Oem Agreement

Exhibit 10.31

CONFIDENTIAL TREATMENT REQUESTED

OEM AGREEMENT This OEM Agreement (the " Agreement" ) is made and entered into as of August 14th, 2006 (the " Effective Date" ), by and between ANDA Networks, Inc. , a Delaware Corporation with its principal place of business at 1274 Geneva Drive, Sunnyvale, California 94089 (" Supplier" ) and Ciena Corporation , a Delaware corporation with its principal place of business at 1201 Winterson Road, Linthicum, Maryland 21090 (together with its affiliates and subsidiaries, " Ciena" and, together with Supplier, the " Parties" and each individually a " Party" ). WHEREAS, Supplier designs, markets and sells certain telecommunications network equipment;

WHEREAS, Ciena designs, markets and sells certain telecommunications network equipment, and has the ability and resources to market, sell and support Supplier' s products; and WHEREAS, the Parties desire to provide certain of Supplier' s products to Ciena on a private-label OEM basis for Ciena to market, resell and support, subject to the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

1 DEFINITIONS

1.1 " Authorized Account" means an End User or other customer (or any specified subsidiary or operating unit thereof) at which Ciena is authorized to market, sell and support the Products under this Agreement.

1.2 " Documentation" means all documents provided with or in connection with the Products, including but not limited to user and installation manuals, product labeling, and marketing materials for the Products generally available from Supplier.

1.3 " End User" means any person or entity that purchases the Products from Ciena for its own internal use and not for resale or distribution.

1.4 " Exclusive Account" means an Authorized Account at which Ciena has obtained exclusive rights to promote, market, sell and support the Products including software and service contracts, either as set forth in Exhibit B or as appointed in accordance with the procedure set forth in Exhibit B. 1.5 " Products" means Supplier' s EtherReach99 2000, EtherReach99 3000 Series, EtherEdge99 4000 Series, EtherDAX99 6000, EtherCare99, and EtherView99 EMS products and related Software and all other products set forth on Exhibit A hereto, and any improvements, updates, upgrades or modifications to the same.

1.6 " Software" means the machine-readable object code form of any software developed and/or owned or licensed/sublicensed by Supplier and contained in the Products on Exhibit A hereto, and all revisions and copies thereof.

1.7 " Specifications" means the design, functional, component performance, system performance, compatibility and operational characteristics, form, fit, visual look and features of the Products and compliance and other applicable standards relating to the Products.

1.8 " Triggering Event" shall mean one or more of the following:

(a) Supplier' s ceasing to do business;

(b) Supplier' s liquidation or dissolution (including by reason of merger, reorganization or sale or all or substantially all of its assets, where the successor entity or its designee refuses or fails to assume all of Supplier' s obligations under this Agreement);

(c) the filing of a petition for bankruptcy, insolvency or receivership by or against Supplier, which petition, if involuntary, is not dismissed within 60 days after its filing; or

(d) Supplier' s material breach of its obligation to supply Products or provide maintenance or other support services under this Agreement (not due to any force majeure event or any act or omission by Ciena), which breach remains uncured for more than 60 days after receipt of a legal written notice from a duly authorized officer of Ciena. 2 APPOINTMENT AND BASIC RIGHTS AND OBLIGATIONS

2.1 Appointment as Authorized Reseller . Supplier hereby appoints Ciena, and Ciena hereby accepts appointment, as an authorized worldwide reseller to purchase Products for its own account and to market, demonstrate, distribute, sell and service Products, directly or indirectly, on an exclusive basis at the Exclusive Accounts and on a non-exclusive basis at the Authorized Accounts, subject to the terms and conditions of this Agreement. The parties hereby acknowledge and agree that Supplier shall not be held in breach of the above rights of exclusivity as they pertain to any of Supplier' s distribution agreements with Verizon, Bell Canada, Rogers and/or All stream in existence as of the Effective Date hereof. Accounts other than those listed in Exhibit B may be added and become authorized, and Authorized Accounts may become Exclusive Accounts, by separate written amendment by the Parties and in accordance with the procedures set forth in Exhibit B. Ciena shall use commercially reasonable efforts to promote the distribution of the Products. Ciena shall set the terms and conditions for resale of the Products, provided that such terms and conditions do not obligate Supplier beyond its obligations set forth in this Agreement without Supplier' s prior written consent.

2.2 Product Branding . Ciena shall promote, market, and sell the Products on a private-label basis, under Ciena' s trade names, trademarks, and logos. Ciena shall provide Supplier all necessary specifications for trademarks, logos, labeling, part numbering, and other desired product graphics, labeling and packaging requirements, and Supplier shall deliver the Products purchased under this Agreement in compliance with Ciena' s branding specifications. Ciena shall reimburse Supplier for non recurring costs for custom product branding, labeling and coding incurred by Supplier, which costs shall not exceed [*] (exclusive of any material changes to form, fit or function of the Products as defined in Telcordia GR-209 due to a specific request of an End User or by mutual agreement of the Parties).

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2.3 Installation, Maintenance, and Support . Ciena shall be responsible for installation, maintenance, and Level I support of the Products (as set forth in Exhibit D ) for its Authorized Accounts. In addition, no later than six months after shipment of the first Product to an Exclusive Account, Ciena shall be responsible for Level II support of the Products (as set forth in Exhibit D ) for such Exclusive Account. Ciena shall contract directly with End Users for the provision of maintenance and support services for the Products. Ciena agrees that Supplier shall not be obligated to provide any maintenance and support services to Ciena and End Users other than those maintenance and support services set forth in Exhibit D without Supplier' s prior written authorization. Supplier shall provide Level II and Level III customer support as set forth in Exhibit D .

2.4 Documentation . Supplier shall provide to Ciena all Documentation, and all material updates and revisions thereto, and any other Product documentation reasonably requested by Ciena to assist Ciena in performing its obligations under this Agreement. Ciena shall reimburse Supplier for non-recurring costs for private-label customization of Supplier Documentation incurred by Supplier, which costs shall not exceed [*] (except for material alterations to the content of the Documentation due to a specific request of an End User or by mutual agreement of the Parties). In the event the Parties develop special or customized Product documentation as required for one or more End Users, the Parties shall mutually agree on the content and share equally the costs of developing such special or customized Product documentation.

2.5 International Sales . Sales of the Products outside the United States shall be in compliance with all U.S. export control and other applicable laws. Ciena may generate foreign language translations of Supplier Product documentation at its expense, provided that, upon request from Ciena, Supplier shall provide foreign language translations of the Documentation, if any, that were or are drafted or commissioned by Supplier or its resellers or distributors in the ordinary course of business. Homologation and other compliance testing costs incurred after the Effective Date shall be paid initially by the party that first sells the Products into the subject country. Should there be additional homologation or certification costs based strictly upon the private label, Ciena shall bear those additional charges. If the other Party thereafter sells the Products into that country based on the prior homologation or compliance test, that party shall promptly reimburse the other party for one-half of the homologation/testing costs, unless otherwise agreed.

2.6 Customer Evaluation and Lab/Demo Equipment . Supplier will provide to Ciena, at the FCA point in accordance with Section 4.1, at no additional charge, with the following Products with related Software for Ciena or End User laboratory or demonstration purposes at both Ciena and End User locations, if and when the same become available by Supplier:


ANDA Product Name

Ciena

Product

Name

Description (Subscriber) Quantity

ER 2108/2118 CN 3202 8xT1 2x10/100 [*]

ER 2108e/211Se CN 3202 8xE1 2x10/100 [*]

ER 2200 CN 3220 1xDS3 2x10/100 [*]

ER 2200e CN 3220 1xE3 2x10/100

ER 4000 CN 3400 1xGE 1T(2) 1 port DS3 Ch, 8 port DS3 10/100 S, 100FX S 2 SCM, 2 AC power [*]

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Non-GA Products (Contingent upon BT Award):

ES 5020 CN 3520 2xSTM-1/4 ch 2xGE [*] CN 3208 8/4xT1/E1 4x10/100/1000 [*]

ER 2804 CN 3634 4xG.SHDSL 4x10/100/1000 [*]

ER 2428 CN 3112 2xGE 8x10/100, 2xFX [*]

ER 2212 CN 3222 2xDS3/E3 4x10/100/1000 [*]

ER 2408 PWE CN 3308 2xGE 8xT1, 8x10/100, 2x100FX [*]

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Ciena may purchase additional Products with related Software from Supplier for Ciena or End Users laboratory or demonstration purposes at both Ciena and End User locations at a [*] Supplier' s then-current list price. All demonstration and laboratory units must be used for end-user evaluation and testing functions and not for resale hereunder. Ciena shall have the option, at any time, to ship the Products and related Software back to Supplier, to be updated with all enhancements, updates, upgrades and additions to keep such Products current with Supplier revision levels and current technology. The Parties shall mutually agree upon the allocation of costs of (i) Product certification testing and laboratory charges assessed by End Users, and (ii) providing any additional Product for use as laboratory or demonstration equipment at Ciena' s facilities as requested by End Users.

2.7 Product Development . Supplier shall provide to Ciena, on a quarterly basis (or more frequently as deemed relevant by the Parties), standard Product development roadmaps as specified under Exhibit A and reports (including but not limited to any known risks associated with such developments) and Product marketing strategies. All information provided to Ciena shall be deemed to be " Confidential Information" of Supplier and shall be subject to the provisions of Section 15 herein, In the event that the Parties mutually agree to develop and deliver specific hardware or software features for an End User, issues relating to such specific features, including but not limited to delivery dates and allocation of costs and responsibilities, will be addressed in a separate amendment to this Agreement.

2.8 Ciena Audit Rights . Supplier shall make all commercially reasonable steps to achieve, at its option, either ISO 9000 or TL 9000 registration as soon as possible. Ciena shall have the right with prior written notice to Supplier of no less than 30 days, to inspect during normal business hours the manufacturing process, software development process and quality management system process with respect to the Products at Supplier' s facilities in order that Ciena may satisfy itself that Supplier' s processes and procedures meet specifications (or Supplier has made sufficient progress in achieving ISO 9000 or TL 9000 registration). After Supplier has achieved ISO 9000 or TL 9000 registration Ciena shall have the right to audit Supplier for compliance with these standards. Supplier agrees to develop corrective action plans to address any deficient processes and to use all commercially reasonable efforts to implement those corrective action plans within a reasonable, mutually agreed time frame. If all Supplier processes and procedures meet the above specifications, the costs of the audits shall be borne by Ciena. If Supplier' s processes and procedures are deficient in accordance with the above ISO 9000 or TL 9000 specifications, Supplier shall bear the cost of the audit.

2.9 Product Integration and Interoperability Testing . The Parties will jointly determine when and whether it is appropriate (i) to integrate their respective products (including but not limited to management and control functionality), and (ii) to conduct interoperability testing of their respective products. If it is determined that such integration and/or interoperability testing of products is appropriate, the Parties agree to enter into a separate written integration and/or interoperability agreement that will define the specific rights and obligations of the Parties.

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2.10 Training . Supplier shall provide Product training [*] to Ciena as follows: (i) upon execution of this Agreement, Product training for up to 12 Ciena customer support engineers at the Supplier facility; (ii) a train-the-trainer program for two Ciena instructors sufficient for Ciena to train its own personnel in providing Services for the Products, which program shall be conducted at a location mutually agreeable to the Parties; and (iii) sales training for up to eight Ciena personnel at the Supplier facility. Supplier shall provide an appropriate number of Products for use in such training. Supplier shall provide Ciena with training materials and related Documentation for the above at no charge, which materials may be duplicated by Ciena for internal purposes only; provided, however, that as part of the train-the-trainer program, Supplier shall provide Ciena with reproducible CD-ROM copies of all relevant course materials and related Documentation that may be duplicated by Ciena for delivery of training programs. If training is conducted at a location other than the Supplier facility, Ciena shall pay all reasonable travel and other expenses for the Supplier training personnel. Ciena may purchase additional training from Supplier [*] Supplier' s list price. 2.11 Development and License Agreement . The Parties shall enter into a separate development and license agreement, which shall cover any custom new product development and engineering work required to integrate Supplier' s existing or new products and technology within Ciena' s product family.

3 PURCHASE ORDERS; FORECASTS; DELIVERY INTERVALS

3.1 Purchase Orders . During the term of this Agreement, Supplier shall sell and ship to Ciena such Products as Ciena may order from time to time pursuant to this Agreement. Specific quantities of Products shall be ordered by Ciena by placement of purchase orders (each, a " Purchase Order" ) to Supplier. Each Purchase Order shall contain: (i) a reference to this Agreement; (ii) the identification of the Products being purchased; (iii) the quantity of Products to be purchased; (iv) the requested shipping destination and shipping date; and (v) any other special information required by this Agreement or by the circumstances of the Purchase Order. Supplier shall accept each such Purchase Order that is materially consistent with the terms and conditions of this Agreement, and shall confirm in writing its receipt of each Purchase Order within [*] following receipt thereof and shall be obligated to deliver on the applicable delivery date the quantity of each Product set forth in the Purchase Order on the terms set forth therein, subject to the terms of Section 3.4 of this Agreement. Notwithstanding the foregoing, in the event that Ciena provides written notice to Supplier in accordance with Section 11.2(b)(i) of this Agreement, Supplier shall have the right to hold any Purchase Order issued by Ciena thereafter until the date that the applicable material breach has been cured (except for non-cancelable Purchase Orders issued by Ciena, which must be accepted by Supplier in accordance with this Agreement).

3.2 Terms and Conditions . This Agreement shall govern all terms and conditions of purchase and sale with respect to Purchase Orders accepted by Supplier. In the event of any conflict between this Agreement and the pre-printed terms and conditions of any Purchase Order or acknowledgment, the terms of this Agreement shall control and no pre-printed terms shall apply. Each Purchase Order shall constitute a legally binding obligation respectively against the Parties upon acceptance by Supplier. Any additional conditions or modifications to an accepted Purchase Order shall require the written consent of both Parties.

3.3 Delivery Intervals . All Products will be delivered by Supplier to the FCA point within [*] after receipt of the Purchase Order. In the event an End User requests a shorter delivery interval, Supplier will use all commercially reasonable efforts to ship the Product(s) within such delivery interval. All specially manufactured Products shall be shipped on a mutually acceptable time frame. In the event Ciena

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requests accelerated delivery of Products and such accelerated delivery results in increased costs to Supplier, the Parties shall mutually agree upon the delivery schedule and Supplier may charge a premium, as mutually agreed with Ciena, for such accelerated delivery. Notwithstanding the foregoing, the Parties agree to negotiate in good faith a supply chain model, to be reflected in an amendment to this Agreement, that serves to reduce significantly the above-referenced delivery interval for the Products and that meets the business and financial requirements of both Parties.

3.4 Purchase Order Changes . Ciena may cancel, suspend, reschedule, reconfigure or otherwise materially modify all or any part of an outstanding Purchase Order at no charge, provided that Supplier receives written notice at least [*] prior to the scheduled date of delivery. In the case of rescheduling, any newly requested delivery date must be within [*] of the original scheduled delivery date and receive written agreement of Supplier. All other requests to materially modify a Purchase Order require written agreement of Supplier and may be subject to a restocking fee in the amount [*] of the purchase price of the affected Products. Ciena shall have no liability to Supplier with respect to any Purchase Order that Ciena cancels contemporaneously with its termination of this Agreement pursuant to Section 11.2(b) herein.

3.5 Electronic Data Interchange . Supplier shall use commercially reasonable efforts to implement, within 90 days of the Effective Date of this Agreement, sufficient systems and processes that will enable the Parties to exchange orders, payments, acknowledgements, invoices, remittance notices, and other records (" Data" ) electronically, in place of tangible documents, which Data will be exchanged in accordance with the Telecommunications Industry Forum EDI Guidelines for use of American National Standards Institute (ANSI) Accredited Standards Committee X12 transaction sets, unless the Parties mutually agree to a proprietary format or another standard (i.e., Extensible Markup Language (XML)). 4 DELIVERY; SHIPMENT; TITLE AND RISK OF LOSS

4.1 Shipment . Unless otherwise mutually agreed by the Parties, Products purchased hereunder (including spares and replacement parts) shall be shipped as follows: (i) for Products manufactured or located in the United States, FCA Supplier U.S. factory (Incoterms 2000), and (ii) for all other Products, FCA Hong Kong (Incoterms 2000). Ciena will provide reasonable instructions to Supplier to ensure proper shipment to each FCA point. Supplier shall not make partial shipments without the express written consent of Ciena. Unless otherwise agreed by the Parties, Ciena or its designee shall be the importer of record for all shipments. The quoted purchase prices for Products exclude all costs of freight, insurance, taxes, customs duties, VAT and similar charges for the transport of the Products to the specified destination, each of which will be paid by the applicable Party in accordance with the shipment term.

4.2 Packing . Supplier will pack and package the Products in accordance with its commercial standards and will load the same aboard the earner selected by Ciena at the FCA point. 4.3 Title and Risk of Loss . Title to Products (excluding Software, for which title does not pass to Ciena at any time), and risk of loss or damage to Products, shall pass from Supplier to Ciena upon delivery to the FCA point.

4.4 Late Deliveries . If Supplier determines that it is reasonably likely that it will not deliver all or any portion of the Products covered by a Purchase Order at the times designated therein, Supplier will immediately advise Ciena and make every reasonable effort to avoid late delivery. In the event that an End User is contractually entitled to receive liquidated damages or other penalties as a result of late

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deliveries of Products, the Parties shall address the allocation of costs with respect to such liquidated damages in a separate amendment to this Agreement.

5 PRICING; PAYMENT; ACCEPTANCE

5.1 Pricing . (a) Supplier' s list price and Ciena' s discount for each Product is set forth on Exhibit A hereto. The Parties acknowledge and agree that (i) Supplier' s list prices shall remain fixed for [*] from the Effective Date of this Agreement, and (ii) thereafter, Supplier may revise its list price(s) upon [*] advance written notice to Ciena, provided that any increase in list price shall result in a corresponding increase in Ciena' s discount for such Product(s) to ensure the same net transfer price to Ciena. Ciena shall have the right, in its discretion, to determine prices for which it sells Products to End Users. All pricing offered and payments made under this Agreement shall be in U.S. dollars. Ciena and Supplier may from time to time mutually agree to custom products and price lists applicable to specific End Users which will be appended to Exhibit A (" Custom Price Lists" ). The Custom Price Lists shall not be applicable to sales of Products to other End Users. The Custom Price List with regard to the joint proposal for [*] is attached hereto as Exhibit A-1 (the [*]. The Custom Price List with regard to the joint proposal for [*] is attached hereto as Exhibit A-2 (the [*]

(b) Supplier represents and warrants that all of the prices and discount structures and warranties granted to Ciena under this Agreement will be comparable or superior to the equivalent prices and discount structures and warranties granted to any other Supplier resellers and distributors under like or similar circumstances.

(c) Ciena and Supplier agree to work together and separately to determine areas in which the Parties can help effectuate cost reductions in the Products. In addition, upon reasonable verification that the pricing established hereunder will not allow Ciena to effectively compete in obtaining orders for the resale of Products to specific End Users, the Parties agree to negotiate, in good faith, and on a customer by customer basis, adjusted pricing that allows Ciena to competitively price the Products and maintain reasonable margins. 5.2 Taxes . Ciena shall pay all sales, use, value-added and other taxes, and any tariffs, customs duties, fees and other charges, imposed by any government authority and based on the value or amount of Products sold under this Agreement, with the exception of any taxes based on the net income of Supplier. In the event any such taxes, tariffs, duties, fees or charges are paid by Supplier, Ciena shall promptly reimburse Supplier upon receipt of invoice.

5.3 Invoicing and Payment . Supplier shall invoice Ciena for the aggregate purchase price of the Products upon acceptance of the Products, as defined in Section 5.4 below. Ciena shall pay to Supplier the full amount of any undisputed invoice or the undisputed portion of any disputed invoice within [*] calendar days after receipt of invoice.

5.4 Product Acceptance . In the event that, as a condition of sale of Products to an End User, Ciena is required to provide Products for First Office Application, Technology Introduction Process or similar testing and acceptance by such End User (e.g., first non-laboratory deployment in a network), such Products shall be deemed accepted by Ciena on the date the End User confirms that the Product complies with the Specifications and contractually accepts the Products. All other Products shall be deemed


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accepted by Ciena upon the earlier of (i) the date the End User confirms that the Products comply with the Specifications and contractually accepts the Products, or (ii) [*] calendar days after the date of delivery to the FCA point (provided that Supplier has not shipped the Products in advance of Ciena' s requested shipment date). Products for First Office Application, Technology Introduction Process, or similar testing and acceptance specifications shall be clearly marked on the Purchase Order. Ciena shall notify Supplier no later than 5 calendar days after End User confirmation of Product acceptance, if applicable.

6 SOFTWARE LICENSE

6.1 Software Right to Use License . Subject to the terms and conditions of this Agreement, Supplier hereby grants to Ciena and Ciena accepts a non-exclusive, non-transferable, fully paid up license to use, in object code form only, the Software (i) for the purpose of marketing, selling, demonstrating and supporting the Products with which such Software is provided by Supplier during the Term of this Agreement, and (ii) for the purpose of using, operating and, if applicable, supporting the Products on a perpetual basis. This license grant does not include any rights with respect to the source code form of the Software, including, without limitation, any right to modify or enhance the Software.

6.2 Right to Distribute Software . Notwithstanding anything herein to the contrary, Supplier further grants to Ciena a non-exclusive, non-transferable, fully paid up license to sublicense the right to use the Software to End Users solely for the purpose of using the Products with which the Software is provided by Supplier. Ciena shall provide to each End User the end user license agreement set forth in Exhibit E (or other, substantially similar license terms and conditions), and shall instruct each End User to return a signed copy of the same to Supplier.

6.3 Restrictions . Ciena shall not copy (except for archival or backup purposes), reverse engineer, decompile or disassemble the Software or incorporate in whole or any part in any other product or create derivative works based on all or any part of the Software, and Ciena shall not grant permission to any third party to do any of the foregoing. Ciena is not authorized to license others to reproduce or use any copies of the Software, except as expressly provided in this Agreement. Ciena will not remove or modify any copyright, trademark and other proprietary notices within or affixed to the Products.

6.4 Software and Technology Escrow . ...