DCME
MASTER MANUFACTURING AND DISTRIBUTION AGREEMENT
This DCME MASTER
MANUFACTURING AND DISTRIBUTION AGREEMENT (this
“Agreement” ), dated as of December 31,
2002, by and between ECI Telecom Ltd., a public company organized
under the laws of the State of Israel ( “ECI” )
having its principal place of business at 30 Hasivim Street, Petah
Tikva 49133, Israel and Veraz Networks Ltd. [formerly Chorale
Networks Ltd.], a private company organized under the laws of the
State of Israel ( “Veraz Israel” ) having its
principal place of business at 43 Hasivim Street, Petah Tikva
49133, Israel, and Veraz Networks, Inc. [formerly Chorale Networks,
Inc.], a Delaware corporation ( “Veraz U.S.” )
having its principal place of business at 926 Rock Avenue, San
Jose, CA 95131. Veraz Israel and Veraz U.S. are collectively
referred to as “Veraz” .
WHEREAS, ECI
manufactures and sells Digital Circuit Multiplication Equipment (
“DCME” ) worldwide; and
WHEREAS, within
the framework of the transfer by ECI of certain assets and rights
relating to the DCME product line to Veraz the parties hereto are
prepared to enter into this Agreement whereby ECI will manufacture
and sell to Veraz DCME to be marketed by Veraz, as more fully set
forth below;
NOW, THEREFORE, in
consideration for their mutual promises and undertakings and other
valuable consideration, the sufficiency of which is acknowledged by
the parties, the parties hereby agree as follows:
1.
Manufacture and Sale, Purchase and
Distribution
1.1 During the
term of this Agreement and subject to the terms and conditions set
forth herein, ECI shall manufacture and sell to Veraz and Veraz
shall purchase from ECI and may distribute worldwide and provide
service and support for the DCME integrated systems and equipment
listed in Exhibit 1.1 attached hereto, together
with DCME spare parts, components and accessories that are
manufactured by ECI and intended by Veraz for use in DCME
integrated systems and equipment (individually, a
“Product,” and collectively the
“Products” ).
1.2 The terms and
conditions of this Agreement shall govern the manufacture, sale and
distribution of any Product provided by ECI to Veraz pursuant to
every purchase order which shall be submitted in accordance with
and which otherwise complies with the conditions for acceptance by
ECI as set forth in Section 6.1 below ( “Purchase
Order” ), each of which shall be deemed a part of this
Agreement.
1.3 Supply
and Service Obligations
(a) During
the term of this Agreement and subject to the exclusions and
conditions and exceptions set forth below within
Sections 1.3(c) and 1.3(d), ECI shall sell and distribute
Products only to Veraz, and not to any other person or
entity.
1.
(b) During
the term of this Agreement, and if and to the extent permitted
under law, only Veraz shall be entitled to provide maintenance
services and support for Products.
(c) The
parties acknowledge and agree that ECI’s obligations set
forth in Sections 1.3(a) and 1.3(b) do not apply
to:
(i) ECI’s
sale of DCME sub-assemblies to ECtel Ltd., the sale of
subassemblies for the Celtro product line and the sale of
components for the Hi-TV product line, solely to the extent that
such DCME sub-assemblies and components are intended for use and
incorporation by them into final products that are not the same or
similar in any material respect with the DCME integrated systems
and equipment listed in Exhibit 1.1 attached hereto;
or
(ii) ECI’s
provision of service and support to ECtel Ltd. for the Celtro
product line and for the Hi-TV product line for those DCME
sub-assemblies and components solely to the extent that such
service and support is provided by ECI in connection with the use
of DCME components in final products that are not the same or
similar in any material respect with the DCME integrated systems
and equipment listed in Exhibit 1.1 attached
hereto.
(d) ECI’s
obligations in Sections 1.3(a) and 1.3(b) are also conditioned
upon the requirements set forth below;
(i) Veraz
is not in material breach of Section 5.11 of this Agreement
that continues for a period of thirty (30) days after
Veraz’s receipt of written notice from ECI of such breach;
and
(ii) Veraz
is not the subject of a petition for relief under any bankruptcy,
insolvency or debtor’s relief law (which petition is not
dismissed within ninety (90) days after the filing thereof),
and is not liquidated or dissolved, and does not make an assignment
for the benefit of creditors, and does not have a receiver
appointed for all or a substantial portion of Veraz’s
assets.
If Veraz fails to
meet any of these requirements, then ECI shall have no further
obligations under Sections 1.3(a) and 1.3(b) for the remainder
of the term of this Agreement.
(a) During
the term of this Agreement and .subject to the exclusions and
conditions set forth below within this Section 1.4(b), Veraz
shall purchase all of its requirements for Products only from ECI,
and not from any other person or entity.
(b) Veraz’s
obligations in Section 1.4(a) are also conditioned upon the
requirements set forth below. If ECI fails to meet any of these
requirements, Veraz shall have no further obligations under
Section 1.4(a) for the remainder of the term of this
Agreement.
(i) ECI
is not in material breach of any material obligation under this
Agreement that continues for a period of thirty (30) days
after ECI’ s receipt of written notice from Veraz of such
breach;
2.
(ii) ECI
is not the subject of a petition for relief under any bankruptcy,
insolvency or debtor’s relief law (which petition is not
dismissed within ninety (90) days after the filing thereof),
and is not liquidated or dissolved, and does not make an assignment
for the benefit of creditors, and does not have a ‘receiver
appointed for all or a substantial portion of ECI’s assets;
and
(iii) ECI
is not the subject of a force majeure event, as described in
Section 16.1, which continues in effect for a period of ninety
(90) days and adversely affects the ability of Veraz to obtain
Products from ECI.
At the beginning
of each month during this Agreement, Veraz will provide ECI with a
six (6)-month rolling Product forecast (each a
“Forecast” ), describing Veraz’s good
faith expectations of the number of Products it intends to purchase
from ECI and the expected sales value in the following six
(6) months for which Purchase Orders have not yet been issued
by Veraz, in the form attached as Exhibit 2 .
Subject to the provisions of Section 3 below, all commitments
made by Veraz for the purchase of Products hereunder shall be made
only upon submission by Veraz of Purchase Orders to ECI pursuant to
Section 6. Each Forecast shall be deemed to be accepted by ECI
unless ECI reasonably objects in writing within five (5) days
of the date of Veraz’s submission of the Forecast. If ECI
objects to any Forecast, it will provide all relevant details to
Veraz regarding its objection, and the parties will work in good
faith to resolve such objection in a prompt and reasonable manner
to meet the potential needs of Veraz to its customers with respect
to the supply of Products.
3.1 ECI shall
purchase sufficient components and raw materials required to
provide the Products ( “Materials” ) using
ECI’s standard purchasing practices, to meet the requirements
of (i) the outstanding Purchase Orders and (ii) the Forecast;
provided, however, that if the number of forecasted Products
specified in the Forecast together with the number of Products
required pursuant to outstanding Purchase Orders exceeds by more
than ten percent (10%) the number of forecasted Products for the
same period as specified in the Veraz business plan attached hereto
as Exhibit 3.1 , as the same may be amended from
time to time by the parties upon their mutual consent (the
“Business Plan” ) (such excess hereinafter
referred to as the “Excess Products” ), ECI may,
but shall not be required to, purchase Materials for the Excess
Products.
3.2 ECI recognizes
its financial responsibility and shall bear all costs for the
Materials purchased by it for inclusion in the Products.
3.3 In the event
ECI does not elect to purchase Materials for Excess Products in
accordance with Section 3.1 above, then VEraz may deliver to
ECI a Purchase Order for said Excess Products, and in such case ECI
shall purchase the Materials for these Excess Products. The price
to Veraz for such Excess Products shall be equal to the applicable
price for such Products that is determined under the provisions in
Exhibit 9.1 , and the provisions of
Sections 9.1 and 9.2 below shall not apply to any such Excess
Products. Payment from Veraz to
3.
ECI for such
Excess Products shall be due thirty (30) days after
Veraz’s receipt and acceptance of any such applicable Excess
Products. ECI acknowledges and agrees that Veraz may use Excess
Products in place of any corresponding Products to be supplied
under a future Forecast, in which case the provision of
Sections 9.1 and 9.2 below shall apply to Customer Revenue
generated from sales made by Veraz of such Excess Products or
Products containing Excess Products, provided, however, that
Veraz shall be entitled deduct from amounts which are due ECI for
such sales those amounts previously paid by Veraz to ECI for such
Excess Products so used or sold.
3.4 If a supplier
of Materials notifies ECI that any such Materials will be
discontinued, ECI shall immediately notify Veraz of such
discontinuance in writing. Veraz shall use commercially reasonable
efforts to locate substitute Materials and failing that shall
within fourteen (14) business days notify ECI, in writing,
specifying the amount of such Materials ECI is requested to
purchase before the discontinuance comes into effect. ECI shall
then use commercially reasonable efforts to purchase the amount of
such Materials which are specified by Veraz.
ECI shall, at its
expense, unless expressly provided otherwise below:
4.1 Manufacture,
assemble, repair, investigate production problems, test, and
deliver in accordance with the delivery date specified in any
Purchase Order and in accordance with this Agreement, the Products
duly ordered by Veraz under each Purchase Order, provided ,
that ECI is expressly permitted to outsource or subcontract to
subcontractors who are one of ECI’s qualified vendors for
parts, processes or completed or substantially completed Products
supplied to Veraz and ECI shall otherwise be completely independent
in determining the manner in which it shall perform its obligations
hereunder without prior written approval from Veraz. Consent of
Veraz to the use of any components manufactured by third parties
shall not derogate from ECI’s obligations under this
Agreement, including, without limitation, ECI’s warranty
obligations under Section 8 of this Agreement;
4.2 Make available
to Veraz, upon its reasonable request, Products and Product test
equipment, if any, that may be located in the regional units of
ECI, as is necessary for Veraz to perform its obligations under
Section 5.1 below in such regions, provided that the
manufacture of the Products and Product test equipment does not
disrupt ECI’s manufacturing process.
4.3 Prepare the
Products described in any Purchase Order, to be ready in its final
packaging for shipping within two (2) business days after
Veraz notifies ECI of final packaging and delivery instructions for
any Purchase Order, provided that ECI shall have at least
ten (10) business days after receipt of any Purchase Order to
deliver the Products described in such Purchase Order (other than
Products that may be tested using the “highly accelerated
screening system”, for which Products ECI shall have five
(5)-business days after receipt of a Purchase Order to deliver such
Products to Veraz);
4.
4.4 Supply, at
Veraz’s reasonable request, Product manufacturing data that
is required for obtaining necessary governmental approvals,
licenses, permits and consents as required pursuant to
Section 5.4 hereof;
4.5 Maintain all
necessary process design technology, labor, material, tooling,
facilities and other resources for the timely and satisfactory
completion and delivery of the Product under this
Agreement;
4.6 Commit and use
sufficient and qualified personnel to support the requirements of
this Agreement;
4.7 Reimburse
Veraz for expenses of third parties approved in advance by ECI in
connection with the development of features to satisfy customer
requests;
4.8 Provide Veraz
with Product demonstration equipment as reasonably requested by
Veraz, provided , that Veraz shall reimburse ECI for
ECI’s depreciated cost of production of any demonstration
equipment not returned to ECI within one (1) year of delivery
to Veraz;
4.9 Obtain and pay
for any bank guarantees, performance bonds or other like
instruments to the extent related to production and performance of
the Products, and necessary for the sale by Veraz of the
Products;
4.10 Provide Veraz
with Products for field trials free of charge, provided that
Veraz shall return such Products within a reasonable timeframe upon
ECI’s written request subject, however, to those contractual
obligations that may exist between Veraz and its customers that may
affect the required return of such Products;
4.11 Provide Veraz
with Products for homologation; provided that Veraz shall
return such Products within a reasonable timeframe upon ECI’s
written request unless Veraz decides to retain such Products which
in such event Veraz shall so promptly notify ECI and will pay to
ECI an amount equal to ECI’s actual cost of manufacture for
such Products that will be invoiced by ECI to Veraz at the time
such decision is made by Veraz;
4.12
(a) Obtain and maintain all governmental and other permits,
licenses and approvals that Veraz notifies ECI in writing are
necessary for the performance of ECI’s undertakings hereunder
and the distribution and sale of Products for intended use by
customers within countries that Veraz plans to distribute such
Products, including an ISO certification for ECI’s processes
to be performed under this Agreement (of at least ISO 9001 or
higher), (b) pay the annual fees associated with obtaining the
CE, TUV and UL marks (to be obtained by Veraz as specified in
Section 5.4 below), and (c) use commercially reasonable
efforts to insure that each subcontractor complies with any
requirements to obtain and maintain such permits, licenses,
approvals and certifications;
4.13 Provide on a
weekly basis to Veraz detailed production and planned delivery
schedules for all Products that are to be manufactured and/or
delivered by ECI for Veraz under this Agreement;
5.
4.14 Manufacture
Products in accordance with the quality requirements, including
reliability testing and inspection methods and procedures, that are
set forth in Exhibit 4.13 to this Agreement or
otherwise agreed to in writing by Veraz and ECI;
4.15 Assist Veraz
in obtaining services of Celtro engineers on an as needed basis to
solve engineering problems in Products, which assistance received,
if any, will be compensated by Veraz to Celtro on commercially
reasonable terms, for so long as Celtro is a wholly-owned division
or a wholly owned subsidiary of ECI.
4.16 Provide Veraz
with quality data and reports that Veraz may reasonably request or
is otherwise required by Veraz to satisfy its obligations to ECI
under this Agreement; provided, however, that ECI shall not
have any obligation under this Section 4.16 to provide Veraz
with any quality data and reports that are not currently being
generated by ECI for the Products as of the date of execution of
this Agreement unless such data and reports are otherwise required
by law, regulation or other legal requirement;
4.17 Maintain, a
business continuity plan for the Products to the extent that ECI
generally has, and that contains protections that are no less
protective than, a business continuity plan for other products that
ECI uses generally to protect its business from disruption;
and
4.18 Appoint, and
hereby does appoint, Veraz as its agent to collect all DCME-related
accounts receivable balances (including both current and
delinquent) pursuant to the provisions of Section 5.10.
Veraz shall, at
its expense, unless expressly provided otherwise below:
5.1 Use
commercially reasonable efforts to seek out and identify
prospective customers, either through its own actions or actions of
its agents, and otherwise promote and expand the sale of the
Products worldwide and follow up inquiries, leads and
correspondence furnished to it by ECI;
5.2 Use
commercially reasonable efforts to provide and maintain an adequate
place of business and sales organization to promote and effect
sales of the Products worldwide;
5.3 Use
commercially reasonable efforts to Conduct promotional campaigns
including advertising campaigns and participation in trade
shows;
5.4 Use
commercially reasonable efforts to obtain all necessary
governmental approvals, licenses, permits and consents in
connection with the import into, distribution, sale and use of the
Products worldwide and comply with all applicable laws and
regulations in connection with the performance of its obligations
hereunder. Veraz (or its agents or distributors) shall qualify and
act as importer of all Products sold, to the extent that such is
required under the laws of any jurisdiction where the Products are
sold;
5.5 Pay any and
all sales and use taxes, duties, fees, expenses and such other
similar charges, including interest and penalties thereon, levied
under any applicable law or regulation
6.
arising out of
or in connection with Veraz’s sale of Products to customers,
provided that nothing in this Section shall be interpreted
to mitigate ECI’s obligations under Sections 8
(Warranty, Epidemic Failure, Warranty Service and Post-Warranty
Support) and 13 (Indemnification);
5.6 Use
commercially reasonable efforts to obtain bank and performance
guarantees related to maintenance service and support that Veraz is
required to provide hereunder, solely to the extent required to
sell the Products to Veraz’s customers, and to use
commercially reasonable efforts to cancel existing guarantees and
take commercially reasonable actions to ensure that such
ECI-obtained guarantees are not called or otherwise
materialized;
5.7 Adopt
reasonable credit procedures with respect to the sale of Products
to third parties that take into account ECI’s credit
procedures and revenue recognition policies, as such procedures and
policies may be amended from time to time, with the cost of any
such procedures (such as, letters of credit or credit insurance
premiums) to be shared equally by ECI and Veraz;
5.8 Other than the
warranty contained in Section 8 hereof and the representations
and warranties contained in the standard agreement with
Veraz’s customers attached hereto as
Exhibit 5.8 , make no representations and
warranties that are different in any material respect to the
Products without the prior written consent of ECI;
5.9 Provide ECI
with (i) engineering data that is reasonably requested by ECI
for maintenance of bill of materials, including replacements,
drawings, quality requirements, technical specifications, standard
operation and test procedures; proposed test equipment, and
approved vendors list; (ii) (a) engineering support that is
reasonably necessary to help enable the manufacture of the
Products, to solve problems on all levels (i.e., component, card,
system), to develop replacement parts together with ECI,
provided that the parties agree that such development is
commercially reasonable and provided further that such parts
cannot be procured by ECI in accordance with Section 3.4 above
and to share the research and development labor costs of such
development in the same ratio of the Percentage of Customers
Revenue for the relevant year as set forth in Column A in
Section 9.1 below, to treat rejected parts, and to improve
test functions, (b) engineering services that is reasonably
necessary to improve Product manufacturability, and (c) support
that is reasonably necessary to help ECI comply with customer
engineering requests, such as fixing hardware and software bugs;
and (iii) sales order data, packing list accompanied with BPCS
order, specific instructions, customer name, date of delivery,
payment terms, and data required to calculate amounts to be paid to
the OCS (for both products and services), and (iv) the
additional information and support that ECI shall reasonably
request and require in order to manufacture the Products and
otherwise comply with ECI’s obligations to Veraz under this
Agreement, provided that, with respect to each of the
foregoing, ECI shall bear the costs incurred by Veraz for materials
or third party subcontractors directly related to the design or
manufacture of the Products;
5.10 Use
commercially reasonable efforts as ECI’s agent to collect
ECI’s DCME Receivables identified in
Exhibit 5.10 attached hereto and to provide ECI
monthly with a projected cash flow collection report, all in
coordination with ECI, such as use of collection agencies, if
reasonably required, for which Veraz shall be entitled to a
commission in the amount of ten percent (10%) of the amounts it
actually collects (with such commission to be increased to twenty
percent (20%) in respect of those DCME Receivables identified in
Exhibit 5.10 as being
7.
“Doubtful Debts” ), with Veraz to either arrange
for the direct payment to ECI by the debtor of the receivables or
for the transfer by Veraz to ECI of the receivables within ninety
(90) days after its receipt thereof;
5.11 Use
commercially reasonable efforts to successfully meet the overall
sales projections for all Products taken as a group, as set forth
in the Business Plan;
5.12 (a) Any
distribution of the Products through ECI’s regional business
units in the United Kingdom, Germany and France (each a
“RBU” ) and any required reimbursement of
expenses by Veraz to any such RBU will be pursuant solely to those
terms and conditions in Exhibits 5.12-Al, 5.12-A2,
5.12-A3 , respectively. Additional terms (if any) with
regard to the execution of the respective RBU agreements are set
forth in Exhibits 5.12-Al(a), 5.12-A2(a), 5.12-A3(a)
.
(b) In
connection with the distribution of Products through ECI’s
country business units (each a “CBU” ) that
Veraz chooses to use, unless otherwise agreed in a separate written
agreement executed by and between Veraz and an applicable CBU,
Veraz will (i) advance to each such CBU, on a monthly basis,
the amount of its estimated monthly DCME sales and marketing budget
as set forth in the CBU DCME Sales and Marketing Budget attached
hereto as Exhibit 5.12-B , which will be
reviewed and adjusted by mutual agreement of the parties on a
semi-annual basis, (ii) reimburse each such CBU on a monthly
basis for its fully-loaded actual costs as agreed in advance by the
parties, and reasonably incurred in connection with Veraz’s
Product sale and marketing expenses, as calculated in accordance
with ECI’s customary cost allocation method, within thirty
(30) days of receiving an invoice therefor, less the
applicable monthly advance, provided that Veraz shall not be
liable for any expenses related to excess space, any depreciation
or excessive rent costs or any past or historical liabilities of
the CBUs; (iii) pay all termination costs that are
attributable to the employment of Veraz approved CBU employees
dedicated to sales and marketing of the Products after the date of
execution of this Agreement and attributable to the period after
the date hereof, excluding in all cases any such costs relating to
employees whose actual or planned termination was made or
determined by ECI prior to the date of execution of this Agreement
and any such costs relating to Israeli expatriate Products
dedicated CBU employees; and (iv) be responsible for all taxes
and corresponding withholding payments arising from Veraz’s
receipt of local service revenues that Veraz retains without any
payment therefore to ECI hereunder; and
(c) Veraz
shall have the right to inspect the relevant parts of the books and
records of any CBU or RBU, as the case may be, upon reasonable
prior notice to such applicable CBU or RBU, during working hours
and in the presence of an ECI representative, all subject to the
confidentiality provisions contained in Section 16.8 below. In
the sale and marketing of Products, all dedicated employees of
CBUs, other than those of the Russian and Baltic CBU, shall act in
accordance with instructions from Veraz and such CBU employees, to
the extent fully dedicated to Veraz, shall receive sales incentives
solely from Veraz. Dedicated employees of the Russian and Baltic
CBU shall act in accordance with the provisions of
Exhibit 5.12-C . Unless otherwise agreed in a
written agreement between the parties, Veraz may terminate its
relationship with any CBU or RBU at any time upon prior written
notice of ninety (90) days and shall be liable upon
termination solely for reasonable termination costs incurred with
respect to those costs borne by Veraz as set forth
above;
8.
5.13 Maintain and
provide to ECI, within ten (10) business days of the end of
each calendar quarter, a detailed inventory of Products used in
field trials, demonstrations or sale or return transactions (
“SOR” ) and of sales of Products which have not
been recognized under its revenue recognition policy;
5.14 Provide to
ECI on a monthly basis a customer default report detailing customer
defaults of more than 60 days including the reasons for such
defaults, and a projected collection report for the next ninety
(90) days; and
5.15 Promptly
notify ECI in writing in the event that its sales projections for
the sales of any one of the DCME Product Lines (as hereinafter
defined), during any rolling calendar twelve (12)-month period fall
below Five Hundred Thousand U.S. Dollars (US $500,000), and upon
mutual agreement of the parties after taking into consideration
market conditions and other factors, issue a notice of
discontinuance to its customers for such DCME integrated systems
and equipment with a six (6) month period within which to make
a final purchase thereof. In this Agreement the term
“Product Lines” , shall mean either one of the
following: (a) DTX 240, (b) DTX 360, (c) QC 300, (d)
DTX 60, or (e) DTX 600.
6.1 Veraz will
provide ECI from time to time during the term hereof with Purchase
Orders in the form attached hereto as
Exhibit 6.1 for each Product covered by a
Forecast that Veraz chooses to order, for ECI’s acceptance.
Any Purchase Order may be submitted either by Veraz U.S. or Veraz
Israel, at Veraz’s sole discretion. Each Purchase Order shall
specify the quantity of Products to be provided in the relevant
period, the relevant price and the requested delivery schedules,
and shall be accompanied with a copy of the customer’s
purchase order. ECI shall accept any Purchase Order that is for a
number of products that does not exceed the amount of such Product
in the then most recent Forecast, provided, however, that in
no event shall ECI be required to accept a Purchase Order, if such
Purchase Order calls for the manufacture within a period of seven
(7) days or less, of a number of Products that is 20% or more
of the amount in the most recent Forecast accepted or deemed
accepted by ECI in accordance with the provisions of Section 2
above, divided by four (4).
6.2 The parties
agree to attempt to develop a commercially reasonable mechanism to
record Products in ECI’s inventory if, at the end of any
quarter, such Products have been shipped but have not been
recognized as a sale on the financial records of ECI or Veraz due
to “Staff Accounting Bulletin 101” accounting
requirements.
6.3 Veraz may, at
any time and without charge, cancel any Purchase Order or
reschedule the delivery of Products ordered under any Purchase
Order which it can substantiate as having been cancelled or
rescheduled in response to a cancellation or request for reschedule
received from a customer of Veraz. Any such request for reschedule
that is initiated by Veraz shall take into consideration the new
requested delivery date received from a customer of
Veraz.
6.4 In the event
of a failure by ECI to supply Products specified in any Purchase
Order pursuant to their requested delivery dates therein, and
provided further that such failure does not arise out of or
result from the fault of Veraz, then the amount due from Veraz to
ECI
9.
under this
Agreement with respect to such Products shall be reduced by any
reasonable price reduction or financial concession that Veraz is
contractually obligated to provide to any affected customer of
Veraz as the result of such delay in delivery. If Veraz anticipates
that it will be required to reduce its price or provide a financial
concession to a customer due to any such delay, it will inform ECI
promptly of such potential reduction in price or financial
concession. As to such matter, if ECI delivers Products to Veraz
after their requested delivery dates, but before their scheduled
date of delivery by Veraz to the affected customers, Veraz will use
a reasonable expedited delivery service to attempt to avoid any
such reduction in price or financial concession that it would
otherwise be required to pay to its affected customers. In such
event, ECI will reimburse Veraz for reasonable expedited charges
that Veraz incurs to expedite the delivery of Products to meet
their scheduled delivery dates with Veraz’s
customers.
6.5 ECI will make
a good faith effort to notify Veraz in the event that ECI
reasonably believes that there is or may be a materials or capacity
constraint that could negatively affect ECI’s ability to meet
any forecasted needs of Veraz under this Agreement (
“Supply Constraint” ). During any period of
Supply Constraint, ECI shall allocate the supply and del
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