<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 28, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
PACKETEER, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 7373 77-0420107
(STATE OF INCORPORATION) (PRIMARY STANDARD INDUSTRIAL (INTERNAL REVENUE SERVICE
CLASSIFICATION CODE NUMBER) EMPLOYER IDENTIFICATION NUMBER)
</TABLE>
10495 N. DE ANZA BOULEVARD
CUPERTINO, CALIFORNIA 95014
(408) 873-4400
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF THE
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
CRAIG W. ELLIOTT
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PACKETEER, INC.
10495 N. DE ANZA BOULEVARD
CUPERTINO, CALIFORNIA 95014
(408) 873-4400
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
WARREN T. LAZAROW NEIL WOLFF
ARMANDO CASTRO YOICHIRO TAKU
VAHE H. SARRAFIAN JOHN SASAKI
ELIZABETH A. R. YEE WILSON SONSINI GOODRICH & ROSATI
BROBECK, PHLEGER & HARRISON LLP PROFESSIONAL CORPORATION
TWO EMBARCADERO PLACE 650 PAGE MILL ROAD
2200 GENG ROAD PALO ALTO, CALIFORNIA 94304
PALO ALTO, CALIFORNIA 94303 (650) 493-9300
(650) 424-0160
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, please check the
following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [X]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [X]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
MAXIMUM MAXIMUM
TITLE OF SHARES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED(1) PER SHARE PRICE REGISTRATION FEE(2)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock, $0.001 par value
per share................... 4,600,000 $15.00 $69,000,000 $19,182
- ------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes 600,000 shares of common stock issuable upon exercise of the
underwriters' over-allotment option.
(2) $17,904 already paid.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INCORPORATION BY REFERENCE
The contents of the Registration Statement on Form S-1, as amended (File
No. 333-79077) filed by Packeteer, Inc. and declared effective July 27, 1999 are
hereby incorporated by reference.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUSITEM 13. OTHER EXPENSES OF ISSUANCE AND
DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by Packeteer in connection with
the sale of Common Stock being registered. All amounts are estimates except the
SEC registration fee and the NASD filing fees.
<TABLE>
<S> <C>
SEC Registration Fee........................................ $ 19,182
NASD Filing Fee............................................. 7,400
Nasdaq National Market Listing Fee.......................... 66,710
Printing and Engraving Expenses............................. 175,000
Legal Fees and Expenses of Packeteer........................ 400,000
Accounting Fees and Expenses................................ 350,000
Blue Sky Fees and Expenses.................................. 5,000
Transfer Agent Fees......................................... 8,000
Miscellaneous............................................... 18,708
----------
Total..................................................... $1,050,000
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnification to
directors and officers in terms sufficiently broad to permit such
indemnification under certain circumstances for liabilities (including
reimbursement for expenses incurred) arising under the Securities Act of 1933,
as amended (the "Securities Act"). Packeteer's Bylaws provide for mandatory
indemnification of its directors and officers and permissible indemnification of
employees and other agents to the maximum extent permitted by the Delaware
General Corporation Law. Packeteer's Certificate of Incorporation provides that,
subject to Delaware law, its directors shall not be personally liable for
monetary damages for breach of the directors' fiduciary duty as directors to
Packeteer and its stockholders. This provision in the Certificate of
Incorporation does not eliminate the directors' fiduciary duty, and in
appropriate circumstances equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Delaware law. In addition,
each director will continue to be subject to liability for breach of the
director's duty of loyalty to Packeteer or its stockholders for acts or
omissions not in good faith or involving intentional misconduct, for knowing
violations of law, for actions leading to improper personal benefit to the
director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. Packeteer has entered
into indemnification agreements with its officers and directors, a form of which
is filed as Exhibit 10 to this Registration Statement (the "Indemnification
Agreements"). The Indemnification Agreements provide Packeteer's officers and
directors with further indemnification to the maximum extent permitted by the
Delaware General Corporation Law. Reference is also made to Section 6 of the
Underwriting Agreement contained in Exhibit 1.1 hereto, indemnifying officers
and directors of Packeteer against certain liabilities, and Section 3.7 of the
Amended and Restated Investors' Rights Agreement contained in Exhibit 4.2
hereto, indemnifying certain of Packeteer's stockholders, including controlling
stockholders, against certain liabilities.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since January 25, 1996, Packeteer has issued and sold the following
securities:
1. Packeteer issued and sold 4,788,050 shares of its Common Stock to
employees and consultants for an aggregate purchase price of $1,064,820
pursuant to the exercise of options under its 1996 Equity Incentive Plan
(Exhibit 10.8).
II-1
<PAGE> 4
2. On February 14, 1996 and April 26, 1996, Packeteer issued 2,800,000
shares of its Series A Preferred Stock, for an aggregate purchase price
of $700,000 to several investors.
3. On September 12, 1996 and October 4, 1996, Packeteer issued and sold an
aggregate of 4,821,860 shares of its Series B Preferred Stock for an
aggregate purchase price of $4,821,860 to several investors.
4. On June 19, 1997 and July 18, 1997, Packeteer issued and sold an
aggregate of 2,216,320 shares of its Series C Preferred Stock for an
aggregate purchase price of $4,432,640 to several investors.
5. On April 16, 1998 and July 15, 1998, Packeteer issued and sold an
aggregate of 2,552,821 shares of its Series D Preferred Stock for an
aggregate purchase price of $10,058,115 to several investors.
6. On June 3, 1997, Packeteer issued warrants to purchase 42,000 shares of
its Series B Preferred Stock, at an exercise price of $1.00 per share
and on June 16, 1998 Packeteer issued warrants to purchase 15,863 shares
of its Series D Preferred Stock, at an exercise price of $3.94 per
share, to Comdisco Inc. in connection with an equipment leasing
transaction.
7. On January 21, 1999, in connection with a subordinated loan and security
agreement, Packeteer issued warrants to purchase 97,765 shares of its
Series D Preferred Stock, at an exercise price of $3.58 per share, to
Comdisco Inc.
8. On May 24, 1999, Packeteer issued warrants to purchase 45,000 shares of
Series D Preferred Stock at an exercise price of $6.25 per share, to
Meier Mitchell.
The issuances described in paragraph 1 were deemed exempt from registration
under the Securities Act in reliance upon Rule 701 promulgated under the
Securities Act. The issuances of the securities described in paragraphs 2
through 7 were deemed to be exempt from registration under the Act in reliance
on Section 4(2) of the Act as transactions by an issuer not involving any public
offering. In addition, the recipients of securities in each such transaction
represented their intentions to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof and
appropriate legends were affixed to the share certificates issued in such
transactions. All recipients had adequate access, through their relationships
with Packeteer, to information about Packeteer.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The exhibits and schedule listed in the Exhibit Index and Schedule are
filed as part of this Registration Statement.
(a) EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- -------- -------------
<S> <C>
1.1** Form of Underwriting Agreement by and among the Registrant,
BancBoston Robertson Stephens Inc., Bear, Stearns & Co. Inc.
and Dain Rauscher Wessels, a division of Dain Rauscher
Incorporated.
3.1** Registrant's Amended and Restated Certificate of
Incorporation.
3.2** Registrant's Amended and Restated Bylaws.
4.1** Form of Registrant's Specimen Common Stock Certificate.
4.2** Amended and Restated Investors' Rights Agreement, among the
Registrant and the investors and founders named therein,
dated as of April 16, 1998.
5.1** Legal Opinion of Brobeck, Phleger & Harrison LLP, counsel
for the Registrant.
10.1** Lease Agreement between Packeteer and Eldon R. Hoffman dated
August 25, 1997.
10.2+ OEM Agreement between Packeteer and ADC Telecommunications,
Inc., dated December 17, 1998.
10.3+** Reseller Agreement between Packeteer and Alcatel Business
Systems, dated May 7, 1999.
</TABLE>
II-2
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- -------- -------------
<S> <C>
10.4** Loan and Security Agreement between Packeteer and Silicon
Valley Bank, dated January 1, 1999.
10.5** Export-Import Bank Loan and Security Agreement between
Packeteer and Silicon Valley Bank, dated January 19, 1999.
10.6** Subordinated Loan and Security Agreement between Packeteer
and Comdisco, Inc., dated January 21, 1999.
10.7** Master Lease Agreement between Packeteer and Comdisco, Inc.,
dated June 3, 1997.
10.8** Registrant's 1996 Equity Incentive Plan.
10.9** Registrant's 1999 Stock Incentive Plan.
10.10** Registrant's 1999 Employee Stock Purchase Plan.
10.11** Form of Indemnity Agreement entered into by Registrant with
each of its executive officers and directors.
10.12+** Loan and Security Agreement between Packeteer and MMC/GATX
Partnership No. 1 dated May 20, 1999.
10.13+ OEM Agreement between Packeteer and Lucent Technologies,
Inc. dated June 25, 1999.
10.14+ OEM Agreement between Packeteer and Adtran, Inc. dated June
29, 1999.
21.1** Subsidiaries.
23.1 Consent of Independent Auditors.
23.2** Consent of Counsel (see Exhibit 5.1).
24.1** Power of Attorney.
27.1** Financial Data Schedule.
</TABLE>
- -------------------------
** Previously filed.
+ Confidential treatment has been requested as to portions of this exhibit
pursuant to an application for confidential treatment.
ITEM 17. UNDERTAKINGS
Packeteer hereby undertakes to provide to the Underwriters at the closing
specified in the Underwriting Agreement, certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of Packeteer
pursuant to the Delaware General Corporation Law, the Certificate of
Incorporation or the Bylaws of Packeteer, Indemnification Agreements entered
into between Packeteer and its officers and directors, the Underwriting
Agreement, or otherwise, Packeteer has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by Packeteer of expenses incurred or paid by a director, officer, or
controlling person of Packeteer in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, Packeteer will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of Prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of Prospectus filed by Packeteer pursuant to Rule 424(b)(1) or
II-3
<PAGE> 6
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective; and
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new Registration Statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-1 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cupertino, State of California, on this 28th day of
July, 1999.
PACKETEER, INC.
By: /s/ DAVID YNTEMA
---------------------------------------
David Yntema
Chief Financial Officer and Secretary
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the persons whose signatures
appear below, which persons have signed such Registration Statement in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* President and Chief Executive July 28, 1999
- ---------------------------------- Officer (Principal Executive
Craig Elliott Officer) and Director
/s/ DAVID YNTEMA Chief Financial Officer and July 28, 1999
- ---------------------------------- Secretary (Principal Financial and
David Yntema Accounting Officer)
* Chief Technical Officer and July 28, 1999
- ---------------------------------- Director
Robert Packer
* Vice President, Engineering, July 28, 1999
- ---------------------------------- Chief Operating Officer
Brett Galloway and Director
* Director July 28, 1999
- ----------------------------------
Steven Campbell
* Director July 28, 1999
- ----------------------------------
Joseph Graziano
* Director July 28, 1999
- ----------------------------------
Peter Morris
</TABLE>
II-5
<PAGE> 8
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
* Director July 28, 1999
- ----------------------------------
William Stensrud
By: /s/ DAVID YNTEMA
- ----------------------------------
David Yntema
Attorney-in-fact
</TABLE>
II-6
<PAGE> 9
Exhibit Index
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT TITLE
- ------- -------------
<S> <C> <C>
1.1** Form of Underwriting Agreement by and among the Registrant,
BancBoston Robertson Stephens Inc., Bear, Stearns & Co. Inc.
and Dain Rauscher Wessels, a division of Dain Rauscher
Incorporated.
3.1** Registrant's Amended and Restated Certificate of
Incorporation.
3.2** Registrant's Amended and Restated Bylaws.
4.1** Form of Registrant's Specimen Common Stock Certificate.
4.2** Amended and Restated Investors' Rights Agreement, among the
Registrant and the investors and founders named therein,
dated July 15, 1998.
5.1** Legal Opinion of Brobeck, Phleger & Harrison LLP, counsel
for the Registrant.
10.1** Lease Agreement between Packeteer and Eldon R. Hoffman dated
August 25, 1997.
10.2+ OEM Agreement between Packeteer and ADC Telecommunications,
Inc., dated December 17, 1998.
10.3+** Reseller Agreement between Packeteer and Alcatel Business
Systems, dated May 7, 1999.
10.4** Loan and Security Agreement between Packeteer and Silicon
Valley Bank, dated January 1, 1999.
10.5** Export-Import Bank Loan and Security Agreement between
Packeteer and Silicon Valley Bank, dated January 19, 1999.
10.6** Subordinated Loan and Security Agreement between Packeteer
and Comdisco, Inc., dated January 21, 1999.
10.7** Master Lease Agreement between Packeteer and Comdisco, Inc.,
dated June 3, 1997.
10.8** Registrant's 1996 Equity Incentive Plan.
10.9** Registrant's 1999 Stock Incentive Plan.
10.10** Registrant's 1999 Employee Stock Purchase Plan.
10.11** Form of Indemnification Agreement entered into by Registrant
with each of its executive officers and directors.
10.12+** Loan and Security Agreement between Packeteer and MMC/GATX
Partnership No. 1 dated May 20, 1999.
10.13+ OEM Agreement between Packeteer and Lucent Technologies,
Inc. dated June 25, 1999.
10.14+ OEM Agreement between Packeteer and Adtran, Inc. dated June
29, 1999.
21.1** Subsidiaries.
23.1 Consent of Independent Auditors.
23.2** Consent of Counsel (see Exhibit 5.1).
24.1** Power of Attorney (see page II-6).
27.1** Financial Data Schedule.
</TABLE>
- -------------------------
** Previously filed.
+ Confidential treatment has been requested as to portions of this exhibit
pursuant to an application for confidential treatment.
<PAGE> 1
PACKETEER, INC.
OEM AGREEMENT
AGREEMENT NO. 2080
THIS OEM AGREEMENT (the "Agreement") is entered into as of this 17 day of
December, 1998 (the "Effective Date"), by and between PACKETEER, INC., a
Delaware corporation having its principal place of business at 10495 N. De Anza
Blvd., Cupertino, CA 95014 (together with any Affiliates, "Packeteer"), and ADC
TELECOMMUNICATIONS, INC., a Minnesota corporation having its principal place of
business at 12501 Whitewater Drive, Minnetonka, MN 55343 (together with any
Affiliates, "ADC").
RECITALS
Packeteer is engaged in the design and manufacture of certain products,
incorporating both hardware and software elements, which products are utilized
in the allocation of bandwidth on wide area network access lines, and related
products.
ADC is engaged in the design and manufacture of certain products,
incorporating both hardware and software elements, which products are utilized
in networks.
ADC desires to port Packeteer's software to ADC's platform, and to
incorporate additional ADC software and hardware elements to create an enhanced
WAN access product and to distribute such product.
Accordingly, the parties agree as follows:
1. DEFINITIONS
1.1 "AFFILIATE" means an entity controlling, controlled by, or under
common control with a party, such control being exercised through ownership or
control, directly or indirectly, of 50% or more of the voting power of the
shares.
1.2 "ADC PRODUCT" means ADC's product that incorporates the Ported
Software, and which provides all the functionality detailed in ATTACHMENT F
("Specifications for ADC Product"), and no greater or lesser functionality than
that detailed therein. In addition to the Ported Software, the ADC Product
includes the following components:
1.2.1 "ADC SOFTWARE" means the software portion of the ADC Product
(other than the Ported Software) developed by or for ADC. The ADC Software has
been partially developed as of the Effective Date. The ADC Software will be
integrated with Packeteer Software only through the Packeteer API.
1.2.2. "ADC HARDWARE" means the hardware portion of the ADC Product
developed by or for ADC.
1.
<PAGE> 2
1.3 PACKAGES. The Packeteer Software comprises a single OEM software
component that includes the following packaging options:
1.3.1 "APPLICATION DISCOVERY SOFTWARE PACKAGE" (SHAPING OFF MODE)
means the Packeteer Software as enabled only for analyzing network traffic flow
and usage and for measuring information related to the network traffic flow, as
described in the PacketShaper/ADC OEM Deliverables document referenced in
ATTACHMENT A ("Packeteer Software").
1.3.1 "RATE CONTROL SOFTWARE PACKAGE" (SHAPING ON/OFF MODE) means the
Packeteer Software as enabled for analyzing network traffic flow and usage and
for prioritizing packets and limiting/controlling partitions that specify
minimum and maximum levels for aggregate traffic classes, as described in the
PacketShaper/ADC OEM Deliverables document referenced in ATTACHMENT A
("Packeteer Software").
1.4 "PACKETEER DOCUMENTATION" means the training manuals and end user
manuals supplied to ADC by Packeteer relating to the Packeteer Software.
1.5 "PACKETEER SOFTWARE" means that software listed as "Packeteer
Software" in ATTACHMENT A ("Packeteer Software), and any Updates thereto
provided under this Agreement. The Packeteer Software includes the following
components:
1.5.1 "PACKETEER SOFTWARE SOURCE" means the human-readable source
code for the Packeteer Software. The Packeteer Software Source does not include
any third party software or materials which Packeteer is unable to sublicense
in source code form.
1.5.2 "PACKETEER SOFTWARE INFORMATION" means supporting information
provided by Packeteer to enable a programmer reasonably skilled in the art to
make use of the Packeteer Software source.
1.5.3 "PACKETEER API" means an application programming interface
developed by Packeteer to permit third party software (such as the ADC
Software) to call certain documented functions in the Packeteer Software. The
Packeteer API is described in detail in ATTACHMENT B ("PacketShaper: OEM
Software Porting Guide"), (the "PACKETSHAPER PORTING GUIDE document, Revision
1.10, dated 11/9/98.
1.6 "PORTED SOFTWARE" means the software, in object code form only,
resulting from ADC's porting and compilation of the Packeteer Software Source
and the Packeteer API to the ADC platform.
1.7 "SOURCE CODE SITES" means those geographic locations at which ADC may
access, store and use the Packeteer Software Source and that are specified in
ATTACHMENT H ("Source Code Sites"). The Source Code Sites may be changed, or
other sites added, upon mutual written agreement of the parties, where
Packeteer's approval will remain in its sole discretion.
1.8 "UPDATES" means those additions, modifications, error corrections,
bug fixes, enhancements, updates, upgrades, future versions and any derivative
works made by Packeteer (or by a third party on Packeteer's behalf) to the
Packeteer Software (or any component thereof)
2
<PAGE> 3
and made generally commercially available by Packeteer. Updates is not meant to
include other modules or plug-ins which have unique characteristics for
specific markets and that are designed to be used in connection with the
feature set (and no more than the feature set) of the Packeteer Software
provided to ADC in accordance with ATTACHMENT A ("Packeteer Software").
2. LICENSE GRANTS
2.1 LIMITED SOURCE CODE LICENSE. Subject to the terms and conditions of
this Agreement, Packeteer hereby grants to ADC a non-exclusive,
non-transferable license to use the Packeteer Software Source at a Source Code
Site for the sole purpose of porting and compiling the Packeteer Software
Source and Packeteer API to ADC's platform to create the Ported Software for
inclusion in the ADC Product.
2.2 DISTRIBUTION LICENSE. Subject to the terms and conditions of this
Agreement, Packeteer hereby grants to ADC a non-exclusive, non-transferable,
royalty-bearing license to reproduce the Ported Software and sublicense and
distribute (through multiple tiers of distribution) the Ported Software solely
as integrated with the ADC Product, by way of licenses to end user customers
("End User Licenses" and "End Users," respectively). Notwithstanding the
foregoing, ADC will be permitted to distribute Updates to existing End Users on
an unbundled basis.
2.3 EXCLUSIONS.
2.3.1 THIRD PARTY TOOLS. No license is granted hereunder to any third
party development tools or other software required to replicate the Packeteer
Software development environment ("Third Party Tools").
2.3.2 OTHER EXCLUDED COMPONENTS. The materials delivered may contain
certain third party software excluded from the definition of Packeteer Software
("Excluded Components"). Such Excluded Components and any additional or
different terms applicable thereto are described in ATTACHMENT A.
2.3.3 NO ADDITIONAL RIGHTS. ADC specifically acknowledges that, other
than as expressly set forth above, no rights to the Packeteer Software are
granted to ADC hereunder and there are no implied licenses under this
Agreement. Without limiting the generality of the foregoing, ADC acknowledges
that it has no right to modify the Packeteer Software Source or Packeteer API,
and that any modification will be deemed a material breach of the Agreement. In
addition to any remedies available to Packeteer for such breach, Packeteer will
have no obligations to support the modified Packeteer Software or the resulting
ADC Product, and ADC shall assign all rights, title and interest in any created
unpermitted modifications to Packeteer. Further, ADC agrees that the ADC
Software and ADC Hardware will only access the Ported Software by means of the
Packeteer API (i.e., no calls will be made to the Ported Software except
through the Packeteer API); breach of the foregoing will also be deemed a
material breach of this Agreement. Except as expressly set forth above, ADC
will have no right to sublicense or transfer the rights granted herein to any
third party.
2.4 DOCUMENTATION. Subject to the terms and conditions hereof, Packeteer
grants to ADC a royalty-free non-exclusive, non-transferable, sub-licensable
license to localize,
3.
<PAGE> 4
reproduce, distribute, reformat, modify and sublicense the Packeteer
Documentation so as to apply to the ADC Product. ADC recognizes that its
ownership of any derivative works of the Packeteer Documentation is subject to
Packeteer's underlying ownership of the Packeteer Documentation. ADC agrees
that it will not modify or delete any copyright notices or other proprietary
notices included in the Packeteer Documentation without written approval of
Packeteer. Packeteer will have the right to inspect the modified Packeteer
Documentation to ensure that it meets Packeteer's quality standards.
2.5 TRADEMARK LICENSE. Subject to compliance with the terms of this
Agreement (including, but not limited to, PARAGRAPH 11 ("Trademarks")) and
ATTACHMENT D ("Packeteer Trademarks"), Packeteer hereby grants to ADC a
non-exclusive, non-transferable, limited license to use the trademarks set
forth in ATTACHMENT D ("Packeteer Trademarks") in connection with the marketing
and distribution of the ADC Products.
2.6 END USER LICENSE. ADC will take all steps necessary to protect
Packeteer's proprietary rights in the Packeteer Software and to ensure that
each ADC Product will be accompanied by a localized copy of ADC's standard
software license agreement applicable to such software which will include terms
and conditions no less protective of Packeteer's interests as those set forth
in ATTACHMENT C ("Packeteer End User License Agreement").
3. DELIVERY
3.1 INITIAL DELIVERY; ACCEPTANCE. Upon receipt of the Initial Delivery
Fee, Packeteer will deliver the Packeteer Software to ADC, including the
Packeteer Software Source, the Packeteer Software Information, the Packeteer
API, and the Packeteer Documentation, all in electronic form, and where
suitable, also in paper form. The Packeteer Software will be deemed accepted
upon delivery.
3.2 MAINTENANCE DELIVERIES. So long as ADC has paid the applicable
maintenance fees and Packeteer is still offering maintenance releases for the
Packeteer Software, Packeteer will deliver applicable Updates to the Packeteer
Software as such Updates are made generally available to Packeteer's customers.
Such deliveries will be deemed accepted upon delivery.
3.3 INCORPORATING UPDATES. ADC will have the opinion to incorporate such
Updates into the ADC Product, provided that if ADC fails to successfully
incorporated such Updates within one (1) year after such Update is made
available to ADC, (a) the trademark license set forth in PARAGRAPH 2.5
("Trademark License") will terminate and ADC will cease to use the Trademarks
in connection with such ADC Product, and (b) Packeteer will bear no obligation
to continue to provide technical support (but will continue to provide Updates
during the Maintenance Period) for such out-of-date ADC Product.
4. SUPPORT AND MAINTENANCE
4.1 DEMONSTRATION. Packeteer will provided a "walk-through" demonstration
(not to exceed one day) for the Packeteer Software, and periodically for each
Update it delivers.
4.2 MODIFICATIONS TO PACKETEER SOFTWARE. In the course of developing the
ADC Product, ADC may from time to time request that Packeteer make changes to
the Packeteer
4.
<PAGE> 5
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
Software in order to provide additional functionality. During the period in
which ADC is paying Packeteer for maintenance and is in compliance with its
maintenance obligations (a "Maintenance Period"), Packeteer agrees to consider
such requested changes promptly, and if it finds, in its sole discretion, such
requested changes to be reasonable to the future development of the Packeteer
Software, to implement such changes promptly as an Update, all without
additional charge to ADC.
4.3 END USER SUPPORT. ADC will be solely responsible for providing all
support and maintenance for End Users of the ADC Product. ADC will provide its
End Users with reasonable documentation, warranty service, and e-mail or
telephone support for the use of the ADC Product consistent with good industry
practice and the terms of this Agreement.
4.4 TECHNICAL SUPPORT. During the Maintenance Period, Packeteer will
provide ADC (but not ADC's End Users, distributors or resellers) with
development support (including access to technical, engineering and management
staff) in the form of telephone and e-mail responses to questions that ADC may
have with respect to the current version of the Packeteer Software and any
previous versions released by Packeteer within the past twelve (12) months.
Packeteer will provide support solely for questions related to the unmodified
Packeteer Software. In the event that such technical support requests become
unduly burdensome, the parties shall confer to discuss whether the number of
hours per month which Packeteer spends providing support should be reduced, or
if the fee for such support should be increased.
4.5 COMPATIBILITY. Updates provided hereunder for functionality that
has previously been implemented by ADC will be "backwards compatible" (so that
there will be no substantial loss of functionality) with the previously
released version and any versions released in the preceding twelve (12) months.
5. PAYMENTS
5.1 INITIAL DELIVERY. On the Effective Date, ADC will pay Packeteer a
fee (the "Initial Delivery Fee") of [*]. This Initial Delivery Fee shall include
maintenance and support for a one (1) year period following the Effective Date.
Packeteer will make the initial delivery of the Packeteer Software to ADC within
five (5) business days of the Effective Date.
5.2 ANNUAL MAINTENANCE. For each additional year (commencing on the
anniversary of the Effective Date) for which ADC desires to receive Updates and
technical support, it will pay Packeteer an annual maintenance fee (the
"Maintenance Fee") as set forth on SCHEDULE 1 ("Fees"). Any decision by ADC not
to pay an annual Maintenance Fee shall terminate those obligations by Packeteer
to provide Updates under PARAGRAPH 3.2 ("Maintenance Deliveries") and technical
support under PARAGRAPHS 4.2 ("Modifications to Packeteer Software") and 4.4
("Technical Support") but shall not otherwise terminate the licenses granted in
PARAGRAPHS 2.1 ("Limited Source Code License") and 2.2 ("Distribution License")
or other obligations of the Parties to this Agreement. Any decision by ADC not
to pay an annual Maintenance Fee shall not relieve ADC from any of its
obligations under this Agreement including the payment of the Royalties under
PARAGRAPH 5.3 ("Royalties"). Upon a failure by ADC to successfully incorporate
any Update as contemplated in PARAGRAPH 3.3 ("Incorporating Updates") within
one (1) year after it is delivered to ADC, (a) ADC will cease to use the
Trademarks (as described
5
<PAGE> 6
in PARAGRAPH 3.3 ("Incorporating Updates")), and (b) Packeteer shall have the
option not to accept any further Maintenance Fee from ADC and to terminate its
obligations to provide Updates under PARAGRAPH 3.2 ("Maintenance Deliveries")
after the current Maintenance Period.
5.3 ROYALTIES. The royalties and other fees payable will be as set
forth on SCHEDULE 1 ("Fees").
5.4 TAXES. ADC agrees to pay, and to indemnify and hold Packeteer
harmless from, any sales, use, excise, import or export, value added or similar
tax, not based on Packeteer's net income, as well as the collection or
withholding thereof, including penalties and interest, as well as any costs
associated with the collection or withholding thereof, and all government
permit or license fees and all customs, duty, tariff and similar fees levied
upon the delivery of the Packeteer Software, the ADC Product or related
products, as well as any costs associated with the collection of any of the
foregoing items. ADC will be responsible for obtaining, at its expense, all
required import licenses, permits or other governmental orders. If a resale
certificate or other certificate, document or other evidence of exemption or
payment or withholding of taxes by ADC is required in order to exempt the
distribution or licensing of the Packeteer Software, ADC Product or other
related product from any such liability or to enable Packeteer to claim any tax
exemption, credit, or other benefit, ADC will promptly furnish such certificate
or document to Packeteer.
5.5 REPORTING. On a quarterly basis, ADC will, within thirty (30) days
following the end of such quarter, provide Packeteer a report including the
following: (a) the number of units of the ADC Product sold during that quarter,
broken down by units in which the Rate Control Software Package is and is not
enabled; (b) geographic information related to the units of ADC Product sold
during that quarter, including, at least, by the country of the sale and, if in
the United States, also by the State and zip code of the sale; (c) the number
of previously sold units of the ADC Product for which the Rate Control Software
Package was enabled during that quarter; and (d) the royalty payments due
during that quarter.
5.6 AUDIT. Each party will keep and maintain, for a period of three (3)
years, proper records and books of account relating to licenses of the ADC
Product to customers and End Users. Upon reasonable notice to the other party,
a party may have a reputable independent auditor inspect, at the requesting
party's expense, such records to verify the other party's payments hereunder no
more than once every six (6) months; however, if the audit reveals a
discrepancy of more than 5%, then the recordkeeper will pay for the cost of the
audit and the auditing party will have the right to conduct another audit
within the six (6) month period.
5.7 MANNER OF PAYMENT. All payments due hereunder are in U.S. Dollars.
ADC shall include royalty payments with each report.
5.8 OVERDUE PAYMENTS. Overdue payments will be subject to a finance
charge of the lesser of one and one-half percent (1-1/2%) per month or the
highest interest rate allowed by law, for each month or fraction thereof that
such amounts are past due.
6. DEVELOPMENT AND TESTING
6.
<PAGE> 7
6.1 ADC DEVELOPMENT RESPONSIBILITIES. ADC will be responsible for
creating the Ported Software, the ADC Product, and incorporating Updates in the
ADC Product in compliance with the terms of the Agreement. In addition, ADC
will be responsible for creating and delivering to Packeteer a list of errors
found prior to Packeteer's certification or testing of the ADC Product pursuant
to ATTACHMENT G ("Test Certification Procedures").
6.2 TESTING AND CERTIFICATION OF ADC PRODUCTS. ADC will test each
version of the ADC Product. Once yearly, Packeteer will certify ADC's test
results or perform independent testing in accordance with the procedures in
ATTACHMENT G ("Test Certification Procedures"). If the ADC Product passes
Packeteer's Test Certification Procedures, then ADC shall be entitled to market
and distribute the ADC Product under the Trademarks under the terms of this
Agreement and advise End Users that the ADC Product has passed the Test
Certification Procedures. ADC will provide Packeteer with reasonable access to
the ADC Software and Ported Software, including, but not limited to, exposing
command line interfaces for the ADC Software in the testing versions of the ADC
Product in order to permit Packeteer to perform regression testing and to
confirm that no unpermitted modifications have been made to the Packeteer
Software. Such regression testing will not be designed to permit Packeteer to
analyze the ADC Software (its source or object code) to determine the manner
and methods utilized in supporting its functionality without the prior written
permission of ADC.
6.3 LOANED EQUIPMENT. ADC will loan Packeteer all necessary equipment
for such certification testing. All equipment loaned by ADC to Packeteer will
remain the property of ADC, will be fully insured by Packeteer, and will be
returned to ADC at its request after termination of Packeteer's testing
activities hereunder. ADC will pay all shipping and other costs (including,
without limitation, custom fees and duties) resulting from delivery of such
loaned equipment to Packeteer. Any loaned equipment will be returned to ADC by
Packeteer, shipping, insurance and any other applicable costs prepaid by ADC.
While in the possession of Packeteer, the loaned equipment will be maintained
by ADC in good working order.
7. MARKETING
7.1 PROMOTIONAL EFFORTS. Without limiting ADC's ability to develop
Competitive Products (as defined in PARAGRAPH 10.8 ("Access")) in compliance
with the terms of this Agreement, ADC agrees to use its reasonable commercial
efforts to market and distribute the ADC Product to End Users. ADC may
advertise the ADC Product in advertising media of ADC's choice. ADC will use
the Trademarks in accordance with the terms of this Agreement in conducting
such marketing efforts.
7.2 PRESS RELEASE. The parties will create a mutually agreeable press
release to announce the execution of this Agreement. Neither party will
disclose any terms of the Agreement, except pursuant to a mutually agreeable
press release or as otherwise required by law.
8. WARRANTY
8.1 PACKETEER WARRANTY. Packeteer warrants for a period of ninety (90)
days from delivery (the "Warranty Period") that the unmodified Packeteer
Software Source will compile in
7.
<PAGE> 8
the development environment specified by Packeteer to yield the corresponding
object code version of such source code (excluding any Excluded Components). If
ADC reports to Packeteer a failure of the Packeteer Software Source to conform
to the foregoing warranty during the Warranty Period, and provides such detail
as Packeteer may require to permit Packeteer to reproduce such failure,
Packeteer, at its expense, shall use reasonable commercial efforts to modify or
replace the Packeteer Software Source to correct such failure. ADC acknowledges
that the Packeteer Software Source delivered by Packeteer to ADC will require
adaptation by ADC or Packeteer for compatibility with ADC platforms and
configurations, which platforms and configurations will generally be different
from the development environment and platform used by Packeteer. ADC
acknowledges that the Packeteer Software is of such complexity that it may have
inherent defects, and agrees that Packeteer makes no other warranty, either
express or implied, as to any matter whatsoever. The foregoing states
Packeteer's sole and exclusive warranty to ADC concerning the Packeteer
Software Source and ADC's sole and exclusive remedy for breach of warranty.
8.2 DISCLAIMER. EXCEPT AS SET FORTH IN PARAGRAPH 8.1 ("PACKETEER
WARRANTY"), THE PACKETEER SOFTWARE IS PROVIDED TO ADC "AS-IS" AND WITHOUT ANY
WARRANTY OF ANY KIND, EXPRESS, IMPLIED, OR STATUTORY. PACKETEER EXPRESSLY
DISCLAIMS ANY IMPLIED WARRANTIES OF NON-INFRINGEMENT, FITNESS FOR A PARTICULAR
PURPOSE OR MERCHANTABILITY.
9. INDEMNITY
9.1 BY PACKETEER. Packeteer agrees to defend and otherwise hold ADC
harmless from any costs, damages and reasonable attorneys' fees resulting from
any claim that the uses permitted hereunder of the Packeteer Software infringe
any U.S. patents or U.S. copyrights, or misappropriate the trade secrets of any
third party, provided that ADC gives Packeteer prompt written notice of any
such claim, tenders to Packeteer the defense or settlement of such a claim at
Packeteer's expense, and cooperates with Packeteer, at Packeteer's expense, in
defending or settling such claim. If Packeteer receives notice of an alleged
infringement or if ADC's use of the Packeteer Software is prevented by
permanent injunction, Packeteer may, at its sole option and expense, procure
for ADC the right to continue use of the Packeteer Software, modify the
Packeteer Software such that it is no longer infringing, or replace the
Packeteer Software with software of similar functional capability (in either of
the latter two options, the revised or replacement software must be backwards
compatible as that term is defined in PARAGRAPH 4.5 ("Compatibility")), or
terminate the license and return to ADC the Initial Delivery Fee. PACKETEER'S
OBLIGATIONS UNDER THIS SECTION WILL BE ADC'S SOLE AND EXCLUSIVE REMEDY FOR ANY
ALLEGED INFRINGEMENT OR MISAPPROPRIATION OF ANY PROPRIETARY RIGHT. PACKETEER
WILL HAVE NO LIABILITY TO ADC IF ANY ALLEGED INFRINGEMENT OR CLAIM THEREOF IS
BASED UPON THE USE OF THE PACKETEER SOFTWARE IN CONNECTION OR IN COMBINATION
WITH EQUIPMENT, DEVICES OR SOFTWARE NOT DELIVERED BY PACKETEER (IF SUCH
INFRINGEMENT OR CLAIM COULD HAVE BEEN AVOIDED BY THE USE OF THE UNMODIFIED
PACKETEER SOFTWARE WITH OTHER EQUIPMENT, DEVICES OR SOFTWARE), OR THE USE OF
THE PACKETEER SOFTWARE OTHER THAN AS PERMITTED UNDER THIS AGREEMENT OR IN A
MANNER FOR WHICH IT WAS NOT INTENDED, OR, AFTER THE TRANSITION PERIOD (AS
DEFINED IN PARAGRAPH
8.
<PAGE> 9
9.1.1) USE OF OTHER THAN THE MOST CURRENT RELEASE OF THE PACKETEER SOFTWARE (IF
SUCH CLAIM WOULD HAVE BEEN PREVENTED BY THE USE OF SUCH RELEASE).
9.1.1 UPDATES. IF PACKETEER GIVES ADC NOTICE THAT A SPECIFIC UPDATE IS
REQUIRED IN ORDER TO AVOID INFRINGING THE INTELLECTUAL PROPERTY RIGHTS OF A
THIRD PARTY, AND IF WITHIN SIXTY (6) DAYS ("THE TRANSITION PERIOD") ADC FAILS
TO USE SUCH UPDATE AND TO DISTRIBUTE SUCH UPDATE TO ITS END USERS, THEN
PACKETEER WILL HAVE NO LIABILITY TO ADC UNDER PARAGRAPH 9.1 FOR INFRINGING SUCH
INTELLECTUAL PROPERTY RIGHTS IF THE INFRINGEMENT WOULD BE AVOIDED IF ADC
ADOPTED SUCH UPDATE.
9.2 BY ADC. ADC agrees to defend and otherwise hold Packeteer harmless
from any costs, damages and reasonable attorneys' fees resulting from any claim
that the uses permitted hereunder of the ADC Product infringe any U.S. patents
or U.S. copyrights, or misappropriate the trade secrets of any third party,
provided that Packeteer gives ADC prompt written notice of any such claim,
tenders to ADC the defense or settlement of such a claim at ADC's expense, and
cooperates with ADC, at ADC's expense, in defending or settling such claim.
ADC'S OBLIGATIONS UNDER THIS SECTION WILL BE PACKETEER'S SOLE AND EXCLUSIVE
REMEDY FOR ANY ALLEGED INFRINGEMENT OR MISAPPROPRIATION OF ANY PROPRIETARY
RIGHTS.
10. PROTECTION OF PROPRIETARY RIGHTS
10.1 PACKETEER OWNERSHIP. Packeteer and its suppliers are the sole and
exclusive owners of all rights, title and interest, including all Trademarks,
copyrights, patents, trade names, trade secrets, and other intellectual
property rights to the Packeteer Software, and in any modifications made to the
Packeteer Software at ADC's request or suggestion under PARAGRAPH 4.2
("Modifications to Packeteer Software"). Except for the rights expressly
enumerated herein, ADC is not granted any rights to patents, copyrights, trade
secrets, trade names, trademarks (whether or not registered), or any other
rights, franchises or licenses with respect to the Packeteer Software. ADC
agrees to protect the Packeteer Software in accordance with PARAGRAPH 10
("Protection of Proprietary Rights") and ATTACHMENT E ("Secure Procedures").
Failure to protect the proprietary rights of Packeteer and its suppliers in the
Packeteer Software, as required by this Agreement, will be considered a
material breach of this Agreement.
10.2 ADC OWNERSHIP. ADC and its suppliers are the sole and exclusive
owners of all rights, title and interest, including all trademarks, copyrights,
patents, trade names, trade secrets, mask works, and other intellectual
property rights to the ADC Product (excluding the Ported Software). Except for
the rights expressly enumerated herein (e.g., the right to perform certain
regression testing), Packeteer is not granted any rights to patents,
copyrights, trade secrets, mask works, trade names, trademarks (whether or not
registered), or any other rights, franchises or licenses with respect to the
ADC Product. Packeteer agrees to protect the ADC Product in accordance with
PARAGRAPH 12 ("Confidentiality").
9.
<PAGE> 10
10.3 COOPERATION. The parties agree to cooperate and execute documents
reasonably requested to confirm such ownership or to obtain protection under
any intellectual property law.
10.4 PROPRIETARY NOTICES. ADC agrees that as a condition of its rights
hereunder, it shall not alter the proprietary notices included in the materials
delivered by Packeteer, and that each copy of the Ported Software will contain
the same proprietary notices which appear on or in the materials provided by
Packeteer to ADC. More specifically, ADC agrees that a valid Packeteer
copyright notice will appear on the media or will be displayed on any screen
visible to a user when any ADC proprietary notices are visible, in the
following format or such other format as Packeteer specifies by written notice
to ADC: the name of the program, the word "Copyright" and the "(C)" symbol, the
year 1996 (the date of first creation of the Packeteer Software), followed by a
hyphen and the year of the most recent version of the Packeteer Software, and
the name of the copyright owner and the words "All Rights Reserved." Presence
of a copyright notice does not constitute an acknowledgment of publication. ADC
will ensure that the trademark notices are displayed in the ADC Product as set
forth in PARAGRAPH 11 ("Trademarks").
10.5 UNAUTHORIZED DISTRIBUTION OR COPYING. ADC agrees that (except as
expressly permitted by this Agreement): (a) distributing, copying, duplicating
or otherwise reproducing all or any part of the Packeteer Software, (b)
distributing or using copies of all or any portion of the Packeteer Software
other than as embedded in a royalty-bearing ADC Product, or (c) failing to
ensure that each End User receives a license agreement as required by PARAGRAPH
2.6 ("End User License") will constitute a material breach of this Agreement.
10.6 GOVERNMENT AGREEMENTS. ADC will take all reasonable steps in making
proposals to and agreements with governments that involve the ADC Product and
related documentation to ensure that Packeteer's proprietary rights receive the
maximum protection available from such governments for commercial computer
software and related documentation developed at private expense.
10.7 PACKETEER TRADE SECRETS. Packeteer represents that the Packeteer
Software and those techniques, algorithms, and processes contained in the
Packeteer Software which have been developed, acquired or licensed by
Packeteer, or any modification or extraction thereof, constitute trade secrets
of Packeteer and/or its suppliers, and ADC agrees they will be used by ADC only
in accordance with the terms of this Agreement. ADC will take all measures
reasonably required to protect the proprietary rights of Packeteer and its
suppliers in the Packeteer Software Information.
10.8 ACCESS. In consideration of the licenses and access to proprietary
information and technology of Packeteer granted under this Agreement, ADC
hereby agrees: (a) not to use the Packeteer Software to develop, manufacture or
distribute goods which compete with the Packeteer products ("Competitive
Products"); and (b) to obtain the Packeteer Software only from Packeteer.
Subject to the terms of restrictions on use of proprietary information
(including, but not limited to this PARAGRAPH 10 ("Protection of Proprietary
Rights"), ATTACHMENT D ("Packeteer Trademarks"), and ATTACHMENT E ("Secure
Procedures") provided under this Agreement, this Agreement does not preclude
ADC from independently developing similar technologies or products, where ADC
can demonstrate by competent proof that such independent
10.
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development has been created without reference to the Packeteer Software
Source, Packeteer Software Information, or Packeteer Documentation.
11. TRADEMARKS
11.1 PROPER USE. Unless ADC or Packeteer opt to terminate the following
requirement of trademark usage and the trademark license of PARAGRAPH 2.5
("Trademark License") under the conditions set out below, ADC will make use of
the Packeteer Trademarks in accordance with the guidelines and requirements set
forth in ATTACHMENT D ("Packeteer Trademarks") and the standard guidelines and
usage requirements as promulgated by Packeteer from time to time regarding the
Trademarks. If Packeteer promulgates any changes to the standard guidelines and
usage requirements, then ADC: (a) shall have six (6) months to continue
operating under the old guidelines; (b) shall have six (6) months to continue
operating under the old guidelines for existing inventory. Either Packeteer or
ADC shall have the right to terminate the trademark usage requirement of this
PARAGRAPH 11.1 ("Proper Use") if ADC does not pay an annual Maintenance Fee as
set out in PARAGRAPH 5.2 ("Annual Maintenance") when such Maintenance Fee is
due. Furthermore, Packeteer shall, under the same instance, additionally be
able to prohibit ADC from using any Packeteer Trademark.
11.2 RIGHT OF REVIEW. In order to assure the Packeteer Trademarks are
associated only with products and services of Packeteer's high quality
standards, Packeteer will have the right to inspect and review all such
products and services. In the event that any use of the Packeteer Trademark
does not comport with the quality standards set by Packeteer, Packeteer will
advise ADC, and ADC will improve the quality within thirty (30) days so as to
comport with Packeteer's standards or cease use of the Packeteer Trademarks
immediately.
11.3 NO COMPETITIVE EXPLOITATION OF TRADEMARKS. With respect to any
Competitive Products which ADC develops or markets, ADC agrees that ADC will
not exploit its access to the Packeteer Software, its relationship with
Packeteer, or the existence of the Ported Software to promote Competitive
Products. Furthermore, so long as ADC is marketing the ADC Product under the
Trademarks, ADC agrees to use all reasonable efforts to distinguish the ADC
Product from any Competitive Product when displaying or referring to the ADC
Product in advertisements, catalogs, brochures and at trade shows by (a)
identifying the ADC Product prominently and exclusively with the Trademarks in
such proximity that the viewer is unlikely to associate the ADC Product with the
Competitive Product, and (b) not associating the Trademarks with any
Competitive Product in advertising, press releases, and other promotional and
marketing materials.
12. CONFIDENTIALITY
12.1 RESTRICTION ON USE. Except as expressly permitted by this
Agreement, each party ("Recipient"), its employees, and its contractors will
not use in any way for its own account or the account of any third party, nor
disclose to any third party, any Confidential Information revealed to it by the
other party ("Disclosing Party") without the Disclosing Party's prior written
consent; provided, however, that if any Confidential Information of the other
party is required to be disclosed pursuant to any statute, regulation, order,
subpoena or document discovery request, then the Recipient shall provide
written notice thereof to the Disclosing Party as soon as
11.
<PAGE> 12
practicable in order to afford the Disclosing Party an opportunity to seek a
protective order (it being agreed that if the Disclosing Party is unable to
obtain or does not seek a protective order and the Recipient is legally
compelled to disclose such information, disclosure of such information may be
made without liability).
12.2 DEFINITION OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement, "Confidential Information" consists of (a) any information
designated by the Disclosing party in writing as confidential, (b) the
Packeteer Software Source and the Packeteer Software Information, (c) the
source code and technical documentation for the ADC Product, and (d) the terms
and conditions of this Agreement. Information in oral form will be considered
Confidential Information only to the extent it is (x) identified as
confidential prior to disclosure and (y) summarized in writing and transmitted
to the Recipient, identified as proprietary, within thirty (30) days after the
oral disclosure.
12.3 EXCLUSIONS FROM DEFINITION OF CONFIDENTIAL INFORMATION.
Confidential Information will not include, and this PARAGRAPH 12
("Confidentiality") will not apply to information that (a) was known to the
Recipient prior to its receipt from the Disclosing Party; (b) is or becomes
public knowledge without fault of Recipient; (c) is acquired by Recipient from
a third party with the right to disclose same and without binder of secrecy;
(d) is independently developed by a party without using the other party's
Confidential Information; or (e) has been approved for release by written
authorization of the Disclosing Party.
12.4 STANDARD OF CARE. Each party will use the same standard of care
that it applies to its own Confidential Information, but in no event less than
reasonable care. Each party agrees to notify the other promptly in the event of
any breach of confidentiality or security under conditions in which it would
appear that any Confidential Information was prejudiced or exposed to loss, and
will, upon request of the other, take all reasonable steps necessary to recover
any compromised trade secrets disclosed to it or placed in its possession by
virtue of this Agreement. Without limiting the generality of the foregoing, ADC
agrees to comply with the terms of ATTACHMENT E ("Secure Procedures") regarding
the handling of the Packeteer Software.
13. LIMITATION OF LIABILITY
EXCEPT IN THE CASE OF WILLFULNESS OR GROSS NEGLIGENCE, NEITHER PACKETEER NOR
ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES, OR AGENTS WILL BE LIABLE
TO ADC OR TO ANY THIRD PARTY FOR ANY LOSS OF USE, INTERRUPTION OF BUSINESS, OR
FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS OR REVENUES) OR SIMILAR DAMAGES, WHETHER BASED ON TORT (INCLUDING
WITHOUT LIMITATION, NEGLIGENCE OR STRICT LIABILITY), CONTRACT, OR OTHER LEGAL
OR EQUITABLE GROUNDS, EVEN IF PACKETEER HAS BEEN ADVISED OR HAD REASON TO KNOW
OF THE POSSIBILITY OF SUCH DAMAGES AND EVEN IN THE EVENT OF FAILURE OF
EXCLUSIVE REMEDIES. In no event will Packeteer's liability under this
Agreement, including claims for contribution or indemnity, exceed the greater
of US $100,000 (One Hundred Thousand Dollars) and all fees paid pursuant to
this Agreement in the twelve (12) months preceding the claim giving rise to
such liability.
12.
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14. TERM AND TERMINATION
14.1 TERM. The initial term of this Agreement will be five (5) years from
the Effective Date. At the conclusion of such term (or any subsequent renewal
term), the Agreement will automatically renew for another three (3) year term
unless either party has given written notice to the other at least sixty (60)
days prior to the renewal date of such party's intention not to renew the
Agreement.
14.2 TERMINATION FOR MATERIAL BREACH. Either party may terminate this
Agreement if the other party has breached any material term of this Agreement
and such breach remains uncured for forty five (45) days after written notice
of such breach (which notice will, in reasonable detail, specify the nature of
such breach).
14.3 BANKRUPTCY. A party may terminate this Agreement upon written notice
to the other in the event the other (a) becomes insolvent or admits in writing
its inability to pay its debts as they mature, or makes an assignment for the
benefit of creditors; (b) files a petition under any foreign, state, or United
States bankruptcy act, receivership statute, or the like, as they now exist, or
as they may be amended; (c) any third party files against it such a petition,
or an application for a receiver of either party is made by anyone and such
petition or application is not resolved favorably within sixty (60) days; or
(d) discontinues its business.
14.4 LIMITED DISTRIBUTION RIGHT UPON NONRENEWAL. In the event that
Packeteer elects to renew this Agreement under the terms of PARAGRAPH 14.1
("Term"), ADC will be permitted, for a period of five (5) years from such
election (the "Extension Term"), to continue to sell the ADC Product in the from
in which such ADC Product exists at the time of such election (the "Latest ADC
Product"), subject to ADC's continued compliance with the terms of this
Agreement. During the Extension Term, ADC may sell the Latest ADC Product only
to those End Users who were bound by End User Licenses as of the Date of
Packeteer's election not to renew, and not to new customers. During the
Extension Term (a) ADC's royalty obligations with respect to distributions of
the Latest ADC Product will persist, (b) Packeteer will have no obligation to
provide any maintenance or technical support to ADC, and (c) ADC may not
distribute the Latest ADC Product under the Packeteer Trademarks. The following
sections will be of effect during the Extension Term, and all other sections
will terminate: PARAGRAPHS 1 ("Definitions"), 2.2 ("Distribution License")(but
only the first sentence), 2.3 ("Exclusions"), 2.6 ("End User License"), 4.3
("End User Support"), 5 ("Payments")(excluding PARAGRAPH 5.2 ("Annual
Maintenance")), 9 ("Indemnity"), 10 ("Protection of Proprietary Rights"), 12
("Confidentiality"), 13 ("Limitation of Liability"), 14 ("Term and
Termination"), 15 ("No Patent License."), and 16 ("General").
14.5 OBLIGATIONS ON CANCELLATION, TERMINATION OR EXPIRATION. Upon
cancellation, termination, or expiration of this Agreement:
14.5.1 LICENSES TERMINATED. The licenses granted pursuant to
PARAGRAPH 2 ("License Grants") will terminate immediately; provided, however,
that ADC will be permitted to sell (for a period of ninety (90) days from
termination) any finished inventory of ADC Product then in stock.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
13.
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14.5.2 SAFEGUARDING OF PROPRIETARY RIGHTS. ADC will continue to be
responsible for safeguarding the proprietary rights of Packeteer and
Packeteer's suppliers in accordance with this Agreement, including PARAGRAPHS
10 ("Protection of Proprietary Rights"), 11 ("Trademarks"), and ATTACHMENT E
("Secure Procedures") after such cancellation, termination, or expiration.
14.5.3 RETURN OR DESTRUCTION OF PACKETEER INFORMATION. Except for the
limited exemption set forth in PARAGRAPH 14.5.1 ("Licenses Terminated")
permitting ADC to sell out existing inventory, ADC will immediately discontinue
use and distribution of the Packeteer Software, and return or destroy all
copies of the Packeteer Software and any Packeteer deliverables in its
possession (including copies placed in any storage device under ADC's control);
provided, however, that ADC may keep a reasonable number of copies for
supporting existing End Users. Upon Packeteer's request, ADC will warrant in
writing to Packeteer compliance with this PARAGRAPH 14.5.3.
14.5.4 PAYMENT. The payment date of all monies due Packeteer will
automatically be accelerated so that they will become due and payable on the
effective date of termination, even if longer terms had been provided
previously.
14.5.5 CONTINUED USE BY END USERS. End Users will be permitted the
continued and uninterrupted use of the ADC Products for the balance of the term
of their End User agreements, as specified in such agreements, provided that
and so long as the End Users are not in default of their End User agreements.
14.5.6 SURVIVAL. The following sections will survive the termination of
expiration of this Agreement: PARAGRAPHS 1 ("Definitions"), 2.3 ("Exclusions"),
2.6 ("End User License"), 8 ("Warranty"), 9 ("Indemnity"), 10 ("Protection of
Proprietary Rights"), 12 ("Confidentiality"), 13 ("Limitation of Liability"),
14 ("Term and Termination"), 15 ("No Patent License."), and 16 ("General").
15. NO PATENT LICENSE.
15.1 PACKETEER PATENTS. As used herein, "Packeteer Patent Right" means any
right arising under any United States or foreign patent now owned by, or later
issued or assigned to Packeteer, applicable to the Packeteer Software.
Packeteer covenants that, to the extent that ADC, ADC's sublicensees as
authorized in this Agreement, ADC's End Users, and ADC's other direct and
indirect customers of Packeteer Software (collectively "Customers") exercise
the rights expressly granted in PARAGRAPH 2 ("License Grants") to ADC, or which
ADC is authorized to grant to Customers herein, Packeteer will not (a) assert
any Packeteer Patent Right against ADC, (b) assert any Packeteer Patent Right
against Customers, or (c) require any additional fee or royalty from ADC or
Customers based upon any Packeteer Patent Right. Except to the extent of such
covenant not to assert any Packeteer Patent Right, nothing contained herein
will be construed as conferring, by implication, estoppel, or otherwise, any
license or right with respect to any Packeteer Patent Right.
15.2 ADC PATENTS. As used herein, "ADC Patent Right" means any patent
right arising under any United States or foreign patent issued or assigned to
ADC and having a filing
14.
<PAGE> 15
date after the inventor had access to the Packeteer Software in which (a) an
inventor is (1) an employee of ADC who has had access to the Packeteer Software
or (2) an independent contractor who has had access to the Packeteer Software
and has assigned patent rights in the claimed invention to ADC and (b) the
Packeteer Software contributed to the claimed invention. ADC Patent Right will
not include any patent applications filed three (3) years after termination or
expiration of this Agreement. ADC covenants that it will not (a) assert any ADC
Patent Right against Packeteer or against its sublicensees or customers for
products of a similar nature to that distributed by ADC, or (b) require any fee
or royalty from Packeteer or such sublicensees or customers for the sale of
such products based upon ADC Patent Rights. Except to the extent expressed
above, nothing contained herein will be construed as conferring, by
implication, estoppel, or otherwise any license or right with respect to any
ADC Patent Right.
16. GENERAL
16.1 GOVERNING LAW. This Agreement will be governed in all respects by the
laws of the United States of America and the State of California as such laws
are applied to agreements entered into and to be performed entirely within
California between California residents. The parties agree that the United
Nations convention on Contracts for the International Sale of Goods is
specifically excluded from application to this Agreement.
16.2 GOVERNING LANGUAGE. This governing language and any interpretation or
construction of this Agreement will be English.
16.3 FORUM. All disputes arising under this Agreement may be brought in
the state and federal courts located in San Jose, California, or Minneapolis,
Minnesota as permitted by law. ADC and Packeteer consent to the personal
jurisdiction of the above courts.
16.4 NOTICES. All notices or reports permitted or required under this
Agreement will be in writing and will be delivered by personal delivery,
telegram, telex, telecopier, facsimile transmission, or by certified or
registered mail, return receipt requested, and will be deemed given upon
personal delivery, five (5) days after deposit in the mail, or upon
acknowledgment of receipt of electronic transmission. Notices will be sent to
the addresses set forth in the introductory paragraph of this Agreement and
shall be sent to the attention of the Chief Financial Officer, or to such other
address or person as may be designated in writing.
16.5 INJUNCTIVE RELIEF. It is understood and agreed that, notwithstanding
any other provisions of this Agreement, breach of the provisions of this
Agreement relating to the protection of intellectual property rights
(including, but not limited to, PARAGRAPHS 2 ("License Grants"), 10
("Protection of Proprietary Rights"), 11 ("Trademarks"), 12
("Confidentiality"), ATTACHMENT D ("Packeteer Trademarks"), and ATTACHMENT E
("Secure Procedures") may cause the other party irreparable damage for which
recovery of money damages would be inadequate, and that a party will therefore
be entitled to obtain timely injunctive relief (whether by arbitral or judicial
authority) to protect its rights under this Agreement in addition to any and
all remedies available at law.
16.6 NO AGENCY. Nothing contained herein will be construed as creating any
agency, partnership, or other form of joint enterprise between the parties.
15.
<PAGE> 16
16.7 FORCE MAJEURE. Neither party will be liable hereunder by reason of
any failure or delay in the performance of its obligations hereunder (except for
the payment of money) on account of strikes, shortages, riots, insurrection,
fires, flood, storm, explosions, acts of God, war, governmental action, labor
conditions, earthquakes, material shortages or any other cause which is beyond
the reasonable control of such party.
16.8 WAIVER. The failure of either party to require performance by the
other party of any provision hereof will not affect the full right to require
such performance at any time thereafter; nor will the waiver by either party of
a breach of any provision hereof be taken or held to be a waiver of the
provision itself.
16.9 SEVERABILITY. In the event that any provision of this Agreement will
be unenforceable or invalid under any applicable law or be so held by applicable
court decision, such unenforceability or invalidity will not render this
Agreement unenforceable or invalid as a whole, and, in such event, such
provision will be changed and interpreted so as to best accomplish the
objectives of such unenforceable or invalid provision within the limits of
applicable law or applicable decisions.
16.10 HEADINGS. The Paragraph headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe,
or describe the scope or extent of such Paragraph or in any way affect this
Agreement.
16.11 ASSIGNMENT. Neither this Agreement nor any rights or obligations of
ADC hereunder may be assigned or transferred by ADC in whole or in part, whether
by operation of law or otherwise, without the prior written approval of
Packeteer which shall not unreasonably be withheld. For the purposes of this
Paragraph, a change in ownership or sale of substantially all of the assets of
ADC or the business division of ADC primarily involved in this Agreement shall
not be considered an assignment or transfer of ADC's rights. Packeteer may
exercise full transfer and assignment rights in any manner at Packeteer's
discretion and specifically may sell, pledge, or otherwise transfer its right to
receive royalties under this Agreement.
16.12 EXPORT. ADC acknowledges that the laws and regulations of the United
States restrict the export and re-export of commodities and technical data of
United States origin, including the Packeteer Software licensed hereunder. ADC
agrees that it will not export or re-export the Packeteer Software or ADC
Product in any form, without the appropriate United States and foreign
governmental licenses, if legally required. ADC agrees that its obligations
pursuant to this Paragraph will survive and continue after any termination or
expiration of rights under this Agreement.
16.13 FULL POWER. Each party warrants that it has full power to enter into
and perform this Agreement, and the person signing this Agreement on each
party's behalf has been duly authorized and empowered to enter into this
Agreement. Each party further acknowledges that it has read this Agreement,
understands it and agrees to be bound by it.
16.14 ENTIRE AGREEMENT. This Agreement together with the Attachments and
appendices completely and exclusively states the agreement of the parties
regarding its subject matter. If supersedes, and its terms govern, all prior
proposals, agreements, or other
16.
<PAGE> 17
communications between the parties, oral or written, regarding such subject
matter. This Agreement will not be modified except by a subsequently dated
written amendment signed on behalf of all parties by their duly authorized
representative and any provision of a purchase order purporting to supplement
or vary the provisions hereof will be void.
16.15 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which will be considered an original, but all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereof have caused this OEM Agreement to
be executed by their duly authorized representatives as of the Effective Date.
PACKETEER, INC. ADC TELECOMMUNICATIONS, INC.
/s/ CRAIG ELLIOTT /s/ WILLIAM L. MARTIN
- ----------------------------------- ---------------------------------
By: Craig Elliott By: William L. Martin
------------------------------ ----------------------------
Its: President & CEO Its: President ADC/BBG
------------------------------ ----------------------------
17.
<PAGE> 18
ATTACHMENT A
PACKETEER SOFTWARE
PACKETEER SOFTWARE
The document entitled "PACKETSHAPER/ADC OEM DELIVERABLES is fully incorporated
within this Attachment A and is directly attached hereto. The Packeteer
Software is limited to the specific modules identified in Section 6.1 of that
document, and to the functionality set forth in Section 6.2 of that document.
EXCLUDED COMPONENTS
None. This list may be modified by Packeteer upon written notice to ADC.
A-1.
<PAGE> 19
ATTACHMENT B
PACKETSHAPER: OEM SOFTWARE PORTING GUIDE
THE DOCUMENT ENTITLED "PACKETSHAPER PORTING GUIDE," REVISION 1.10, DATED
11/9/98 IS FULLY INCORPORATED WITHIN THIS ATTACHMENT B AND IS DIRECTLY ATTACHED
HERETO.
B-1.
<PAGE> 20
ATTACHMENT C
PACKETEER END USER LICENSE AGREEMENT
The following is a sample form of the Packeteer End User Agreement as of the
Effective Date:
"THIS AGREEMENT IS PROOF OF YOUR RIGHT TO USE THE SOFTWARE CONTAINED IN
THE PACKETEER PACKETSHAPER PRODUCT AND CONTAINS ADDITIONAL INFORMATION
CONCERNING PACKETEER'S PRODUCT WARRANTY AND LIMITATIONS OF LIABILITY.
PLEASE READ IT CAREFULLY.
This Agreement is between you (either an individual or an entity) and
PACKETEER, INC. ("Packeteer"). Packeteer is willing to grant you the following
rights to use the software incorporated in or supplied with the Packeteer
PacketShaper product and its accompanying documentation (collectively, the
"Packeteer Software") only if you agree to be bound by all of the terms of this
Agreement. By installing the product (the "Equipment") or using the Packeteer
Software, you agree to be bound by all the terms of this Agreement. If you do
not agree to be bound by any of the terms of this Agreement, Packeteer is
unwilling to grant you any rights to use the Packeteer Software and you must
not use the Packeteer Software or the Equipment; instead you must promptly
return the Equipment and Packeteer Software for a full refund to Packeteer or
to the authorized Packeteer reseller that provided you with the product.
1. OWNERSHIP: The Packeteer Software is and shall remain a proprietary
product of Packeteer. Packeteer and Packeteer's suppliers shall retain
ownership of all patents, copyrights, trademarks, trade names, trade secrets
and other proprietary rights relating to or residing in the Packeteer Software
and Equipment. Except for the license grant provided in Paragraph 2, you shall
have no right, title or interest in or to the Packeteer Software. The Packeteer
Software is licensed, not sold, to you for use only under the terms of this
Agreement.
2. GRANT OF LICENSE: Packeteer grants you a non-transferable (except as set
forth in this Paragraph) non-exclusive, restricted right to use the Packeteer
Software as incorporated in or supplied with the Equipment and solely in
connection with the operation of the Equipment for your own internal business
purposes. You understand that Packeteer may update the Packeteer Software at
any time and in doing so incurs no obligation to furnish such updates to you
pursuant to this Agreement. You may transfer the license to use the Packeteer
Software only in connection with a sale or transfer of the Equipment and as
included with the Equipment and not on a standalone basis, provided the buyer
or transferee agrees to be bound by the terms and conditions of this Agreement.
3. RESTRICTIONS: Packeteer reserves all rights in the Packeteer Software not
expressly granted to you. Except as permitted in Paragraph 2, you may not use,
copy, modify, create derivative works of, distribute, sell, assign, pledge,
sublicense, lease, loan, rent, timeshare, deliver or otherwise transfer the
Packeteer Software, nor permit any other party to do any of the foregoing. You
may not remove from the Packeteer Software, or alter, any of the trademarks,
trade names, logos, patent or copyright notices or markings, or add any other
notices or markings to the Packeteer Software. To the extent permissible by
applicable law, you may not derive or attempt to derive the source code of the
Packeteer Software by any means, nor permit any other party to derive or
attempt to derive such source code. To the extent permissible by applicable
law, you may not reverse engineer, decompile, disassemble, or translate the
Packeteer Software or any part thereof.
4. LIMITED WARRANTY: Packeteer does not warrant that the functions contained
in the Packeteer Software and Equipment will meet your requirements or that the
operation of your Packeteer Software or Equipment will be uninterrupted or
error free. Packeteer warrants that for a period of ninety (90) days from your
date of receipt of the Equipment and Packeteer Software, (a) the Equipment will
be free of any defects in materials and workmanship and (b) the Packeteer
Software will perform substantially in accordance with the accompanying
documentation. This limited warranty is void if failure of the Equipment or
Packeteer Software to conform with the warranty has resulted from improper
installation, testing, misuse, neglect, accident, fire or other hazard, or any
breach of this Agreement.
5. LIMITED REMEDIES: In the event of a breach of the foregoing limited
warranty, you must return the Equipment and Packeteer Software to Packeteer or
the Packeteer authorized reseller that provided you with the Packeteer
Software, postage prepaid, before the expiration of the warranty period, with a
copy of the invoice for the unit. Packeteer's sole and exclusive obligation and
your sole and exclusive remedy shall be, at Packeteer's sole discretion, to
either (a) repair the Packeteer Software or Equipment; (b) provide a
replacement unit or a replacement copy of the Packeteer Software or (c) refund
the amount you paid for the unit and terminate this Agreement. Any replacement
copy of the Packeteer Software or replacement Equipment unit will be warranted
for the remainder of the original warranty period or thirty (30) days,
whichever is longer.
6. NO OTHER WARRANTIES: OTHER THAN THE FOREGOING LIMITED WARRANTY, PACKETEER
HEREBY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, FITNESS
FOR A PARTICULAR PURPOSE AND MERCHANTABILITY. SOME JURISDICTIONS DO NOT ALLOW
THE DISCLAIMER OF IMPLIED WARRANTIES, SO THE ABOVE DISCLAIMER MAY NOT APPLY TO
YOU. IN WHICH CASE THE DURATION OF ANY SUCH IMPLIED WARRANTIES IS LIMITED TO
SIXTY (60) DAYS FROM THE DATE THE EQUIPMENT AND PACKETEER SOFTWARE ARE RECEIVED
BY YOU. THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS. YOU MAY HAVE OTHER LEGAL
RIGHTS WHICH VARY FROM JURISDICTION TO JURISDICTION.
7. LIMITATION OF LIABILITY: PACKETEER'S AGGREGATE LIABILITY IN CONNECTION
WITH THIS AGREEMENT, THE PACKETEER SOFTWARE AND THE EQUIPMENT, REGARDLESS OF
THE FORM OF THE ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT
OR OTHERWISE), SHALL NOT EXCEED THE AMOUNT PAID BY YOU TO
C-1
<PAGE> 21
PACKETEER. PACKETEER SHALL NOT BE LIABLE TO YOU FOR ANY INDIRECT, EXEMPLARY,
SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY KIND (INCLUDING WITHOUT
LIMITATION LOSS OF DATA, EQUIPMENT DOWNTIME OR LOST PROFITS), EVEN IF PACKETEER
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME JURISDICTIONS DO NOT
ALLOW THE LIMITATION OR EXCLUSION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL
DAMAGES SO THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU. THE LIMITED
WARRANTY, LIMITED REMEDIES AND LIMITED LIABILITY PROVISIONS CONTAINED IN THIS
AGREEMENT ARE FUNDAMENTAL PARTS OF THE BASIS OF PACKETEER'S BARGAIN HEREUNDER,
AND PACKETEER WOULD NOT BE ABLE TO PROVIDE THE PACKETSHAPER TO YOU ABSENT SUCH
LIMITATIONS.
9. GOVERNMENT END USERS. The Packeteer Software is comprised of "commercial
computer software" and "commercial computer software documentation" as such
terms are used in 48 C.F.R. 12.212 (SEPT 1995) and is provided to the
Government (a) for acquisition by or on behalf of civilian agencies, consistent
with the policy set forth in 48 C.F.R. 12.212; or (b) for acquisition by or on
behalf of units of the Department of Defense, consistent with the policies set
forth in 48 C.F.R. 227-7202-1 (JUN 1995) and 227-7202-3 (JUN 1995).
10. EXPORT CONTROL. Since the Packeteer Software is subject to the export
control laws of the United States, you may not export or reexport the
Packeteer Software without the appropriate United States and foreign government
licenses. You shall otherwise comply with all applicable export control laws
and shall defend, indemnify and hold Packeteer and all Packeteer suppliers
harmless from any claims arising out of your violation of such export control
laws.
11. GENERAL. The United Nations Convention on Contracts for the International
Sale of Goods is specifically disclaimed. If any provision of this Agreement is
held by a court of competent jurisdiction to be unenforceable for any reason,
the remaining provisions hereof shall be unaffected and remain in full force
and effect. This Agreement is the final, complete and exclusive agreement
between the parties relating to the subject matter hereof, and supersedes all
prior or contemporaneous understandings and agreements relating to such subject
matter, whether oral or written. Should you have any questions regarding this
Agreement, or if you desire to contact Packeteer for any reason, please write
to: Packeteer, Inc., 10495 N. De Anza Blvd., Cupertino, California 95014,
U.S.A."
C-2.
<PAGE> 22
ATTACHMENT D
PACKETEER TRADEMARKS
Packeteer may adopt certain trademarks, trade names, marks, and logos
("Trademarks") from time to time in its sole discretion. The following
Packeteer Trademarks are licensed to ADC pursuant to this Agreement:
[PACKETEER INC. LOGO]
The above trademark is designated to be included on the front panel of the
ServicePoint product(s). Pending platform(s) design, this trademark use will be
in the lower right hand corner of the front panel.
The Trademarks may be modified at any time by Packeteer.
USE OF PACKETEER TRADEMARKS
1. OWNERSHIP OF TRADEMARKS. ADC acknowledges the ownership of the Packeteer
Trademarks in Packeteer. ADC agrees that it will do nothing inconsistent with
such ownership and that all use of the Trademarks by ADC will inure to the
benefit of and be on behalf of Packeteer. ADC acknowledges that Trademarks are
valid under applicable law and that ADC's utilization of the Trademarks will
not create any right, title or interest in or to such Trademarks. ADC
acknowledges Packeteer's exclusive right to use of the Trademarks and agrees
not to do anything contesting or impairing the trademark rights of the
Packeteer. Any use of the Trademarks must identify Packeteer as the owner of
such Trademarks.
2. QUALITY STANDARDS. Packeteer hereby appoints ADC as its representative for
the limited purpose of controlling the quality of the ADC Products and any
other products or services it supplies in connection with the use of the
Trademarks. ADC agrees that (a) the nature and quality of the ADC Products and
any other products or services it supplies in connection with use of the
Trademarks will conform to the standards set by Packeteer, and (b) it will
cooperate with Packeteer in facilitating Packeteer's monitoring and control of
the nature and quality of such products and services. Such assistance will
include supplying Packeteer, upon its request, with specimens of its use of the
Trademarks, including supplying samples of reprinted documentation,
translations, product packaging and promotional materials that use the
Trademarks in conjunction with ADC's marketing of ADC Products. Upon reasonable
notice to ADC and at Packeteer's sole expense, Packeteer may conduct an
inspection of such specimens at facilities of its choosing to determine
conformance with the standards. ADC will, at Packeteer's request and expense,
assist Packeteer in conducting such inspection and testing including, but not
limited to, providing Packeteer with applicable hardware. If, at any time,
Packeteer determines that ADC has not met the Packeteer quality standards,
Packeteer will so advise ADC and, upon ADC's receipt of such notice by any
means, ADC will have thirty (30) days to improve the quality to the standard
previously approved by Packeteer, or to cease the use of all Trademarks.
D-1.
<PAGE> 23
ADC will comply with all applicable laws and regulations pertaining to the use
of the Trademarks and to the distribution and advertising of the ADC Products;
however, Packeteer shall obtain all appropriate government approvals pertaining
to the use of the Trademarks.
3. INFRINGEMENT PROCEEDINGS. ADC agrees to notify Packeteer of any
unauthorized use of the Trademarks by others promptly as it comes to ADC's
attention. Packeteer will have the sole right and discretion to bring
infringement or unfair competition proceedings involving the Trademarks.
4. ADC'S USE OF TRADEMARKS. Except as set forth otherwise in the Agreement,
ADC agrees that it will (a) prominently and permanently include the Packeteer
Trademarks on all copies of the Packeteer Software and on any ADC Products
distributed to End Users (b) use the Packeteer Trademarks, including the
Packeteer logo, in any advertising or printed materials concerning the ADC
Products, (c) use all applicable Trademarks on all copies, advertisements,
brochures, manuals, packaging and other appropriate uses made in the promotion,
sale or use of the ADC Products, and (d) ensure that the logo set forth above
will appear prominently on the logon screen, splash screen, or other first
display created by the Packeteer Software when End Users initialize the
Packeteer Software.
5. TRADEMARK REGISTRATIONS. ADC, at Packeteer's request and expense, will (a)
promptly provide Packeteer with any specimens, (b) execute all applications for
trademark registrations, assignments or other applicable documents, and (c)
perform any other act reasonably necessary for Packeteer to secure or maintain
any and all trademark rights in any country in which ADC is marketing the ADC
Products in association with a Trademark. ADC's responsibilities will include
complying with the formalities of local law, including, but not limited to,
executing any application for registration as a registered user, executing
additional license agreements suitable for recording with the appropriate
authorities or providing proof of use of the trademarks in any other applicable
documents.
6. NO UNITARY OR COMPOSITE TRADEMARKS. ADC agrees not to use any other
trademark or service mark in close proximity to any of the Packeteer Trademarks
or combine the marks so as to effectively create a unitary composite mark
without the prior written approval of Packeteer.
D-2.
<PAGE> 24
ATTACHMENT E
SECURE PROCEDURES
1. AUTHORIZED EMPLOYEES AND CONTRACTORS. ADC agrees that it will not
disclose all or any portion of the Packeteer Software to third parties, with the
exception of authorized employees ("Authorized Employees") and authorized
contractors ("Authorized Contractors") (subject to ADC's having obtained
authorization for use of such contractors in accordance with PARAGRAPH 2 of this
ATTACHMENT E, below) who (a) require access thereto for a purpose authorized by
this Agreement, (b) have signed an employee or contractor agreement in which
such employee or contractor agrees to protect third party confidential
information and (c) in the case of disclosure of Packeteer Software Source or
Packeteer Software Information ("Source Information"), have received a notice of
confidentiality prior to access to such Source Information, and again upon any
termination of such access, that contains, at a minimum provisions substantially
in accordance with the following:
"Recipient has previously signed an agreement with ADC pursuant to which
Recipient has agreed to maintain the confidentiality of confidential
information of ADC and its suppliers (the "Confidential Information") and
to use the Confidential Information solely for ADC's benefit. The purpose
of this notice is to apprise Recipient that Recipient will be receiving
certain proprietary information of Packeteer, including internal source
code, interface specifications and related documentation for the Packeteer
product and related Packeteer information, all of which is of a
confidential nature and which contains valuable trade secrets, known-how,
and proprietary information of Packeteer (the "Packeteer Information") and
which constitutes Confidential Information under Recipient's agreement with
ADC.
This is to inform Recipient that the Packeteer Information cannot be used
for any purpose except for the specific purposes which ADC or Packeteer
authorize in writing and that Recipient is not authorized to disclose the
Packeteer Information to any person at any time except to employees of
Packeteer and to those Authorized Employees and Authorized Contractors
which ADC informs Recipient are authorized to receive such Packeteer
Information.
All materials including, without limitation, programs, recorded
information, documents, drawings, models, apparatus, sketches, designs, and
lists furnished to Recipient by ADC or Packeteer which are designated in
writing to be the property of Packeteer remain the property of Packeteer
and must be returned to Packeteer promptly at its request, together with
any copies or modifications thereof."
ADC guarantees the compliance of all such Authorized Employees and Authorized
Contractors with their obligations under such confidentiality agreements.
2. PRIOR APPROVAL OF CONTRACTORS. Notwithstanding the provisions in this
ATTACHMENT E permitting Authorized Contractors to have access to Source
Information, ADC may not permit a contractor to come into contact with Source
Information, or engage in the
E-1.
<PAGE> 25
development of the Ported Software hereunder unless ADC has first obtained such
authorization in writing from Packeteer. Packeteer, in its sole discretion, may
withhold such approval in the event that a contractor (or contractor's
employer) to whom ADC intends to disclose Source Information is engaged in
Competitive Product development, either for its own benefit or for the benefit
of a third party, or if Packeteer believes that the contractor may be engaged
in similar product development, and ADC cannot assure Packeteer to its
satisfaction that contractor, while engaged in supporting such development
activities, will be able to refrain from commingling or sharing any portion of
the Source Information with any such Competitive Product development.
3. PACKETEER SUPPORT INFORMATION.
3.1 ADC will ensure that all Source Information received from
Packeteer, and copies made thereof, will be properly marked or otherwise
appropriately identified as Packeteer Information before being made available
to Authorized Employees and Authorized Contractors hereunder.
3.2 ADC will ensure that the same degree of care is used to prevent
the unauthorized use, dissemination, or publication of the Source Information
as ADC uses to protect its own confidential information of a like nature, but
in no event will the safeguards for protecting such Packeteer Support
Information be less than a reasonably prudent business would exercise under
similar circumstances. ADC will take prompt and appropriate action to prevent
unauthorized use or disclosure of Source Information.
3.3 ADC will instruct Authorized Employees and Authorized
contractors not to copy Source Information on their own, and not to disclose
Source Information to any one not authorized to receive it.
3.4 Source Information will be handled, used, and stored solely at
the Development Site. The Source Information will not be stored on any computer
or network which is accessible from outside of the Development Site or by
people other than Authorized Employees or Authorized Contractors.
3.5 ADC will provide Packeteer with a log of all Authorized
Employees and Authorized Contractors who have access to the Source Information
and who have had access in the preceding five (5) years.
4. TRADE SECRETS. The Packeteer Software, including the techniques,
algorithms, and processes contained in the Packeteer Software which have been
developed, acquired, or licensed by Packeteer, or any modification or
extraction thereof, constitute trade secrets of Packeteer and/or its suppliers,
and will be used by ADC only in accordance with the terms of this Agreement. ADC
will take all measures reasonably required to protect the proprietary rights of
Packeteer and its suppliers in the Packeteer Software and will promptly notify
Packeteer of any lost or missing items and take all reasonable steps to recover
such items. ADC agrees that it will not attempt to reverse engineer any portion
of the Packeteer Software which is provided to ADC solely in object code form.
5. NO COMMINGLING OF TECHNOLOGY. If ADC engages in development of
products (other than the Ported Software) that are comparable to the Packeteer
Software
E-2.
<PAGE> 26
("Comparable Products") during the term of this Agreement, it will ensure that
there is no sharing with such Comparable Products development any of the
following: (a) design documents of schematics supplied by Packeteer; (b) Source
Information or other information based upon or derived from the Source
Information; or (c) any computing resources (including, but not limited to,
computer systems and network storage devices), or (d) personnel with access to
any of (a)-(c) above. ADC will ensure that all Authorized Employees and
Authorized Contractors who have had previous access to the Packeteer Software
will be precluded for a period of twenty-four (24) months after their latest
access to such Packeteer Software from being employed in any Comparable Product
development (either internally or externally) by or for ADC or any Competitive
Product (as defined in PARAGRAPH 10.8 ("Access") of this Agreement) or
Comparable Product development for any third parties. "Employment in any
Competitive (or Comparable) Product development" will be defined as having
direct access to, or producing any specifications, documentation, or source
code, for components of a Competitive (or Comparable) Product.
6. PROPRIETARY RIGHTS AUDIT. During the term of the Agreement and for a
period of twenty-four (24) months thereafter, an independent auditor selected
by Packeteer will have access to such portion of ADC's records and premises to
allow Packeteer to determine whether ADC is substantially in compliance with
this ATTACHMENT E and PARAGRAPH 10 ("Protection of Proprietary Rights") of the
Agreement. In no event will audits be made hereunder more frequently than twice
per year. Such access will be (a) during ADC's regular business hours, (b)
arranged so that, to the extent possible, ADC's regular business activities are
minimally disrupted and (c) under the terms of an appropriate confidentiality
agreement executed by the individual(s) conducting such audit. ADC will
immediately correct any deficiencies discovered in the course of the audit.
E-3.
<PAGE> 27
ATTACHMENT F
SPECIFICATIONS FOR ADC PRODUCT
A ServicePoint device is a WAN access termination hardware device.
ServicePoint MAS (Modular Access Solutions) is a software base capable of
running on ADC's ServicePoint line of WAN access termination hardware devices
or its partners WAN access termination hardware devices.
ServicePoint MAS software will, after the Effective Date of the Agreement to
which this Attachment F is attached, always include the [*].
Some configurations of the ServicePoint MAS software may also enable the [*].
The ServicePoint MAS software otherwise includes at least one of the following
capabilities in any combination:
[*].
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
F-1.
<PAGE> 28
ATTACHMENT H
SOURCE CODE SITES
ADC Kentrox facility in Portland, Oregon.
14375 Northwest Science Park Drive
Portland, OR 97229
ADC Kentrox facility in the San Francisco bay area (Silicon Valley).
(As of 12/98)
2755 Campus Drive, Suite 165
San Mateo, CA 94403
(As of 1/99)
800 El Camino Real, Suite 100
Mountain View, CA
H-1.
<PAGE> 29
SCHEDULE I
FEES
I. PRODUCT DISTRIBUTION. ADC will pay Packeteer:
A. APPLICATION DISCOVERY SOFTWARE PACKAGE:
$[*] for each ADC Product distributed by or on behalf of ADC in which
the Application Discovery Software Package is included. ADC will make
minimum royalty payments (on a quarterly basis) for Application
Discovery for the first two years from the FCS Date (as defined in
Section III below) as set forth below.
<TABLE>
<CAPTION>
Application Discovery
royalties Annual Minimum
Year ADC Prepaid Units Royalty amount
<S> <C> <C>
1 [*] [*]
2 [*] [*]
</TABLE>
The minimum quarterly payments due for Application Discovery Software
Package units:
<TABLE>
<CAPTION>
Year Quarter 1 Quarter 2 Quarter 3 Quarter 4
<S> <C> <C> <C> <C> <C>
1 Total = [*] [*] [*] [*] [*]
2 Total = [*] [*] [*] [*] [*]
</TABLE>
B. RATE CONTROL SOFTWARE PACKAGE:
ADC will pay Packeteer the following for each unit distributed with
Rate Control functionality and for each unit upgrade to include Rate
Control functionality
<TABLE>
<S> <C> <C>
First [*] units Per T1 port or equivalent [*]
in the United States, and
per E1 port or equivalent
in International markets
Units [*] to [*] Per T1 port or equivalent [*]
in the United States, and
per E1 port or equivalent
in International markets
Units [*] to [*] Per T1 port or equivalent [*]
in the United States, and
per E1 port or equivalent
in International markets
For all units over [*] Per T1 port or equivalent [*]
in the United States, and
</TABLE>
SCHEDULE-1.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 30
per E1 port or equivalent
in International markets
ADC will make minimum royalty payments (on a quarterly basis) for units which
include (or are upgraded to) Rate Control Software Package for the first two
years of the Agreement as set forth below:
<TABLE>
<CAPTION>
Rate Control royalties
Year ADC Prepaid Annual Minimum
Units Royalty amount
<S> <C> <C>
1 [*] [*]
2 [*] [*]
</TABLE>
The minimum quarterly payments due for Rate Control Software Package units:
<TABLE>
<CAPTION>
Year Quarter 1 Quarter 2 Quarter 3 Quarter 4
<S> <C> <C> <C> <C> <C>
1 Total = [*] [*] [*] [*] [*]
2 Total = [*] [*] [*] [*] [*]
</TABLE>
ADC will make payments for the prepaid royalty commitments for both the
Application Discovery and Rate Control packages on a quarterly basis for the
first two years. After the first two years (and not during such two-year
period), if the royalty commitments previously paid exceed the amounts due for
the units already shipped, ADC may apply such balance to future units shipped
in accordance with the royalty schedule set forth above.
II. MAINTENANCE RELEASES. There is no further royalty due to Packeteer for any
copies of any Updates distributed to End Users.
The Maintenance Fee will be [*] annually and paid at the beginning of
the period. This fee will commence at the beginning of the second year of
the Agreement.
III. TIMING OF PAYMENTS. The initial obligation to pay the royalties set forth
above shall commence upon the earlier of (i) the first commercial shipment of
an ADC Product unit to the distribution channel (the "FCS Date") and (ii) July
1, 1999, and shall continue for two years thereafter. The quarterly payments
due shall accompany the reports furnished under PARAGRAPH 5.5 ("Reporting"). In
the event that ADC's royalty obligations for units shipped during any quarter
exceeds the minimum quarterly royalty obligation payable for such quarter, ADC
shall remit the additional royalties due along with the other quarterly
payments for such quarter.
References to calendar quarters and year periods for the royalty obligations
(but not the maintenance payments) set forth in Section I above are measured
from the FCS Date.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
G-2.
<PAGE> 1
EXHIBIT 10.13
LUCENT TECHNOLOGIES INC.
STANDARD OEM PURCHASE AGREEMENT TERMS AND CONDITIONS
Agreement No. SC11990054
Sheet 1 of 28
Packeteer Inc.
10495 N. De Anza Blvd.
Cupertino, CA 95014
This Agreement is made by and between Lucent Technologies Inc. ("Company")
having an office at 188 Mt Airy Road, Basking Ridge, NJ 07920 and Packeteer Inc.
("Supplier") having an office at 10495 N. De Anza Blvd., Cupertino, CA 95014.
Company agrees to purchase and Supplier agrees to sell in accordance with the
terms and conditions stated in this Agreement and any attachments to this
Agreement.
WHEREAS, Company wishes to purchase products of Supplier's (design and)
manufacture for resale to Company's customers, and
WHEREAS, Supplier desires to sell such materials to Company for resale to
Company's customers,
THEREFORE, the parties agree as follows
1. AGREEMENT EFFECTIVE PERIOD
The term of this Agreement shall commence on, June 25, 1999, and
shall, except as otherwise provided in this Agreement, continue in effect
thereafter until September 21, 2003.
2. MATERIAL
"MATERIAL" as used in this Agreement shall mean Supplier's
PacketShaper Products as listed in APPENDIX A, attached and made a part of
this Agreement. Such MATERIAL is hereby offered for sale of hardware and
license to software by Supplier and may be purchased by Company in
accordance with the terms, conditions and specifications stated in this
Agreement. This Agreement is a non-commitment agreement and MATERIAL shall
be furnished by Supplier on an as-ordered basis.
<PAGE> 2
Agreement No. SC11990054
Sheet 2 of 28
"Specification(s)" as used in this Agreement shall mean all of the
specifications made part of this Agreement.
3. OPTION TO EXTEND
Company shall have the right to extend the period specified in the
section "AGREEMENT EFFECTIVE PERIOD" for up to twelve (12) months by
giving Supplier at least thirty (30) business days prior written notice.
Within ten (10) business days of the date of Company's notice to
extend the period, Supplier shall notify Company in writing whether
Supplier proposes to revise the price(s) under this Agreement. If the
parties fail to agree on the revised price(s) within twenty (20) business
days after the date of Supplier's notice, Company's notice of extension
shall be considered withdrawn and prices for outstanding orders or orders
placed during the term of this Agreement shall not be revised.
4. PRICE AND DISCOUNTS
Prices shall be as shown in APPENDIX A. Prices as listed in
Appendix A shall remain in effect during the period June 25, 1999 through
June 24, 2000. Thereafter, Supplier may increase prices once in the
remaining twelve (12) months term of the Agreement. Supplier shall notify
Company sixty (60) business days in advance of any proposed price
increase. Orders placed prior to the proposed effective date shall not be
affected by the proposed price revision. If Company and Supplier fail to
agree upon prices by the proposed effective date, Company reserves the
right to terminate this Agreement and any outstanding purchase orders
placed against this Agreement without any cost to or liability or
obligation of Company.
5. COST REDUCTION
Both parties shall endeavor to reduce the costs of products
furnished under this Agreement.
6. BEST PRICE
If, at any time during the term of this Agreement Supplier should
sell to any customer other than to affiliates or subsidiaries of Supplier,
material at least equal or similar quality and volume at a price lower
than that in effect under this Agreement, Company shall pay such lower
price on all deliveries of MATERIAL which are made during the period when
such lower price is in effect Subject to Company's obligations including
without limitation, Company's obligations of confidentiality, and upon ten
(10) days written notice and not more than twice per calendar year, a
qualified third party, reasonably acceptable to both parties, may audit
Supplier's applicable books and records for the purpose of verifying
Supplier's compliance with this provision. Such third party shall be
subject to a confidentiality agreement and any report shall be limited to
verifying Supplier's obligations under this section.
7. TERMS OF PAYMENT
Net thirty (30) business days from the date of shipment of the
MATERIAL to Company, or designate, or receipt of the applicable invoice.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 3
Agreement No. SC11990054
Sheet 3 of 28
8. FORECASTS
Company shall provide Supplier with a [*] forecast submitted to
Supplier by the fifth (5th) business day of each calendar month. Such
forecast shall be used by Supplier for planning purposes only and shall
not be deemed a commitment by Company to purchase the MATERIAL shown in
the forecast.
9. FOB
The MATERIAL shall be shipped FOB Supplier's location ( or such
other Supplier's location as may be designated by Supplier). Company shall
select the carrier(s) and provide the name(s) of the carrier(s) and
Company's account number(s) with said carriers to Supplier within thirty
(30) days of execution of this Agreement.
10. FREIGHT CLASSIFICATION
MATERIAL purchased under this Agreement shall be shipped to Company
or Company's customers subject to freight charges appropriate for goods
classified as Data Communication Products. Supplier shall indicate on the
bill of lading that Company's contract rates apply.
11. NON-EXCLUSIVE MARKET RIGHTS
This Agreement neither grants to Supplier an exclusive right or
privilege to sell to Company any or all products of the type described in
the MATERIAL section which Company may require, nor requires the purchase
of any MATERIAL or other products from Supplier by Company. Therefore,
Company may contract with other manufacturers and suppliers for the
procurement of comparable products. In addition, Company shall, at its
sole discretion, decide the extent to which Company will market advertise,
promote, support or otherwise assist in further offerings of the MATERIAL.
Purchases by Company under this Agreement shall neither restrict the
right of Company to cease purchasing nor require Company to continue any
level of such purchases. Company's right to any supply of MATERIAL
hereunder is non-exclusive except for MATERIAL marked with INSIGNIA.
Supplier shall have the right to supply comparable products to third
parties.
12. SPECIFICATIONS OR DRAWINGS
Supplier's standard commercial specifications (data sheets) are
included by reference and further defined in APPENDIX B
("Specifications"). Supplier shall manufacture MATERIAL in accordance with
Specifications, so that MATERIAL conforms to such Specifications.
In accordance with the notification requirements outlined in Section
"PRODUCT CHANGES", Supplier shall provide Company with at least thirty
(30) business days prior written notice of any hardware change, and any
notification of any software change
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 4
Agreement No. SC11990054
Sheet 4 of 28
to be made by Supplier in the MATERIAL furnished pursuant to said
Specifications under this Agreement.
If Company, in its sole discretion, does not agree to the change
proposed by Supplier, Company may submit a Modification Request to address
the change. If the Company's Modification Request is not an acceptable
solution, then in lieu of all other rights and remedies at law or equity
or otherwise, and without any cost to or liability or obligation of
Company, Company shall have the right to terminate this Agreement .
Supplier shall continue to supply MATERIAL to Company pursuant to
the Specifications for the term of the Agreement. If Supplier is unable to
continue to thus supply or discontinues manufacture of MATERIAL, Company
shall be entitled to three (3) month's advance notice, provided (i) the
discontinuance is at Supplier's election and (ii) there has been a
reasonable amount of purchases during the period preceding Supplier's
notice of discontinuance.
13. ASSIGNMENT
Supplier shall not assign any right or interest under this Agreement
(excepting solely for moneys due or to become due) without the prior
written consent of Company, provided however, no such consent shall be
required in connection with the sale of all or substantially all of the
business of Supplier related to MATERIAL or in connection with any merger,
reorganization or sale of Supplier. Except where Company has specified a
designated subcontractor, Supplier shall be responsible to Company for all
work performed by Supplier's subcontractor(s) at any tier. In the event of
an assignment, Company may terminate this Agreement or an order, in whole
or in part, by written notice to Supplier. In such case, Company's
liability shall be limited to payment of the amount due for Work performed
and/or MATERIAL provided by Supplier up to and including the date of
termination.
14. BANKRUPTCY AND TERMINATION FOR FINANCIAL INSECURITY
Either party may terminate this Agreement by notice in writing:
(i) if the other party makes an assignment for the benefit of
creditors (other than solely an assignment of monies due); or:
(ii) if the other party evidences an inability to pay debts as they
become due, unless adequate assurance of such ability to pay
is provided within thirty (30) days of such notice.
If a proceeding is commenced under any provision of the United
States Bankruptcy Code, voluntary or involuntary, by or against either
party, and this Agreement has not been terminated, the non-debtor party
may file a request with the bankruptcy court to have the court set a date
within sixty (60) days after the commencement of the case, by which the
debtor party will assume or reject this
<PAGE> 5
Agreement No. SC11990054
Sheet 5 of 28
Agreement, and the debtor party shall cooperate and take whatever steps
necessary to assume or reject the Agreement by such date.
15. CFC PACKAGING
Supplier warrants that all packaging materials furnished under this
Agreement and all packaging associated with MATERIAL furnished under this
Agreement were not manufactured using and do not contain
chlorofluorocarbons. "Packaging" means all bags, wrapping, boxes, cartons
and any other packing materials used for packaging. Supplier shall
indemnify and hold Company harmless for any liability, fine or penalty
incurred by Company to any third party or governmental agency arising out
of Company's good faith reliance upon said warranty.
16. CHOICE OF LAW
This Agreement and all transactions under it shall be governed by
the laws of the State of New Jersey excluding its choice of laws rules and
excluding the Convention for the International Sale of Goods. Supplier
agrees to submit to the jurisdiction of any court wherein an action is
commenced against Company based on a claim for which Supplier has agreed
to indemnify Company under this Agreement.
17. COMPLIANCE WITH LAWS
Supplier and Company and all persons furnished by Supplier and
Company shall comply at their own expense with all applicable laws,
ordinances, regulations and codes, export regulations, including the
identification and procurement of required permits, certificates,
licenses, insurance, approvals and inspections in performance under this
Agreement.
18. CONTINUING AVAILABILITY
Supplier shall offer for sale to Company, during the term of this
Agreement and for at least six (6) months after the expiration of this
Agreement, MATERIAL conforming to the Specifications set forth in this
Agreement. Supplier further shall offer for sale to Company, during the
term of this Agreement and until [*] after the expiration of this
Agreement, maintenance, replacement, and repair parts ("Parts") which are
functionally equivalent for the MATERIAL covered by this Agreement. The
price for the MATERIAL and Parts shall be the price set forth in
Supplier's then current agreement with Company for said MATERIAL or Parts
or, if no such agreement exists, at a price agreed upon by Company and
Supplier. If the parties fail to agree on a price, the price shall be a
reasonably competitive price for said MATERIAL or Parts at the time for
delivery. The MATERIAL and Parts shall be warranted as set forth in the
"WARRANTY" section of this Agreement. The term "Parts" is included in the
term "MATERIAL."
In the event Supplier fails to supply such MATERIAL or Parts and
Supplier is unable to obtain another source of supply for Company, then
Company and Supplier shall endeavor to develop an alternative method of
provisioning MATERIAL or parts, which
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 6
Agreement No. SC11990054
Sheet 6 of 28
may include licensing Manufacturing Rights to Company. At that time, both
parties shall determine necessary measures required for Company to obtain
MATERIAL under this license.
19. DEFAULT
If either Supplier or Company shall be in breach or default of any
of the terms, conditions or covenants of this Agreement or of any purchase
order, and if such breach or default shall continue for a period of thirty
(30) days after the giving of written notice to the other party then, in
addition to all other rights and remedies which each party may have at law
or equity or otherwise, Supplier or Company shall have the right to cancel
this Agreement and/or any purchase orders placed by Company without any
charge to or obligation or liability of either party.
20. ELECTRONIC DELIVERY SERVICE
Supplier agrees, if requested by Company, to implement Electronic
Delivery Service (EDS) ordering arrangements as an electronic means of
trading business document with Company when it can reasonably accomplish
the task. The electronic business documents include purchase orders,
acknowledgments, purchase order changes, ship notices, remittance advice,
or such purchasing communications as may be requested by Company for
transaction under this Agreement.
21. EPIDEMIC CONDITION
If during the term of this Agreement and for [*] after the last
shipment date of MATERIAL under this Agreement Company notifies Supplier
that MATERIAL shows evidence of an "Epidemic Condition," Supplier shall
prepare and propose a Corrective Action Plan ("CAP") with respect to such
MATERIAL within fifteen (15) working days of such notification, addressing
implementation and procedure milestones for remedying such Epidemic
Condition(s). An extension of this time-frame is permissible upon mutual
written agreement of the parties.
Upon notification of the Epidemic Condition to Supplier, Company
shall have the right to postpone all or part of the shipments of unshipped
MATERIAL, by giving written notice of such postponement to Supplier,
pending correction of the Epidemic Condition. Such postponement shall
temporarily relieve Supplier of its shipment liability and Company of its
shipment acceptance liability. Should Supplier not agree to the existence
of an Epidemic Condition or should Company not agree to the CAP, then
Company shall have the right to suspend all or part of its unshipped
orders without liability to Company until such time as a mutually
acceptable solution is reached.
An Epidemic Condition will be considered to exist when one or more
of the following conditions occur:
(1) Failure reports or statistical samplings show that MATERIAL
shipped contain a potential safety hazard (such as personal injury or
death, fire, explosion, toxic
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 7
Agreement No. SC11990054
Sheet 7 of 28
emissions, etc.), or exhibit a highly objectionable symptom (such as
emissions of smoke, loud noises, deformation of housing) or other
disconcerting symptoms of this type.
(2) Reliability plots of relevant data indicate that the MATERIAL
has actual Mean Time Between Failures (MTBF) of less than 80% of the MTBF
stipulated in the Specification. The MTBF parameter of MATERIAL is defined
as the total operating or power-on time of any population under
observation ("T"), in hours, divided by the total number of critical
failures ("n") that have occurred during the observed period. A critical
failure is defined as a failure to operate per the requirements of the
Specification. The total operating time of a population is the summation
of operating time of individual units in that population. MTBF is
expressed as MTBF = T/n. An Epidemic Condition shall exist when data
derived from populations being tracked confirms the condition with 80%
confidence. (3) MATERIAL Dead on Arrival (DOA) failures exceed the
Epidemic DOA failure rate which is defined as 1.2 x DOA specified in the
section of this Agreement entitled PRODUCT CONFORMANCE REVIEW.
Only major hardware failures and visual/mechanical/appearance
defects are considered for determining Epidemic Condition. MATERIAL could
be either sampled or, a Company's option, 100% audited at Company
warehouses, factories or Company's customers' locations. If MATERIAL is
sampled, the data must have 80% or better statistical confidence.
For the purpose of this Agreement, functional DOA shall be defined
as any MATERIAL that during the test, installation or upon its first use
fails to operate in accordance with the Specifications as defined or
specified in writing. Visual/mechanical/appearance DOA is defined as any
MATERIAL containing one or more major defects that would make the MATERIAL
unfit for use or installation.
An Epidemic Condition shall not include failures due to customer
misapplication, utilization of parts not approved by Supplier, or chain
failures induced by internally or externally integrated subassemblies.
In the event that Supplier develops a remedy for the defect(s) that
caused the Epidemic Condition and Company agrees in writing that the
remedy is acceptable, such acceptance shall not be unreasonably withheld
or delayed, Supplier shall:
(a) Incorporate the remedy in the affected MATERIAL in accordance with
Company's written instructions.
(b) Ship all subsequent MATERIAL incorporating the required modification
correcting the defect(s) at no additional charge to Company; and
(c) Repair and/or replace MATERIAL that caused the Epidemic Condition. In
the event that Company incurs reasonable and documented costs due to such
repair and/or
<PAGE> 8
Agreement No. SC11990054
Sheet 8 of 28
replacement, including but not limited to labor and shipping costs,
Company shall supply such documentation and Supplier shall reimburse
Company for such reasonable costs. Supplier shall bear risk of in transit
loss and damage for such repaired and/or replaced MATERIAL.
Supplier and Company shall mutually agree in writing as to the
remedy's implementation schedule. Supplier shall use its best efforts to
implement the remedy in accordance with the agreed-upon schedule.
If Supplier is unable to develop a mutually agreeable remedy, or
does not adequately take into account the business interests of Company,
as reasonably agreed by the parties, Company may (1) develop and implement
such remedy and, in such case, implementation costs and risk of in-
transit loss and damage shall be allocated between the parties as set
forth in this section, and/or (2) cancel postponed orders without
liability and return all MATERIAL affected by such Epidemic Condition for
full refund, payable by Supplier within thirty (30) business days after
receipt of returned MATERIAL (with risk of loss or in-transit damage borne
by Supplier) and/or (3) terminate this Agreement without further
liability.
22. EXPORT CONTROL
Supplier and Company will not use, distribute, transfer or transmit
any products, software or technical information (even if incorporated into
other products) provided under this Agreement except in compliance with
U.S. export laws and regulations (the "Export Laws"). Supplier and Company
will not, directly or indirectly, export or re-export the following items
to any country which is in the then current list of prohibited countries
specified in the applicable Export Laws:(a) software or technical data
disclosed or provided to Supplier by Company or by Company to Supplier or
Company's subsidiaries or affiliates; or (b) the direct product of such
software or technical data. Supplier and Company agree to promptly inform
the other party in writing of any written authorization issued by the U.S.
Department of Commerce office of export licensing to export or re-export
any such items referenced in (a) or (b). The obligations stated above in
this clause will survive the expiration, cancellation or termination of
this Agreement or any other related agreement.
23. FORCE MAJEURE
Neither party shall be held responsible for any delay or failure in
performance of any part of this Agreement (except for the obligation to
pay money) to the extent such delay or failure is caused by fire, flood,
strike, civil, governmental, or military authority, act of God, or other
similar causes beyond its control and without the fault or negligence of
the delayed or non performing party or its subcontractors. Supplier's
liability for loss or damage to Company's MATERIAL in Supplier's
possession or control shall not be modified by this section. When a
party's delay or nonperformance continues for a period of at least fifteen
(15) days, the other party may terminate, at no charge, this Agreement or
an order under the Agreement.
<PAGE> 9
Agreement No. SC11990054
Sheet 9 of 28
24. GOVERNMENT CONTRACT PROVISIONS
The following provisions regarding equal opportunity, and all
applicable laws, rules, regulations and executive orders specifically
related thereto, including applicable provisions and sections from the
Federal Acquisition Regulation and all supplements thereto are
incorporated in this Agreement as they apply to work performed under
specific U.S. Government contracts: 41 CFR 60-1.4, Equal Opportunity; 41
CFR 60-1.7, Reports and Other Required Information; 41 CFR 60-1.8,
Segregated Facilities; 41 CFR 60-250.4, Affirmative Action For Disabled
Veterans and Veterans of the Vietnam Era (if in excess of $10,000); and 41
CFR 60-741.4, Affirmative Action for Disabled Workers (if in excess of
$2,500), wherein the terms "contractor" and "subcontractor" shall mean
"Supplier". In addition, orders placed under this Agreement containing a
notation that the material or services are intended for use under
Government contracts shall be subject to such other Government provisions
printed, typed or written thereon, or on the reverse side thereof, or in
attachments thereto.
25. HEAVY METALS IN PACKAGING
Supplier warrants to Company that no lead, cadmium, mercury or
hexavalent chromium have been intentionally added to any packaging or
packaging component (as defined under applicable laws) to be provided to
Company under this Agreement and that packaging materials were not
manufactured using and do not contain chlorofluorocarbons. Supplier
further warrants to Company that the sum of the concentration levels of
lead, cadmium, mercury and hexavalent chromium in the package or packaging
component provided to Company under this Agreement does not exceed 100
parts per million. Upon request, Supplier shall provide to Company
Certificates of Compliance certifying that the packaging and/or packaging
components provided under this Agreement are in compliance with the
requirements set forth above in this section.
26. IDENTIFICATION
Except where provided by law, neither party shall, without the other
party's prior written consent, which consent shall not be unreasonably
withheld, engage in publicity related to this Agreement, or make public
use of any Identification in any circumstances related to this Agreement.
"Identification" means any semblance of any trade name, trademark, service
mark, insignia, symbol, logo, or any other designation, or drawing of
either party or its affiliates. Supplier shall remove or obliterate any
Identification prior to any use or disposition of any MATERIAL rejected or
not purchased by Company.
27. INDEMNITY
At Company's request, Supplier agrees to indemnify, defend and hold
harmless Company, its affiliates, customers, employees, successors and
assigns (all referred to as "Company") from and against any losses,
damages, claims, fines, penalties and expenses (including reasonable
attorney's fees) that arise out of or result from: (i) injuries or death
to persons or damage to property, including theft, in any way arising out
of or caused or alleged to have been caused by the Work or services
performed by, or material provided by Supplier or persons furnished by
Supplier; (ii) assertions under
<PAGE> 10
Agreement No. SC11990054
Sheet 10 of 28
Workers' Compensation or similar acts made by persons furnished by
Supplier; or (iii) any failure of Supplier to perform its obligations
under this Agreement; provided however, Supplier shall not be liable for
any expense or settlement under this section unless Supplier shall have
complete control of the defense of any claim or settlement, and Company
timely notifies Supplier of any claim or allegation and shall cooperate,
at Supplier's expense, in good faith with Supplier to facilitate the
defense of any such claim or allegation. Supplier agrees not to make any
admissions that would be detrimental to Company.
28. INFRINGEMENT
Supplier shall indemnify and save harmless Company, its affiliates
and their customers, officers, directors, employees (all referred to in
this section as "Company") from and against any losses, damages,
liabilities, fines, penalties, and expenses (including reasonable
attorneys' fees) that arise out of or result from any and all claims (i)
of infringement of any patent, copyright, trademark or trade secret right,
or other intellectual property right, private right, or any other
proprietary or personal interest, and (ii) related by circumstances to the
existence of this Agreement or performance under or in contemplation of it
(an Infringement Claim). If the Infringement Claim arises solely from
Supplier's adherence to Company's written instructions regarding services
or tangible or intangible goods provided by Supplier (Items) and if the
Items are not (i) commercial items available on the open market or the
same as such items, or (ii) items of Supplier's designated origin, design
or selection, Company shall indemnify Supplier. Company or Supplier (at
Company's request) shall defend or settle, at its own expense any demand,
action or suit on any Infringement Claim for which it is indemnitor under
the preceding provisions; provided however, the party shall not be liable
for any expense or settlement under this section unless such party shall
have complete control of the defense of any Infringement Claim or
settlement and each shall timely notify the other of any assertion against
it or any Infringement Claim and shall cooperate in good faith with the
other to facilitate the defense of any such Claim.
29. INSIGNIA
Upon Company's written request, "Insignia", including certain
trademarks, trade names, insignia, symbols, decorative designs or
packaging designs of Company, or evidences of Company's inspection will be
properly affixed by Supplier to the MATERIAL furnished or its packaging.
Such Insignia will not be affixed, used or otherwise displayed on the
MATERIAL furnished or in connection therewith without written approval by
Company. The manner in which such Insignia will be affixed must be
approved in writing by Company in accordance with standards established by
Company. Company shall retain all right, title and interest in any and all
packaging designs, finished artwork and separations furnished to Supplier.
This section does not reduce or modify Supplier's obligations under the
"IDENTIFICATION" and "USE OF INFORMATION" section.
<PAGE> 11
Agreement No. SC11990054
Sheet 11 of 28
30. INSURANCE
Supplier shall maintain and cause Supplier's subcontractors to
maintain during the term of this Agreement: (i) Workers' Compensation
insurance as prescribed by the law of the state or nation in which the
Work is performed; (ii) employer's liability insurance with limits of at
least $500,000 for each occurrence; (iii) automobile liability insurance
if the use of motor vehicles is required, with limits of at least
$1,000,000 combined single limit for bodily injury and property damage for
each occurrence; (iv) Commercial General Liability ("CGL") insurance, iso
1988 or later occurrence form of insurance including Blanket Contractual
Liability and Broad Form Property Damage, with limits of at least
$1,000,000 combined single limit for bodily injury and property damage for
each occurrence; and (v) if the furnishing to Company (by sale or
otherwise) of products or material is involved, CGL insurance endorsed to
include products liability and completed operations coverage in the amount
of $5,000,000 per occurrence. All CGL and automobile liability insurance
shall designate Company, its affiliates, and its directors, officers and
employees (all referred to as "Company") as additional insured. All such
insurance must be primary and non-contributory and required to respond and
pay prior to any other insurance or self-insurance available. Any other
coverage available to Company shall apply on an excess basis. Supplier
agrees that Supplier, Supplier's insurer(s) and anyone claiming by,
through, under or in Supplier's behalf shall have no claim, right of
action or right of subrogation against Company and its customers based on
any loss or liability insured against under the foregoing insurance.
Supplier and Supplier's subcontractors shall furnish prior to the start of
Work, certificates or adequate proof of the foregoing insurance, including
if specifically requested by Company, endorsements and insurance policies.
Company shall be notified in writing at least thirty (30) days prior to
cancellation of or any change in the policy. Insurance companies providing
coverage under this Agreement must be rated by A-M Best with at least an
A-rating.
31. INVOICING FOR GOODS
Supplier shall: (i) render original invoice, or as otherwise
specified in this Agreement, showing Agreement and order number, through
routing and weight, (ii) render separate invoices for each shipment, and
(iii) mail invoices with copies of shipping notices to the address shown
on this Agreement or order. If prepayment of transportation charges is
authorized, Supplier shall include the transportation charges from the
F.O.B. point to the destination as a separate item on the invoice stating
the name of the carrier used.
32. INVOICING FOR STOCKS
If Company requests for reasons other than covered by Section "FORCE
MAJEURE", that shipment be postponed beyond the date shown on a purchase
order, Supplier may invoice Company as of the original scheduled delivery
date for MATERIAL manufactured under this Agreement, if it has been
inspected and approved by Company's designated quality organization
(provided inspection has been specified in this Agreement or in an order
issued under this Agreement).
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33. JURISDICTION
Subject to the section "MEDIATION", the parties agree that any
action or legal proceeding arising out of this Agreement shall be brought
only in a court of competent jurisdiction in the United States of America
and the parties expressly submit to, and accepts the jurisdiction of, any
such court in connection with such action or proceeding and the parties
further consent to the enforcement of any judgment arising therefrom in
any jurisdiction in which a losing party has or shall have any assets.
34. LICENSES
Except as provided in Section 42, no Licenses, express or implied,
under any patents, copyrights, trademarks or other proprietary rights are
granted by Company to Supplier, or by Supplier to Company, under this
Agreement or order.
35. MARKING
All MATERIAL furnished under this Agreement shall be marked for
identification purposes in accordance with the specifications set forth in
this Agreement and as follows:
(a) with Supplier model/serial number; and
(b) with month and year of manufacture.
(c) with Company's Comcode
In addition, Supplier shall add any other identification which might
be requested by Company such as but not limited to indicia conforming to
the Company's Serialization Plan (KS-23490) as shown in APPENDIX E.
Charges, if any, for such additional identification marking shall be as
agreed upon by Supplier and Company. This section does not reduce or
modify Supplier's obligations under the "IDENTIFICATION" section.
36. MEDIATION
If a dispute relates to this Agreement, or its breach, and the
parties have not been successful in resolving such dispute through
negotiation for not more than thirty (30) days from the notice by either
party of such a dispute, the parties shall attempt to resolve the dispute
through mediation by submitting the dispute to a sole mediator selected by
the parties or, at any time at the option of a party, to mediation by the
American Arbitration Association ("AAA"). Each party shall bear its own
expenses and an equal share of the expenses of the mediator and the fees
of the AAA. All defenses based on passage of time shall be suspended
pending the termination of the mediation. Nothing in this section shall be
construed to preclude any party from seeking injunctive relief in order to
protect its rights pending mediation.
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37. MONTHLY ORDER AND SHIPMENT REPORTS
Supplier shall render monthly order and shipment reports on or
before the fifth working day of the succeeding month containing the
information required on report form APPENDIX C. These forms will be
furnished by Company.
38. NEW AND CHANGED METHODS, PROCESSES AND EQUIPMENT
Supplier shall keep abreast of major developments in Supplier's
industry and to promptly advise Company of any developments which might
affect the production of any MATERIAL under this Agreement.
39. NON DISCLOSURE AGREEMENT
Whereas Company and Supplier each expect to disclose to the other
party certain information concerning products, business and strategies
which are considered confidential and proprietary and which neither party
wants to disclose to others, they have entered into a Non Disclosure
Agreement. A copy of the Non Disclosure Agreement is attached hereto and
made a part hereof, as APPENDIX D. This section does not reduce or modify
Supplier's obligations under Section "USE OF INFORMATION."
40. NON WAIVER
The failure of either party at any time to enforce any right or
remedy available to it under this Agreement or otherwise with respect to
any breach or failure by the other party shall not be construed to be a
waiver of such right or remedy with respect to any other breach or failure
by the other party.
41. NOTICES
Any notice given or demand which under the terms of this Agreement
or under any statute must or may be given or made by Supplier or Company
shall be in writing and shall be given or made by confirmed facsimile, or
similar communication or by certified or registered mail addressed to the
respective parties as follows
To Company: Lucent Technologies Inc.
Global Procurement Organization
188 Mt. Airy Road
Room C222
Basking Ridge, NJ 07920
Attn.: [*]
-OR-
To Supplier: Packeteer Inc.
10495 N. De Ariza Blvd.
Cupertino, CA 95014
Attn: Bill Klaus
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Such notice or demand shall be deemed to have been given or made
when sent by facsimile, or other communication or when deposited, postage
prepaid in the U.S. mail. The above addresses may be changed at any time
by giving prior written notice as above provided.
42. OPERATING SYSTEM SOFTWARE
The term MATERIAL includes any software (operating program in
machine readable form and related documentation) and storage media
therefor normally furnished with or embedded in the MATERIAL. Title to the
software, including copyright, shall remain in Supplier. The party having
title to the MATERIAL shall have title to the software storage media. For
the life of the MATERIAL listed in this Agreement, Supplier grants to
Company and any subsequent purchaser, lessee or other end user (referred
to collectively in this section as "end user") a non-exclusive license to
use said software on the MATERIAL on which it was delivered and only in
accordance with Supplier's documentation. Company and any subsequent end
user may not copy the software included on any storage media of the
MATERIAL except as such copy may be created by the execution or loading of
such software. Company will not reverse compile or disassemble the
software. Company will include and display all proprietary notices and/or
copyrights in or on the software in the form delivered by the Supplier
when the MATERIAL is operational.
43. OZONE DEPLETING CHEMICALS
Supplier hereby warrants that it is aware of international
agreements and pending legislation in several nations, including the
United States, which would limit, ban and/or tax importation of any
product containing, or produced using ozone depleting chemicals ("ODCs"),
including chloroflurocarbons, halons and certain chlorinated solvents.
Supplier hereby warrants that the MATERIAL furnished to Company will
conform to all applicable requirements established pursuant to such
agreements, legislation and regulations, and the MATERIAL furnished to
Company will be able to be imported and used lawfully (and without
additional taxes associated with ODCs not reported to Company by Supplier
as set forth in this section) under all such agreements, legislation and
requirements. Supplier also warrants that it is currently reducing, or if
Supplier is not the manufacturer of the MATERIAL, is currently causing the
manufacturing vendor to reduce and will, in an expeditious manner,
eliminate, or, as applicable, have its manufacturing vendor eliminate the
use of ODCs in the manufacture of the MATERIAL.
If the MATERIAL furnished by Supplier under this Agreement is
manufactured outside the United States, Supplier shall, upon execution of
this Agreement, and at any time that new products are added to this
Agreement or changes are made to the MATERIAL furnished under this
Agreement, complete, sign and return to Company the attached ODC Content
Certification. The ODC Content Certification must be signed by Supplier's
facility manager, corporate officer or his delegate.
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The term "ODC content" on the ODC Content Certification means the
total pounds of ODC used directly in the manufacture of each unit of
MATERIAL. This includes all ODCs used in the manufacturing and assembly
operations for the MATERIAL plus all ODCs used by Supplier's vendors and
any other vendors in producing components or other products incorporated
into the MATERIAL sold to Company.
Supplier is responsible to obtain information on the ODC content of
all components and other products acquired to manufacture the MATERIAL and
to incorporate such information into the total ODC content reported to
Company. Provided however, that Supplier should not include in the ODC
content those components or other products which are manufactured in the
United States. Supplier hereby warrants to Company that all information
furnished by Supplier on the ODC Content Certification is complete and
accurate and that Company may rely on such information for any purpose,
including but not limited to providing reports to government agencies or
otherwise complying with applicable laws. Supplier shall defend, indemnify
and hold Company harmless of and from any claims, demands, suits,
judgments, liabilities, fines, penalties, costs and expenses (including
additional ODC taxes as provided for in paragraph one of this section and
reasonable attorney's fees) which Company may incur under any applicable
federal, state, or local laws or international agreements, and any and all
amendments thereto by reason of Company's use of reliance on the
information furnished to Company by Supplier on the ODC Content
Certification or by reason of Supplier's breach of this section. Supplier
shall cooperate with Company in responding to any inquiry concerning the
use of ODCs to manufacture the MATERIAL or components thereof and to
execute without additional charge any documents reasonably required to
certify the absence or quantity of ODCs used to manufacture the MATERIAL
or components thereof.
44. OZONE DEPLETING SUBSTANCES LABELING
Supplier warrants and certifies that all MATERIAL and other
products, including packaging and packaging components, provided to
Company under this Agreement have been accurately labeled, in accordance
with the requirements of 40 CFR, Part 82 entitled "Protection of
Stratospheric Ozone, Subpart E- The Labeling of Products Using Ozone
Depleting Substances."
45. PACKING, LABELING AND SERIALIZATION
MATERIAL purchased, repaired, replaced or refurbished under this
Agreement shall be packed, labeled and serialized by Supplier at no
additional charge in accordance with specifications PKG-91NJ1045
"Packaging, Packing, Palletization, Labeling and Marking Requirements for
Material being Delivered to Lucent Technologies Manufacturing and
Distribution Locations", and KS-23490 "Product Bar Code, Serial and
Comcode Label," as changed from time to time with Supplier's written
approval, which Specifications are attached and made a part of this
Agreement as APPENDIX E. Company shall pre-approve and if approved, incur
the initial expenses for development of
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the packaging and labeling as specified in PKG-91NJ1045 and KS-23490. In
no event shall Company's labeling or other Identification marks be applied
to the interior of the MATERIAL, nor shall Supplier's marks be removed
from the interior of the MATERIAL. Pursuant to Company's written approval
of the design, all MATERIAL will be affixed with Supplier's logo.
46. PRODUCT CHANGES
Supplier shall provide Company with at least thirty (30) days, prior
written notice of any change proposed to be made in accordance with this
Agreement, or in the Specification and documentation covered by this
Agreement that would impact upon: (i) reliability, or (ii) functional
equivalency (as defined below).
The only exception will be in those cases where an extremely
hazardous or unsatisfactory condition requires immediate action.. In such
cases, verbal notification shall be made, followed by Supplier's prompt
written confirmation. Procedures for reporting MATERIAL changes are
described in "Product Change Notice Procedure", APPENDIX F.
Supplier shall submit changes to the following address:
Lucent Technologies Inc.
188 Mt. Airy Road
Room: C261
Basking Ridge, NJ 07920
Attn.: [*]
If the plan for MATERIAL Change is not accepted by Company, in
addition to all other rights and remedies at law or equity or otherwise,
and without any cost to or liability or obligation of Company, Company
shall have the right to terminate this Agreement and to terminate any or
all orders for MATERIAL affected by such change. Notwithstanding the
above, Supplier shall continue to provide functionally equivalent MATERIAL
for a period of twelve (12) months from the date the change is effective.
47. PRODUCT CONFORMANCE REVIEWS
Sections (1) or (2) applies if either is indicated in this Agreement
or an order issued pursuant to this Agreement. Section 30 applies to both
section (1) and (2). (1) All MATERIAL is subject to a Product Conformance
Review ("Review") prior to shipment. (1) Supplier shall notify Company's
designated quality inspection organization, at (609) 639-3149, when
MATERIAL is ready for such Review. (2) Supplier may ship MATERIAL without
a review but Company may perform such review prior to shipment by giving
Supplier notice to that effect, in which event Supplier shall notify
Company's designated quality inspection organization when MATERIAL is
ready for such review. (3) Supplier will provide, without charge,
appropriate production testing facilities and
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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personnel at a site of Supplier's selection required to perform or assist
in the Review as specified in the applicable Quality Program Specification
or other quality specification provided under this Agreement or order.
Company's Reviews as set forth herein may only be waived by written
notification from Company's designated quality inspection organization.
Quality Program Specification (QPS) No. 40.030, which may be changed
from time to time with Supplier's written approval, is attached and made a
part of this Agreement as APPENDIX G.
48. PRODUCT DOCUMENTATION
Supplier shall furnish, at no charge, product documentation, and any
succeeding changes thereto, as described in the Specifications. Company
may use, reproduce, reformat, modify and distribute such product
documentation.
Company shall reproduce Supplier's copyright notice contained in any
documentation reproduced without change by Company. For documentation
which is reformatted or modified by Company, Company shall have the right
to place only Company's own copyright notice on the reformatted or
modified documentation; provided that Supplier's copyright notice shall be
placed on any documentation or derivative work of Company.
49. PURCHASE ORDERS
Purchase orders issued under this Agreement shall be sent to the
following address:
Packeteer Inc.
10495 N. De Ariza Blvd.
Cupertino, CA 95014
Attn.: Sales Department
Purchase orders shall specify: (i) description of MATERIAL,
inclusive of any numerical/alphabetical identification referenced in the
price list in this Agreement, (ii) delivery date, (iii) applicable price,
(iv) location to which the MATERIAL is to be shipped and (v) location to
which invoices shall be sent for payment.
50. POINT OF SALE INFORMATION
Company shall provide Supplier, on a quarterly basis, data on the
location of Company's customers who purchase Supplier's MATERIAL provided
pursuant to this Agreement. Such information shall be supplied in machine
readable "softcopy" form in Excel format electronic mail to [*] in no
more than 45 days after the end of each calendar quarter. Format and
method of transmission may be changed from time to time pursuant to
agreement by both parties. Email address shall change upon notice by
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Supplier to Company. Information supplied shall include, without
limitation: MATERIAL product number, quantity sold, zip code of US
shipment or country (if international shipment).
51. REGISTRATION AND RADIATION STANDARDS
When MATERIAL furnished under this Agreement is subject to Part 68,
Part 15 or any other part of the Federal Communication Commission's Rules
and Regulations, as may be amended from time to time (hereinafter "FCC
Rules"), Supplier warrants that such MATERIAL complies with the
registration, certification, type-acceptance and/or verification standards
of the FCC Rules including, but not limited to, all labeling, customer
instruction requirements, and the suppression of radiation to specified
levels. Supplier shall also establish periodic on-going compliance
retesting and follow a Quality Control program, submitted by Company, to
assure that MATERIAL shipped complies with the applicable FCC Rules.
Supplier shall indemnify and save Company harmless from any liability,
fines, penalties, claims or demands (including the costs, expenses and
reasonable attorney's fees on account thereof) that may be made because of
Supplier's noncompliance with the applicable FCC Rules. Supplier shall
defend Company, at Company's request, against such liability, claim or
demand provided Supplier is promptly notified of any such claim or demand
and Company tenders full control of any such claim or demand to Supplier.
Company shall promptly advise Supplier in writing of any such claim and
shall reasonably cooperate, at Supplier's expense, with Supplier in the
defense or settlement thereof.
In addition, during the WARRANTY period, should MATERIAL which is
subject to Part 15 of the FCC Rules, during use generate harmful
interference to radio communications, Supplier shall provide the Company
information relating to methods of suppressing such interference and pay
the cost of suppressing such interference or, at the option of Company,
accept the return of the MATERIAL and [*].
To the extent that MATERIAL furnished under this Agreement is also
subject to FCC Rules governing the use of the MATERIAL as a component in a
system as identified in Supplier's Specifications , Company shall be
responsible for compliance with the applicable FCC Rules governing the
system. Supplier shall fully cooperate with Company, by providing
technical support and information, and, upon written request from Company,
shall modify MATERIAL to enable Company to ensure ongoing compliance with
the FCC Rules. Company shall pay any increase in Supplier's costs and/or
expenses resulting from Company's request to modify MATERIAL to enable
Company to comply with the FCC Rules.
Nothing in this section shall be deemed to diminish or otherwise
limit Supplier's obligations under the "WARRANTY" section or any other
section of this Agreement.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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52. REJECTIONS
If Company rejects any or all of the MATERIAL, Company may, in lieu
of other rights and remedies at law or equity, exercise one or more of the
following remedies: (1) return rejected MATERIAL for full credit at the
price charged plus transportation charges from Supplier's plant, and
return; or (2) accept a conforming part of any shipment; or (3) have
rejected MATERIAL replaced by Supplier at the purchase price stipulated in
this Agreement.
53. RELEASES VOID
Neither party shall require (i) waivers or releases of any personal
rights or (ii) execution of documents which conflict with the terms of
this Agreement, from employees, representatives or customers of the other
in connection with visits to its premises and both parties agree that no
such releases, waivers or documents shall be pleaded by them or third
persons in any action or proceeding.
54. REPAIRS NOT COVERED UNDER WARRANTY
In addition to repairs provided for in the "WARRANTY" section
Supplier shall provide repair service on all MATERIAL ordered under this
Agreement during the term of this Agreement and until * * *
after the expiration of this Agreement. MATERIAL to be repaired under
this section will be returned to a location designated by Supplier, and
unless otherwise agreed upon by Supplier and Company, Supplier shall ship
the repaired MATERIAL which meets the Specifications set forth in the
"SPECIFICATIONS OR DRAWINGS" section and all other Specifications within
ten (10) business days of receipt of the defective or non-conforming
MATERIAL. With the concurrence and scheduling of Company, repair may be
made by Supplier on site.
If MATERIAL is returned to Supplier for repair as provided for in
this section and is determined to be beyond repair, Supplier shall so
notify Company. If requested by Company, Supplier will sell to Company a
replacement at the price set forth in Supplier's then current agreement
with Company for said MATERIAL or, if no such agreement exists, at a price
agreed upon by Supplier and Company. If the parties fail to agree on a
price, the price shall be a reasonably competitive price for such MATERIAL
at the time for delivery. Further, if requested by Company, Supplier shall
take the necessary steps to dispose of the unrepairable MATERIAL and pay
to Company the salvage value, if any. Replacement and repaired MATERIAL
shall be warranted as set forth in the "WARRANTY" section.
This Agreement does not grant Supplier an exclusive privilege to
repair any or all of the MATERIAL purchased under this Agreement for which
Company may require repair; and Company may perform the repairs or
contract with others for these services. In addition, Supplier authorizes
Company and any qualified repairer with whom Company may contract to
perform repairs on all MATERIAL purchased under this Agreement. Not
withstanding any provision of this Agreement to the contrary, any MATERIAL
not repaired by Supplier shall not be covered by any warranty hereunder.
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All transportation costs of and in transit risk of loss and damage
to MATERIAL returned to Supplier for repair under this section will be
borne by Company and all transportation costs of and in transit risk of
loss and damage to such repaired or replacement MATERIAL returned to
Company will be borne by Company.
Price schedules for repairs under this section are listed in
APPENDIX A.
55. REPAIR PROCEDURES
Company shall furnish the following information with MATERIAL
returned to Supplier for repair: (a) Company's name and complete address;
(b) name(s) and telephone numbers(s) of Company's employee(s) to contact
in case of questions about the MATERIAL to be repaired; (c) ship-to
address for return of repaired MATERIAL if different than (a); (d) a
complete list of MATERIAL returned; (e) the nature of the defect or
failure if known; and (f) whether or not returned MATERIAL is in warranty.
Supplier shall, within ten (10) days of the execution of this Agreement,
provide a written notice to Company specifying (i) the name(s) and
telephone number(s) of the individual(s) to be contacted concerning any
questions that may arise concerning repair, and (ii) if required, any
special packing of MATERIAL which might be necessary to provide adequate
in-transit protection from transportation damage.
MATERIAL repaired by Supplier shall have the repair completion date
stenciled or otherwise identified in a permanent manner at a readily
visible location on the MATERIAL and the repaired MATERIAL shall be
returned with a tag or other papers describing the repairs which have been
made.
All invoices originated by Supplier for repair services must be
clearly identified as such, and must contain: (i) a reference to Company's
purchase order for these repair services, (ii) a detailed description of
repairs made by Supplier and the need therefor, and (iii) an itemized
listing of parts and labor charges, if any. Replaced parts will, upon
request, be available for inspection by or returned to Company. Further,
the provisions of the "INVOICING" and "SHIPPING" sections, other than
provisions relating to transportation charges with respect to MATERIAL
repaired under warranty, shall apply to Supplier's return to Company of
repaired MATERIAL.
56. RIGHT OF ENTRY
Subject to prior written notice of ten (10) days and not more than
twice per calendar year, each party shall have the right to enter the
premises of the other party during standard business hours for the purpose
of reasonable verification of each party's performance under this
Agreement, including an inspection or a Quality Review, subject to all
plant rules and regulations, clearances, security regulations and
procedures as applicable. Each party shall provide safe and proper
facilities for such purpose. No charge shall be made for such visits.
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57. SAFETY CERTIFICATION
All MATERIAL purchased under this Agreement shall be designed to be
in compliance with the applicable Underwriters Laboratories (UL)and
Canadian Standards Association (CSA) rules and regulations. It is agreed
that Supplier shall be responsible for filing the required documents to
obtain compliance with said Underwriters Laboratories Standards and
Canadian Standards. Supplier shall be responsible for making the MATERIAL
available for testing.
58. SECTION HEADINGS
The headings of the sections in this Agreement are inserted for
convenience only and are not intended to affect the meaning or
interpretation of this Agreement.
59. SERVICES
Visits by Supplier's representatives or its suppliers'
representatives for inspection, adjustment or other similar purposes in
connection with MATERIAL purchased under this Agreement shall for all
purposes be deemed "Work under this Agreement" and shall be at no charge
to Company unless otherwise agreed in writing between the parties.
60. SEVERABILITY
If any of the provisions of this Agreement shall be invalid or
unenforceable, such invalidity or unenforcability shall not invalidate or
render unenforceable the entire Agreement, but rather the entire Agreement
shall be construed as if not containing the particular invalid or
unenforceable provision or provisions, and the rights and obligations of
Supplier and Company shall be construed and enforced accordingly.
61. SHIPPING
Supplier shall: (i) ship the MATERIAL covered by this Agreement or
order complete unless instructed otherwise, (ii) ship to the destination
designated in the Agreement or order, (iii) ship according to routing
instructions given by Company, (iv) place the Agreement and order number
on all subordinate documents, (v) enclose a packing memorandum with each
shipment and, when more than one package is shipped, identify the package
containing the memorandum; and (vi) mark the order number on all packages
and shipping papers. Adequate protective packing shall be furnished at no
additional charge. Shipping and routing instructions may be furnished or
altered by Company without a writing. If Supplier does not comply with the
terms of the FOB section of the Agreement,Supplier authorizes Company to
deduct from any invoice of Supplier (or to charge back to Supplier), any
increased cost incurred by Company as a result of Supplier's
noncompliance.
62. SHIPPING INTERVAL
The delivery schedule applicable to each purchase order will be
agreed upon by Supplier and Company and set forth in the purchase order.
(Note: Supplier has indicated that MATERIAL can usually be shipped an
average of [*] after receipt of
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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Company's purchase order; however, in no event shall the delivery interval
[*] after acceptance of purchase order.)
If Supplier exceeds the above maximum interval then in lieu of all
other rights and remedies at law or equity or otherwise, and without any
liability or obligation of Company, Company shall have the right to: (a)
cancel such purchase order, or (b) extend such delivery date to a later
date, subject, however, to the right to cancel as in (a) preceding if
delivery is not made or performance is not completed on or before such
extended delivery date. If Company elects to extend such delivery date,
Supplier shall absorb the difference between the charges to ship normal
transportation and the charges to ship premium overnight.
If a purchase order is canceled by Company pursuant to the above,
Company shall have the right to retain or return any or all MATERIAL
received by or paid for by Company under such purchase order. Within [*]
business days of Supplier's receipt of returned MATERIAL, Supplier shall
reimburse Company for the costs of shipping the MATERIAL returned to
Supplier and for any amounts, including shipping costs, previously paid by
Company for the MATERIAL. Company shall pay for any MATERIAL if retains at
the prices set forth in APPENDIX A, less applicable discounts which shall
be applied on the basis of the quantity specified in the purchase order.
If, during the course of this Agreement, Supplier determines that
Supplier will no longer be able to ship within the above interval,
Supplier shall immediately notify Company's buyer to that effect.
Supplier shall also notify Company's buyer, as soon as it becomes
apparent, if Supplier is unable to meet the delivery date for an order.
However, nothing contained in this paragraph shall waive Company's rights
as set forth above in this section.
63. SHIPPING LOCATION
The material shall be shipped FOB ORIGIN.
64. STORAGE OF PAID FOR STOCK
Subject to the section "OPERATING SYSTEM SOFTWARE", Company has and
shall have at all times all right, title and interest in all MATERIAL
invoiced to Company in accordance with the section "INVOICING FOR STOCKS"
provided Company is in accordance with TERMS OF PAYMENT. Such MATERIAL
shall be referred to in this section as "Company Property." Supplier shall
store such Company Property without cost to Company at Supplier's
[ADDRESS] facility and ship such Company Property as ordered by Company
for a period not to exceed one (1) month. After said one (1) month,
Supplier may transfer Company Property to Company at Company's designated
facility. In addition, Supplier shall:
(i) Be responsible for the safekeeping of the Company Property as a
secondary insurer to Company, assume all risks of loss or damage to the
same and be
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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liable for the value paid for such Company Property. In case of removal of
all or any part of the Company Property from one building to another,
Supplier's responsibility for loss or damage shall continue and Supplier
shall give Company at least ten (10) days advance notice in writing of the
removal, except when the removal is required to comply with Company's
shipping orders or to protect the Company Property from loss or damage.
(ii) Permanently mark or if impracticable to do so then affix
labeling stating that the Company Property is the "PROPERTY OF LUCENT
TECHNOLOGIES INC." For purposes of this section, the term "LUCENT
TECHNOLOGIES INC." shall be deemed to mean Company or the Company
affiliated or associated company which owns the tooling, as applicable.
(iii) Store the Company Property safely, indoors in protected areas
approved by Company. Store the Company Property segregated from other
property in sections of Supplier's plant marked Property of Company.
(iv) Deliver the Company Property only to Company or Company's
designated customers in accordance with Company's orders or upon Company's
demand, FOB Supplier's plant without additional charge for removal,
packing, or crating.
(v) Supplier shall not allow any security interest, lien, tax lien
or other encumbrance (collectively referred to as "encumbrance") to be
placed on any Company Property. Supplier shall give Company immediate
written notice should any third party attempt to place or place an
encumbrance on such Company Property. Supplier shall indemnify and hold
Company harmless from any such encumbrance. Supplier shall, at Company's
request, promptly execute a "protective notice" UCC-1 form and all other
documents reasonably necessary to enable Company to protect its interest
in such Company Property. This Agreement shall constitute the security
agreement required by the UCC of the appropriate state.
(vi) Company may inspect, inventory, and authenticate the account of
the Company Property during Supplier's normal business hours. Supplier
shall provide Company access to the premises where all such Company
Property is located.
The obligations assumed by Supplier with respect to the Company
Property are for the protection of Company's property. If Supplier
defaults in carrying out Supplier's obligations under this Agreement,
then, at no cost to Company and upon twenty-four (24) hours notice to
Supplier, Company may cancel this Agreement in whole or in part or
withdraw all or any part of the Company Property, or both. Supplier shall,
at Company's option, return to Company or hold for Company's disposition
any or all of such Company Property in Supplier's possession.
<PAGE> 24
Agreement No. SC11990054
Sheet 24 of 28
65. SUPPLIER'S INFORMATION
Supplier shall not provide under, or have provided in contemplation
of, this Agreement any idea, data, program, technical, business or other
intangible information, however conveyed, or any document, print, tape,
disc, semiconductor memory or other information-conveying tangible
article, unless Supplier has the right to do so, and Supplier shall not
view any of the foregoing as confidential or proprietary. If Supplier must
furnish any such information to Company with restrictions, it shall be
furnished after negotiation and execution on behalf of Company of a
separate written agreement specifically identifying the documents to be
furnished and setting forth Company's rights and obligations with respect
hereto.
66. SURVIVAL OF OBLIGATIONS
Section 16, 18, 26, 27, 28, 29, 34, 37, 41, 42, and 61 shall survive
termination, cancellation or expiration of this Agreement.
67. TAXES
Company shall reimburse Supplier only for the following tax payments
with respect to transactions under this Agreement unless Company advises
Supplier than an exemption applies: state and local sales and use taxes,
as applicable. Taxes payable by Company shall be billed as separate items
on Supplier's invoices and shall not be included in Supplier's prices.
68. TECHNICAL SUPPORT
Company will be the primary interface to the customer and will
provide Tier 1, Tier 2 and Tier 3 technical customer support.
Supplier will provide Tier 4 technical customer support. "Tier 4"
means the fourth of four levels of technical customer support and
addresses issues escalated from Tier 3 when either the source of the issue
cannot be identified, or the issue is identified and must be addressed by
the manufacturer of the MATERIAL. Tier 4 technical customer support will
be provided 24 hours a day, 7 days a week via telephone or pager to
Company's support personnel at no charge. Supplier's response time shall
be within 30 minutes on Monday through Friday, 8:30 am - 5:30 pm (Pacific
Time), and within 2 hours at all other times.. Nine (9) months after the
effective date of this Agreement and every six months thereafter, Supplier
may request a review of Company's Tier 4 support requests that Supplier
believes do not fit into the category of support issues as defined in this
Section. Company shall be given a reasonable cure period to correct any
problem areas identified in the review before re-opening the Tier 4
compensation provision of this Section.
69. TERMINATION OF PURCHASE ORDER
Company may at any time terminate any portion or the total quantity
of any purchase order(s) placed under this Agreement. Company's liability
to Supplier with respect to such termination shall be limited to (i)
Supplier's purchase price of all
<PAGE> 25
Agreement No. SC11990054
Sheet 25 of 28
components for the MATERIAL (not usable in Supplier's other operations or
salable to Supplier's other customers), plus (ii) the actual costs
incurred by Supplier in procuring and manufacturing MATERIAL (not usable
in Supplier's other operations or salable to Supplier's other customers)
in process as of the date of giving notice of termination, less (iii) any
salvage value thereof. However, no such termination charges will be
invoiced if, within sixty (60) days of notice of termination, MATERIAL
equivalent in kind to that being terminated is ordered by Company. If
requested, Supplier shall substantiate such cost and price with proof
satisfactory to Company.
70. TIMELY PERFORMANCE
If Supplier has knowledge that anything prevents or threatens to
prevent the timely performance of the Work under this Agreement, Supplier
shall immediately notify Company's Representative thereof and include all
relevant information concerning the delay or potential delay.
71. TITLE AND RISK OF LOSS
Title (other than software) and risk of loss and damage to MATERIAL
shall vest in Company when the MATERIAL has been delivered at the FOB
point.
72. TOXIC SUBSTANCES AND PRODUCT HAZARDS
Supplier hereby warrants to Company that, except as expressly stated
elsewhere in this Agreement, all MATERIAL furnished by Supplier as
described in this Agreement is safe for its foreseeable use, is not
defined as a hazardous or toxic substance or material under applicable
federal, state or local law, ordinance, rule, regulation or order
(hereinafter collectively referred to as "law" or "laws"), and presents no
abnormal hazards to persons or the environment. Supplier also warrants
that it has no knowledge of any federal, state or local law, that
prohibits the disposal of the MATERIAL as normal refuse without special
precautions except as expressly stated elsewhere in this Agreement.
Supplier also warrants that where required by law, all MATERIAL furnished
by Supplier is either on the EPA Chemical Inventory compiled under Section
8 (a) of the Toxic Substance Control Act, or is the subject of an
EPA-approved pre manufacture notice under 40 CFR Part 720. Supplier
further warrants that all MATERIAL furnished by Supplier complies with all
use restrictions, labeling requirements and all other health and safety
requirements imposed under federal, state, or local laws. Supplier further
warrants that, where required by law, it shall provide to Company, prior
to delivery of the MATERIAL, a Material Safety Data Sheet which complies
with the requirements of the Occupational Safety and Health Act of 1970
and all rules and regulations promulgated thereunder.
Supplier shall defend, indemnify and hold Company harmless for any
expenses (including, but not limited to, the cost of substitute material,
less accumulated depreciation) that Company may incur by reason of the
recall or prohibition against continued use or disposal of MATERIAL
furnished by Supplier as described in its Agreement whether such recall or
prohibition is directed by Supplier or occurs under
<PAGE> 26
Agreement No. SC11990054
Sheet 26 of 28
compulsion of law. Company shall cooperate with Supplier to facilitate and
minimize the expense of any recall or prohibition against use or disposal
of MATERIAL directed by Supplier or under compulsion of law.
Supplier further shall defend, indemnify and hold Company harmless
of and from any claims, demands, suits, judgments, liabilities, costs and
expenses (including reasonable attorney's fees) which Company may incur
under any applicable federal, state or local laws, and any and all
amendments thereto, including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980; the
Consumer Product Safety Act of 1972; the Toxic Substance Control Act;
Fungicide, Rodenticide Act; the Occupational Safety and Health Act; and
the Atomic Energy Act; and any and all amendments to all applicable
federal, state, or local laws, by reason of Company's proper acquisition,
use, distribution or disposal of MATERIAL furnished by Supplier under this
Agreement.
73. TRAINING
If requested by Company, Supplier will:
(a) provide instructors and the necessary instructional material of
Supplier's standard format to train Company's personnel in the
installation, planning and practices, operation, maintenance and repair of
MATERIAL furnished under this Agreement. These classes shall be conducted
at reasonable intervals at locations agreed upon by Supplier and Company.
The costs associated with the TRAINING are described in APPENDIX A.
Or, at the option of Company,
(b) provide to Company training modules or manuals and any necessary
assistance, covering those areas of interest outlined in (a) of this
section, sufficient in detail, format and quantity to allow Company to
develop and conduct a training program.
74. USE OF INFORMATION
Supplier shall view as Company's property any idea, data, program,
technical, business or other intangible information, however conveyed, and
any document, print, tape, disc, tool, or other tangible
information-conveying or performance-aiding article owned or controlled by
Company, and provided to, or acquired by, Supplier under or in
contemplation of this Agreement (Information). Supplier shall, at no
charge to Company, and as Company directs, destroy or surrender to Company
promptly at its request any such article or any copy of such Information.
Supplier shall keep Information confidential and use it only in performing
under this Agreement and obligate its employees, subcontractors and others
working for it to do so, provided that the foregoing shall not apply to
information previously known to Supplier free of obligation, or made
public through no fault imputable to Supplier.
<PAGE> 27
Agreement No. SC11990054
Sheet 27 of 28
75. VARIATION IN QUANTITY
Company assumes no liability for MATERIAL produced, processed or
shipped in excess of the amount specified in this Agreement or in an order
issued pursuant to this Agreement.
76. WARRANTY
Supplier warrants to Company, as defined in this section, that
MATERIAL furnished will be new, merchantable, free from defects in design,
material and workmanship and will conform to and perform under normal use
in all material respects with the Specifications, drawings and samples set
forth in this Agreement. These warranties extend to the future performance
of the MATERIAL and shall continue for a period of twelve (12) months from
the date of delivery to an end user customer (hereinafter "Customer") but
no longer than fifteen (15) from the date of shipment or, for MATERIAL
installed by Company or its re-sellers, for a period of twelve (12) months
from the completion of installation but no longer than fifteen (15) months
from date of shipment.
Supplier also warrants to Company that services will be performed in
a first class, workmanlike manner. In addition, if MATERIAL furnished
contains one or more manufacturer's warranties, Supplier hereby assigns
such warranties to Company provided such assignment is expressly permitted
under such warranties. Supplier warrants that at the time of delivery to
Company such MATERIAL shall be free of any security interest or any other
lien or any other encumbrance whatsoever. All warranties shall survive
inspection, acceptance and payment.
Defective or non-conforming MATERIAL will, at Company's option,
either be returned to Supplier for repair or replacement, at no cost to
Company, with risk of in-transit loss and damage borne by Supplier and
freight paid by Supplier, or be repaired or replaced by Supplier on
Customer's site or another site designated by Company at no cost to
Company. Unless otherwise agreed upon by Supplier and Company, Supplier
shall complete repairs and ship the repaired MATERIAL within [*] of
receipt of defective or non-conforming MATERIAL, or at Company's option,
ship replacement MATERIAL within [*] after verbal notification is given
Supplier by Company. Supplier shall bear the risk of in-transit loss and
damage and shall prepay and bear that cost of freight for shipments to
Company of repaired or replaced MATERIAL. If requested by Company,
Supplier shall begin on-site repairs within [*] after verbal notification
is given Supplier by Company.
If MATERIAL returned to Supplier or made available to Supplier on
site for repair as provided for in this section is determined to be beyond
repair, Supplier shall promptly so notify Company and, unless otherwise
agreed to in writing by Supplier and Company, Supplier shall ship
replacement MATERIAL without charge [*] of such notification.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 28
Agreement No. SC11990054
Sheet 28 of 28
Replacement MATERIAL shall be warranted as set forth above in this
"WARRANTY" section. Any MATERIAL which is repaired, modified, or otherwise
serviced by Supplier shall be warranted as provided in this "WARRANTY"
section for the remainder of the warranty period (based upon the date
repair, modification or other service is completed and accepted by
Company) or [*] after the MATERIAL is returned to a Customer, whichever
is later.
Supplier considers MATERIAL year 2000 ready if the MATERIAL's
performance and functionality are unaffected by the processing of dates
prior to, during and through the year 2000 transition, provided that
hardware, firmware, software, and databases used in combination with the
MATERIAL properly exchange accurate and correctly formatted date data with
the MATERIAL.
The MATERIAL defined in APPENDIX A are considered Year 2000 ready.
EXCEPT AS EXPRESSLY PROVIDED IN SECTION 76 AND 28, MATERIAL IS
PROVIDED ON AN "AS IS" BASIS WITHOUT ANY WARRANTY, AND SUPPLIER EXPRESSLY
DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED, AND STATUTORY INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY,
NON-INFRINGEMENT OF THIRD PARTY RIGHTS AND FITNESS FOR A PARTICULAR
PURPOSE.
77. ENTIRE AGREEMENT
This Agreement shall incorporate the typed or written provisions on
Company's orders issued pursuant to this Agreement and shall constitute
the entire agreement between the parties with respect to the subject
matter of this Agreement and the order(s) and shall not be modified or
rescinded, except by a writing signed by Supplier and Company. Printed
provisions on the reverse side of Company's orders (except as specified
otherwise in this Agreement) and all provisions on Supplier's forms shall
be deemed deleted. Estimates or forecasts furnished by Company shall not
constitute commitments. The provisions of this Agreement supersede all
contemporaneous oral agreements and all prior oral and written
communications, and understandings of the parties with respect to the
subject matter of this Agreement.
Accepted (Date) June 25, 1999
PACKETEER, INC LUCENT TECHNOLOGIES INC.
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
<PAGE> 1
EXHIBIT 10.14
PACKETEER, INC.
OEM AGREEMENT
AGREEMENT NO. __62999__
THIS OEM AGREEMENT (the "Agreement") is entered into as of this 29th day
of June, 1999 (the "Effective Date"), by and between PACKETEER, INC., a Delaware
corporation having its principal place of business at 10495 N. De Anza Blvd.,
Cupertino, CA 95014 (together with any Affiliates, "Packeteer"), and ADTRAN,
INC., a Delaware corporation having its principal place of business at 901
Explorer Boulevard, Huntsville, Alabama 35806 (together with any Affiliates,
"ADTRAN").
RECITALS
Packeteer is engaged in the design and manufacture of certain products,
incorporating both hardware and software elements, which products are utilized
in the allocation of bandwidth on wide area network access lines, and related
products.
ADTRAN is engaged in the design and manufacture of certain products,
incorporating both hardware and software elements, which products are utilized
in networks.
ADTRAN desires to port Packeteer's software to ADTRAN's platform, and to
incorporate additional ADTRAN software and hardware elements to create an
enhanced Smart DSU product and to distribute such product.
Accordingly, the parties agree as follows:
1. DEFINITIONS
1.1 "AFFILIATE" means an entity controlling, controlled by, or under
common control with a party, such control being exercised through ownership or
control, directly or indirectly, of 50% or more of the voting power of the
shares.
1.2 "ADTRAN PRODUCT" means ADTRAN's product that incorporates the Ported
Software, and which provides all the functionality detailed in ATTACHMENT F
("Specifications for ADTRAN Product"), and no greater or lesser functionality
than that detailed therein. In addition to the Ported Software, the ADTRAN
Product includes the following components:
1.2.1 "ADTRAN SOFTWARE" means the software portion of the ADTRAN
Product (other than the Ported Software) developed by ADTRAN. The ADTRAN
Software has been partially developed as of the Effective Date. The ADTRAN
Software will be integrated with Packeteer Software only through the Packeteer
API (See Section 1.5.3).
1.2.2 "ADTRAN HARDWARE" means the hardware portion of the ADTRAN
Product.
1.
<PAGE> 2
1.3 PACKAGES. The Packeteer Software comprises a single OEM software
component that includes the following packaging options:
1.3.1 "APPLICATION DISCOVERY SOFTWARE PACKAGE" means the
Packeteer Software for analyzing network traffic flow and usage and for
measuring information related to the network traffic flow, as described in the
PacketShaper/ADTRAN OEM Deliverables document referenced in ATTACHMENT A
("Packeteer Software").
1.3.2 "RATE CONTROL SOFTWARE PACKAGE" means the Packeteer
Software as enabled for analyzing network traffic flow and usage and for
prioritizing packets and limiting/controlling partitions that specify minimum
and maximum levels for aggregate traffic classes, as described in the
PacketShaper/ADTRAN OEM Deliverables document referenced in ATTACHMENT A
("Packeteer Software")
1.4 "PACKETEER DOCUMENTATION" means the training manuals and end user
manuals supplied to ADTRAN by Packeteer relating to the Packeteer Software.
1.5 "PACKETEER SOFTWARE" means that software listed as "Packeteer
Software" in ATTACHMENT A ("Packeteer Software"), and any Updates thereto
provided under this Agreement. The Packeteer Software includes the following
components:
1.5.1 "PACKETEER SOFTWARE SOURCE" means the human-readable source
code for the Packeteer Software. The Packeteer Software Source does not include
any third party software or materials that Packeteer is unable to sublicense in
source code form.
1.5.2 "PACKETEER SOFTWARE INFORMATION" means supporting
information provided by Packeteer to enable a programmer reasonably skilled in
the art to make use of the Packeteer Software Source.
1.5.3 "PACKETEER API" means an application programming interface
developed by Packeteer to permit third party software (such as the ADTRAN
Software) to call certain documented functions in the Packeteer Software. The
Packeteer API is described in detail in ATTACHMENT B ("PacketShaper: OEM
Software Porting Guide"), (the "PACKETSHAPER PORTING GUIDE document, REVISION
1.17, DATED 5/3/99.
1.6 "PORTED SOFTWARE" means the software, in object code form only,
resulting from ADTRAN's porting and compilation of the Packeteer Software Source
and the Packeteer API to the ADTRAN platform.
1.7 "SOURCE CODE SITES" means those geographic locations at which ADTRAN
may access, store and use the Packeteer Software Source and that are specified
in ATTACHMENT H ("Source Code Sites"). The Source Code Sites may be changed upon
mutual written agreement of the parties.
1.8 "UPDATES" means those additions, modifications, error corrections,
bug fixes, enhancements, updates, upgrades, future versions and any derivative
works made by Packeteer (or by a third party on Packeteer's behalf) to the
Packeteer Software (or any component thereof) and made generally commercially
available by Packeteer. Updates is not meant to include other
2.
<PAGE> 3
modules or plug-ins which have unique characteristics for specific markets and
that are designed to be used in connection with the feature set (and no more
than the feature set) of the Packeteer Software provided to ADTRAN in accordance
with ATTACHMENT A ("Packeteer Software").
2. LICENSE GRANTS
2.1 LIMITED SOURCE CODE LICENSE. Subject to the terms and conditions of
this Agreement, Packeteer hereby grants to ADTRAN a non-exclusive,
non-transferable license to use the Packeteer Software Source at a Source Code
Site for the sole purpose of porting and compiling the Packeteer Software Source
and Packeteer API to ADTRAN's platform to create the Ported Software for
inclusion in the ADTRAN Product.
2.2 DISTRIBUTION LICENSE. Subject to the terms and conditions of this
Agreement, Packeteer hereby grants to ADTRAN a non-exclusive, non-transferable,
royalty-bearing license to reproduce the Ported Software and sublicense and
distribute (through multiple tiers of distribution) the Ported Software solely
as integrated with the ADTRAN Product, by way of licenses to end user customers
("End User Licenses" and "End Users," respectively),and through hardware OEMs
(re-labeled Adtran Product). Notwithstanding the foregoing, ADTRAN will be
permitted to distribute Updates to existing End Users and OEMs on an unbundled
basis.
2.3 EXCLUSIONS.
2.3.1 THIRD PARTY TOOLS. No license is granted hereunder to any
third party development tools or other software required to replicate the
Packeteer Software development environment ("Third Party Tools"). A complete
list of the Third Party Tools is set forth in ATTACHMENT A ("Packeteer
Software).
2.3.2 OTHER EXCLUDED COMPONENTS. The Packeteer Software may
contain certain third party software that Packeteer has no right to redistribute
in source code form ("Excluded Components"). A complete list of Excluded
Components is set forth in ATTACHMENT A ("Packeteer Software).
2.3.3 NO ADDITIONAL RIGHTS. ADTRAN specifically acknowledges
that, other than as expressly set forth above, no rights to the Packeteer
Software are granted to ADTRAN hereunder and there are no implied licenses under
this Agreement. Without limiting the generality of the foregoing, ADTRAN
acknowledges that it has no right to modify the Packeteer Software Source or
Packeteer API except for the limiting porting activities licensed under
PARAGRAPH 2.1 ("Limited Source Code License"), and that any modification will be
deemed a material breach of the Agreement. In addition to any remedies available
to Packeteer for such breach, Packeteer will have no obligations to support the
modified Packeteer Software or the resulting ADTRAN Product, and ADTRAN shall
assign all right, title and interest in such unpermitted modifications to
Packeteer. Except as expressly set forth above, ADTRAN will have no right to
sublicense or transfer the rights granted herein to any third party.
2.4 DOCUMENTATION. Subject to the terms and conditions hereof, Packeteer
grants to ADTRAN a royalty-free non-exclusive, non-transferable, sub-licensable
license to localize, reproduce, distribute, reformat, modify and sublicense the
Packeteer Documentation so as to apply to the ADTRAN Product. ADTRAN recognizes
that its ownership of any derivative works
3.
<PAGE> 4
of the Packeteer Documentation is subject to Packeteer's underlying ownership of
the Packeteer Documentation. ADTRAN agrees that it will not modify or delete any
copyright notices or other proprietary notices included in the Packeteer
Documentation without written approval of Packeteer. Packeteer will have the
right to inspect the modified Packeteer Documentation to ensure that it meets
Packeteer's quality standards.
2.5 TRADEMARK LICENSE. Subject to compliance with the terms of this
Agreement (including, but not limited to, PARAGRAPH 11 ("Trademarks")) and
ATTACHMENT D ("Packeteer Trademarks"), Packeteer hereby grants to ADTRAN a
non-exclusive, non-transferable, limited license to use the trademarks set forth
in ATTACHMENT D ("Packeteer Trademarks") in connection with the marketing and
distribution of the ADTRAN Products.
2.6 END USER LICENSE. ADTRAN will take all steps necessary to protect
Packeteer's proprietary rights in the Packeteer Software and to ensure that each
ADTRAN Product will be accompanied by a localized copy of ADTRAN's standard
software license agreement applicable to such software which will include terms
and conditions no less protective of Packeteer's interests as those set forth in
ATTACHMENT C ("Packeteer End User License Agreement").
2.7 OWNERSHIP OF PORTED SOFTWARE. Packeteer will own all right, title
and interest in all Ported Software created by ADTRAN. ADTRAN hereby assigns to
Packeteer the entire right, title and interest in the Ported Software. ADTRAN
will deliver all such Ported Software to Packeteer in source and object code
form as such Ported Software is created, or upon Packeteer's request, but in no
event less frequently than once per calendar quarter. ADTRAN agrees to render
reasonable cooperation to Packeteer in the procurement and maintenance of
Packeteer's rights in the Ported Software and to sign all papers which Packeteer
may deem necessary and desirable for vesting Packeteer with such rights
throughout the world, including litigation of applicable patents, copyrights and
other proceedings, and execution of an assignment of copyright.
3. DELIVERY
3.1 INITIAL DELIVERY; ACCEPTANCE. Upon receipt of the Initial Delivery
Fee, Packeteer will deliver the Packeteer Software to ADTRAN, including the
Packeteer Software Source, the Packeteer Software Information, the Packeteer
API, and the Packeteer Documentation, all in electronic form, and where
suitable, also in paper form. The Packeteer Software will be deemed accepted
upon delivery.
3.2 MAINTENANCE DELIVERIES. So long as ADTRAN is current on maintenance
fees and Packeteer is still offering maintenance releases for the Packeteer
Software, Packeteer will deliver applicable Updates to the Packeteer Software as
such Updates are made generally available to Packeteer's customers. Such
deliveries will be deemed accepted upon delivery.
3.3 INCORPORATING UPDATES. ADTRAN will have the option to incorporate
such Updates into the ADTRAN Product, provided that if ADTRAN fails to
successfully incorporate such Updates within one (1) year such Update is made
generally available, (a) the trademark license set forth in PARAGRAPH 2.5
("Trademark License") will terminate and ADTRAN will cease to use the Trademarks
in connection with such ADTRAN Product, and (b) Packeteer will
4.
<PAGE> 5
bear no obligation to continue to provide technical support (but will continue
to provide Updates during the Maintenance Period) for such out-of-date ADTRAN
Product.
4. SUPPORT AND MAINTENANCE
4.1 DEMONSTRATION. Packeteer will provide a "walk-through" demonstration
(not to exceed one day) for the Packeteer Software, and periodically for each
Update it delivers.
4.2 MODIFICATIONS TO PACKETEER SOFTWARE. In the course of developing the
ADTRAN Product, ADTRAN may from time to time request that Packeteer make changes
to the Packeteer Software in order to provide additional functionality. During
the period in which ADTRAN is paying Packeteer for maintenance and is in
compliance with its maintenance obligations (a "Maintenance Period"), Packeteer
agrees to consider such requested changes promptly, and if it finds, in its sole
discretion, such requested changes to be reasonable to the future development of
the Packeteer Software, to implement such changes promptly as an Update, all
without additional charge to ADTRAN.
4.3 END USER SUPPORT. ADTRAN will be solely responsible for providing
all support and maintenance for End Users of the ADTRAN Product. ADTRAN will
provide its End Users with reasonable documentation, warranty service, and
e-mail or telephone support for the use of the ADTRAN Product consistent with
good industry practice and the terms of this Agreement.
4.4 TECHNICAL SUPPORT. During the Maintenance Period, Packeteer will
provide ADTRAN (but not ADTRAN's End Users, distributors or resellers) with
development support (including access to technical, engineering and management
staff) in the form of telephone and e-mail responses to questions that ADTRAN
may have with respect to the current version of the Packeteer Software and any
previous versions released by Packeteer within the past twelve (12) months.
Packeteer will provide support solely for questions related to the unmodified
Packeteer Software. In the event that such technical support requests become
unduly burdensome, the parties shall confer to discuss whether the number of
hours per month which Packeteer spends providing support should be reduced, or
if the fee for such support should be increased. In this scenario support will
not be withheld during such discussions.
4.5 COMPATIBILITY. Updates provided hereunder for functionality that has
previously been implemented by ADTRAN will be "backwards compatible" (so that
there will be no substantial loss of functionality) with the previously released
version and any versions released in the preceding twelve (12) months.
5. PAYMENTS
5.1 INITIAL DELIVERY. On the Effective Date, ADTRAN will pay Packeteer a
fee (the "Initial Delivery Fee") in SCHEDULE 1.
5.2 MAINTENANCE. For each calendar quarter for which ADTRAN desires to
receive Updates and technical support, it will pay Packeteer a maintenance fee
(the "Maintenance Fee") as set forth on SCHEDULE 1 ("Fees"). Any failure by
ADTRAN to pay a Maintenance Fee shall terminate those obligations by Packeteer
to provide Updates under PARAGRAPH 3.2 ("Maintenance Deliveries") and technical
support under PARAGRAPHS 4.2 ("Modifications to
5.
<PAGE> 6
Packeteer Software") and 4.4 ("Technical Support") but shall not otherwise
terminate the licenses granted in PARAGRAPHS 2.1 ("Limited Source Code License")
and 2.2 ("Distribution License") or other obligations of the Parties to this
Agreement. Any failure by ADTRAN to pay a Maintenance Fee shall not relieve
ADTRAN from any of its obligations under this Agreement including, without
limitation, the payment of the Royalties under PARAGRAPH 5.3 ("Royalties"). Upon
a failure by ADTRAN to successfully incorporate any Update as contemplated in
PARAGRAPH 3.3 ("Incorporating Updates") within one (1) year after it is made
generally available by Packeteer, (a) ADTRAN will cease to use the Trademarks
(as described in PARAGRAPH 3.3 ("Incorporating Updates")), and (b) Packeteer
shall have the option not to accept any further Maintenance Fees from ADTRAN and
to terminate its obligations to provide Updates under PARAGRAPH 3.2
("Maintenance Deliveries") after the current Maintenance Period.
5.3 ROYALTIES. The royalties and other fees payable will be as set forth
on
6.
<PAGE> 7
SCHEDULE 1 ("Fees").
5.4 TAXES. ADTRAN agrees to pay, and to indemnify and hold Packeteer
harmless from, any sales, use, excise, import or export, value added or similar
tax, not based on Packeteer's net income, as well as the collection or
withholding thereof, including penalties and interest, as well as any costs
associated with the collection or withholding thereof, and all government permit
or license fees and all customs, duty, tariff and similar fees levied upon the
delivery of, the ADTRAN Product or related products, as well as any costs
associated with the collection of any of the foregoing items in the event that
it is deemed not to be a sale for resale under applicable state law by the
relevant taxing authority. ADTRAN will be responsible for obtaining, at its
expense, all required import licenses, permits or other governmental orders. If
a resale certificate or other certificate, document or other evidence of
exemption or payment or withholding of taxes by ADTRAN is required in order to
exempt the distribution or licensing of the Packeteer Software, ADTRAN Product
or other related product from any such liability or to enable Packeteer to claim
any tax exemption, credit, or other benefit, ADTRAN will promptly furnish such
certificate or document to Packeteer.
5.5 REPORTING. On a quarterly basis, ADTRAN will, within [*] following
the end of such quarter, provide Packeteer a report including the following: (a)
the number of units of the ADTRAN Product sold during that quarter; (b)
geographic information related to the units of ADTRAN Product sold during that
quarter, including, at least, by the country of the sale, by the State and
postal (zip) code of the sale; (c) the royalty payments due during that quarter.
5.6 AUDIT. Each party will keep and maintain, for a period of three (3)
years, proper records and books of account relating to licenses of the ADTRAN
Product to customers and End Users. Upon reasonable notice to the other party, a
party may have a reputable independent auditor inspect, at the requesting
party's expense, such records to verify the other party's payments hereunder no
more than once every six (6) months; however, if the audit reveals a discrepancy
of more than 5%, then the recordkeeper will pay for the cost of the audit and
the auditing party will have the right to conduct another audit within the six
(6) month period.
5.7 MANNER OF PAYMENT. All payments due hereunder are in U.S. Dollars.
ADTRAN shall include royalty payments with each report.
5.8 OVERDUE PAYMENTS. Overdue payments will be subject to a finance
charge of the lesser of one and one-half percent (1 1/2%) per month or the
highest interest rate allowed by law, for each month or fraction thereof that
such amounts are [*] past due.
6. DEVELOPMENT AND TESTING
6.1 ADTRAN DEVELOPMENT RESPONSIBILITIES. ADTRAN will be responsible for
creating the Ported Software, the ADTRAN Product, and incorporating Updates in
the ADTRAN Product in compliance with the terms of the Agreement. In addition,
ADTRAN will be responsible for creating and delivering to Packeteer a list of
errors found prior to Packeteer's certification or testing of the ADTRAN Product
pursuant to ATTACHMENT G ("Test Certification Procedures").
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
7.
<PAGE> 8
6.2 TESTING AND CERTIFICATION OF ADTRAN PRODUCTS. ADTRAN will test each
version of the ADTRAN Product. Once yearly, Packeteer will certify ADTRAN's
tests results or perform independent testing in accordance with the procedures
in ATTACHMENT G ("Test Certification Procedures"). If the ADTRAN Product passes
Packeteer's Test Certification Procedures, then ADTRAN shall be entitled to
market and distribute the ADTRAN Product under the Trademarks under the terms of
this Agreement. ADTRAN will provide Packeteer with reasonable access to the
ADTRAN Software and Ported Software, including, but not limited to, exposing
command line interfaces for the ADTRAN Software in order to permit Packeteer to
perform regression testing and to confirm that no unpermitted modifications have
been made to the Packeteer Software. Such regression testing will not be
designed to permit Packeteer to analyze the ADTRAN Software (its source or
object code) to determine the manner and methods utilized in supporting its
functionality without the prior written permission of ADTRAN.
6.3 LOANED EQUIPMENT. ADTRAN will loan Packeteer all necessary equipment
for such certification testing. All equipment loaned by ADTRAN to Packeteer will
remain the property of ADTRAN, will be fully insured by Packeteer, and will be
returned to ADTRAN at its request after termination of Packeteer's testing
activities hereunder. ADTRAN will pay all shipping and other costs (including,
without limitation, custom fees and duties) resulting from delivery of such
loaned equipment to Packeteer. Any loaned equipment will be returned to ADTRAN
by Packeteer, shipping, insurance and any other applicable costs prepaid by
ADTRAN. While in the possession of Packeteer, the loaned equipment will be
maintained by ADTRAN in good working order.
7. MARKETING
7.1 PROMOTIONAL EFFORTS. ADTRAN will use its reasonable efforts to
market and distribute the ADTRAN Product to End Users. ADTRAN may advertise the
ADTRAN Product in advertising media of ADTRAN's choice. ADTRAN will use the
Trademarks in accordance with the terms of this Agreement in conducting such
marketing efforts.
7.2 PRESS RELEASE. The parties will create a mutually agreeable press
release to announce the execution of this Agreement. Neither party will disclose
any terms of the Agreement, except pursuant to a mutually agreeable press
release or as otherwise required by law.
8. WARRANTY
8.1 PACKETEER WARRANTY. Packeteer warrants for a period of ninety (90)
days from delivery (the "Warranty Period") that the unmodified Packeteer
Software Source will compile in the development environment specified by
Packeteer to yield the corresponding object code version of such source code
(excluding any Excluded Components). Packeteer also warrants for the Warranty
Period that the unmodified Packeteer Software Source when used in accordance
with the Packeteer Documentation shall share substantially equivalent
functionality (excluding functionality corresponding to the excluded components)
with Packeteer's PacketShaper software delivered to ADTRAN for testing on or
about February 10, 1999. If ADTRAN reports to Packeteer a failure of the
Packeteer Software Source to conform to the foregoing warranties during the
Warranty Period, and provides such detail as Packeteer may require to permit
8.
<PAGE> 9
Packeteer to reproduce such failure, Packeteer, at its expense, shall use
reasonable commercial efforts to modify or replace the Packeteer Software Source
to correct such failure. ADTRAN acknowledges that the Packeteer Software Source
delivered by Packeteer to ADTRAN will require adaptation by ADTRAN or Packeteer
for compatibility with ADTRAN platforms and configurations, which platforms and
configurations will generally be different from the development environment and
platform used by Packeteer. ADTRAN acknowledges that the Packeteer Software is
of such complexity that it may have inherent defects, and agrees that Packeteer
makes no other warranty, either express or implied, as to any matter whatsoever.
The foregoing states Packeteer's sole and exclusive warranty to ADTRAN
concerning the Packeteer Software Source and ADTRAN's sole and exclusive remedy
for breach of warranty.
8.2 DISCLAIMER. EXCEPT AS SET FORTH IN PARAGRAPH 8.1 ("PACKETEER
WARRANTY"), THE PACKETEER SOFTWARE IS PROVIDED TO ADTRAN "AS-IS" AND WITHOUT ANY
WARRANTY OF ANY KIND, EXPRESS, IMPLIED, OR STATUTORY. PACKETEER EXPRESSLY
DISCLAIMS ANY IMPLIED WARRANTIES OF NON-INFRINGEMENT, FITNESS FOR A PARTICULAR
PURPOSE OR MERCHANTABILITY.
9. INDEMNITY
9.1 BY PACKETEER. Packeteer agrees to defend and otherwise hold ADTRAN
harmless from any costs, damages and reasonable attorneys' fees resulting from
any claim that the uses permitted hereunder of the Packeteer Software infringe
any U.S. patents or U.S. copyrights, or misappropriate the trade secrets of any
third party, provided that ADTRAN gives Packeteer prompt written notice of any
such claim, tenders to Packeteer the defense or settlement of such a claim at
Packeteer's expense, and cooperates with Packeteer, at Packeteer's expense, in
defending or settling such claim. If Packeteer receives notice of an alleged
infringement or if ADTRAN's use of the Packeteer Software is prevented by
permanent injunction, Packeteer may, at its sole option and expense, procure for
ADTRAN the right to continued use of the Packeteer Software, modify the
Packeteer Software such that it is no longer infringing, or replace the
Packeteer Software with software of similar functional capability (in either of
the latter two options, the revised or replacement software must be backwards
compatible as that term is defined in PARAGRAPH 4.5 ("Compatibility")), or
terminate the license and return to ADTRAN the Initial Delivery Fee. PACKETEER'S
OBLIGATIONS UNDER THIS SECTION WILL BE ADTRAN'S SOLE AND EXCLUSIVE REMEDY FOR
ANY ALLEGED INFRINGEMENT OF MISAPPROPRIATION OF ANY PROPRIETARY RIGHT. PACKETEER
WILL HAVE NO LIABILITY TO ADTRAN IF ANY ALLEGED INFRINGEMENT OR CLAIM THEREOF IS
BASED UPON THE USE OF THE PACKETEER SOFTWARE IN CONNECTION OR IN COMBINATION
WITH EQUIPMENT, DEVICES, OR SOFTWARE NOT DELIVERED BY PACKETEER (IF SUCH
INFRINGEMENT OR CLAIM COULD HAVE BEEN AVOIDED BY THE USE OF THE UNMODIFIED
PACKETEER SOFTWARE WITH OTHER EQUIPMENT, DEVICES OR SOFTWARE), OR THE USE OF THE
PACKETEER SOFTWARE OTHER THAN AS PERMITTED UNDER THIS AGREEMENT OR IN A MANNER
FOR WHICH IT WAS NOT INTENDED, OR USE OF OTHER THAN THE MOST CURRENT RELEASE OF
THE PACKETEER SOFTWARE (IF SUCH CLAIM WOULD HAVE BEEN PREVENTED BY THE USE OF
SUCH RELEASE).
9.
<PAGE> 10
9.1.1 UPDATES. IF PACKETEER GIVES ADTRAN NOTICE THAT A SPECIFIC
UPDATE IS REQUIRED IN ORDER TO AVOID INFRINGING THE INTELLECTUAL PROPERTY RIGHTS
OF A THIRD PARTY, AND IF WITHIN SIXTY (60) DAYS ADTRAN FAILS TO USE SUCH UPDATE
AND TO DISTRIBUTE SUCH UPDATE TO ITS END USERS, THEN PACKETEER WILL HAVE NO
LIABILITY TO ADTRAN UNDER PARAGRAPH 9.1 FOR INFRINGING SUCH INTELLECTUAL
PROPERTY RIGHTS IF THERE WOULD HAVE BEEN NO INFRINGEMENT HAD ADTRAN ADOPTED SUCH
UPDATE.
9.2 BY ADTRAN. ADTRAN agrees to defend and otherwise hold Packeteer
harmless from any costs, damages and reasonable attorneys' fees resulting from
any claim that the uses permitted hereunder of the ADTRAN Product infringe any
U.S. patents or U.S. copyrights, or misappropriate the trade secrets of any
third party, provided that Packeteer gives ADTRAN prompt written notice of any
such claim, tenders to ADTRAN the defense or settlement of such a claim at
ADTRAN's expense, and cooperates with ADTRAN, at ADTRAN's expense, in defending
or settling such claim. ADTRAN'S OBLIGATIONS UNDER THIS SECTION WILL BE
PACKETEER'S SOLE AND EXCLUSIVE REMEDY FOR ANY ALLEGED INFRINGEMENT OF ANY
PROPRIETARY RIGHT.
10. PROTECTION OF PROPRIETARY RIGHTS
10.1 PACKETEER OWNERSHIP. Packeteer and its suppliers are the sole and
exclusive owners of all rights, title and interest, including all Trademarks,
copyrights, patents, trade names, trade secrets, and other intellectual property
rights to the Packeteer Software, and in any modifications made to the Packeteer
Software at ADTRAN's request or suggestion under PARAGRAPH 4.2 ("Modifications
to Packeteer Software"). Except for the rights expressly enumerated herein,
ADTRAN is not granted any rights to patents, copyrights, trade secrets, trade
names, trademarks (whether or not registered), or any other rights, franchises
or licenses with respect to the Packeteer Software. ADTRAN agrees to protect the
Packeteer Software in accordance with PARAGRAPH 10 ("Protection of Proprietary
Rights") and ATTACHMENT E ("Secure Procedures"). Failure to protect the
proprietary rights of Packeteer and its suppliers in the Packeteer Software, as
required by this Agreement, will be considered a material breach of this
Agreement.
10.2 ADTRAN OWNERSHIP. Packeteer acknowledges ADTRAN's statement that
ADTRAN and its suppliers are the sole and exclusive owners of all rights, title
and interest, including all trademarks, copyrights, patents, trade names, trade
secrets, mask works, and other intellectual property rights to the ADTRAN
Product (excluding the Ported Software). Except for the rights expressly
enumerated herein (e.g., the right to perform certain regression testing),
Packeteer is not granted any rights to patents, copyrights, trade secrets, mask
works, trade names, trademarks (whether or not registered), or any other rights,
franchises or licenses with respect to the ADTRAN Product. Packeteer agrees to
protect the ADTRAN Product in accordance with PARAGRAPH 12 ("Confidentiality").
10.3 COOPERATION. The parties agree to cooperate and execute documents
reasonably requested to confirm such ownership or to obtain protection under any
intellectual property law.
10.
<PAGE> 11
10.4 PROPRIETARY NOTICES. ADTRAN agrees that as a condition of its
rights hereunder, each copy of the Ported Software will contain the same
proprietary notices which appear on or in such Packeteer Software provided by
Packeteer to ADTRAN. More specifically, ADTRAN agrees that a valid Packeteer
copyright notice will appear on the media or will be displayed on any screen
visible to a user when the ADTRAN Product is first initialized in the following
format or such other format as Packeteer specifies by written notice to ADTRAN:
the name of the program, the word "Copyright" and the "(C)" symbol, the year
1996 (the date of first creation of the Packeteer Software), followed by a
hyphen and the year of the most recent version of the Ported Software, and the
name of the copyright owner and the words "All Rights Reserved." Presence of a
copyright notice does not constitute an acknowledgment of publication. ADTRAN
will ensure that the trademark notices are displayed in the ADTRAN Product as
set forth in PARAGRAPH 11 ("Trademarks").
10.5 UNAUTHORIZED DISTRIBUTION OR COPYING. ADTRAN agrees that (except as
expressly permitted by this Agreement): (a) distributing, copying, duplicating
or otherwise reproducing all or any part of the Packeteer Software, (b)
distributing or using copies of all or any portion of the Packeteer Software
other than as embedded in a royalty-bearing ADTRAN Product, or (c) failing to
ensure that each End User receives a license agreement as required by PARAGRAPH
2.6 ("End User License") will constitute a material breach of this Agreement.
10.6 GOVERNMENT AGREEMENTS. ADTRAN will take all reasonable steps in
making proposals to and agreements with governments that involve the ADTRAN
Product and related documentation to ensure that Packeteer's proprietary rights
receive the maximum protection available from such governments for commercial
computer software and related documentation developed at private expense.
10.7 CERTIFICATION. At Packeteer's request, ADTRAN will provide
Packeteer with written certification by an officer of ADTRAN of ADTRAN's
compliance with its obligations under this PARAGRAPH 10 ("Protection of
Proprietary Rights") and ATTACHMENT E ("Secure Procedures").
10.8 PACKETEER TRADE SECRETS. Packeteer represents that the Packeteer
Software and those techniques, algorithms, and processes contained in the
Packeteer Software which have been developed, acquired or licensed by Packeteer,
or any modification or extraction thereof, constitute trade secrets of Packeteer
and/or its suppliers, and ADTRAN agrees they will be used by ADTRAN only in
accordance with the terms of this Agreement. ADTRAN will take all measures
reasonably required to protect the proprietary rights of Packeteer and its
suppliers in the Packeteer Software Information.
10.9 ACCESS. In consideration of the licenses and access to proprietary
information and technology of Packeteer granted under this Agreement, ADTRAN
hereby agrees: (a) not to use the Packeteer Software to develop, manufacture or
distribute GOODS OUTSIDE OF THOSE DEFINED IN ATTACHMENT F (SPECIFICATIONS FOR
ADTRAN PRODUCT); and (b) to obtain the Packeteer Software only from Packeteer.
Subject to the terms of restrictions on use of proprietary information
(including, but not limited to this PARAGRAPH 10 ("Protection of Proprietary
Rights"), ATTACHMENT D ("Packeteer Trademarks"), and ATTACHMENT E ("Secure
Procedures") provided under this Agreement, this Agreement does not preclude
ADTRAN from
11.
<PAGE> 12
independently developing similar technologies or products, where ADTRAN can
demonstrate by competent proof that such independent development has been
created without reference to the Packeteer Software Source, Packeteer Software
Information, or Packeteer Documentation.
11. TRADEMARKS
11.1 PROPER USE. Unless ADTRAN or Packeteer opt to terminate the
following requirement of trademark usage and the trademark license of PARAGRAPH
2.5 ("Trademark License") under the conditions set out below, ADTRAN will make
use of the Packeteer Trademarks in accordance with the guidelines and
requirements set forth in ATTACHMENT D ("Packeteer Trademarks") and the standard
guidelines and usage requirements as promulgated by Packeteer from time to time
regarding the Trademarks. If Packeteer promulgates any changes to the standard
guidelines and usage requirements, then ADTRAN: (a) shall have six (6) months to
continue operating under the old guidelines; (b) shall have six (6) months to
continue operating under the old guidelines for existing inventory. Either
Packeteer or ADTRAN shall have the right to terminate the trademark usage
requirement of this PARAGRAPH 11.1 ("Proper Use") if ADTRAN does not pay an
annual Maintenance Fee as set out in PARAGRAPH 5.2 ("Annual Maintenance") when
such Maintenance Fee is due. Furthermore, Packeteer shall, under the same
instance, additionally be able to prohibit ADTRAN from using any Packeteer
Trademark.
11.2 RIGHT OF REVIEW. In order to assure the Packeteer Trademarks are
associated only with products and services of Packeteer's high quality
standards, Packeteer will have the right to inspect and review all such products
and services. In the event that any use of the Packeteer Trademark does not
comport with the quality standards set by Packeteer, Packeteer will advise
ADTRAN, and ADTRAN will improve the quality within thirty (30) days so as to
comport with Packeteer's standards or cease use of the Packeteer Trademarks
immediately.
11.3 NO COMPETITIVE EXPLOITATION OF TRADEMARKS. With respect to any
Competitive Products which ADTRAN develops or markets, ADTRAN agrees that ADTRAN
will not exploit its access to the Packeteer Software, its relationship with
Packeteer, or the existence of the Ported Software to promote ATTACHMENT I
"Competitive Products". Furthermore, so long as ADTRAN is marketing the ADTRAN
Product under the Trademarks, ADTRAN agrees to use best efforts to distinguish
the ADTRAN Product from any ATTACHMENT I "Competitive Product" when displaying
or referring to the ADTRAN Product in advertisements, catalogs, brochures and at
trade shows by (a) identifying the ADTRAN Product prominently and exclusively
with the Trademarks in such proximity that the viewer is unlikely to associate
the ADTRAN Product with the Competitive Product, and (b) not associating the
Trademarks with any Competitive Product in advertising, press releases, and
other promotional and marketing materials.
12. CONFIDENTIALITY
12.1 RESTRICTION ON USE. Except as expressly permitted by this
Agreement, each party ("Recipient"), its employees, and its contractors will not
use in any way for its own account or the account of any third party, nor
disclose to any third party, any Confidential Information revealed to it by the
other party ("Disclosing Party") without the Disclosing Party's prior written
consent; provided, however, that if any Confidential Information of the other
party is required to
12.
<PAGE> 13
be disclosed pursuant to any statute, regulation, order, subpoena or document
discovery request, then the Recipient shall provide written notice thereof to
the Disclosing Party as soon as practicable in order to afford the Disclosing
Party an opportunity to seek a protective order (it being agreed that if the
Disclosing Party is unable to obtain or does not seek a protective order and the
Recipient is legally compelled to disclose such information, disclosure of such
information may be made without liability).
12.2 DEFINITION OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement, "Confidential Information" consists of (a) any information designated
by the Disclosing Party in writing as confidential, (b) the Packeteer Software
Source and the Packeteer Software Information, (c) the source code and technical
documentation for the ADTRAN Product, and (d) the terms and conditions of this
Agreement. Information in oral form will be considered Confidential Information
only to the extent it is (x) identified as confidential prior to disclosure and
(y) summarized in writing and transmitted to the Recipient, identified as
proprietary, within thirty (30) days after the oral disclosure.
12.3 EXCLUSIONS FROM DEFINITION OF CONFIDENTIAL INFORMATION.
Confidential Information will not include, and this PARAGRAPH 12
("Confidentiality") will not apply to information that (a) was known to the
Recipient prior to its receipt from the Disclosing Party; (b) is or becomes
public knowledge without fault of Recipient; (c) is acquired by Recipient from a
third party with the right to disclose same and without binder of secrecy; (d)
is independently developed by a party without using the other party's
Confidential Information; or (e) has been approved for release by written
authorization of the Disclosing Party.
12.4 STANDARD OF CARE. Each party will use the same standard of care
that it applies to its own Confidential Information, but in no event less than
reasonable care. Each party agrees to notify the other promptly in the event of
any breach of confidentiality or security under conditions in which it would
appear that any Confidential Information was prejudiced or exposed to loss, and
will, upon request of the other, take all reasonable steps necessary to recover
any compromised trade secrets disclosed to it or placed in its possession by
virtue of this Agreement. Without limiting the generality of the foregoing,
ADTRAN agrees to comply with the terms of ATTACHMENT E ("Secure Procedures")
regarding the handling of the Packeteer Software.
13. LIMITATION OF LIABILITY
EXCEPT IN THE CASE OF WILLFULNESS OR GROSS NEGLIGENCE, NEITHER PACKETEER NOR ANY
OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES, OR AGENTS WILL BE LIABLE TO
ADTRAN OR TO ANY THIRD PARTY FOR ANY LOSS OF USE, INTERRUPTION OF BUSINESS, OR
FOR ANY INDIRECT, INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOST
PROFITS OR REVENUES) OR SIMILAR DAMAGES, WHETHER BASED ON TORT (INCLUDING
WITHOUT LIMITATION, NEGLIGENCE OR STRICT LIABILITY), CONTRACT, OR OTHER LEGAL OR
EQUITABLE GROUNDS, EVEN IF PACKETEER HAS BEEN ADVISED OR HAD REASON TO KNOW OF
THE POSSIBILITY OF SUCH DAMAGES AND EVEN IN THE EVENT OF FAILURE OF EXCLUSIVE
REMEDIES. In no event will Packeteer's liability under this Agreement, including
claims for contribution or indemnity,
13.
<PAGE> 14
exceed the greater of US $100,000 (One Hundred Thousand Dollars) and all fees
paid pursuant to this Agreement in the twelve (12) months preceding the claim
giving rise to such liability.
14. TERM AND TERMINATION
14.1 TERM. The initial term of this Agreement will be five (5) years
from the Effective Date; provided however, in the event Packeteer assigns this
Agreement pursuant to PARAGRAPH 16.11 during such initial term, and Packeteer's
assignee fails to perform all or substantially all of its obligations pursuant
to such assignment and such failure remains uncured for a period of thirty (30)
days, ADTRAN may at its option renew this Agreement with Packeteer for a term of
three (3) years by giving written notice to Packeteer. Such option shall be
exercisable, if at all, only within ninety (90) days of such failure;
thereafter, this Agreement shall not be renewable except by written agreement of
the parties.
14.2 TERMINATION FOR MATERIAL BREACH. Either party may terminate this
Agreement if the other party has breached any material term of this Agreement
and such breach remains uncured for forty five (45) days after written notice of
such breach (which notice will, in reasonable detail, specify the nature of such
breach).
14.3 BANKRUPTCY. A party may terminate this Agreement upon written
notice to the other in the event the other (a) becomes insolvent or admits in
writing its inability to pay its debts as they mature, or makes an assignment
for the benefit of creditors; (b) files a petition under any foreign, state, or
United States bankruptcy act, receivership statute, or the like, as they now
exist, or as they may be amended; (c) any third party files against it such a
petition, or an application for a receiver of either party is made by anyone and
such petition or application is not resolved favorably within sixty (60) days;
or (d) discontinues its business.
14.4 OBLIGATIONS ON CANCELLATION, TERMINATION OR EXPIRATION. Upon
cancellation, termination, or expiration of this Agreement:
14.4.1 LICENSES TERMINATED. The licenses granted pursuant to
PARAGRAPH 2 ("License Grants") will terminate immediately; provided, however,
that ADTRAN will be permitted to sell (for a period of ninety (90) days from
termination) any finished inventory of ADTRAN Product then in stock.
14.4.2 SAFEGUARDING OF PROPRIETARY RIGHTS. ADTRAN will continue
to be responsible for safeguarding the proprietary rights of Packeteer and
Packeteer's suppliers in accordance with this Agreement, including PARAGRAPHS 10
("Protection of Proprietary Rights"), 11 ("Trademarks"), and ATTACHMENT E
("Secure Procedures") after such cancellation, termination, or expiration.
14.4.3 RETURN OR DESTRUCTION OF PACKETEER INFORMATION. Except for
the limited exemption set forth in PARAGRAPH 14.4.1 ("Licenses Terminated")
permitting ADTRAN to sell out existing inventory, ADTRAN will immediately
discontinue use and distribution of the Packeteer Software, and return or
destroy all copies of the Packeteer Software and any Packeteer deliverables in
its possession (including copies placed in any storage device under ADTRAN's
control); provided, however, that ADTRAN may keep a reasonable number of copies
for
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
14.
<PAGE> 15
supporting existing End Users. Upon Packeteer's request, ADTRAN will warrant in
writing to Packeteer compliance with this PARAGRAPH 14.4.3.
14.4.4 PAYMENT. The payment date of all monies due Packeteer will
automatically be accelerated so that they will become due and payable on the
effective date of termination, even if longer terms had been provided
previously.
14.4.5 CONTINUED USE BY END USERS. End Users will be permitted
the continued and uninterrupted use of the ADTRAN Products for the balance of
the term of their End User agreements, as specified in such agreements, provided
that and so long as the End Users are not in default of their End User
agreements.
14.4.6 SURVIVAL. The following sections will survive the
termination of expiration of this Agreement: PARAGRAPHS 1 ("Definitions"), 8
("Warranty"), 9 ("Indemnity"), 10 ("Protection of Proprietary Rights"), 12
("Confidentiality"), 13 ("Limitation of Liability"), 14 ("Term and
Termination"), 15 ("No Patent License."), and 16 ("General").
15. NO PATENT LICENSE.
15.1 PACKETEER PATENTS. As used herein, "Packeteer Patent Right" means
any right arising under any United States or foreign patent now owned by, or
later issued or assigned to Packeteer, applicable to the Packeteer Software.
Packeteer covenants that, to the extent that ADTRAN, ADTRAN's sublicensees as
authorized in this Agreement, ADTRAN's End Users, and ADTRAN's other direct and
indirect customers of Packeteer Software (collectively "Customers") exercise the
rights expressly granted in PARAGRAPH 2 ("License Grants") to ADTRAN, or which
ADTRAN is authorized to grant to Customers herein, Packeteer will not (a) assert
any Packeteer Patent Right against ADTRAN, (b) assert any Packeteer Patent Right
against Customers, or (c) require any additional fee or royalty from ADTRAN or
Customers based upon any Packeteer Patent Right. Except to the extent of such
covenant not to assert any Packeteer Patent Right, nothing contained herein will
be construed as conferring, by implication, estoppel, or otherwise, any license
or right with respect to any Packeteer Patent Right.
15.2 ADTRAN PATENTS. As used herein, "ADTRAN Patent Right" means any
patent right arising under any United States or foreign patent issued or
assigned to ADTRAN and having a filing date after the inventor had access to the
Packeteer Software in which (a) an inventor is (a) an employee of ADTRAN who has
had access to the Packeteer Software or (b) an independent contractor who has
had access to the Packeteer Software and has assigned patent rights in the
claimed invention to ADTRAN and (b) the Packeteer Software contributed to the
claimed invention. ADTRAN Patent Right will not include any patent applications
filed three (3) years after termination or expiration of this Agreement. ADTRAN
covenants that it will not (a) assert any ADTRAN Patent Right against Packeteer
or against its sublicensees or customers for products of a similar nature to
that distributed by ADTRAN, or (b) require any fee or royalty from Packeteer or
such sublicensees or customers for the sale of such products based upon ADTRAN
Patent Rights. Except to the extent expressed above, nothing contained herein
will be construed as conferring, by implication, estoppel, or otherwise any
license or right with respect to any ADTRAN Patent Right.
15.
<PAGE> 16
16. GENERAL
16.1 GOVERNING LAW. This Agreement will be governed in all respects by
the laws of the United States of America and the State of California as such
laws are applied to agreements entered into and to be performed entirely within
California between California residents. The parties agree that the United
Nations Convention on Contracts for the International Sale of Goods is
specifically excluded from application to this Agreement.
16.2 GOVERNING LANGUAGE. This governing language and any interpretation
or construction of this Agreement will be English.
16.3 FORUM. All disputes arising under this Agreement may be brought in
the state and federal courts located in San Jose, California, or Huntsville,
Alabama as permitted by law. ADTRAN and Packeteer consent to the personal
jurisdiction of the above courts.
16.4 NOTICES. All notices or reports permitted or required under this
Agreement will be in writing and will be delivered by personal delivery,
telegram, telex, telecopier, facsimile transmission, or by certified or
registered mail, return receipt requested, and will be deemed given upon
personal delivery, five (5) days after deposit in the mail, or upon
acknowledgment of receipt of electronic transmission. Notices will be sent to
the addresses set forth in the introductory paragraph of this Agreement and
shall be sent to the attention of the Chief Financial Officer, or to such other
address or person as may be designated in writing.
16.5 INJUNCTIVE RELIEF. It is understood and agreed that,
notwithstanding any other provisions of this Agreement, breach of the provisions
of this Agreement relating to the protection of intellectual property rights
(including, but not limited to, PARAGRAPHS 2 ("License Grants"), 10 ("Protection
of Proprietary Rights"), 11 ("Trademarks"), 12 ("Confidentiality"), ATTACHMENT D
("Packeteer Trademarks"), and ATTACHMENT E ("Secure Procedures") may cause the
other party irreparable damage for which recovery of money damages would be
inadequate, and that a party will therefore be entitled to obtain timely
injunctive relief (whether by arbitral or judicial authority) to protect its
rights under this Agreement in addition to any and all remedies available at
law.
16.6 NO AGENCY. Nothing contained herein will be construed as creating
any agency, partnership, or other form of joint enterprise between the parties.
16.7 FORCE MAJEURE. Neither party will be liable hereunder by reason of
any failure or delay in the performance of its obligations hereunder (except for
the payment of money) on account of strikes, shortages, riots, insurrection,
fires, flood, storm, explosions, acts of God, war, governmental action, labor
conditions, earthquakes, material shortages or any other cause which is beyond
the reasonable control of such party.
16.8 WAIVER. The failure of either party to require performance by the
other party of any provision hereof will not affect the full right to require
such performance at any time thereafter; nor will the waiver by either party of
a breach of any provision hereof be taken or held to be a waiver of the
provision itself.
16.
<PAGE> 17
16.9 SEVERABILITY. In the event that any provision of this Agreement
will be unenforceable or invalid under any applicable law or be so held by
applicable court decision, such unenforceability or invalidity will not render
this Agreement unenforceable or invalid as a whole, and, in such event, such
provision will be changed and interpreted so as to best accomplish the
objectives of such unenforceable or invalid provision within the limits of
applicable law or applicable court decisions.
16.10 HEADINGS. The Paragraph headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe,
or describe the scope or extent of such Paragraph or in any way affect this
Agreement.
16.11 ASSIGNMENT. Neither this Agreement nor any rights or obligations
of ADTRAN hereunder may be assigned or transferred by ADTRAN in whole or in
part, whether by operation of law or otherwise, without the prior written
approval of Packeteer which shall not unreasonably be withheld. For the purposes
of this Paragraph, a change in ownership or sale of substantially all of the
assets of ADTRAN or the business division of ADTRAN primarily involved in this
Agreement shall not be considered an assignment or transfer of ADTRAN's rights.
Packeteer may exercise full transfer and assignment rights in any manner at
Packeteer's discretion and specifically may sell, pledge, or otherwise transfer
it's right to receive royalties under this Agreement.
16.12 EXPORT. ADTRAN acknowledges that the laws and regulations of the
United States restrict the export and re-export of commodities and technical
data of United States origin, including the Packeteer Software licensed
hereunder. ADTRAN agrees that it will not export or re-export the Packeteer
Software or ADTRAN Product in any form, without the appropriate United States
and foreign governmental licenses, if legally required. ADTRAN agrees that its
obligations pursuant to this Paragraph will survive and continue after any
termination or expiration of rights under this Agreement.
16.13 FULL POWER. Each party warrants that it has full power to enter
into and perform this Agreement, and the person signing this Agreement on each
party's behalf has been duly authorized and empowered to enter into this
Agreement. Each party further acknowledges that it has read this Agreement,
understands it and agrees to be bound by it.
16.14 ENTIRE AGREEMENT. This Agreement together with the Attachments and
appendices completely and exclusively states the agreement of the parties
regarding its subject matter. It supersedes, and its terms govern, all prior
proposals, agreements, or other communications between the parties, oral or
written, regarding such subject matter. This Agreement will not be modified
except by a subsequently dated written amendment signed on behalf of all parties
by their duly authorized representative and any provision of a purchase order
purporting to supplement or vary the provisions hereof will be void.
16.15 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, each of which will be considered an original, but all of
which together will constitute one and the same instrument.
17.
<PAGE> 18
IN WITNESS WHEREOF, the parties hereto have caused this OEM Agreement to
be executed by their duly authorized representatives as of the Effective Date.
PACKETEER, INC. ADTRAN, INC.
/s/ CRAIG ELLIOTT /s/ DANNY WINDHAM
- ---------------------------- -----------------------------------------
By: Craig Elliott By: Danny Windham
------------------------ ------------------------------------
Its: President and CEO Its: Vice President, Marketing CPE
----------------------- Products
-----------------------------------
18.
<PAGE> 19
ATTACHMENT A
PACKETEER SOFTWARE
PACKETEER SOFTWARE
The Packeteer Software components that Adtran has the right to use and
distribute are defined with check marks in the following table, and by reference
to the PACKETSHAPER PORTING GUIDE v 1.17 which is fully incorporated into this
agreement in Attachment B.
[*]
* Requires a disk drive
[*]
THIRD PARTY TOOLS
[List of development tools required to replicate the development environment, as
well the vendor who offers such tools]
TOOL VENDOR
SNMP EMANATE
DNS UNIVERSITY OF CALIFORNIA
EXCLUDED COMPONENTS
[List all third party software which Packeteer is not permitted to sublicense in
source code form, as well as all third party software for which there might be
any ambiguity as to their inclusion (e.g. Any RTOS software, objects, etc.).]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
A-1.
<PAGE> 20
ATTACHMENT B
PACKETSHAPER: OEM SOFTWARE PORTING GUIDE
THE DOCUMENT ENTITLED "PACKETSHAPER PORTING GUIDE," REVISION 1.17, DATED 5/3/99
IS FULLY INCORPORATED WITHIN THIS ATTACHMENT B AND IS DIRECTLY ATTACHED HERETO.
B-1.
<PAGE> 21
ATTACHMENT C
PACKETEER END USER LICENSE AGREEMENT
THE FOLLOWING IS A SAMPLE FORM OF THE PACKETEER END USER AGREEMENT AS OF THE
EFFECTIVE DATE:
"THIS AGREEMENT IS PROOF OF YOUR RIGHT TO USE THE SOFTWARE CONTAINED IN THE
PACKETEER PACKETSHAPER PRODUCT AND CONTAINS ADDITIONAL INFORMATION CONCERNING
PACKETEER'S PRODUCT WARRANTY AND LIMITATIONS OF LIABILITY.
PLEASE READ IT CAREFULLY.
THIS AGREEMENT IS BETWEEN YOU (EITHER AN INDIVIDUAL OR AN ENTITY) AND PACKETEER,
INC. ("PACKETEER"). PACKETEER IS WILLING TO GRANT YOU THE FOLLOWING RIGHTS TO
USE THE SOFTWARE INCORPORATED IN OR SUPPLIED WITH THE PACKETEER PACKETSHAPER
PRODUCT AND ITS ACCOMPANYING DOCUMENTATION (COLLECTIVELY, THE "PACKETEER
SOFTWARE") ONLY IF YOU AGREE TO BE BOUND BY ALL OF THE TERMS OF THIS AGREEMENT.
BY INSTALLING THE PRODUCT (THE "EQUIPMENT") OR USING THE PACKETEER SOFTWARE, YOU
AGREE TO BE BOUND BY ALL THE TERMS OF THIS AGREEMENT. IF YOU DO NOT AGREE TO BE
BOUND BY ANY OF THE TERMS OF THIS AGREEMENT, PACKETEER IS UNWILLING TO GRANT YOU
ANY RIGHTS TO USE THE PACKETEER SOFTWARE AND YOU MUST NOT USE THE PACKETEER
SOFTWARE OR THE EQUIPMENT; INSTEAD YOU MUST PROMPTLY RETURN THE EQUIPMENT AND
PACKETEER SOFTWARE FOR A FULL REFUND TO PACKETEER OR TO THE AUTHORIZED PACKETEER
RESELLER THAT PROVIDED YOU WITH THE PRODUCT.
1. OWNERSHIP: The Packeteer Software is and shall remain a proprietary product
of Packeteer. Packeteer and Packeteer's suppliers shall retain ownership of all
patents, copyrights, trademarks, trade names, trade secrets and other
proprietary rights relating to or residing in the Packeteer Software and
Equipment. Except for the license grant provided in Paragraph 2, you shall have
no right, title or interest in or to the Packeteer Software. The Packeteer
Software is licensed, not sold, to you for use only under the terms of this
Agreement.
2. GRANT OF LICENSE: Packeteer grants you a non-transferable (except as set
forth in this Paragraph) non-exclusive, restricted right to use the Packeteer
Software as incorporated in or supplied with the Equipment and solely in
connection with the operation of the Equipment for your own internal business
purposes. You understand that Packeteer may update the Packeteer Software at any
time and in doing so incurs no obligation to furnish such updates to you
pursuant to this Agreement. You may transfer the license to use the Packeteer
Software only in connection with a sale or transfer of the Equipment and as
included with the Equipment and not on a standalone basis, provided the buyer or
transferee agrees to be bound by the terms and conditions of this Agreement.
3. RESTRICTIONS: Packeteer reserves all rights in the Packeteer Software not
expressly granted to you. Except as permitted in Paragraph 2, you may not use,
copy, modify, create derivative works of, distribute, sell, assign, pledge,
sublicense, lease, loan, rent, timeshare, deliver or otherwise transfer the
Packeteer Software, nor permit any other party to do any of the foregoing. You
may not remove from the Packeteer Software, or alter, any of the trademarks,
trade names, logos, patent or copyright notices or markings, or add any other
notices or markings to the Packeteer Software. To the extent permissible by
applicable law, you may not derive or attempt to derive the source code of the
Packeteer Software by any means, nor permit any other party to derive or attempt
to derive such source code. To the extent permissible by applicable law, you may
not reverse engineer, decompile, disassemble, or translate the Packeteer
Software or any part thereof.
4. LIMITED WARRANTY: Packeteer does not warrant that the functions contained in
the Packeteer Software and Equipment will meet your requirements or that the
operation of your Packeteer Software or Equipment will be uninterrupted or error
free. Packeteer warrants that for a period of ninety (90) days from your date of
receipt of the Equipment and Packeteer Software, (a) the Equipment will be free
of any defects in materials and workmanship and (b) the Packeteer Software will
perform substantially in accordance with the accompanying documentation. This
limited warranty is void if failure of the Equipment or Packeteer Software to
conform with the warranty has resulted from improper installation, testing,
misuse, neglect, accident, fire or other hazard, or any breach of this
Agreement.
5. LIMITED REMEDIES: In the event of a breach of the foregoing limited warranty,
you must return the Equipment and Packeteer Software to Packeteer or the
Packeteer authorized reseller that provided you with the Packeteer Software,
postage prepaid, before the expiration of the warranty period, with a copy of
the invoice for the unit. Packeteer's sole and exclusive obligation and your
sole and exclusive remedy shall be, at Packeteer's sole discretion, to either
(a) repair the Packeteer Software or Equipment; (b) provide a replacement
Equipment unit or a replacement copy of the Packeteer Software or (c) refund the
amount you paid for the unit and terminate this Agreement. Any replacement copy
of the Packeteer Software or replacement Equipment unit will be warranted for
the remainder of the original warranty period or thirty (30) days, whichever is
longer.
6. NO OTHER WARRANTIES: OTHER THAN THE FOREGOING LIMITED WARRANTY, PACKETEER
HEREBY EXPRESSLY DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION THE IMPLIED WARRANTIES OF TITLE, NON-INFRINGEMENT, FITNESS
FOR A PARTICULAR PURPOSE AND MERCHANTABILITY. SOME JURISDICTIONS DO NOT ALLOW
THE DISCLAIMER OF IMPLIED WARRANTIES, SO THE ABOVE DISCLAIMER MAY NOT APPLY TO
YOU, IN WHICH CASE THE DURATION OF ANY SUCH IMPLIED WARRANTIES IS LIMITED TO
SIXTY (60) DAYS FROM THE DATE THE EQUIPMENT AND PACKETEER SOFTWARE ARE RECEIVED
BY YOU. THIS WARRANTY GIVES YOU SPECIFIC LEGAL RIGHTS. YOU MAY HAVE OTHER LEGAL
RIGHTS WHICH VARY FROM JURISDICTION TO JURISDICTION.
7. LIMITATION OF LIABILITY: PACKETEER'S AGGREGATE LIABILITY IN CONNECTION WITH
THIS AGREEMENT, THE PACKETEER SOFTWARE AND THE EQUIPMENT, REGARDLESS OF THE FORM
OF THE ACTION GIVING RISE TO SUCH LIABILITY (WHETHER IN CONTRACT, TORT OR
OTHERWISE), SHALL NOT EXCEED THE AMOUNT PAID BY YOU TO
C-1.
<PAGE> 22
PACKETEER. PACKETEER SHALL NOT BE LIABLE TO YOU FOR ANY INDIRECT, EXEMPLARY,
SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY KIND (INCLUDING WITHOUT
LIMITATION LOSS OF DATA, EQUIPMENT DOWNTIME OR LOST PROFITS), EVEN IF PACKETEER
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. SOME JURISDICTIONS DO NOT
ALLOW THE LIMITATION OR EXCLUSION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL
DAMAGES SO THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU. THE LIMITED
WARRANTY, LIMITED REMEDIES AND LIMITED LIABILITY PROVISIONS CONTAINED IN THIS
AGREEMENT ARE FUNDAMENTAL PARTS OF THE BASIS OF PACKETEER'S BARGAIN HEREUNDER,
AND PACKETEER WOULD NOT BE ABLE TO PROVIDE THE PACKETSHAPER TO YOU ABSENT SUCH
LIMITATIONS.
9. GOVERNMENT END USERS: The Packeteer Software is comprised of "commercial
computer software" and "commercial computer software documentation" as such
terms are used in 48 C.F.R. 12.212 (SEPT 1995) and is provided to the Government
(a) for acquisition by or on behalf of civilian agencies, consistent with the
policy set forth in 48 C.F.R. 12.212; or (b) for acquisition by or on behalf of
units of the Department of Defense, consistent with the policies set forth in 48
C.F.R. 227-7202-1 (JUN 1995) and 227.7202-3 (JUN 1995).
10. EXPORT CONTROL: Since the Packeteer Software is subject to the export
control laws of the United States, you may not export or re-export the Packeteer
Software without the appropriate United States and foreign government licenses.
You shall otherwise comply with all applicable export control laws and shall
defend, indemnify and hold Packeteer and all Packeteer suppliers harmless from
any claims arising out of your violation of such export control laws.
11. GENERAL: The United Nations Convention on Contracts for the International
Sale of Goods is specifically disclaimed. If any provision of this Agreement is
held by a court of competent jurisdiction to be unenforceable for any reason,
the remaining provisions hereof shall be unaffected and remain in full force and
effect. This Agreement is the final, complete and exclusive agreement between
the parties relating to the subject matter hereof, and supersedes all prior or
contemporaneous understandings and agreements relating to such subject matter,
whether oral or written. Should you have any questions regarding this Agreement,
or if you desire to contact Packeteer for any reason, please write to:
Packeteer, Inc., 10495 N. De Anza Blvd., Cupertino, California 95014, U.S.A."
C-2.
<PAGE> 23
ATTACHMENT D
PACKETEER TRADEMARKS
Packeteer may adopt certain trademarks, trade names, marks, and logos
("Trademarks") from time to time in its sole discretion. The following Packeteer
Trademarks are licensed to ADTRAN pursuant to this Agreement:
[PACKETWISE TECHNOLOGY LOGO]
The above trademark is designated to be included on the back panel of the Adtran
Box Level Product (Attachment F). Pending platform(s) design of the System Level
Products (Attachment F), use of this trademark will be determined prior to
shipping.
The Trademarks may be modified at any time by Packeteer.
USE OF PACKETEER TRADEMARKS
1. OWNERSHIP OF TRADEMARKS. ADTRAN acknowledges the ownership of the Packeteer
Trademarks in Packeteer. ADTRAN agrees that it will do nothing inconsistent with
such ownership and that all use of the Trademarks by ADTRAN will inure to the
benefit of and be on behalf of Packeteer. ADTRAN acknowledges that Trademarks
are valid under applicable law and that ADTRAN's utilization of the Trademarks
will not create any right, title or interest in or to such Trademarks. ADTRAN
acknowledges Packeteer's exclusive right to use of the Trademarks and agrees not
to do anything contesting or impairing the trademark rights of the Packeteer.
Any use of the Trademarks must identify Packeteer as the owner of such
Trademarks.
2. QUALITY STANDARDS. Packeteer hereby appoints ADTRAN as its representative for
the limited purpose of controlling the quality of the ADTRAN Products and any
other products or services it supplies in connection with the use of the
Trademarks. ADTRAN agrees that (a) the nature and quality of the ADTRAN Products
and any other products or services it supplies in connection with use of the
Trademarks will conform to the standards set by Packeteer, and (b) it will
cooperate with Packeteer in facilitating Packeteer's monitoring and control of
the nature and quality of such products and services. Such assistance will
include supplying Packeteer, upon its request, with specimens of its use of the
Trademarks, including supplying samples of reprinted documentation,
translations, product packaging and promotional materials that use the
Trademarks in conjunction with ADTRAN's marketing of ADTRAN Products. Upon
reasonable notice to ADTRAN and at Packeteer's sole expense, Packeteer may
conduct an inspection of such specimens at facilities of its choosing to
determine conformance with the standards.
D-1.
<PAGE> 24
ADTRAN will, at Packeteer's request and expense, assist Packeteer in conducting
such inspection and testing including, but not limited to, providing Packeteer
with applicable hardware. If, at any time, Packeteer determines that ADTRAN has
not met the Packeteer quality standards, Packeteer will so advise ADTRAN and,
upon ADTRAN's receipt of such notice by any means, ADTRAN will have thirty (30)
days to improve the quality to the standard previously approved by Packeteer, or
to cease the use of all Trademarks. ADTRAN will comply with all applicable laws
and regulations pertaining to the use of the Trademarks and to the distribution
and advertising of the ADTRAN Products; however, Packeteer shall obtain all
appropriate government approvals pertaining to the use of the Trademarks.
3. INFRINGEMENT PROCEEDINGS. ADTRAN agrees to notify Packeteer of any
unauthorized use of the Trademarks by others promptly as it comes to ADTRAN's
attention. Packeteer will have the sole right and discretion to bring
infringement or unfair competition proceedings involving the Trademarks.
4. ADTRAN'S USE OF TRADEMARKS. Except as set forth otherwise in the Agreement,
ADTRAN agrees that it will (a) prominently and permanently include the Packeteer
Trademarks on all copies of the Packeteer Software and on any ADTRAN Products
distributed to End Users (b) use the Packeteer Trademarks, including the
PacketWise logo, in any advertising or printed materials concerning the ADTRAN
Products, (c) use all applicable Trademarks on all copies, advertisements,
brochures, manuals, packaging and other appropriate uses made in the promotion,
sale or use of the ADTRAN Products, and (d) ensure that the logo set forth above
will appear prominently on the logon screen, splash screen, or other first
display created by the Packeteer Software when End Users initialize the
Packeteer Software.
5. TRADEMARK REGISTRATIONS. ADTRAN, at Packeteer's request and expense, will (a)
promptly provide Packeteer with any specimens, (b) execute all applications for
trademark registrations, assignments or other applicable documents, and (c)
perform any other act reasonably necessary for Packeteer to secure or maintain
any and all trademark rights in any country in which ADTRAN is marketing the
ADTRAN Products in association with a Trademark. ADTRAN's responsibilities will
include complying with the formalities of local law, including, but not limited
to, executing any application for registration as a registered user, executing
additional license agreements suitable for recording with the appropriate
authorities or providing proof of use of the trademarks in any other applicable
documents.
6. NO UNITARY OR COMPOSITE TRADEMARKS. ADTRAN agrees not to use any other
trademark or service mark in close proximity to any of the Packeteer Trademarks
or combine the marks so as to effectively create a unitary composite mark
without the prior written approval of Packeteer.
D-2.
<PAGE> 25
ATTACHMENT E
SECURE PROCEDURES
1. AUTHORIZED EMPLOYEES AND CONTRACTORS. ADTRAN agrees that it will only
disclose all or any portion of the Packeteer Software to authorized employees
("Authorized Employees") and authorized contractors ("Authorized Contractors")
(subject to ADTRAN's having obtained authorization for use of such contractors
in accordance with PARAGRAPH 2 of this ATTACHMENT E, below) who (a) require
access thereto for a purpose authorized by this Agreement, (b) have signed an
employee or contractor agreement in which such employee or contractor agrees to
protect third party confidential information and (c) in the case of disclosure
of Packeteer Software Source or Packeteer Software Information ("Source
Information"), have received a notice of confidentiality prior to access to such
Source Information, and again upon any termination of such access, that
contains, at a minimum provisions substantially in accordance with the
following:
"Recipient has previously signed an agreement with ADTRAN pursuant to
which Recipient has agreed to maintain the confidentiality of
confidential information of ADTRAN and its suppliers (the "Confidential
Information") and to use the Confidential Information solely for
ADTRAN's benefit. The purpose of this notice is to apprise Recipient
that Recipient will be receiving certain proprietary information of
Packeteer, including internal source code, interface specifications and
related documentation for the Packeteer product and related Packeteer
information, all of which is of a confidential nature and which contains
valuable trade secrets, know-how, and proprietary information of
Packeteer (the "Packeteer Information") and which constitutes
Confidential Information under Recipient's agreement with ADTRAN.
This is to inform Recipient that the Packeteer Information cannot be
used for any purpose except for the specific purposes which ADTRAN or
Packeteer authorize in writing and that Recipient is not authorized to
disclose the Packeteer Information to any person at any time except to
employees of Packeteer and to those Authorized Employees and Authorized
Contractors which ADTRAN informs Recipient are authorized to receive
such Packeteer Information.
All materials including, without limitation, programs, recorded
information, documents, drawings, models, apparatus, sketches, designs,
and lists furnished to Recipient by ADTRAN or Packeteer which are
designated in writing to be the property of Packeteer remain the
property of Packeteer and must be returned to Packeteer promptly at its
request, together with any copies or modifications thereof."
ADTRAN guarantees the compliance of all such Authorized Employees and Authorized
Contractors with their obligations under such confidentiality agreements.
2. APPROVAL OF CONTRACTORS. Notwithstanding the provisions in this
ATTACHMENT E permitting Authorized Contractors to have access to Source
Information,
E-1.
<PAGE> 26
ADTRAN may not permit a contractor to come into contact with Source
Information, or engage in the development of the Enhanced Software hereunder
unless ADTRAN has first obtained a non-disclosure agreement which protects
against the unauthorized use of Source Information, and assures that the
contractor is not engaged in Competitive Product development.
3. PACKETEER SUPPORT INFORMATION.
3.1 ADTRAN will ensure that all Source Information received from
Packeteer, and copies made thereof, will be properly marked or otherwise
appropriately identified as Packeteer Information before being made available to
Authorized Employees and Authorized Contractors hereunder. Packeteer will
properly mark all material and Source Information as Packeteer Information.
3.2 ADTRAN will ensure that the same degree of care is used to
prevent the unauthorized use, dissemination, or publication of the Source
Information as ADTRAN uses to protect its own confidential information of a like
nature, but in no event will the safeguards for protecting such Packeteer
Support Information be less than a reasonably prudent business would exercise
under similar circumstances. ADTRAN will take prompt and appropriate action to
prevent unauthorized use or disclosure of Source Information.
3.3 ADTRAN will instruct Authorized Employees and Authorized
Contractors not to copy Source Information on their own, and not to disclose
Source Information to anyone not authorized to receive it.
3.4 Source Information will be handled, used, and stored solely
at the Development Site. The Source Information will not be stored on any
computer or network which is accessible from outside of the Development Site or
by people other than Authorized Employees or Authorized Contractors.
3.5 ADTRAN will provide Packeteer with a list of all Authorized
Employees and Authorized Contractors who have access to the Source Information
and who have had access in the preceding five (5) years.
4. TRADE SECRETS. The Packeteer Software, including the techniques,
algorithms, and processes contained in the Packeteer Software which have been
developed, acquired, or licensed by Packeteer, or any modification or extraction
thereof, constitute trade secrets of Packeteer and/or its suppliers, and will be
used by ADTRAN only in accordance with the terms of this Agreement. ADTRAN will
take all measures reasonably required to protect the proprietary rights of
Packeteer and its suppliers in the Packeteer Software and will promptly notify
Packeteer of any lost or missing items and take all reasonable steps to recover
such items. ADTRAN agrees that it will not attempt to reverse engineer any
portion of the Packeteer Software which is provided to ADTRAN solely in object
code form.
5. NO COMMINGLING OF TECHNOLOGY. If ADTRAN engages in development of
products (other than the Ported Software) that are comparable to the Packeteer
Software ("Comparable Products") during the term of this Agreement, it will
ensure that there is no sharing with such Comparable Products development any of
the following: (a) design documents or schematics supplied by Packeteer; (b)
Source Information or other information based upon or
E-2.
<PAGE> 27
derived from the Source Information; or (c) any facilities (including, but not
limited to, computer systems and network storage devices), or (f) personnel with
access to any of (a)-(c) above. ADTRAN will ensure that all Authorized Employees
and Authorized Contractors who have had previous access to the Packeteer
Software will be precluded for a period of twenty-four (24) months after their
latest access to such Packeteer Software from being employed in any Comparable
Product development (either internally or externally) by or for ADTRAN or any
Competitive Product (as defined in PARAGRAPH 10.9 ("Access") of this AGREEMENT)
or Comparable Product development for any third parties. "Employment in any
Competitive (or Comparable) Product development" will be defined as having
direct access to, or producing any specifications, documentation, or source code
for, components of a Competitive (or Comparable) Product.
6. CERTIFICATION. At Packeteer's request ADTRAN will provide Packeteer
with written certification by an officer of ADTRAN of ADTRAN's compliance with
its obligations under PARAGRAPHS 1 and 5 of this ATTACHMENT E.
7. PROPRIETARY RIGHTS AUDIT. During the term of the Agreement and for a
period of twenty-four (24) months thereafter, an independent auditor selected by
Packeteer will have access to such portion of ADTRAN's records and premises to
allow Packeteer to determine whether ADTRAN is substantially in compliance with
this ATTACHMENT E and PARAGRAPH 10 ("Protection of Proprietary Rights") of the
Agreement. In no event will audits be made hereunder more frequently than twice
per year. Such access will be (a) during ADTRAN's regular business hours, (b)
arranged so that, to the extent possible, ADTRAN's regular business activities
are minimally disrupted and (c) under the terms of an appropriate
confidentiality agreement executed by the individual(s) conducting such audit.
If Packeteer determines, after conducting such audit, that ADTRAN is not
substantially in compliance with its obligations to protect Packeteer's
proprietary rights, ADTRAN will pay the costs of such audit. Otherwise,
Packeteer will pay the costs of such audit. Such payment will not preclude
Packeteer from exercising any right which it may have under the Agreement.
ADTRAN will immediately correct any deficiencies discovered in the course of the
audit.
E-3.
<PAGE> 28
ATTACHMENT F
SPECIFICATIONS FOR ADTRAN PRODUCT
[*]
[*]
[*]
[*]
F-1.
<PAGE> 29
ATTACHMENT G
TEST CERTIFICATION PROCEDURES
INTRODUCTION.
This document describes proposed requirements for the software verification
testing that Packeteer, Inc. will perform
The areas are
- Support materials
- Software requirements
- Hardware requirements
- Testing Methods
- Reporting results
SUPPORT MATERIALS
Adtran must provide documentation on the following areas:
- - A set of manuals and a complete description of the feature set of the
Device Under Test (DUT)
- - A description of current revision level, how this version differs from
any previous version, and estimated ship date of the next version.
- - A complete set of test plans, test scripts, test tools and test results
from Adtran's own internal testing effort. This must include a list of
known bugs.
SOFTWARE REQUIREMENTS
- - DUT must have implement the complete Packeteer Command Line Interface
(CLI) for each Packeteer module implemented in the DUT.
- - This CLI must be accessible through Telnet through any port (Inband or
Outband) of the DUT.
- - This CLI need not be accessible for normal customers, but in this event,
Packeteer must be given some means of putting the DUT into this
Packeteer test mode.
G-1.
<PAGE> 30
HARDWARE REQUIREMENTS
- - Adtran will provide at least two (2) end-to-end test rigs for the DUT.
- - These test rigs must be capable of placing the DUT into an IP/Ethernet
based test harness. Thus, for example, if the DUT were a frame-relay
access device, each test rig would consist of at least two Ethernet
frads (one of which would be the DUT), connected back to back across the
frame-relay link by either a frame-relay router or a null-cable.
- - If the DUT features require cross-traffic to test, then the rig must be
capable of passing such traffic. This may require a central router with
3 or more interfaces.
- - The test rig must also have Sun Sparc 20's (or equivalent) running
Solaris 2.6, with Ethernet interfaces, to function as test traffic
generators.
TESTING METHODS
Packeteer testing will consist of two parts
- - Automated testing. In this phase, a series of automated tests will be
performed where the DUT is placed into various traffic modes, loaded
with traffic, and the results compared with expected.
- - Limited manual testing. In this phase, various features which are
awkward to test in an automated fashion are executed manually.
REPORTING RESULTS
Packeteer will provide a complete test report upon completing the tests.
This report will include all automated and manual tests run, the expected
results, the actual results, and whether the result constitutes a test pass or
fail.
G-2.
<PAGE> 31
ATTACHMENT H
SOURCE CODE SITES
ADTRAN facility.
ADDRESS
901 Explorer Boulevard,
Huntsville, Alabama 35806
SCHEDULE-1.
<PAGE> 32
ATTACHMENT I
COMPETITIVE PRODUCTS
PRODUCT WITH TRAFFIC SHAPING FUNCTIONALITY FROM THESE VENDORS:
ALLOT
AMPLIFY.NET
CHECKPOINT
NET REALITY
STRUTURED INTERNETWORKS
XEDIA
G-2.
<PAGE> 33
SCHEDULE 1
FEES
ADTRAN shall make the following payments to Packeteer:
[*] Initial Delivery Fee payable on the Effective Date.
Prepaid royalties shall be paid upon the following schedule:
[*]
For a total of * * * of prepaid royalties. The prepaid royalties shall be fully
creditable against royalties according to the following schedule:
From the Effective Date to December 31, 2000 at a rate of 100% against a unit's
royalty due;
Beginning January 1, 2001 at a rate of 50% against a unit's royalty due. Cash
will make up the remainder of the royalty due.
ROYALTY SCHEDULE:
Cumulative Royalties are an aggregate of all products defined in Attachment F:
- For box level products
Computed as a percentage of list price(s) of the base unit plus any add-on
amount designated for PacketWise.
[*]
For system level products:
Computed as a percentage of list price(s) of the component unit as described in
Attachment F plus any add-on amount designated for PacketWise.
[*]
MAINTENANCE FEE:
[*]
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
G-3.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Packeteer, Inc.:
We consent to incorporation by reference herein of our reports dated March 3,
1999, except as to Note 9, which is as of May 19, 1999, relating to the
consolidated balance sheets of Packeteer Inc. and subsidiaries as of December
31, 1997 and 1998, and the related consolidated statements of operations,
stockholders' equity, and cash flows for the period from January 25, 1996
(inception) to December 31, 1996, and for each of the years in the two-year
period ended December 31, 1998, and the related financial statement schedule,
which reports are included in the registration statement on Form S-1 (No.
333-79077) of Packeteer, Inc., and to the reference to our firm under the
headings "Experts" and "Selected Consolidated Financial Data" in such
registration statement.
Mountain View, California
July 27, 1999
72