Exhibit 10.29
RESOLUTION
AGREEMENT
This Resolution Agreement (this
“ Agreement ”) is entered into as of
October 3, 2006 (the “ Execution Date ”) by
and between (i) Alcatel Teletas Telekomunikasyon Endustri
A.S., a company duly existing pursuant to the laws of Turkey,
having its head offices at 1. Esensehir, Ataturk cad. No:4
Y.Dudullu Istanbul (“ Alcatel ”) and
(ii) Avici Systems Inc., a corporation duly existing pursuant
to the laws of the State of Delaware with offices at 101 Billerica
Avenue, North Billerica, MA 01862 (“ Avici ”)
(each of Avici and Alcatel a “ Party ” and
collectively, the “ Parties ”). The effective
date of this Agreement (the “ Effective Date ”)
shall be the Payment Date (as defined below).
Avici and Alcatel are parties to the
Supply Agreement executed by Alcatel on October 10, 2005 and
by Avici on October 25, 2005 (the Supply Agreement, together
with all Annexes and other attachments, exhibits and schedules
thereto and purchase orders thereunder, all as amended, the “
Supply Agreement ”). The Supply Agreement was entered
into in connection with the IP/MPLS Backbone Contract between
Alcatel and Customer (the IP/MPLS Backbone Contract, together with
all annexes, attachments, exhibits and schedules thereto, all as
amended, the “ Prime Contract ”). Capitalized
terms used in this Agreement and not otherwise defined in this
Agreement shall have the respective meanings specified in the
Supply Agreement.
In consideration of the mutual
covenants contained herein, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, Avici
and Alcatel agree as follows:
1. Credits and
Payments . In consideration of the termination of the Supply
Agreement and the release provided herein and the other agreements
of Alcatel under this Agreement, Avici shall (i) within five
business days after the Execution Date pay to Alcatel by wire
transfer in accordance with the wire instructions specified on
Exhibit A the First Payment Amount specified on Exhibit A (the date
on which such payment is credited to Alcatel’s bank shall be
referred to as the “ Payment Date ”, it being
agreed that Avici shall initiate such wire transfer within five
business days of the Execution Date but cannot guarantee that such
wire will be credited to Alcatel’s bank within such five
business days), and (ii) on the Effective Date reverse and
write-off all accounts receivable owed by Alcatel to Avici as of
the Effective Date. If (and only if) Alcatel causes the Required
Items (as defined below) to be returned to and received by Avici on
or before the thirtieth (30 th
) day after the
End Date (as defined below) in accordance with Sections 3 and 4 and
Exhibit B of this Agreement, Avici shall pay to Alcatel by wire
transfer in accordance with the wire instructions specified on
Exhibit A an additional amount equal to the Second Payment Amount
specified on Exhibit A within fifteen business days after Avici
receives the Required Items (the date on which the Second Payment
Amount is credited to Alcatel’s bank shall be the “
Final Payment Date ”). The “ Required
Items ” means the Delivered Equipment (excluding any
ancillary components of the Delivered Equipment that cannot be
returned in accordance with Exhibit B provided that the aggregate
original invoice price of such components not returned in
accordance with Exhibit B does not exceed 5% of the total original
invoice price of the Delivered Equipment), the Returned Licensed
Materials (except to the extent any Returned Licensed Materials are
permitted by Section 4(a) to be destroyed and are actually
destroyed) and the Licensed Materials Certification (each as
defined below).
2. Termination of Supply
Agreement . The Supply Agreement, and all rights,
representations, warranties, licenses, covenants, indemnitees and
obligations thereunder or that may be or come into existence as a
result of, in connection with or arising out of the execution,
delivery, performance or non-performance of the Supply Agreement
(including, without limitation any rights, representations,
warranties, licenses, covenants, indemnitees or obligations arising
under applicable law and any rights, representations, warranties,
licenses, covenants, indemnitees or obligations that would
otherwise survive the termination of the Supply Agreement, whether
under Section 22.7 thereof or otherwise) are hereby terminated
and of no further force or effect. After the Effective Date,
neither Avici nor Alcatel shall have any rights, representations,
warranties, licenses, covenants, indemnitees or obligations
(including, without limitation, any obligation to deliver or
provide products or services or to develop new features or any
warranty obligations) under or in connection with the Supply
Agreement. For the avoidance of doubt, Alcatel, and not Avici,
shall be responsible for sourcing, purchasing, installing,
providing and maintaining the equipment, products, services and
other deliverables required under the Prime Contract in place of
the equipment, products, services and other deliverables previously
provided or otherwise to have been provided under the Supply
Agreement. For the avoidance of doubt, the provisions of this
Section 2 shall not be construed to limit the express
obligations of the Parties under any provision of this Agreement,
including, without limitation, Section 3.
3. Delivered Equipment;
Transition Period . Prior to the Effective Date, Avici has
delivered under the Supply Agreement the equipment listed on
Exhibit B (the “ Delivered Equipment ”). During
the period from the Effective Date until August 15, 2007 (the
“ Transition Period ”) Alcatel shall use the
Delivered Equipment, and shall permit the Delivered Equipment to be
used, solely by Alcatel and Customer under the Prime Contract as
part of the transition by Alcatel to substitute equipment in place
of the Delivered Equipment. Alcatel shall use best efforts to
replace and remove the Delivered Equipment from use as soon as
reasonably practicable, but in any event Alcatel shall replace and
remove the Delivered Equipment from use by the end of the
Transition Period. Alcatel shall use its best efforts to cause the
Delivered Equipment to be returned to Avici in accordance with
Exhibit B within thirty (30) days after the date (such date,
the “ End Date ”) that is the earlier of
(i) the last day of the Transition Period and (ii) the
date on which the
Delivered Equipment is physically removed from
Customer’s network. From and after the date the Delivered
Equipment is returned to Avici, Avici
