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Exhibit 10.23
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (the "Agreement") is made as of the 14th day of
August, 2000, by and between CORVIS Corporation ("CORVIS"), a Delaware
corporation, and JCA ("VENDOR"), a California corporation.
RECITAL
CORVIS desires to purchase from VENDOR and VENDOR desires to supply to
CORVIS certain components.
NOW, THEREFORE, in consideration of the representations, warranties,
promises, mutual covenants and agreements of the parties contained in this
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
CORVIS and VENDOR agree as follows:
ARTICLE 1 -- DEFINITIONS
Capitalized terms shall have the meanings set forth in Appendix 1 to the
Agreement.
ARTICLE 2 -- PRODUCTS
2.1 Products. VENDOR shall process and manufacture the products listed
on Attachment 1 hereto (the "Products") for CORVIS in accordance with such
Product's Manufacturing Standards and shall deliver to CORVIS such Products in
compliance with the Product Quality Specifications.
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PURCHASE AGREEMENT
(a) Quantity. By the seventh business day of each month (the month
hereafter being "M"), CORVIS shall provide to VENDOR a twelve-month rolling
forecast (the "Rolling Forecast") of deliveries for the twelve-month period
commencing at the beginning of the next month. The first month of each Rolling
Forecast (hereinafter "M+1") shall include the quantity of each product, by
product code, to be delivered during M+l and the target delivery date for each
shipment to be made during M+1. The remaining months of each Rolling Forecast
(M+2 through M+12) shall contain the quantity of each product by product code
which CORVIS anticipates will be delivered during the specified month. The first
month of the Rolling Forecast shall represent a binding commitment to order and
CORVIS shall submit a Purchase Order for such amount no later than seventh
business day of M for delivery in the following month (M+1). The forecast issued
in M for the second month of each Rolling Forecast (M+2) shall be partially
binding in that in the next subsequent Rolling Forecast (in which M+1 has become
M and M+2 has become M+1), the quantity of each product, by product code, to be
delivered in M+l and the corresponding Purchase Order shall be not less than 75%
of the quantity forecast in the immediately preceding Rolling Forecast.
(b) Capacity. VENDOR shall accept Purchase Orders for delivery in
M+l of Products designated in a Rolling Forecast delivered by the seventh
business day of M, provided that VENDOR shall not be obligated to deliver more
than 125% of the amount specified for that product code for delivery in that
month in the immediately preceding Rolling Forecast (in which the month was then
M+2). VENDOR shall make commercially reasonable efforts to maintain sufficient
capacity to process, manufacture, and deliver to CORVIS, within the delivery
times set out in Section 4.2.
(c) Inventory. VENDOR shall maintain an inventory of each Product
equal to the amount it is required to supply pursuant to Section 2.1(b) for
month M+l of the then current Rolling Forecast and an inventory of materials
sufficient to manufacture Products it is required to supply pursuant to Section
2.1(b) for months M+2 and M+3 of the then current Rolling Forecast. In addition,
VENDOR shall maintain for CORVIS a safety stock of each product at least equal
to the quantity of such product it is committed to deliver to CORVIS in month
M+1. The inventories are for sole use by Corvis and must be in place at the time
of the first shipment and maintained thereafter. VENDOR shall assure that
inventories are constantly "refreshed" by utilizing, to the extent possible,
Products in inventory to fill current orders.
(d) Product Report. VENDOR will provide CORVIS with a periodic
report of the manufacturing capacity utilization, inventory quantities and
refreshment rates and current lead times for each Product.
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PURCHASE AGREEMENT
(e) Pricing. The unit price for each Product shall be that set forth
in Attachment 1. The unit price set forth in Attachment 1 shall remain in effect
for at least one year, unless expressly agreed upon by CORVIS and VENDOR as
provided in this Section. VENDOR and CORVIS shall perform a quarterly review of
each unit price to ensure CORVIS is receiving the lowest US market price for the
same quantities and specifications of each Product and the parties shall
negotiate in good faith to adjust the unit pricing contained in Attachment 1
accordingly. For pricing that is variable based upon the units purchased by
CORVIS, pricing shall be based upon quantities CORVIS has in its Rolling
Forecast. At the end of contract year, if the actual amount purchased by CORVIS
is greater or less than the initial Rolling Forecast amount upon which the
pricing was calculated, the price for such Product shall be retroactively
adjusted to the price that would have applied to the actual quantities
purchased. Based upon such adjusted prices, the party owing money to the other
shall pay such amount within thirty (30) days of the end of such contract year.
If during the first six months of any contract year CORVIS has not purchased [*]
of the amount contained in the first Rolling Forecast for such year, the price
shall be adjusted to the price that would apply based upon two times the actual
quantity ordered during such six-month period. If at any time CORVIS is
purchasing amounts that would, on an annualized basis, qualify it to purchase
any Product at a more favorable price, such price shall apply. If there is a
discrepancy between the unit price of any Product listed in Attachment 1 and
another correspondence, including purchase orders and order confirmations, the
unit price set forth in Attachment 1 shall control, unless amended via an
express writing executed by CORVIS and VENDOR.
[*] 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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PURCHASE AGREEMENT
(f) Product Discontinuance. VENDOR shall not discontinue any Product
unless it gives CORVIS at least six months' notice in writing. In such event,
VENDOR shall provide CORVIS with a suggested product replacement at the same
time for the remainder of the term of this Agreement. CORVIS shall have the
right to substitute the Replacement Product for the Product under this
Agreement, at a price to be negotiated by the parties, but in no event more than
the price paid for the original Product. If CORVIS elects not to use the
suggested replacement product, VENDOR shall offer CORVIS a six-month period
beginning the day of the notice of discontinuance within which CORVIS can place
orders for the discontinued Product. CORVIS may give a last order ("One Time Buy
Order") immediately prior to the end of the six-month period. The One Time Buy
Order is non-cancelable, non-reschedulable and non-returnable, except as
otherwise provided in this Agreement. Products ordered with the One Time Buy
Order will be delivered to CORVIS as agreed to by the parties, but no later than
one year after the notice of discontinuance.
ARTICLE III -- SPECIFICATIONS AND STANDARDS
3.1 Changes to Specifications.
(a) Manufacturing Standards. Ninety (90) days prior to any proposed
implementation of changes to the Manufacturing Standards for any Product, VENDOR
shall provide CORVIS with notice of any such proposed modifications for CORVIS'
review and VENDOR shall include therewith an assessment of the impact of such
modifications on the Product Quality Specifications and pricing of each Product.
CORVIS shall respond to any such proposed change within thirty (30) days of its
proposed date of implementation. To the extent that such proposed modifications
are unacceptable to CORVIS, they shall not be implemented except as provided in
Section 2.1(f).
(b) Product Quality Specifications. CORVIS may provide VENDOR with
written notice of modifications to the Manufacturing Standards or the Product
Quality Specifications of any individual Product. VENDOR shall use commercially
reasonable efforts to implement such modifications. Vendor shall have the right
to review any proposed modifications and the parties shall meet to discuss such
modifications prior to their implementation, which shall be at CORVIS'
discretion, at prices to be agreed to between the parties.
3.2 Record keeping. VENDOR shall maintain accurate records of all
quality tests, processing activities, monitoring of process steps, and Product
quality tests for a period of at least three years. CORVIS shall have the right
upon request to inspect such records, and to obtain a copy of such records.
3.3 Inspection. Authorized representatives of CORVIS shall have the
right, upon reasonable notice to VENDOR and during normal business hours, to
enter VENDOR's facility and to inspect all areas used for the storage and
handling of ingredients, and in the processing, manufacturing, and storage of
the Products, to monitor and assure compliance with the Manufacturing Standards
and Product Quality Specifications. CORVIS shall also be permitted to review
quality reports and statistical process controls related to the manufacturing of
Products.
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PURCHASE AGREEMENT
ARTICLE IV -- ORDER, ACCEPTANCE, AND PAYMENT PROCEDURES
4.1 CORVIS Orders. CORVIS shall submit Purchase Orders to VENDOR for the
quantities of each Product code it is required to purchase pursuant to Section
2.1(a) and (b). VENDOR agrees to provide an Order Confirmation confirming the
shipment dates within 48 hours after receipt of a Purchase Order for orders it
is obligated to accept pursuant to Sections 2.1(a) and (b). Upon acceptance, a
Purchase Order shall constitute a binding obligation of the parties subject to
the terms of this Agreement. The terms of this Purchase Agreement shall control
over any inconsistent terms of any Purchase Order or Order Confirmation issued
after the date of this Agreement. Nothing herein obligates VENDOR to accept any
terms of a Purchase Order delivered by CORVIS or obligates CORVIS to accept the
terms of an Order Confirmation delivered by VENDOR.
4.2 Delivery Times. VENDOR shall use commercially reasonable efforts to
deliver the Products within the delivery time frames, which may be weekly,
specified in Purchase Orders issued pursuant to Article 2 of this Purchase
Agreement. VENDOR shall deliver 100% of all products ordered under Article 2
within the Delivery Window (10 days early/0 days late). VENDOR agrees to
participate in a Vendor Evaluation Program with respect to deliveries under this
Agreement. VENDOR shall use commercially reasonable efforts to comply with any
request by CORVIS for acceleration of delivery, subject to product inventory and
lead time requirements. CORVIS shall also have the right to delay delivery of
ordered products by a maximum of thirty (30) days by providing VENDOR not less
than twenty (20) days' written notice before the target delivery date. Any
Product for which CORVIS has requested a delay shall be deemed timely delivered
within the Delivery Window. Should VENDOR fail to deliver any Product in
accordance with the obligations contained in Article 2 on time within the
Delivery Window at least 90% of the time, the minimum purchase percentages
contained in Section 2.1(a) shall not apply with respect to such Product.
4.3 Cancellations. Subject to CORVIS' capacity purchase obligations in
Section 2.1(a), CORVIS shall have the right to cancel any Purchase Order in
whole or in part prior to shipment. In such case, CORVIS shall promptly purchase
at the prices set forth in Attachment 1, all finished goods. The parties shall
negotiate in good faith to establish the purchase prices for work-in-process and
raw materials that (i) were necessary for and dedicated to the relevant Purchase
Order, and (ii) are unique to CORVIS' product and cannot reasonably be utilized
by VENDOR for any other purpose. VENDOR must cease production and delivery upon
notification of cancellation.
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PURCHASE AGREEMENT
4.4 Point of Delivery. The Products sold to CORVIS under this Agreement
shall be delivered by VENDOR to CORVIS at Columbia, Maryland (the "Point of
Delivery"), unless otherwise indicated on the Purchase Order.
4.5 Packaging. Products shall be packaged in accordance with
commercially reasonable and industry standard specification and any applicable
requirements of the carrier used to deliver such Products. Each Product shall be
labeled with relevant part numbers and Purchase Order number.
4.6 Partial Deliveries. Should VENDOR be unable to deliver Products
within a delivery schedule established by a given Purchase Order, it shall
deliver partial shipments only with CORVIS' consent.
4.7 Inspection, Acceptance and Rejection.
(a) Inspection. All Products shall be inspected by CORVIS following
receipt at the Point of Delivery.
(b) Rejection. CORVIS shall have the right to reject any Product
that was not manufactured in compliance with the Manufacturing Standards or that
does not comply with the Product Quality Specifications. CORVIS shall inform the
VENDOR within a commercially reasonable time of its rejection of any Product. If
CORVIS determines that a shipment or lot of a given Product received from VENDOR
contains one or more units that do not conform to the Manufacturing Standards or
the Product Quality Standards, CORVIS shall have the right to reject all, some
or none of the shipment or lot of such Product containing such defective unit or
units. Upon the return of any such defective Products, the parties shall meet as
soon as practicable to discuss and resolve the reasons for the Product defects.
VENDOR shall, at the request of CORVIS, immediately replace or repair the entire
shipment or lot, or the part thereof rejected by CORVIS. VENDOR shall use
commercially reasonable efforts to issue material return authorizations in an
expeditious manner. In rejecting any Products, CORVIS shall provide a reasonably
detailed reason for the rejection and/or failure of the Products so returned and
accurate original shipping information.
(c) Disposition of Rejected Products. If CORVIS rejects any Product,
CORVIS shall have the right to:
(1) return the rejected Product to VENDOR for credit, refund,
repair or replacement.
If CORVIS requests replacement of a Product, VENDOR shall promptly ship
the replacement Product, which may be the repaired Product or a new Product, at
VENDOR's discretion.
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PURCHASE AGREEMENT
(d) Responsibility for Rejected and Returned Products. If CORVIS
rejects a Product under warranty pursuant to Article 5:
(1) VENDOR shall, upon notice from CORVIS, make all necessary
arrangements for the transportation and return of the rejected Product; (2)
VENDOR shall be solely responsible for all costs of transportation and other
actions necessary to return the rejected material;
(2) VENDOR shall retain all risks of loss, contamination, and
liability with respect to shipment and disposition of such rejected Product; and
(3) VENDOR shall be solely responsible for the proper handling,
transportation, storage, treatment and disposal of the rejected material.
(e) Title; Risk of Loss. Title to Products shall pass to CORVIS upon
delivery of such Products to CORVIS at the Point of Delivery. VENDOR assumes all
risks of loss or contamination and liabilities arising from the storage,
handling and shipment of products until such time as such Products are delivered
to CORVIS at the Point of Delivery.
4.8 Payment. Payment for Products by CORVIS shall be made net 30 days
following the later of the receipt of a valid invoice or acceptance of the
Product.
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PURCHASE AGREEMENT
ARTICLE V -- WARRANTY
Product Warranty. For a period of 24 months commencing upon CORVIS'
receipt of any given Product under this Agreement (the "Warranty Period"),
VENDOR warrants that all Products sold hereunder or pursuant hereto, will be
free of any claim of any nature by any third person and that VENDOR will convey
clear title thereto to CORVIS as provided hereunder. VENDOR warrants that during
the Warranty Period each Product delivered pursuant to this Agreement was
manufactured in accordance with the Manufacturing Standards, conforms to the
Product Quality Specifications and is of good material and workmanship and is
free from defects in material, workmanship and programming. Any attempt by
VENDOR to limit, disclaim, or restrict any such warranties or any remedies of
CORVIS, by acknowledgment or otherwise, in accepting or performing any Purchase
Order, shall be null, void, and ineffective without CORVIS' written consent. The
foregoing warranties are exclusive and in lieu of all other warranties, express
or implied. WITHOUT LIMITING THE FOREGOING SENTENCE, THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND OF FITNESS FOR PARTICULAR PURPOSE SHALL NOT APPLY.
5.2 Warranty Remedy. If any Product is found to be in violation of the
warranty contained in Section 5.1, CORVIS may, in addition to any other rights
which it may have under warranties provided or required by law or contained in
this Agreement, at its option and at VENDOR's sole cost and expense, (A) correct
or have corrected the nonconformity or defect, (B) return any nonconforming or
defective Product to VENDOR for correction or replacement, or (C) require VENDOR
to inspect the Product and remove nonconforming or defective Product and/or
replace with a conforming Product. If CORVIS elects option (C) in the preceding
sentence and VENDOR fails promptly to make the necessary inspection, removal and
replacement, CORVIS at its option may inspect, remove and/or replace the
Products and VENDOR shall bear the cost thereof. Payment by CORVIS of any
invoice shall not constitute acceptance of the Products covered by such invoice,
and acceptance by CORVIS shall not relieve VENDOR of its warranty or other
obligations under this Agreement.
ARTICLE VI -- INTELLECTUAL PROPERTY
6.1 Warranty and Infringement Indemnity. VENDOR hereby warrants that the
Products do not infringe any third party intellectual property and VENDOR is
entitled to make, have made, use, offer for sale, or sell the Products to
CORVIS. VENDOR shall indemnify according to the provisions of this Agreement and
defend any action brought against CORVIS that is based on any claim that a
Product infringes any third party intellectual property; except, when the
infringement claim is based on a CORVIS supplied design. CORVIS shall promptly
notify VENDOR in writing of any infringement claim and VENDOR shall have the
right to control the defense of all such claims, lawsuits, or proceedings. If an
infringement claim is sustained, or CORVIS' use of the Product is enjoined,
VENDOR shall either (i) procure the right to continue to make, use, and sell the
Product or (ii) replace or modify the Product to be non-infringing while still
confirming to the Product Quality Standards.
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6.2 Right to Use. VENDOR hereby grants to CORVIS the right to offer for
sale, and sell each Product for its intended purpose under all intellectual
property owned or licensed by VENDOR, either solely or jointly, as long as
CORVIS continues to purchase Products from VENDOR. If VENDOR is unable to supply
a Product to CORVIS as a result of a Force Majeure Event, bankruptcy
proceedings, or otherwise, or is in default, CORVIS shall also have the right to
itself manufacture, use, offer for sale to third parties, and sell to third
parties each Product for its intended purpose until such time as VENDOR is able
to supply the Product. The parties shall meet as soon as practicable to
facilitate the exercise of CORVIS' rights under this Section 6.2.
ARTICLE VII -- COMPLIANCE WITH LAWS AND OTHER RESPONSIBILITIES
7.1 Vendor Responsibilities. VENDOR shall be solely responsible for
compliance with all Environmental Laws, export laws, and other laws, rules,
regulations, Governmental Approvals, and governmental requirements applicable to
the manufacturing, storage, transportation and delivery of the Products. The
parties acknowledge and agree that VENDOR is the exclusive owner and, operator
of VENDOR's facilities, and that all operations of VENDOR's facilities are
conducted solely under the direction and control of VENDOR. Nothing in this
Agreement is intended or should be construed as indicating that CORVIS has the
ability to control the operation of VENDOR's facilities.
7.2 Safety Information. VENDOR shall acquire from the supplier of any
raw materials, and make available to CORVIS, all appropriate information,
including Material Safety Data Sheets, regarding the properties and
characteristics of such materials and procedures for their proper handling,
management and disposition. VENDOR shall provide all such information to CORVIS
as may be applicable to the Products at time of delivery.
ARTICLE VIII -- CONFIDENTIAL INFORMATION
VENDOR and CORVIS acknowledge that each may receive proprietary and
confidential information of the other in connection with the execution and
performance of this Agreement. Each party agrees not to use or disclose to third
parties any Confidential Information supplied to it by the other party as
provided in the Bi-lateral Nondisclosure Agreement executed by the parties on
October 26, 1999 that shall remain in full force and effect and control the
obligations of the parties with respect to Confidential Information exchanged
pursuant to this Agreement.
ARTICLE IX -- REPRESENTATIONS, WARRANTIES, COVENANTS
9.1 VENDOR Representations, Warranties, and Covenants. VENDOR
represents, warrants, and covenants to CORVIS that:
(b) VENDOR has disclosed to CORVIS any affiliation or association
with a CORVIS Competitor, other than as a VENDOR. No CORVIS Competitor holds a
Controlling Interest in VENDOR or operates as an affiliate or within the same
organization, or has any other relationship with VENDOR that would provide
access to information pertaining to VENDOR's relationship with CORVIS. VENDOR
shall notify CORVIS immediately if (i) a CORVIS Competitor consummates the
acquisition of a
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Controlling Interest in VENDOR, (ii) any agreement is reached under which VENDOR
may merge with or otherwise be acquired by a CORVIS Competitor, or (iii) a
change occurs in VENDOR's relationship with any CORVIS Competitor that may
provide access to information pertaining VENDOR's relationship with CORVIS.
(a) VENDOR holds and will maintain all required Governmental
Approvals necessary to operate VENDOR's facilities involved in performing
VENDOR's obligations under this Agreement, including but not limited to, all
Governmental Approvals required for (i) the storage, use, processing,
manufacture, and shipment of the Products or materials used in the manufacture
of the Products, and (ii) the storage, treatment, discharge or disposal of any
Regulated Substances or wastes generated by VENDOR's processes or facilities.
(b) VENDOR shall comply with the requirements of all federal, state
and local laws, rules, regulations, ordinances, permits, licenses and other
requirements, including without limitation, all Environmental Laws, applicable
to the conduct by VENDOR of its business and the performance by VENDOR of its
obligations under this Agreement.
9.2 Insurance.
(a) VENDOR shall obtain and maintain the following insurance
coverages for the duration of this Agreement:
(1) Workers Compensation Insurance as statutorily required; and
Employers' Liability Insurance of not less than $1 Million for each accident, $1
Million disease limit per employee, and $2 Million disease limit in the
aggregate;
(2) Commercial general liability insurance, including, but not
limited to, product liability insurance, of not less than $10 Million per
occurrence, and $20 Million in the aggregate;
(3) Pollution legal liability insurance, with $1 Million per
occurrence and $2 Million in the aggregate; and
(4) Umbrella insurance coverage with excess coverage limit of
not less than $20 Million.
(b) VENDOR shall provide CORVIS with the appropriate Certificates of
Insurance prior to the start of work under this Agreement.
(c) VENDOR shall notify CORVIS of any change in, or cancellation of,
any policies listed in this Section. The Certificates of Insurance shall
acknowledge and stipulate that any such change or cancellation of an insurance
policy listed in this Section shall not be valid as respects CORVIS' interest
therein until and unless CORVIS is provided with at least thirty (30) days
notice in writing of such change or cancellation.
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ARTICLE X -- TERM
10.1 Term. Unless otherwise renewed pursuant to Section 10.2 or
terminated pursuant to Section 10.3, this Agreement shall commence on the date
hereof, and shall continue for a term of two years from such date (the "Initial
Term").
10.2 Renewal. CORVIS and VENDOR may by mutual agreement renew this
Agreement for additional one (1) year terms (each a "Renewal Term") after the
expiration of the Initial Term, upon such terms and conditions as the parties
may agree. If CORVIS desires to extend the term of this Agreement beyond the end
of the Initial Term or any then-current Renewal Term, CORVIS shall provide
VENDOR at least forty (40) days prior to the end of such term a written notice
of such renewal request together with any proposed changes to the terms and
conditions of this Agreement. Within thirty (30) days after receipt of such
notice, VENDOR shall notify CORVIS whether it (i) accepts CORVIS' proposal for
such proposed Renewal Term, (ii) has a counteroffer for the terms and conditions
of the proposed Renewal Term, or (iii) is unwilling to renew this Agreement.
10.3 Termination.
(a) Special Rights of Termination by CORVIS. If (i) VENDOR merges
with or enters into any agreement to merge with a CORVIS Competitor, (ii) a
Controlling Interest in VENDOR is acquired or is being acquired by a CORVIS
Competitor, or (iii) a change occurs in VENDOR's relationship with any CORVIS
Competitor that may provide access to information pertaining VENDOR's
relationship with CORVIS, CORVIS shall have the right, upon written notice to
VENDOR, to terminate this Agreement.
(b) Force Majeure. If a Force Majeure Event (defined below) prevents
VENDOR from performing its obligations under this Agreement for a period in
excess of 30 days, CORVIS shall have the right to terminate this Agreement upon
written notice to VENDOR.
(c) Termination for Default. Either party may terminate this
Agreement in the event of a default by the other, as provided in Article 13.
ARTICLE XI -- FORCE MAJEURE
11.1 Force Majeure. Except as provided in Section 11.4, neither party
shall be liable for any failure or delay in performance of its obligations under
this Agreement due to any of the following conditions: (a) an act of God,
hurricane, tornado, epidemic, earthquake, flood, fire, explosion or similar
occurrence; (b) an act of the public enemy, war, riot, civil disturbance, or
similar occurrence; or (c) the order, injunction or judgment of any court,
administrative agency, or governmental body with jurisdiction over the
performance of a party's obligations under this Agreement (excepting decisions
interpreting federal, state or local taxes), provided that such injunction,
order or judgment is not the result of the negligent or willful action or
inaction of the party relying thereon (collectively, a "Force Majeure Event").
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11.2 Mitigation. The party seeking relief from its obligations shall be
obligated to take all reasonable steps to mitigate the adverse effect of any
such Force Majeure Event.
11.3 Notice. Each party affected by a Force Majeure Event shall provide
prompt notice to the other party of the nature of the Force Majeure Event, its
anticipated impact and duration, and the actions being taken to avoid or
minimize its effect.
11.4 Exceptions.
(a) In no event shall a Force Majeure Event relieve a party from
liability for its own negligence or willful actions or inactions.
(b) Neither party shall be excused by a Force Majeure Event from the
obligation to pay money due under this Agreement.
ARTICLE XII -- ASSIGNMENT AND SUBCONTRACTING
12.1 Assignment and Subcontracting by VENDOR. VENDOR shall not assign,
subcontract, or delegate, any of its obligations hereunder without the prior
written consent of CORVIS.
12.2 Assignment by CORVIS. CORVIS may not assign any of its rights or
obligations under this Agreement without the prior written consent of VENDOR,
which consent shall not be unreasonably withheld; provided, however, that CORVIS
may subcontract any part of its obligations, or assign this entire Agreement, to
any of CORVIS' majority-owned subsidiaries, by providing written notification to
VENDOR of such assignment or subcontract.
12.3 Full Liability. Notwithstanding any assignment or subcontract by
CORVIS permitted by the terms of this Section, or any assignment by CORVIS or
VENDOR pursuant to the prior written consent of the other party, each of VENDOR
and CORVIS shall remain fully liable for full performance of all of their
respective obligations under this Agreement.
ARTICLE XIII -- DEFAULT
13.1 Events of Default. Any one or more of the following shall
constitute an Event of Default hereunder.
(a) A party to this Agreement fails to perform or observe in any
material respect any material term, covenant, condition or restriction of this
Agreement, and such default shall continue for a period of thirty (30) days
after notice in writing thereof is given (unless resulting from a prior failure
or breach by the other party);
(b) The inaccuracy in any material respect of any representation or
warranty made by a party herein or in a document or certificate delivered
pursuant hereto; or
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(c) A party to this Agreement ceases doing business in the normal
course, becomes insolvent, fails generally to pay its debts as they become due,
makes a general assignment for the benefit of creditors, suffers or permits the
appointment of a receiver for its assets, invokes provisions of bankruptcy,
insolvency or similar laws or becomes subject to the provisions of bankruptcy,
insolvency or similar laws and any proceedings thereunder are not dismissed or
stayed within forty-five (45) days of commencement.
13.2 Remedies Upon Default. Upon the occurrence of an Event of Default
as described in Section 13.1 above, the non-defaulting party shall have the
right to terminate this Agreement by giving written notice to the defaulting
party of its intention to terminate, provided that the specified default is then
continuing. Upon such a termination, (a) Each party shall make available to the
other any material, tangible or intangible, then in possession of such party,
(b) the parties shall pay to each other all amounts then due and owing, and (c)
each party shall promptly return to the other all Confidential Information. The
foregoing remedies are not exclusive, but are in addition to any other rights
and remedies provided in this Agreement, by law or in equity.
13.3 Limitation of Liability. Except for liability under ARTICLE 6,
neither party shall be liable for any special, indirect or consequential damages
arising in connection with this Agreement, including any loss of profits,
regardless of how caused, whether or not either party had been advised of the
possibility of such damages or the legal theory or form of course of action
under which such damages may be sought.
13.4 Survival of Obligations. Upon a termination of this Agreement,
neither party shall be relieved of any obligation or liability accruing
hereunder prior to the date of termination. In addition, the obligations of the
parties ARTICLES 6, 8 and 14 shall survive termination of this Agreement.
ARTICLE XIV -- INDEMNIFICATION
14.1 Indemnification by VENDOR. VENDOR hereby agrees to defend,
indemnify and hold harmless the CORVIS Indemnified Parties from and against any
and all Claims and Losses arising from or related to: (a) injury to or death of
any person or loss of or damage to property caused by VENDOR or VENDOR's
Responsible Parties in connection with the performance or nonperformance of
VENDOR's obligations under this Agreement, (b) non-compliance by VENDOR with any
Environmental Law, (c) any existing Environmental Condition at VENDOR's property
or facilities, (d) any Environmental Condition and any pollution or
contamination of the environment arising from the storage, treatment, handling,
disposal, or release of Regulated Substances at VENDOR's facility, or (e) the
sale by VENDOR to CORVIS of Products processed by VENDOR pursuant to this
Agreement which do not conform to the specifications set forth in Attachment 2,
except to the extent that such Claims or Losses are caused by the negligent or
willful action or inaction of CORVIS or CORVIS Responsible Parties.
14.2 Indemnification by CORVIS. CORVIS hereby agrees to defend,
indemnify and hold harmless VENDOR and the VENDOR Indemnified Parties from and
against any and all
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PURCHASE AGREEMENT
Claims and Losses resulting from or arising out of: (f) injury to or death of
any person or loss of or damage to property caused by CORVIS or CORVIS
Responsible Parties, in connection with the performance or nonperformance of
CORVIS' obligations under this Agreement, (g) non-compliance by CORVIS with any
Environmental Law, (h) any existing Environmental Condition at CORVIS' property
or facilities, (i) any Environmental Condition, pollution or contamination of
the environment related to the release of Regulated Substances arising from the
shipment, handling, storage, or management of the Products while such Products
are under the ownership and control of CORVIS, or (j) the sale by CORVIS of the
Products, where such Products at the time of delivery to CORVIS conformed to the
specifications set forth in Attachment 2, except to the extent that any of such
VENDOR Losses are caused by the negligent or willful actions or inaction of
VENDOR, its agents, employees, successors and assigns or others for whose
actions VENDOR has legal responsibility.
14.3 Indemnification Limitations and Procedures.
(a) (The indemnification obligations of both VENDOR (pursuant to
Section 14.1) and CORVIS (pursuant to Section 14.2) are limited to the extent
that the amount of any recovery by a VENDOR Indemnified Party or CORVIS
Indemnified Party, as the case may be, shall be net of any foreign, federal,
state and/or local income tax benefits inuring to the Indemnified Party as a
result of the events that entitled the Indemnified Party to recover from the
Indemnifying Party.
(b) If any claim, liability, demand, assessment, action, suit or
proceeding shall be asserted against an Indemnified Party in respect of which
such Indemnified Party proposes to demand indemnification or defense, the
Indemnified Party shall promptly notify the Indemnifying Party thereof, provided
that the failure to so notify the Indemnifying Party shall not reduce or affect
the Indemnifying Party's obligations with respect thereto except to the extent
that the Indemnifying Party is materially prejudiced thereby. Any written notice
delivered pursuant to this Section shall set forth with specificity the basis of
the claim for indemnification or defense and an estimate of the amount thereof.
(c) Subject to rights of or duties to any insurer or other third
person having liability therefor, the Indemnifying Party may, within thirty (30)
days following receipt of a notice of a claim under this Section, assume the
defense of any such Claim or Loss.
(b) In the event the Indemnifying Party assumes the defense of such
Claim or Loss:
(1) The Indemnifying Party may engage, at its expense, counsel
selected by the Indemnifying Party and approved by the Indemnified Party (which
approval shall not be unreasonably withheld). The Indemnified Party may engage
separate counsel at the Indemnified Party's sole expense.
(2) The other party shall cooperate and make available to the
Indemnifying Party and its representatives all employees, information, books,
and records reasonably necessary or useful in connection with the defense.
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PURCHASE AGREEMENT
(3) The Indemnifying Party shall have the right to compromise or
settle such Claim or Loss, provided that any such compromise or settlement must
be approved by the Indemnified Party (which approval shall not be unreasonably
withheld).
(c) If an Indemnifying Party does not elect to assume the defense of
a Claim or Loss pursuant to this Article:
(1) The Indemnified Party shall alone have the right to conduct
such defense, and to compromise or settle the Claim or Loss without prior
consent of the Indemnifying Party.
(2) If it is ultimately determined by a court of competent
jurisdiction that the Claim or Loss which forms the basis of such judgment or
settlement is one that is validly an obligation of the Indemnifying Party who,
after notice, elected not to assume the defense, the Indemnifying Party shall be
bound by any such judgment or settlement as to the existence and amount of the
claim, and the amount of such judgment or settlement shall be conclusively
deemed to be a liability on account of which the other party is entitled to be
indemnified pursuant to this Article.
ARTICLE XV -- ARBITRATION
15.1 AAA Arbitration. If at any time a question or controversy shall
arise between the Parties related to this Agreement upon which the Parties
cannot agree, such question or controversy ("Dispute") shall be finally settled
by arbitration in accordance with the Commercial Arbitration Rules ("Arbitration
Rules") of the American Arbitration Association (as amended and in effect as of
February 1, 1984), as modified by the provisions of this Section 15. The
arbitration process shall be commenced by the initiating Party giving written
notice to the other of its intention to arbitrate ("Demand").
15.2 Designation of Arbitrator. One arbitrator or three arbitrators
designated by the Parties as follows shall decide the Dispute. If the Parties
are able to agree upon a single arbitrator within twenty (20) days after the
receiving Party has removed the Demand, the Dispute shall be submitted to said
single arbitrator. If the Parties are unable to so agree upon a single
arbitrator within such period, the Dispute shall be submitted to three
arbitrators, chosen as follows. Each Party shall designate an arbitrator and
notify the other of its choice within thirty (30) days after the receiving Party
has received the Demand. If either Party does not so designate within such
thirty (30) days, the American Arbitration Association shall promptly select an
arbitrator for the Party in question within ten (10) days after the expiration
of such thirty (30) day period. The two arbitrators so chosen shall select a
third arbitrator within ten (10) days after both are appointed. If the two
arbitrators so chosen shall be unable to agree upon a third arbitrator within
such ten (10) day period, the third arbitrator shall be chosen in accordance
with the Arbitration Rules.
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PURCHASE AGREEMENT
15.3 Discovery. The Parties shall, before the hearing, make discovery
and disclosure of all materials relevant to the subject matter of the Dispute to
the extent such materials would be subject to discovery in a proceeding before a
federal court in Maryland as conclusively determined by the arbitrator(s), which
discovery and disclosure shall be completed within a thirty (30) day period. The
hearing shall not be held any later than thirty (30) days after the discovery
and disclosure addressed by this Section 15(3) have been completed and shall be
held in a location of the defending party's choice.
15.4 Final Decision. The arbitrator(s) shall, with reasonable diligence,
render a final decision with respect to the Dispute as disclosed in the Demand
and the answering statement, if any, filed by the other Party. The arbitrator(s)
shall give the Parties reasonable notice of the time and place (of which the
arbitrator(s) shall be the judge) for hearing evidence and argument. At the
hearing, each Party shall be permitted to present its case, witnesses and
evidence, if any, in the presence of the other Party. Witnesses shall testify
under oath. A written transcript of the hearing shall be made and furnished to
the Parties and each Party may submit, within thirty (30) days after the close
of the hearing, a written brief setting forth the Party's position. The decision
shall be rendered within ninety (90) days after the commencement of the hearing,
unless the arbitrator(s) find it necessary to extend this period to hear the
dispute or reasonably render a decision.
15.5 Procedural Matters. In reaching a decision, the arbitrator(s) shall
decide in accordance with the terms of this Agreement and, without limiting the
foregoing, nothing herein contained shall be deemed to give the arbitrator(s)
any authority, power or right to change, modify, add to or subtract from any of
the provisions of this Agreement. If the answer to the Dispute is not found
within the terms of this Agreement or involves an interpretation thereof, the
arbitrator(s) shall determine the Dispute in accordance with the substantive
laws of the State of Maryland. If the Dispute is heard by three arbitrators, the
decision of a majority of the arbitrators shall govern. The award of the
arbitrator(s), which shall be in writing and state the reasons upon which the
award is based, shall be final and binding upon the Parties, who shall forthwith
comply therewith after receipt. Judgment may be entered thereon in any court
having jurisdiction. Until the award is issued, performance under this Agreement
shall continue in the manner and form existing prior to the Dispute but subject
to adjustment as a result of the award.
15.6 Costs. The compensation and all other costs and expenses ("Costs")
of a single arbitrator shall be paid in equal shares by the Parties. If the
Dispute is heard by three arbitrators, each Party shall pay the Costs of the
arbitrator appointed on its behalf and the Costs of the additional arbitrator
shall be paid in equal shares by the Parties. Each Party shall bear the Costs of
its own counsel, witnesses and exhibits. The administrative fee of the American
Arbitration Association will be paid in equal shares by the Parties.
15.7 Defense to Suit. The provisions of this Section shall be a complete
defense to any suit, action or proceeding instituted in any federal, state or
local court or before any administrative tribunal with respect to any Dispute
arising with regard to this Agreement.
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PURCHASE AGREEMENT
ARTICLE XVI -- MISCELLANEOUS
16.1 Authority. The parties hereby represent and warrant that they have
full power and authority to enter into and perform this Agreement and the
parties know of no agreements, contracts, promises or undertakings which would
prevent the full execution and performance of this Agreement.
16.2 Independent Contractor. VENDOR's relationship to CORVIS shall be
that of an independent contractor and nothing in this Agreement shall be
construed to constitute VENDOR or any of its employees or officers as an
employee, agent, joint venturer or partner of CORVIS.
16.3 Reservation of Rights. Either party's waiver of any of its remedies
due to a breach by the other party shall be without prejudice and shall not
operate to waive any other remedies which it shall have available to it, nor
shall such waiver operate to waive its rights to any remedies due to a future
breach, whether of a like or different character.
16.4 Headings and Construction. The Section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. To the extent the context requires,
the singular shall include the plural and the plural shall include the singular.
All dollar amounts listed herein shall be considered to be references to U.S.
dollars.
16.5 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Maryland without giving effect to
the choice of laws principles thereof.
16.6 Severability. In the event that any provision of this Agreement
shall be found to be void or unenforceable, such finding shall not be construed
to render any other provision of this Agreement either void or unenforceable,
and all other provisions shall remain in full force and effect unless the
provisions which are invalid or unenforceable shall materially affect the rights
or obligations granted to or undertaken by either party hereunder.
16.7 Notices. Any notices required or permitted to be given under the
terms of this Agreement shall be in writing and sent to the following address by
(a) certified or registered United States Mail, return receipt requested,
postage prepaid (b) Federal Express or comparable overnight or next business day
courier service, or facsimile. Notices shall be deemed given only upon receipt
at the following addresses:
If to JCA Technology, Inc.: If to CORVIS:
JCA Technology, Inc. CORVIS Telecommunications, Inc.
4000 Via Pescador 0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000 XX Xxx 0000
ATTN: Director of Marketing Xxxxxxxx, XX 00000-0000
Attention: Chief Operating Officer
With a copy to: General Counsel
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PURCHASE AGREEMENT
16.8 Waiver. Any failure of either party to comply with any of its
obligations or agreements herein contained may be waived only in writing by the
other party.
16.9 Binding Effect; Benefits. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective successors and
assigns. Nothing in this Agreement, express or implied, is intended to confer on
any person other than the parties hereto and their respective successors and
permitted assigns any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
16.10 Counterparts. This Agreement may be executed simultaneously 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.
16.11 Full Agreement. This Agreement represents the complete and
exclusive statement of the parties with respect to its subject matter. All prior
understandings, agreements and discussions with respect hereto are merged into
and superseded by this Agreement. No amendment, modification or waiver of any
provision of this Agreement and no understanding, course of dealing or usage of
trade purporting to modify this Agreement shall be effective unless it is in
writing signed by both parties and specifically states an intention to modify
and amend this Agreement. No modification or amendment shall be effected by the
acknowledgment or acceptance of purchase orders, shipping instructions, or other
forms containing terms at variance with or in addition to those set forth
herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
JCA TECHNOLOGY, INC. CORVIS CORPORATION
Signature: /s/ XXXXX XXXX Signature: /s/ XXXXXXX UNTER
------------------------------- ----------------------------------
By: Xxxxx Xxxx By: Xxxxxxx Unter
------------------------------- ----------------------------------
Title: President & CEO Title: COO
------------------------------- ----------------------------------
Date: 8/14/00 Date: 8/31/00
------------------------------- ----------------------------------
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PURCHASE AGREEMENT
APPENDIX 1
DEFINITIONS
(a) "Claims" and "Losses" means any suits, claims, actions, damages,
losses, liabilities, obligations, expenses, damages, fines, penalties, or costs
and expenses, including costs of defense, settlement and reasonable attorney's
fees (including those incurred in connection with the defense or prosecution of
any indemnifiable claim or incurred in connection with the enforcement of an
indemnification provision). Unless specifically stated in an indemnification
provision, Claims and Losses does not include any consequential, indirect,
incidental, or other similar damages (including without limitation lost profits)
incurred by any indemnified party, under any form or theory of action
whatsoever, whether in contract or otherwise).
(b) "Confidential Information" means all business, personnel, and
technical information, designs, specifications, techniques, data and related
know-how, technical knowledge, trade secrets and experience, customer lists,
sales and market information, now or hereafter in the possession of VENDOR
related to the Products, and the products or business of CORVIS. Confidential
Information includes any improvements to designs, specifications, techniques or
processes related to the Products, whether such improvements are developed by
CORVIS or the VENDOR.
(c) "Controlling Interest" means owning twenty-five (25%) percent or
more of the voting stock of VENDOR.
(d) "CORVIS Competitor" means an entity engaged in the manufacturing or
distribution of products that are of substantially similar nature or use to the
products manufactured or sold by CORVIS.
(e) "CORVIS Indemnified Parties" means CORVIS, its officers, directors,
employees, agents, successors and permitted assigns.
(f) "CORVIS Responsible Parties" means CORVIS, and CORVIS' agents,
employees, successors and assigns, or others for whose actions CORVIS has legal
responsibility.
(g) "Effective Date" is the date of this Agreement as listed in the
opening paragraph of this Agreement.
(h) "Environmental Condition" means the presence of a Regulated
Substance (other than a naturally occurring substance) on or at a property
(including, but not limited to, the presence in surface water, groundwater,
soils or subsurface strata).
(i) "Environmental Law" means any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, or policy having the force of
law relating to protection of the environment or relating to the production,
generation, use, storage, treatment, processing, transportation or disposal of
Regulated Substances, including, without limitation: the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq. ("CERCLA"); the Superfund Amendments and Reauthorization Act, Public Law
99-499, 100 Stat. 1613; Resource Conservation and Recovery Act ("RCRA"), 42
U.S.C. Section 6901, et seq.;
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the National Environmental Policy Act, 42 U.S.C. Section 4321; the Safe Drinking
Water Act, 42 U.S.C. Section 300f et seq.; the Toxic Substances Control Act
("TSCA"), 15 U.S.C. Section 2601 et seq.; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. Section 136, et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801; the Federal Water Pollution Control
Act 33, U.S.C. Section 1251 et seq.; the Oil Pollution Act of 1990, 33 U.S.C.
Section 2701, et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq., and
counterpart state and foreign statutes, and regulations adopted thereunder.
"Environmental Law" does not include or encompass the tort, contract or any
other law of any jurisdiction concerning or relating to Claim and Losses for
product liability, breach of warranty, trespass, nuisance, personal injury or
property damage.
(j) "Governmental Approval" means any permit, license, authorization,
consent, approval, waiver, exception, variance, order, or exemption issued by
any federal, state or local governmental authority pursuant to an Environmental
Law.
(k) "Indemnified Party" means a VENDOR Indemnified Party or a CORVIS
Indemnified Party who is owed an obligation to indemnify and defend against a
Claim or Loss pursuant to Section 14.
(l) "Indemnifying Party" means the VENDOR or CORVIS, as the case may be,
who owes an obligation to indemnify and defend against a Claim or Loss pursuant
to Section 14.
(m) "Manufacturing Standards" means the specifications for manufacturing
process steps and manufacturing conditions set forth in Attachment 2.
(n) "Products" shall mean the products described in Attachment 1.
(o) "Product Quality Specifications" means those specifications for a
Product established pursuant to Attachment 2 and shall include performance and
other specifications.
(p) "Purchase Order" shall mean a purchase order delivered by CORVIS and
may include data in an equivalent form exchanged by Electronic Data Interchange.
(q) "Regulated Substance" means any pollutant, contaminant, hazardous
substance, hazardous material, toxic substance, toxic pollutant, solid waste,
municipal waste, industrial waste, or hazardous waste, that is defined as such
and is subject to regulation under any applicable Environmental Law.
(r) "VENDOR Indemnified Parties" means VENDOR, its officers, directors,
employees, agents, successors and permitted assigns.
(s) "VENDOR Responsible Parties" means the VENDOR, and VENDOR's agents,
employees, successors and assigns, or others for whose actions VENDOR has legal
responsibility.
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PURCHASE AGREEMENT
ATTACHMENT 1 -- PRODUCT SUMMARY
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PRODUCT NAME AND DESCRIPTION REQUIRED UNIT PRICE TOTAL COST [RESERVED] [RESERVED]
QUANTITY
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[*] [*] [*]
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[*]
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[*]
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VENDOR Signature: _/s/_______________ Date: _8/17/00 CORVIS Signature: _____________________________________ Date: ________
[*] 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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PURCHASE AGREEMENT
ATTACHMENT 2
MATERIAL, MANUFACTURING, AND PRODUCT SPECIFICATIONS
PRODUCT NAME
[*]
RAW MATERIAL SPECIFICATIONS
MANUFACTURING STANDARD
[*]
PRODUCT QUALITY SPECIFICATION
[*]
[*] 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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