CONFIDENTIAL TREATMENT REQUESTED
RESELLER AGREEMENT
by and between
PATH 1 NETWORK TECHNOLOGIES INC.
and
INTERNET PHOTONICS, INC.
OCTOBER 11, 2002
1 Nonexclusive Appointment.....................................................................................4
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2 Co-Branding..................................................................................................5
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2.1 Path 1's Marks..........................................................................................5
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2.1.1 Nonexclusive right to Use..........................................................................5
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2.1.2 Goodwill...........................................................................................5
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2.1.3 Copyrights.........................................................................................5
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2.2 IPI's Marks.............................................................................................6
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3 Prices.......................................................................................................7
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4 Product Changes and additions................................................................................7
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5 Orders.......................................................................................................8
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5.1 Product Ordering........................................................................................8
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5.2 Shipment................................................................................................8
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5.3 Acceptance..............................................................................................9
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5.4 Payment.................................................................................................9
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5.5 Changes and Cancellations...............................................................................9
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5.6 Performance.............................................................................................9
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6 License.....................................................................................................10
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7 Updates and improvements....................................................................................10
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8 Confidentiality.............................................................................................10
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9 Marketing and support obligations...........................................................................11
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9.1 Path 1 Technical Assistance and Marketing Support......................................................11
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9.2 End User Support.......................................................................................11
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9.3 IPI Marketing Organization and Activities..............................................................12
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9.3.1 Sales and Technical Support.......................................................................12
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9.3.2 Administrative Support............................................................................13
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9.3.3 Demonstration Equipment...........................................................................13
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9.3.4 Customer Support and Service Contracts............................................................13
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9.3.5 Business Conduct..................................................................................13
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9.3.6 Business Reviews..................................................................................13
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9.3.7 Rolling Forecasts.................................................................................13
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10 Warranties and remedies..................................................................................14
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10.1 Limited Warranties..................................................................................14
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10.1.1 Intellectual Property.............................................................................14
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10.1.2 Defects...........................................................................................14
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10.1.3 Specifications....................................................................................14
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10.2 Transferability.....................................................................................14
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10.3 Improvements in Warranty............................................................................14
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10.4 Limited Remedy for Certain Warranties...............................................................14
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10.5 Disclaimer..........................................................................................15
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11 Repairs..................................................................................................15
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12 Technical Support........................................................................................15
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13 Term and Termination.....................................................................................15
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14 Product Continuation After termination...................................................................17
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14.1 Product Availability................................................................................17
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14.2 Right to Use Products...............................................................................17
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15 Product and service continuation after delivery of products..............................................17
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15.1 Technical Support...................................................................................17
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15.2 Post-Production Spares..............................................................................17
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16 Continuation of Supply...................................................................................18
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17 Indemnification..........................................................................................18
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18 Relationship of the Parties..............................................................................19
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19 Notices..................................................................................................19
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20 Severabilty..............................................................................................19
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21 ASSIgnment and assumption................................................................................19
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22 Governing Law............................................................................................20
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23 Dispute resolution/escalation............................................................................20
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24 Compliance With Laws/ Foreign Corrupt Practices Act......................................................20
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25 Injunctive Relief........................................................................................20
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26 Counterparts.............................................................................................21
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27 Force Majuere............................................................................................21
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28 Headings.................................................................................................21
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29 Governmental Approval Obligations........................................................................21
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30 Waiver...................................................................................................21
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31 Equal Representation.....................................................................................23
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32 Complete Agreement.......................................................................................23
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33 Attorney's Fees..........................................................................................23
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34 SIGNATURES...............................................................................................23
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Path 1 Network Technologies Inc. and Internet Photonics, Inc.
Product Development Agreement
Confidential
CONFIDENTIAL TREATMENT REQUESTED
Exhibit ____
RESELLER AGREEMENT
THIS RESELLER AGREEMENT ("Agreement") is made and effective this
October 11, 2002, by and between Path 1 Network Technologies Inc., a Delaware
corporation ("Path 1") and Internet Photonics, Inc., a Delaware corporation
("IPI").
Path 1 has developed certain products, which it markets directly to
end-users and also markets through intermediaries such as IPI. Path 1 also OEMs
products for other intermediaries which are excluded from this agreement.
IPI has developed certain communications equipment, which it markets to
end-users through its direct sales force and through intermediaries.
IPI desires to license certain of Path 1's products as identified in
Appendix A (the "Products") attached hereto, add value to same through its own
products, co-brand and remarket the value-added products, all pursuant to this
Agreement.
NOW, THEREFORE, it is agreed:
1 NONEXCLUSIVE APPOINTMENT
IPI is hereby appointed a nonexclusive value-added reseller of the
Products listed in Appendix A, in the cable television market (the
"Market"), for the term of this Agreement. IPI accepts such appointment
and agrees to serve as a reseller of the Products as provided herein. For
all purposes of this Agreement, "customers" and "end-users" shall refer
interchangeably both to customers and end-users that acquire products
directly from IPI, and to end-users that acquire Products from entities
that originally acquired such Products from IPI. This Agreement is not
exclusive to IPI, and Path 1 reserves the unrestricted right to sell,
license, market and distribute or to grant to others the right to sell,
license, market and distribute the Products and value added versions
thereof anywhere in the world, except as otherwise provided in the
Development and Supply Agreement between Path 1 and IPI, dated September
9, 2002 (the "Development Agreement"). Path 1 also reserves the right to
enter into future agreements which may include exclusive terms and
conditions.
In the event that Path 1 receives a bona fide offer involving
non-exclusive territories, or markets, within the Term of this Reseller
Agreement from another party for a set minimum sales level in return for
an exclusive territory, or market, IPI will have a first right of refusal
to match said bona fide offer within
*** days of written notification.
Not withstanding the above, Internet Photonics will retain non-exclusive
rights to North America for the Term of this Agreement. For non-North
American territories, should Path 1 enter into any exclusive agreement,
Internet Photonics will have the right of continuation of supply, during
the Term of this Agreement for:
a.) Customers, including named accounts, to whom Internet Photonics has
tendered a response to an FRP or RFQ, submitted standard quotes, or
other existing contractual commitments, which Internet Photonics has
undertaken prior to Path 1 entering into an exclusive Reseller
Agreement for products or;
b.) Current customers, with existing cable networks, who wish to expand
those networks.
c.) Named account includes, but is not limited to, Liberty Properties.
Additional named accounts will be at the mutual consent of the
parties.
2 CO-BRANDING
2.1 PATH 1'S MARKS
2.1.1 NONEXCLUSIVE RIGHT TO USE
Path 1 hereby grants to IPI a limited, nonexclusive right
to use Path 1's regular tradenames, trademarks, titles and
logos (the "Licensed Marks") in the advertising, promotion
and sale of the Products. IPI shall not make or permit
alteration or removal of tags, labels, or identifying
marks placed by Path 1 on or within any product. IPI will
not use Path 1's tradenames or abbreviations (with the
exception of a logo or ▇▇▇▇ or graphic design provided by
Path 1 which indicates IPI is an authorized reseller of
Path 1) in IPI's corporate title or name, or in any way
that might result in confusion as to separate and distinct
identities of Path 1 and IPI. Upon the expiration or
earlier termination of this Agreement, the license granted
to IPI in the Licensed Marks shall immediately cease;
provided that IPI shall not be obligated to remove any
Licensed Marks to the extent the same already exist on
Products (i) sold to existing end-users and (ii) in IPI's
possession pending sale or distribution to end-users (the
end-users described in clauses (i) and (ii) are referred
to collectively as the "Installed User Base").
2.1.2 GOODWILL
IPI recognizes and acknowledges Path 1's ownership and
title to the Licensed Marks and the goodwill related
thereto and agrees that any goodwill relating to the
Licensed Marks that accrues because of IPI's use of such
marks shall become the property of Path 1. IPI further
agrees not to contest or take any action in opposition to
any trademark, servicemark, tradename or logo of Path 1
that is used on the Products, or to use, employ or attempt
to register any ▇▇▇▇ or tradename which is similar to any
▇▇▇▇ or name owned by Path 1 that is used on the Products.
2.1.3 COPYRIGHTS
IPI shall not remove any of Path 1's copyright notices on
the Products.
2.2 IPI'S MARKS
Path 1 shall have no right to use the tradenames,
trademarks, titles or logos of IPI.
3 PRICES
Prices and other terms, if any, for the Products are set forth on Appendix
A. The parties will meet on a quarterly basis to make any necessary
amendments to Appendix A to yield pricing for each Product that results in
*** (defined for purposes hereof as Path 1's (i) *** plus (ii) *** plus
(iii) ***.
During the Term of this Agreement (and irrespective of the prices set
forth on Appendix A), the prices offered, at any volume level, by Path 1
to IPI for the Products shall be no less favorable than most favorable
prices offered by Path 1 to any other customer at like volume levels
(treating for this purpose IPI and all of its customers purchasing
Products as a single customer, and after deducting such portion of the
price as is representative of IPI's share of revenue) purchasing similar
quantities of similar products on reasonably comparable terms. In any such
case, to the extent the prices reflected on Appendix A are less favorable
than the prices to another similarly situated customer, Path 1 shall
promptly so notify IPI and IPI shall be entitled to the more favorable
pricing (it being understood that the failure of Path 1 to so notify IPI
shall not affect IPI's right to obtain the more favorable pricing).
4 PRODUCT CHANGES AND ADDITIONS
During the Term of this Agreement, Path 1 has the right to modify, alter
or discontinue the Products at any time, at its discretion, following at
least ninety (90) days' prior written notice to IPI. Notwithstanding the
foregoing, if IPI notifies Path 1 that IPI's customers require the
original Products that Path 1 proposes to so modify, alter or discontinue,
Path 1 will in good faith work with IPI to continue to supply the version
of the Product requested by such customers. Any new versions of Products,
as defined in Appendix A of this Agreement must either (i) be fully
interoperable with the Products comprising the Installed User Base or (ii)
become interoperable with the Products comprising the Installed User Base
by means of a remote upgrade to the Installed User Base, which remote
upgrade will be made available to IPI and the Installed User Base at no
cost.
From time to time, Path 1 or IPI may propose that one or more upgrades to or
additional Path 1 products be made available for resale by IPI. IPI understands
that Path 1 may offer IPI future products, defined in Appendix A of this
Agreement, which may not be interoperable with those listed in Appendix A. In
any such case, the parties shall in good faith consider the proposed addition.
If the parties agree as to the inclusion of such products and the pricing
therefor, such products shall be added to Appendix A (which shall be initialed
by representatives of each party to evidence their assent to such addition),
with any interoperability issues identified, and shall be treated as "Products"
for all purposes hereunder.
5 ORDERS
5.1 PRODUCT ORDERING
Purchases of Product pursuant to this Agreement shall be made by
IPI using IPI's regular purchase order form; provided, however,
that additional, modified or conflicting terms and conditions on
IPI's purchase order form or any Path 1 order confirmation shall
not modify or amend this Agreement unless expressly agreed to in
writing signed by both parties. For avoidance of doubt, performance
by either side of its obligations following receipt of a purchase
order or confirmation that purports to modify or amend this
Agreement shall not be deemed to constitute acceptance of the terms
set forth on such purchase order or confirmation.
All orders must specify the Product or Products to be purchased;
the appropriate purchase price; the requested ship date; and, if
applicable, state the appropriate tax exemption certificate number.
All purchase orders and amendments thereto must reference this
Agreement and are subject to acceptance by Path 1, which acceptance
shall be delivered within 48 hours after receipt.
5.2 SHIPMENT
Path 1 will use its best efforts to delivered all ordered Products
within *** days after receipt of a purchase order therefor.
Shipment of the Products purchased by IPI hereunder shall be made
F.O.B. Path 1's facilities or such other location or locations as
Path 1 may from time to time designate in writing. If agreed to in
advance by IPI's customers, Path 1 may make partial shipments, and
each shipment shall be deemed a separate order and payment therefor
shall become due in accordance with the terms hereof. IPI shall
take the license to the Products at the F.O.B. point and all risks
of loss and expenses in connection with the Products shall
thereafter be the responsibility of IPI; provided, however, that
Path 1 retains all applicable rights to the intellectual property
contained in the Products (as herein set forth).
Path 1 will hold in parts inventory the parts required to deliver
within *** days *** units of *** series Products. Should the cost
of maintaining an inventory of so-called long lead time parts
required to comply with such *** day delivery obligation exceed
***% of the total parts cost of the Products, then IPI shall
reasonably co-operate with Path 1 to share the cost of maintaining
such inventory of long lead time parts. If such inventory levels
for the *** Products should fall below *** units (or should a
comparable reduction in inventory occur for any other Products) as
a result of unanticipated orders, Path 1 will use commercially
reasonable efforts to make up the shortfall as soon as possible.
5.3 ACCEPTANCE
Products ordered hereunder will be deemed accepted by IPI following
satisfactory testing as provided in the following sentence. IPI
shall have *** days after receipt of the Products at IPI's
facilities (the "Test Period"), but prior to reshipment of the
Products to IPI's customers, to inspect and test the Products. If
IPI discovers any defect in a Product and reports such defect in or
within the Test Period, Path 1 will, at its option, either repair,
replace or accept return of the Product or credit IPI for the
applicable purchase price. The foregoing is in addition to, and
does not limit, the warranty obligations of Path 1 as set forth in
Section 10.
5.4 PAYMENT
Payment shall be made by IPI within *** (***) days after the date
of Path 1's invoice. IPI shall be responsible to pay, or reimburse
Path 1, as appropriate, for any sales, use, excise or similar tax
levied on the transactions hereunder, or any personal property tax
attributable to the license granted IPI herein.
5.5 CHANGES AND CANCELLATIONS
IPI may reschedule each purchase order one time for a shipment
within *** days of the original ship date if IPI so notifies Path 1
at least *** days in advance of the originally scheduled ship date.
IPI may cancel an order prior to shipment upon payment of a
cancellation fee equal to *** (***%) of the order subject to
cancellation, and provided that Path 1 receives notice of the
cancellation not more than (***) days prior to the scheduled ship
date. Cancellation of any order after the last day for
cancellation, or in the event that Path 1 has already shipped the
Product, shall require IPI to pay *** (***%) of the purchase price
of the order subject to cancellation. The parties agree that these
charges are a reasonable method for determining Path 1's expenses
and damages arising out of cancellation or refusal to accept
shipment.
Path 1 will exert reasonable efforts to either modify and resell to
others finished products or return unused parts to its suppliers.
Path 1 will reduce IPI's obligations stated above accordingly.
5.6 PERFORMANCE
The Parties agree that there shall be an expectation of minimum
acceptable performance during the term of this Agreement as set
forth in Section 13 Term and Termination
6 LICENSE
During the Term of this Agreement, Path 1 grants and IPI accepts a limited,
nonexclusive, non-transferable (except as provided in Section 21), fully paid
and royalty free license to distribute the Products directly and indirectly to
customers and end-users, and to use, maintain and test the Products for the
purposes of carrying out its obligations (including its support obligations)
hereunder. The license granted herein shall permit IPI to combine or include the
Products with IPI's other products for the purpose of adding to or increasing
the value, functionality or utility of such products for IPI's end-user
customers.
7 UPDATES AND IMPROVEMENTS
From time to time, Path 1 may release improvements, modifications or other
alterations of its Products. For purposes hereof, "Updates" means releases
that correct errors or bugs, or that offer minor improvements in
functionality or performance that, taken as a whole, do not materially
affect the overall value of the Product. "Upgrades" means releases with
significant improvements in functionality or performance that, taken as a
whole, materially affect the overall value of the Product. Any Update or
Upgrade that relates to any Product shall be provided to IPI promptly upon
its general release by Path 1. All Products thereafter sold will be deemed
to automatically include any Updates thereto, without charge. Path 1 may
charge an additional sum for any Upgrades (subject to the "most favored
nation" pricing provisions of Section 3, treating for this purpose IPI and
all of its customers purchasing Products as a single customer), it being
understood that IPI and its customers are free to elect not to purchase
any Upgrade. Path 1 will also provide IPI with such copies or parts as may
be required to provide Updates and Upgrades to the Installed User Base.
From time to time IPI may request that Path 1 improve or modify the
Products. Path 1 agrees that it will in good faith consider any such
requests. Without limiting the generality of the foregoing, if IPI
discovers an error in the operation of any Product, Path 1 will use
commercially reasonable efforts to remedy the same and rectify the error
by means of a Update.
8 CONFIDENTIALITY
In the performance of this Agreement, each party may have access to
confidential, proprietary or trade secret information owned or provided by
the other party relating to software, computer programs, object code,
source code, marketing plans, business plans, financial information,
specifications, flow charts and other data ("Confidential Information").
All Confidential Information supplied by one party to another pursuant to
this Agreement shall remain the exclusive property of the disclosing
party. The receiving party shall use such Confidential Information only
for the purposes of this Agreement and shall not copy, disclose, convey or
transfer any of the Confidential Information or any part thereof to any
third party. Notwithstanding the foregoing, IPI may sublicense the
Products as set forth in this Agreement and IPI may disclose the terms of
this Agreement to current or prospective investors, customers or
acquirors; provided, however that such party shall have undertaken to
preserve the confidentiality of the terms hereof. Neither party shall have
any obligation with respect to Confidential Information which: (i) is or
becomes generally known to the public by any means other than a breach of
the obligations of a receiving party; (ii) was previously known to the a
receiving party or rightly received by a receiving party from a third
party; (iii) is independently developed by the receiving party; or (iv) is
required to be disclosed by court order or other legal process, or in
accordance with the regulation of the SEC or any national securities
exchange. The provisions of this Section 8 shall survive termination of
this Agreement.
9 MARKETING AND SUPPORT OBLIGATIONS
9.1 PATH 1 TECHNICAL ASSISTANCE AND MARKETING SUPPORT
Reasonable assistance from Path 1 experts will be provided by Path
1 during the period of resale rights as outlined in both the
Development Agreement and this Resale Agreement.
Upon reasonable request by IPI, Path 1 will supply technical
support to IPI for its sales activities including, but not limited
to, (i) assistance in providing technical answers for tenders; (ii)
assistance in responding to technical inquiries from IPI's
customers; (iii) assistance in preparation of marketing materials
such as white papers, brochures and application notes; and (iv)
review and development of Product adaptations, if any, as
determined by Path 1.
Path 1 agrees to provide sales and technical training for a maximum
of *** (***) people over *** (***) days at *** facilities at ***.
Path 1 will use reasonable commercial efforts to cooperate with IPI
to make ongoing sales and technical training available to IPI.
9.2 END USER SUPPORT
IPI shall provide all first level End User customer support for
Products, as defined below, in the same manner IPI provides similar
support for other products. Path 1 will provide second and third
level support, according to the Technical Support Guidelines set
forth in Appendix D.
As used herein: (i) First Level Support shall mean services
responsive to the End User's initial notification that a suspected
problem exists with the Product, including call logging,
validation, determining whether a solution is given in User
Documentation or Maintenance Documentation, and a review of known
resolutions for the reported problem; (ii) Second Level Support
shall mean First Level Support plus services performed in order to
attempt to reproduce the suspected problem and correct it by means
of work-around, or in determining that the problem cannot be
reproduced; and (iii) Third Level Support shall mean services
provided to the End User to resolve problems that are determined to
be or to be likely to be the result of one or more design or
manufacturing defects or interaction between the Product and other
materials, and that cannot be resolved by the End User.
During the first *** (***) months following shipment, this Support
will be provided for all Products shipped to IPI. Subsequent to the
initial *** (***) month period following shipment, Path 1 shall
provide End User Support based on an annual support fee of a
minimum of *** percent (***%) of the Transfer Price, or higher
based on Customer requirements and Path 1's standard Terms and
Conditions for Extended Warranty, only for those Products subject
to a Reseller support and maintenance agreements executed with
customers / End-Users. IPI shall provide Path 1, on a quarterly
basis, with the number of Products subject to a IPI's support and
maintenance agreement. The fee will be invoiced quarterly in
advance effective Jan 1, 2003.
During the first *** months following shipment, in the event
on-site support is required to resolve Customer problems, Path 1
shall bear its costs of travel and related expenses and such
on-site service shall be at no additional charge, unless it is
determined that Path 1 products were not responsible for the
problem. In this circumstance, the customer will be responsible for
all Path 1's reasonable travel and related expenses and
professional time.
After the *** warranty, subject to an Extended Warranty Agreement,
in the event on-site support is required to resolve Customer
problems, Path 1 shall bear its costs of travel and related
expenses and such on-site service shall be at no additional charge,
unless it is determined that Path 1 products were not responsible
for the problem. In this circumstance, the customer will be
responsible for all Path 1's reasonable travel and related expenses
and professional time.
After the *** warranty, with no Extended Warranty Agreement, in the
event on-site support is required to resolve Customer problems,
Customer shall bear Path 1's costs of travel and related expenses
and professional fees at Path 1's standard rates.
9.3 IPI MARKETING ORGANIZATION AND ACTIVITIES
IPI agrees to use reasonable commercial efforts to market the
Products. IPI shall use reasonable commercial efforts to persuade
potential customers to accommodate their needs with exiting
Products or Path 1 products still in development wherever
commercially practicable (in IPI's judgment). Without limiting the
foregoing:
9.3.1 SALES AND TECHNICAL SUPPORT
IPI shall hire, train and employ at its place or places of
business competent sales, technical and support personnel
to sell and support the Products
IPI further agrees to engage Path 1 to train all relevant
sales and technical staff biennially, as reasonably
needed. IPI will provide Path 1 with copies of all
training materials relating to the Products prepared by
IPI as the same become available, and will permit Path 1
to attend a reasonable number of IPI training sessions at
no cost (it being understood that travel and other costs
for Path 1 employees will be paid by Path 1).
9.3.2 ADMINISTRATIVE SUPPORT
IPI agrees to maintain adequate human resources and other
facilities to assure prompt handling of all inquiries,
orders, shipments and after-sale Tier 1 support for the
Products.
9.3.3 DEMONSTRATION EQUIPMENT
IPI agrees to maintain adequate equipment and other
resources to properly demonstrate the Products to
prospective customers. Path 1 and IPI agree to identify
such demonstration requirements within the first three (3)
months of the effective date of this Agreement. Such
demonstration equipment will be provided to IPI ***.
9.3.4 CUSTOMER SUPPORT AND SERVICE CONTRACTS
IPI agrees to consider to offer to its customers a service
contract from Path 1 to cover the costs of Product and
feature upgrades, if any, and out of warranty hardware
repairs at Path 1's then current rate. The service
contract may include, but would not be limited to,
providing reasonable telephone consultation regarding the
functions and features of the Products.
9.3.5 BUSINESS CONDUCT
Each party shall conduct its respective business and
perform its respective obligations hereunder in a
professional, businesslike manner that will reflect
favorably on the other party, and neither party shall
engage in deceptive, fraudulent, misleading, illegal or
unethical business practices, whether with respect to the
Products or otherwise.
9.3.6 BUSINESS REVIEWS
IPI shall host quarterly business reviews for Path 1 in
which IPI will present performance against plan for
Products for the pervious period and the business plan for
the Products for the coming month and quarter.
9.3.7 ROLLING FORECASTS
Each ***, IPI will submit to Path 1, a non-binding ***
rolling *** forecast for the Products estimated to be
purchased and distributed by IPI.
10 WARRANTIES AND REMEDIES
10.1 LIMITED WARRANTIES
10.1.1 INTELLECTUAL PROPERTY
Path 1 warrants that it is the owner of or otherwise has
the right to license the Products and otherwise perform
its obligations set forth herein.
10.1.2 DEFECTS
Path 1 warrants that the Products shall be free from
defects in materials and workmanship for a period of ***
following the date of shipment.
10.1.3 SPECIFICATIONS
Path 1 warrants that for a period of *** following
shipment of the Products, each Product will perform the
functions substantially according to Path 1's regular
specifications document with respect to such Product.
10.2 TRANSFERABILITY
The warranties set forth in Sections 10.1.2 and 10.1.3 are
transferable by IPI to any customer that acquires Product
from IPI.
10.3 IMPROVEMENTS IN WARRANTY
Should Path 1 improve its standard product warranty during
the Term of this Agreement, IPI and its customers will be
entitled to an equivalent improvement hereunder. Should
IPI's customers demand longer product warranty periods, Path
1 will work with IPI to meet those requests, at reasonable
increases in fees to support those extended periods of time.
10.4 LIMITED REMEDY FOR CERTAIN WARRANTIES
In the event of any breach of the warranty set forth in
Sections 10.1.2 or 10.1.3, the sole remedy of IPI (or its
customer) and the sole obligation of Path 1 will be for Path
1 to promptly either repair or replace the Product in
question such that the Product conforms with the warranties
set forth in such sections, or (but only with the prior
consent of IPI or IPI's customer, as applicable) for Path 1
to refund the original purchase price of such Product.
10.5 DISCLAIMER
THE WARRANTIES OF PATH 1 SET FORTH IN THIS SECTION 10,
TOGETHER WITH THE INDEMNITY OBLIGATIONS OF PATH 1 UNDER
SECTION 17 HEREOF, ARE EXCLUSIVE AND EXPRESSLY IN LIEU OF
ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. IN NO EVENT SHALL PATH 1 BE LIABLE TO IPI FOR
INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES INCLUDING,
WITHOUT LIMITATION, LOSS OF DATA OR PROFITS, WITH A CLAIM BY
REASON OF BREACH OF WARRANTY OR BASED ON CONTRACT, STRICT
LIABILITY OR OTHERWISE, REGARDLESS OF WHETHER PATH 1 HAS
BEEN ADVISED OF THE RISK OF SUCH DAMAGES IN ADVANCE.
11 REPAIRS
Path 1 will perform all other repairs within *** of receipt of the
Products requiring repair at Path 1. Should Path 1 have difficulty with
meeting this schedule for any reason, Path 1 will promptly notify IPI by
Facsimile or Email. Out of warranty repairs will be charged based on Path
1's standard repair rates ***. Repairs will be subject to the warranties
in Sections 10.1.2 and 10.1.3 for the longer of 90 days from the date of
repair or the remaining original warranty period.
12 TECHNICAL SUPPORT
Path 1 will train and certify IPI to serve as primary Tier 1 direct
technical support to IPI's customers. Appendix B sets forth the elements
of technical support that constitute Tier 1, Tier 2 and Tier 3 technical
support. Path 1 will maintain qualified personnel to provide Tier 2 and
Tier 3 technical support services, including regular customer support
hours via telephone, email, cell phone or pager from 8 AM to 8 PM Eastern
Time every day of the year.
13 TERM AND TERMINATION
This Agreement shall commence on October 4, 2002, and continue for a term
ending ***. Thereafter, this Agreement shall be renewable each *** months
thereafter for a period of ***, upon mutual agreement by Path 1 and IPI.
In the event that IPI has failed to pay any amount when due or is in
breach or default of any other material obligation set forth in this
Agreement, then Path 1 may provide written notice to IPI and if IPI has
not paid the entire amount due or cured its other breach or default within
thirty (30) days following such notice, then Path 1 may elect to terminate
this Agreement.
In the event that Path 1 is in breach or default of any material
obligation set forth in this Agreement, then IPI may provide written
notice to Path 1 and if Path 1 has not cured its breach or default within
thirty (30) days following such notice, then IPI may elect to terminate
this Agreement.
In the event of any voluntary petition for bankruptcy protection by either
party (or an involuntary petition relating to such party which shall not
have been dismissed or stayed within 60 days after filing), the other
party may terminate this Agreement by written notice to the first party.
After the expiration of the Exclusivity Period, in the event that IPI does
not order a total of *** units (combined total of all Path 1 products
covered in Appendix A) each successive *** month period, Path 1 will have
the option to terminate this Agreement.
The provisions of Sections 8, 10, 14, 15 and 16 shall survive the
expiration or termination of this Agreement.
14 PRODUCT CONTINUATION AFTER TERMINATION
Following the termination of this Agreement, in addition to such rights as
may be applicable under Sections 8, 10, 15 and 16:
14.1 PRODUCT AVAILABILITY
Path 1 will continue to make each Product available to IPI's
customers on commercially reasonable terms for as long as Path 1
continues to offer such Product in the market, for a period of ***
after termination of this Agreement (Provided the Agreement was not
terminated due to default of Internet Photonics), Path1 shall
supply to Internet Photonics, in accordance with the terms and
conditions in effect at the time of termination of the Agreement,
Products required by Internet Photonics for the expansion of the
existing systems in which Products are already used.
14.2 RIGHT TO USE PRODUCTS
All IPI customers that have purchased or deployed Products shall
continue to be entitled to use such Products (including any
licensed intellectual property included in the Products).
15 PRODUCT AND SERVICE CONTINUATION AFTER DELIVERY OF PRODUCTS
15.1 TECHNICAL SUPPORT
For at least *** after the last date of delivery of any Products to IPI
(irrespective of whether such period extends beyond the date of
termination of this Agreement), Path 1 shall make available, at
commercially reasonable rates, the Technical Support to be provided under
Section 12.
15.2 POST-PRODUCTION SPARES
For at least *** after the last date of delivery of any Products to IPI
(irrespective of whether such period extends beyond the date of
termination of this Agreement), Path 1 shall use commercially reasonable
efforts to maintain components and parts for customer support and
upgrades. Path 1 shall also use commercially reasonable efforts
accommodate reasonable requests by IPI customers to maintain parts for
periods in excess of ***. The level will be agreed by *** based on ***.
16 CONTINUATION OF SUPPLY
During the Term of this Agreement, within the time period(s) as defined in
Appendix C, upon written request by Internet Photonics, Path 1 shall
deliver the materials and provide the licenses as described therein.
AppendixPath 1 shall also deliver product materials defined in Appendix C,
under the same terms and conditions, with respect to such Upgrades,
Updates or new Products.
IPI shall have and Path 1 hereby grants to IPI, a limited nonexclusive,
nontransferable, nonsublicensable license to the Source Materials only to
allow IPI to maintain, correct errors, support its End Users solely for
the purpose of maintaining and continuing its then current Exclusive
Product; provided that IPI shall exercise this license to the Source
Materials and shall be entitled to release thereof only in the event of a
Release Condition. The term of the limited license shall be for the
remainder of the Term of this Agreement.
17 INDEMNIFICATION
IPI agrees to indemnify and hold harmless Path 1 and its respective
officers, agents and employees from and against loss, suit, damage or
claim, including reasonable attorney's fees and costs, arising out of or
in connection with the sale, sublicense or use of any of the Products
which have been modified by IPI.
Path 1 shall, at its own expense, defend any actions, claim or suit that
may be instituted against IPI or any end-user customer of IPI on the
grounds that any Product allegedly infringes any intellectual property
rights of any third party; provided that: such alleged infringement
consists only of the use of the Product in the manner for which the
Product was designed by itself, and does not relate to any modification or
alteration or combination with other works (other than any such
modification, alteration or combination that is approved in writing by
Path 1). IPI shall promptly notify Path 1 in writing of any such suit, it
being understood that failure to deliver such notice shall not relieve
Path 1 of its obligation under this paragraph except to the extent the
failure to give such notice actually adversely affects Path 1's ability to
defend against such claim. Path 1 shall be permitted, with counsel of its
choice, to defend any such suits. IPI will provide, and will use
commercially reasonable efforts to cause its customers to provide, Path 1
with any necessary information, assistance and authority to enable Path 1
to defend such suit, it being understood that IPI and/or its customers
shall be promptly reimbursed by Path 1 to the extent such assistance
requires any significant expenditures.
18 RELATIONSHIP OF THE PARTIES
It is expressly understood and agreed that the relationship between the
parties is solely that of "seller" and "buyer." Neither party is or shall
be deemed to be a partner, agent, representative or joint venturer of the
other. Neither party has any authority to assume or create any obligation
for or on behalf of the other, express or implied, with respect to the
Products or otherwise.
19 NOTICES
Any notice required by this Agreement or given in connection with it,
shall be in writing and shall be given to the appropriate party by
personal delivery or by certified mail, postage prepaid, or recognized
overnight delivery service;
If to Path 1:
Path 1 Network Technologies, Inc.
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▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If to IPI:
Internet Photonics, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
20 SEVERABILTY
If any term of this Agreement is held by a court of competent jurisdiction
to be invalid or unenforceable, then the remaining terms of this Agreement
will remain in full force and effect as if such invalid or unenforceable
term had never been included.
21 ASSIGNMENT AND ASSUMPTION
Neither party may assign its rights or delegate its obligations hereunder
without the prior written consent of the other, which consent will not be
unreasonably withheld. Notwithstanding the foregoing, either party may
assign its rights and delegate its obligations hereunder to a successor in
interest to such party's business, whether by merger, sale of assets or
otherwise, so long as the successor agrees in writing to be bound by such
party's obligations hereunder.
22 GOVERNING LAW
This Agreement shall be construed and enforced in accordance with the laws
of the state of California. Subject to the obligation of the parties to
arbitrate their disputes in accordance with Section 23, the parties hereby
submit to the jurisdiction of and waive any venue objections against, the
United States District Court for the Central District of California, Los
Angeles Branch, and the Superior Courts of the State of California, Los
Angeles County, in any litigation arising out of this Agreement.
23 DISPUTE RESOLUTION/ESCALATION
In the event of any dispute among the parties, the parties will in good
faith work for a reasonable period of time to resolve their differences
amicably. Any differences that cannot be so resolved shall be submitted to
binding arbitration under the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA"). Such arbitration shall take place
before a single arbitrator to be agreed to by the parties from a list
proposed by the AAA; if the parties cannot agree upon an arbitrator, the
AAA shall select an arbitrator. The parties shall jointly share the costs
of arbitration, subject to Section 33 hereof.
24 COMPLIANCE WITH LAWS/ FOREIGN CORRUPT PRACTICES ACT
IPI agrees at all times to comply with applicable laws and regulations in
its performance of this Agreement, including, without limitation, the
provisions of the United States' Foreign Corrupt Practices Act ("FCPA").
IPI will indemnify, defend and hold harmless Path 1 and its respective
officers, agents and employees from and against any and all losses, costs,
claims and other liabilities arising out of, relating to or resulting from
IPI's failure to comply with the provisions of applicable laws or the
FCPA.
25 INJUNCTIVE RELIEF
The copying, disclosure or use of the Products in a manner inconsistent
with any provision of this Agreement may cause irreparable injury to Path
1 for which Path 1 may not have an adequate remedy at law. Path 1 may be
entitled to equitable relief in court for any such copying, disclosure or
use, including, but not limited to, temporary restraining orders,
preliminary injunctions and permanent injunctions.
26 COUNTERPARTS
This Agreement may be executed simultaneously in two or more counterparts,
each of which will be deemed an original, but all of which together will
constitute one and the same instrument.
27 FORCE MAJUERE
Neither party will be liable for any failure or delay in performance under
this Agreement which might be due, in whole or in part, directly or
indirectly, to any contingency, delay, failure or cause of, any nature
beyond the reasonable control of such party, including, without in any way
limiting the generality of the foregoing, fire, explosion, earthquake,
storm, flood or other weather, unavailability of necessary utilities or
raw materials, strike, lockout, unavailability of components, activities
of a combination of workmen or other labor difficulties, war insurrection,
riot, acts of God or public enemy, law, act, order, export control
regulation, proclamation, decree, regulation, ordinance or instructions of
Government or other public authorities, or judgment or decree of a court
of competent jurisdiction (not arising out of breach by such party of this
Agreement). In the event of the happening of such a cause, the party whose
performance is so affected will give prompt written notice to the other
party, stating the period of time the same is expected to continue.
▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ used in this Agreement are provided for convenience only and
shall not be used to construe meaning or intent.
29 GOVERNMENTAL APPROVAL OBLIGATIONS
Each party shall, at its own expense, obtain and arrange for the
maintenance in full force and effect of all governmental approvals,
consents, licenses, authorizations, declarations, filings and
registrations as may be necessary or advisable to be obtained or
maintained by it for the performance by it of all the terms and conditions
of this Agreement including, but not limited to, distribution approval,
foreign exchange approvals, import and export licenses and all approvals
which may be required to realize the purpose of this Agreement.
30 WAIVER
No term or provision hereof will be considered waived by either party, and
no breach excused by either party, unless waiver or consent is in writing
signed by both parties. No consent by either party to, or waiver of, a
breach by either party, whether express or implied, will constitute a
consent to, waiver of, or excuse of any other, different, or subsequent
breach by either party.
31 EQUAL REPRESENTATION.
No inference or presumption shall be drawn if a party or its attorney
prepared and/or drafted this Agreement; it shall be conclusively presumed
that the parties participated equally in its preparation and/or drafting.
32 COMPLETE AGREEMENT
This Agreement, including all Appendices and Appendixs, as well as the
Development Agreement, constitutes the entire agreement between the
Parties with respect to the subject matter hereof, and supersedes and
replaces all prior or contemporaneous understandings or agreements,
written or oral, regarding such subject matter. No amendment to or
modification of this Agreement shall be binding unless in writing and
signed by duly authorized representatives of both Parties. To the extent
any terms and conditions of this Agreement conflict with the terms and
conditions of any invoice, purchase order or purchase order
acknowledgement placed hereunder, the terms and conditions of this
Agreement shall govern and control.
33 ATTORNEY'S FEES
The prevailing Party in any dispute under this Agreement shall be entitled
to all of its reasonable attorneys' fees.
34 SIGNATURES
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representatives.
PATH 1 NETWORK TECHNOLOGIES INC.: INTERNET PHOTONICS, INC.:
BY: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- ------------------------------------
NAME: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇ NAME: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TITLE: Chief Executive Officer TITLE: Chief Financial Officer
DATE: October 14, 2002 DATE: October 14, 2002
*** Portions of this document have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission. *** Portions of
this page have been omitted pursuant to a request for Confidential Treatment and
filed separately with the Commission.
