1
Exhibit 10.5
RESELLER AGREEMENT
THIS AGREEMENT is entered into this 29 day of OCT, 1999, by and between
INRANGE TECHNOLOGIES CORPORATION, a Delaware corporation, located at 00000
Xxxxxxxxx Xxxxx, Xx Xxxxxx, Xxx Xxxxxx ("Inrange"), and ANCOR COMMUNICATIONS,
INC., a Minnesota corporation, located at 0000 Xxxx Xxxxx Xxxxx 00, Xxxx
Xxxxxxx, Xxxxxxxxx 00000 ("Purchaser").
BACKGROUND
WHEREAS, Inrange is engaged in the design, manufacture, sale and servicing
of switching, cable management and diagnostic systems and products for
controlling and testing data communications, data processing, and
telecommunications networks; and
WHEREAS, Purchaser is a manufacturer, supplier and marketer of technical
devices which incorporate switching, cable management and diagnostic systems and
products; and
WHEREAS, Inrange and Purchaser are parties to a Technology License
Agreement dated September 24, 1998 (the "Technology License Agreement") under
which Purchaser has granted to Inrange a license with respect to Purchaser's
ASICs and Ancor Technology (each, as defined in the Technology License
Agreement); and
WHEREAS, Inrange is in the process of developing Class 2/3 Native Fiber
Channel 64 and 128 port switches (known as FC/9000-64 and FC/9000-128 and
containing the features set forth on Exhibit A) which incorporate Purchaser's
ASICs and Ancor Technology (the "Designated Inrange Products"); and
WHEREAS, Inrange and Purchaser desire to establish, pursuant to this
Agreement, a mutually beneficial relationship through which Purchaser will
purchase Designated Inrange Products for disposition through third parties that
will sell the Designated Inrange Products under private label to end-users
(collectively, "OEMs");
NOW, THEREFORE, in consideration of the mutual covenants and agreements
stated below, the parties intending to be legally bound agree as follows:
ARTICLE I
OEM RIGHTS
1.1 Appointment. Subject to the terms and conditions of this Agreement,
and for the term of this Agreement, Inrange hereby appoints Purchaser as a
non-exclusive worldwide reseller of the Designated Inrange Products to OEMs.
Pursuant to such appointment, subject only to compliance by Purchaser with the
terms and conditions of this Agreement, Purchaser shall have the non-exclusive
right during the term of this Agreement to sell, lease, market or otherwise
dispose of Designated Inrange Products purchased from Inrange hereunder, but
only to OEMs and only under
2
the private label of the OEM (such products are referred to as "Third-Party
Private Label Products") or, on a case-by-case basis subject to prior approval
by Inrange, the private label of Purchaser (such products are referred to as
"Ancor Private Label Products"). Notwithstanding anything to the contrary
contained herein, Purchaser shall not sell, directly or indirectly, nor deliver,
any Designated Inrange Product in or to any country where such a sale or
delivery by Purchaser would be prohibited by virtue of any applicable law,
regulation or agency ruling.
1.2 Non-Exclusivity. Purchaser acknowledges that its appointment hereunder
as a reseller for the Designated Inrange Products is non-exclusive. Inrange
reserves the right to appoint additional sales representatives, value added
resellers, systems integrators, distributors or OEMs for the Designated Inrange
Products, and for any other products manufactured or distributed by Inrange, and
Inrange reserves the right, at any time, to sell any of the Designated Inrange
Products directly in each case without thereby incurring any commission or other
obligation to Purchaser of any type or nature, except as provided in the
Technology License Agreement.
1.3 [Intentionally Omitted.]
1.4 Independent Purchaser Status. Purchaser is authorized to sell
Designated Inrange Products in such manner, at such prices and upon such terms
as Purchaser shall determine. Purchaser is an independent purchaser and reseller
of Designated Inrange Products. Purchaser shall not be considered an agent or
legal representative of Inrange for any purpose, and neither Purchaser nor any
director, officer, agent or employee of Purchaser, shall be, or be considered,
an employee or agent of Inrange for any purpose whatsoever. Purchaser is not
granted and shall not exercise any right or authority to assume or create any
obligation or responsibility on behalf of or in the name of Inrange, including
without limitation contractual obligations and obligations based on warranties
or guarantees.
1.5 Operations and Expenses. Except as provided herein, the detailed
operations of Purchaser under this Agreement are subject to the sole control and
management of Purchaser. Purchaser shall be responsible for all its own expenses
and employees. Purchaser shall provide, at its own expense, such office space
and facilities, and hire and train such personnel, as may be required to carry
out its obligations under this Agreement, Purchaser agrees that it shall incur
no expense chargeable to Inrange, except as may be specifically authorized in
advance in writing in each case by Inrange.
1.6 Effect on Technology License Agreement. Inrange will not be required
to pay royalties under the Technology License Agreement for Inrange's sales of
Designated Inrange Products to Purchaser under this Agreement; however,
Inrange's sale of Designated Inrange Products to Purchaser under this Agreement
will be included in the calculation of Inrange's Minimum Market Share under
Section 3.4 of the Technology License Agreement. In addition, any Designated
Inrange Products that Purchaser manufactures or has manufactured under the
rights set forth in Section 6.5 will also be included in the calculation of
Inrange's Minimum Market Share under Section 3.4 of the Technology License
Agreement. Notwithstanding anything to the contrary in this Agreement, the
parties acknowledge and agree that this Agreement, and the parties respective
rights and obligation hereunder, do not and will not modify in any way each
party's ownership of and other
2
3
rights granted in and to the Inrange Technology, Ancor Technology and Developed
Technology (as those terms are defined in the Technology License Agreement), as
expressly set forth in the Technology License Agreement
1.7 Promotional Materials and Product Manuals. Purchaser shall have the
right to create and distribute promotional materials and product manuals for the
Designated Inrange Products sold pursuant to this Agreement. As part of that
process, Purchaser may modify the promotional materials and product manuals
provided by Inrange pursuant to Sections 4.1 and 4.2; however, such modified
materials may only be used in connection with Designated Inrange Products sold
pursuant to this Agreement. Inrange shall retain all rights, including
copyrights, in the materials it provides to Purchaser. Also, Purchaser shall be
responsible for any modifications to Inrange's materials.
ARTICLE II
TERMS AND CONDITIONS OF SALE
2.1 Third-Party Private Label Products. If Ancor desires to purchase a
Party Private Label Product, it must (i) forecast that it will purchase a
minimum of * per year of the particular Third-Party Private Label Product, (ii)
advise Inrange of the particular Third-Party Private Label Product customization
requirements (including the Federal Paint Number for the color to be used),
(iii) afford Inrange lead-time to prepare the new private label customization,
and (iv) pay Inrange a customization preparation fee. The customization
preparation fee for standard lead-time (meaning 90 days or such longer time
designated by Inrange for special color orders) is *. The customization
preparation fee for expedited lead-time is *. The initial customization
preparation fee shall be paid at the time that the particular private label
customization is first requested. Thereafter, Ancor shall only be required to
pay an additional customization preparation fee for the Third-Party Private
Label Product if Ancor requests changes in the customization requirements in
that Third-Party Private Label Product. Such additional customization
preparation fee shall be paid at the time that the changes are first requested.
Private label customization shall include only the following features: (a)
replacement of the Inrange logo in its customary placement with the private
label, (b) replacement of the Inrange corporate name in its customary placement
with the customer's name, (c) one designated color paint for the switch cabinet,
(d) generic model/serial number label, (e) certification/approval agency labels,
and (f) accessory kit composed of two loopback plugs.
2.2 Ancor Private Label Products. Ancor Private Label Products will not be
subject to customization lead-time or any customization preparation fee. All
Ancor Private Label Products will include the private label customization
features described in Section 2.1 and will be a single color, to be designated
by Ancor.
2.3 Firm Purchase Orders. All orders for Designated Inrange Products
placed by Purchaser hereunder shall be evidenced by the Purchaser's firm
purchase order and shall be subject to all of the provisions set forth in this
Agreement. By placing each order, the Purchaser confirms its agreement with and
acceptance of all such terms and conditions. In the event of any discrepancy
between the provisions set forth herein, on the one hand, and any purchase
order, order confirmation,
* Confidential treatment requested with respect to this information.
3
4
or other communication between the parties, whether or not acknowledged by the
other party, on the other hand, the provisions hereof shall prevail. In
addition, any additional terms contained in any purchase order, order
confirmation or other communication between the parties, whether or not
acknowledged by the other party, shall not be binding on either party unless
such additional terms are expressly accepted in writing by both parties. No
order for any Designated Inrange Product placed by Purchaser hereunder shall be
binding on Inrange unless, and until, accepted by Inrange. Within five (5)
business days after the receipt of a Purchaser's purchase order hereunder,
Inrange shall either provide a written acknowledgement of acceptance of the
purchase order or written objections to the purchase order. If Inrange fails to
provide any such written acknowledgment or objection within five (5) business
days of its receipt of any Purchaser's purchase order hereunder, the purchase
order shall be deemed to be rejected by Inrange and of no further force and
effect. Purchase orders shall provide details sufficient to identify the
customer, the applicable customized features, and the shipping instructions.
2.4 Prices. The prices charged to Purchaser for the Designated Inrange
Products shall be as set forth in Schedule 2.4 hereof; the parties shall
mutually agree upon an amendment to said Schedule which will finalize the
pricing for the FC/9000-128 products. Such prices shall remain firm for the term
of this Agreement. The prices set forth in Schedule 2.4 are predicated on
Release 1 of the Designated Inrange Products being generally available for
distribution on or before * and Release 2 of the Designated Inrange Products
being generally available for distribution on or before * (each, a "General
Availability Date"). For each full month prior to its General Availability Date
that a Designated Inrange Product is made generally available for purchase, the
price for such Designated Inrange Product under this Agreement will be subject
to a discount of *% This discount will only apply during the 12-month period
commencing upon the applicable accelerated General Availability Date.
Notwithstanding the foregoing, Ancor may request concessions in the prices for a
Third-Party Private Label Product if Ancor's volume for that Third-Party Private
Label Product exceeds * chassis in a 12-month period. If Ancor is entitled to
and does request a concession in prices as described above, the parties shall
negotiate in good faith to reach a revised price based on the applicable volume.
2.5 Payment Terms. All prices are expressed, and shall be payable, in
United States Dollars. Payment terms shall be net thirty (30) days from the date
of invoice. Inrange shall issue invoices upon shipment. To the extent Purchaser
shall fail to make payments as specified in this Agreement, or if for any other
bona fide reason Inrange deems itself to be insecure as to payment, Inrange may
demand that Purchaser make full or partial payment in advance, open for
Inrange's benefit irrevocable documentary letters of credit, obtain for
Inrange's benefit bank guaranties, provide current financial statements for
Purchaser, and/or provide other satisfactory security or guaranties that
invoices will be promptly paid when due. All Designated Inrange Products sold
hereunder shall be invoiced to Purchaser, and Purchaser shall be responsible for
invoicing its customer. Inrange reserves the right to charge interest at one and
one half percent (1.5%) per month on any unpaid balance owing by Purchaser from
the date on which the unpaid balance was due to Inrange.
2.6 Delivery/Shipment.
* Confidential treatment requested with respect to this information.
4
5
2.6.1 Shipment Schedules. Inrange will ship Designated Inrange
Products to Purchaser or to Purchaser's OEM, as indicated in the purchase order.
Initial orders of Third-Party Private Label Products (including initial orders
after a change in customization requirements) will be shipped within * . Other
orders of Third-Party Private Label Products will be shipped within * . All
orders of Ancor Private Label Products will be shipped within * .
2.6.2 U.S. Domestic. For all orders for shipment of Designated
Inrange Products hereunder to destinations within the U.S. 48 contiguous states,
all prices are stated, and all Designated Inrange Products purchased by
Purchaser from Inrange hereunder shall be shipped, F.O.B. [Factory]. All
transportation, insurance and handling charges for Designated Inrange Products
so shipped shall be borne by Purchaser.
2.6.3 International. For all orders for shipment of Designated
Inrange Products by Inrange hereunder from the U.S. to a destination outside the
U.S. 48 contiguous states, shipping tents shall be Ex works (Factory). For all
shipments from the U.S. to foreign destinations, title to all Designated Inrange
Products shall pass outside the U.S. Customs territory.
2.7 Cancellation of Ordered Products. All Designated Inrange Products
ordered hereunder are considered customized products. After Purchaser has
received notice from Inrange of acceptance of an order but prior to the
originally scheduled shipment date, Purchaser will be able to cancel, reduce,
reconfigure or reschedule the order without the prior written consent of
Inrange; provided, however, that Purchaser shall not do so unreasonably and that
any such action shall be subject to the payment requirements set forth in this
Section. Purchaser shall not have the right to take any such action after the
order has been shipped. If, during the period beginning * and ending * prior to
the original shipment date, Purchaser cancels an order, reduces an order by more
than *% or reschedules an order for shipment more than * after the original
shipment date, Purchaser shall pay a charge equal to *% of the purchase price
for the affected Designated Inrange Products. If, during the period beginning *
and ending one day prior to the original shipment date, Ancor cancels an order,
reduces an order by more than * or reschedules an order for shipment more than *
after the original shipment date, Ancor shall pay a charge equal to *% of the
purchase price for the affected Designated Inrange Products. If, during the
period beginning * and ending one day prior to the original shipment date, Ancor
reduces an order up to *%, reconfigures an order, or reschedules an order for
shipment * or less after the original shipment date, Ancor shall pay a charge
equal to *% of the purchase price for the affected Designated Inrange Product.
Except as provided above, Ancor shall not be required to pay any additional
charge in connection with a cancellation, reduction, reconfiguration or
reschedule of an order.
2.8 Warranties.
2.8.1 All sales to Purchaser shall be subject to Inrange's warranty
attached as Schedule 2.8 hereto. Except for permitted modifications to the
Software as described in Sections 2.16 and 2.17, Purchaser agrees that it shall
not in any way alter the Designated Inrange Products (nor the parts or
components thereof) without the prior written authorization of Inrange, nor make
any warranty or representation other than those contained in Inrange's warranty.
Any warranty given
* Confidential treatment requested with respect to this information.
5
6
by Purchaser with respect to Designated Inrange Products that have been altered
without prior authorization of Inrange or any such additional warranty or
representation shall be void. Claims by Purchaser in regard to any defect in any
Designated Inrange Product shall be made pursuant to claims procedures set forth
in the warranty and this Agreement.
2.8.2 Inrange further warrants that it shall convey good title to
all Designated Inrange Products sold to Purchaser, free of all security
interests, liens and encumbrances, but subject to any licenses for third-party
software included in the Designated Inrange Products.
2.9 Disclaimer of Warranties. THE FOREGOING WARRANTIES ARE EXCLUSIVE AND
IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES WHATSOEVER, INCLUDING BUT
NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PARTICULAR
PURPOSE.
2.10 Limitation of Liability.
2.10.1 IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER (OR
SHALL INRANGE BE LIABLE TO ANY PURCHASER OR END USER OF ANY DESIGNATED INRANGE
PRODUCT) FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR CONTINGENT
DAMAGES WHATSOEVER, INCLUDING WITHOUT LIMITATION LOSS OF PROFITS, INJURIES TO
PROPERTY, LOSS OF USE OF ANY DESIGNATED INRANGE PRODUCT OR ANY ASSOCIATED
EQUIPMENT, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED THAT THE POSSIBILITY OF
SUCH LOSS, AND WHETHER THE CLAIM IS FOR BREACH OR REPUDIATION OR CONTRACT, TORT,
BREACH OF WARRANTY, NEGLIGENCE, OR OTHERWISE.
2.10.2 EXCEPT FOR INDEMNIFICATION CLAIMS UNDER SECTION 2.18,
INRANGE'S AND PURCHASER'S LIABILITY UNDER, FOR BREACH OF, OR ARISING OUT OF
THESE TERMS AND CONDITIONS OR SALE AND/OR SALE OR USE OF A DESIGNATED INRANGE
PRODUCT SHALL BE LIMITED TO AN AMOUNT EQUAL TO THE PRICE OF THE AFFECTED
DESIGNATED INRANGE PRODUCT.
THE ESSENTIAL PURPOSE OF THIS SECTION 2.10 IS TO LIMIT THE POTENTIAL
LIABILITY OF THE PARTIES ARISING OUT OF THESE TERMS AND CONDITIONS OF SALE, THE
PURCHASE AND SALE OF DESIGNATED INRANGE PRODUCTS HEREUNDER, AND ARE DESIGNATED
INRANGE PRODUCTS SOLD HEREUNDER.
2.11 Liability Insurance. Each party shall maintain in effect appropriate
liability (including product liability) insurance policies with a recognized
carrier providing for coverage of not less than two million U.S. Dollars
($2,000,000). Upon written request, Purchaser shall provide to Inrange a
certificate of insurance evidencing the above coverage.
2.12 Claims Procedure. Any claim against Inrange for shortages in or
damages to any Designated Inrange Product shipped to Purchaser shall be made in
accordance with Inrange's
6
7
standard procedures and other written instructions conveyed to Purchaser by
Inrange from time to time. Any other claims against Inrange arising out of
Designated Inrange Products sold to Purchaser shall be made within ninety (90)
days after Purchaser first knows or has reason to know of such claim. All such
claims shall be submitted to Inrange in writing and shall set forth in full the
details, basis, and amount of such claim against Inrange. Failure by Purchaser
to provide proper documentation to support an insurance claim that then results
in total or partial denial of coverage shall render Purchaser liable to Inrange
for all amounts unpaid.
2.13 Product Modification or Discontinuance. Inrange will include
Purchaser in its engineering change order ("ECO") process with respect to the
Designated Inrange Products; however, Purchaser will not have any approval
rights with respect to Inrange's ECO process. Inrange may at any time make
changes in any Designated Inrange Product (whether in design, material, the
addition of improvements, or otherwise) and may discontinue the manufacture of
any Designated Inrange Product, all in its sole discretion, without incurring
any obligation of any kind as a result thereof. Inrange shall notify Purchaser
with as much advance notice as possible of changes to form, fit or function
which affect the Designated Inrange Products or the private label customization
features. Purchaser may request a delay in the implementation of a change to
form, fit or function in response to specific requirements from a customer, and
Inrange shall use reasonable efforts to accommodate such request; provided,
however, in no circumstance will Inrange be required to support any version of a
Designated Inrange Product other than the then-current version, the two
immediately preceding software versions, and the one immediately preceding
hardware version. Inrange shall notify Purchaser six (6) months in advance of
its discontinuance of the manufacture of any of the Designated Inrange Products,
and shall use reasonable efforts to support any discontinued Designated Inrange
Products for three (3) years after the sale. Purchaser may request an extension
of the support period in response to specific requirements from a customer, and
Inrange shall use reasonable efforts to accommodate such request; provided,
however, in no circumstance will Inrange be required to support any version of a
Designated Inrange Product other than the then-current version, the two
immediately preceding software versions, and the one immediately preceding
hardware version.
Purchaser will include Inrange in its ECO process with respect to
the Designated Inrange Products; however, Inrange will not have any approval
rights with respect to Purchaser's ECO process. Purchaser shall notify Inrange
with as much advance notice as possible of changes to form, fit or function
which affect the Designated Inrange Products or the private label customization
features. Within five (5) business days of Inrange's receipt of a requested
change from Purchaser, Inrange will respond to Purchaser with a projected cut-in
date.
2.14 Offsets. Any credits, allowances, or other amounts payable or
creditable to Purchaser by Inrange shall be subject to offset for any claims or
other amounts owed by Purchaser to Inrange pursuant to the provisions hereof or
otherwise.
2.15 Security. As security for payment and performance of all of
Purchaser's obligations and liabilities to Inrange under this Agreement,
Purchaser grants to Inrange a security interest in all of the Designated Inrange
Products acquired by Purchaser pursuant to this Agreement, and in all proceeds
of any such Designated Inrange Products. Upon request by Inrange, Purchaser
agrees to
7
8
execute and deliver to Inrange any and all financing statements or other
instruments or documents reasonably necessary in order to establish, perfect, or
maintain such security interests.
2.16 Software License. Designated Inrange Products delivered by Inrange
hereunder may contain or require the use of separable Software (the "Software"),
which is defined herein to include (i) computer programs consisting of
hard-wired logic instructions and/or instruction sequences in machine-readable
code, contained on a magnetic tape, diskette, semiconductor device or other
memory device or system memory which provides basic logic, operating
instructions and user-related application instructions and (ii) documentation
used to describe, maintain and use the programs. Inrange and Purchaser
acknowledge and agree that such Software includes Ancor Technology, Inrange
Technology and Developed Technology, which technologies are owned by Inrange
and/or Purchaser as stated in the Technology License Agreement. Notwithstanding
any other provisions of this Agreement and/or reference to "sale" of Designated
Inrange Products in this Agreement or Inrange's terms and conditions, the title
to, and ownership of, the Software shall remain in Inrange; provided, however,
that Inrange's and Purchaser's respective rights with respect to all Ancor
Technology, Inrange Technology and Developed Technology (even if included in the
Software) shall be as stated in the Technology License Agreement notwithstanding
Inrange's ownership of the compilation of all such technologies as embodied in
the Software.
Inrange hereby grants to Purchaser a personal, non-exclusive,
non-assignable license to distribute and sublicense to Purchaser's OEMs and
their end users the object code for the Software for use solely in connection
with the Designated Inrange Products sold pursuant to this Agreement and subject
to Inrange's standard software license terms (which terms shall not apply to any
Ancor Technology or Developed Technology except as those technologies are
embodied in the Software).
Inrange further grants to Purchaser a personal, non-exclusive,
non-assignable license to use, modify, create derivative works from, port,
integrate and translate the source code for the Software for use solely in
connection with the Designated Inrange Products sold pursuant to this Agreement
and subject to reasonable restrictions imposed by Inrange for protection of its
source code. Inrange further grants to Purchaser's OEMs the right to modify the
source code for the Software as required to perform private label customization
(i.e. change of logo and name) of the Software solely in connection with the
sale of Designated Inrange Products pursuant to this Agreement and subject to
reasonable restrictions imposed by Inrange for protection of its source code. On
a case-by-case basis, at Purchaser's request, Inrange will consider extending to
Purchaser the right to sublicense Purchaser's OEM to use, modify, and create
derivative works from the source code for the Software for use solely in
connection with the Designated Inrange Products sold pursuant to this Agreement.
The grant of such right to sublicense shall be subject to reasonable
restrictions imposed by Inrange for protection of its source code.
Notwithstanding the foregoing, the parties acknowledge and agree that the
Software may include certain third-party software and that Purchaser's rights
with respect to the source code for the Software will not extend to any such
third-party software.
Inrange will not be responsible for any errors arising from the
content of those portions of the Software modified by Purchaser or any errors in
compilation arising from Purchaser's modification of the Software. Purchaser
will pay to Inrange, in addition to any other fees payable
8
9
under this Agreement, the cost of any license fees or charges related to any
third-party software included in the Software if Purchaser elects to have
Inrange deliver to Purchaser such third-party software as part of the Software.
All rights, including copyrights, in the Software shall be retained
by Inrange (subject to Purchaser's ownership rights in and to the Ancor
Technology and Developed Technology embodied in the Software), and Purchaser
shall not have any right to copy or use the Software (whether modified or
unmodified) except as provided in this Agreement. Notwithstanding anything to
the contrary herein, Purchaser's rights to use, modify, distribute and create
derivative works of the Ancor Technology and Developed Technology, as stated in
the Technology License Agreement, shall not be restricted or prohibited in any
way by this Agreement, even if such Ancor Technology and Developed Technology is
also embodied in the Software; however, Purchaser's actions with respect to the
Software itself shall be in accordance with this Agreement
If Purchaser's OEMs or their end user need support for
modifications, integration, interface or new features, Purchaser may request
that Inrange provide such support for a mutually acceptable NRE charge. Inrange
will use its reasonable efforts to accept reasonable requests by Purchaser for
customer customization requirements.
Purchaser agrees further to enter into sub-license agreements with
its OEMs and to cause its OEMs to enter into sub-license agreements with their
end users, which, at a minimum, provide that (a) OEM or end user will keep
confidential and protect the Software and associated documentation from
unauthorized disclosure; (b) any reproduction of the Software shall be solely
for backup or archival purposes; (c) except as authorized in this Section 2.16,
OEM or end user will not modify or attempt to modify the Software without the
written consent of Inrange; (d) no transfer of title to the Software to OEM or
end user shall be deemed to have occurred by virtue of such sub-license; and (e)
the end user will use the Software solely in connection with the Designated
Inrange Products sold pursuant to this Agreement and for its internal business
purposes.
2.17 Modification of Inrange's Java/Browser Control Software. As part of
the license to the Software described in Section 2.16, Inrange grants to
Purchaser a license to modify that portion of Inrange's Java/Browser Control
Software (the "JBC Software") which is based on Purchaser's source code and
included in the Designated Inrange Products, but solely for the purpose of (i)
replacing Inrange logos and name references with the logos and name references
of Purchaser or Purchaser's OEMs, as applicable, and revising pictures and
diagrams to conform to the private label customization features of the
Designated Inrange Products or (ii) modifying and creating derivative works of
the Ancor Technology and Developed Technology embodied in the JBC Software
solely for use in connection with Designated Inrange Products sold pursuant to
this Agreement. Purchaser will furnish the modified JBC Software files to
Inrange, and Inrange will produce the modified JBC Software for shipment with
the Designated Inrange Products. Inrange's obligation with respect to the JBC
Software will be limited to error-free compilation of the unmodified Inrange
portion. Inrange will not be responsible for any errors arising from the content
of those portions of the JBC Software modified by Purchaser or any errors in
compilation arising from Purchaser's modification of the JBC Software. Purchaser
will pay to Inrange, in addition to any other fees payable under this Agreement,
the cost of any license fees or charges related to any third-party software
included in the
9
10
JBC Software if Purchaser elects to have Inrange deliver to Purchaser such
third-party software as part of the JBC Software.
All rights, including copyrights, in the JBC Software shall be
retained by Inrange (subject to purchaser's ownership rights in and to the Ancor
Technology and Developed Technology embodied in the JBC Software), and Purchaser
shall not have any right to copy or use the JBC Software (whether modified or
unmodified) except as provided in this Agreement. Notwithstanding anything to
the contrary herein, Purchaser's rights to use, modify, distribute and create
derivative works of the Ancor Technology and Developed Technology, as stated in
the Technology License Agreement, shall not be restricted or prohibited in any
way by this Agreement, even if such Ancor Technology and Developed Technology is
also embodied in the JBC Software; however. Purchaser's actions with respect to
the JBC Software itself shall be in accordance with this Agreement.
2.18 Indemnification.
2.18.1 Inrange shall defend, indemnify and hold harmless Purchaser
its officers, directors, employees, successors, and assigns, against any losses,
damages, or expenses of whatever form or nature, including attorneys' fees and
other costs of legal defense that they, or any of them, may sustain or incur as
a result of any third party suit, proceeding, claim or other legal action
(collectively. "Third Party Action") insofar as such Third Party Action is based
on a claim that a Designated Inrange Product or its use, manufacture (as
provided in Section 6.5), import or sale as permitted hereunder, constitutes an
infringement of any issued United States patent or copyright. The foregoing
indemnification obligation of Inrange shall be subject to (i) Purchaser promptly
notifying Inrange of any such Third Party Action and furnishing Inrange a
complete copy of each communication, notice or other action relating to the
alleged infringement. (ii) Inrange being given authority, information and
reasonable assistance necessary to settle, compromise or litigate such Third
Party Action, and (iii) no settlement of any Third Party Action being made
without the express permission of Inrange. If the Designated Inrange Product is
held in any such Third Party Action to infringe and the use of the Designated
Inrange Product is enjoined, or in the case of a settlement as described above,
Inrange shall, at its own expense, either procure for Purchaser a right to
continue using the Designated Inrange Product or replace same with a
noninfringing Designated Inrange Product, or modify same to make it
noninfringing, or, if Inrange cannot reasonably accomplish one of the foregoing
remedies, refund the depreciated value of the Designated Inrange Product and
accept the return of same.
2.18.2 Inrange shall not be obligated to defend or be liable for
costs and damages if infringement as described in this Section arises out of (i)
compliance with Purchaser's specifications, (ii) incorporation of any Ancor
Technology in the Designated Inrange Product, (iii) any combination or use of
the Designated Inrange Product with materials or technology not furnished by
Inrange if such infringement would have been avoided by use of the Designated
Inrange Product alone, (iv) a modification of the Designated Inrange Product
after delivery by Inrange if the infringement would have been avoided without
such modification, or (v) other fault or action of Purchaser. In any of these
cases, Purchaser will indemnify and defend Inrange on the basis described in the
preceding
10
11
subsection. Inrange may decline to make further shipments to Purchaser under
this Agreement if infringement caused by any such action of Purchaser has been
alleged or has occurred.
2.18.3 The foregoing states the entire liability of Inrange for
patent, copyright, or other intellectual property infringement by The Designated
Inrange Products furnished hereunder. The obligations under this Section shall
survive the termination of this Agreement for any reason.
ARTICLE III
OBLIGATIONS OF PURCHASER
3.1 Sales Promotion. Purchaser shall use its best efforts, consistent with
its business plan, to promote the sale of the Designated Inrange Products to all
potential customers and will cooperate with users of the Designated Inrange
Products. For that purpose, Purchaser shall conduct the following activities:
3.1.1 Forecast and Market Analysis: Purchaser shall provide Inrange
with:
(a) a rolling 12-month forecast of sales, to be received by
Inrange no later than the last day of each calendar quarter;
(b) immediate notice of any material changes in Purchaser's
quarterly forecast of sales; and
(c) updates on any material developments in the business and
marketing conditions in the industry which could reasonably be
expected to affect the sale of Designated Inrange Products to
customers and prospective customers.
3.2 Promotional Materials. Purchaser shall maintain an adequate inventory
of promotional materials and shall use such materials in an efficient and
effective manner to promote the sale of the Designated Inrange Products in the
Territory. Any modifications to Inrange promotional materials shall be subject
to Section 1.7.
3.3 Product Manuals. Purchaser shall create and maintain an adequate
inventory of product manuals and shall include a product manual with each sale
of a Designated Inrange Product. Any modifications to Inrange product manuals
shall be subject to Section 1.7.
3.4 Sales Policies. Purchaser shall, at all times, conduct business in the
manner that will reflect favorably upon the Designated Inrange Products and
Inrange. Purchaser shall not make any false or misleading representations
concerning the Designated Inrange Products, or make any representations
concerning the Designated Inrange Products' specifications, features,
capabilities and applicable manufacturer warranties which are not consistent
with those set forth in the product descriptions or promotional materials
delivered by Inrange to Purchaser hereunder.
11
12
3.5 Support. Unless otherwise agreed in writing by Inrange, Purchaser
shall, at its expense, provide all customer service, installation and
maintenance services, and technical support of the Designated Inrange Products
sold by it. Inrange will only provide direct support to Purchaser's customers,
on a special-request basis, subject to Inrange's reasonable acceptance of such
request and to terms reasonably acceptable to Inrange.
3.6 Governmental Approvals and Compliance. Purchaser shall, at its
expense, obtain all registrations, licenses and permits required to perform its
obligations, pay all taxes and fees due in connection therewith, and comply with
any and all applicable laws, regulations, and orders. Purchaser shall furnish
Inrange with such documentation as Inrange may request to confirm Purchaser's
compliance with this Section 3.6 and agrees that it shall not engage in any
course of conduct that, in Inrange's reasonable belief, would cause Inrange to
be in violation of the laws of any jurisdiction. Any breach of the provisions of
this Section 3.6 shall be deemed a material breach of this Agreement.
3.7 [Intentionally Omitted.]
3.8 Questionable Payments. Purchaser certifies that neither it, nor any of
its directors, officers, employees, or agents is an official, agent, or employee
of any government or governmental agency or political party or a candidate for
any political office on the date of this Agreement. Purchaser shall promptly
notify Inrange of the occurrence of any event that would or may result in an
exception to the foregoing representation. Purchaser shall not, directly or
indirectly, in the name of, on behalf of, or for the benefit of Inrange offer,
promise or authorize to pay, or pay, any compensation, or give anything of value
to, any official, agent or employee of any government or governmental agency, or
to any political party or officer, employee, or agent thereof. Any breach of the
provisions of this Section 3.8 shall be deemed a material breach of this
Agreement and, if such breach is not susceptible to a cure, shall entitle
Inrange to terminate this Agreement effective immediately on notice to
Purchaser.
3.9 Exclusivity. Purchaser acknowledges and agrees (i) that the Designated
Inrange Products under this Agreement fall within the scope of "Inrange
Products" described in Section 2.2 of the Technology License Agreement and (ii)
that Purchaser's breach of Section 2.2 of the Technology License Agreement with
respect to a Designated Inrange Product shall be deemed to be a material breach
of this Agreement. This Section is not intended to impose additional
restrictions on the distribution of Designated Inrange Products beyond those
otherwise set forth in this Agreement.
3.10 Competitive Fibre Channel Switch. Inrange shall give Purchaser
written notice of Inrange's intention to offer for sale any fibre channel switch
that is competitive with the Designated Inrange Product at least twelve (12)
months prior to Inrange's first offer of such switch for sale. Purchaser shall
give Inrange written notice of Purchaser's intention to offer for sale any fibre
channel switch that is competitive with the Designated Inrange Product at lease
twelve (12) months prior to Purchaser's first offer of such switch for sale.
12
13
3.11 Indemnification. Purchaser shall indemnity, defend, and hold harmless
Inrange, its officers, directors, employees, successors, and assigns, against
any losses, damages, or expenses of whatever form or nature, including
attorneys' fees and costs of legal defense, that they, or any of them may
sustain or incur as a result of any third parry suit, proceeding, claim or other
legal action (collectively, "Third Party Action") insofar as such Third Party
Action is based on a claim (a) that Purchaser has breached this Agreement, (b)
that Purchaser has made any representations or warranties with respect to the
Designated Inrange Products that are inconsistent with or in addition to
Inranges' standard warranties on the Designated Inrange Products, (c) of any
defect arising from or related to the intention of Purchasers' ASICs in or with
the Designated Inrange Products caused by Purchaser, or (d) caused by a
modification of the Designated Inrange Product after delivery by Inrange. The
foregoing Indemnification obligation of Purchaser shall be subject to (1)
Inrange promptly notifying Purchaser of any such Third Parry Action and
furnishing Purchaser a copy of each communication, notice or other action
relating to the claim, (2) Purchaser being given authority, information, and
reasonable assistance necessary to settle, compromise or litigate such Third
Party Action, and (3) no settlement of any Third Party Action being made without
the express written permission of Purchaser.
3.12 Spares. Purchaser shall maintain an inventory of spares sufficient to
fulfill its support obligations under this Agreement.
3.13 Use of Parts and Components. Purchaser shall not sell or use any
parts or components of a Designated Inrange Product except in connection with
the sale of a Designated Inrange Product pursuant to this Agreement.
ARTICLE IV
OBLIGATIONS OF INRANGE
4.1 Promotional Materials. Inrange shall provide Purchaser with electronic
versions of certain promotional materials as designated by Inrange for the
Designated Inrange Products in "Framemaker" programing format to enable
Purchaser to modify these materials to conform to the private label
customization features provided for in this Agreement. Any modifications to the
materials provided by Inrange shall be subject to Section 1.7.
4.2 Product Manuals. Inrange shall provide Purchaser with electronic
versions of product manuals for the Designated Inrange Products in "Framemaker"
programing format to enable Purchaser to modify these manuals to conform to the
private label customization features provided for in this Agreement. Any
modifications to the manuals provided by Inrange shall be subject to Section
1.7.
4.3 [Intentionally Omitted.]
4.4 Assistance. Inrange shall provide Purchaser with reasonable access to
third level telephonic assistance by Inrange's technical personnel. Such
telephone assistance shall be available
13
14
directly during normal business hours and by pager 24 hours per day, seven days
per week. Such telephone assistance shall be requested by Purchaser only after
it has reasonably attempted all other means to remedy the customer problem. Such
telephone assistance and any necessary follow-up assistance shall be provided in
accordance with Schedule 4.4 and shall be without charge to Purchaser except as
may be otherwise mutually agreed. Inrange may provide on-site support on terms
mutually agreed by the parties. Inrange shall have no obligation to provide
assistance to Purchaser's customers or to end users unless mutually agreed by
the parties based on a specific request by Purchaser.
4.5 Training. Inrange will provide, and Purchaser will cause its personnel
to attend, such technical, sales and service training sessions with respect to
the Designated Inrange Products as the parties deem necessary to enable
Purchaser to effectively market, sell and support the Designated Inrange
Products; provided, however, Inrange, in its sole discretion, will determine the
reasonableness of the number of training sessions during any 12-month period
(but in no case will the number of training sessions during any 12-month period
be fewer than three sessions. Such training will be provided for no fewer than *
Purchaser personnel and no more than * Purchaser personnel at any one time. Such
training will be provided at Inrange's designated training site, at times
mutually agreeable to the parties, without charge to Purchaser. At Purchaser's
request, Inrange will provide such training at Purchaser's designated training
site, at times mutually agreeable to the parties, but in such case Purchaser
will reimburse Inrange for the actual travel and living expenses of Inrange
personnel delivering the training as well as incidental expenses associated with
the training.
If Purchaser requests training in addition to the training described
in the first paragraph of this Section, Inrange will provide such training at
Inrange's designated training site, at times mutually agreeable to the parties,
at Inrange's then-current rate (currently, * per student). Each such additional
training class is subject to a minimum fee equivalent to the cost of * students,
and the maximum class size for such additional training classes will be *
students. At Purchaser's request, Inrange will provide such additional training
classes at Purchaser's designated site, at times mutually agreeable to the
parties, but in such case, in addition to the additional training charges
payable by Purchaser, Purchaser will also reimburse Inrange for the actual
travel and living expenses of Inrange personnel delivering the training, as well
as incidental expenses associated with the training.
4.6 [Intentionally Omitted.]
4.7 Extended Warranty. Inrange will make available an extended warranty
for Designated Inrange Products (providing for factory repair service at
Inrange's factory) on terms and at the prices set forth in Schedule 2.4.
4.8 Out-Of-Warranty Factory Repair Service. Inrange will make available
factory repair service for Designated Inrange Products that are no longer
covered by the warranty at Inrange's factory at rates equal to *% of the
Designated Inrange Product prices set forth in Section 2.4.
*Confidential treatment requested with respect to this information.
14
15
4.9 No Additional Obligations. Except for the foregoing obligations, and
the repair or replacement obligations set forth in its warranty, Inrange shall
have no other support, maintenance or repair obligations.
4.10 Spares. Inrange will make available to Purchaser, for maintenance
purposes, a reasonable number of spare Designated Inrange Products for a period
of three (3) years after the date of the last sale of the Designated Inrange
Product by Inrange. Purchaser may request an extension of this three-year period
in response to specific requirements from its customers, and Inrange shall use
reasonable efforts to accommodate such customer requirements; provided, however,
in no circumstance will Inrange be required to support any version of a
Designated Inrange Product other than the then-current version, the two
immediately preceding software versions, and the one immediately preceding
hardware version.
4.11 Software Updates. Inrange will provide to Purchaser any and all
updates to and/or new releases of Software for the Designated Inrange Products
within 60 days of the completion of Inrange's Beta test Such updates and/or new
releases shall be subject to the licenses set forth in Section 2.16.
ARTICLE V
CONFIDENTIAL INFORMATION AND PROPRIETARY RIGHTS
5.1 Confidential Information: All Confidential Information (as defined in
Section 5.2 below) shall be deemed confidential and proprietary to the party
disclosing such information hereunder. Each party may use the Confidential
Information of the other party during the term of this Agreement only as
permitted or required for the receiving party's performance hereunder. The
receiving party shall not disclose or provide any Confidential Information to
any third party, other than as permitted or required for the receiving party's
performance hereunder, and shall take reasonable measures to prevent any
unauthorized disclosure by its employees, agents, contractors or consultants
during the term hereof including appropriate individual nondisclosure
agreements. The foregoing duty shall survive any termination or expiration of
this Agreement for a period of five (5) years.
5.2 Definition. As used in this Agreement, the term "Confidential
Information" shall mean (a) all information designated by a party as
confidential in which is disclosed by Purchaser to Inrange, or is disclosed by
Inrange to Purchaser, (b) all information embodied in the Designated Inrange
Product, regardless of the form in which it is disclosed, (c) the source code
for the Software, and (d) any information relating to know-how, markets,
customers, products, patents, inventions, procedures, methods, designs,
strategies, plans, development efforts, assets, liabilities, prices, costs,
revenues, profits, organization, employees, agents, resellers or business in
general, or, the algorithms, programs, user interfaces and organization of the
disclosing parties's products. Notwithstanding anything to the contrary in this
Article V, nothing herein shall affect the confidentiality obligations of the
parties under the Technology License Agreement. Without limiting the generality
of the foregoing, this Article V shall not impose any additional confidentiality
15
16
obligations on the parties with respect to the Ancor Technology or Developed
Technology other than those stated in the Technology License Agreement.
5.3 Exclusions. The following shall not be considered Confidential
Information for purposes of this Article V: (a) information which is or becomes
in the public domain through no fault or act of the receiving party; (b)
information which was independently developed by the receiving party without the
use of or reliance on the disclosing parties' Confidential Information; (c)
information which was provided to the receiving party by a third party under no
duty of confidentiality to the disclosing party; or (d) information which is
required to be disclosed by law, provided, however, prompt prior notice thereof
shall be given to the party whose Confidential Information is involved.
5.4 [Intentionally Omitted]
5.5 Trademark and Tradenames. Neither party shall directly or indirectly
use any of the other party's trademarks, trade names or part thereof, or any
xxxx or name confusingly similar thereto, as part of its corporate or business
name or in any other manner, except that (a) Purchaser may identify itself as an
authorized purchaser of Inrange, and (b) on Inrange's written consent the
Purchaser may use Inrange's trademarks relating to the Designated Inrange
Products for display purposes in connection with solicitation of orders for
Designated Inrange Products from OEMs and in any other manner previously
approved by Inrange in writing. All resulting use of such trademarks shall inure
solely to the benefit of the party that owns such trademarks. In addition,
neither party shall register any of the other party's trademarks or any xxxx or
name closely resembling them, unless requested to do so by the other party in
writing.
5.6 Protection of Proprietary Rights. Each party agrees to cooperate with
and assist the other party at the other party's expense, in the protection of
trademarks, patents, or copyrights owned by or licensed to the other party and
shall inform the other party immediately of any infringements or other improper
action with respect to such trademarks, patents, or copyrights that shall come
to the attention of the first party.
ARTICLE VI
TERM AND TERMINATION
6.1 Term and Renewal. Unless terminated as provided in Section 6.2 below,
this Agreement shall continue in full force and effect for an initial three (3)
year term and shall renew thereafter for additional one (1) year terms upon the
mutual agreement of the parties.
6.2 Termination. This Agreement may be terminated prior to expiration of
the initial or any renewal term, as provided in Section 6.1 above, by prior
written notice to the other party, as follows:
6.2.1 By either party, in the event the other party is in material
breach of this Agreement and has failed, within thirty (30) days after receipt
of written notice thereof from the non-
16
17
breaching party, (i) to cure such breach or (ii) to diligently pursue corrective
action with respect to any material breach that cannot be reasonably cured
within such 30-day period.
6.2.2 By either party, effective immediately, if the other party
should become the subject of any voluntary or involuntary bankruptcy,
receivership, or other insolvency proceedings or make an assignment or other
arrangement for the benefit of its creditors, and such action is not discharged
or terminated within ninety (90) days.
6.2.3 By Inrange, effective immediately, if Purchaser should sell,
assign, delegate or transfer any of its rights and obligations under this
Agreement without having obtained Inrange's prior written consent thereto, or if
there should occur any material change in the control of Purchaser or if the
Purchaser merges or otherwise combines with an entity that manufactures, offers
for sale, or sells any product that is directly competitive with any Inrange
product.
6.2.4 By Inrange, effective immediately, in accordance with
provisions of Section 3.8 hereof.
6.2.5 By Purchaser, in the event that Inrange should fail to supply
Designated Inrange Products that conform to Inrange's product specifications and
should fail to remedy or work-around such quality deficiency within thirty (30)
days after receiving written demand therefor, unless such quality deficiency
cannot reasonably be remedied or worked-around within thirty (30) days, in which
case the cure period shall be extended as long as Inrange diligently pursues
such remedy or work-around.
6.3 Rights of Parties on Termination or Expiration. The following
provisions shall apply on the termination or expiration of this Agreement.
6.3.1 Inrange will complete all orders for Designated Inrange
Products which (i) have been accepted by Inrange prior to the effective date of
termination or expiration, but for which delivery has not yet been made, or (ii)
are submitted by Purchaser (and accepted by Inrange) within six (6) months after
the effective date of termination or expiration based on a contractual
obligation between Purchaser and its customer which exists as of the effective
date of termination or expiration. Inrange shall have a right to review and
verify any contractual obligation between Purchaser and its customer which is
the basis for an order under this Section. Termination or expiration shall not
relieve the parties of their obligations under Sections 1.4, 1.5, 1.6, 1.7, 2.3,
2.4, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 2.12, 2.13, 2.14, 2.15, 2.16, 2.17, 2.18,
3.5, 3.6, 3.8, 3.11, 3.13, 6.3, 6.4, 6.5, 6.6 and Articles V and VII hereof.
6.3.2 Except as provided in Section 6.3.1, Purchaser shall cease all
sales activities on behalf of Inrange.
6.3.3 Purchaser will have a continuing right to use Inrange's
Confidential Information to fulfill Purchaser's support obligations with respect
to Designated Inrange Products purchased under this Agreement.
17
18
6.3.4 All indebtedness of Purchaser to Inrange shall become
immediately due and payable without further notice or demand, which is expressly
waived, and Inrange shall be entitled to reimbursement for any reasonable
attorneys' fees that it may incur in collecting or enforcing payment of such
obligations.
6.3.5 Except as required for continued performance under Section
6.3.1, Purchaser shall remove from its property and immediately discontinue all
use, directly or indirectly, of trademarks, designs, and markings owned or
controlled, now or hereafter, by Inrange, or of any word, title expression,
trademark, design, or marking that, in the opinion of Inrange, is confusingly
similar thereto. Purchaser shall further certify in writing to Inrange that
Purchaser has completely terminated its use of any and all such trademarks,
designs, or markings, or any other word, title or expression similar thereto
that appeared in or on any devices or other materials used in conjunction with
Purchaser's business.
6.4 Remedy. Under no circumstance shall either party be liable to the
other by reason of termination or non-renewal of this Agreement for
compensation, reimbursement or damages for (a) loss of prospective compensation;
(b) goodwill or loss thereof; or (c) expenditures, investments, leases or any
type of commitment made in connection with the business of such party or in
reliance on the existence of this Agreement.
6.5 Limited Right to Manufacture. Purchaser shall have the non-exclusive,
nontransferable, worldwide right, during the period of time required for
Purchaser to fulfill its contractual obligations existing on the date of the
Trigger Event (as defined below), to manufacture or have manufactured the
Designated Inrange Products solely for the purpose of Purchaser disposing of
such Designated Inrange Products to OEMs wider private label upon the occurrence
of any of the following events (each, a "Trigger Event"), provided that
Purchaser is not then in breach of this Agreement, provided that the Trigger
Event does not arise from or relate to any defects arising from or relating to
the integration of Purchaser's ASICs in or with the Designated Inrange Products
resulting from Purchaser's or the ASIC's supplier's actions, and provided that
Purchaser manufactures the Designated Inrange Products in accordance with
Inrange's specifications:
(a) (i) the entry of an order for relief in a proceeding in
bankruptcy (other than Chapter 11 of Title 11 of the U.S. Code, as the same may
be amended) in which Inrange is the named debtor; (ii) Inrange's making of an
assignment for the benefit of Inrange's creditors; (iii) the appointment of a
receiver for Inrange; (iv) the filing of (1) any bankruptcy proceeding against
Inrange, other than Chapter 11 of Title 11 of the U.S. Code, (2) any proceeding
for an assignment for the benefit of Inrange's creditors or (3) any proceeding
for appointment of a receiver or custodian of the assets and property of
Inrange, which proceeding shall be consented to or acquiesced to be by Inrange
or has not been discharged or terminated within ninety (90) days; (v) the
rejection by Inrange or any trustee of Inrange of the Reseller Agreement
pursuant to 11 U.S.C. #365; or (vi) following the filing of a proceeding under
Chapter 11 of Title 11 of the U.S. Code, a failure by Inrange or its trustee to
perform its obligations under the Reseller Agreement;
(b) Inrange ceases to operate as a business for a period of thirty
(30) days;
(c) Inrange has materially breached this Agreement, and has failed
to cure such breach within thirty (30) days after its receipt of written notice
thereof from Purchaser or, if such
18
19
breach is not susceptible of cure within such period, has failed to commence
such cure within such period;
(d) Failure by Inrange to deliver at least 80% of the delivery
quantities of conforming Designated Inrange Products for which Inrange has
acknowledged acceptance of orders and provided a delivery date during any sixty
(60) day period, which has not been cured within sixty (60) days after written
notice thereof from Purchaser to Inrange;
(e) The effective date of the discontinuance of the manufacture of a
Designated Inrange Product pursuant to Section 2.13 (provided that the limited
right to manufacture shall apply only to the discontinued Designated Inrange
Product); or
(f) Failure by Inrange to repair or replace defective Designated
Inrange Products within the warranty period specified in Schedule 2.8, which has
not been cured within thirty (30) days after written notice thereof from
Purchaser to Inrange.
In the event that Purchaser gains the limited right to manufacture as set forth
in this Section, Inrange shall not have any obligations with respect to the
Designated Inrange Products manufactured by Purchaser (including but not limited
to any obligations to provide assistance, warranties, warranty service, or
updates); provided, however, notwithstanding the foregoing, Inrange's
indemnification obligation under Section 2.18 shall continue. The right granted
under this Section will be terminated if Inrange demonstrates to Purchaser's
reasonable satisfaction that it has cured the reasons for the Trigger Event and
is able to fully perform the terms of this Agreement and has made Purchaser
whole for all expenses Purchaser has incurred due to the event(s) and the
implementation of the right granted under this Section. The right granted under
this Section covers Designated Inrange Products in existence at the time it
becomes effective and does not permit Purchaser to use Inrange's Confidential
Information to develop new products.
6.6 Escrow. Within sixty (60) days alter execution of this Agreement,
Inrange and Purchaser and Purchaser's designated independent escrow agent will
execute a three party escrow agreement, consistent with the terms of Section
6.5, providing for the release of deposit materials in escrow to Purchaser upon
the occurrence of a Trigger Event. Within sixty (60) days after Inrange's first
sale of a Designated Inrange Product to Purchaser pursuant to this Agreement,
Inrange will deliver to the escrow agent all Inrange Confidential Information
required for the manufacture of the Designated Inrange Product. Inrange shall
update such escrow account from time to time during the term of this Agreement,
but no less than once in every six (6) month period, in order to keep such
account current. Purchaser shall pay all costs, fees and charges of the escrow
agent. Purchaser will use Inrange Confidential Information released by the
escrow agent only in connection with its right under Section 6.5 and will return
all such Inrange Confidential Information to Inrange upon the expiration or
termination of such right. Notwithstanding the foregoing, if Purchaser transfers
any of the Inrange Confidential Information to a third party in order to have
the Designated Inrange Product manufactured as contemplated in Section 6.5, then
(a) only such Inrange Confidential Information as is necessary to manufacture
the Designated Inrange Product may be transferred and (b) such third party shall
execute a written nondisclosure agreement that is at least as protective of
Inrange's rights in such transferred Inrange Confidential Information as is
provided
19
20
under this Agreement. Upon any release of the deposit materials in escrow to
Purchaser pursuant to such escrow agreement, Inrange shall have no further
obligation to maintain or update the escrow account. Further, upon the
expiration or termination of Purchaser's right to purchase Designated Inrange
Products pursuant to this Agreement, the escrow agreement shall be terminated
and all deposit materials in escrow shall be returned to Inrange.
ARTICLE VII
GENERAL PROVISIONS
7.1 Entire Agreement. This Agreement, including the Schedules hereto,
represents the entire agreement between the parties as to the purchase and sale
of Designated Inrange Products by Purchaser and supersedes all prior
discussions, agreements and understandings of every kind and nature between them
pertaining to the subject matter hereof. Notwithstanding the foregoing, this
Agreement does not supercede or modify in any manner the Technology License
Agreement. No modification of this Agreement will be effective unless in writing
and signed by both parties.
7.2 Notices. All notices under this Agreement shall be in English and
shall be in writing and given by facsimile transmission (confirmed by overnight
courier with certified receipt) addressed to the parties at the addresses set
forth below:
If to Inrange: Inrange Technology Corp.
Attention: Xxxx Xxxxxx
00000 Xxxxxxxxx Xxxxx
Xx. Xxxxxx, XX 00000
Fax: (000) 000-0000
with copy to: Xx. Xxxx Xxxxxxx
00000 Xxxxxxxxx Xxxxx
Xx. Xxxxxx, XX 00000
Fax:(000) 000-0000
If to Purchaser: Ancor Communications, Inc.
0000 Xxxx Xxxxx, Xxxxx 00
Xxxx Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxxx
Fax: (000) 000-0000
or, in each case, to such other person or address of which either party may
advise the other in writing. Notices will be deemed given when sent.
7.3 Force Majeure. Neither party shall be in default hereunder by reason
of any failure to delay in the performance of any obligation under this
Agreement which such failure or delay
20
21
arises out of any cause beyond the reasonable control and without the fault or
negligence of such party. Such causes shall include, without limitation, storms,
floods, other acts of nature, fires, explosions, riots, wars or civil
disturbances, strikes or other labor unrest embargoes and other governmental
actions or regulations which would prohibit either party from ordering or
furnish Products or from performing any other aspect of the obligations
hereunder, delays in transportation, and inability to obtain necessary labor,
supplies or manufacturing facilities.
7.4 Severability. The illegality or unenforceability of any provision of
this Agreement shall not affect the validity and enforceability of any legal or
enforceable provisions hereof.
7.5 Survival of Terms. Termination or expiration of this Agreement for any
reason shall not release either party from any liabilities or obligations set
forth in this Agreement which (a) the parties have expressly agreed shall
survive any such termination or expiration, or (b) remain to be performed or by
their nature would be intended to be applicable following any such termination
or expiration.
7.6 Non-assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the business interests of the
parties hereto. Neither party shall have the right to assign or otherwise
transfer its rights and obligations under this Agreement except with the prior
written consent of the other party, whose consent shall not be unreasonably
withheld, except that no consent shall be required for Inrange to assign or
otherwise transfer its rights and/or obligations under this Agreement to one or
more of Inrange's affiliates (i.e., an entity that controls, is controlled by,
or is under common control with Inrange). Any prohibited assignment shall be
null and void.
7.7 Announcements. The terms and conditions of this Agreement are
confidential and, except to the extent that such disclosure is required by law,
neither party shall disclose the terms and conditions of this Agreement to any
third party without the prior written consent of the other party. Any press
release or announcement containing any reference to the other party must be
approved, in writing, by the referenced party prior to publication or release.
7.8 Waivers. Any failure of either party to comply with any obligation,
covenant or agreement herein may be waived in writing by the other party, but
such waiver or failure to insist upon strict compliance of such obligation,
covenant or agreement shall not operate as a waiver of, or estoppel with respect
to, any subsequent or other failure.
7.9 Counterparts. This Agreement may be executed simultaneously in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
7.10 Applicable Law. This Agreement shall be interpreted in accordance
with and governed by the laws of the State of New Jersey.
IN WITNESS WHEREOF, the parties have caused this instrument to be executed
by their duly authorized officers, as of the day and year first above written.
21
22
INRANGE TECHNOLOGIES CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxxx
----------------------------------
Title: President
---------------------------------
ANCOR COMMUNICATIONS, INC.
By: /s/ Xxx Xxxxxx
------------------------------------
Name: XXX XXXXXX
----------------------------------
Title: PRESIDENT
---------------------------------
22
