Tellabs Contract No. CON AFC 008 OEM 96 08
OEM AGREEMENT
This Agreement was made and executed by and between Tellabs Operations, Inc., on
behalf of itself, and its Affiliates, as hereinafter defined (collectively,
"Tellabs"), a Delaware corporation, having offices at 0000 Xxxxxxx Xxxxxx,
Xxxxx, Xxxxxxxx 00000-0000 XXX; and Advanced Fibre Communications, Inc.
(hereinafter "AFC"), a Delaware corporation, having its principal place of
business at 0000 XxXxxxxx Xxxx. Xx., Xxxxxxxx, XX 00000.
WHEREAS, Tellabs wishes to have AFC manufacture and deliver to Tellabs and AFC
wishes to manufacture and deliver to Tellabs, AFC's UMC 1000 Products, as
specified in the License Agreement (defined below) ("AFC Product(s)"), under
Tellabs' colors and tradedress;
WHEREAS, AFC wishes to have Tellabs manufacture and deliver to AFC and Tellabs
wishes to manufacture and deliver to AFC, the Tellabs Developments, as specified
in the License Agreement (defined below) ("Tellabs Products(s)"), under AFC's
colors and tradedress;
WHEREAS, AFC and Tellabs contemplate the repetitive purchases of their
respective Products between them, and desire that the terms and conditions
controlling such repetitive purchases shall be consistent, uniform, and
agreed to by both Tellabs and AFC in advance of placing any purchase orders;
and
WHEREAS, contemporaneous herewith, the parties have also entered into a
Termination Agreement and a License and Marking Agreement which contains certain
additional rights and obligations of the Parties as they relate to the AFC
Products and the Tellabs Products ("License Agreement").
NOW THEREFORE, in consideration of the mutual promises, covenants and conditions
contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 Cross Reference Table
AFC Preamble
AFC Products Preamble
License Agreement Preamble
Tellabs Preamble
Tellabs Products Preamble
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Term Section 3
1.2 "Affiliates" shall mean an individual or entity that directly or
indirectly controls, is controlled by, or is under common control
with, the entity specified. For purposes of this definition,
"control" shall mean beneficial ownership of more than fifty
percent (50%) of the voting stock of such entity.
1.3 "Buyer" means Tellabs and its Affiliates in the case of the AFC
Products and AFC and its Affiliates, in the case of the Tellabs
Products.
1.4 "Customer" means a customer of a Buyer and includes both end users
and distributors.
1.5 "Functional Specifications" means the Seller's functional
specifications for the applicable Product.
1.6 "Licensed Software" means the particular software programs owned by
the Seller, or its licensors, that are provided to a Buyer under
the terms hereof, and all documentation relating to such software.
1.7 "Products" shall mean any products sold hereunder by Tellabs and
AFC. With respect to sales by AFC hereunder, "Product(s)" shall
mean the AFC Products. With respect to sales by Tellabs hereunder,
"Product(s)" shall mean the Tellabs Products.
1.8 "Seller" means AFC, in the case of the AFC Products, and Tellabs,
in the case of the Tellabs Products.
2. SCOPE OF WORK
AFC hereby grants to Tellabs and its Affiliates the right to sell and
service the AFC Products, subject to the terms and conditions set forth
below and in the License Agreement. AFC will, at no extra charge, use
Tellabs' colors and tradedress for the AFC Products being sold and licensed
to Tellabs hereunder.
Tellabs hereby grants to AFC and its Affiliates the right to sell and
service the Tellabs Products, subject to the terms and conditions set forth
below and in the License Agreement. Tellabs will, at no extra charge, use
AFC's colors and tradedress for the Tellabs Products being sold and
licensed to AFC hereunder.
3. TERM
This Agreement shall commence December 23, 1996, and shall remain in effect
until neither party has any OEM rights under the License Agreement, unless
sooner terminated as provided herein (hereinafter "Term").
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4. QUANTITY
Buyer assumes no obligation hereunder to purchase any quantity of Products.
Any forecast of quantities stated herein or on any attached Attachment, or
otherwise provided to Seller from time to time, represents Buyer's best
estimate of requirements for planning purposes only and shall not be
construed as an obligation to buy any quantity of Products.
5. PRICE AND PAYMENT TERMS
During the Term, the prices charged to the Buyer for Products purchased
hereunder shall be as set forth in Sections 5.2.2 or 5.4.2, as applicable,
of the License Agreement. Seller warrants that at all times during the
Term, no lower price shall be offered to any of its customers which are not
Affiliates for the same Products or for equivalent products purchased in
similar quantities.
Seller will invoice on shipment, and Buyer will pay for Products within
thirty (30) days of the date of invoice. Prices are exclusive of charges
for freight and insurance. Unless otherwise agreed, such charges will be
prepaid by Seller and will appear as separate items on Seller's invoices.
Invoices for services ordered by the Buyer and performed by Seller shall be
due within thirty (30) days from the date of Seller's invoices. Invoices
for services shall be issued upon completion of such services.
6. TAXES
Buyer agrees to pay any sales, use or other local, state, and federal
taxes, however designated (but exclusive of taxes based on or measured by
Seller's net income or net worth), imposed on or based upon the provision,
sale or use of the Products or services provided under this Agreement.
Taxes will be separately stated on the invoice. If an order is exempt from
sales or use taxes, such tax will not be invoiced, provided Buyer provides
a valid exemption certificate.
7. PURCHASE ORDERS
Products shall be ordered by Buyer through the issuance of purchase orders
which shall be subject to and governed by this Agreement. Each purchase
order shall state the model number, Product description, quantity of
Product ordered, desired shipment date and delivery location, method of
shipment, unit and extended price for each Product ordered and total
purchase price for the order. Purchase Orders shall ship complete unless
Buyer has authorized partial shipments.
Seller shall place a readable packing slip on the face of all shipped
Products, which slip shall include the following:
a. Order Number/Buyer's Part Number
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b. Quantity shipped
c. Description of Products and/or Services
d. Buyer's P.O. Number
8. CANCELLATION
Buyer can cancel any purchase order and/or any portion of a purchase order,
without charge, provided that Seller is advised of the cancellation at
least ninety-one (91) days prior to the original acknowledged, scheduled
ship date. Buyer can postpone any purchase order and/or any portion of a
purchase order. Cancellation notices received less than ninety-one (91)
days before shipment will be subject to the cancellation charges set forth
below. If an order has been postponed and then subsequently canceled, the
cancellation charge shall be based on the number of days prior to the
original scheduled ship date that notice of cancellation is received:
Number of days prior to original Cancellation charge as a percentage of
scheduled ship date that notice original purchase order amount:
of cancellation is received by
Seller:
1 to 30 days 25%
31 to 60 days 15%
61 to 90 days 10%
91 or more days No Charge
9. DELIVERY/LEAD XXXX
Xxxxxx agrees to meet all purchase order delivery date requests which
reflect the lead times stated in Attachment A. During the Term, the Seller
shall attempt to reduce these lead times. Buyer shall be entitled to
cancel, at no charge, any purchase order which is more than five (5) days
late.
In addition, in the event that Seller fails to meet its agreed delivery
dates, Buyer may request a corrective action meeting. If Buyer so
requests, within ten (10) calendar days of receiving such a request, Seller
shall send the appropriate management representative from Seller's
manufacturing plant to Buyer's designated location to discuss the problem
and develop a corrective action plan.
10. QUALITY REQUIREMENTS
10.1 Products shall be subject to application analysis, electrical
characterization, and/or physical analysis. In addition, Buyer may
evaluate Seller for technical and processing capability through
written and on-site quality surveys.
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10.2 Seller shall make available at no additional cost to Buyer, such production
testing facilities, labor, data, specifications, procedures and such other
documents and assistance as necessary for Buyer or Buyer's agent to perform
inspections. In addition, Seller shall make available to Buyer or Buyer's
agent at no additional charge, data obtained through Seller's normal
routines which show the results of Seller's inspections, tests and audits
of Products.
10.3 ON-SITE INSPECTION
To the extent that such testing and inspection are practicable without
interrupting Seller's normal work flow, during Seller's normal workday any
Products or Services supplied by Seller under this Agreement may be subject
to inspection and testing by Buyer at Seller's facility to determine
compliance with Buyer's quality specifications, at no Seller-imposed cost
to Buyer.
10.4 INSPECTION PROCEDURES/BUYER'S FACILITY
Incoming Products shall be subject to predetermined inspection/testing to
determine conformance with the purchase order as well as with all of the
following:
10.4.1 Seller's workmanship standards for the Products, approved in
advance by Buyer;
10.4.2 Seller's Functional Specifications; and
10.4.3 Buyer's packing and shipping requirements, or as otherwise agreed
to by the parties.
Incoming inspection also shall identify damage that may have
occurred in transit. Products may be subject to laboratory
testing, including but not limited to chemical, physical, and
metallurgical tests as required to verify specific characteristics.
Inspection and test reports indicating acceptance or rejection,
inspection results and quality evaluations shall be maintained by
Buyer in a central file and shall be used as the basis for the
adjustments of sampling inspection, corrective action, and
qualification status.
10.5 PRODUCT CHANGES
10.5.1 Seller will notify Buyer of all Product Change Notices
("PCN") for Products purchased by Buyer whether within or
outside the applicable warranty period, prior to
implementing any such change. Each PCN shall contain the
following information:
Product Change Number
Description Of Change
Reason For Change
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Seller will provide Buyer with a single point of contact to
whom Buyer may direct questions regarding a particular PCN
in order to assess its impact on reliability,
specifications, and form, fit or function. Based upon the
information provided, Buyer shall classify changes in the
Product into one of the following classes:
"CLASS A" CHANGE:
Changes are required to correct a Product deficiency such
as:
Safety or fire hazard;
Electrically or mechanically inoperative;
Operational or design defects that cause higher than
advertised Product failure rates or adverse Buyer reaction;
Product does not operate as documented in the Seller's
specifications, literature, as warranted by the Seller or as
specified in this Agreement.
"CLASS AC" CHANGE:
Changes have limited application or are conditional changes
to a product that affects:
A specific Product over time;
A specific subset of Products over time;
Specific Product combinations;
The use of certain options.
"CLASS B" CHANGE:
Changes that are made to incorporate improvements in design
resulting in better operation, improved testing and
maintenance, longer life, service improvements, cost
reductions and addition of new features. Class B changes
are applied to manufactured Products and may be recommended
for application to existing equipment in the field.
"CLASS D" CHANGE:
Changes that incorporate minor new features and design
improvements that do not affect the existing functionality
of a Product, or other minor service improvement and test
capabilities not sufficiently significant to require a Class
B change.
a. Component changes that involve physical or electrical
specification differences to the replaced component and
require product identification change are considered
Class D.
b. Routine changes in Product documentation or technical
specification are documented with a Class D PCN. The
Product would not change since form, fit or function of
the Product was not affected.
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Buyer shall have the right to accept such changes before
such changes may be implemented on Products shipped to Buyer
and its Customers. For Class A and AC changes Seller shall
replace or modify at no charge all affected Product and
documentation furnished hereunder. Seller shall supply
relevant documentation to Buyer for all Class A and AC
changes. The parties shall mutually agree on a schedule
which shall implement such changes for all affected
in-service Product locations. Seller shall at no charge to
the Buyer implement all Class A and AC changes prior to
shipment of Product, unless otherwise directed by Buyer.
For Class B changes, Seller shall first notify Buyer of the
exact nature of the change. Buyer shall determine if such
Class B change is to be implemented in Product furnished
hereunder and placed in service. Should such implementation
be deemed necessary, Seller shall make arrangements for the
implementation at prices and schedules agreed prior to
implementation. Documentation shall be provided by Seller
as specified for Class A and AC changes above.
For Class D changes, Seller shall notify Buyer of the nature
of the change and shall provide associated documentation.
Seller shall, at no charge to Buyer, make all A and AC
changes prior to shipment of Product, unless otherwise
directed by Buyer.
For Class A and AC changes which involve only an exchange of
components, Seller shall provide such components at no
charge for the Product affected and Buyer shall implement
such change.
10.5.2 MANUFACTURING CHANGES
Seller shall notify Buyer of process changes made by Seller
in the manufacturing of Products to be purchased under this
Agreement if such changes affect the form, fit, or function
of Products. If deemed necessary by Buyer, requalification
procedures for said Products then may be required.
10.6 QUALITY PERFORMANCE
Seller shall inspect and test all Products prior to their shipment
to Buyer. Seller agrees to maintain a 100% lot acceptance rate as
measured by Buyer's incoming inspection. Seller agrees to
communicate to Buyer, any and all process or Functional
Specification difficulties prior to Buyer's receipt of the effected
Product. Buyer's incoming inspection performance measure shall be
based upon the quantity of lots accepted for all specified
electrical, mechanical, cosmetic and solderability attributes
versus the quantity of lots received, which
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results in a lot acceptance percentage. Any rejects caused by
Buyer's internal drawing or specification errors shall be excluded
from the calculation.
10.7 OUT-OF-BOX FAILURES
Seller shall inspect and test all Products prior to shipment.
Notwithstanding the foregoing, it is understood and agreed, that,
upon receiving the Products, Buyer reserves the right to perform,
within ten (10) business days after delivery, any test Buyer deems
necessary to adequately demonstrate that the Products meet all of
the Functional Specifications. Product which does not conform to
the Functional Specifications, or any other requirements outlined
in this Section 10 may, at Buyer's option, be returned to Seller
(at Seller's expense) for rework or replacement under warranty, or
Buyer may cancel the entire purchase order or the portion thereof
relating to the nonconforming Products at no charge to Buyer. For
any such returned defective Product, Buyer shall either debit
Seller the cost of said Product plus freight, or request a refund
for said amounts. Rejected units returned for rework shall be
repaired under warranty and shall have the warranty renewed upon
redelivery to Buyer for the full warranty period.
10.8 CORRECTIVE ACTION
Upon Buyer's request, Seller must within forty-eight (48) hours
following notification, provide Buyer with a written corrective
action plan to address Seller's failure to conform with this
Section 10. This plan shall be reviewed by Buyer who then may
conduct a follow-up on-site survey at Seller's facility.
11. PACKAGING AND SHIPMENT; RISK OF LOSS
Seller shall package and ship all items in Buyer's requested manner. All
shipments shall be F.O.B. origin with freight prepaid. Buyer may adjust
the purchase order shipping destination any time up to two days prior to
shipment. Seller shall invoice Buyer, and Buyer shall pay, Seller's actual
shipping charges upon presentation of evidence that Seller paid such
charges. The risk of loss and damage to Products shall pass to Buyer at
the F.O.B. point.
12. WARRANTY
Seller hereby warrants that all Products furnished hereunder shall conform
to the Functional Specifications, and shall be free from defects in
material, workmanship and design for a period of two (2) year(s) from date
of receipt of shipment. Buyer shall have the option to require Seller to
repair or replace defective Products without charge or expense. Repaired
Products, including Out-of-Box Failures shall be warranted for a minimum
period of six (6) months from completion of repairs or the remainder of the
Product's original warranty, whichever is longer. This warranty shall
survive inspection, acceptance, payment and expiration or termination of
this
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Agreement. The parties also agree to comply with the terms of Attachment B,
with respect to their respective products, which shall be incorporated
herein by reference.
13. SOFTWARE LICENSE
13.1 The Licensed Software is subject to the terms and conditions set
forth in the License Agreement. Licensed Software is furnished to
Buyer solely for Buyer's use and the use of Buyer's Customers for
the use specified herein and in the License Agreement. The Licensed
Software may not be copied, in whole or in part, except as may be
necessary and incidental to such uses for archival and back-up
purposes or to replace a worn or defective copy.
13.2 Buyer will not reverse compile, disassemble, modify or alter any
Licensed Software, except under the circumstances referred to in the
License Agreement.
13.3 Buyer may sublicense Licensed Software to its Customers under the
sublicense conditions contained in Sections 13.3.1 and 13.3.2 below.
Otherwise, Buyer shall not sell, transfer, publish, disclose, display
or otherwise make available any Licensed Software or copies
thereof to any third party. The following conditions do not apply
to firmware. Buyer may sublicense firmware without restriction
(except as provided in the License Agreement) provided that the
firmware may only be used on and with the Product with which it is
delivered.
13.3.1 If Buyer sublicenses Licensed Software under this Agreement,
the sublicensee must also agree to the terms of a Software
License Agreement substantially in accordance with this
Section 13.
13.3.2 This right to sublicense is intended for Buyer's use for its
direct and indirect Customers and does not imply any further
right of sublicense by those Customers, except in the case
of distributors which may, in turn, sublicense to their end
user customers.
14. CONTINUING AVAILABILITY OF PRODUCTS, COMPONENTS AND PRODUCT SUPPORT
14.1 Seller Agrees to offer to Buyer during the Term hereof and for a
period of ten (10) years thereafter, full maintenance/repair services
and components for the Products. Repair or replacement shall be
accomplished within Seller's published repair intervals or as agreed
upon by the parties.
14.2 Seller shall be strictly liable for loss of or damage to Products
in its care, custody or control.
14.3 If Seller fails or is unable to offer such services, Products and
components thereof, and if Seller is unable to obtain another source
of supply acceptable to
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Buyer, then such failure or inability shall be deemed noncompliant
with this Section 14 and, in addition to whatever other rights and
remedies Buyer may have at law or in equity, Seller shall be required
to provide to Buyer, without obligation or charge, the technical
information and any other licenses and rights necessary to enable
Buyer to supply, have supplied, manufacture, or have manufactured,
such services, Products and/or components. The above-referenced
technical information shall include, by example and not by
limitation: (1) manufacturing drawings and specifications of raw
materials and components comprising such parts; (2) manufacturing
drawings and specifications covering tooling and the operation
thereof; and (3) a detailed list of all commercially available
parts and components including the part number, name and location of
the component's supplier, prices and functional descriptions.
1.4. Seller shall provide Buyer advance written notification one (1) year
prior to entirely discontinuing the manufacture or replacement of
Products or component parts.
15. NOTIFICATION PROCEDURES
All notices, demands or consents required or permitted hereunder shall
be in writing and shall be delivered by overnight delivery, facsimile (with
confirmation copy by mail), or mailed to the respective parties at the
addresses first set forth above or at such other address as shall have
been given to the other party in writing for the purposes of this clause.
IF TO AFC: IF TO TELLABS:
Purchasing Department Purchasing Department
ADVANCED FIBRE COMMUNICATIONS, INC. TELLABS OPERATIONS, INC.
0000 XxXxxxxx Xxxx. No. 0000 Xxxxxxxxx Xxxx. MS124
Petaluma, CA 94975 Xxxxxxxxxxx, XX 00000
Phone: (000) 000-0000 Phone: (000) 000-0000
FAX: (000) 000-0000 FAX: (000) 000-0000
COPY TO: COPY TO:
Advanced Fibre Communications, Inc. Tellabs Operations, Inc.
Legal Department Legal Department - MS 16
0000 XxXxxxxx Xxxx. No. 0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxxxx, XX 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Such notices and other communications shall be deemed effective upon the
earliest to occur of (i) actual delivery, (ii) five days after mailing,
addressed and postage prepaid, return receipt requested, delivery as
aforesaid (seven (7) days for intercontinental deliveries), (iii) one
(1) business day after transmission by overnight delivery (two (2)
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business days for intercontinental deliveries), or (iv) the day of
receipt where receipt has been confirmed.
16. BANKRUPTCY
In addition to all other rights or remedies provided by law, either
party may cancel this Agreement or any purchase orders placed hereunder,
in the event that (a) the other party becomes insolvent or makes a
general assignment for the benefit of creditors, (b) the other party
admits in writing its inability to pay debts as they become due, (c) a
trustee or receiver is appointed by any court with respect to the assets
or any substantial portion of the assets of the other party, or (d) an
action is taken by or against the other party under bankruptcy or
insolvency laws relating to the relief of debtors, including the Federal
Bankruptcy Code.
17. FORCE MAJEURE
Neither party to this Agreement shall be held responsible for any delay
or failure in performing its obligations hereunder caused by fires,
strikes, embargoes, requirements imposed by government regulations, civil
or military authorities, acts of God, or by the public enemy or other
similar causes, if the injured party receives prompt notice of such
contingency. If such contingency occurs, the party injured by the other's
inability to perform may elect to: (a) terminate this Agreement in whole
or in part as to Products not already received or work not already
performed, (b) suspend performance for the duration of the delaying cause,
or (c) resume performance under this Agreement in whole or in part once
the delaying cause ceases, with an option to the injured party to extend
the delivery date up to the length of time the contingency endured. Unless
written notice is given within thirty (30) days after such injured party
is apprised of the contingency, option 18(b) shall be deemed selected.
18. TERMINATION
18.1 DEFAULT
Either party shall have the right to terminate this Agreement, in
whole or in part, as set forth in Section 18.4, for default by the
other in the performance of any substantial obligation or material
breach of this Agreement where such default or breach continues for a
period of thirty (30) days after written notice thereof to the other.
Termination of this Agreement will not affect any sublicenses granted
prior to termination.
18.2 BANKRUPTCY
Either party may terminate this Agreement, in whole or in part, as
set forth in Section 18.4, by written notice in the event that the
other party makes an assignment for the benefit of creditors, or
admits in writing its inability to pay debts as they become due, or a
trustee or receiver for any substantial part of its assets is
appointed by any court, or a proceeding is instituted under a
provision
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of the Federal Bankruptcy Code by or against the other party and
is acquiesced in or is not dismissed within ninety (90) days or
results in an adjudication in bankruptcy.
18.3 TERMINATION OF LICENSE AGREEMENT
This Agreement shall terminate under the circumstances provided in
the License Agreement.
18.4 PARTIAL TERMINATION
Notwithstanding anything to the contrary herein contained, a
Terminating Party entitled to terminate this Agreement pursuant to
Section 18.1, 18.2 or 18.3 may, at its election, only partially
terminate this Agreement by terminating all license rights of the
Terminated Party, while not terminating its own license and
manufacturing rights, with the effect set forth in Section 18.5
below. In such a case, this Agreement shall remain in partial force
and effect, and the Terminated Party shall be required to observe all
of its obligations to the Terminating Party for the remainder of the
Term of this Agreement (unless the Terminated Party terminates this
Agreement in accordance with the terms of this Section 18).
Notwithstanding the foregoing, the Terminating Party may, at any time
prior to the end of the Term, elect to terminate this Agreement in
its entirety, with the effect set forth in Section 18.5 below. For
purposes of this Section 18, the party electing to terminate this
Agreement will be deemed to be the "Terminating Party" and the other
party shall be deemed to be the "Terminated Party."
18.5 EFFECT OF TERMINATION
18.5.1 In the event that this Agreement is terminated by either
party, in whole or in part, as provided in this Section 18,
the parties will be obligated to agree upon terms and
conditions which provide for continuing support for the
other party's embedded customer base for the Products. Unless
otherwise agreed, the Terminating Party will, at its option,
either take over such continuing support obligations, or
grant the Terminated Party sufficient rights to enable that
party to continue to provide such support.
18.5.2 In the event that this Agreement is terminated as provided
in Section 18.1, 18.2, 18.3 or 18.4 the Terminating Party
shall be entitled to obtain promptly from the Terminated
Party (and the Terminated Party will be obligated to provide
to the Terminating Party), any and all design and
manufacturing documentation, which is necessary or useful for
the design and/or manufacture of the Products, including the
Licensed Software and the source code therefor, being
purchased by the Terminating Party under this Agreement.
The Terminating Party shall be entitled to use such materials
as well as any other materials previously disclosed under
this Agreement for purposes of manufacturing, having
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manufactured, modifying, maintaining, marketing and
distributing the Products. If requested by the Terminating
Party, at any time during the term hereof, the Terminated
Party agrees to deposit any and all such documentation in
escrow, subject to release under the terms hereof. The
Terminated Party shall bear the out of pocket costs
associated with the escrow. The Terminated Party will be
obligated to keep the escrow updated at all times.
In addition, the Terminated Party agrees:
18.5.2.1 if requested by the Terminating Party, to
continue to manufacture Products for the
Terminating Party for a one year period following
the date of notice of termination; and
18.5.2.2 to use its best efforts to assist the Terminating
Party to disengage its manufacturing operations
from the Terminated Party and to cooperate with the
transition to a new manufacturer, in such manner
as to enable the Terminating Party to continuously
acquire Products during a reasonable transition
period; and
18.5.2.3 to transfer to the Terminating Party or its
designee any of the Terminating Party's work-in-
process, inventory, finished goods ordered by the
Terminating Party and manufacturing equipment owned
by the Terminating Party on terms and conditions,
including prices, to be mutually agreed upon by the
parties.
19. LABELING AND EMISSIONS
19.1 Irrespective of whether a specification is furnished, if Products
or containers to be furnished under this Agreement or under the
License Agreement are required to be constructed, packaged, labeled
or registered in a prescribed manner, the Seller shall comply with
applicable federal, state and/or local laws. (As used herein, "local"
shall mean where Products are manufactured.) Seller further agrees to
indemnify Buyer for any losses, fines, or other penalties which may
be incurred or assessed, including reasonable attorney's fees, due
to Seller's failure to comply with the provisions of this Section.
19.2 Products and components hereunder shall comply, to the extent
applicable, with the requirements of Subpart J of Part 15 of the
Federal Communications Commission's Rules and Regulations, as may be
amended from time to time, including those sections concerning the
labeling of such Products and components and the suppression of
radiation to specified levels.
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Nothing herein shall be deemed to diminish or otherwise limit
Seller's obligations under the "WARRANTY" section of this Agreement.
20. GOVERNING LAW
This Agreement shall be governed by the laws of the State of Illinois,
excluding its conflict of laws provisions, for matters relating to sales of
Tellabs Products and California law, excluding its conflict of laws
provisions, for matters relating to sales of AFC Products.
21. INCORPORATION BY REFERENCE
The following Sections of the License Agreement are incorporated herein
by reference.
Section 8 Warranty and Indemnification
Section 9 Limitation of Liability
Section 10 Confidentiality
Section 15 Export Restrictions
Section 16 General Provisions (except Section 16.4)
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized agents on the dates written below. This Agreement shall
not be binding until it has been signed by both Parties.
ADVANCED FIBRE COMMUNICATIONS, INC. TELLABS OPERATIONS, INC.
By: /s/ XXXX X. XXXXXXX By: /s/ XXXXX X. XXXXXXX
------------------------------- ----------------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxx
----------------------------- --------------------------------
Title: President Title: President
---------------------------- -------------------------------
Date: December 30, 1996 Date: December 23, 1996
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ATTACHMENT A
LEAD TIMES
AFC Products 30 days after receipt of order
Tellabs Products 30 days after receipt of order
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ATTACHMENT B
This Attachment B also includes the terms of Tellabs' and AFC's standard
warranty and repair and return policies which are attached hereto and
incorporated herein by reference. The Seller(s) will make available to Buyer
hardware and software compatibility matrixes for the Seller's Product(s) when
and as such matrixes are developed by Seller. In the event of a conflict
between the terms and conditions of this Attachment B, including the standard
policies, and the terms of the Agreement, the Agreement shall control.
WARRANTY AND SERVICE FOR TELLABS PRODUCTS
REPAIR COSTS
Tellabs Products may be returned freight prepaid to Tellabs for repair. AFC
must secure prior authorization of Tellabs for the return of such Products,
which authorization shall not be unreasonably withheld. The charge for such
repairs shall be as stated below:
Priority Warranty No Warranty
-------- -------- -----------
Normal $0 50% of new board
Emergency $250 per module 50% of new board + $250
Customer
Requested $150 per module 50% of new board + $150
Priority
--------------------------------------------------------------------------------
PAGE 16 OF 16
WARRANTY DATE CODES
------------------------------------------------------------------------------
Each Tellabs hardware product is stamped with a warranty code in a
customer-accessible location (E.G., front panel, circuit-card
stiffener, etc.). This date stamp approximates the date of shipment.
The warranty period begins on the date stamped on the product. A
sample date code is shown below:
---------
--- 05-96 ---
| --------- |
| |
month year
SOFTWARE
------------------------------------------------------------------------------
Tellabs warrants that software programs will substantially conform
to the applicable Tellabs product specifications for a period of
90 days from the date of shipment, provided that the software is used
on the hardware and with the system on which it was originally
installed. Tellabs also warrants that the media on which the software
programs are distributed are free from defects in material and
workmanship for a period of 90 days from the date of shipment.
Tellabs will replace the defective media or correct substantial
program errors at no charge, provided that the software is returned
to Tellabs during the warranty period.
CONDITION AND EXCEPTIONS
------------------------------------------------------------------------------
The product must be used as outlined in its applicable Tellabs
product specifications and it must be handled, installed, operated
and shipped in accordance with industry standards. Claims under this
warranty may be made only by the original purchaser or user. This
warranty does not apply to items that have a limited life expectancy,
such as lamps and fuses. Furthermore, this warranty does not apply to
products modified or repaired by someone other than Tellabs or
products deemed as being damaged beyond repair. Classification as
being damaged beyond repair includes, but is not limited to, burn
marks, cracks or other physical damage, and damage due to catastrophic
failure (such as lightning damage). Failure to comply with any of the
terms of this Tellabs U.S. Warranty, Repair and Return Policy will
result in invalidation of the warranty.
EXCLUSION OF WARRANTIES AND LIMITATION OF LIABILITY
------------------------------------------------------------------------------
NO OTHER WARRANTIES ARE EXPRESSED OR IMPLIED EXCEPT AS SET FORTH
HEREIN. ALL OTHER WARRANTIES, INCLUDING WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY
EXCLUDED FROM THIS WARRANTY.
A CUSTOMER'S EXCLUSIVE REMEDY FOR ANY CAUSE OF ACTION ARISING OUT
OF ANY DEFECTIVE PRODUCT IS LIMITED TO REPAIR OR REPLACEMENT OF THE
PRODUCT DURING THE WARRANTY PERIOD, AT TELLABS' OPTION. UNDER NO
CIRCUMSTANCES WILL TELLABS BE LIABLE FOR ANY INDIRECT, SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES OR LOSS, INCLUDING, BUT NOT
LIMITED TO, LOSS OF PROFITS, LOSS OF USE OR LOSS OF DATA, WHETHER
CAUSED BY BREACH OF CONTRACT, NEGLIGENCE, OR OTHERWISE. UNDER NO
CIRCUMSTANCES WILL TELLABS' LIABILITY UNDER THIS WARRANTY POLICY
EXCEED THE PURCHASE PRICE OR LICENSE FEE PAID BY A CUSTOMER FOR THE
PRODUCT.
TELLABS PRODUCT SCREENING SERVICE
------------------------------------------------------------------------------
For customers with product in inventory with uncertain operational
status, Tellabs offers a product screening service. During the
product screening, a pass/fail test is performed on your product to
determine if the product meets its applicable Tellabs product
specifications. Please contact the Tellabs Product Services
Department at 630.378.8800 for further details.
Page 16 - 1
PROCEDURE FOR REPAIR AND RETURN
-------------------------------------------------------------------------------
When a product requires repair service, contact the Tellabs Product
Services Department at 630.378.8800 and request a Material Return
Authorization (MRA) number. A service representative will request
your company's name and address; the product's model number, issue
number and warranty date code; and, the purchase order number for the
return transaction. The service representative will then assign an
MRA number that identifies your particular transaction. After you
obtain the MRA number, write the number clearly on the outside of the
carton being returned. Enclose an explanation of the malfunction,
your company name and address, the name of a person to contact for
further information and the purchase order number for the
transaction. Then send the product, freight prepaid, to:
Tellabs Operations, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Attn: Product Services, MRA No.______
Product returned without an MRA number may be subject to return to
the customer without repair.
Tellabs will inspect the returned product. If the product is in
warranty and found defective, Tellabs will, at its option, either
repair or replace the product. Return freight will be paid by
Tellabs. Please allow 15 business days for standard repair and return
warranty service. Out-of-warranty products will be repaired rather
than replaced (see Costs section below for applicable charges).
If the product is found to be damaged beyond repair, a service
representative will contact you and offer a refurbished replacement,
when available, at 65 percent of the current list price in the
latest Tellabs published price list for that equipment.
Additionally, Tellabs offers a next day, expedited repair service.
If you require expedited repair, it should be indicated at the time
the MRA is requested (see Costs section below for applicable
charges).
EXTENT OF REPAIRS
------------------------------------------------------------------------------
All products will be repaired to meet the applicable Tellabs product
specifications established for the particular product returned.
The warranty period for any repaired product is either the
remainder of the products' original warranty period or a period of
six (6) months from the date of repair, whichever is longer. Out-of-
warranty products that are repaired will receive a new warranty
period covering the repairs for a period of six (6) months from the
date of repair.
COSTS
------------------------------------------------------------------------------
The charge for retesting, repairing and revision-updating a module
is based upon the module's current list price in the latest Tellabs
published price list. Listed below is the current repair pricing
formula for out-of-warranty products:
Repair Charge = 15 percent of the current published list price + $50
Products that have been modified or repaired by someone other than
Tellabs or that, in Tellabs' opinion, are deemed damaged beyond
repair will be returned to the customer with a $30 handling charge
and the warranty voided. Subject to availability, the customer may
elect to purchase an equivalent refurbished product at 65 percent
of the current list price in the latest Tellabs published price list.
In this case, the $30 handling charge will be waived.
Customers requiring next day expedited repairs will also be
assessed a $75 express fee for each product, in addition to the
applicable repair charge.
NOTE: IF A PRODUCT IS SUBMITTED FOR REPAIR UNDER WARRANTY AND IS
FOUND BY TELLABS TO MEET THE APPLICABLE TELLABS PRODUCT
SPECIFICATIONS (I.E., "NO DEFECT FOUND"), A RETEST CHARGE OF 15
PERCENT OF THE CURRENT LIST PRICE IN THE LATEST TELLABS PUBLISHED
PRICE LIST OF THE PRODUCT, UP TO A MAXIMUM OF $100 WILL BE INVOICED.
Page 16 - 2
TELLABS EXPEDITED REPLACEMENT SERVICE
------------------------------------------------------------------------------
The Tellabs Expedited Replacement Service is designed to provide
reliable shipment of an exact replacement, if available in stock,
anywhere within the United States. When a time-critical service
outage exists, contact our Corporate Customer Service office at
800.443.5555, where our product specialists are available 24 hours
a day, seven days a week to provide technical assistance.
If product replacement is required, the product specialist will
arrange for the replacement of the defective equipment via the
shipment modes shown below. This service offers two (2) levels
of express shipment at an applicable service charge:
OVERNIGHT SERVICE: $90 per module for overnight shipment of a exact
replacement (if replacement is available from stock) anywhere in
the United States.
COUNTER-TO-COUNTER SERVICE: Price is based upon destination plus 10
percent of the current list price. Same-day shipment will be made
of an exact replacement (if replacement is available from stock)
anywhere in the United States.
THE OVERNIGHT SERVICE FEE WILL BE WAIVED IF THE EXPEDITED
REPLACEMENT REQUEST IS WITHIN 90 DAYS OF A DEFECTIVE PRODUCT'S
WARRANTY DATE CODE.
To expedite your replacement request, the product specialist will
also request your company's name and address; the product's model,
issue numbers and warranty date code; and, the purchase order
number for the replacement transaction. Tellabs will ship the
replacement via the shipment mode of the customer's choice. After
the replacement equipment is shipped, an invoice will be issued
for the current list price in the latest Tellabs published price
list for the equipment, plus an overnight delivery charge and an out-
of-warranty charge, if applicable.
After receiving the replacement, the customer has 30 days to return
the defective product to Tellabs Product Services Department using
the Material Return Authorization (MRA) number listed on the
packing slip issued with the replacement. If the defective
equipment is received within 30 days, credit will be issued for the
product's list price, leaving a balance due on the replacement
invoice reflecting the overnight delivery charges and an
out-of-warranty charge, if applicable.
Defective equipment returns RECEIVED AFTER 30 DAYS are also subject
to a restocking charge. The following restocking charges apply:
1 to 6 months: 25 percent of current list price in the latest
Tellabs published price list.
7 to 12 months: 40 percent of current list price in the latest
Tellabs published price list.
All invoices are due and payable within 30 days after the date of
invoice.
Any product(s) returned 12 months or more after the initial 30 days
WILL NOT BE ACCEPTED FOR CREDIT.
NOTE: IF A MODULE IS MODIFIED BY ANYONE OTHER THAN TELLABS, OR IS
DEEMED DAMAGED BEYOND REPAIR, TELLABS RESERVES THE RIGHT TO CHARGE
THE CUSTOMER FOR THE REPLACEMENT PART AT THE CURRENT LIST PRICE IN
THE TELLABS PUBLISHED PRICE LIST. MODIFIED PRODUCTS (DESIGNATED BY
"M" AND A NUMBER) AND MANUFACTURE-DISCONTINUED (MD) PRODUCTS ARE
EXPRESSLY EXCLUDED FORM THE TELLABS EXPEDITED REPLACEMENT SERVICE.
Tellabs Operations, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
000.000.0000
Fax: 000.000.0000
Tellabs, [logo], CROSSNET, Dataplexer. 331 Xplexer, T-Coder, TITAN
and Your Networking Partner are registered U.S. trademarks of Tellabs
Operations, Inc.
CABLESPAN, Datacell and Minicell are trademarks of Tellabs
Operations, Inc.
Xxxxxx and DXX are Finnish trademarks of XXXXXX Oy, a subsidiary of
Tellabs, Inc. 74-0064 B
Page 16 - 3
[LOGO]
WARRANTY
Advanced Fibre Communication ("AFC") warrants that its products ("Products")
are free from defects in design, workmanship, materials and title as provided
herein. This warranty shall survive inspection, acceptance, and payment for a
period of two (2) years after the date the Product is shipped from AFC (or
greater if an extended warranty has been purchased), provided that said
Product has not been misused, improperly operated or subjected to repairs or
modifications by any party other than AFC without AFC's written consent, or
damaged by fire, explosion, electrical power failure or acts of God.
Extended warranty plans are also available at an additional cost.
Except as expressly provided herein, AFC makes no warranty, express or implied,
with respect to its products or services including, without limitation,
warranties of merchantability or fitness for a particular purpose.
Buyer's sole remedy with respect to breach of any warranties shall be, at
AFC's option, to repair or replace the defective Product, or for AFC to
furnish a credit for such defective Product, or for AFC to furnish a credit
for such defective Product equal to the purchase price. Buyer shall, upon
evidence of a particular Product's breach of warranty, return said Product to
AFC, at Buyer's risk and expense. AFC shall examine the Product and repair
or replace the Product within a reasonable time, returning the Product to
Buyer at Buyer cost and expense, or furnish Buyer credit equal to the
purchase price for such defective Product.
If AFC's examination discloses misuse, improper operation, unauthorized repair
or modification of the Product by Buyer or its agents, then Buyer shall pay AFC
the current charges for repair or replacement for said Product. Repairs or
replacements carried out by AFC shall be free from defects in design,
workmanship, materials and title for the period of said Product's original
warranty, or for 90 days from the date of shipment of the repaired or replaced
Product, whichever occurs later.
Consumable materials such as fuses, batteries, floppy disks and lamps are not
warranted by AFC in any way. Equipment manufactured by third parties, such
as computers and computer peripherals carry only the manufacturer's original
warranty and are not warranted in any way by AFC. Components of AFC's
Product purchased from AFC carry no warranty, express or implied.
The remedy set forth above is Buyer's exclusive and sole remedy and the
entire extent of AFC's liability for any claims Buyer may have against AFC
regarding AFC products. AFC shall have no liability with respect to any
product or service, whether in contract, negligence, strict liability, or any
other legal or equitable theory, for any amount in excess of buyer's payments
to AFC for such product or service or any incidental, consequential or
special damages or lost profits or cost of procurement of substitute goods,
services or technology. There are no warranties which extend beyond the
description of the face hereof.
[LETTERHEAD]
18.4. REPAIR & RETURN POLICY
Advanced Fibre Communications has designed a policy to help quickly and
efficiently repair and return quality equipment to our customers. All failed
boards which are processed through the Petaluma facility are repaired and
revised to the most current revision level possible. Equipment purchased from
Advanced Fibre Communications is covered under various warranty plans. Check
with your system administrator to determine the type of warranty plan and the
length of the warranty purchased for your system.
Equipment failure occurring in the field must be reported to the AFC order
administrator in Petaluma. The order administrator can be contacted during
normal working hours (8-5), pacific coast time at 1-707-794-7700. If an
emergency failure has occurred, call the 24 hour Technical Assistance Center at
0-000-000-0000. The order administrator will assign an RMA number to each
failed board. The RMA number is a unique number and should be recorded in your
files as it is the key to identifying a failed board throughout the repair and
return process. You will be able to contact Order Administration at any time to
identify the repair status and expected turn around time of your returned
boards. Failed boards should be shipped to:
Advanced Fibre Communications
0000 XxXxxxxx Xxxxxxxxx Xxxxx, Xxxxx X
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Repair Service Department
RMA #__________________
There are three levels of priority which can be assigned to your failure. The
failure can be classified as either normal, emergency, or customer requested
priority upon your request. Fees for these services will depend upon the
current warranty status of the returned boards. The turn around time for boards
will vary depending upon local customs departments and methods of shipment,
however, AFC will guarantee the time periods listed below once the boards reach
our facility.
For boards which are classified as normal failures, we will repair the board
and ship it back within 15 calendar days. Shipping arrangements will be made
via the most economical means possible.
If a failure is traffic affecting, and no spares are available, the failure will
be classified as an emergency. In emergency cases, a reconditioned board of the
same revision or better will be shipped via a priority one service within 24
hours of notification to AFC. If there are no reconditioned boards available, a
new board will be shipped.
18-15
UMC 100A Ordering Guide
Marketing Document
6-101, Issue 2.0
18.4. REPAIR & RETURN POLICY
AFC also offers a 72 hour turn around of failed boards. This service is
classified as a customer requested priority and guarantees return of a board
within 3 business days after receipt of a failed board. A schedule of costs
for the various priority classifications is given below.
--------------------------------
Warranty No Warranty
-----------------------------------------------
Normal $0 50% of new
board
-----------------------------------------------
Emergency $250 50% of new
board + $250
-----------------------------------------------
Customer
Requested $150 50% of new
Priority board + $150
-----------------------------------------------
To help facilitate the repair and return process, the order administrator will
request that a Failure Report Tag be completed for each failed board. If
failure tags are not available, a copy of the tag can be found in the
Installation, Maintenance and Test Manual of the UMC documentation set. The
failure tag must be included with the failed module and the RMA number must be
marked on the outside of the shipping container. All charges for shipping to
AFC's facility will be the responsibility of the customer. AFC is responsible
for shipping costs when returning boards to the field.
18-16
