EXHIBIT 10.3
OEM AGREEMENT
This OEM Agreement ("Agreement"), effective as of the ____ day of July,
2000 (the "Effective Date"), is entered into by and between Interwave
Communications International, Ltd., a Bermuda company, having offices at 000
Xxxxxxxxxxxx Xxxxx, Xxxxx Xxxx, XX 00000 ("IWAV"), and UTStarcom, Inc., a
Delaware corporation, having offices at 0000 Xxxxxx Xxx Xxxxxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America ("UTStarcom").
BACKGROUND
A. UTStarcom is in the business of designing and marketing
telecommunications access products in markets outside of the United States,
primarily in the People's Republic of China (PRC), and desires to distribute
certain of IWAV's Products (as defined below) [***], on the terms and conditions
set forth below.
B. IWAV is in the business of designing and marketing GSM wireless
cellular base station transceivers, controllers, and associated software. IWAV
desires to have certain of its Products (as defined below) distributed by
UTStarcom in [***] on the terms and conditions set forth below.
1. DEFINITIONS
1.1 "CUSTOMERS" shall mean end-user customers solicited by
UTStarcom within the Territory.
1.2 "DOCUMENTATION" means the documentation or user manuals
provided by IWAV for the Product.
1.3 "PRODUCT" or "PRODUCTS" means the products listed on the
attached EXHIBIT A, a copy of which is attached hereto and incorporated by
reference. IWAV may change or abandon the Products from time to time during the
term of this Agreement, upon 60 days written notice to UTStarcom, and by
providing a new EXHIBIT A to UTStarcom.
1.4 "SOFTWARE" means the computer software or firmware that is
incorporated into or otherwise generally accompanies a Product, or that IWAV
makes available to UTStarcom and its customers generally, without additional
charge, for use with the Products. Software is provided in object code form
only.
1.5 "TERRITORY" means the [***].
1.6 "UPDATE" means error corrections and bug fixes that IWAV
generally makes available to Customers free of charge, but excluding new
versions of the Software that contains significant new features or
functionality, as determined by IWAV in IWAV's sole discretion.
2. APPOINTMENT
2.1 GRANT. IWAV hereby appoints UTStarcom, and UTStarcom hereby
accepts the appointment, as a non-exclusive distributor of IWAV to distribute
IWAV Products to Customers in the Territory. UTStarcom shall distribute the IWAV
Product(s) under the UTStarcom trademark and product label, as provided pursuant
to Section 18 of this Agreement. To further as rapidly as possible the purposes
of this grant, the parties hereto shall apply their best efforts to undertake
and complete within schedule the Agreement activities listed in EXHIBIT B, which
is attached hereto and incorporated by reference into this Agreement.
2.2 NO OTHER RIGHTS. Except as expressly provided herein, no
right, title or interest is granted by IWAV to UTStarcom. IWAV may distribute
the Products, or products other than the Products, in the Territory, either
directly, or indirectly, for any and all uses, and no right, title or interest
is granted by IWAV to UTStarcom relating to either the Products, or products
other than the Products. Further, notwithstanding the rights granted in Section
2.1 above, IWAV reserves the right to market, distribute and sublicense,
directly or indirectly, the Products and products other than the Products, and
nothing in this Agreement will prevent IWAV from using the Products or
intellectual property therein to make, have made, develop, sell, license,
distribute and/or market products other than the Products. IWAV further reserves
the right under all intellectual property rights to make, have made, use, copy,
modify, have modified, create derivative works of, have created derivative works
of, demonstrate, maintain and support the Products and the right to sublicense
the foregoing rights.
2.3 SOFTWARE LICENSE. Prior to providing any Customer with any
Software, UTStarcom shall ensure that each Customer has read and agreed to the
terms and conditions of the Software license agreement contained in each
Software package, as may be provided by IWAV ("Software License Agreement"). In
the event that any Software is installed by UTStarcom and not by the Customer,
UTStarcom agrees that prior to the use of any such Software by such Customer,
UTStarcom will ensure that such Customer has read and agreed to the Software
License Agreement. UTStarcom shall diligently enforce Software License
Agreements and use its best efforts to ensure that Customers abide by the terms
of Software License Agreements. To the extent permitted by law, UTStarcom shall
not, and shall not authorize any third party to, copy, modify, alter, reverse
engineer, disassemble or decompile the Products, and UTStarcom shall not
distribute or market any Software or Product containing any Software
electronically, or by interactive cable, remote processing services, online
services, linkups or multi-user local or area networks. Software provided to
UTStarcom hereunder is subject to license and not sale.
2.4 CONFLICTS. The parties acknowledge and agree that any
efforts by UTStarcom to sell, license, or distribute other products in the
Territory which are derived from sources other than IWAV, and which are
commercially or technically similar to the Product(s), or which are commercially
reasonable substitutes for the Product(s) ("Competing Products") would
constitute a conflict of interest with respect to UTStarcom's obligation to
market and distribute the Products, and UTStarcom represents and warrants that
as of the Effective Date of the Agreement, it does not represent any Competing
Products. If UTStarcom chooses to market, promote or distribute Competing
Products, it shall notify IWAV of its intent at least [***] prior to commencing
such activity without any liability to IWAV.
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3. OBLIGATIONS OF UTSTARCOM
3.1 DILIGENCE. UTStarcom shall use its best efforts to promote
the marketing and distribution of the Products to realize the sales potential
for the Products in the Territory. Except as expressly set forth herein,
UTStarcom shall be [***] responsible for all costs and expenses related to the
advertising, marketing, promotion, and distribution of the Products and for
performing its obligations hereunder.
3.2 REPORTS.
3.2.1 UTStarcom shall provide IWAV, on a calendar [***]
basis, a written sales activity report indicating quantities of Products
purchased and total dollar amounts invoiced to all purchasers. UTStarcom also
shall maintain records sufficient to create the foregoing reports.
3.2.2 UTStarcom shall make available its Customer shipment
records to IWAV and permit IWAV's inspection of UTStarcom's books and records
(including computer database records) as IWAV may from time to time reasonably
request.
3.3 SOURCE. In order to assure the authenticity and quality of
the Products, UTStarcom shall obtain any and all of the Products solely from
IWAV or IWAV's designee. UTStarcom shall not obtain the Products from any other
source without the IWAV's prior written approval.
3.4 PRODUCT SUPPORT.
3.4.1 UTStarcom shall be [***] responsible for supporting
all Products distributed hereunder. UTStarcom shall provide reasonable technical
support to Customers, including without limitation (1) maintaining trained and
competent technical and engineering support personnel for the Products who are
sufficiently knowledgeable with respect to the Products to answer Customer
questions regarding the use and operation of Products, (2) designating a
technical liaison to coordinate UTStarcom's technical support provided to
Customers, (3) responding promptly to requests for technical support from
Customers, and (4) providing technical support services to address and resolve
Customers' support requests with respect to the Products. UTStarcom shall ensure
that UTStarcom's technical and engineering support personnel attend any training
provided by IWAV with respect to the Products.
3.4.2 UTStarcom shall ensure that all Customer questions
regarding the use or operation of Products are initially addressed to and
answered by UTStarcom. Unless otherwise agreed in writing by IWAV, UTStarcom
shall not represent to any third party that IWAV is available to answer
questions from any Customer directly.
3.4.3 Without limiting the foregoing and in addition to
any other obligations set forth in IWAV's then current support terms and
conditions, UTStarcom also shall be responsible for (1) providing sufficient
information to IWAV for IWAV to duplicate any reported error in the Products;
(2) incorporating Updates into the Products promptly upon receipt thereof; (3)
reporting errors promptly in English and in writing in accordance with IWAV's
standard support procedures;
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and (4) providing reasonable cooperation and full information to IWAV in the
furnishing of support for the Products.
3.4.4 IWAV agrees upon signing this Agreement to promptly
arrange an appropriate training course for UTStarcom's personnel to be
adequately trained in the installation and maintenance of IWAV's Products, by
arranging for IWAV to train UTStarcom's personnel at the UTStarcom's site in the
[***]. [***] shall be responsible for the travel, lodging, and meal expenses of
its training personnel.
3.4.5 PRODUCTS FOR UTSTARCOM USE. UTStarcom may order and
use Products for demonstration and internal purposes, provided UTStarcom shall
pay [***] for any such Products and use of any Software shall be governed by the
terms of the Software License Agreement. UTStarcom agrees to purchase and
maintain at least [***] demonstration unit of the Product(s) upon execution of
this Agreement.
4. OBLIGATIONS OF IWAV
4.1 INFORMATION AND SUPPORT.
4.1.1 IWAV shall use reasonable efforts to provide to
UTStarcom such back-up telephone or electronic-mail technical support as IWAV
makes generally available to its distributors other than UTStarcom. Such
telephone support shall be provided during UTStarcom's normal business hours for
its offices located within the [***]. With respect to Software, during the term
of this Agreement, IWAV will provide support only for the then-current version
of the Software which incorporates all Updates to the Software.
4.1.2 Additionally, IWAV shall use reasonable efforts to
extend the technical support described in Paragraph 4.1.1 above to 24 hours a
day, 7 days a week for urgent matters. UTStarcom agrees that this extended
coverage should only be used under urgent circumstances, as determined by [***].
4.1.3 Upon terms to be mutually agreed upon, IWAV will
dispatch qualified engineers and other necessary personnel within a reasonable
time to UTStarcom to enable UTStarcom to provide the necessary technical support
to its clients in the Territory, [***] may deem reasonably necessary.
4.1.4 IWAV, [***] will consider maintaining a
representative stock level of spare parts in the Territory in order to meet
Customer's requirements for quick response time to system failures during the
Warranty Period. [***] agrees to provide storage facilities and take full
responsibility for keeping the spare parts in good condition.
4.1.5 In order to ensure the success of this Agreement,
and in addition to any other obligation of IWAV contained within this Agreement,
IWAV will provide technical support services relating to the initiation of the
terms and conditions of this Agreement, including but not limited to the
following: a) project bid proposal support; b) technical training; and c)
technical assistance with respect to the modification of Product network
interfaces, as may be mutually agreed
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upon by the parties hereto. [***] shall be responsible for the expenses related
to technical support services provided pursuant to this Section 4.1.5.
4.2 MARKETING MATERIALS. IWAV, at [***] expense, shall
periodically provide UTStarcom with reasonable quantities of IWAV's advertising
and promotional materials, pricing information and technical data related to the
Products in English, in each case to the extent IWAV in its discretion makes
such materials generally available to its distributors other than UTStarcom;
provided that [***] shall pay the freight costs and other taxes and duties
applicable to any such items provided or the delivery thereof. UTStarcom shall
modify the materials described in this Section 4 only with IWAV's prior written
approval.
4.3 TRANSLATION. UTStarcom may translate the Documentation for
use within the Territory, it being understood that UTStarcom hereby assigns to
IWAV all ownership rights in and to translated versions of the Documentation and
agrees to, or cause its employees, agents and consultants to, execute such
documents and perform such acts as may be reasonably necessary to perfect such
assignment.
4.4 TYPE APPROVAL; HOMOLOGATION/CERTIFICATION. IWAV will
provide its prompt and best efforts to assist UTStarcom, as it may reasonably
request, with all type approval, homologation, and/or certification processes
that may be required for commercial distribution of the Products, including but
not limited to UTStarcom's use of existing type approval certifications that
IWAV may then currently have access to. The parties shall equally share any
expenses directly related to any type approval, homologation and/or
certification processes.
4.5 JOINT PRODUCT DEVELOPMENT. As may be mutually agreed to
from time to time by the parties hereto, IWAV and UTStarcom agree to jointly
cooperate in the design and development of products other than the Products,
and/or new features for the Products. UTStarcom and IWAV agree that any such
joint product development shall be the subject of a separate agreement, the
terms and conditions of which to be mutually agreed to by the parties.
4.6 PRODUCT DEVELOPMENT VISIBILITY. In order to facilitate the
development of Products and Product features that may be best suited for
marketability in the Territory, IWAV agrees to provide UTStarcom with access to
technical information relating to IWAV's design and development of new products
other than the Products, and/or new features being developed for the Products.
Such technical information shall include but not limited to information
regarding the following: [***]. UTStarcom represents and warrants that is shall
keep such technical information confidential as required by Section 16 of this
Agreement.
5. PRICE/PRICE CHANGE
5.1 PRICE. The prices and fees to be paid by UTStarcom to IWAV
for Products are as set forth in price purchase schedules or bulletins issued by
IWAV from time to time during the term of this Agreement ("Prices"). The Prices
of Products as of the Effective Date are as set forth in Exhibit A attached
hereto, a copy of which is attached hereto and incorporated by reference. Prices
are [***]. The difference between the Price and UTStarcom's price to its
Customers shall be UTStarcom's sole remuneration from IWAV for the distribution
and sale of Products.
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5.2 PRICE CHANGES. Prices are subject to change by IWAV [***].
IWAV shall forward to UTStarcom written notice of any price change at least
[***] prior to its effective date. Price changes will only apply to orders
received by IWAV after the effective date of the price change. IWAV will
maintain prices for Products on any existing customer contracts or bid
proposals, which contain price assurances for which it had given prior approval.
5.3 SPECIAL DISCOUNTS. UTStarcom [***] may offer special
discounts for certain projects in order to win business over competition.
Special Discounts are effective immediately and applicable only to the intended
projects.
6. TAXES AND OTHER CHARGES
6.1 TAXES GENERALLY. Prices do not include and are net of any
foreign or domestic governmental taxes or charges of any kind that may be
applicable to the sale, licensing, marketing or distribution of the Products,
including without limitation excise, sales, use, or value-added taxes; customs
or other import duties; or other taxes, tariffs or duties. UTStarcom shall be
responsible for and shall pay all such taxes and charges levied against IWAV in
a timely manner. When IWAV has the legal obligation to pay or collect such
taxes, excluding taxes on the income of IWAV, the appropriate amount shall be
invoiced to UTStarcom and paid by UTStarcom within [***] of the date of invoice
unless UTStarcom provides IWAV with a valid tax exemption certificate authorized
by the appropriate taxing authority.
6.2 WITHHOLDING TAXES. All payments by UTStarcom must be made
free and clear of, and without reduction for, any withholding taxes. Any such
taxes which are otherwise imposed on payments to IWAV are the sole
responsibility of UTStarcom. UTStarcom shall provide IWAV with official receipts
issued by the appropriate taxing authority or such other evidence as is
reasonably requested by IWAV to establish that such taxes have been paid.
7. PAYMENT
7.1 PAYMENT TERMS. Payment shall be in U.S. Dollars. UTStarcom
shall pay [***] for Products by either check or wire transfer (at UTStarcom's
discretion) to IWAV's designated account within [***] of receipt of invoice.
7.2 BOOKS AND RECORDS; AUDIT. UTStarcom agrees to maintain,
until [***] after expiration of this Agreement, complete books, records and
accounts relevant to computation and accounting for amounts payable under
Section 5 above. UTStarcom agrees to allow an independent certified public
accountant the right to audit and examine such books, records and accounts
during UTStarcom's normal business hours no more than once per [***] upon
reasonable notice to verify the accuracy of the reports and payments made to
IWAV under this Section 7. In the event such examination leads to a
determination that UTStarcom has not paid all amounts payable under this
Agreement, UTStarcom agrees to pay, in addition to any damages to which IWAV
might be entitled, the amount of such shortfall.
8. ORDERS
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8.1 ORDER AND ACCEPTANCE. All orders for Products submitted by
UTStarcom shall be initiated by written purchase order sent to IWAV and
requesting a shipment date during the term of this Agreement; provided, however,
that an order may be initially placed orally, by telecopy or fax if a
confirmational written purchase order is received by IWAV within [***] of an
oral, telecopy or fax order. All orders for Products are subject to acceptance
by IWAV in writing, and IWAV has no liability to UTStarcom with respect to
purchase orders that are not accepted. No partial acceptance of a purchase order
constitutes the acceptance of an entire order, unless IWAV explicitly accepts
the entire order. To facilitate IWAV's production scheduling, UTStarcom shall
submit purchase orders to IWAV in accordance with IWAV's lead times then in
effect which shall be communicated to UTStarcom upon UTStarcom's request.
Notwithstanding the foregoing, UTStarcom acknowledges and agrees that the
shipment and delivery dates are estimates only.
9. SHIPMENT/RISK OF LOSS
Products delivered pursuant to the terms of this Agreement shall be
suitably packed for shipment in IWAV's standard shipping cartons, marked for
shipment to the destination specified in UTStarcom's purchase order, and
delivered to the carrier agent [***]. Unless otherwise instructed in writing by
UTStarcom in UTStarcom's purchase order, IWAV shall select the carrier. All
freight, insurance, and other shipping expenses, excepting expenses for any
special packing requested by UTStarcom and provided by IWAV, shall be paid by
[***].
10. REJECTION
UTStarcom shall inspect all Products promptly upon receipt thereof and
may reject any defective Product, provided that UTStarcom shall (i) within the
earlier of [***] after receipt of such alleged defective Product or [***] after
discovery of such alleged defect, notify IWAV of its rejection and request a
Return Material Authorization ("RMA") number, and (ii) within [***] of receipt
of the RMA number from IWAV return such rejected Product to IWAV, freight
prepaid and properly insured. Products not rejected within the foregoing time
periods shall be deemed accepted by UTStarcom. In the event that IWAV determines
that the returned Product is defective and properly rejected by UTStarcom, IWAV
shall [***], repair or replace such defective Product, or accept return for
credit of such defective Product. IWAV shall return to UTStarcom, freight
prepaid, all repaired or replaced Products properly rejected by UTStarcom. In
the event that any rejected Product is determined by IWAV to not be defective or
to have been modified or subjected to unusual electrical or physical stress,
misuse, abuse or unauthorized repair, UTStarcom shall reimburse IWAV for all
costs and expenses related to the inspection, repair, if any, and return of such
Product to UTStarcom.
11. PRODUCT CHANGES
IWAV reserves the right, after fulfillment of any outstanding Product
orders from UTStarcom, to discontinue or to limit its production of any Product
upon [***] prior written notice to UTStarcom; to allocate, terminate or limit
deliveries of any Product in time of shortage, provided however that UTStarcom's
Product orders shall be given priority over the orders of other distributors in
times of Product shortage; to alter the design or construction of any Product;
to add new and
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additional products to the "Products;" and upon reasonable notice to UTStarcom,
to change its sales and distribution policies, not inconsistent with the terms
of this Agreement.
12. FORECASTS
By the end of each calendar [***], UTStarcom shall provide IWAV with a
good faith [***] rolling forecast, commencing with the next calendar [***], that
shows UTStarcom's prospective requirements for the Products and anticipated
purchase order submittal dates, including all sales and business prospects, in
such format as specified by IWAV ("Forecast"). Forecasts shall commence on the
first day of the calendar [***] following submission of the Forecast to IWAV.
Such Forecasts are for IWAV's planning purposes only and shall not constitute a
binding obligation on the part of IWAV to supply Products in accordance with
such Forecasts. Notwithstanding the foregoing, UTStarcom will use its best
efforts to make each Forecast as accurate as possible. In the event UTStarcom
believes, in good faith, that the results forecast by UTStarcom in UTStarcom's
Forecast are inaccurate, UTStarcom will notify IWAV promptly and provide IWAV
with a revised Forecast.
13. RETURNED PRODUCT
Any Product returned to IWAV by UTStarcom as authorized under this
Agreement shall be shipped, [***], and shall be packed in its original packing
material. IWAV may refuse to accept any Product not packed and shipped as herein
provided.
14. LIMITED WARRANTY
14.1 LIMITED WARRANTY. Subject to the provisions of this Section
00, XXXX warrants to UTStarcom that the non-Software Products, as delivered,
will be free from defects in materials and workmanship for a period of [***]
from the date of delivery ("Warranty Period"). IWAV, at its sole discretion, may
extend the Warranty Period if expressly required by the Customer, in which case
the extended Warranty Period shall be specified by IWAV in writing. The
foregoing warranty is contingent upon proper use of the Products in the
applications for which they were intended and shall not apply to Products that
are modified or subjected to unusual physical or electrical stress, misuse,
abuse, or unauthorized repair. IWAV's [***] liability and UTStarcom's [***]
remedy shall be limited to repair, replacement, credit or refund, at [***] sole
option and election. [***] shall pay all freight charges for shipment of any
replacement Product to UTStarcom during the Warranty Period. Replacement or
repair of a Product shall not extend the original warranty for that unit, and
UTStarcom may return Product only during the original Warranty Period. All
Software is provided "AS IS" and IWAV makes no warranty that Software operation
will be uninterrupted or error-free in case of misuse or improper installation
by a party other than IWAV or UTStarcom's trained staff. UTStarcom is [***]
responsible for any other warranty or product liability claims arising from the
suitability of the Products for a specific purpose or incorrect Product
application. Under no circumstances shall IWAV have any liability in respect of
any Product except to the extent set forth in this Section 14.1.
14.2 DISCLAIMER OF WARRANTIES. EXCEPT AS EXPRESSLY PROVIDED IN SECTION
00.0 XXXXX, XXXX MAKES NO WARRANTIES OR CONDITIONS, EXPRESS, STATUTORY, IMPLIED,
OR OTHERWISE, AND IWAV SPECIFICALLY DISCLAIMS THE
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IMPLIED WARRANTIES AND CONDITIONS OF NONINFRINGEMENT, MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE. NOTWITHSTANDING THE FOREGOING, IWAV DOES NOT
EXCLUDE LIABILITY TO THE EXTENT THAT SUCH LIABILITY MAY NOT BE EXCLUDED OR
LIMITED BY LAW.
14.3 INHERENTLY DANGEROUS APPLICATIONS. THE PRODUCTS ARE NOT
AUTHORIZED FOR USE AS CRITICAL COMPONENTS IN LIFE SUPPORT DEVICES OR SYSTEMS
OR FOR USE IN AVIATION, NUCLEAR OR ANY OTHER INHERENTLY DANGEROUS APPLICATION
WITHOUT THE EXPRESS WRITTEN APPROVAL OF THE MANAGING DIRECTOR OF IWAV. LIFE
SUPPORT DEVICES OR SYSTEMS ARE THOSE WHICH ARE INTENDED TO SUPPORT OR SUSTAIN
LIFE AND WHOSE FAILURE TO PERFORM CAN REASONABLY BE EXPECTED TO RESULT IN A
SIGNIFICANT INJURY TO THE USER. CRITICAL COMPONENTS ARE THOSE COMPONENTS
WHOSE FAILURE TO PERFORM CAN REASONABLY BE EXPECTED TO CAUSE FAILURE OF A
LIFE SUPPORT DEVICE OR SYSTEM OR AFFECT ITS SAFETY OR EFFECTIVENESS.
14.4 UTSTARCOM LIMITATIONS. Except to the extent required by
applicable law, UTStarcom shall not pass on to its Customers a warranty of
greater scope or protection than the warranty (including the limited remedy,
exclusions, and limitation of liability) set forth in this Section 14 and
Section 19 below. UTStarcom shall indemnify, defend and hold harmless IWAV
from any claim or liability arising out of or relating to breach of the
foregoing provisions of this Section 14 or representations or warranties
which exceed IWAV's express warranties set forth in this Section 14.
14.5 PRODUCT RETURNS. In order to return Product that fails
to conform to the foregoing warranty set forth in this Section 14, UTStarcom
shall (i) notify IWAV in writing that such Product failed to conform with the
warranty set forth in this Section 14 and furnish a detailed explanation of
any alleged nonconformity; (ii) obtain a RMA number for the nonconforming
Product from IWAV; and (iii) within [***] of receipt of the RMA number,
return such Product to IWAV, [***], with the RMA number prominently attached
[***].
14.6 CUSTOMER CLAIMS. UTStarcom shall ensure that all
Customer warranty claims are addressed to UTStarcom and not to IWAV.
UTStarcom shall, promptly upon being given notice by a Customer of a claim
covered by IWAV's warranty, provide to IWAV written notice of such claim, and
shall include in that notice sufficient information that IWAV can determine
the source of the problem. If resolving the problem requires replacement
parts, then IWAV will provide those replacement parts to UTStarcom and
UTStarcom will install those parts according to IWAV's instructions. If
resolving the problem requires modifications to the setup of the Products,
then UTStarcom shall make such modifications at IWAV's request and according
to IWAV's instructions. In any event, UTStarcom shall notify IWAV promptly
when any warranty services under this Agreement are completed.
15. TERM AND TERMINATION
15.1 TERM. This Agreement shall commence upon the Effective Date
and continue in full force and effect for a fixed term of [***], unless earlier
terminated in accordance with the
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provisions of this Agreement. This Agreement may be renewed for subsequent
one-year terms only by written agreement of the parties.
15.2 TERMINATION FOR CAUSE. Either party hereto may terminate this
Agreement effective upon written notice to the other party stating its intention
to terminate in the event (i) the opposite party breaches any of the provisions
of Sections 2 or 16; (ii) any current legislation or exchange controls under
applicable law preclude UTStarcom from making payments to IWAV in United States
currency for a period of [***]; provided, however, that termination under this
subsection shall not relieve UTStarcom of its payment obligations under this
Agreement; or (iii) any law, decree, or regulation is enacted by the government
of the Territory which would impair or restrict (1) the right of either party to
terminate or elect not to renew this Agreement as herein provided, (2) IWAV's
right, title or interest in the Products or the intellectual property rights
therein, or (3) IWAV's rights to receive the payments under this Agreement.
Without limiting the foregoing, either party may terminate this Agreement
effective upon written notice to the other party stating such party's intention
to terminate, in the event the other party:
15.2.1 ceases to function as a going concern or to conduct
operations in the normal course of business, or
15.2.2 has a petition filed by or against it under any state or
federal bankruptcy or insolvency law which petition has not been dismissed or
set aside within [***] of its filing; or
15.2.3 fails to perform any of its obligations under this
Agreement so as to be in default hereunder and fails to cure such default within
[***] after written notice of such default.
15.3 PURCHASE ORDERS; NO WAIVER: UTStarcom shall be obligated to accept
deliveries of Products for which purchase orders were accepted by IWAV prior to
the effective date of termination. After any notice of termination has been
delivered by either party hereunder, deliveries of Product from IWAV to
UTStarcom, unless otherwise agreed by IWAV [***], shall require prepayment by
[***] (at [***] option) by UTStarcom to IWAV. The acceptance of any purchase
order from or the sale or license of any Product to UTStarcom after the
termination or expiration of this Agreement shall not be construed as a renewal
or extension of this Agreement nor as a waiver of termination of this Agreement.
15.4 NO LIABILITY FOR TERMINATION. Except as expressly required by law,
in the event of termination of this Agreement by either party in accordance with
any of the provisions of this Agreement, neither party shall be liable to the
other, because of such termination, for compensation, reimbursement or damages
on account of the loss of prospective profits or anticipated sales or on account
of expenditures, inventory, investments, leases or commitments in connection
with the business or goodwill of IWAV or UTStarcom. Termination shall not,
however, relieve either party of obligations incurred prior to the termination.
15.5 SURVIVAL. UTStarcom may sell Products existing in its inventory as
of the effective date of termination of this Agreement for a period of [***]
after the effective date of such termination ("Wind-Down Period"). During the
Wind-Down Period, the provisions of Sections 0, 0
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xxx 0 xxxxx xxxxxxx. In addition to the provisions set forth in this Section
15.5, the following provisions shall survive expiration or any termination of
this Agreement: Sections 14, 16, 17, 19, 21 and the last sentence of Section
18.2.
15.6 RETURN OF MATERIALS. All Products, trademarks, marks, trade
names, patents, copyrights, designs, drawings, formulas or other data,
photographs, samples, literature, and sales and promotional aids of every kind
shall remain the property of IWAV. Within [***] after the effective date of
termination of this Agreement, UTStarcom shall at [***] option destroy all
tangible items bearing, containing, or contained in, any of the foregoing, in
its possession or control and provide written certification of such destruction,
or prepare such tangible items for shipment and ship such items to IWAV or
IWAV's designee, [***] IWAV, at [***] expense. UTStarcom shall not make or
retain any copies of any Confidential Information (as defined in Section 16
below) which may have been entrusted to it.
16. CONFIDENTIALITY AND PROPRIETARY RIGHTS
16.1 CONFIDENTIALITY. Each party hereto acknowledges that by
reason of its relationship to the other party hereunder it will have access to
certain information and materials concerning the other party's business, plans,
Customers, technology, and products that are confidential and of substantial
value to the Parties, which value would be impaired if such information were
disclosed to third parties ("Confidential Information"). Each party agrees that
it will not use in any way for its own account or the account of any third
party, nor disclose to any third party, any Confidential Information revealed to
it by the other party. Each party shall take every reasonable precaution to
protect the confidentiality of Confidential Information. Upon request by either
party, the other party shall advise whether or not it considers any particular
information or materials to be confidential. Neither party shall publish any
technical description of the Products beyond the description authorized by
mutual agreement between the parties. In the event of termination of this
Agreement, there shall be no use or disclosure by either party of any
Confidential Information, and neither party shall manufacture or have
manufactured any devices, components or assemblies utilizing any of the other
party's confidential information. Notwithstanding the provisions of this Section
16.1, the parties hereby consent to the public disclosure of the existence of
this Agreement, and to disclosure of the terms of this Agreement as may be
required by law or governmental decree, including but not limited to any
disclosures which may be required by the United States Securities and Exchange
Commission. Additionally, the parties hereto agree that each party may, after
the signing of this Agreement, publicize the existence of this Agreement by
issuance of a press release describing the general nature of the relationship
envisioned hereby. Prior to the issuance of said press release[s], the releasing
party shall provide the other party with a draft copy of the proposed press
release, and shall gain the other party's approval of the press release prior to
issuance.
16.2 PROPRIETARY RIGHTS. UTStarcom agrees that IWAV retains all
of its rights, title and interest in and to all patent rights, trademarks, trade
names, inventions, copyrights, know-how and trade secrets relating to the
Products or the product lines that include the Products, and the design,
manufacture, operation or service of the Products. The use by UTStarcom of any
of these property rights is authorized only for the purposes herein set forth
and upon termination of this Agreement for any reason such authorization will
cease. UTStarcom shall not (and shall require that
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its Customers do not) remove, alter, cover or obfuscate any copyright notices or
other proprietary rights notices placed or embedded by IWAV on or in any
Product.
17. PATENT/COPYRIGHT/TRADEMARK INDEMNIFICATION
17.1 INDEMNITY. UTStarcom agrees that IWAV has the right to
defend, or at its option to settle, and IWAV agrees, at its own expense, to
defend or at its option to settle, any third party claim, suit or proceeding
(collectively, "Action") brought against UTStarcom alleging the Products
infringe any patent, copyright or IWAV Trademark (as defined in Section 18.1) in
existence as of the Effective Date, subject to the limitations hereinafter set
forth. IWAV will have sole control of any such Action or settlement
negotiations, and IWAV agrees to pay, subject to the limitations hereinafter set
forth, any final judgment entered against UTStarcom on such issue in any such
Action defended by IWAV. UTStarcom agrees that IWAV will be relieved of the
foregoing obligations unless UTStarcom notifies IWAV promptly in writing of such
Action, gives IWAV authority to proceed as contemplated herein, and gives IWAV
proper and full information and assistance to settle and/or defend any such
Action. If it is adjudicatively determined, or if IWAV believes, that the
Products, or any part thereof, infringe any patent, copyright or trademark, or
if the sale or use of the Products, or any part thereof, is, as a result,
enjoined, then IWAV may, at its election, option, and expense: (i) procure for
UTStarcom the right under such patent, copyright or trademark to sell or use, as
appropriate, the Products or such part thereof; or (ii) replace the Products, or
part thereof, with other noninfringing suitable Products or parts; or (iii)
suitably modify the Products or part thereof; or (iv) remove the Products, or
part thereof, terminate distribution or sale thereof and refund the payments
paid by UTStarcom for such Products less a reasonable amount for use and damage.
IWAV will not be liable for any costs or expenses incurred without its prior
written authorization, or for any installation costs of any replaced Products.
17.2 LIMITATIONS. Notwithstanding the provisions of Section 17.1
above, IWAV has no liability to UTStarcom for (i) any infringement of patent or
copyright claims alleging infringement by completed equipment or any assembly,
circuit, combination, method or process in which any of the Products may be used
but not covering the Products standing alone; (ii) any trademark infringements
involving any marking or branding not applied by or requested by IWAV, or
involving any marking or branding applied by IWAV at the request of UTStarcom;
or (iii) the modification of the Products, or any part thereof, unless such
modification was made by IWAV, where such infringement would not have occurred
but for such modifications.
17.3 DISCLAIMER. IWAV'S LIABILITY ARISING OUT OF OR RELATING TO
THIS SECTION 17 SHALL NOT EXCEED THE AGGREGATE AMOUNTS PAID BY UTSTARCOM TO IWAV
FOR THE ALLEGEDLY INFRINGING PRODUCTS THAT ARE THE SUBJECT OF THE INFRINGEMENT
CLAIM. THE FOREGOING PROVISIONS OF THIS SECTION 17 STATE THE ENTIRE LIABILITY
AND OBLIGATIONS OF IWAV AND THE EXCLUSIVE REMEDY OF UTSTARCOM AND ITS CUSTOMERS,
WITH RESPECT TO ANY ALLEGED PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT BY THE
PRODUCTS OR ANY PART THEREOF.
18. USE OF TRADEMARKS/TRADE NAMES
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18.1 TRADEMARKS. During the term of this Agreement, UTStarcom
shall distribute the IWAV Product(s) under the UTStarcom trademark and product
label. The trademarks, marks, trade names and product labels of UTStarcom which
shall be used for distribution of the Product(s) are set forth in EXHIBIT C
("Trademarks"), a copy of which is attached hereto, and incorporated into this
Agreement by reference. UTStarcom shall have the right to indicate to the public
that it is an authorized distributor of IWAV's Products.
18.2 USE. Except as set forth in this Section 18, nothing
contained in this Agreement shall grant or shall be deemed to grant to UTStarcom
any right, title or interest in or to IWAV's Trademarks. All uses of IWAV's
Trademarks will inure solely to IWAV and UTStarcom shall obtain no rights with
respect to any of IWAV's Trademarks, other than the right to distribute Products
as set forth herein, and UTStarcom irrevocably assigns to IWAV all such right,
title and interest, if any, in any of IWAV's Trademarks. At no time during or
after the term of this Agreement shall UTStarcom challenge or assist others to
challenge IWAV's Trademarks (except to the extent expressly prohibited by
applicable law) or the registration thereof or attempt to register any
trademarks, marks or trade names confusingly similar to those of IWAV.
19. LIMITATION OF LIABILITY
IWAV's liability arising out of or relating to this Agreement shall not
exceed the aggregate amounts paid by UTStarcom to IWAV hereunder. IN NO EVENT
SHALL EITHER PARTY BE LIABLE FOR LOST PROFITS, COST OF PROCUREMENT OF SUBSTITUTE
GOODS, OR ANY OTHER SPECIAL, RELIANCE, INCIDENTAL, OR CONSEQUENTIAL DAMAGES,
HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY WHETHER BASED IN CONTRACT, TORT
(INCLUDING NEGLIGENCE), OR OTHERWISE. THE FOREGOING LIMITATIONS SHALL APPLY
REGARDLESS OF WHETHER SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED
REMEDY STATED HEREIN.
20. COMPLIANCE WITH LAWS
20.1 EXPORT CONTROL. UTStarcom understands and acknowledges that
IWAV is subject to regulation by agencies of the United States Government,
including, but not limited to, the U.S. Department of Commerce, which prohibit
export or diversion of certain products and technology to certain countries. Any
and all obligations of IWAV to provide the Products, as well as any other
technical information or assistance shall be subject in all respects to such
United States laws and regulations as shall from time to time govern the license
and delivery of technology and products abroad by persons subject to the
jurisdiction of the United States, including the Export Administration Act of
1979, as amended, any successor legislation, and the Export Administration
Regulations issued by the Department of Commerce, Bureau of Export
Administration. UTStarcom agrees to cooperate with IWAV including without
limitation, providing required documentation, in order to assist IWAV in
obtaining export licenses or exemptions therefrom. UTStarcom warrants that it
will comply with the Export Administration Regulations and other United States
laws and regulations governing exports in effect from time to time. UTStarcom
further agrees not to resell Products to any organization, public or private,
which engages in the research or production of
-13-
military devices, armaments, or any instruments of warfare, including
biological, chemical and nuclear warfare.
20.2 GOVERNMENTAL APPROVALS. UTStarcom represents and warrants
that it has obtained all required approvals of the government within the
Territory in connection with this Agreement and that the provisions of this
Agreement and the rights and obligations of the parties hereunder, are
enforceable under the laws within the Territory.
20.3 FOREIGN CORRUPT PRACTICES ACT. In conformity with the
United States Foreign Corrupt Practices Act and with IWAV's established
corporate policies regarding foreign business practices, UTStarcom and its
employees and agents shall not directly or indirectly make any offer, payment,
or promise to pay; authorize payment; nor offer a gift, promise to give, or
authorize the giving of anything of value for the purpose of influencing any act
or decision of an official of any government within the Territory or the United
States Government (including a decision not to act) or inducing such a person to
use his or her influence to affect any such governmental act or decision in
order to assist IWAV in obtaining, retaining or directing any such business.
21. MISCELLANEOUS PROVISIONS
21.1 INDEPENDENT CONTRACTORS. The relationship of IWAV and
UTStarcom established by this Agreement is that of independent contractors, and
neither party is an employee, agent, partner or joint venturer of the other. All
financial obligations associated with UTStarcom's business are the sole
responsibility of UTStarcom. All sales and other agreements between UTStarcom
and its Customers are UTStarcom's exclusive responsibility and will have no
effect on UTStarcom's obligations under this Agreement.
21.2 ASSIGNMENT. UTStarcom may not transfer or assign its rights
or obligations under this Agreement without the prior written consent of IWAV.
Subject to the foregoing sentence, this Agreement will be binding upon and inure
to the benefit of the parties hereto, their successors and assigns.
21.3 INDEMNITY. Except for warranty claims for which IWAV is
liable under Section 14 and infringement claims covered by Section 17, UTStarcom
agrees to indemnify and hold IWAV harmless against any cost, loss, liability or
expense (including attorney's fees) arising out of third party claims against
IWAV relating to UTStarcom's use and distribution of the Products.
21.4 NO IMPLIED WAIVERS. The failure of either party at any time
to require performance by the other of any provision hereof shall not affect the
right of such party to require performance at any time thereafter, nor shall the
waiver of either party of a breach of any provision hereof be taken or held to
be a waiver of a provision itself.
21.5 SEVERABILITY. If any provision of this Agreement is held to
be invalid by a court of competent jurisdiction, then the remaining provisions
will nevertheless remain in full force and effect. The parties agree to
renegotiate in good faith those provisions so held to be invalid to be valid,
enforceable provisions which provisions shall reflect as closely as possible the
original intent of the parties, and further agree to be bound by the mutually
agreed substitute provision.
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21.6 FORCE MAJEURE. Except for payment of monies, neither party
shall be liable for failure to fulfill its obligations under this Agreement or
any purchase order issued hereunder or for delays in delivery due to causes
beyond its reasonable control, including, but not limited to, acts of God,
man-made or natural disasters, earthquakes, fire, riots, flood, material or
supplier shortages, strikes, delays in transportation or inability to obtain
labor or materials through its regular sources. The time for performance of any
such obligation shall be extended for the time period lost by reason of the
delay.
21.7 CONFLICTING TERMS. The parties agree that the terms and
conditions of this Agreement shall prevail, notwithstanding contrary or
additional terms, in any purchase order, sales acknowledgment, confirmation or
any other document issued by either party effecting the purchase and/or sale of
Products.
21.8 HEADINGS. Headings of paragraphs herein are inserted for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement.
21.9 LIABILITY OF IWAV. The provisions of this Agreement under
which the liability of IWAV is excluded or limited shall not apply to the extent
that such exclusions or limitations are declared illegal or void under the laws
applicable in the Territory in which Products are sold, unless the illegality or
invalidity is cured under the laws of the Territory by the fact that the law of
California governs this Agreement.
21.10 CURRENCY CONTROL. UTStarcom represents and warrants that,
as of the Effective Date of this Agreement, no currency control laws applicable
in the Territory prevent the payment to IWAV of any sums due under this
Agreement. In the event that any such laws come into effect and the local
government of the Territory does not permit that payment be made in United
States Dollars, UTStarcom will notify IWAV immediately, and if so instructed by
IWAV, deposit all monies due IWAV to the account of IWAV in a local bank of
IWAV's choice in the Territory.
21.11 NOTICE. Any notice required or permitted to be given under
this Agreement shall be delivered (i) by hand, (ii) by registered or certified
mail, postage prepaid, return receipt requested, to the address of the other
party first set forth above, or to such other address as a party may designate
by written notice in accordance with this Section 21.11, (iii) by overnight
courier, or (iv) by fax with confirming letter mailed under the conditions
described in (ii) above. Notice so given shall be deemed effective when
received, or if not received by reason of fault of addressee, when delivered.
21.12 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements relating thereto, written or oral, between the
parties. Amendments to this Agreement must be in writing, signed by the duly
authorized officers of the parties. The terms of any purchase order are
expressly excluded.
21.13 GOVERNING LAW. This Agreement shall be governed by and
construed under the law of the State of California, without regard to conflict
of laws principles or the U.N. Convention on Contracts for the International
Sale of Goods.
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21.14 ARBITRATION. Any dispute or claim arising out of or in
relation to this Agreement, or the interpretation, making, performance, breach
or termination thereof, shall be finally settled by binding arbitration under
the Rules of Conciliation and Arbitration of the International Chamber of
Commerce as presently in force ("Rules") and by 3 arbitrators appointed in
accordance with said Rules. Judgment on the award rendered may be entered in any
court having jurisdiction thereof. The place of arbitration shall be Alameda
County, U.S.A. Any monetary award shall be in U.S. dollars and the arbitration
shall be conducted in the English language. The parties may apply to any court
of competent jurisdiction for temporary or permanent injunctive relief, without
breach of this Section 21.14 and without any abridgment of the powers of the
arbitrator.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
effective as of the Effective Date.
Interwave Communications International, LTD: UTSTARCOM:
By: /s/ Xxx x. Sugarbroad By: /s/ Hong Xxxxx Xx
-------------------------------------------- ------------------------
Name: Xxx X. Sugarbroad Name: Hong Xxxxx Xx
Title: President & Chief Operating Officer Title: President & CEO
Exhibit:
-------
A: Product Listing & Pricing
B: Activity Schedule
C: Trademarks
EXHIBIT A - PRODUCTS & PRICING
INTERWAVE LIST PRICE LESS [***] (i)
(i) Pricing based on distributor volume discount. Supplier and
Distributor may negotiate alternative discount structures to meet specific needs
in target markets or applications, on a case by case basis.
------------------------------------------ --------------------------------------- ----------------------------------------
PART NUMBER DESCRIPTION UNIT PRICE US $
------------------------------------------ --------------------------------------- ----------------------------------------
[***]
EXHIBIT A - PRODUCTS & PRICING
---------------------------------------------------------------------------------------------------------------------------
OPTIONS/SPARES
---------------------------------------------------------------------------------------------------------------------------
PART NO. QNTY. DESCRIPTION PRICE
------------------------------------- ----------------- ------------------------------------------------ ------------------
[***]
------------------------------------- -------------- ------------------------------------------------- --------------------
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EXHIBIT B - ACTIVITY SCHEDULE
------------------------------------------------------------------------------------------------ -------------------------
ACTIVITIES TARGET DATES
------------------------------------------------------------------------------------------------ -------------------------
1. Begin Type Approval/Certification Process [***]
------------------------------------------------------------------------------------------------ -------------------------
2. Launch Sales & Marketing Plan with Targeted Operators [***]
------------------------------------------------------------------------------------------------ -------------------------
3. Launch First Trial with Selected Operator [***]
------------------------------------------------------------------------------------------------ -------------------------
EXHIBIT C - TRADEMARKS
- UTStarcom-Registered Trademark- (name and distinctive logo)
- PAS-TM-
- WLL-TM-
- AN-2000-TM-
- OMUX-TM-
- WACOS-TM-
