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EXHIBIT 10.17
NOTE: THE SYMBOL ***** INDICATES WHERE
CONFIDENTIAL PORTIONS HAVE BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
SECOND AMENDMENT TO COOPERATION AGREEMENT
DATED AS OF OCTOBER 31ST, 1996
BETWEEN SAT AND INNOVA CORPORATIONS
This Amendment Agreement (this "Amendment") is entered into as of 20 June 1997
by and between SAT (Societe Anonyme de Telecommunications), 11 rue Watt XX 000
00000 XXXXX XXXXX 00 - XXXXXX and INNOVA CORPORATION, Gateway North, Building 2,
0000 Xxxxx 000xx Xxxxxx, Xxxxxxx, Xxxxxxxxxx
00000, XXX.
WHEREAS, on October 31, 1996, the parties entered into a Cooperation Agreement
(the "Cooperation Agreement") regarding the development, manufacturing and
commercialization of digital high frequency radiolinks;
WHEREAS, the Parties are very pleased with their relationship and wish to expand
that relationship;
WHEREAS, due to the evolution of market requirements and of the US Dollar
exchange rate during the execution of the Cooperation Agreement, the priority of
the different tasks allocated to the Parties has changed and the transfer prices
need to be modified;
WHEREAS, important commercial actions have been conducted by SAT in France as
well as in Italy and in Poland and the price aspects appear to be critical in
all these three countries.
NOW, THEREFORE, in consideration of the aforesaid premises and mutual covenants
expressed herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Innova and SAT.
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1:
Annex 1 of the Cooperation Agreement is hereby canceled and replaced as follows:
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QUOTE
ANNEX 1
ITEMS TO BE DEVELOPED
ALLOCATION OF DEVELOPMENT TASKS
AND TIME SCHEDULE
PRODUCTS TO BE DEVELOPED BY TIME SCHEDULE
-------- ------------------ -------------
2x2 and 4x2 Mbit/s
-23/26/38 GHz INNOVA 3rd quarter 1996 (1)
-00/00 XXx XXXXXX 0xx quarter 1996 (1)
-13 GHz INNOVA 3rd quarter 1997
4x2 and 8x2 Mbit/s
-15/18/23/26/38 GHz INNOVA 3rd quarter 1997
-13 GHz INNOVA 3rd quarter 1997
8x2 and 16x2 Mbit/s(1+1)
-15 GHz QPSK SAT 0xx xxxxxxx 0000
-00 XXx XXXX SAT 4th quarter 0000
-00 XXx 0XXX XXX/XXXXXX 0xx quarter 1998
(1) these developments are complete at the date of signature of this amendment.
UNQUOTE
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ARTICLE 2:
Each Party acknowledges to the other that, as of the date of the 2nd amendment,
there are no on-going material default by, or disputes with or claims against,
the other Party arising out of the other Party's performance to date under the
Cooperation Agreement.
ARTICLE 3:
Paragraph 6.2(a)(i) of Article 6 of the Cooperation Agreement is hereby canceled
and replaced as follows:
Quote
"(i) a license from INNOVA to SAT to use the interfaces and all Background and
Foreground Technology pertaining to the SIU and the SIU-to-ARU interface
developed by INNOVA for the INNOVA Developed Products, for the purpose of
developing any product below 15 GHz. This license will become a license for the
purpose of manufacturing any product within SAT's exclusive territories as soon
as all the information, specified in Annex 3, relevant to the license of the
16x2 Mb/s 15 GHz product as described in (a)(ii) is given by SAT to INNOVA."
Unquote
ARTICLE 4:
The license granted under paragraph 6.2(a)(iii) of Article 6 of the Cooperation
Agreement is hereby extended as follows:
-In respect of the SIU portion of the Products mentioned in said paragraph, SAT
shall have the right to manufacture in France and install in France and in any
of SAT's exclusive territories, quantities of the SIUs which do not exceed on a
quarterly basis *****% of SAT's quarterly sales of SIUs in France or ***** SIUs,
whichever is higher.
-In respect of the ARU portion of the Products mentioned in said paragraph, SAT
may, as long as it is not in material default under the First Amendment to the
Master Purchase Agreement of even date, increase for the purpose of installation
in France and in any of SAT's exclusive territories, the quantities of ARUs
manufactured in France to a figure equivalent to *****% of SAT's quarterly sales
of ARUs in France plus *****% of SAT's quarterly sales in Italy and Poland, or
to ***** ARUs, whichever is higher.
Transfer prices of the ARU (2, 4 and 8 Mb/s) which are sold to SAT when the SIU
is manufactured by SAT are described in the following table. These prices
include the royalty on the manufacture of the SIU by SAT, as well as the royalty
specified
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for the XP View software license in the First Amendment to the Cooperation
Agreement.
===================================================================================
ARU DELIVERED BEFORE ARU DELIVERED AFTER
DECEMBER 31ST, 1997 DECEMBER 31ST, 1997
-----------------------------------------------------------------------------------
23, 26, 38 GHZ $***** $*****
-----------------------------------------------------------------------------------
18 GHZ $***** $*****
-----------------------------------------------------------------------------------
13 - 15 GHZ $***** $*****
===================================================================================
ARTICLE 5:
The licenses granted under paragraph 6.2 (a)(iv) and 6.2(a)(v) of the
Cooperation Agreement are no longer granted and those paragraphs are therefore
hereby deleted from Article 6 of the Cooperation Agreement.
ARTICLE 6:
INNOVA undertakes:
- to send the letter appended hereto to Bouygues Telecom and Xxxx Xxxxxxx,
so that it is received before June 17th, 1997.
- to deliver to SAT before July 1st, 1997 the technical data required in
the framework of manufacturing licenses, described in Annex 3 of the
Cooperation Agreement, for the 18 / 23 / 26 / 38 GHz products, before
August 1st, 1997 for the 15 GHz products, and before October 1st, 1997
for the 13 GHz products.
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ARTICLE 5:
The first page of Annex 2 of the Cooperation Agreement is hereby canceled and
replaced as follows:
QUOTE
ANNEX 2
PRICES AND OTHER TERMS AND CONDITIONS
APPLICABLE TO THE PURCHASE OF PRODUCTS
1. Market Prices and Transfer Prices
For each Product, the Transfer Price per link (1+0) shall be obtained by
applying to the Market Price stated in the schedule below (which is
applicable for only 24 months after the effective date of this
Agreement), a discount equal to ***** (*****) except that in no event
during such 24-month period shall the Transfer Price of INNOVA developed
Products at 2xE1 and 4xE1 bit rates exceed US $***** per link (1+0) as an
incentive for SAT to shift from XP3 and STD 10 to XP4 as soon as
possible.
INNOVA Developed Products - excluding antenna and cables
Market Price Transfer Price
------------ --------------
- 23, 26, 38 XXx, 0xX0 &
4xE1
Small Qty(i)(1+0) US $ 17,000 US $*****
Large Qty(i)(1+0) US $ 15,000 US $***** (ii)
- 13, 15, 18 XXx, X0 & Market Price Transfer Price
4xE1 ------------ --------------
Small Qty(i)(1+0) US $ 17,000 US $***** (iii)
Large Qty(i)(1+0) US $ 16,100 US $***** (iv)
INNOVA Developed Lens Horn Antennas Transfer Price
----------------------------------- --------------
- 23 & 38 GHz, 24 cm XX x*****
- 00 & 00 XXx, 00 cm US $*****
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- For Product providing 4xE1 & 8xE1 tributaries, Market Price and Transfer
Price are ***** higher than those of products providing 2xE1 & 4xE1
tributaries.
SAT Developed Products - excluding antenna and cables
Market Price Transfer Price
------------ --------------
- 7/8, 13, 15 GHz QPSK
8xE1 & 16xE1
Annual Qty (v) <50 links US $ 36,000 US $*****
(1+0)
Annual Qty (v) >50 links US $ 30,000 US $*****
(1+0)
Notes
(i) prices for small or large quantity apply for annual quantities
respectively below or above ***** (1+0) links, for any product mix from
13 to 38 GHz, whatever the bit rate. At the beginning of each year, each
Party will forecast its annual quantity requirements, which will
determine the applicable price for the year.
(ii) applicable for deliveries after 31st December 1997. For deliveries until
30th June 1997, prices for "small quantity" shall apply for any quantity.
For deliveries from 1st July up to 31st December 1997 a maximum Transfer
Price of US $***** shall apply. However, INNOVA shall use commercially
reasonable efforts to reduce this Transfer Price before 1st January 1998
if cost reductions enable it.
(iii) prices for 18 GHz will be the same as 23, 26 or 38 GHz for deliveries
after 31st of December 1997.
(iv) applicable for deliveries after 31st December 1997. Prices for 18 GHz
will be the same as 23, 26 or 38 GHz for deliveries after 31st December
1997. For deliveries from 1st July up to 31st December 1997 a maximum
Transfer Price of US $***** shall apply. However, INNOVA shall use
commercially reasonable efforts to reduce this Transfer Price before 1st
January 1998 if cost reductions enable it.
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(v) for any product mix from 7 GHz up to 15 GHz, whatever the bit rate.
UNQUOTE
IN WITNESS WHEREOF, the Parties hereto have executed this Amendment in two (2)
original counterparts as of the date first above written.
For INNOVA CORPORATION For SAT (Societe Anonyme
de Telecommunications
By /s/ Xxxx-Xxxxxxxx Xxxxxx By /s/ Xxxx Xxxxxxx
--------------------------- ------------------------------
(signature) (signature)
Xxxx-Xxxxxxxx Xxxxxx Xxxx Xxxxxxx
--------------------------- ------------------------------
(print name) (print name)
President and CEO Executive V.P.
--------------------------- ------------------------------
(title) (title)
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