OTU US$[***]
ORU US$[***]
1.5 Alcatel shall pay to Telaxis the sum of US$[****] (US$[***]) over and
above the unit pricing as noted in Section 1.4 above. The Parties agree
that the additional sum reflects the increased costs of the amended
production volume.
1.6 Alcatel shall pay the sum of US$[***] as stated in Section 1.4 as follows:
a) The sum of $[***] shall be paid to Telaxis in Alcatel fiscal Q3 - 2000
upon shipment of the last unit of Vendor Product from Telaxis to
Alcatel in Alcatel fiscal Q3 2000;
b) The sum of $[***] shall be paid to Telaxis in Alcatel fiscal Q4 - 2000
upon successful completion by Telaxis of mutually agreeable Product
Improvement Milestones as set out in Appendix A attached hereto:
c) The sum of $[***] shall be paid to Telaxis in each of Alcatel fiscal
Q4 - 2000 and Alcatel fiscal Q1 - 2001 upon accomplishment of mutually
agreeable Product Compatibility Milestones establishing compatibility
between the Telaxis Cross Polarized ODUs and the Alcatel NIU and as
more particularly described in Appendix B attached hereto; and
[****] Confidential Treatment Requested
<PAGE>
2. Co-Polarized Product Line
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2.1 Alcatel shall purchase the following minimum quantities of co-polarized
products for delivery on or before December 31, 2000 as set out in Table B
below.
Table B
<TABLE>
<CAPTION>
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Sept Oct Nov Dec Total 2000
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<S> <C> <C> <C> <C>
[****] [****] [****] [****] [****]
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</TABLE>
2.2 In addition to the units set out in Table B, Alcatel shall purchase a
minimum of [****] units of Vendor Product to be delivered on or before
December 31, 2001. The [****] units of Vendor Product may be a combination
of [****] and [****] products. Vendor Products delivered during the Alcatel
fiscal year 2001 shall be at a nominal rate of [****] per month.
2.3 Purchases made pursuant to Section 2.1 and 2.2 above shall be conditional
upon the Parties agreeing to mutually acceptable terms including, but not
limited to, pricing, performance and quality.
3. Product Improvement Concepts
---------------------------------
3.1 Telaxis agrees to arrange and conduct engineering discussions with Alcatel
of potential product improvement and cost reduction concepts at quarterly
intervals.
4. New Product Development
----------------------------
4.1 The sum of $[****] shall be paid to Telaxis upon accomplishment of a
successful Preliminary Design Review (PDR), and a further sum of $[****]
will be paid to Telaxis upon accomplishment of a successful Critical Design
Review (CDR) on a future BTS or CPE product to be determined by Alcatel.
The PDR and CDR are more particularly described in Appendix B attached
hereto.
5. Terms
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5.1 Section 6.3 of the Reseller Agreement shall not apply to this Supplemental
Agreement. In all other respects the terms and conditions contained in the
Reseller Agreement shall be deemed to be incorporated into this
Supplemental Agreement. In the event of conflict between the terms of the
Reseller Agreement and this Agreement, the terms of this Agreement shall
prevail.
[****] Confidential Treatment Requested
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
Alcatel Networks Corporation Telaxis
By: /c/ Hubert de Pasquidoux By: /c/ Ransom Reynolds
------------------------ ------------------------
Name: Hubert de Pasquidoux Name: Ransom Reynolds
Title: Chief Executive Officer Title: Sr. Vice President
<PAGE>
<TABLE>
<CAPTION>
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Payment OTU [****] [****] [****] [****] [****] [****] [****]
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
[****] Eng Analysis & Test 3Q2000 1Q2001 2Q2001 2Q2001 3Q2001 3Q2001 3Q2001
Upon Develop [****] Tone Test Set
Completion Develop [****] Tone Simulation Software
of ----------------------------------------------------------------------------------------------------------------
[****] Release specs 4Q2000 1Q2001 2Q2001 2Q2001 3Q2001 3Q2001 3Q2001
Activity [****] power [****] evaluation
Linearizer test
Test set manifold match improvement
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1st Board Spin into production [some risk to 4Q2000 1Q2001 2Q2001 2Q2001 3Q2001 3Q2001 3Q2001
MS l level Gain Flatness - get as much as
possible]
DAC
IF Amp
Temp Sensor location
Improved IF match to 2GHz
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</TABLE>
<TABLE>
<CAPTION>
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Payment ORU [****] [****] [****] [****] [****] [****] [****]
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
[****] Eng Analysis & Test 3Q2000 1Q2001 2Q2001 2Q2001 3Q2001 3Q2001 3Q2001
Upon
Completion LNA evaluation and others
of ----------------------------------------------------------------------------------------------------------------
[****] Release specs 4Q2000 1Q2001 2Q2001 2Q2001 3Q2001 3Q2001 3Q2001
Activity 1st Board Spin into production
Move gain stages
New LNA [on [****] + existing bands that
use new MMIC]
IF output VSWR improvement
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</TABLE>
<TABLE>
<CAPTION>
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Payment OTRU [****] [****] [****] [****] [****] [****] [****]
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
[****] Xmtr [****] fix implemented for [****] 3Q2000 1Q2001 2Q2001 2Q2001 3Q2001 3Q2001 3Q2001
Upon Max IF input power [****]
Completion Inrush fix (all but [****])
of ----------------------------------------------------------------------------------------------------------------
[****] Release specs 4Q2000 1Q2001 2Q2001 2Q2001 3Q2001 3Q2001 3Q2001
Activity IF VSWR fix (all below for [****])
Rx RF image rejection - para 3.1.29([****]
at greater than / equal to 200mhz - improved
filter)
Tx/Rx gain [****] fix (target [****])-
validate approach
Tx noise figure [****] improvement - confirm no
issues with [****] degredation
Rx noise figure [****] improvement
Rx out of band [****] implementation
([****] first)
Crossover fix (validate approach)
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</TABLE>
[****] Confidential Treatment Requested
<PAGE>
APPENDIX B
PRODUCT COMPATIBILITY MILESTONES
To Be agreed to
PRELIMIMARY DESIGN REVIEW
PDR (Preliminary Design Review): Held at the point in the development at which
the first theoretical concept design is available. This review usually consists
of a "paper" design augmented with simulations and sometimes a limited amount of
measured results.
CRITICAL DESIGN REVIEW
CDR (Critical Design Review) Held at the point in development at which most if
not all of the sub-components have been built and tested for module level
compliance with the specifications. Measured results are available on most
parameters. Last point in the design cycle where the design may be revised
before fully functional prototypes are fabricated.
