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EXHIBIT 10.17
THIRD ADDENDUM TO PROCUREMENT AGREEMENT
BETWEEN
SPRINT/UNITED MANAGEMENT COMPANY
AND
CIENA CORPORATION
This Third Addendum to Procurement Agreement (the "Addendum") is executed this
21st day of October 1998 and is effective as of the 9th day of October 1998 (the
"Effective Date"), by and between Sprint/United Management Company, a Kansas
corporation, having its principal place of business at 2330 Shawnee Mission
Parkway, Westwood, Kansas 66205 (hereinafter referred to as "Sprint") and CIENA
Corporation, a Delaware corporation, having its principal place of business at
1201 Winterson Road, Linthicum, Maryland 21090 (hereinafter referred to as
"CIENA"), as an addendum to that certain Procurement Agreement KC103251ML dated
December 14, 1995, between Sprint and CIENA (the "Agreement"). Except as
otherwise indicated, defined terms in this Addendum have the same meaning as in
the Agreement, as amended through the Second Addendum.
A. BACKGROUND
1. Pursuant to the Agreement, Sprint has been purchasing and CIENA has been
supplying Deliverables.
2. Sprint and CIENA implemented a special purchasing arrangement in November
1996 for purchases in 1997, which arrangement was memorialized by that
certain First Addendum to Procurement Agreement between Sprint/United
Management Company and CIENA Corporation dated November 7, 1996 (the
"First Addendum"). The parties implemented a special purchasing
arrangement in March 1998 for purchases in 1998, which arrangement was
memorialized by that certain Second Addendum to Procurement Agreement
between Sprint/United Management Company and CIENA Corporation dated
March 10, 1998 (the "Second Addendum"). The Procurement Agreement, First
Addendum and Second Addendum shall constitute the "Agreement".) The
parties now desire to implement this Third Addendum.
3. Sprint contemplates purchasing new Deliverables (Addendum Deliverables as
defined below) from CIENA *.
4. Except as amended by this Third Addendum, the Agreement shall remain in
full force and effect.
Now, therefore, in consideration of the foregoing premises, the parties agree as
follows:
B. ADDENDUM
DEFINITIONS.
1.1 "Addendum Deliverables" means Deliverables ordered during the Addendum
Term and the training services specified herein. Addendum Deliverables shall
not include orders for installation services, emergency technical and support
services.
1.2 "Addendum Term" means the period from October 9, 1998 through December 31,
1999. "Addendum Deliverables Schedule" means that written document representing
the Sprint forecasted
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* The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
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quantities and delivery dates of Deliverables throughout the Addendum Term. The
Deliverables Schedule is incorporated by reference into this Addendum as Exhibit
F.
1.3 "Addendum Deliverables Schedule" means *.
1.4 "Preferred Provider" means *.
2. PREFERRED PROVIDER.
Sprint designates CIENA as its Preferred Provider during the Addendum Term.
3. PRICES, QUANTITIES AND DELIVERY SCHEDULES.
(a) Section 2.1 of the 1998 Agreement is deleted in its entirety and
replaced with the following:
(1) During the Addendum Term, Sprint shall furnish Supplier a
monthly Projection Schedule ("Schedule") setting forth a
rolling twelve (12) month forecast of the respective
quantities of each type of Addendum Deliverable that Sprint
then estimates it will require for each month in the
immediately succeeding twelve (12) month period. Sprint and
CIENA shall meet on a monthly basis to review Sprint's
issuance of Purchase Orders for the Addendum Deliverables,
and CIENA's deliveries of same, each in relation to the
Addendum Deliverables Schedule.
(2) The Addendum Deliverables Schedule, which is set forth and
incorporated as Exhibit F, is Sprint's *. Except as
specifically provided in Section 4(a) below, CIENA
acknowledges that such forecast is not a commitment and may
change from time to time.
(b) Section 3.1, Exhibit "C" pricing in the 1998 Agreement is deleted in
its entirety and replaced with the new Exhibit C "New Pricing",
which is set forth and incorporated herein by reference, *.
(c) Section 13.10 in the 1998 Agreement and the related portions of
Exhibit C thereto * are hereby deleted and replaced by Exhibit D
attached hereto, which refers to Supplier's 96 channel system.
(d) CIENA will provide Sprint, *.
4. ADDITIONAL COMMITMENTS OF THE PARTIES.
(a) Sprint shall order *. Any unfilled purchase orders issued prior to
execution of this Addendum as identified below will be priced *.
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(b) * training services during the Addendum Term; provided, however,
that Sprint shall pay or reimburse CIENA for travel, meals and
lodging expenses for CIENA employees performing training services
for Sprint during the Addendum Term at a location other than CIENA's
training headquarters in Linthicum, Maryland.
(c) *.
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* The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
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(d) In the event of force majeure affecting CIENA's manufacturing
capacity or delivery capability, Sprint shall thereupon have the
first priority on CIENA's manufacturing output for so long as
necessary to fill Sprint's orders which were pending at the time
of the force majeure or otherwise scheduled in accordance with the
Addendum Deliverables Schedule. *.
(e) CIENA's plan for readying Addendum Deliverables for use on
dispersion shifted fiber ("DSF") shall be as set forth in Exhibit
E.
(f) The parties agree to make a joint press release in a form mutually
agreed upon execution of this Addendum.
(g) Any successors or assignees of Sprint or CIENA must honor all the
terms and conditions of the Agreement and this third Addendum.
5. GENERAL
Except as amended by this Third Addendum, the 1998 Agreement shall remain in
full force and effect. In the event of a conflict between the terms of the 1998
Agreement and this Third Addendum, this Third Addendum will control.
This Third Addendum is executed by authorized representatives of Sprint and
CIENA and is made a part of and incorporates the terms and conditions of the
1998 Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Third Addendum to
be executed by their duly authorized representatives as of the day and year
below written.
CIENA CORPORATION SPRINT/UNITED MANAGEMENT COMPANY
By: ________________________________ By:____________________________________
Title: _____________________________ Title:_________________________________
Date: ______________________________ Date:__________________________________
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* The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
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Attachments:
Exhibit F - Addendum Deliverables Schedule
Exhibit C - Pricing *
Exhibit D - MW 9600 *
Exhibit E - CIENA Plan *
X
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X This "X" denotes that the remaining 19 pages of this exhibit have been omitted
in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.
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* The asterisk denotes that confidential portions of this exhibit have been
omitted in reliance on Rule 24b-2 of the Securities Exchange Act of 1934. The
confidential portions have been submitted separately to the Securities and
Exchange Commission.