Exhibit 10.7
STRATEGIC PARTNERSHIP AND DISTRIBUTORSHIP AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 4th day of
December, 1996, by and between: TERAYON CORPORATION (hereinafter called
"TERAYON"), a corporation organized and existing under the laws of California,
having its principal business office at 0000 Xxxxxx Xxxx Xxxx, Xxxxx Xxxxx, XX,
XXX and SUMITOMO CORPORATION, Information and Telecommunications Business Dept.
(hereinafter called "SUMITOMO"), a corporation organized and existing under the
laws of Japan, having its principal business office at 0-0, Xxxxxxxxxxxx 0-
xxxxx, Xxxxxxx-xx, Xxxxx, Xxxxx.
RECITALS:
WHEREAS, TERAYON has developed "S-CDMA" modulation and CATV/Internet
products which use S-CDMA as a result of its research and development efforts;
and
WHEREAS, SUMITOMO has promoted CATV and Internet related businesses in
Japan as a result of its efforts; and
WHEREAS, TERAYON is engaged in the business of manufacturing, selling and
exporting the products described herein; and
WHEREAS, TERAYON desires to promote the sales of such products in the
territory described herein; and
WHEREAS, TERAYON desires to appoint SUMITOMO as a strategic partner for
entering CATV/Internet products distribution business in accordance with the
terms and conditions of this Agreement; and
WHEREAS, SUMITOMO desires to obtain an exclusive right to market such
products in Japan and a non-exclusive right to market such products in the rest
of the world, and to obtain an option to manufacture TERAYON'S products for
resale.
NOW THEREFORE, the parties hereto, in consideration of the premises and
covenants and undertakings herein contained, mutually agree as follows:
ARTICLE 1
APPOINTMENT
1.1 Subject to the terms and conditions of this Agreement, TERAYON and
SUMITOMO hereby agree to become strategic partner for promoting CATV/Internet
products and TERAYON hereby appoints SUMITOMO as the exclusive distributor for
TERAYON'S CATV/Internet products described in Schedule A (hereinafter
----------
"PRODUCTS") in Japan (hereinafter "TERRITORY") and
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
1.
as the non-exclusive distributor for PRODUCTS in the rest of the world
(hereinafter "NON-EXCLUSIVE TERRITORY").
1.2 Subject to the terms and conditions of this Agreement, TERAYON hereby
grants SUMITOMO an option to manufacture PRODUCTS for resale during the course
of this Agreement on terms and conditions to be agreed upon by the parties.
ARTICLE 2
DUTIES OF SUMITOMO
2.1 SUMITOMO hereby accepts such appointment as the exclusive distributor
for PRODUCTS in TERRITORY and the non-exclusive distributor for PRODUCTS in the
NON- EXCLUSIVE TERRITORY, and represents that it has reasonably adequate
facilities and personnel to perform the services hereinafter set forth, and
agrees to the following:
(a) It shall use its efforts through its sales and merchandising
programs to promote the sales of PRODUCTS within the TERRITORY and NON-EXCLUSIVE
TERRITORY.
(b) It shall solicit orders for and sell PRODUCTS within TERRITORY and
NON- EXCLUSIVE TERRITORY.
(c) SUMITOMO shall perform its own trial of PRODUCTS within TERRITORY
at its own expense.
(d) SUMITOMO shall demonstrate PRODUCTS at its booth in trade shows.
(e) It shall at all times conduct its affairs under this Agreement in
accordance with the high standards of business ethics and propriety.
(f) SUMITOMO shall provide sales support and front-line post-sales
support of PRODUCTS . TERAYON shall not be responsible for providing any support
for any PRODUCTS sold by SUMITOMO. In addition, SUMITOMO shall prepare Japanese
manuals and sales documents for PRODUCTS. TERAYON hereby grants SUMITOMO a
limited copyright license to use, modify, translate, create derivative works of,
reproduce and distribute, through multiple tiers of distribution, PRODUCT
documentation and sales literature produced by TERAYON for the purpose of
creating appropriate Japanese-language manuals and sales literature. SUMITOMO
will make copies of the Japanese-language manuals and sales literature available
to TERAYON at TERAYON'S request, and agrees to make any changes to these
materials required for technical accuracy.
(g) SUMITOMO shall cooperate with TERAYON to determine technical
specifications required for PRODUCTS to be successfully installed and work with
2.
CATV/Internet systems in the TERRITORY and NON-EXCLUSIVE TERRITORY, and shall
communicate any modifications of the PRODUCTS required to conform to such
technical specifications to TERAYON with sufficient lead time to permit TERAYON
to make such modifications in a timely manner to fill SUMITOMO's orders for such
modified PRODUCTS.
ARTICLE 3
DUTIES OF TERAYON
3.1 During the term of this Agreement, TERAYON agrees as follows:
(a) TERAYON shall refer to SUMITOMO all inquiries or orders for
PRODUCTS which TERAYON receives directly from potential customers in the
TERRITORY as long as SUMITOMO is the exclusive distributor of PRODUCTS in the
TERRITORY.
(b) TERAYON shall use its best commercial efforts to produce PRODUCTS
suitable for installation and use in the TERRITORY pursuant to SUMITOMO's
requests for modifications as set forth in Section 2.1(g).
(c) TERAYON shall furnish to SUMITOMO, at no cost, a reasonable
quantity of available catalogues, quotation sheets, specifications and technical
data for the promotion of sales of the PRODUCTS in the TERRITORY and NON-
EXCLUSIVE TERRITORY.
(d) TERAYON shall provide reasonable technical sales assistance and
technical advice for use of PRODUCTS in combination with other products,
equipment, devices, software, systems, data or services not supplied by TERAYON
at any locations requested by SUMITOMO under terms and conditions to be agreed
upon by TERAYON and SUMITOMO.
(e) TERAYON shall provide initial training in the installation and use
of PRODUCTS at TERAYON'S California facilities and TERAYON'S field trial
location free of charge.
(f) TERAYON will use its best commercial efforts to supply PRODUCTS
according to all reasonable requirements of SUMITOMO in the TERRITORY and NON-
EXCLUSIVE TERRITORY, subject to the provisions of Article 5 ("Sale of
Products").
ARTICLE 4
PROHIBITION OF SALES IN TERRITORY
4.1 As long as SUMITOMO is the exclusive distributor of PRODUCTS in the
TERRITORY, TERAYON shall not sell any PRODUCTS to any person, firm or
corporation in TERRITORY other than SUMITOMO.
3.
ARTICLE 5
SALES OF PRODUCTS
5.1 All sales of PRODUCTS hereunder shall be made by TERAYON to SUMITOMO
for SUMITOMO's resale to its customers. SUMITOMO shall be free to resell
PRODUCTS purchased from TERAYON to customers within TERRITORY and NON-EXCLUSIVE
TERRITORY at whatever prices and on whatever terms and conditions SUMITOMO
determines shall best promote the purpose of this Agreement.
5.2 SUMITOMO's purchase orders for SUMITOMO Products shall contain the
quantity to be purchased, the delivery destinations, the requested delivery
dates, any special shipping or delivery instructions, billing instructions and
any other special information required by this Agreement. The terms and
conditions of this Agreement with respect to the purchase and distribution of
SUMITOMO Products shall be incorporated into and made a part of each SUMITOMO
purchase order and each amendment thereto agreed on by the parties. TERAYON
reserves the right to reject any purchase order that is not consistent with the
terms of this Agreement The terms and conditions of this Agreement shall
supersede any terms set forth in any purchase order or other SUMITOMO document
delivered in connection with SUMITOMO's purchases under this Agreement, and any
terms and conditions appearing in any purchase order that are inconsistent with
or in addition to the terms and conditions of this Agreement shall be of no
force and effect. No general or form acknowledgment by TERAYON of any SUMITOMO
purchase order or any communications with respect to such an order, or the
making of deliveries with respect thereto, shall in any case be construed as
acceptance or approval of any change in the terms or conditions of this
Agreement.
5.3 Shipping terms shall be F.O.B. (INCOTERMS 1990) TERAYON'S manufacturing
facilities. SUMITOMO shall be responsible for all freight and related costs for
shipment to SUMITOMO's specified destinations.
5.4 All purchase orders shall be issued at least ninety (90) days before
the stated delivery date. Should urgent delivery be required, however, Terayon
will endeavor to expedite shipment in order to fulfill the order.
5.5 TERAYON will endeavor to fill all SUMITOMO orders for PRODUCTS insofar
as it is practicable and consistent with its production schedules to do so, but
in the event of its failure to fill all or part of any order, TERAYON shall not
be to any extent liable or responsible therefor. No SUMITOMO purchase order will
become fixed and binding on TERAYON unless and until accepted by TERAYON.
TERAYON may reject any purchase order that is not consistent with the terms of
this Agreement.
5.6 Payment for all PRODUCTS will be made in US Dollars within sixty (60)
days of TERAYON'S presentation of the applicable invoice and relevant shipping
documents.
4.
CONFIDENTIAL TREATMENT REQUESTED
5.7 Risk of loss from any cause whatsoever shall be borne by SUMITOMO from
the time of delivery of PRODUCTS to a carrier by TERAYON at the F.O.B. point
(INCOTERMS 1990). Unless otherwise instructed by SUMITOMO in writing, shipment
will be made by the means and carrier selected by TERAYON.
5.8 Title to all PRODUCTS will remain with TERAYON until full payment
therefor is made by SUMITOMO, provided that at no time will title to any
software or firmware included in or with the PRODUCTS pass to SUMITOMO.
5.9 TERAYON shall provide a limited warranty for the PRODUCTS as set forth
in Schedule B.
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ARTICLE 6
MINIMUM QUANTITY
6.1 SUMITOMO agrees to purchase from TERAYON the minimum annual quantities
of PRODUCTS set forth below (each year being measured from the date of TERAYON'S
first PRODUCTS shipment to SUMITOMO's end users, except shipments to SUMITOMO
for its field trial in the TERRITORY) without any penalty.
First Year: [*****] Quantity of "TeraPro" modems
Second Year: [******] Quantity of "TeraPro" modems
Third Year: [******] Quantity of "TeraPro" modems
Provided, however, that prior to the commencement of each of the Second and
Third Years, both parties hereto shall discuss the sales forecast for such
Second and Third Year and consider making a reasonable adjustment of the minimum
annual quantity as set forth above if required by business conditions in the
TERRITORY.
6.2 If SUMITOMO does not purchase a total of [**********************] units
by the end of the first year or [************************] units by the end of
the Second Year, Sumitomo shall continue to use its best commercial efforts to
improve the promotion and secure sales of the PRODUCTS in the TERRITORY and
shall present to TERAYON its improved promotion and support plans for the
following year.
ARTICLE 7
PRICE
7.1 The prices to be payable by SUMITOMO for PRODUCTS under this Agreement
shall be those established in the price list and discount schedule set forth in
Schedule C hereto.
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[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
5.
CONFIDENTIAL TREATMENT REQUESTED
TERAYON reserves the right to change the price list on one hundred and twenty
(120) days prior notice to SUMITOMO.
ARTICLE 8
TRADE NAMES AND TRADEMARKS
8.1 SUMITOMO shall have the right to use TERAYON'S trade names and
trademarks in the promotion and sales of PRODUCTS under this Agreement,
provided, however, that TERAYON reserves the right to restrict any such use
which is detrimental to the names or marks, and to require SUMITOMO to cease use
of any xxxx which is, or in TERAYON'S opinion is likely to become, subject to a
claim of infringement.
8.2 SUMITOMO shall not remove, alter or obliterate any trade name or
trademark affixed to PRODUCTS, nor shall it add any other names or marks, except
with the prior written consent of TERAYON. SUMITOMO agrees to display the
following notices of trademark status adjacent to and with the first or most
prominent use of a TERAYON trademark in each piece of advertising or printed
materials in which such trademark appears and includes the respective legends
adjacent to or as a footnote to the trademarks as follows:
(a) [********] is a trademark of Terayon Corporation, which may be
registered in certain jurisdictions; and
(b) Such other symbols and notices as may be prescribed by TERAYON from
time to time.
ARTICLE 9
INDEMNITY
9.1 Subject to the limit of liability in Article 18 ("Limitation of
Liability"), TERAYON shall indemnify and hold harmless SUMITOMO from and against
all actions, proceedings, claims, damages, costs and demands which may arise out
of or in connection with any claims of infringement of patent, copyright,
trademark or other intellectual property rights, provided, however, that
SUMITOMO shall in every instance refrain from making any admission of liability,
shall give TERAYON a notice of any claim made, shall give TERAYON sole and
exclusive control of the defense or settlement of any such claim and shall
assist in the defense of such claim. TERAYON shall have no liability to for any
action or claim alleging infringement or misappropriation based upon (a)
TERAYON'S compliance with SUMITOMO's instructions, drawings, designs or
functional specifications; (b) any use of the PRODUCTS in a manner other than as
specified by TERAYON; (c) any use of the products in combination with other
products, equipment, devices, software, systems, data or services not supplied
by TERAYON to the extent that the such claim is directed against such
combination; or (d) any alteration or modification of the products by anyone
other than TERAYON. if any PRODUCTS supplied
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
6.
by TERAYON to SUMITOMO shall be held to directly infringe any valid intellectual
property right in the TERRITORY or NON-EXCLUSIVE TERRITORY and the use of same
is enjoined, or if TERAYON believes such a holding is likely, terayon shall, at
its option and its expense, have the right: (i) to procure for SUMITOMO the
right to use such products free of liability for infringement, or (ii) to
replace (or modify) the products with a non-infringing substitute otherwise
complying substantially with all the requirements of this agreement, or (iii)
upon return of the PRODUCTS, refund the purchase price and the transportation
costs of the products. if the infringement is alleged prior to completion of
delivery of the PRODUCTS, TERAYON shall have the right to decline to make
further shipments without being in breach of the agreement.
9.2 SUMITOMO shall indemnify TERAYON for (i) failure to pay taxes and (ii)
for all actions, proceedings, claims, damages, costs and demands which may arise
out of or in connection with any unauthorized warranties made to customers by
SUMITOMO with respect to the PRODUCTS or TERAYON. TERAYON authorizes SUMITOMO to
make warranties to customers with respect to the PRODUCTS which are the same as
the warranties made by TERAYON to SUMITOMO with respect to such PRODUCTS.
ARTICLE 10
CONFIDENTIALITY
10.1 The terms and conditions of the confidentiality agreement between the
parties dated October 16.1996 are incorporated into this Agreement by reference
and shall govern the exchange of confidential information between the parties
during and after the term of the Agreement.
10.2 Notwithstanding the Article 10.1 above, either of the parties may
disclose such information if required by laws, regulations or orders of the
Government of Japan or the United states Government, or any of their competent
agencies.
ARTICLE 11
INDEPENDENT CONTRACTOR
11.1 The relationship between TERAYON and SUMITOMO shall be that of seller
and buyer. Neither party shall be deemed or construed the legal agent of the
other for any purpose whatsoever, and neither party shall have any right or
authority to make or undertake any promise, warranty or representation, to
execute any contract or otherwise to assume any obligation or responsibility in
the name of or on behalf of the other party, except to the extent specifically
authorized in writing by the other party.
7.
CONFIDENTIAL TREATMENT REQUESTED
ARTICLE 12
TERM
12.1 Unless sooner terminated pursuant to the other provisions of this
Agreement, the term of this Agreement shall be a three (3) year period
commencing on the date hereof. This Agreement shall be subject to automatic
extension for additional one (1) year period unless either party, with or
without cause, shall give written notice of termination to the other not less
than ninety (90) days prior to the end of the initial term of this Agreement or
any extension thereof.
ARTICLE 13
TERMINATION
13.1 Either of the parties hereto may terminate this Agreement by giving a
written notice of termination to the other party:
(a) if the other party breaches any of the provisions of this Agreement
and does not remedy the breach within thirty (30) days after a written notice is
given requesting such party to remedy the breach; and
(b) if the other party becomes insolvent, or any voluntary or
involuntary petition in bankruptcy or for corporate reorganization is filed by
or against the other party, or a receiver is appointed with respect to any of
the assets of the other party, or a liquidation proceeding is commenced by or
against the other party.
13.2 Nothing in this Article 13 shall affect, be construed, or operate as a
waiver of any right of the party aggrieved by any breach of this Agreement to
recover any loss or damage incurred as a result of such breach, either before or
after the termination hereof.
13.3 TERAYON commits to use [***] to insure that PRODUCTS are compatible
with [***] in the TERRITORY. SUMITOMO may terminate the Agreement with no
liability to TERAYON or SUMITOMO upon thirty (30) days notice to TERAYON if
TERAYON is unable to supply PRODUCTS which are compatible.
ARTICLE 14
EFFECT OF TERMINATION
14.1 Upon the termination of this Agreement for any reason, other than with
respect to the liquidation of the inventory which is then in the possession of
SUMITOMO and will not be repurchased by TERAYON, SUMITOMO shall discontinue the
use of TERAYON'S names and trade-marks, labels, copyrights, and other
advertising media and shall remove all signs and displays relating thereto and
return to TERAYON any material labeled "Confidential" received
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
8.
from TERAYON, except for those materials necessary for the provision of support
to the installed base of PRODUCTS as of the termination date. SUMITOMO will
continue to provide support for PRODUCTS in the field unless otherwise agreed by
the parties.
14.2 Upon the termination of this Agreement for any reason, TERAYON shall
have the option to repurchase PRODUCTS then in the possession of SUMITOMO and
available for sales, at the prices originally billed to SUMITOMO.
14.3 No termination of this Agreement shall release either party from any
liability or obligation which has therefore accrued and remains to be performed
as of the date of such termination.
14.4 The following Articles and Sections of this Agreement shall survive
termination: Article 10 ("Confidentiality"), Section 5.7, Section 5.8, Article 9
("Indemnity"), Article 14 ("Effect of Termination"), Article 16 ("Governing
Law"), Article 18 ("Limitation of Liability"), Article 19 ("Assignment"),
Article 22 ("Entire Agreement"), and Article 25 ("Notice").
ARTICLE 15
FORCE MAJEURE
15.1 Any other provision contained herein to the contrary notwithstanding,
neither party hereto shall be liable to the other party for any delay or failure
to perform any of its obligations hereunder caused due to governmental
regulations or directions, outbreak of a state of emergency, Act of God, war,
warlike hostilities, civil commotions, riots, epidemics, storms, fires, strikes,
lockouts, and any other similar cause or causes beyond the reasonable control of
such party.
ARTICLE 16
GOVERNING LAW
16.1 This Agreement shall be construed in accordance with and governed by
the laws of the State of California as those laws are applied to contracts
entered into and to be performed entirely in California by California residents.
The parties agree to submit to the non-exclusive jurisdiction and venue of the
federal and state courts of the State of California. The parties agree that the
United Nations Convention on Contracts for the International Sale of Goods is
specifically excluded from application to this Agreement.
ARTICLE 17
ARBITRATION
9.
CONFIDENTIAL TREATMENT REQUESTED
17.1 All disputes, controversies or differences which may arise between the
parties out of or in relation to or in connection with the AGREEMENT shall be
settled amicably. If settlement is not reached between the parties hereto, it
shall be exclusively submitted to and finally settled by arbitration to be
conducted in Tokyo, Japan or in California, USA in accordance with the Rules of
Conciliation and Arbitration of the International Chamber of Commerce. The
arbitration shall be held in English, and subject to California law, in Tokyo
when it is requested by TERAYON, or in California when it is requested by
SUMITOMO. The award shall be final and binding upon both parties. Any dispute
concerning the ownership of intellectual property shall not be subject to
arbitration.
ARTICLE 18
LIMIT OF LIABILITY
18.1 TERAYON'S AGGREGATE LIABILITY IN CONNECTION WITH THIS AGREEMENT,
REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN
CONTRACT, TORT OR OTHERWISE), AND INCLUDING ANY LIABILITY UNDER SECTION 5.9
("LIMITED WARRANTY") AND ARTICLE 9 ("INDEMNITY"), SHALL NOT EXCEED [*******].
NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT, EXEMPLARY, SPECIAL,
CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY KIND (INCLUDING WITHOUT LIMITATION
LOST PROFITS), EVEN IF IT HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
EXCEPT FOR A BREACH EITHER PARTY'S OBLIGATIONS WITH RESPECT TO ARTICLE 10
("CONFIDENTIALITY"). THE LIMITATIONS OF LIABILITY CONTAINED IN THIS AGREEMENT
ARE A FUNDAMENTAL PART OF THE BASIS OF EACH PARTY'S BARGAIN HEREUNDER, AND
NEITHER PARTY WOULD ENTER INTO THIS AGREEMENT ABSENT SUCH LIMITATIONS.
ARTICLE 19
ASSIGNMENT
19.1 Neither of the parties hereto shall assign, pledge, delegate or
otherwise dispose of any of its rights or its duties under this Agreement
without the prior written consent of the other party hereto.
ARTICLE 20
WAIVER
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
10.
20.1 Waiver of any default in the performance of any part of this Agreement
shall not apply to or be deemed a waiver of any other or further default
hereunder or thereunder. Similarly, no waiver of any condition shall operate
thereafter as a waiver of the same or any other condition.
ARTICLE 21
AMENDMENT
21.1 No oral explanation or oral information by either party hereto shall
alter the meaning or interpretation of this Agreement. No modifications,
alterations, additions or changes in the terms hereof shall be binding on either
party hereto unless reduced to writing and executed by the duly authorized
representative of each party.
ARTICLE 22
ENTIRE AGREEMENT
22.1 This Agreement shall supersede any and all prior agreements,
understandings, arrangements, promises, representations, warranties, and/or any
contracts of any form or nature whatsoever, whether oral or in writing and
whether explicit or implicit, which may have been entered into prior to the
execution hereof between the parties, their officers, directors, or employees as
to the subject matter hereof. Neither of the parties hereto has relied upon any
oral representation of the other party.
ARTICLE 23
SEVERABILITY
23.1 In the event that any term or provision of this Agreement shall, for
any reason, be held to be invalid, illegal, or unenforceable in any respect, and
either party shall determine that such invalidity, illegality, or
unenforceability goes to the heart of this Agreement, then that party shall have
the right to terminate this Agreement upon sixty (60) days' prior written notice
to the other party. In the event either party does not so terminate this
Agreement, this Agreement shall continue in full force and effect, except that
it shall be interpreted and construed as if such term or provision, to the
extent the same shall have been held to be invalid, illegal or unenforceable,
had never been contained herein.
ARTICLE 24
SUCCESSORS AND ASSIGNEES
11.
24.1 This Agreement shall inure to the benefit of and be binding upon the
successors and permitted assignees of the parties hereof. ARTICLE 25
NOTICE
25.1 Any notice or communication required or permitted to be given by
either party to the other pursuant to this Agreement shall be sent to the
following address and may be given by fax or by prepaid airmail post and shall
be deemed to have been given:
(a) in the case of notice by fax, when dispatched; or
(b) in the case of notice by prepaid airmail post, ten (10) full
calendar days after posting; and in proving the giving of such notice it shall
be sufficient to prove that the fax was duly dispatched or the letter was duly
posted.
TERAYON:
Terayon Corporation
0000 Xxxxxx Xxxx Xxxx
Xxxxx Xxxxx, XX 00000
attention: President
fax: (000) 000-0000
SUMITOMO:
2-2, Xxxxxxxxxxxx 0-xxxxx, Xxxxxxx-xx,
X.X.X.Xxx 0000 Xxxxx, 000-00 Xxxxx
Information and Telecommunications Business (ELF'S) Dept. Attn : Xx.Xxxx
Kinoashita
Fax No. x00-0-0000-0000
25.2 Either party may at any time and from time to time change its address
and fax number for the purpose of this Article 24 by giving notice to the other
pursuant to this Article. ARTICLE 26
HEADINGS
26.1 Headings included in this Agreement are included for the purpose of
convenience only and shall not affect the construction or interpretation of any
of its provisions.
12.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above
written.
TERAYON CORPORATION
By: XXXX XXXXX [s/s]
Name: Xxxx Xxxxx
Title: Chief Executive Officer
SUMITOMO CORPORATION
By: XXXX XXXXXX
Name: Xxxx Xxxxxx
Title: Deputy General Manager
13.
SCHEDULE A
TERAYON PRODUCTS
1. TeraLink 1000 head-end controller and data multiplexer
2. TeraPro Cable Modem
SCHEDULE B
TERAYON LIMITED WARRANTY AND PRODUCT LIABILITY INDEMNITY
1. All PRODUCTS shall be deemed accepted by SUMITOMO upon delivery.
2. TERAYON warrants, to SUMITOMO only, that all PRODUCTS shall substantially
conform to the specifications established for the PRODUCTS under normal use and
service for ninety (90) days after delivery to SUMITOMO ("the Warranty Period").
During the Warranty Period, if any product fails to substantially conform to the
applicable specifications, SUMITOMO shall notify TERAYON in writing of such non-
conformance as soon as SUMITOMO becomes aware of it. If requested by TERAYON,
SUMITOMO agrees to return the defective PRODUCTS to TERAYON, at TERAYON'S
expense, with packaging and shipping documents bearing a returned materials
authorization ("RMA") number or code assigned by TERAYON.
3. SUMITOMO's sole and exclusive remedy for any PRODUCTS which do not conform
to the warranty in the preceding Paragraph 2 of this Exhibit will be for
TERAYON, at TERAYON'S option, to repair or replace the PRODUCT or, if neither of
these are commercially feasible, then to refund the purchase price therefor.
4. TERAYON agrees to defend SUMITOMO against all third party claims that the
PRODUCTS are the sole cause of any personal injury or property damage and will
pay any damages and costs (including reasonable attorney fees) finally awarded
by a court of competent jurisdiction or arbitrators, provided that SUMITOMO
shall in all instances refrain from making any admission of liability, shall
give TERAYON a notice of any claim made, shall give TERAYON sole and exclusive
control of the defense and settlement of any such claim and shall assist in the
defense of such claim.
5. TERAYON DISCLAIMS ALL OTHER EXPRESS AND IMPLIED WARRANTIES INCLUDING BUT NOT
LIMITED TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-
INFRINGEMENT.
6. All of the foregoing obligations in this Exhibit are subject to the limit of
liability as set out in Article 18 of the Agreement.
CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE C
PRODUCT PRICES [****]
1. SUMITOMO will be entitled to purchase PRODUCTS [**********] as follows:
[****] [*******************] [**%]
[********************] [**%]
[**********] [***********************] [**%]
[***************] [**%]
[****************] [**%]
[**********] [**%]
[***************************] [**%]
[**********************] [**%]
[**********************] [**%]
[*************] [**%]
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
