Product Purchase and Sale Agreement between Accelerated Networks, Inc. and UniDial Communications, Inc.
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Summary
This agreement, effective February 23, 2000, is between Accelerated Networks, Inc. (the seller) and UniDial Communications, Inc. (the customer). It sets terms for UniDial to purchase at least $10 million of Accelerated Networks' products, with specific delivery schedules and payment terms. The agreement covers order procedures, pricing, delivery, inspection, software licensing, and warranties. UniDial is responsible for taxes and shipping, and has rights to inspect and reject nonconforming products. The agreement also includes monthly meetings between the parties to discuss ongoing business matters.
EX-10.28 7 0007.txt EXHIBIT 10.28 1 Exhibit 10.28 PRODUCT PURCHASE AND SALE AGREEMENT This Product Purchase and Sale Agreement ("Agreement"), effective as of February 23, 2000 (the "Effective Date"), is made by and between Accelerated Networks, Inc., a California corporation with its principal place of business at 301 Science Drive, Moorpark CA, 93021 ("SELLER") and UniDial Communications, Inc. with its principal place of business 1901 East Point Parkway, Louisville, KY 40223 ("CUSTOMER"). CUSTOMER AND SELLER are also referred to collectively as the "Parties." The Parties agree as follows: 1. PRODUCT ORDERS 1.1 Purchase Order. On the effective date of this agreement, CUSTOMER will submit a purchase order for SELLER's products described in Attachment A ("Products") having an aggregate purchase price of at least $10,000,000 (the "Purchase Order"). Delivery dates will be [***] in calendar --- Quarter One of 2000 and [***] in Quarters Two, Three and Four --- respectively. CUSTOMER may apply overage purchases to the following Quarter's commitment level. CUSTOMER may specify the carrier and mode of transportation for shipment of Product. Terms and conditions contained in any purchase order, confirmation, invoice, acknowledgment, release, acceptance or other written correspondence will not only modify any of the terms of this Agreement and the terms of this shall be controlling over any inconsistent or conflicting terms. 1.2 Subsequent Purchase Orders. During the term of this Agreement, CUSTOMER may submit purchase orders in addition to the Purchase Order described in Section 1.1. The terms of this Agreement shall apply to all such additional purchase orders. 1.3 Submission of Orders. All purchase orders shall be sent by fax to the following address: Accelerated Networks 301 Science Drive Moorpark, CA 93021 Attn: Sales Administration Fax ###-###-#### 1.4 Purchase Order Cancellation, Rescheduling and Alterations. CUSTOMER may cancel delivery of Products pursuant to a purchase order without charge upon written notice to SELLER not less than [***] prior to the scheduled delivery date. CUSTOMER will be responsible for payment of one hundred percent (100%) of the amount of any portion of a purchase order that is canceled less than [***] prior to the scheduled delivery date. CUSTOMER may reschedule delivery date of Products pursuant to a purchase order without charge upon written notice to SELLER not less than [***] prior to the scheduled delivery date. This reschedule of delivery of Products by SELLER can only be done two (2) times per purchase order and the revised delivery date cannot be greater than [***] from the originally scheduled delivery date. CUSTOMER may alter a purchase order with a written purchase order change notice to SELLER not less than [***] prior to the scheduled delivery date. Alterations would include (i) change a location for delivery, (ii) modify the quantity or type of Products to be delivered or (iii) correct typographical or clerical errors. *** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. 1 2 1.5 Pricing. Product prices payable by the CUSTOMER and applicable discounts are set forth in Attachment B. Prices are exclusive of all taxes, customs duties or similar tariffs and fees, shipping and insurance charges which SELLER may be required to pay or collect upon the sale or delivery of the Products or upon collection of the sales price, all of which shall be CUSTOMER's responsibility. 1.6 Payment. Terms of payment are net thirty (30) days of SELLER's invoice date, unless SELLER at any time determines that CUSTOMER's credit is not satisfactory, in which case payment terms shall be, at SELLER's election, C.O.D., in advance of delivery or by irrevocable letter of credit in favor of SELLER. All payments shall be made in U.S. dollars in the United States. 2. DELIVERY AND ACCEPTANCE 2.1 Delivery. Products are delivered FOB SELLER's plant or other place of shipment. Shipments will be made to the delivery address specified on CUSTOMER's purchase order. In the absence of a specified delivery address, delivery will be made to CUSTOMER's Louisville facility. Shipping arrangements will be mutually agreed upon by the Parties prior to delivery. SELLER shall use its commercially reasonable efforts to fill (by full or partial shipment) CUSTOMER's purchase orders for Products within [***] of receiving purchase order. 2.2 Inspection and Acceptance of Deliveries. CUSTOMER shall have the right to visually inspect all Products ordered pursuant to this Agreement for a period of [***] following delivery. If the delivered Product(s) fails to conform to the applicable purchase order or release, in whole or in part, CUSTOMER may reject the delivery and CUSTOMER shall promptly return the rejected Product(s) to SELLER at SELLER's risk and expense. Upon receipt of the rejected Product(s), SELLER will promptly ship replacement Product(s) to CUSTOMER. 2.3 Pre-shipment Review. If reasonably requested by CUSTOMER, a representative of CUSTOMER may participate, to the extent applicable, in SELLER's preshipment configuration, prestaging and inspection of Product at SELLER's facility. 3. SOFTWARE LICENSE 3.1 License Grant. SELLER grants CUSTOMER, subject to the terms and conditions set forth in this Agreement, a non-exclusive, non-transferable, non-sublicenseable license to (i) use the software comprising any Product (including software contained in firmware embedded in a Product) ("Software") and (ii) distribute the Software to CUSTOMER's end-user customers together with SELLER's standard End User Software License Agreement in conjunction with CUSTOMER's product and service offerings. All copies of the Software are licensed and not sold. As between the Parties, SELLER retains all title to (except as expressly licensed by SELLER)s, and rights (including all intellectual property and proprietary rights anywhere in the world) and interest in the Software. 3.2 License Regulations. CUSTOMER shall not, nor permit others to (i) copy, modify or create any derivative work of the Software or include the Software in any other software (ii) delete, alter or obscure any copyright or other notice or proprietary legend appearing in the Software or on any documentation, media, master or package materials for the Software provided by SELLER or (iii) reverse assemble, decompile, reverse engineer or otherwise attempt to derive the source code (or the underlying ideas, structure, sequence, organization or algorithms) from the Software. 4. MONTHLY MEETINGS. SELLER and CUSTOMER shall each designate at least one representative to serve as a liaison with the other party (each a "Representative"). The Representatives shall meet, either in person or by telephone, to discuss in good faith matters relating to this Agreement including Product delivery schedules, joint marketing activities, sales training needs, price changes and new Product features and *** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. 2 3 enhancements. Such meetings shall take place on a monthly basis at a mutually agreed upon location. Each party shall bear its own costs incurred in attending or participating in such meetings. 5. SELLER'S WARRANTY 5.1 Product Warranty. SELLER warrants to CUSTOMER (i) for a period of one (1) year from the date of shipment, that the hardware Products will be free from material defects in materials and workmanship, (ii) for a period of ninety (90) days from the date of shipment, the Software will perform substantial in accordance with applicable specifications identified in the user manual of the then current release and (iii) services performed by SELLER hereunder will be performed in a professional and workmanlike manner and in accordance with current industry standards. SELLER's warranty does not extend to any Product that (a) is modified or altered, (b) is not maintained to SELLER's maintenance recommendations (c) is operated in a manner other than that specified by SELLER, (d) has its serial number removed or altered or (e) is treated with abuse, negligence or other improper treatment (including, without limitation, use outside the recommended environment). 5.2 Remedies. Products delivered to CUSTOMER by SELLER hereunder which do not comply with the warranty in Section 5.1 above and are returned to SELLER during the applicable warranty period will be repaired or replaced at SELLER's option at no cost to CUSTOMER. If SELLER cannot, or determines that it is not practical to, repair or replace a returned Product, the price paid by CUSTOMER for such Product will be credited and applied to future orders. 5.3 Disclaimer. SELLER MAKES NO WARRANTIES (OTHER THAN AS EXPRESSLY PROVIDED IN SECTION 5.1 ABOVE) WITH RESPECT TO THE PRODUCTS, OR ANY SERVICES AND DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. FURTHER, SELLER DOES NOT WARRANT THE USE, OR THE RESULTS OF THE USE, OF THE PRODUCTS OR THAT ANY SOFTWARE WILL BE ERROR-FREE. 5.4 Year 2000 Compliance Warranty. Seller 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 the Specifications, (b) all data fields for the Date Data contained in the Products are four-digit fields capable of indicating century and millennium, and (c) that Seller has verified through its testing procedures that no change in the System Date (including the changes 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, Seller 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. 6. CUSTOMER'S REPRESENTATIONS AND WARRANTIES. CUSTOMER represents, warrants and covenants that (i) it shall comply with good business practices and all laws and regulations relevant to this Agreement or the subject matter hereof, (ii) it shall use the then current names used by SELLER for the Products provided that all advertisements, promotional materials, packaging and anything else bearing any trademark of SELLER's shall identify SELLER as the trademark owner and shall be subject to SELLER's prior written approval and (iii) shall comply with all export laws, restrictions, national security controls and regulations of the United States or other applicable foreign agency or authority, and not to export or re-export, or allow the export or re-export of any Product or Proprietary Information of SELLER or any direct product thereof in violation of any such restrictions, laws or regulations, or without all required licenses and proper authorizations, any Group D-I or E-2 country (or national of such country) specified in the then current U.S. Export Administration Regulations (or any successor supplement or regulations). 7. LIMITATION OF LIABILITY. NEITHER PARTY WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR (I) ANY AMOUNTS IN EXCESS IN THE AGGREGATE OF THE AMOUNTS PAID TO IT (IN THE CASE OF SELLER) OR (IN THE CASE OF 3 4 CUSTOMER) PAID OR OWED BY IT HEREUNDER DURING THE TWELVE (12)-MONTH PERIOD PRIOR TO DATE THE CAUSE OF ACTION AROSE OR (II) ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOST PROFITS OR LOST DATA OR (III) COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES. THE LIMITATIONS OF THIS SECTION 7 SHALL NOT APPLY TO ANY BREACH OF SECTION 3.2 OR 9. 8. RELATIONSHIP OF THE PARTIES. CUSTOMER expressly acknowledges that it is an independent contractor in the performance of this Agreement, and is solely liable for all labor and related expenses in connection with this Agreement. CUSTOMER will not have, and will not represent that it has, any power, right or authority to bind SELLER, or to assume or create any obligation or responsibility, express or implied, on behalf of SELLER. 9. PROPRIETARY INFORMATION. The Parties acknowledge that in the course of performing their duties under this Agreement, each may obtain confidential and proprietary information of the other ("Proprietary Information"). Such Proprietary Information may include, but is not limited to, trade secrets, know-how, inventions, techniques, processes, programs, schematics, software source code, data, customer lists, financial information, and sales and marketing plans. Each party shall at all times keep in trust and confidence all Proprietary Information of the other party and, during the term of this Agreement and for five (5) years after its termination, shall not use such Proprietary Information other than in the course of performing its duties under this Agreement nor shall it disclose any such Proprietary Information to any third party without the written consent of the other. Upon termination or expiration of this Agreement or upon the request of the disclosing party, each party shall promptly return all manifestations of the other's Proprietary Information in its possession. 10. TERM AND TERMINATION. 10.1 Term. This Agreement shall commence on the Effective Date and shall remain in force for a period of One (1) year unless earlier terminated as provided in this Section 10. Thereafter, this Agreement shall automatically renew for successive one (1)-year terms unless a party provide written notice to the other party no later than sixty (60) days prior to the expiration of the then current terms of such party's intent not to renew. 10.2 Termination for Convenience. This Agreement may be terminated at any time, with or without cause, by either party upon ninety (90) days prior written notice to the other party. 10.3 Termination for Cause. This Agreement may be terminated by either party for cause immediately by written notice upon the occurrence of any of the following events: (i) if the other ceases to do business, or otherwise terminates its business operations, provided, however, that the acquisition of all or substantially all of a party's stock, assets or business shall not be grounds for termination of this Agreement; or (ii) if the other breaches any material provision of this Agreement and fails to cure such breach within thirty (30) days of written notice describing the breach; provided, however, that a breach of the obligations set forth in Section 3.2 or 9 and shall be grounds for immediate termination of this Agreement by the non-breaching party, or (iii) if the other becomes insolvent or seeks protection under any bankruptcy, receivership, trust deed, creditors arrangement, composition or comparable proceeding, or if such proceeding is instituted against the other (and not dismissed within ninety (90) days). 10.4 Effect of Termination. Upon any termination or expiration of this Agreement, all pending purchase orders for release of Products shall be canceled as of the effective date of termination or expiration, all sums payable to SELLER shall be due and payable on the effective date of termination of expiration and all licenses granted to CUSTOMER under this Agreement shall immediately terminate, and CUSTOMER shall discontinue all use and distribution of the Products. Upon an end-user acquiring a copy of the Software pursuant to an End-User License Agreement, the end-user shall be entitled to use that copy of the Software, subject to the terms and conditions of the End-User License Agreement. 11. PUBLICITY. The Parties shall announce this Agreement and the establishment of the relationship between CUSTOMER and SELLER under this Agreement pursuant to a joint press release to be mutually agreed 4 5 upon. The Parties agree to submit to each other for approval all other press releases relating to this Agreement and to not publish any press release without prior approval of the other party, which approval shall not be unreasonably withheld. 12. ASSIGNMENT. This Agreement shall be binding on successors and assigns provided, however, this Agreement may not be assigned or transferred by CUSTOMER without the prior written consent of the SELLER, which consent shall not be unreasonably withheld. Any purported assignment in violation of this Section 12 shall be null and void. 13. MISCELLANEOUS 13.1 No Waiver. A waiver by either party of any provision of this Agreement or breach, in any one instance, shall not be construed as a waiver of any other provision or subsequent breach thereof. 13.2 Notices. All notices or communications of any kind made or required to be given pursuant to this Agreement shall be in writing and delivered by personal service to the other party or sent by first class mail, postage prepaid to the address for such party specified in this first paragraph of this Agreement or such other address as such party shall provide notice of in accordance with this Section 13.2. 13.3 Governing Law Legal Actions. This Agreement shall be governed and construed under California law, without regard to conflicts of laws provisions thereof. Any controversy, claim or dispute between the parties to this Agreement arising out of, in connection with, or in relation to the interpretation, validity, performance or breach of this Agreement shall, at the request of either party, be resolved to the exclusion of a court of law by binding arbitration in Ventura County, California, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect (but. nonetheless the arbitration itself shall not be conducted under the auspices of such Association unless the parties shall expressly so agree). The arbitrator(s) shall be empowered to award relief which is legal and/or equitable in nature, as appropriate. Except to the extent expressly contradicted by the Commercial Arbitration Rules of the American Arbitration Association and/or this Agreement, the arbitration provisions of Section 1280 et seq. (Part 3, Title 9) (with the exception of Section 1283.05) of the California Code of Civil Procedure shall be fully applicable to this Agreement. For purposes of California Code of Civil Procedure Section 1281.8 (relating to court issuance of provisional remedies), the parties agree that in any controversy, claim or dispute involving the Proprietary Information section of this Agreement and/or the protection of any intellectual property, it shall be conclusively presumed, if a party is otherwise entitled to have a court issue a provisional remedy, that the arbitration award to which the party may be entitled may be rendered ineffectual without provisional remedy. 13.4 Severability. If any provisions of this Agreement is held by a court of competent jurisdiction to be illegal, invalid or unenforceable, that provision shall be limited or eliminated to the minimum extent necessary so that this Agreement shall otherwise remain in full force and effect and enforceable. 13.5 Force Majeure. A party shall not be liable for non-performance or delay in performance (other than of payment or confidentiality obligations) caused by any event reasonably beyond the control of such party including, but not limited to wars, hostilities, revolutions, riots, civil commotion, national emergency, strikes, lockouts or other labor disputes or shortages or inability to obtain material or equipment, unavailability of supplies, compliance with laws or regulation (including, without limitation, those related to infringement), epidemics, fire, flood, earthquake, force of nature, explosion, embargo, or any Act of God, or any law, proclamation, regulation, ordinance or other act or order of any court, government or governmental agency. 13.6 Entire Agreement Amendment. This Agreement, including all Attachments to this Agreement, constitutes the entire agreement between the parties relating to the subject matter hereof and all prior or simultaneous proposals, negotiations, representations, conversations, discussions and agreements, whether written or oral, among the parties and all past dealing or industry custom. This Agreement may not be amended except by a writing signed by the Parties. 5 6 13.7 This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the Parties hereto have executed this Agreement effective as the Effective Date. By: /s/ Suresh Nihalani By: /s/ Michael Johnson -------------------------------- -------------------------------- Name: Suresh Nihalani Name: Michael Johnson ------------------------------ ------------------------------ Title: President and CEO Title: CTO ------------------------------ ------------------------------ Date: March 17, 2000 Date: February 23, 2000 ------------------------------ ------------------------------ 6 7 ATTACHMENT A
A-1 8 ATTACHMENT B PRODUCT PRICES AND DISCOUNT LEVELS SHIPMENT SCHEDULE FOR Q1/2000:
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-1 9
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-2 10 SHIPMENT SCHEDULE FOR Q2/2000:
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-3 11
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-4 12
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-5 13 SHIPMENT SCHEDULE FOR Q3/2000:
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-6 14
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-7 15
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-8 16 SHIPMENT SCHEDULE FOR Q4/2000:
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-9 17
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-10 18
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. B-11 19 ATTACHMENT C RESIDENT ENGINEER AND TRAINING PROGRAM Accelerated Networks will provide at [***] during the first 12 months of UniDial's deployment a Resident Engineer starting [***] after the effective date of this agreement. Description and cost savings are described below. [***] Accelerated Networks will provide [***] to UniDial a total of [***] training seats with a class load of [***] persons maximum, which equates to [***] classes of on site training. UniDial may allocate a portion of the [***] seats as desired to Accelerated Network's HQ Training facility following appropriate scheduling timelines. Descriptions and cost savings to UniDial are described below. [***]
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. C-1 20
C-2 21 ATTACHMENT D TECHNICAL SUPPORT PROGRAMS ACCELERATED NETWORKS WILL HONOR A [***] DISCOUNT OFF LIST FOR A 1 YEAR CONTRACT PAID IN ADVANCE ACCELERATED NETWORKS WILL HONOR A [***] DISCOUNT OFF LIST FOR A 2 YEAR CONTRACT PAID IN ADVANCE ACCELERATED NETWORKS WILL HONOR A [***] DISCOUNT OFF LIST FOR A 3 YEAR CONTRACT PAID IN ADVANCE
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. D-1 22 TECHNICAL SUPPORT PRICING
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. D-2 23
*** Confidential treatment has been requested for certain redacted provisions of this agreement. The redacted provisions are identified by three asterisks enclosed by brackets and underlined. The confidential portion has been filed separately with the Securities and Exchange Commission. D-3