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Exhibit 10.23
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 230.406
OEM AGREEMENT
This Agreement is made on March 16, 1999 ("Effective Date") by and between XYLAN
CORPORATION, a California Corporation with offices at 00000 Xxxx Xxxxxx Xx.,
Xxxxxxxxx, Xxxxxxxxxx 00000 ("Xylan"), and PARADYNE CORPORATION with offices at
0000 000xx Xxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000 ("Buyer"), under which Xylan will
sell and Buyer will purchase certain computer hardware and software.
1. RESALE RIGHTS
Subject to the terms of this Agreement, Xylan grants to Buyer a
non-exclusive, non-transferable worldwide license to market,
distribute, sell, lease, rent and maintain the products identified in
Exhibit A ("Products") under Buyer's label to end-users and other
resellers. The Products shall be modified per Buyer's private label
specifications as mutually agreed in accordance with Exhibit B. Buyer
shall supply, at its expense and reasonably in advance of orders, the
necessary artwork labels and color information for the Products as more
fully described in Exhibit B.
2. PRODUCT PURCHASE AND PRICES
2.1 Price. Buyer's prices for the Products are listed in Exhibit A
in relation to Xylan's OEM Price List and are subject to the
terms contained therein. All prices specified are for Buyer as
purchaser. All Xylan prices are [***]. In lieu of [***], Buyer
[***]. Xylan shall show [***].
Xylan may [***] amend the prices on its OEM Price List from
time to time and add or remove products from the OEM Price. In
the event of a [***], Buyer's new purchase price shall [***]
of [***]. Buyer's existing backlog of open orders will be
credited the difference between the original price and the
decreased price. Xylan will notify Buyer of any price change
at least fifteen (15) days prior to said change.
2.2 Annual Delivery Period. The first Annual Delivery Period shall
commence on the Effective Date and shall last twelve (12)
months. Subsequent Annual Delivery Periods shall begin at the
end of each Annual Delivery Period and last for the next
twelve (12) months.
2.3 Forecast. On the Effective Date of this Agreement and no later
than the first day of each calendar month thereafter, Buyer
will provide Xylan a written, non-binding detailed forecast
setting forth buyer's anticipated monthly needs for the
Products during the four (4) calendar month period following
the issuance of the forecast. This forecast is to be sent to
Xylan at the address indicated in Section 17, to the attention
of OEM Program Manager.
2.4 Under GSA Schedule Agreements, distributors are required to
guarantee to their resellers that the prices proposed for
products will not increase during the term of the GSA
Agreement except where the product cost is authorized to be
raised by official GSA modification utilizing the economic
price adjustment
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clause. Xylan agrees to support this guarantee for any
agreements that Buyer may enter into for sale of Product(s) to
a GSA distributor or reseller during the term of this
Agreement and any extensions thereof.
3. RESCHEDULING AND CANCELLATION
3.1 Rescheduling. Buyer may, [***] reschedule the delivery date of
a purchase order by giving Xylan notice at least five (5) days
prior to the originally requested delivery date; provided,
such order must be rescheduled to a date not later than sixty
(60) days following the originally scheduled delivery date.
After any initial rescheduling of a purchase order, all other
rescheduling shall be subject to [***].
3.2 Cancellation. Buyer may cancel purchase orders (in whole or in
part) subject to the schedule and charges set forth in this
Section by giving written notice to Xylan. Such notice shall
be effective on the date of receipt. Buyer must pay in
accordance with Section 5 the full amount of any portion of
any Order which is not subject to rescheduling or cancellation
by Buyer.
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Number of Days Prior to Scheduled Percent of Order Cancellation
Delivery Cancelable Charge
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Less than 5 days [***] [***]
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6-30 days [***] [***]
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More than 30 days [***] [***]
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4. TERM AND TERMINATION
4.1 Term. This Agreement shall commence on the Effective Date and,
unless earlier terminated as provided herein, shall continue
for twenty-four (24) months after which this Agreement shall
automatically renew thereafter for additional one (1) year
periods unless either party gives written notice of
termination at least 60 days prior to the end of the then
current term.
4.2 Termination for Cause. Either party may terminate this
Agreement (i) if the other materially breaches any provision
of this Agreement and fails to cure such breach within thirty
(30) days of written notice describing the breach or (ii)
immediately, if Buyer materially breaches the provisions of
Section 5.
4.3 Termination for Insolvency. This Agreement may be terminated
with written notice (i)upon the institution by or against
Buyer of insolvency, liquidation, receivership, bankruptcy
proceedings, or any other proceedings for the settlement of
Buyer's debt, if such proceeding is not dismissed within
thirty (30) days; or (ii) following Buyer's making an
assignment for the benefit of creditors; or (iii) following
Buyer's dissolution.
4.4 Termination for Convenience. This Agreement may be terminated
for convenience by mutual agreement upon one hundred eighty
(180) days written notice by either party.
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4.5 Obligations of Termination. Upon any of the following events,
Buyer shall reimburse Xylan for reasonable direct expenses
incurred relating to Unique Components not delivered to Buyer
for any of the following reasons: (i) Xylan's termination for
cause, (ii) Buyer's termination for convenience, or (iii)
Buyer's cancellation of all or part of a purchase order (see
Section 3.2).
Buyer's maximum reimbursement obligation under this Section
4.5 shall be [***]. Xylan shall take reasonable steps to
mitigate such costs and shall notify subcontractors, if any,
to do likewise. Upon Buyer's request, Xylan will provide
appropriate support documentation for such costs.
4.6 Survival of Certain Terms. The provision in Sections 1,2.4, 5,
7, 9, 11, 12, 13, 14, 15, 16, 17, and 18 shall survive
expiration or termination of this Agreement for any reason.
All other rights and obligations shall cease upon termination
of this Agreement, except that in the event Buyer terminates
this Agreement under Section 4.4, any minimum purchase
requirement mutually agreed upon (Deleted) shall, at Xylan's
option, survive and be satisfied in accordance with the terms
and conditions of this Agreement.
4.7 Return of Materials. All of Xylan's trademarks, marks, trade
names, patents, copyrights, designs, drawings, formulas or
other data, photographs, samples, literature, and sales aids
of every kind will remain the property of Xylan. Within thirty
(30) days after the termination of this Agreement, Buyer will
prepare all such items in its possession for shipment, as
Xylan may direct, at Xylan's expense. Buyer will not make or
retain any copies of any of Xylan's Proprietary Information
which may have been entrusted to it. Effective upon any
termination of this Agreement pursuant to Section 4.2 or 4.3
above, Buyer will cease to use all trademarks and trade names
of Xylan. Upon termination of this Agreement, Xylan may at its
option repurchase all or part of the Buyer's existing
inventory of the Products.
5. PAYMENT TERMS
All payments shall be made in U.S. currency in the United States and
shall be due within thirty (30) days after the date of invoice. Without
limiting any other remedy provided in this Agreement, in the event
Buyer is delinquent in the payment of any invoice or is otherwise in
breach of this Agreement, Xylan, may in its discretion, withhold
shipment (including partial shipments) of any order or may, at its
option, require Buyer to pay C.O.D. for further shipments. Buyer agrees
to pay [***] on payments more than ten (10) days past due.
6. ORDERING, SHIPMENT AND ACCEPTANCE
6.1 Ordering. All purchase orders shall be dated, uniquely
numbered for identification and incorporate the terms and
conditions of this Agreement. The terms and conditions of this
Agreement prevail regardless of any terms or conditions on the
purchase order. Orders are subject to acceptance by Xylan and
assignment of delivery schedules in accordance with
availability. With respect to Generally Available Products,
Xylan agrees to accept and fill any requested delivery date
with a standard lead time of at least thirty (30) days
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from the order date; provided however, beginning with the
fourth calendar month following the Effective Date, Xylan
agrees to accept and fill forecasted Generally Available
Products with a lead time of fourteen (14) calendar days from
the order date. Additionally, Xylan agrees to make
commercially reasonable efforts to meet non-forecasted
delivery orders requesting delivery within fourteen (14)
calendar days of the order. Xylan will accept or reject
Buyer's orders within two (2) days of receipt. If Xylan does
not confirm or reject Buyer's order by written notice within
two (2) days, Buyer's order will be deemed accepted by Xylan.
Facsimile release orders will be accepted as releases against
purchase orders. Buyer may order Products either as fully
configured units or as subassemblies. Buyer shall purchase
Products by issuing a written purchase order indicating a
model number, description of the Products being ordered,
quantity, price, ship-to location, invoice point and delivery
date requested.
Xylan shall provide Buyer with the TELCO version of the models
ordered, where available. Such TELCO versions will include
Buyer's CLEI codes where provided by Buyer.
Xylan shall use reasonable commercial efforts to fill Buyer's
orders for the Products within fourteen (14) days after
receipt of order, but only if Buyer has issued a detailed
forecast in accordance with Section 2.3.
6.2 Shipment and Delivery. Delivery is F.O.B. Xylan, Calabasas.
All title and risk of loss or damage with respect to the
Products shall pass to Buyer on delivery to the Buyer's common
carrier. Xylan will provide Buyer with a shipment
acknowledgement form by facsimile within twelve (12) to
twenty-four (24) hours of the shipment to Buyer's customer.
Xylan will include at a minimum, the serial number of the
unit, the date shipped, the part number and quantity shipped
and the carrier name on the acknowledgement form along with a
copy of the waybill. Buyer grants Xylan a security interest in
Products purchased under this Agreement to secure payment for
those Products purchased. If requested by Xylan, Buyer shall
execute financing statements, from time to time, to perfect
this security interest. Xylan shall make commercially
reasonable efforts to deliver Products in accordance with
Buyer's instructions regarding shipping and choice of common
carrier at the F.O.B. point. Buyer must notify Xylan within
thirty (30) days of receipt of the Products of any
discrepancies or of any reason for rejection of the Products.
If Buyer fails to so notify Xylan within such thirty (30) day
period, Buyer will be deemed to have accepted the Products.
7. WARRANTY AND LIMITATIONS
7.1 Xylan warrants to Buyer, and only to Buyer, that hardware
Products delivered on or after the Effective Date of this
Agreement will be free from material defects in material and
workmanship under conditions of normal and proper use and will
substantially conform to Product specifications for a period
of twelve (12) months from date of shipment to the Buyer.
7.2 Xylan warrants to Buyer and only to Buyer that hardware
Products delivered prior to the Effective Date of this
Agreement will be free from material defects in material and
workmanship under conditions of normal and proper use and
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will substantially conform to Product specifications for a
period of twenty-four (24) months from the date of shipment to
the Buyer.
7.3 BUYER'S SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF THE
FOREGOING WARRANTY SHALL BE REPLACEMENT OF OR (AT XYLAN'S
OPTION IF DESPITE COMMERCIALLY REASONABLE EFFORTS REPLACEMENT
IS IMPRACTICAL) REFUND FOR RETURNED NON-CONFORMING UNITS OF
THE PRODUCTS FOR WHICH FULL DOCUMENTATION AND PROOF OF NON-
CONFORMITY IS PROVIDED TO XYLAN WITHIN THE APPLICABLE WARRANTY
PERIOD AFTER THE ORIGINAL NON-CONFORMING UNITS ARE RECEIVED BY
BUYER. EXCEPT FOR THE FOREGOING WARRANTIES XYLAN DOES NOT
WARRANT THE MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OF ANY PRODUCT OR PERFORMANCE, DOES NOT MAKE ANY
WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO, PRODUCT,
SPECIFICATIONS, SUPPORT SERVICE OR ANYTHING ELSE AND DOES NOT
MAKE ANY WARRANTY TO BUYER'S DISTRIBUTORS, CUSTOMERS OR
AGENTS. XYLAN HAS NOT AUTHORIZED ANYONE TO MAKE ANY
REPRESENTATION OR WARRANTY OTHER THAN AS PROVIDED ABOVE.
7.4 THIS WARRANTY DOES NOT INCLUDE AND XYLAN SHALL NOT BE
RESPONSIBLE FOR DAMAGE TO THE PRODUCTS RESULTING FROM A CAUSE
OTHER THAN PRODUCT DEFECT OR MALFUNCTION, INCLUDING IMPROPER
INSTALLATION, NEGLECT, ACCIDENT, UNREASONABLE USE, OR
SERVICING OR MODIFICATION OF THE PRODUCT BY ANYONE OTHER THAN
XYLAN OR AN ORGANIZATION CERTIFIED BY XYLAN.
7.5 Warranty service may be obtained by (i) providing the Xylan
Customer Service Department with written notification of a
defect before the expiration of the warranty period, (ii)
returning the defective product to Xylan's designated repair
depot within sixty (60) days of Xylan's issuance of a Return
Material Authorization ("RMA"), and (iii) providing proof of
purchase date and written description of the problem or
failure. Buyer agrees to prepay shipping charges and assume
risk of loss or damage in transit. Buyer's failure to package
the hardware Product in the original packaging or packaging
substantially similar to the original packaging may void the
warranty. If the hardware Product is damaged in transit, the
customer must file a claim with the carrier. Xylan will be
responsible for payment of shipping charges for return of the
hardware Product to Buyer.
Upon return of such repaired Product, the warranty with
respect to such Product will continue for the remaining
unexpired warranty or ninety (90) days, whichever is longer.
7.6 No hardware Product may be returned or exchanged for repair
except as provided for herein. All repairs shall be performed
at a Xylan authorized service center. To return an item for
repair, the Xylan Customer Service Department must be
contacted to obtain an RMA number. No equipment may be
returned without obtaining this RMA number.
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7.7 Xylan will provide Buyer with Software Fixes (bug fixes and
critical patches intended to correct feature or function
deficiencies in the Product) and maintenance releases for
Products during the first ninety (90) days after the Products
are purchased from Xylan. Outside this period, software fixes
shall be available only through new software releases pursuant
to the terms and conditions of Exhibit D.
7.8 Xylan shall provide to Buyer out of warranty repair for
Products at its then prevailing repair rates less Buyer's
discount per Exhibit A and according to the terms and
conditions of this Section 7.
7.9 If a revision change to the Product addresses an identified
customer problem which has not been previously resolved by a
Fix or Update, Xylan will, at its expense, provide Buyer with
the new version of the Product.
8. ENGINEERING CHANGES
8.1 Xylan may, without prior approval from or prior notice to
Buyer, make changes to the Products (i) which do not adversely
affect form, fit, or function or performance at a higher level
of assembly, and/or (ii) when required for safety regulatory,
or legal purposes.
8.2 Xylan will make reasonable efforts to notify Buyer of changes
to the Products which affect form, fit or function forty-five
(45) days in advance of scheduled shipment. If Buyer notifies
Xylan that the changes are unacceptable within thirty (30)
days of notification by Xylan, Xylan shall, at its option,
either (i) accommodate Buyer's objections in the changed
configuration; or (ii) provide Buyer end-of-life Products
under the previous configuration in a quantity mutually
agreed; or (iii) cancel the entire order and refund to Buyer
any pre-paid amount. If Buyer does not provide Xylan with
written notification of objection within thirty (30) days
after such notification by Xylan, Xylan shall have no
obligation to accommodate Buyer's objections.
8.3 Xylan agrees to negotiate in good faith any engineering
changes requested by Buyer. Engineering changes, as defined by
this Section 8.3, represent changes in either cosmetic
appearance of or functionality of the Products that is not
currently included in Xylan's specifications and user manuals
and which are not addressed in the Statement of Work, Exhibit
B. In the event Buyer requests an engineering change, Xylan's
acceptance of the change shall be conditioned upon Buyer's
agreement (i) to pay for all rework of units not shipped, (ii)
to pay for all work in progress, (iii) to pay Non-Recurring
Engineering charges to implement such change and (iv) to
reimburse Xylan for any and all reasonable costs of raw
materials, equipment and other goods and services, if any,
required for the Products and made obsolete by the engineering
change. Xylan shall take all reasonable steps to mitigate such
costs and shall notify subcontractors, if any, to do likewise.
9. TRADEMARK USAGE
9.1 Except as provided in Section 9.2 below, Xylan hereby grants
to Buyer a non-exclusive, worldwide, royalty-free right and
license, during the term of this Agreement, to utilize any
trademarks, logotypes and similar materials of Xylan
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("Trademarks") solely in connection with the sale and
distribution of the Products by Buyer. However, Buyer is
limited to such use in a manner, which is not reasonably
misleading, confusing, or deceiving nor likely to be injurious
or inimical to the best interests of Xylan. Buyer agrees to
diligently safeguard such Trademarks.
9.2 Any right to use Trademarks of Xylan shall terminate with this
Agreement, except that Buyer shall retain such rights with
respect to any Products remaining in Buyer's inventory or
right to sell spares parts or manuals to be purchased from
Xylan, if any, after termination. Buyer shall respect all
rights of Xylan in Trademarks during the term of this
Agreement and thereafter.
10. NON-COMPETITION
Xylan will not sell the OmniSwitch product directly to end-users where
Xylan is aware that: (i) the end user has purchased the OmniSwitch
product and Buyer's DSLAMS from Buyer and (ii) the end user's intent is
to use the OmniSwitch it would purchase from Xylan to directly
collocate with and/or connect to Buyer's DSLAMS. Moreover, Xylan will
not encourage distributors or resellers of the OmniSwitch product
(other than Buyer) to sell the OmniSwitch product to end-users under
circumstances set forth in the preceding sentence.
11. CONFIDENTIALITY
11.1 Confidentiality. The Mutual Confidentiality Agreement between
the Buyer and Xylan dated April 28, 1997 is hereby
incorporated into and made a part of this Agreement and shall
remain in effect for a period of five (5) years after the
termination of this Agreement.
11.2 This Agreement shall impose no obligation upon the receiving
party with respect to any proprietary information which (i) is
now or which subsequently becomes generally known or available
by publication, general use, or otherwise; (ii) was known by
the receiving party prior to the time of disclosure as showed
by the receiving party's files and records immediately prior
to the time of disclosure; (iii) is furnished by the
disclosing party to third parties without restriction on
disclosure; (iv) is subsequently rightfully furnished to the
receiving party by a third party without restriction on
disclosure; or (v) is independently developed by the receiving
party as demonstrated by such party's files and records,
provided that the person or persons developing same have not
had access to the proprietary information.
12. INDEMNIFICATION AGAINST INFRINGEMENT
12.1 Xylan represents that it has the sufficient right, title and
interest in the Products to enter into this Agreement and to
grant the license rights as stated in Section 14.4. Xylan
agrees, at its own expense, to defend, indemnify and hold
Buyer, its directors, officers, shareholders, employees and
agents harmless against any suit, claim, or proceeding brought
against Buyer alleging that any use of the Products as
delivered by Xylan infringes any duly issued patent, copyright
or trademark or any trade secret of any third party, provided
that Buyer (i) promptly notifies Xylan in writing of any such
suit, claim or proceeding; (ii) allows Xylan to defend, settle
or otherwise dispose of such suit or proceeding and, at its
expense, to direct the defense of such suit, claim, or
proceeding; (iii) gives Xylan sole authority, full information
and, at Xylan's
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expense, assistance necessary to defend such suit, claim, or
proceeding; and, (iv) does not enter into any settlement of
any such suit, claim or proceeding without Xylan's written
consent. This obligation will not cover (a) any claim that the
combination or operation of any of the Products with products
not supplied by Xylan infringes any third party's rights as
used in combination with products not supplied by Xylan to the
extent such claim relates to such combination; or (b) any
claim that arises out of Xylan's compliance with technical
specifications provided by Buyer.
12.2 If such claim has occurred, or in Xylan's opinion is likely to
occur, Buyer agrees to permit Xylan at its option and expense,
either to procure for Buyer the right to continue using the
Product or to replace or modify the same so that it becomes
non-infringing, or, if in Xylan's judgment neither of the
foregoing alternatives is reasonably available, cease all use
and distribution of the Product and refund to Buyer the price
thereof as depreciated by an equal annual amount over a five
(5) year period. Xylan shall not be responsible for any
settlement it does not approve in writing. THE FOREGOING
PROVISIONS OF THIS SECTION 12 STATE THE ENTIRE LIABILITY AND
OBLIGATION OF XYLAN AND THE EXCLUSIVE REMEDY OF BUYER AND ITS
CUSTOMERS, WITH RESPECT TO ANY VIOLATION OR INFRINGEMENT OF
ANY ALLEGED PATENT, COPYRIGHT, TRADEMARK OR OTHER INTELLECTUAL
PROPERTY RIGHT BY THE PRODUCTS OR ANY PART THEREOF.
12.3 Buyer shall be solely responsible for any claims, warranties
or representation made by Buyer or its employees, agents or
resellers that differ from the warranty provided by Xylan.
13. LIMITATIONS OF LIABILITY
Except for payment obligations, violation of a license, breaches of
confidentiality or express indemnity obligations, each party's
liability to the other under this Agreement shall be limited to [***]
([***]) or the [***], whichever is greater. IN NO EVENT SHALL EITHER
PARTY BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL
DAMAGES IN CONNECTION WITH OR ARISING OUT OF ITS PERFORMANCE OR FAILURE
TO PERFORM PURSUANT TO THIS AGREEMENT EVEN IF INFORMED OF THE
POSSIBILITY THEREOF IN ADVANCE. Both parties release the other from all
obligation, liability, claims or demands in excess of the limitations
provided in this Section 13.
14. INTELLECTUAL PROPERTY RIGHTS
14.1 Xylan represents and warrants that it has sufficient right,
title and interest in existing products to modify the products
to develop the Products specified in Exhibit A. Xylan will
have and retain all proprietary rights in the results of the
development work; including, without limitation, all
intermediate and final specifications and products unless
otherwise expressly agreed in this Agreement or any addendum
thereto. Xylan may incorporate those results into any Xylan
product for use, license, lease or other disposition, and/or
Xylan may use or dispose of the technology and/or resulting
products in any manner Xylan chooses.
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With respect to any jointly developed products between Xylan
and Buyer, the issues of ownership and obtaining and paying
for any necessary third party licenses will be separately
addressed in an addendum executed by both parties to this
Agreement.
14.2 Buyer agrees that nothing in this Agreement may be construed
to grant by implication any license to Xylan's intellectual
property or design rights. Buyer agrees that as between the
parties Xylan retains full title to any intellectual property,
or design rights for Products mentioned herein. Buyer agrees
not to reverse engineer the Products or any software,
firmware, hardware, or other technology contained therein.
14.3 With respect to software and firmware, hardware or other
technology delivered hereunder, notwithstanding any use of the
terms "Sale" or "Sell" or the like elsewhere in this
Agreement, Buyer agrees not to copy, use, or distribute such
software or firmware except as specifically provided for in
this Agreement.
14.4 Xylan grants to Buyer a non-exclusive, non-transferable,
worldwide license to redistribute software Products purchased
by Buyer under this Agreement, solely to end-users of the
software Products. Xylan does not grant Buyer the right to
reproduce, alter, modify or change the software Products. Each
copy of each software Product shall be sublicensed pursuant to
terms and conditions at least as protective of Xylan's rights
as the end-user license agreement attached as Exhibit C. Buyer
agrees to use commercially diligent efforts to enforce the
obligations of its end-user license agreements and to inform
Xylan immediately of any known breach of such obligations.
Breach of this provision may result in immediate termination
of this Agreement.
14.5 Buyer is notified that the software Products delivered
hereunder may contain software licensed to Xylan by certain
third party licensors. LICENSORS MAKE NO WARRANTIES, EXPRESS,
IMPLIED, STATUTORY OR OTHERWISE, AND LICENSORS SPECIFICALLY
DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE. Licensors do not warrant that the
software will meet the requirements of Buyer or its end-users
or that the operation of the software will be uninterrupted or
error-free. Licensors are third party beneficiaries of this
Section 14 with rights of enforcement.
15. ASSIGNMENT
15.1 Assignment. Either party shall have the right to assign this
Agreement, whether by sale, merger or otherwise, and to assign
its rights and delegate its duties under this Agreement in
whole at any time upon written notice to the non-assigning
party and without the non-assigning party's consent. Upon an
assignment by either party and with thirty days prior written
notice the non-assigning party may terminate the Agreement in
the event that the assignee, in the non-assigning party's
reasonable opinion, is a competitor of the non-assigning
party or is of questionable financial stability and/or
soundness. Notwithstanding the above, either pasty may without
consent assign or transfer this Agreement, in whole or in
part, to its parent or any of its affiliates in which it has
greater than fifty percent (50%) ownership. An assignment
pursuant to this section shall neither affect nor diminish any
rights or duties that either party may then thereafter have as
to Products, licensed materials or services
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delivered prior to the effective date of this assignment. Upon
the assumption of the duties under this Agreement by the
assignee, the assigning party shall be released and
discharged, to the extent of the assignment, from all further
duties under this Agreement as to Products, licensed materials
or services not delivered by the assigning party by the
effective date of the assignment.
15.2 Subject to the limitations herein expressed, this Agreement
will inure to the benefit of and be binding upon the parties,
their successors, administrators, personal representatives,
guardians, heirs and assigns.
16. EXPORT CONTROLS
Both parties agree to fully comply with all applicable United States
and EU or other countries regulations and laws in effect now and
hereinafter, including compliance with all export controls on the
distribution or dissemination of Products, technology, and information
related to and/or exchanged under this Agreement. A party's failure to
comply strictly with this clause will constitute its material breach of
this Agreement and if not cured within thirty (30) days may result in
immediate termination for cause. Xylan will provide Buyer with required
documents and reasonable assistance with respect to export compliance.
17. NOTICES
All notices shall be sent to the following address or to such other
address as one party notifies the other of in writing:
If to Buyer: PARADYNE CORPORATION
LAW DEPARTMENT
0000 000xx Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Attn: Manager, Corporate Contracts
TEL: 727/000-0000
FAX: 727/000-0000
If to Xylan: XYLAN CORPORATION
00000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Legal Department
FAX: 000-000-0000
Telephone: 000-000-0000
All notices required under this Agreement shall be deemed given when hand
delivered; mailed by certified mail, return receipt, postage prepaid; or
deposited for next-day delivery with a reliable overnight courier service.
18. GENERAL PROVISIONS
18.1 Force Majeure. Neither party shall be responsible for delays
or failures in performance resulting from acts beyond the
reasonable control of such party. Such acts shall include but
not be limited to acts of God, labor conflicts, acts of war or
civil disruption, governmental regulations imposed after the
fact, public utility failures, industry wide shortages of
labor or material, or natural disasters. In the event of
interruption of Xylan's manufacture or shipment for reasons
beyond Xylan's reasonable control, Xylan may allocate
production or shipment among its customers in a fair and
reasonable manner. Should such
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force majeure condition continue uninterrupted for a period of
sixty (60) days, the parties agree to negotiate in good faith
a fair and equitable solution.
18.2 Compliance and Separability. Both parties shall comply with
all applicable country, federal, state, and local laws, rules
and regulations. Each party shall indemnify and hold harmless
the other party, its successors, assigns and its customers
against any liability, loss or expense (excluding attorneys'
fees) arising out of such party's non-compliance therewith.
Also, each party shall furnish to the other party any
non-confidential information in such furnishing party's
possession required by such other party during the term of
this Agreement to enable it to comply with the requirements of
any federal, state, local or foreign government agency.
If any term or provision of the Agreement shall be found to be
illegal or unenforceable therein, this Agreement shall remain
in full force and effect and such term or provision shall be
deemed stricken and the parties will endeavor to substitute
similar language that is as consistent as possible with the
original intent.
18.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois
and the United States, without regard to conflicts of law
provisions thereof and without regard to the United Nations
Convention on contracts for the International Sales of Goods.
The sole jurisdiction and venue for actions related to the
subject matter hereof shall be Illinois state and U.S. federal
courts having within their jurisdiction the location of
Xylan's principal place of business. Both parties consent to
the jurisdiction of such courts and agree that process may be
served in the manner provided herein for giving of notices or
otherwise as allowed by Illinois state or U.S. federal law. In
any action or proceeding to enforce rights under this
Agreement, the prevailing party shall be entitled to recover
costs and reasonable attorneys' fees. The English language
version of this Agreement prevails when interpreting this
Agreement.
18.4 Entire Agreement. This Agreement, including Exhibits A through
E and all addenda attached hereto, which are hereby
incorporated by reference, represents the entire Agreement
between the parties relating to the subject matter and
supersedes all prior representations including discussions,
negotiations and agreements, whether written or oral. No
amendment to this Agreement shall be effective unless it is in
writing, dated subsequent hereto, refers explicitly to this
Agreement and is signed on behalf of Buyer and Xylan by their
duly authorized representatives. No terms or conditions on
Buyer's purchase order form or Xylan's order acknowledgment
form will be effective to modify or supplement this Agreement.
18.5 Waiver. No waiver will be implied from a party's conduct or
failure to enforce its rights thereunder. No waiver will be
effective unless in writing signed on behalf of the party
against whom the waiver is asserted.
18.6 Media Releases. Press releases and other like publicity
regarding this Agreement which mentions this Agreement or the
other party by name shall not be released without the prior
written consent of the other party, which consent shall not be
unreasonably withheld.
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18.7 Relationship of the Parties. The parties to this Agreement are
independent contractors. There is no relationship of agency,
partnership, joint venture, employment or franchise between
the parties. Neither party has the ability to bind the other
or to incur any obligation on its behalf. Xylan acknowledges
that work done by its subcontractors is deemed work done by
Xylan.
18.8 Headings. Heading and captions are for convenience only and
are not to be used in the interpretation of this Agreement.
18.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original and all
of which together will constitute one instrument.
18.10 Indemnification of Xylan. Except for warranty claims for which
Xylan is liable under Section 7 and indemnity claims covered
by Section 12, Buyer agrees to indemnify and hold Xylan
harmless against claims or damages (inclusive of costs and
attorneys' fees) made against Xylan as a result of negligence,
recklessness, misrepresentation, error or omission by Buyer or
its employees, agents or representatives, or failure to pay
required amounts (including taxes) due under this Agreement.
Buyer will be responsible for any warranties beyond the scope
of this Agreement which Buyer makes to its customers. Xylan
agrees to indemnify Buyer against claims or damages (inclusive
of costs and reasonable attorney's fees) made against Buyer as
a result of Xylan's negligence, recklessness,
misrepresentations, error or omission by Xylan or its
employees.
18.11 Arbitration. Any controversy or claim, whether based on
contract, tort, or other legal theory (including, but not
limited to, any claim of fraud or misrepresentation),arising
out of or related to this Agreement may be resolved by
arbitration pursuant to this paragraph and the then current
rules and supervision of the American Arbitration Association.
The arbitration shall be held in the headquarters city of the
party not initiating the claim before a single arbitrator who
is knowledgeable in business information and electronic data
processing systems. The arbitrator's decision and award shall
be final and binding and may be entered in any court having
jurisdiction thereof. The arbitrator shall not have the power
to award punitive or exemplary damages. Arbitration issues
shall be determined in accordance with the federal substantive
and procedural laws relating to arbitration; all other aspects
shall be interpreted in accordance with the laws of the State
of Illinois. Each party shall bear its own attorneys' fees
associated with the arbitration and other costs and expenses
of the arbitration shall be borne as provided by the rules of
the American Arbitration Association.
18.12 Quality. Xylan agrees to comply with the quality standards
outlined in Exhibit E hereto.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE EXECUTED
BY THEIR RESPECTIVE DULY AUTHORIZED REPRESENTATIVES WITH EACH PARTY INTENDING TO
BE LEGALLY BOUND.
FOR BUYER FOR XYLAN
By: By: Xxxx Xxxxxxx
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Signed /s/ Signed: /s/
Title: Title: Exec. Vice President, Business Development
Date: 4/1/99 Date: 3/18/99
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EXHIBIT A
PRODUCTS AND PRICING
1. PRODUCTS
The Products are private label versions of Xylan's products as contained in
Xylan's OEM Price List on the Effective Date.
Pricing to Buyer for private label versions of Xylan Products is as follows:
Products Discount Off Xylan's Then-Current OEM List Price
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
Buyer may purchase the Products according to the discount schedule described
above. A copy of Xylan's current OEM Price List is attached hereto. Buyer has
the right under this Agreement to purchase the Products at the discount levels
stated herein or as otherwise mutually agreed upon by both parties in writing
pursuant to Section 17 hereof and amended to this Agreement.
2. NOTES TO PRICING
The discount schedule described above applies to all Products, including
demonstration equipment and spares.
---------------------------------
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EXHIBIT B
STATEMENT OF WORK SCHEDULES
[***]
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EXHIBIT C
XYLAN'S END USER LICENSE
XYLAN CORPORATION
SOFTWARE LICENSE AGREEMENT
IMPORTANT
PLEASE READ THE TERMS AND CONDITIONS OF THIS LICENSE AGREEMENT CAREFULLY
BEFORE OPENING THE PACKAGE.
BY OPENING THE PACKAGE CONTAINING THE PROGRAM DISKETTES, THE SOFTWARE THEREIN,
AND THE ACCOMPANYING USER DOCUMENTATION, YOU (THE "LICENSEE") ACCEPT AND AGREE
TO THE TERMS OF THIS LICENSE AGREEMENT. IF THE LICENSEE IS NOT WILLING TO BE
BOUND BY THE TERMS OF THIS LICENSE AGREEMENT, DO NOT OPEN THE PACKAGE. PLEASE
PROMPTLY RETURN THE PACKAGE IN UNOPENED FORM TO THE PLACE WHERE THE LICENSEE
OBTAINED IT FOR A FULL REFUND.
1. LICENSE GRANT. This is a license, not a sales agreement, between Licensee and
Xylan. Xylan hereby grants to Licensee, and Licensee accepts, a non-exclusive,
non-transferable license to use the program media and the computer software
contained therein in object-code-only form, and the accompanying user
documentation (collectively referred to as the "Licensed Files"), only as
authorized in this License Agreement. Licensee may, subject to the terms of this
License Agreement, use one copy of the software in tangible object code form
only, for physical loading into a single central processing unit (also referred
to as a management processor module, or MPM) of the Licensee's system. Licensee
agrees not to assign, sublicense, transfer, pledge, lease, rent, or share its
rights under this License Agreement. Licensee may retain the program media for
backup purposes with retention of Xylan's copyright and other proprietary
notices. Licensee shall not and shall not attempt to decompile, reverse engineer
or otherwise gain access to any source code for the Licensed Files. Except as
authorized under this paragraph, no copies of the Licensed Files or any portions
thereof may be made by Licensee.
2. XYLAN'S RIGHTS. Licensee acknowledges and agrees that the Licensed Files are
the sole property of Xylan and its licensors, protected by U.S. copyright law,
trademark law, and is licensed on a right to use basis. Licensee further
acknowledges and agrees that all rights, title, and interest in and to the
Licensed Files are and shall remain with Xylan and its licensors and that no
such right, license, or interest shall be asserted with respect to such
copyrights and trademarks and any related know-how, ideas, and programs. This
License Agreement does not convey to Licensee an interest in or to the Licensed
Files, but only a limited right to use revocable in accordance with the terms of
this License Agreement.
3. CONFIDENTIALITY. Xylan considers the Licensed Files to contain valuable trade
secrets of Xylan, the unauthorized disclosure of which could cause irreparable
harm to Xylan. Except as expressly set forth herein, Licensee agrees to use
reasonable efforts not to disclose the Licensed Files to any third parties and
not to use the Licensed Files other than for the purpose authorized by this
License Agreement. This confidentiality obligation shall continue after any
termination of this License Agreement.
4. INDEMNITY. Licensee agrees to indemnify, defend and hold Xylan harmless from
any claim, lawsuit, legal proceeding, settlement or judgment (including without
limitation Xylan's reasonable United States and local attorneys' and expert
witnesses' fees and costs) arising out of or in connection with the copying,
marketing, performance or other distribution of the Licensed Files.
5. LIMITED WARRANTY. Xylan warrants, for Licensee benefit alone, that the
program diskettes in which the computer software is embedded and the
documentation shall, for a period of Ninety (90) days from the date of
commencement of this License Agreement (referred to as the Warranty Period), be
free from material defects in material and workmanship under normal use. Xylan
further warrants, for Licensee benefit alone, that during the Warranty Period
the software shall operate under normal use substantially in accordance with the
specifications in the User's Guide. If during the Warranty Period, a defect in
the software appears, Licensee may return the Licensed Files to Xylan for either
replacement or, if so elected by Xylan, refund of amounts paid by Licensee under
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this License Agreement. EXCEPT FOR THE WARRANTIES SET FORTH ABOVE, THE LICENSED
FILES, AND THE SOFTWARE CONTAINED THEREIN, ARE LICENSED "AS IS" AND LICENSOR
DISCLAIMS ANY AND ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING
(WITHOUT LIMITATION) ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
6. LIMITATION OF LIABILITY. Xylan's cumulative liability to Licensee or any
other party for any loss or damages resulting from any claims, demands, or
actions arising out of or relating to this License Agreement shall not exceed
the license fee paid to Xylan for the use of the Licensed Files. IN NO EVENT
SHALL XYLAN BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR
EXEMPLARY DAMAGES OR LOST PROFITS, EVEN IF XYLAN HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES. SOME STATES DO NOT ALLOW THE LIMITATION OR
EXCLUSION OF LIABILITY FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE
LIMITATION OR EXCLUSION MAY NOT APPLY TO LICENSEE.
7. EXPORT CONTROL. Licensee may not export or re-export the Licensed Files,
without complying with all United States export laws and regulations, including
but not limited to (i) obtaining prior authorization from the U.S. Department of
Commerce if a validated export license is required, and (ii) obtaining "written
assurances" from licensees, if required.
8. SUPPORT AND MAINTENANCE. Except as may be provided in a separate agreement
between Xylan and Licensee, if any, Xylan is under no obligation to maintain or
support the copies of the Licensed Files made and distributed hereunder and
Xylan has no obligation to furnish Licensee with any further assistance,
documentation or information of any nature or kind. Licensee is solely
responsible for the support and maintenance of all portions of any Licensed
Files.
9. TERM. This License Agreement is effective upon Licensee opening of this
package and shall continue until terminated. The Licensee may terminate this
License Agreement at any time by returning the Licensed Files and all copies
thereof and extracts therefrom to Xylan. Xylan may terminate this License
Agreement upon the breach by Licensee of any term hereof. Upon such termination
by Xylan, Licensee agrees to return to Xylan or destroy the Licensed Files and
all copies and portions thereof.
10. GOVERNING LAW. This License Agreement shall be construed and governed in
accordance with the laws of the State of California.
11. SEVERABILITY. Should any term of this License Agreement be declared void or
unenforceable by any court of competent jurisdiction, such declaration shall
have no effect on the remaining terms herein.
12. NO WAIVER. The failure of either party to enforce any rights granted
hereunder or to take action against the other party in the event of any breach
hereunder shall not be deemed a waiver by that party as to subsequent
enforcement of rights or subsequent actions in the event of future breaches.
13. NOTES TO UNITED STATES GOVERNMENT USERS. Software and documentation are
provided with restricted rights. Use, duplication or disclosure by the
government is subject to (i) restrictions set forth in GSA ADP Schedule Contract
with Xylan's reseller(s), or (ii) restrictions set forth in subparagraph (c) (1)
and (2) of 48 CFR 52.227-19, as applicable.
14. THIRD PARTY MATERIALS. Licensee is notified that the Licensed Files may
contain third party software and materials licensed to Xylan by certain
licensors ("Licensors"). LICENSORS MAKE NO WARRANTIES, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, AND LICENSOR AND ITS SUPPLIERS SPECIFICALLY DISCLAIM ANY
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
Licensors do not warrant that the third party software and materials will meet
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Licensee's requirements or that the operation of the software will be
uninterrupted or error-free. Licensors are third party beneficiaries to this
License Agreement will full rights of enforcement.
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EXHIBIT D
TRAINING, SERVICE, AND SUPPORT
This Exhibit D documents the maintenance and support available by XYLAN to
Buyer, and where applicable, to the end-users and Paradyne's service provider
partners, for the Products delivered under this Agreement.
I. PREMISES
1. LEVELS OF SUPPORT SERVICE
Support services are two tiered. Support provided by Buyer or
Buyer's Authorized Service Providers to its end-users is Level
I Support. Support provided by XYLAN to Buyer is Level II
Support.
2. CLASSIFICATION OF PROBLEM SEVERITY
--------------------------------------------------------------------------------
Degree Diagnosis
--------------------------------------------------------------------------------
Severity 1 [***]
--------------------------------------------------------------------------------
Severity 2 [***]
--------------------------------------------------------------------------------
Severity 3 [***]
--------------------------------------------------------------------------------
Severity 4 [***]
--------------------------------------------------------------------------------
II. LEVEL II SUPPORT PROCEDURE
XYLAN shall make commercially reasonable efforts to provide Level II
Support to Buyer according to the following procedures:
1. INITIAL RESPONSE
XYLAN will provide a one hour call back to Buyer's calls to the nearest
XYLAN Service Center, pursuant to the following chart:
--------------------------------------------------------------------------------
SERVICE CENTERS NUMBERS TO CALL BUSINESS HOURS
--------------------------------------------------------------------------------
XYLAN U.S. 1-800-XYLAN-96 (within the U.S.) 24 hours a day
0-000-000-0000 (for International
callers)
--------------------------------------------------------------------------------
XYLAN EUROPE 00-00-000-000 8AM - 7PM (CET)
Monday thru Friday
(excluding local holidays)
--------------------------------------------------------------------------------
Severity l or 2 calls will be responded to within one hour on a 24 hours a day
and 7 days a week basis. Buyer may open Severity 3 or 4 cases by email:
xxxxxxx@xxxxx.xxx or XYLAN will allow Buyer 24 hours a day and 7 days a week
XYLAN web site (www) access to open Severity 3 or 4 cases.
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2. PROBLEM TRACKING
XYLAN will issue Buyer a case number for each new problem reported.
3. RESOLUTION
XYLAN will assist Buyer to ensure the customer receives prompt
resolution to XYLAN product issues. Xylan's escalation procedure
according to Problem Severity are outlined below. XYLAN will make the
designated escalation contacts available to Buyer in the event problems
are not being resolved in a satisfactory manner.
--------------------------------------------------------------------------------
SEVERITY 1 SEVERITY 2 SEVERITY 3 SEVERITY 4
--------------------------------------------------------------------------------
Mgr. Technical Support [***] [***] [***] [***]
--------------------------------------------------------------------------------
VP Service & Support [***] [***] [***] [***]
--------------------------------------------------------------------------------
VP Engineering [***] [***] [***] [***]
--------------------------------------------------------------------------------
Note: Severities 1 and 2 are based on 24 hour clock.
4. ON-SITE VISIT
If it is mutually agreed that a problem resolution would be
significantly facilitated by a XYLAN site visit, XYLAN will dispatch
the necessary technical personnel. Buyer will dispatch a technical
resource on-site to assist XYLAN. If the primary problem is the result
of a XYLAN product anomaly, there will be at no charge to Buyer. If the
problem is not the result of a XYLAN product anomaly, XYLAN at its sole
discretion may xxxx Buyer at the prevailing rates published in the
XYLAN Price List.
III. ON-GOING SUPPORT PROGRAM UNDER LEVEL II SUPPORT
1. TRAINING
XYLAN will provide Buyer certification training for [***] technical
support engineers [***] at Xylan's training facilities for each major
software release; provided, however, [***] of such training will be
charged to Buyer for any cancellation by Buyer within two weeks of such
scheduled training session. Buyer will bear the cost for travel and
expenses, if applicable.
2. SOFTWARE UPDATES AND NEW RELEASES
XYLAN will make available new Software Releases and Software Updates
(as defined in 7.6) upon Xylan's General Availability date. XYLAN will
provide FTP server access to the Buyer for the downloading of all
mentioned software and their associated release notes. XYLAN grants
Buyer the right to duplicate Software Releases and Software Updates to
Buyer's customers licensed to use the Software.
3. HARDWARE REPLACEMENT SERVICE PROGRAM
XYLAN shall make commercially reasonable efforts to provide Hardware
Replacement Service to Buyer according to the following procedures:
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Buyer will be able to request (from Xylan's Customer Support) an RMA
number via telephone, E-mail or facsimile. RMA number(s) should be
returned within one (1) working day of request. Buyer will return
defective parts to Xylan for repair and Xylan will ship repaired parts
to Buyer within ten (10) working days from receipt of parts at Xylan
(actual delivery of said parts to Buyer will depend upon destination
-i.e., customs requirements). Buyer will bear the cost of shipment to
Xylan and Xylan will bear the cost of shipment to Buyer or end user.
If the Xylan equipment is identified as DOA, Xylan will ship a
replacement during the same day that the DOA is reported. This same day
support will at the expense of Xylan, Buyer will arrange the return of
the defective Product to Xylan.
Note
Parts Repair Process ensures that the same serial numbered unit is
repaired and returned to Buyer (except for Advance Replacement Service
and in the case of "product beyond repair"). This service is sometimes
required due to import/export and government regulations.
IV. FEES AND DISCOUNT SCHEDULE FOR SUPPORT SERVICE
LEVEL II SUPPORT FEE
In return for information necessary to support Buyer's customers with
Buyer's basic and enhanced service offerings, Buyer agrees [***]
specifically for the servicing of Xylan Product.
Buyer and Xylan agree to review this Level II Support Fee (1) the later
of six (6) months from the Effective Date of this Agreement, or (2)
when sufficient run rate data is available and every six months
thereafter for the term of this Agreement, to determine whether, in
lieu of the fee described in the previous paragraph, Buyer should pay a
flat fee in a mutually agreed upon amount.
V. LEVEL I SUPPORT
In providing support services by Buyer or Buyer's Authorized Service Providers
to its end users, Buyers must satisfy the following requirements satisfactory to
XYLAN.
1. SERVICE REQUIREMENTS
Buyer must maintain its own Technical Support Center and/or Authorized
Service Provider for providing Level I Support, pre-sales and
post-sales support to its end users. In order to provide quality
service to its end-users, Buyer's Technical Support Center and/or
Authorized Service Providers must meet the following requirements:
a) Staffing a minimum of two designated technical personnel for
XYLAN products.
b) Personnel should have technical competency with XYLAN model
numbers, hardware architecture and configurations, software
features and functionality, software configuration, and
Xylan's OmniVision management software and console user
interface.
c) Personnel should have industry standards experience with
Ethernet, Token ring, ATM, FDDI, routers, bridges, and network
operating systems.
d) Buyer's service organization must own and be trained on the
use of relevant network trouble-shooting equipment including
protocol analyzers, cable testers, and portable PC for console
access.
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2. END-USER SUPPORT PROCEDURES
2.1 INITIAL RESPONSE
Buyer will provide one hour call back to customers during normal
business hours, at minimum, Monday through Friday 9 AM to 5 PM
local time, excluding local holidays.
2.2 PROBLEM TRACKING
Buyer shall have a data base problem tracking capability to assist
in providing all of the information necessary and available to
access and resolve Product problems.
2.3 RESOLUTION
Buyer will use Problem Severities consistent with XYLAN. Buyer
should make best efforts to report unresolved cases to XYLAN using
the following guidelines whenever possible:
- Severity 1 [***]
- Severity 2 [***]
- Severity 3 [***]
- Severity 4 [***]
Once the case is reported, the Buyer and XYLAN will work in good
faith to develop and execute a plan that will provide a timely and
satisfactory resolution. The Buyer still maintains responsibility
to provide the customer a technical contact, regular progress
updates, and equipment to collect data and perform problem
diagnosis.
2.4 ON-SITE VISITS
On-site assistance will be provided if the problem can no longer
be remotely diagnosed by the Buyer or XYLAN.
3. ON-GOING SUPPORT TO END-USERS AND AUTHORIZED SERVICE PROVIDERS
3.1 XYLAN TRAINING
Buyer will schedule personnel to attend XYLAN training, at XYLAN
training facilities, as prescribed by Buyer's Performance
Development (Training) Organization. The Buyer's training
organization will provide the training needed to support its
Technical Support Center or Authorized Service Providers.
3.2 WARRANTY
Buyer will provide Software Updates and Hardware exchanges
consistent with Xylan's Warranty service period as outlined in
this Agreement at no charge to customers.
3.3 SOFTWARE UPDATES AND NEW RELEASES
Buyer will provide Software Updates. Buyer will make new software
releases and release notes available to the end-user and
Authorized Service Providers as appropriate.
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3.4 SPARES AND SERVICE PERSONNEL
Buyer or its Authorized Service Provider will maintain sufficient
spares parts inventory and personnel to fulfill warranty
administration and any service contracts Intergrator maintains
with customer on XYLAN products.
4. RETURN MATERIAL PROCEDURES
Buyer shall return the failed part (freight, duties, and insurance prepaid)
to:
XYLAN Corporation
00000 X. Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Customer Support Department
Package the product(s) to be returned in the same container in which the
replacement was received, using the same protective packing material. Place one
RMA label on each container. Write piece count on outside each container (i.e.,
1 of 2,2 of 2).
International returns, your commercial invoice must include the following
statement - "American goods being returned for repair/replacement". Return to be
prepaid by shipper to Los Angeles Airport and title transferred to our Customs
Broker in Los Angeles for clearance and delivery.
Customs Broker: Air Express Int'l (AEI)
0000 Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
(Tel: 000-000-0000)
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EXHIBIT E
QUALITY
X.0 QUALITY ASSURANCE
Buyer has a significant interest in the quality of the Product. Because
the Product has a useful life expectancy greater than the warranty
obligation period and because of the good will lost by malfunctioning
Products, even though they may be corrected at Seller's expense, it is
agreed by Buyer and Seller that without limiting or abridging Buyers
rights to inspect the Product prior to acceptance or Seller's
post-acceptance obligations provided for in the Agreement, if any, the
following provisions shall apply to ensure acceptable quality for
Products manufactured for Buyer under the terms & this Agreement:
X. 1 QUALITY CONTROL MONITORING & SOURCE INSPECTION
Buyer reserves the right, at any time during the term of this
agreement, with 48 hours prior notice and subject to product
availability, to place one or more personnel in Seller facilities to
carry out inspection and tests, process certifications, review of
quality data, and other functions Buyer may deem reasonably necessary
to maintain quality objectives.
Personnel authorized by Buyer shall be empowered to reject the material
intended for the delivery to Customers in the event that such material
fails to meet Xylan specifications. In the event that the
Representative ascertains that an item of Product is defective because
it fails to meet Xylan specifications, said Representative will advise
Seller's authorized personnel and such defect shall be remedied prior
to shipment. Rejected lots (or Products) will then be corrected and
re-submitted for re-inspection at Seller's expense.
Buyer may, at its option, implement a sampling inspection with lot
rejection in accordance with an appropriate sampling plan and
inspection procedure to be accomplished at Seller's facility. If any
inspection or test is made on Seller's premises, Seller shall, without
additional charge, provide all reasonable facilities and assistance for
the safety and convenience of Buyer's inspector subject to the security
and safety regulations existing at the facilities.
X.2 ACCEPTANCE TESTS
Acceptance test procedures for final manufacturing testing and for
product acceptance purposes will be mutually agreed upon by the Buyer
and Seller if applicable.
X.3 WORKMANSHIP STANDARDS
All Products shall be in compliance with the Buyer's workmanship
standards, IPC-A-610, as a minimum criteria of workmanship.
X.4 QUALITY CONTROL SYSTEM & ISO 9000 COMPLIANCE
Seller shall maintain the quality control system mutually agreed upon
at the Effective Date of this Agreement and as specified in the Xylan
specifications. Seller shall, with every reasonable and timely effort,
apply for and/or maintain ISO 9001 registration. Seller is expected to
use its reasonable best efforts to attain and maintain acceptable
ratings resulting from any future quality system assessments.
X.5 SELLER/BUYER CONTINUOUS IMPROVEMENT EFFORTS
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Buyer and Seller mutually agree to develop a continuous improvement
plan in an effort to reduce costs in both processes and Products that
will mutually benefit both parties in the areas off
a. Target costs
b. Cost reduction efforts, including both materials and processes
c. On time shipments as measured by customer request date and
scheduled ship date.
d. Repair data.
e. Cycle time reductions, including manufacturing, repair,
release processing spare pans delivery, and others.
f. Electronic Data Interchange (EDI).
X.6 NOTIFICATION OF QUALITY ISSUES
Xylan shall notify Buyer within 24 hours of catastrophic failures
affecting customer safety or performance of Product. These failures
include, but are not limited to, Product failures which greatly exceed
the normal failure rate of Product, or line down conditions at Seller
which may impact the timely shipment or quality of Product. Product
produced at Seller must demonstrate a confirmed DOA Defect rate of no
more than .4% per month.
X.7 CORRECTIVE ACTION FOR QUALITY ISSUES
Seller is expected to maintain a functioning and documented quality
system to provide timely and effective corrective action(s) regarding
quality issues. Upon request from Buyer, Seller is to determine the
root cause of quality defects, ensure that these defects are prevented
from shipping to customers, and provide effective corrective action to
prevent the recurrence of these, or similar, defects. Buyer reserves
the right to stop shipment of Buyer product from Seller facilities
until such actions deemed necessary to corrective the defect have been
completed.
X.8 INSPECTION AT DESIGNATED DELIVERY LOCATION
Within 30 days of the receipt of any Product at its designated delivery
location, Buyer may test such Product to confirm conformance to Xylan
specifications. Buyer shall be entitled to reject any product that
fails to conform to the Xylan specifications. Buyer must notify Seller
of any such rejection in writing within five (5) business days of
shipment by Seller.
Upon rejection, Buyer will notify Seller of such rejection and cause
for rejection and return the entire shipment or any portion, to Seller.
Seller accepts all cost of rejected lots, shipping charges back to
Seller and Buyer, any insurance costs, all risk of loss and for
rejected Products. If Seller does not receive such notice of any such
rejection from Buyer within five (5) business days after shipment of
Product, such Product shall be deemed accepted by Buyer for purposes of
this Exhibit of this Agreement. Any Products returned under this
Section of the agreement will be shipped by a carrier selected by
Seller, or Seller will be liable for freight charges at a rate
equivalent to Buyer's documented freight rates. If it is determined
that any Products returned by Buyer under this Section of this Exhibit
are conforming to the Xylan specification then (i) Seller shall utilize
such Products for Buyer's releases and Buyer shall, notwithstanding
anything to the contrary in this Section, pay for the expenses
associated with Buyers original return of such Products to Seller under
this Section. Notwithstanding the foregoing, damage to Products caused
by Buyer's Shipper shall not be considered a nonconformity to the Xylan
specification.
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