Exhibit 10.54
[Nortel Networks Letterhead]
September 14, 2001
Mr. Xxxxx Xxxx
Chief Financial Officer
Elastic Networks, Inc.
0000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
RE: LETTER AGREEMENT-NORTEL NETWORKS/ELASTIC NETWORKS:
TERMINATION OF MODIFICATION NO. 1 TO DISTRIBUTION AGREEMENT
Dear Xxxxx:
This letter agreement documents the agreement of Elastic Networks, Inc.
("Elastic Networks") and Nortel Networks Inc. ("Nortel Networks"), regarding the
termination of the agency relationship described in Modification Number 1 dated
September 27, 2000 ("Modification Number 1") to the Distribution Agreement
between Elastic Networks and Nortel Networks entered into on September 1, 1998
("Distribution Agreement"). The parties agree to terminate Modification Number 1
pursuant to the terms of this Letter Agreement effective July 31, 2001 in
accordance Elastic Networks' notice dated July 1, 2001.
All sales of Elastic Networks products shipped through December 31, 2001 to the
customers identified on Schedule A attached hereto and incorporated herein by
reference shall qualify for and satisfy all conditions precedent for the Fee as
such term is defined in Modification Number 1. Notwithstanding the foregoing,
all sales of Elastic Networks products to Verizon Avenue Corporation ("Verizon
Avenue") from January 1, 2001 through the term of the agreement currently being
negotiated, and which will include Elastic Networks as a named principal, for
such sales shall qualify for the Fee. Where Nortel Networks performs the billing
to customers identified on Schedule A (except for Verizon Avenue), a transition
plan will be required to facilitate the purchase and billing of Elastic Networks
products after December 31, 2001.
Notwithstanding the payment terms described in Modification Number 1 the parties
agree from the date hereof of: (i) Nortel Networks' shall satisfy Elastic
Networks invoices with forty-five (45) for Elastic Networks products shipped and
invoiced through Nortel Networks' standard processes. These payments do not
transfer title to Nortel Networks, and Nortel Networks shall be entitled to
recoup any amounts paid to Elastic Networks for products for which payment is
not promptly received from the end customer; (ii) Elastic Networks shall pay to
Nortel Networks the Fee in accordance with the following schedule: fees earned
from August 2001 - October 2001 may be paid on or before
November 5, 2001; fees earned from November 2001 - January 2002 may be paid on
or before February 5, 2002; fees earned from February 2002 - April 2002 may be
paid on or before May 5, 2002; fees earned from May 2002 - July 2002 may be paid
on or before August 5, 2002; etc. (iii) the Fees relating to July 2001 sales may
be paid on or before November 5, 2001.
The parties agree that all amounts due and owing under Modification Number 1 as
of June 30, 2001 have been paid in full.
Nothing herein shall prevent the parties from collaborating together in the
future on joint proposals. The parties anticipate that under a joint proposal
Elastic Networks would contract directly with the end customer.
Except for the termination of Modification Number 1 as set for herein, the
Distribution Agreement remains in full force and effect.
If the above is consistent with your understanding of our Agreement, please
execute this Letter Agreement as indicated below and return the execute copy to
my attention.
Sincerely,
/s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
Vice President, Americas Finance
Acknowledged and agreed to:
/s/Xxxxxx Xxxxxxxx
------------------------------------------
Elastic Networks, Inc.
Xxxxxx Xxxxxxxx
VP Sales
Date: 9/26/01
cc: X. Xxxxx
X. Xxxxxxx
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Schedule A
Verizon Avenue (agency fee to continue through the term)
Mon-Cre (via ZCorum)
University of Georgia (via Layer 3)
Oxford Telephone
Hargray Telephone
City Tel (via On Line Leasing)
Hay Telecommunications
Hurontel
Hurontario
Mornington Communications
Quadro
Westport
Libotel
Valor Telecom
Broadwing (including Cincinnati Bell)
-3-
