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EXHIBIT 10.31
INTERNATIONAL DISTRIBUTOR AGREEMENT
This International Distributor Agreement (the "Agreement") is made and entered
into this ___ day of November, 1999, by and between Avanex Corporation, a
corporation duly organized and existing under the laws of California, having its
principal place of business at 00000 Xxxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx
00000 (hereinafter referred to as "Manufacturer") and Hakuto Co., Ltd., a
corporation duly organized and existing under the laws of Japan, having its
principal place of business at 1-13, Shinjuku 1-chome, Xxxxxxxx-xx, Xxxxx
000-0000, Xxxxx (hereinafter referred to as "Hakuto" or "Distributor"),
WITNESSETH:
WHEREAS, Manufacturer is engaged in the business of the manufacture of various
photonic processors including the Products hereinafter defined; and
WHEREAS, Hakuto is engaged in the business of the sale and marketing of
merchandise throughout the world, including products similar or related to the
Products of Manufacturer; and
WHEREAS, Hakuto is desirous of being appointed distributor of the Products in
the Territory hereinafter defined.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, Manufacturer and Hakuto do hereby agree the terms and conditions set
forth below:
1. Distributorship, Products and Territory
1.01 Distributorship. Manufacturer hereby grants to Hakuto during the term of
this Agreement the non-exclusive right to sell the Products in the Territory all
in accordance with the terms and conditions herein set forth. Distributor shall
pursue aggressive sales policies and procedures to realize the maximum sales
potential for the Products in the Territory. Manufacturer reserves the right to
market its products directly to the House Accounts set forth on Exhibit A.
1.02 Products. The term Products as used herein shall refer to the equipment set
forth on Exhibit B attached hereto and made a part hereof, as well as all
accessories, attachments, spare parts and renewal parts therefor. Manufacturer
shall have the right to modify, alter, improve, change or discontinue any or all
of the Products covered by this Agreement but only upon [*] prior written notice
to Hakuto. In the event Manufacturer manufactures any new or additional products
similar to or related to the Products hereunder, said products, at the option of
Hakuto, shall be added to the Products covered by this Agreement.
1.03 Territory. Territory shall have the meaning set forth in Exhibit C.
1.04 Conflict of Interest. Distributor warrants to Manufacturer that it does not
currently represent or promote any lines or products that compete with the
Products. During the term of this Agreement, Distributor shall not, without
Manufacturer's prior written consent, represent, promote or otherwise try to
sell within the Territory any lines or products that, in Manufacturer's
judgment, compete with the Products covered by this Agreement.
2. Orders and Shipment
2.01 Order and Acceptance. Before accepting order from its customers, Hakuto
shall place written order inquiry for the Products with Manufacturer on Hakuto's
standard order inquiry form setting forth the quantity of Products, the
specifications therefor, and the desired delivery date. Manufacturer shall use
its reasonable best efforts to notify Distributor of the acceptance or rejection
of an order inquiry and of the assigned delivery date for accepted orders within
five (5) days after receipt of the order inquiry. Upon acceptance of the order
inquiry by the Manufacturer, Hakuto shall place written orders for the Products
with Manufacturer on Hakuto's standard purchase order form setting forth the
quantity of Products, the specifications therefor, and the desired delivery date
as agreed by Manufacturer. To facilitate Manufacturer's production scheduling,
Distributor shall submit purchase orders to Manufacturer at least sixty (60)
days prior to the first day of the requested month of delivery. No order shall
be binding upon Manufacturer until accepted by Manufacturer in writing, and
Manufacturer shall have no liability to Distributor with respect to purchase
orders that are not accepted. No partial shipment of an order shall constitute
the acceptance of the entire order, absent the written acceptance of such entire
order. Manufacturer shall use its reasonable best efforts to deliver Products at
the times specified
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either in its quotation or in its written acceptance of Distributor's purchase
orders. The Products sold to Hakuto by Manufacturer shall be shipped F.O.B. (as
defined in Section 2319 of the California Uniform Commercial Code)
Manufacturer's factory at Fremont, CA to the destination in the Territory
designated by Hakuto in the purchase order, unless otherwise agreed by the
parties. Hakuto will supply a [*] rolling forecast throughout the agreement.
2.02 Reservation of Title. Title to and all risks of loss or damage of the
Products shipped to Hakuto from Manufacturer shall be subject to full payment of
the Purchase Price therefor. Until such full payment, the Product shall remain
the property of Manufacturer. For all Products to which Manufacturer retains
title, Distributor shall (i) carry full insurance on the Products throughout the
time they are in Distributor's possession and (ii) segregate those Products from
other products in Distributor's inventory.
2.03 Terms of Purchase Orders. Distributor's purchase orders submitted to
Manufacturer from time to time with respect to Products to be purchased
hereunder shall be governed by the terms of this Agreement, and nothing
contained in any such purchase order shall in any way modify such terms of
purchase or add any additional terms or conditions.
2.04 Import and Export Requirements. Distributor shall, at its own expense, pay
all import and export licenses and permits, pay customs charges and duty fees,
and take all other actions required to accomplish the export and import of the
Products purchased by Distributor. Distributor understands that Manufacturer is
subject to regulation by agencies of the U.S. government, including the U.S.
Department of Commerce, which prohibit export or diversion of certain technical
products to certain countries. Distributor warrants that it will comply in all
respects with the export and re-export restrictions set forth in the export
license for every Product shipped to Distributor.
3. Price and Terms of Payment
3.01 Prices. The difference between Distributor's purchase price and
Distributor's selling price to its customers shall be Distributor's sole
remuneration for sale of the Products. The initial prices for Manufacturer's
Products shall be delivered by Manufacturer to Distributor within a reasonable
time after the date of this Agreement. Said price shall be subject to change by
Manufacturer from time to time by [*] days' prior written notice to Hakuto;
provided, however, that no such price change shall affect purchase orders
accepted by Manufacturer prior to notification of Hakuto of the price change by
Manufacturer. Hakuto shall pay all freight, insurance, taxes, duty and customs,
and any other charges associated with transportation after shipment and import
of the Products.
3.02 Terms of Payment. Unless otherwise agreed by the parties, payment shall be
made by Hakuto separately for each purchase order accepted by Manufacturer.
Payment by Hakuto to Manufacturer for Products shall be made by cash remittance
within thirty (30) days from the invoice date.
3.03 Currency. Currency for payments covered by this Agreement shall be in U.S.
Dollars.
3.04 Taxes. Distributor's Purchase Price does not include any federal, state or
local taxes that may be applicable to the Products. When Manufacturer has the
legal obligation to collect such taxes, the appropriate amount shall be added to
Distributor's invoice and paid by Distributor unless Distributor provides
Manufacturer with a valid tax exemption certificate authorized by the
appropriate taxing authority.
4. Marketing and Advertising
4.01 Hakuto's Undertaking. Hakuto shall exert best efforts to vigorously promote
the sale of the Products in the Territory during the term of this Agreement and
to develop a market demand for the same in the Territory. Hakuto shall advertise
the Products throughout the Territory in appropriate advertising media and in a
manner insuring proper and adequate publicity for the Products. Hakuto will
ensure the translation into the Japanese language of the following: the
leaflets, catalogues, technical literatures and maintenance manuals. Hakuto
shall participate training program offered by Manufacturer. Hakuto shall
maintain a sales organization which can be best utilized for the promotion of
the sales of the Products and shall have the right, at its own discretion, to
appoint a sub-dealer or sub-dealers to exploit the Products. The prices at which
the Products are resold in the Territory shall be at the sole discretion of
Hakuto. Hakuto shall provide a rolling [*] forecast at [*] basis.
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4.02 Manufacturer's Undertaking. Manufacturer shall, from time to time, make
available to Hakuto free of charge advertising materials for the marketing of
the Products, such as pamphlets, leaflets, calendars, catalogues, posters, and
the like. Manufacturer shall also provide Hakuto free of charge service manuals,
parts lists and any other servicing information as may be currently available to
Manufacturer.
4.03 Fairs and Exhibitions. Hakuto agrees to participate in fairs and
exhibitions to exploit the Products in the Territory. The cost of the fairs or
exhibitions and displays and the responsibility therefor shall be discussed by
the parties prior to the fair or exhibition.
5. [Intentionally Left Blank].
6. Warranty to Distributor's Customers
6.01 Distributor shall pass on to its customers Manufacturer's standard limited
warranty for the Products, including the limitations set forth in 6.02 and 6.03
below. Manufacturer warranty shall state that the Products shall be free from
defects in design, materials and workmanship for a period of twelve (12) months
after the date of customer's acceptance. Manufacturer shall replace free of
charge all Products or parts found to be defective during said period. Hakuto
will supply the manpower to detect the faulty parts, and replace it with the new
one supplied by Manufacturer. Manufacturer further warrants that all the
Products shall meet the technical specifications of applicable governmental
authorities of Japan. Manufacturer shall be responsible for and shall pay all
transportation charges for the return of defective Products or parts thereof,
and all transportation charges for the replacement Products or parts thereof.
Manufacturer shall supply Hakuto free of charge replacement parts necessary for
the after-sale warranty servicing performed by Hakuto and Manufacturer shall
provide to Hakuto for replacement parts necessary for post-warranty servicing at
a reasonable price. This warranty is contingent upon proper use of a Product in
the application for which it was intended and does not cover Products that were
modified without Manufacturer's approval or that were subjected by the customer
to unusual physical or electrical stress.
6.02 No Other Warranty. EXCEPT FOR THE EXPRESS WARRANTY SET FORTH ABOVE,
MANUFACTURER GRANTS NO OTHER WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR
OTHERWISE, REGARDING THE PRODUCTS, THEIR FITNESS FOR ANY PURPOSE, THEIR QUALITY,
THEIR MERCHANTABILITY, OR OTHERWISE.
6.03 Limitation of Liability. MANUFACTURER'S LIABILITY UNDER THE WARRANTY SHALL
BE LIMITED TO A REFUND OF THE CUSTOMER'S PURCHASE PRICE. IN NO EVENT SHALL
MANUFACTURER BE LIABLE FOR THE COST OF PROCUREMENT OF SUBSTITUTE GOODS BY THE
CUSTOMER OR FOR ANY SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES FOR BREACH OF
WARRANTY.
7. [Intentionally Left Blank]
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8. Report
Hakuto agrees to furnish to Manufacturer quarterly reports regarding sales to
customers or to prospective customers in the Territory.
9. Intellectual Property Rights
9.01 Property Rights. Distributor agrees that Manufacturer owns all right,
title, and interest in the product lines that include the Products and in all of
Manufacturer's patents, trademarks, trade names, inventions, copyrights,
know-how, and trade secrets relating to the design, manufacture, operation or
service of the Products. The use by Distributor of any of these property rights
is authorized only for the purposes herein set forth, and upon termination of
this Agreement for any reason such authorization shall cease.
9.02 Sale Conveys no Right to Manufacture or Copy. The Products are offered for
sale and are sold by Manufacturer subject in every case to the condition that
such sale does not convey any license, expressly or by implication, to
manufacture, duplicate or otherwise copy or reproduce any of the Products.
Distributor shall take appropriate steps with its customers, as Manufacturer may
request, to inform them of and assure compliance with the restrictions.
9.03 Confidentiality. Distributor acknowledges that by reason of its
relationship to Manufacturer hereunder it will have access to certain
information and materials concerning Manufacturer's business, plans, customers,
technology, and products that are confidential and of substantial value to
Manufacturer, which value would be impaired if such information were disclosed
to third parties. Distributor agrees that it will not use in any way for its own
account or the account of any third party, nor disclose to any third party, any
such confidential information revealed to it by Manufacturer. Distributor shall
take every reasonable precaution to protect the confidentiality of such
information. Upon request by Distributor, Manufacturer shall advise whether or
not it considers any particular information or materials to be confidential.
Distributor shall not publish any technical description of the Products beyond
the description published by Manufacturer (except to translate that description
into appropriate languages for the Territory). In the event of termination of
this Agreement, there shall be no use or disclosure by Distributor of any
confidential information of Manufacturer, and Distributor shall not manufacture
or have manufactured any devices, components or assemblies utilizing any of
Manufacturer's confidential information. Distributor expressly consents to
Manufacturer's use of Distributor's name in promotional materials and other
documents delivered to government agencies and otherwise.
9.04 Trademarks and Trade Names.
(a) Use. During the term of this Agreement, Distributor shall
have the right to indicate to the public that it is an authorized distributor of
Manufacturer's Products and to advertise within the Territory such Products
under the trademarks, marks, and trade names that Manufacturer may adopt from
time to time ("Manufacturer's Trademarks"). Distributor shall not alter or
remove any Manufacturer's Trademark applied to the Products at the factory.
Except as set forth in this Section 9.04, nothing contained in this Agreement
shall grant to Distributor any right, title or interest in Manufacturer's
Trademarks. At no time during or after the term of this Agreement shall
Distributor challenge or assist others to challenge Manufacturer's Trademarks or
the registration thereof or attempt to register any trademarks, marks or trade
names confusingly similar to those of Manufacturer.
(b) Approval of Representations. All representations of
Manufacturer's Trademarks that Distributor intends to use shall first be
submitted to Manufacturer for approval (which shall not be unreasonably
withheld) of design, color, and other details or shall be exact copies of those
used by Manufacturer. If any of Manufacturer's Trademarks are to be used in
conjunction with another trademark on or in relation to the Products, then
Manufacturer's xxxx shall be presented equally legibly, equally prominently, and
of greater size than the other but nevertheless separated from the other so that
each appears to be a xxxx in its own right, distinct from the other xxxx.
9.05 Patent, Copyright and Trademark Indemnity.
(a) Indemnification. Distributor agrees that Manufacturer has
the right to defend, or at its option to settle, and Manufacturer agrees, at its
own expense, to defend or at its option to settle, any claim, suit or proceeding
brought against Distributor or its customer on the issue of infringement of any
United States or Japan patent, copyright or trademark by the Products sold
hereunder or the use thereof, subject to the limitations hereinafter set forth.
Manufacturer shall have sole control of any such action or settlement
negotiations, and Manufacturer agrees to pay, subject to the limitations
hereinafter set forth, any final judgment entered against Distributor or its
customer on such issue in any such suit or proceeding defended by Manufacturer.
Distributor agrees that Manufacturer at its sole
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option shall be relieved of the foregoing obligations unless Distributor or its
customer notifies Manufacturer promptly in writing of such claim, suit or
proceeding and gives Manufacturer authority to proceed as contemplated herein,
and, at Manufacturer's expense, gives Manufacturer proper and full information
and assistance to settle and/or defend any such claim, suit or proceeding. If
the Products, or any part thereof, are, or in the opinion of Manufacturer may
become, the subject of any claim, suit or proceeding for infringement of any
United States or Japan patent, copyright or trademark, or if it is
adjudicatively determined that the Products, or any part thereof, infringe any
United States or Japan patent, copyright or trademark, or if the sale or use of
the Products, or any part thereof, is, as a result, enjoined, then Manufacturer
may, at its option and expense either: (i) procure for Distributor and its
customers the right under such patent, copyright or trademark to sell or use, as
appropriate, the Products or such part thereof; or (ii) replace the Products, or
part thereof, with other suitable Products or parts; or (iii) suitably modify
the Products, or part thereof; or (iv) if the use of the Products, or part
thereof, is prevented by injunction, remove the Products, or part thereof, and
refund the aggregate payments paid therefor by Distributor, less a reasonable
sum for use and damage. Manufacturer shall not be liable for any costs or
expenses incurred without its prior written authorization.
(b) Limitation. Notwithstanding the provisions of Subsection
9.05(a) above, Manufacturer assumes no liability for (i) infringements covering
completed equipment or any assembly, circuit, combination, method or process in
which any of the Products may be used but not covering the Products when used
alone; (ii) trademark infringements involving any marking or branding not
applied by Manufacturer or involving any marking or branding applied at the
request of Distributor; or (iii) infringements involving the modification or
servicing of the Products, or any part thereof, unless such modification or
servicing was done by Manufacturer.
(c) Entire Liability. The foregoing provisions of this Section
9.05 state the entire liability and obligations of Manufacturer and the
exclusive remedy of Distributor and its customers, with respect to any alleged
infringement of patents, copyrights, trademarks or other intellectual property
rights by the Products or any part thereof.
10. Relationship of Parties
The relationship between Manufacturer and Hakuto shall not be that of a
principal and an agent, but shall be that of a seller and purchaser, each acting
as an independent contractor. Hakuto shall have no right or authority to incur,
assume or create, in writing or otherwise, any warranty, liability, or
obligation of any kind, express or implied, in the name of or on behalf of
Manufacturer.
11. Assignment
Neither party shall assign, transfer or otherwise dispose of this Agreement or
any of its rights or obligations hereunder in whole or in part to any
individual, firm or corporation without the prior written consent of the other
party.
12. Term of Agreement
12.01 Term and Renewal This Agreement shall become effective on the date
mentioned above, remain effective for a period of one (1) year and shall
thereafter be automatically renewed from year to year unless terminated by
either party giving to the other ninety (90) days' written notice prior to the
expiration of the term or renewal term of this Agreement.
13. Events of Termination
13.01 Cancellation In addition to the right of termination set forth in
paragraph 12.01, either party may cancel this Agreement as follows:
(a) Termination for Convenience. This Agreement may be cancelled
by either party for any reason or no reason, whether or not extended beyond the
first year, by giving the other party written notice [*] in advance. If
Manufacturer terminates this Agreement under the provisions of this Subsection
13.01(a) and 12.01, then Manufacturer shall, at Distributor's option, repurchase
Distributor's then-current inventory at the lower of the current Purchase Price
or Distributor's original Purchase Price and shall bear all shipping costs for
the return to Manufacturer of that inventory.
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(b) Bankruptcy etc. By either party immediately and without
prior written notice to the other party in the event that proceedings in
bankruptcy or insolvency are instituted by or against the other party, or a
receiver is appointed, or if any substantial part of the assets of the other
party is the object of attachment, sequestration or other type of comparable
proceeding, and such proceeding is not vacated or terminated within thirty (30)
days after its commencement or institution;
(c) Default. By either party immediately if one party defaults
in the performance of any of the provisions of this Agreement and does not cure
the default within thirty (30) days after receipt of written notice given by the
other party; or
(d) Licenses. By either party immediately if either party is
unable to obtain or renew any permit, license, patent or other governmental
approval necessary to carry on the business contemplated under this Agreement.
13.02 Fulfillment of Orders upon Termination. Upon termination of this Agreement
for other than Distributor's breach, Manufacturer shall continue to fulfill,
subject to the terms of Sections 2 and 3 above, all orders accepted by
Manufacturer prior to the date of termination.
13.03 Return of Materials. All trademarks, trade names, patents, copyrights,
designs, drawings, formulas or other data, photographs, samples, literature, and
sales aids of every kind shall remain the property of Manufacturer. Within
thirty (30) days after the termination of this Agreement, Distributor shall
prepare all such items in its possession for shipment, as Manufacturer may
direct, at Manufacturer's expense. Distributor shall not make, use, dispose of
or retain any copies of any confidential items or information which may have
been entrusted to it. Effective upon the termination of this Agreement,
Distributor shall cease to use all trademarks, marks, and trade names of
Manufacturer. Notwithstanding the foregoing, Distributor may use all trade
marks, marks, and tradename of Manufacturer in connection with the sales of
Distributor's remaining inventory of Manufacturer's products within 90 days from
the date of termination.
13.04 Limitation on Liability. In the event of termination by either party in
accordance with any of the provisions of this Agreement, neither party shall be
liable to the other, because of such termination, for compensation,
reimbursement or damages on account of the loss of prospective profits or
anticipated sales or on account of expenditures, inventory, investments, leases
or commitments in connection with the business or goodwill of Manufacturer or
Distributor. Termination shall not, however, relieve either party of obligations
incurred prior to the termination.
13.05 Survival of Certain Terms. The provisions of Sections 2.02, 2.04, 3.02, 6,
9, 10, 13, 14, 15, 16, 17, 18, 19 and 20 shall survive the termination of this
Agreement for any reason. All other rights and obligations of the parties shall
cease upon termination of this Agreement.
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14. LIMITATION ON LIABILITY.
MANUFACTURER'S LIABILITY ARISING OUT OF THIS AGREEMENT AND/OR SALE OF THE
PRODUCTS SHALL BE LIMITED TO THE AMOUNT PAID BY THE CUSTOMER FOR THE PRODUCTS.
IN NO EVENT SHALL MANUFACTURER BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE
GOODS. IN NO EVENT SHALL MANUFACTURER BE LIABLE TO DISTRIBUTOR OR ANY OTHER
ENTITY FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES, HOWEVER
CAUSED, ON ANY THEORY OF LIABILITY.
15. Entire Agreement
This Agreement, the exhibits and duly executed addenda thereto constitute the
entire agreement between the parties hereto and supersede all previous
negotiations, agreements and commitments in respect thereto, and shall not be
released, discharged, changed or modified in any manner, except by instruments
signed by duly authorized officers or representatives of each of the parties
hereto.
16. Governing Law
The validity and interpretation of this Agreement and each clause and part
thereof shall be governed by the laws of California without regards to conflict
or laws principles.
17. Arbitration
All disputes, controversies or differences arising between the parties hereto,
out of or in relation to or in connection with this Agreement, or the breach
thereof, which cannot be amicably settled by the parties, shall be referred to
arbitration in accordance with the Commercial Arbitration Rules of the Japan
Commercial Arbitration Association and the decision of such arbitration
proceeding shall be binding and conclusive upon the parties hereto. Arbitration
shall be conducted in Tokyo, Japan. The expense of any such arbitration shall be
borne equally by the parties.
18. Separability of Provisions
A judicial or administrative declaration in any jurisdiction on the invalidity
of any one or more of the provisions hereof shall not invalidate the remaining
provisions of this Agreement in that jurisdiction, nor shall such declaration
have any effect on the validity or interpretation of this Agreement outside of
that jurisdiction.
19. Waiver of Compliance
Any failure by any party hereto to enforce at any time, any term or condition
under this Agreement shall not be considered a waiver of that party's right
thereafter to enforce each and every term and condition of this Agreement.
20. Notices
All notices and other communications in connection with this Agreement shall be
in writing and shall be sent to the respective parties at the following
addresses, or to such other addresses as may be designated by the parties in
writing from time to time by postage prepaid registered or certified mail or
electronic mail, facsimile or other reliable method of transmission:
To Manufacturer: Avanex Corporation
00000 Xxxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
X.X.X.
Attention: Xxxxx Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
To Hakuto: Hakuto Co. Ltd.
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X.X.X. Xxx 00
Xxxxx 000-0000
Xxxxx
Attention:
Phone:
Fax:
21. Force Majeure. Nonperformance of either party shall be excused to the extent
that performance is rendered impossible by strike, fire, flood, governmental
acts or orders or restrictions, failure of suppliers, or any other reason where
failure to perform is beyond the reasonable control of and is not caused by the
negligence of the nonperforming party.
22. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall
constitute one instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their respective duly authorized representatives.
Avanex Corporation Hakuto Co., Ltd.
By: /s/ XXXXXX XXXXXXXXXXXX By: /s/ XXXXXX XXXXXXXX
--------------------------------- ---------------------------------
Xxxxxx Xxxxxxxxxxxx Xxxxxx Xxxxxxxx
Title: President and CEO Title: President
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Date: Date:
------------------------------ ------------------------------
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EXHIBITS
EXHIBIT A HOUSE ACCOUNTS
[*]
EXHIBIT B PRODUCTS
All current Avanex products offered by Avanex as of the date of this
Agreement; provided however, that Avanex has the right, upon [*] days'
prior written notice, to exclude all products that perform [*].
EXHIBIT C TERRITORY
The Territory shall include the [*] on a [*] basis; provide however,
that Distributor shall not sell Products to any account in [*] without
the prior written approval of Manufacturer. Distributor shall have the
[*] right to sell the Products to [*] in [*]. Distributor shall not have
the right to sell the Products to [*].
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
