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EXHIBIT 10.17.2
AMENDMENT NO. 02
to the
Agreement for Purchase of Products - OEM Agreement
Dated 21 January 1999 Between Accelerated Networks, Inc. (hereinafter
"ANI"), and Siemens Carrier Networks LLC (hereinafter "Siemens")
successor in interest to certain business of Siemens Information and
Communication Networks, Inc. ("Agreement").
WHEREAS, Siemens has entered into an agreement with WinStar Communications, Inc.
further amended to incorporated Accelerated Products ("WinStar Agreement"); and
WHEREAS, Siemens requested Accelerated Networks modify the terms and conditions
of the Agreement to incorporate certain changes and considerations
("Amendment"), and
WHEREAS, Siemens further requested Accelerated Networks to modify the terms and
conditions of the Agreement to incorporate other changes and considerations with
the purpose to cover certain provisions of the WinStar Agreement ("Amendment
2"), and
WHEREAS, such changes shall be applicable only to the extent that Siemens is
dealing with WinStar and its affiliates as its end user customer under the above
referenced Winstar Agreement. In all other cases, unless specifically modified
or changed in a separate amendment, the Agreement shall remain in full force and
effect.
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter
contained, the parties hereto agree to amend the Agreement as follows:
1. SCOPE OF THIS AMENDMENT:
This amendment complements and modifies the Agreement and its attachments,
amendments, exhibits and schedules to incorporate certain changes with the
intent of supporting certain terms and conditions of the Winstar Agreement.
2. DEFINITIONS:
Wherever the word Siemens is set forth in the Agreement and in this Amendment
it shall mean Siemens Carrier Networks LLP.
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3. THE FOLLOWING PROVISIONS ARE INCORPORATED HEREBY TO THE AGREEMENT:
3.1 CHANGE PROCEDURES
(a) During the Warranty Period and Extend Warranty Period, Siemens shall
be entitled to all Software updates, enhancements, releases, patches
and error corrections developed by ANI. ANI shall give due
consideration and implement all reasonable modifications,
enhancements and patches to the Software as prioritized by the user
group and within the agreed upon timeframes.
(b) ANI shall also develop and provide for sale to Siemens System
modifications and enhancements and new commercially available
products in accordance with the following:
(i) From time to time during the term of the Agreement, Siemens
may provide to ANI a proposed change in or addition to the
System or a written idea for a new product. Siemens and ANI
shall schedule a meeting to discuss the proposal as soon as
practicable following ANI receipt of the proposal. All such
proposals shall be considered Siemens Confidential Information
and Siemens proprietary information for purposes hereof;
provided, however, that this will not restrict the parties
making the item subject of the proposal an agreed upon
commercial product as provided in this Subsection (b).
(ii) Following the meeting, ANI shall propose a unit price for
equipment (i.e., the price for Siemens to purchase following
development of the item) or a one time fee with respect to
software items, and delivery schedule applicable to Siemens'
proposal. In determining such price, if the proposed changes
or additions include a request for ANI to correspondingly
reduce or eliminate any components of the Systems it is then
providing, such components shall be considered "Replacements."
In that event, the Parties shall determine the costs and
expenses required to provide the Replacements and the
reduction in the costs and expenses related to the components
being replaced, and there shall be an equitable adjustment in
the applicable price for such costs and expense being
replaced.
(iii) If Siemens in its sole discretion accepts such unit price or
one time fee with respect to software items and delivery
schedule (A) ANI, at its sole cost and expense, shall design,
develop and manufacture (or program with respect to software
items) or have manufactured (or programmed with respect to
software items) such changes/additions or new products in
accordance with the proposed delivery schedule and (B) Siemens
shall xxxxx XXX (including its suppliers, if necessary) all
rights it has as necessary to permit ANI (including its
suppliers, if necessary) to design, develop, manufacture and
exploit such changes/additions or new products as contemplated
under this Subsection (b) with no additional compensation
other than as stated in Subsection (iv) below.
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(iv) In consideration for Siemens providing the proposal for the
change in or addition to the System or the new product, ANI
shall provide an additional discount of ten (10%) for each
unit purchased by Siemens or with respect to the one time fee
for software and an additional ten percent (10%) discount on
all System components impacted by the change/addition or new
product for a period of six (6) months following commercial
availability of the change/addition or new product. All
changes/additions to the System and new products developed
under this Subsection (b) shall be warranted and supported by
ANI as if part of the System when first deployed.
(c) If ANI does not desire to implement/consider Siemens' proposal under
Subsections (a) or (b) above or if the Parties are unable to agree
upon the unit price, delivery schedule or any other term surrounding
the proposed changes in Subsection (b) above and if Siemens has
taken delivery of Systems and/or Services under this Agreement,
Siemens may require ANI to provide changes in or additions to the
System or new products pursuant to the following:
(i) The procedure in Subsections (b)(i) and (ii) above shall be
followed.
(ii) In addition, ANI shall promptly provide a detailed itemization
of its estimated direct and actual costs (i.e., no markup or
overhead expenses) to design and develop the change/addition
to the System or new product, as applicable (the "Development
Cost"). Siemens agrees to provide such estimate using its best
good faith. The Parties shall meet if requested by Siemens to
discuss and negotiate such Development Cost and establish a
reasonable payment schedule therefore; provided, that, no less
than thirty percent (30%) of the total Development Cost shall
be withheld until final acceptance of the change/addition or
new product by Siemens and Siemens shall be entitled to a full
refund of all amounts paid in the event the change/addition or
new product is not accepted by Siemens in accordance with a
mutually agreed upon acceptance test. The acceptance testing
and critical milestones for the development of the
change/addition or new product shall also be established by
the Parties and the Parties will each appoint a project leader
for such activities.
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(iii) If Siemens in its sole discretion accepts such Development
Cost and the unit price and delivery schedule, ANI shall
design, develop and manufacture such changes/additions or new
products in accordance with the proposed delivery schedule for
the Development Cost. ANI shall retain financial records
related to the Development Cost and Siemens shall be entitled
to audit all such Development Cost.
(iv) In consideration for Siemens providing the proposal and
payment of the Development Cost for the change in or addition
to the System or the new product, ANI shall provide an
additional discount of ten (10%) for each such change/addition
or new product unit purchased by Siemens and an additional ten
percent (10%) discount on all System components impacted by
the change/addition or new product for a period of six (6)
months following commercial availability of the
change/addition or new product. In addition, Siemens shall
have an exclusive right to use such change/addition to the
System or new product, including all direct derivatives
thereof (i.e., ANI shall not sell or otherwise distribute or
provide, either directly or indirectly, the change/additions
to the System or new products to any other person or entity)
(the "Exclusive Right"). All changes/additions to the System
and new products developed under this Subsection (b) shall be
warranted and supported by Siemens as if part of the System
when purchased by Siemens.
(v) In the event ANI desires to sell or otherwise distribute any
change/addition to the System or new product that Siemens paid
the Development Cost and received the Exclusive Right, ANI
shall notify Siemens and Siemens shall xxxxx XXX (including
its suppliers, if necessary) all rights it has as necessary to
permit ANI (including its suppliers, if necessary) to design,
develop, manufacture and exploit such changes/additions with
no additional compensation other than as stated in this
Subsection (v)) upon Siemens fulfilling one of the following
options as elected solely by Siemens: (1) a lump sum payment
by Siemens to Siemens of an amount equal to four times the
Development Cost or (2) a lump sum payment by ANI to Siemens
of an amount equal to three times the Development Cost
together with a six month exclusivity period for use of the
change/addition to the System or new product by Siemens or (3)
payment of a five percent (5%) royalty for all future sales of
the change/addition.
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(d) Notwithstanding anything to the contrary herein, no changes in or
additions to Systems or new products provided herein, or additional
costs therefore, shall be made unless approved in writing by the
Siemens' Contract Manager.
3.2 SYSTEMS AND SERVICES WARRANTIES
"Warranty Period" shall mean fifteen (15) months from the date of
shipment. Siemens may extend the Warranty Period one or more times in its
sole discretion, for additional consecutive one year periods each, upon
payment of the Extended Warranty fee of fifteen (15%) percent of the
invoiced price for all hardware provided to Siemens, for the WinStar
Agreement, during the twelve (12) months prior to the extension date of
the Extended Warranty Period, which shall be charged to Siemens only once
a year but paid quarterly. The discounts provided in the System Price and
Warranty Schedule attached shall apply ("Schedule A").
(a) ANI warrants that Systems provided under this Agreement shall be
free from defects in design, material and workmanship, and shall
operate in accordance with the Specifications during the
Warranty Period and any Extended Warranty Period.
(b) ANI represents, warrants and covenants that all Equipment
components (including spare parts) provided hereunder shall be
new, not refurbished or re-manufactured, except that replacement
Equipment and components may be refurbished or remanufactured.
(c) ANI warrants that it shall maintain the Systems such that the
Systems conform to the Specifications during the Warranty Period
and Extended Warranty Period. Such maintenance shall include:
(i) in accordance with the procedures set forth in Schedule
Q of the WinStar Agreement, repairs on Equipment,
including any repairs recommended by third-party
manufacturers;
(ii) providing any modification or enhancements that are
necessary to maintain the Systems in compliance with
Applicable Standards (excluding, however, standards
established by Bellcore and IEEE unless such standards
are provided to other customers of ANI under warranty or
extended warranty), as well as Documentation related to
such enhancements;
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(iii) providing any release, update, alteration, modification,
enhancement or improvement that is generally available
to ANI's other customers under warranty or extended
warranty;
(iv) providing engineering changes and maintaining the
availability of Equipment parts and sub-parts,
consistent with the Equipment redundancy design;
(v) providing code corrections or maintenance patches
(including, all bug fixes, error correction, revisions,
modifications, and maintenance recommended by
third-party vendors) will be supplied to correct a
Defect in order to bring the Software into conformance
with applicable System Specifications. Siemens shall
also replace the Software if the media is destroyed or
damaged unless and to the extent the damage is on
account of Siemens or its customers improper use (which
shall not be improper use if used in accordance with the
documentation or as instructed by ANI's) and as a result
such Software are unusable or fail to operate in
accordance with the applicable System Specifications;
(vi) providing all improvements, enhancements, extensions,
upgrades and other changes to the Software. ANI shall
concurrently provide updated Documentation reflecting
such changes. ANI shall also supply, when necessary,
updated Software required to cause the Software to
operate with upgraded Equipment (including engineering
changes) or under new versions or releases of the
operating system or other system software designed for
the Software;
(vii) providing telephone support to Siemens in order to
assist Siemens or its customers to locate and correct
functional or operational problems with the System. Such
support shall be provided on a 24 hour, 7 days per week
basis via Siemens help desk. ANI's technical engineering
support is available 8:00 a.m. to 8:00 p.m. EST during
normal business days. In addition, ANI's technical
engineering support is available on a 24 hour, 7 days
per week basis for Critical Problems as designated by
Siemens. ANI shall provide a single contact number for
Siemens to report problems; and
(viii) in the event of Software problems that cannot be
corrected with telephone support or on a remote basis
within the applicable Performance Standards, ANI shall
provide on-site assistance free of charge. However, if
the problem is due to Siemens' acts or omissions and
on-site assistance is required, ANI's personnel rates
set forth in Schedule A will apply.
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(d) ANI represents and warrants that it shall maintain the
availability of Equipment parts and sub-parts, consistent with
the Equipment redundancy design, for a period of five (5) years
from manufacturing. Subject to the foregoing support periods,
ANI shall provide to Siemens written notification at least one
(1) year prior to the discontinuation of manufacture of any
System components associated with this Agreement to permit
Siemens a last time purchase opportunity; provided, however,
during the term of the Agreement ANI shall only discontinue
System components in the event there is a replacement component
that will permit the Systems to continue to meet or exceed the
Specifications. ANI acknowledges and agrees that it shall not
utilize this "discontinuation" provision as a means to cease
supplying Systems or components thereof during the term of the
Agreement.
(e) ANI warrants that it shall stock spare Equipment parts and
provide 14 day availability of such parts; provided, however,
Siemens shall provide 24 hour availability of spare Equipment
parts that Siemens requires to resolve a Critical Problem.
(f) ANI warrants that all upgrades to Equipment and Software shall
be backward compatible to existing Systems and prior releases.
In no event shall Siemens be required to upgrade its Software if
such upgrade requires a corresponding Equipment upgrade. In such
event, ANI shall continue to support the release of the Software
that did not require a corresponding Equipment upgrade as set
forth in this Agreement. Equipment upgrades to implement
Software enhancements or improvements that Siemens desires to
implement shall be provided to Siemens at mutually agreed upon
unit rates.
(g) ANI shall provide access to appropriate technical resources to
Siemens' appropriate personnel in order to resolve any problem
that Siemens cannot resolve through lower level support,
including help desk support and field service support for errors
that cannot be remotely diagnosed and cured.
(h) In the event of a breach of the foregoing representations,
warranties and covenants during the Warranty Period or an
Extended Warranty Period, and upon written notice from Siemens
describing the breach, ANI shall at no additional cost to
Siemens: (i) in the case of Equipment, repair or replace such
Equipment so that it is compliant with the warranty within the
time period specified as part of the Performance Standards, and
(ii) in the case of Services, immediately re-perform the
Services.
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(i) The foregoing representations and warranties will not apply if
and to the extent, and so long as not caused by ANI or its
subcontractors or agents where:
(i) defects in Equipment delivered hereunder are caused by
alteration, modification, or repair by any person other
than ANI's or its subcontractors or agents or due to an
act of God; provided, however, the foregoing exclusion
shall not apply with respect to Siemens or Siemens'
subcontractors' making of spare changes or if an
alteration, modification or repair is authorized by the
Documentation or otherwise by ANI or its subcontractors or
agents in writing;
(ii) defects are caused by Siemens or Siemens' suppliers or
subcontractors mishandling or abuse, excluding
specifically ANI, its Affiliates and their suppliers and
subcontractors; or
(iii) defects are caused from improper operation,
interconnection or installation by any person other than
ANI or its subcontractors.
The terms and conditions of this Amendment 2 supercede any conflicting terms and
conditions of the Agreement and any amendments to in regard to the procurement
of Systems set forth in the Winstar Agreement. Unless otherwise stated herein,
the remaining terms and conditions of the Agreement are unchanged and remain in
full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed and delivered by the
undersigned officers, thereunto, duly authorized, as of the date last written
below.
ACCELERATED NETWORKS, INC. SIEMENS CARRIER NETWORKS LLC
BY: /s/ Xxxxxx X. Xxxxxx BY: /s/ Xxxx X. XxXxxx
NAME: Xxxxxx X. Xxxxxx NAME: Xxxx X. XxXxxx
TITLE: Director of Contracts TITLE: Manager, Subcontracts
DATE: 12/01/00 DATE: 12/01/00
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