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EXHIBIT 10.12
ADDENDUM TO THE
DEVELOPMENT AGREEMENT OF 23.12.1996
REGARDING THE DEVELOPMENT OF A TUNABLE LASER SOURCE MODULE
by and between
HEWLETT-PACKARD GmbH
HERRENBERGER STRABE 130
71034 BOEBLINGEN
GERMANY
- hereinafter referred to as "HP" -
and
NEW FOCUS INC.
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- hereinafter referred to as "New Focus" -
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1. If not expressly stated to the contrary herein, all provisions set forth
in the Development Agreement of 23.12.1996 (the "Agreement") shall fully
apply to this Addendum and shall remain in full force and effect.
2. Delivery by New Focus of the [*] units as described in the Agreement shall
be due on July 31, 1998. The per unit price for these production units
shall remain unchanged at $[*].--([*] U.S. Dollars).
3. The parties hereto will agree on separate terms and conditions for a
contract regarding the production and delivery of the Tunable Laser Source
Modules as defined in Clause 11.1 of the Agreement. In amendment of
Schedule 1 A.) 5. of the Agreement, the parties agree on an initial per
unit price ("HP Purchase Price") of $[*]. -- ([*] U.S. Dollars) for the
Module. This HP Purchase Price is based on the initial HP U.S. List Price
for the Module of $[*]. -- ([*] U.S. Dollars). To the extent HP decreases
or increases the HP U.S. List Price for the Module, New Focus will decrease
or increase the HP Purchase Price by half of the percentage the HP List
Price decreased or increased. If and to the extent the HP Purchase Price
falls below $[*],-- ([*] U.S. Dollars), New Focus shall have the right to
terminate the contract regarding the production and delivery of the Tunable
Laser Source Modules. If and to the extent the HP List Price falls below
$[*] -- ([*] U.S. dollars), HP shall have the right to terminate such
contract. These rights of termination shall be specified in detail in such
contract. It is understood between the parties hereto that, in this case,
HP shall be absolutely free to manufacture the Modules itself or have the
Modules manufactured and delivered by a third party provided licensing
agreements as outlined in Clause 7 of this Addendum are strictly adhered
to. In addition, HP shall not be responsible for any additional development
costs associated with supplying HP with the PMF Option of the Module due to
the fact that such additional development costs were already covered by the
NRE payments documented in the Development Contract of December 23, 1996.
4. HP agrees to pay to New Focus an amount of $[*].--([*] U.S. Dollars) within
30 days of the execution of this Addendum in order to ensure timely
manufacturing and delivery of the Modules by New Focus. Payment shall be
subject to New Focus providing HP a guarantee for [*]% ($[*].--[*] U.S.
Dollars) of the above amount from an internationally recognized Bank
substantially in the form as laid out in Schedule 1 hereto.
5. New Focus shall repay up to [*]% ($[*].--[*] U.S. Dollars) of the above
amount to the extent that one or more of the following applies:
(i) New Focus being in delay with any deadline set forth in the
Agreement, this Addendum or the production and delivery contract;
provided that a delay with respect to the delivery of the production
units according to Clause 2 above shall
[*] Certain information on this page has been omitted and
filed separately with the Commission. Confidential treatment
has been requested with respect to the omitted portions.
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only trigger repayment if such delay exceeds one month and New Focus
does not provide HP with reasonably sufficient justification for such
delay
and/or HP may not be reasonably expected to accept such delay and/or
the delay has not been primarily caused by HP.
(ii) New Focus being in default of any other material provision of the
Agreement, this Addendum or the production and delivery contract.
The following repayment schedule shall be binding:
$[*].--([*] U.S. Dollars) on [*], 1998
$[*].--([*] U.S. Dollars) on [*], 1998
$[*].--([*] U.S. Dollars) on [*], 1998
$[*].--([*] U.S. Dollars) on [*], 1998
$[*].--([*] U.S. Dollars) on [*], 1998
Clauses 5 (i) and 5(ii) of this Addendum shall not apply for any failure or
delay in the performance of New Focus due to causes including, but not
limited to, an act of God, an act of civil or military authority, fire,
epidemic, flood, earthquake, riot, war, sabotage, and governmental action
which are beyond its reasonable control; provided that New Focus: (i)
promptly gives HP written notice of such cause and, in any event, within
fifteen (15) calendar days of discovery thereof; and (ii) uses diligent
efforts to correct such failure or delay in its performance.
6. In view of HP's exclusive rights of use as described in Clause 11 of the
Agreement, the Parties agree upon the following:
(i) New Focus may solely sell Modules in their completely assembled form
(as defined by form factor, HW and SW interface) to HP.
(ii) Until HP officially informs New Focus of the obsolescence of the
Module, New Focus shall not in any way manufacture and/or sell the
Module and/or the building blocks (defined as the complete assembled
opto-mechanical sub-assembly including but not limited to, the diode
laser, external cavity, cavity optics, and drive train, in the exact
configuration) thereof either under its own brand name in a way that
direct competition to the HP Module is created or to direct HP Module
competitors (including but not limited to corporations such as Anritsu,
Photonetics, EXFO, Tektronix, Santec etc.) without the expressed
written consent of HP.
Subject to the foregoing, none of HP's rights according to Clause 11 of the
Agreement and Clause 7 of this Addendum nor any other of HP's rights under
the Agreement shall be in any way affected hereby.
[*] Certain information on this page has been omitted and
filed separately with the Commission. Confidential treatment
has been requested with respect to the omitted portions.
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7. With respect to HP's rights of use pursuant to 11.1 of the Agreement, and
to the extent HP decides to manufacture the Modules itself or decides to
have the Modules manufactured and delivered by a third party, the Parties
shall enter into negotiations regarding the amount of the license fee for
the New Focus patent in question (U.S. Patent No.: [*]). This license fee
shall not exceed $[*]. -- ([*] U.S. Dollars) per manufactured Module. New
Focus warrants that it is the sole owner of U.S. patent No. [*] and the
therewith related applications [*] and [*] and any other patent or patent
application claiming the priority of this patent or patent application.
Furthermore, it is the understanding of the parties:
(i) that no further royalty or license fees shall in any way be payable by
HP to New Focus for the Module.
(ii) that HP's use of the patent in question is limited to the Module in
its completely assembled form (as defined by form factor, HW and SW
interface).
8. No ancillary verbal agreements have been made. Any alterations and
amendments hereto must be made in writing in order to be valid and must
expressly indicate that they constitute an alteration or amendment hereto.
This shall similarly apply to any waiver of this written form requirement.
Should one or more of the provisions hereof be or become void or invalid,
the parties hereto undertake to replace such a provision with a valid
provision which approximates the economic purpose or intent of the void or
invalid provision as closely as possible. The validity of the remaining
provisions shall remain unaffected thereby.
For HP: For New Focus:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇
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Fiber Optic Test/Business Manager Engineering/Vice President
[*] Certain information on this page has been omitted and
filed separately with the Commission. Confidential treatment
has been requested with respect to the omitted portions.
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MID-PENINSULA BANK
October 23, 1997
Hewlett-Packard GmbH
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Dear Sirs:
Mid-Peninsula Bank (the "Bank") herewith confirms that it has knowledge that
Hewlett-Packard GmbH (hereinafter referred to as HP), ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ has granted to New Focus, Inc. a payment in the amount
of $USD[*] ([*] US Dollars). The payment to New Focus, Inc. is specified within
the terms and conditions of the Addendum dated October 28, 1997 to the
Development Agreement (the "Agreement") dated December 23, 1996 by and between
HP and New Focus, Inc.
The Bank herewith provides assurance to HP as follows. The Bank, acting as a
principal obligor, guarantees to HP prompt payment by New Focus, Inc. of all of
its (repayment) obligations under the terms specified in that certain Addendum
to the Agreement, in an amount not to exceed $USD[*] ([*] US Dollars), such
amount to exclude accrued interest and/or costs. In the event that New Focus,
Inc. does not make payment to HP in accordance with Clause 5 of the Addendum to
the Agreement, the Bank shall forthwith upon the first demand of HP, make
payment to HP in such amount(s) (not to exceed $USD[*] - [*] US Dollars) as was
not paid by New Focus, Inc. (as if the Bank instead of New Focus, Inc. were
expressed to be the principal obligor).
This guaranty shall remain in effect as long as New Focus, Inc. has a potential
payment obligation towards HP under Clause 5 of the Addendum to the Agreement.
Mid-Peninsula Bank
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇
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Executive Vice President
[*] Certain information on this page has been omitted and
filed separately with the Commission. Confidential treatment
has been requested with respect to the omitted portions.
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Schedule 1
GUARANTEE
Whereas
We, the undersigned, Bank, herewith confirm that we have knowledge that
Hewlett-Packard GmbH, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ has
granted to New Focus payment of an amount of $[*] -- ([*] U.S. Dollars).
Therefore
We guarantee, as principal obligor, to HP prompt performance by New Focus
of all its (repayment) obligations under the Addendum. We undertake with HP
up to a maximum amount of $[*] -- ([*] U.S. Dollars), such maximum amount
not including accrued interest and/or costs, that whenever New Focus does
not pay amount when due in accordance with Clause 5 of the Addendum, we
shall forthwith on first demand pay that amount as if we instead of New
Focus were expressed to be the principal obligor.
This guarantee shall be valid until final performance of New Focus of all
its obligations under the Agreement, the Addendum or the production and
delivery contract.
[*] Certain information on this page has been omitted and
filed separately with the Commission. Confidential treatment
has been requested with respect to the omitted portions.
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