Standard Terms and Conditions of Sale

The terms and conditions of this Purchase Agreement (“PA”) shall apply to the purchase of Products and Services by Customer from Calix.

1. Definitions.

“Calix Software” means all Software included under the Calix Advantage Program including Software embedded into Calix Products. “Software” means the computer programs in object code format, delivered with or embodied in any Product, and any error correction or modification thereof.

“Compass” means Software products included under the Compass program, excluding Calix Management Software (“CMS”) and software embedded into Calix Products

“CPE” means Products located at a residence or end user place of business, including without limitation, ONTs, associated cables and power supplies.

“Delivery Date” means the confirmed delivery date for Products as set forth in a PO acceptance.

“Documentation” means user manuals and written materials, in hard or electronic form, for the Products, as modified by Calix from time to time and made available to Customer.

“Intellectual Property Rights” or “IPR” means any and all rights throughout the world in or to any patents, copyrights, trademarks, trade secrets, mask works, or similar rights.

“Product” means Calix equipment, Calix Software and related Documentation sold to Customer under this PA.

“Purchase Order” or “PO” means an order for Products or Services submitted by Customer to Calix.

“Service(s)” means all services provided by Calix under this PA or a PO, including consulting, engineering, installation, maintenance, training, support, and repair

2. Term and Termination.

(a) Term. The term of the PA is 3 years from the Effective Date, unless terminated as set forth below. The PA will automatically renew for additional one-year terms, unless earlier terminated under this Section 2.

(b) Termination for Convenience. Either party may terminate this PA for any reason upon 30-days’ written notice. Termination or expiration shall not affect the obligations of either party under this PA for any PO previously executed.

(c) Termination for Cause. If either party breaches a material term of the PA and fails to cure within 30 days of written notice, the other party shall have the right to terminate the PA. In case of Customer’s breach of a payment obligation, Calix shall have the right to immediately terminate this PA and shall not be obligated to provide any further Products or Services of any kind under this PA – including without limitation access to the Calix Technical Assistance Center (“TAC”), warranty services, and Calix Advantage services – until such Customer payment obligation has been satisfied in full. Either party may immediately terminate this PA, on written notice, if the other party becomes the subject of a petition in bankruptcy or any proceeding relating to insolvency, receivership, liquidation or assignment for the benefit of creditors.

(d) Effect of Termination. In the event a party terminates the PA under Section 2, (i) the PA shall apply to all Products shipped prior to the termination date, and (ii) orders for Products which have not been shipped as of the termination date may be canceled at the option of the terminating party.

3. Sale of Product. Calix agrees to sell and Customer agrees to purchase Products for which POs are placed by Customer and accepted by Calix as set forth below. This PA is non-exclusive. Products are sold for use by Customer and its end users only, and may not be resold to third parties. Calix customer support services shall be extended only to Products purchased directly from Calix or its specifically authorized resellers.

4. Forecasts. Within five days of the beginning of each calendar quarter, Customer shall provide Calix with a written good faith rolling 12- month forecast (“Forecast”) which sets forth projected demand for Products by Customer for each of the 12 months following delivery of such Forecast. Forecasts are provided for informational purposes and shall not create any binding obligations on behalf of either party.

5. POs. Customer shall order Products by issuing written and signed POs. No PO shall request a Delivery Date sooner than Calix’s standard lead time for the Products ordered. Calix shall have the right, in its sole discretion, to accept or reject POs, and no PO shall be binding until accepted by Calix in writing. Each PO will set forth: the Product(s) and quantities desired, requested delivery date, ship-to location(s), billing address, and any delivery instructions. A PO constitutes a firm purchase obligation of Customer, provided that Customer may cancel any PO prior to its shipping date, subject to payment of a 15% cancellation fee if canceled fewer than 20 business days before ship date. POs cannot be cancelled on or after the scheduled shipping date.

6. Delivery. Calix shall use commercially reasonable efforts to meet the Delivery Date for Products. Time of any delays and holds resulting from Customer activity or inactivity shall be added to the Delivery Date. Should Calix be unable to make shipment of a Product by the Delivery Date, it shall inform Customer as soon as the delay is reasonably identified and advise of the new Delivery Date as soon as it is available. Calix may deliver Products in partial shipments and such partial shipments may be invoiced individually.

7. Acceptance. All Products shall be deemed accepted upon delivery. Any return of unused Products must be approved in advance by Calix and be received at Calix within 30 days of original delivery date to Customer. Product returns are subject to a 15% restocking fee.

8. Prices, Shipping and Payment Terms.

(a) Prices. Customer shall pay the Product and Service prices provided to Customer by Calix in writing from time to time. Calix shall have the right to revise prices upon 30 days’ written notice to Customer. Revised prices shall apply to all POs submitted after the effective date of the revision.

(b) Shipping and Taxes. All prices are exclusive of shipping, insurance and installation charges, all of which are Customer’s sole responsibility. Prices are exclusive of all sales, use, excise, value added, withholding and other taxes, and all customs duties and tariffs. Such charges will be added to the price or subsequently invoiced to the Customer. In the event Calix is required to pay any such tax, duty or charge, Customer will promptly reimburse Calix.

(c) Payment/Financing. Calix may determine credit terms on a per-PO basis, and may change or withdraw credit terms at any time in its sole discretion. Unless otherwise specified in the invoice, all payments shall be made in US$ net 30 days from the date of invoice. Amounts not paid when due will accrue interest at the greater of 1.5% per month, or the maximum allowed by law. If any payment is more than 30 days overdue, Calix shall have the right to suspend performance under this PA, including without limitation all warranty, support, and Calix Advantage services, until all payments are made current. Customer shall pay all costs (including reasonable attorneys’ fees) incurred by Calix in connection with collection of late payments. Each accepted PO is a separate, independent transaction, and Customer has no right of set-off against other POs or other transactions with Calix.

(d) Security Interest. Customer grants Calix a security interest in the Products in the amount of any unpaid balance of purchase price until paid.

9. Title/Risk of Loss. All shipments are Incoterms 2010 EXW Calix’s designated manufacturing facility, and title and risk of loss will pass to Customer when Calix places the Products at the disposal of the carrier. The carrier shall be deemed Customer’s agent, and any claims for damages in shipment must be filed with the carrier. Calix is authorized to designate a carrier under Calix’s standard shipping practices.

10. IPR. Calix and its licensors own and retain all rights to all IPR embodied in the Products. Calix at no time waives or assigns any rights or ownership to any IPR, and Customer shall not contest the ownership of any IPR.

11. Software License.

(a) For all Calix Software, Calix grants Customer a non-exclusive, non-transferable, non-sublicensable license to use such Software solely for Customer’s business purposes. Customer shall not, and shall not authorize any third party to, (i) transfer, copy, modify or distribute the Software, (ii) decompile, reverse engineer or otherwise gain access to Calix Software source code, or unbundle embedded Software from any Product, or (iii) remove or alter any copyright or trademark notice. Customer shall not modify or copy any Product Documentation. Any reference in this PA to purchase or sale of Calix Software means the acquiring or granting of this license. Customer acknowledges that except for the above license, Calix retains all right, title and interest in and to the Software. If any derivative work is created by Customer from the Software, Calix or its licensors shall own all right, title and interest in such derivative work(s).

(b) Restrictions on Use. Customer shall not (i) permit any other entity or third party to access or use the services under the Calix Advantage Program, (ii) rent or lease Software provided under the Calix Advantage program, or (iii) use such Software for third-party training or time-sharing purposes.

(c) Termination of Compass and CMS Software License. Upon any termination or expiration of the PA, Customer shall, at Calix’s option, either return to Calix or destroy the Compass and CMS Software, Documentation and all copies, and shall promptly provide Calix a written certification of destruction executed by an officer of Customer. Calix shall have the right to audit compliance with these requirements.

(d) Audit Rights. Calix reserves the right to audit Customer’s use of the services under the Calix Advantage Program upon five-days’ notice, but no more frequently than twice a year. If Calix finds that Customer is not using the services under the Calix Advantage Program in accordance with this Agreement, Customer shall reimburse Calix for the cost of the audit.

12. Calix Advantage Program.

Purchase of Calix Advantage Program services entitles Customer to:

(a) CMS. A license (under the terms of Section 11(a), above) to use CMS;

(b) Upgrades. All upgrades, updates and new releases of Calix Software, made generally available to other Software licensees; and

13. Indemnity.

(a) Each party shall defend, indemnify and hold harmless the other party, its officers, directors and employees against any claim, suit or proceeding (“Claim”) brought against the other Party for damages resulting from the negligence or willful misconduct of the defending party.

(b) Calix will defend, indemnify and hold harmless Customer against any third party action alleging that a Product infringes a US patent or copyright, and Calix shall pay all settlements, final judgments, fees and costs in connection with such action. If any Product, or part thereof, becomes, or in Calix’s opinion may become, the subject of an infringement claim, Calix may, at its option: (i) procure for Customer the right to continue using the Product, (ii) modify or replace the Product with substantially equivalent non-infringing products, or (iii) require return of the Product and refund Customer a pro-rata portion of the purchase price of the Product based on a three-year straight line depreciation. This Section 13(b) states the entire liability of Calix for any infringement of IPR.

(c) Calix shall have no indemnification obligations with respect to any third party action alleging that (i) use of any Product in combination with products not supplied by Calix, or (ii) any service or process using any Product infringes any third party IPR. In such event Customer shall defend, indemnify and hold harmless Calix against such action, and pay all settlements entered into, and all final judgments, fees and costs awarded in connection with such action.

(d) Each party’s indemnification obligations are subject to the indemnified party (i) notifying the indemnifying party promptly in writing of such action, (ii) giving the indemnifying party exclusive control and authority over the defense or settlement of such action, and (iii) providing all reasonable assistance to the indemnifying party (at the indemnifying party’s expense).

14. Product Warranty.

(a) Calix warrants that for the period specified below (“Warranty Period”), Products will be free from material defects in materials and workmanship and will conform to Calix’s specifications in effect as of the date of manufacture. With respect to Calix Software defects, Calix’s sole obligation is to use commercially reasonable efforts to: provide corrected Calix Software, communicate a workaround, or provide another remedy which enables Customer to achieve substantially the same functionality as could be obtained without the defect. During the Term, the Calix Software warranty applies solely to Calix Software within two major releases of the most current for that Product. The limited warranty terms of this Section 14(a) extend only to Customer as original purchaser.

(b) The above warranty shall not apply if the Product (i) has been subjected to abuse, misuse, accident, improper testing, improper storage, or other use contrary to Calix instructions, (ii) has been repaired or modified by persons other than Calix, (iii) has not been installed, operated, repaired and maintained in accordance with its documentation, (iv) has failed due to an act of God, including without limitation fire, flood, tornado, earthquake, hurricane or lightning or (v) has been used with any third-party software or hardware not previously approved in writing by Calix. In addition, the above warranty shall not apply to Products (A) marked or identified as “sample,” (B) loaned or provided at no cost, (C) which have had their serial numbers or other identifying marks removed or altered, or (D) sold “as is”.

(c) If during the Warranty Period (i) Calix is notified promptly in writing upon discovery of a material breach of the above warranty, including a detailed description of the alleged breach, (ii) the Product is returned, shipping prepaid, to a designated manufacturing facility under Calix’s then-current return procedures, and (iii) Calix determines that the Product is defective and not subject to any Section 14(b) exception, then, as Customer’s sole remedy and Calix’s sole obligation, Calix will, at its option, repair or replace the Product without charge. Any Product repaired or replaced under warranty shall have warranty coverage for the longer of 90 days from return or the remaining Warranty Period. Replacement parts used in the repair of Products may be new or reconditioned.

(d) Calix makes no additional warranty, express, implied or statutory, for any product, including without limitation any implied warranty of merchantability, fitness for a particular purpose, non-infringement, or arising from usage of trade, course of performance, or dealing.

(e) Calix does not warrant any third party hardware or software products provided under this PA. Customer’s sole remedy with respect to third party products shall be under the original manufacturer’s or licensor’s warranty, if any.

15. Road Maps. Under no circumstances shall provision to Customer of any product road maps, or other documents or oral presentations of any kind concerning Calix’s future product development plans, be construed as a binding commitment to provide any such new products, features or enhancements to Customer on any specific timetable or at all.

16. Limitation of Liability. In no event shall Calix be liable to customer or a third party for costs of procuring substitute products or services, lost profits, data or business, or any indirect, special, incidental, exemplary or consequential damages of any kind arising out of or in connection with this PA, however caused and on any theory of liability. Calix’s total cumulative liability under this PA, in contract, tort, strict liability or otherwise, shall in no event exceed the amounts received by Calix from customer in the 12 months prior to the date the cause of action arose. The above limitations shall apply even if Calix has been advised of the possibility of such damages, and regardless of any failure of essential purpose of any limited remedy.

17. Confidentiality. Each party agrees to hold in confidence information disclosed by the other party which is designated in writing as confidential (“Confidential Information”). Confidential Information disclosed orally must be confirmed in writing by the Discloser as Confidential Information within 30 days after disclosure. Each party agrees to: (a) protect the confidentiality of the Confidential Information; (b) refrain from using the Confidential Information except as contemplated by this PA; and (c) not disclose Confidential Information to any third party. Confidential Information shall not include information which: (i) was in the party’s possession or known to it, without restriction, at the time of disclosure, as proven by files then in existence; (ii) is or becomes public knowledge through a source other than, and without fault of, the party; (iii) is independently developed without reference to any Confidential Information; (iv) is or becomes available from a third-party source without breach of any obligation of confidentiality; (v) is disclosed with the other party’s prior written approval; or (vi) is disclosed under order or requirement of a court, administrative agency, or governmental body, provided however, that the disclosing party shall (A) provide prompt notice to the other party to enable that party to seek to prevent or restrict such disclosure, and (B) disclose only that portion of Confidential Information required to comply with the order or requirement. Neither party shall disclose any terms of this PA to any third party without prior written consent of the other party; however, either party may disclose the terms of this PA: (i) to legal counsel; (ii) in confidence, to accountants, banks, and finance sources and their advisors solely for purposes of securing financing; (iii) in connection with enforcement of this PA; or (iv) in confidence, in connection with an actual or proposed merger or acquisition, solely for use in the due diligence investigation in connection with such transaction.

18. Survival. The provisions of Sections 1, 7, 8(d), 10 – 19 of this PA, and all payment obligations incurred during the term, shall survive the expiration or termination of this PA for any reason. The provisions of Section 17 shall survive the expiration or termination of this PA for five years from date of disclosure. All other rights and obligations of the parties shall cease upon termination of this PA.

19. Miscellaneous.

(a) Severability. If any portion of this PA is held invalid, it shall not affect the validity of the remaining portions.

(b) Waiver. Failure of either party to exercise a right granted or to require performance of any term of this PA, or waiver by either party of a breach of this PA shall not prevent subsequent exercise or enforcement of, or be deemed a waiver of any subsequent breach of, the same or other term of this PA.

(c) No Joint Venture or Agency. Nothing in this PA shall create a joint venture, partnership, or similar arrangement between the parties. No party is authorized to act as agent for the other party except as expressly stated in this PA.

(d) Export Control. Customer acknowledges that Products purchased and licensed under this PA may be subject to restrictions imposed by the US Export Administration Act and regulations. Customer agrees that it will not export or re-export any Products purchased, or Calix Software licensed, under this PA into any country in violation of such Act or any other laws, rules or regulations of any country, state or jurisdiction.

(e) Notices. All notices required or permitted under this PA will be in writing and will be effective upon confirmed receipt by hand delivery, courier, mail, or email to the address set forth above.

(f) Assignment. Customer may not assign this PA, its rights or obligations, voluntarily, by operation of law or by change of control, without written consent of Calix. Calix may assign this PA to a successor by way of merger, acquisition or sale of all or substantially all of its assets, and may assign all or part of the right to payments under this PA.

(g) Governing Law and Venue. This PA shall be construed under the laws of the State of California, without regard to its conflicts of laws provisions. Customer and Calix consent to the exclusive jurisdiction of, and venue in, the state and federal courts within San Francisco County, California.

(h) Force Majeure. Calix shall not be responsible for any failure to perform or delay attributable to any cause beyond its reasonable control, including but not limited to acts of God, government actions, war, civil disturbance, sabotage, labor disputes, failure or delay in delivery by Calix’s suppliers or subcontractors, transportation difficulties, shortage of energy, raw materials or equipment, or Customer’s fault or negligence. In the event of any such delay the Delivery Date shall, at the request of Calix, be deferred for a period equal to the time lost by reason of the delay.

(i) Entire Agreement and Modifications. This PA supersedes all prior communications, transactions, and understandings, oral or written, and constitutes the entire agreement between the parties regarding its subject matter. The terms of this PA shall override any conflicting terms contained in any PO, quote, acceptance, or other document. No modification, addition, deletion or waiver of any term or condition of this PA shall be binding on either party unless in writing signed by an authorized representative of such party.

(j) Counterparts. This PA may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one agreement. The Parties agree that signatures delivered by fax, scan, email or other electronic means shall be considered original signatures for all purposes under this Agreement.