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Exhibit 2.6
[LOGO OF GLOBAL NETWORK] [LOGO OF RIVER STONE]
Memorandum of Agreement
Regarding
GNTS-Riverstone Inter-Company Operations
Dated: June 3, 2000
This Memorandum of Agreement ("MOA") contains an agreement between
GlobalNetwork Technology Services, Inc., a Delaware corporation ("GNTS") and
Riverstone Networks, Inc., a Delaware corporation ("Riverstone"). GNTS and
Riverstone (collectively the "Parties") are controlled subsidiaries of Cabletron
Systems, Inc., a Delaware corporation ("Cabletron") and maintain various
commercial relationships. The Parties or their predecessor divisions have been
operating as independent companies since March 1, 2000 in accordance with the
provisions described in this MOA and its Exhibits and now wish to formalize the
terms and conditions under which they will continue to provide products and
services to each other by executing this MOA.
The Parties intend to agree on and execute one or more definitive Inter-
Company Operating Agreements to govern their relationships as soon as
practicable. These definitive agreements may contain additional or modified
terms and conditions. The Parties agree, however, that this MOA and its
Exhibits reflect their agreement with respect to their commercial relationships
and contain commitments that shall be legally binding unless and until more
definitive Inter-Company Operating Agreements are executed and become effective.
This MOA includes:
Exhibit A Basic Terms and Conditions
Exhibit B GNTS Services Referral Agreement
Exhibit C GNTS Services Resale Agreement
In Witness Whereof, the Parties have caused this MOA to be executed by their
duly authorized representatives:
GlobalNetwork Technology Services, Inc. Riverstone Networks, Inc
By: /s/ Earle Humphreys By:_______________________
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Name: Earle Humphreys Name:_____________________
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Title: President Title_____________________
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[LOGO OF GLOBAL NETWORK] [LOGO OF RIVER STONE]
Memorandum of Agreement
Regarding
GNTS-Riverstone Inter-Company Operations
Dated: June 3, 2000
This Memorandum of Agreement ("MOA") contains an agreement between
GlobalNetwork Technology Services, Inc., a Delaware corporation ("GNTS") and
Riverstone Networks, Inc., a Delaware corporation ("Riverstone"). GNTS and
Riverstone (collectively the "Parties") are controlled subsidiaries of Cabletron
Systems, Inc., a Delaware corporation ("Cabletron") and maintain various
commercial relationships. The Parties or their predecessor divisions have been
operating as independent companies since March 1, 2000 in accordance with the
provisions described in this MOA and its Exhibits and now wish to formalize the
terms and conditions under which they will continue to provide products and
services to each other by executing this MOA.
The Parties intend to agree on and execute one or more definitive Inter-
Company Operating Agreements to govern their relationships as soon as
practicable. These definitive agreements may contain additional or modified
terms and conditions. The Parties agree, however, that this MOA and its
Exhibits reflect their agreement with respect to their commercial relationships
and contain commitments that shall be legally binding unless and until more
definitive Inter-Company Operating Agreements are executed and become effective.
This MOA includes:
Exhibit A Basic Terms and Conditions
Exhibit B GNTS Services Referral Agreement
Exhibit C GNTS Services Resale Agreement
In Witness Whereof, the Parties have caused this MOA to be executed by their
duly authorized representatives:
GlobalNetwork Technology Services, Inc. Riverstone Networks, Inc
By:________________________ By: /s/ Romulus S. Pereira
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Name:______________________ Name: Romulus S. Pereira
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Title:_____________________ Title President & CEO
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<PAGE>
EXHIBIT A BASIC TERMS AND CONDITIONS
1. Definitions - Any capitalized terms not defined in this Exhibit shall have
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the meanings ascribed to them in the MOA and the other Exhibits thereto. As
used in this MOA:
Business Days means weekdays excluding United States federal
holidays when those days fall or are celebrated on
weekdays.
Claim has the meaning set forth in Section 7
Confidential Information has the meaning set forth in Section 4.
Dispute has the meaning set forth in Section 9.
GNTS Product means the services and hardware and software
products listed on the GNTS published price list
supplied to Riverstone.
Intellectual Property means all copyrights, trademarks, patents and
other intangible property of the Parties.
MOA means this Memorandum of Agreement and all its
Exhibits.
Notice has the meaning set forth in Section 8.
Orders means orders placed by one Party on the other
Party for that Party's Products that include the
information required by Section 3.2 or agreed to
by the Parties.
Parties GNTS and Riverstone, each of which may be referred
to as a "Party."
Product means any Riverstone Product or GNTS Product.
Riverstone Product means the services and hardware and software
products listed on the Riverstone published price
list supplied to GNTS.
Territory unless otherwise specified in this MOA or agreed
by the Parties, the Territory is worldwide.
Transformation Agreement means the agreement dated __, 2000 by and among
Cabletron and certain other Cabletron affiliates
governing the transformation of Cabletron.
2. Relationship of the Parties - The Parties shall operate their respective
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businesses as if they are independent entities.
3. Commercial Terms
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3.1 Application of Cabletron Standard Licenses and Warranties - All Product
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warranty terms and all license terms for Products sold hereunder shall be
according to Cabletron's then-current standard U.S. warranty or license for
the type of product or service in question unless otherwise mutually
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agreed to by the Parties in writing as an amendment to this MOA and
attached hereto as an additional Exhibit. All such warranties and licenses
are available from Cabletron upon request.
3.2 Orders - The Party placing an Order ("the Ordering Party") shall submit the
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Order to the location and in the manner designated by the Party on which
the Order is placed (the "Shipping Party"). All Orders are subject to
acceptance by the Shipping Party. No additional or different terms on the
face or reverse side of any Order, or in any written communication shall
supersede the terms of this MOA, unless such terms are agreed upon in
advance, set forth in writing, and signed by an authorized signatory of
both Parties. Each Order shall contain: (i) a complete list of the
Products to be purchased specifying quantity, type, description and
purchase price; (ii) the delivery date and ship-to location; (iii) the
invoicing address; and (iv) any special terms and conditions agreed to in
writing by the Parties. Orders may only be placed via electronic document
transfer, facsimile, or hard copy. Verbal or telephone orders must be
followed promptly by one of the transmission means described above.
3.3 Acceptance and Rejection - Orders may be rejected by a Shipping Party in
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its reasonable discretion, provided that any Order shall be deemed accepted
unless the Shipping Party provides notice of rejection to the Ordering
Party within ten (10) Business Days after receipt of the Order. The
Ordering Party may request changes to Orders including reschedules and
cancellation of either all or portions of a Order, however the Shipping
Party reserves the right to offer a different solution, reject the change
or cancellation or to accept it and assess a charge of up to five percent
(5%) of the Order if the change or cancellation is requested within ten
(10) days of the scheduled ship date of the Order.
3.4 Invoices and Payment - All payments for Products shall be due and payable
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thirty (30) days after the receipt of the invoice. Should a dispute arise
regarding payment of any amount due, the undisputed portion shall be paid
within thirty (30) days after the receipt of the invoice. Disputed amounts
that remain unpaid for ninety (90) days or more shall be treated as a
Dispute under Section 9 hereto and resolved according to the process
outlined in Section 9.
3.5 Delivery - The Shipping Party shall deliver Products, Incoterms Ex-Works,
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the shipping location of the Shipping Party, with the Ordering Party
responsible for the cost of freight and insurance. The Shipping Party will
use commercially reasonable efforts to deliver all Products pursuant to the
Shipping Party's published lead-times, and, whenever possible, to meet
requests for expedited delivery in accordance with the delivery date
specified in the Order. Products will ship from the regular shipping
location closest location to which the Order was submitted, provided the
Ordering Party places Orders for delivery within the Shipping Party's
published lead-times. Products will be packed and packaged according to
the Shipping Party's then current standard packaging methods.
3.6 Special Requests and Changes - If the Ordering Party request an expedited
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delivery of a Product, the Ordering Party shall pay any resulting premium
freight and other expedited delivery charges. The Shipping Party reserves
the right to schedule, reschedule, or make partial shipments, provided that
the Shipping Party shall give the Ordering Party reasonable advance notice
of any such scheduled delivery change and the Ordering Party shall agree to
any such changes. When Products or component parts are in short supply, or
on an industry wide allocation, the Shipping Party will allocate its
available inventory and make deliveries on a basis the Shipping Party deems
equitable, in its sole discretion, and without liability to the Ordering
Party on account of the method of allocation chosen or its implementation.
Special packaging or packing requirements shall be quoted by the Shipping
Party, and mutually agreed to in advance.
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3.7 Carriers - Products will be shipped by a the carrier designated in writing
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by the Ordering Party, provided that in the absence of any specific
shipping instructions from the Ordering Party, the Shipping Party may
select the carrier. In no event, however, shall the Shipping Party be
liable for the shipment or shall the carrier be deemed an agent or
representative of the Shipping Party. The Ordering Party shall be
responsible for filing any claims directly with the carrier.
3.8 Taxes - The Ordering Party shall be liable for all taxes, duties, levies,
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and fees associated with the delivery of the Shipping Party's Products to
the Ordering Party, but not including any income taxes owed by the Shipping
Party.
4. Confidentiality - It is anticipated that during the Term of this MOA the
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Parties will exchange Confidential Information (as defined below). For
purposes of this Section, the Party disclosing the Confidential Information
is the "Discloser" and the Party receiving the Confidential Information is
the "Recipient". "Confidential Information" shall include, but not be
limited to, information relating to (i) the technical specifications of the
Products, (ii) the development, research, testing, marketing and financial
activities of the Discloser, (iii) the identity and special needs of the
customers or suppliers of the Discloser, and (iv) the people and
organizations with whom the Discloser has business relationships and those
relationships. All Confidential Information acquired by Recipient or its
employees or agents shall remain Discloser's exclusive property, and
Recipient shall use its best efforts (which in any event shall not be less
than the efforts Recipient takes to ensure the confidentiality of its own
proprietary and other confidential information) to keep, and have its
employees and agents keep, any and all such information and data
confidential, and shall not copy or publish or disclose it to others, or
authorize its employees, or agents or anyone else to copy, publish, or
disclose it to others, without Discloser's prior written approval, and
shall return such information and data to Discloser at its request.
Recipient shall only use any Confidential Information in connection with
its performance under this MOA. Except as provided herein, upon termination
or expiration, a Recipient shall deliver to Discloser all Confidential
Information furnished by Discloser, which is then in the possession of the
Recipient, and shall not retain copies of the same.
5. Term and Termination
--------------------
5.1 Termination of MOA - Unless terminated in advance by written agreement of
------------------
the Parties or under Section 10 of the Transformation Agreement, the terms
of this MOA shall remain in effect and binding until the earlier of: (i)
the date that a definitive Inter-Company Operating Agreement between the
Parties becomes effective; or (ii) a date three (3) years from the date
hereof.
5.2 Limitation of Liability for Termination - In the event this MOA is
---------------------------------------
terminated, neither Party shall be liable to the other for compensation,
reimbursement or damages on account of the loss of prospective profits or
anticipated sales, or on account of expenditures, investments, leases or
commitments in connection with the business or good will of the other
Party, or for any other reason relating to or arising from such
termination.
6. Limitation of Liability - NEITHER PARTY SHALL BE LIABLE FOR ANY
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CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS AND
UNLIQUIDATED INVENTORY), INDIRECT, SPECIAL OR PUNITIVE DAMAGES EVEN IF THE
OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES EXCEPT (I)
IN CONNECTION WITH A BREACH OF THE CONFIDENTIALITY PROVISIONS SET FORTH IN
THIS MOA (II) MISAPPROPRIATION OF INTELLECTUAL PROPERTY AND (III) TO THE
EXTENT ANY SUCH DAMAGES ARE A PART OF AN INDEMNIFIED LOSS AGAINST WHICH A
PARTY IS ENTITLED TO BE INDEMNIFIED PURSUANT TO THE OTHER PROVISIONS OF
THIS MOA.
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7. Intellectual Property: Permissions, Infringement, and indemnification
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7.1 Ownership and Title - The Party owning the Intellectual Property in
-------------------
question shall be considered and remain the "Owning Party" of such
Intellectual Property. Nothing herein shall grant to the other Party any
right, title or interest in the Intellectual Property of the Owning Party.
The Parties acknowledge that any unauthorized use of Intellectual Property
will cause immediate and irreparable harm to the Owning Party and shall
entitle it to appropriate injunctive relief
7.2 Publicity - Each Party may accurately publicize its business relationships
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with the other Party and may advertise the Products that contain Trademarks
of the Owning Party of such Trademarks and which the other Party is
authorized to sell under this MOA. The Parties agree to use and acknowledge
all Trademarks when advertising or referring to the authorized Products.
The Owning Party may, at its option, require prior approval of any
materials, as to substance, form and style used by the other Party in its
advertising. All other permissions or licenses of Intellectual Property
shall be agreed to mutually by the Parties in an Exhibit attached hereto.
7.3 Indemnification - Each Party shall indemnify, defend and hold harmless the
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other Party and its affiliates and their respective directors, officers,
shareholders, employees and agents from and against any and all claims,
demands, suits, actions, judgments, costs and liabilities, including
attorneys' fees, relating to or arising out of any allegation that Products
furnished under this MOA infringe or violate any patent, copyright, trade
secret, trade name, trade dress, mask work, mask rights, trademark or any
other proprietary right (a "Claim") and shall pay all costs and damages
awarded; provided, the foregoing indemnity shall not apply: (i) to any
Claim that arises as a consequence of the combination of the Products not
authorized by the Owning Party where such claim would not have occurred but
for such combination; or (ii) to any Claim relating to use of a Product
following the date on which the Owning Party made available a non-
infringing version of such Product. Each Party agrees to promptly notify
the Owning Party of such Claim and permit the Owning Party to defend and
compromise such Claim provided, the other Party's failure to so notify the
Owning Party shall not diminish the Owning Party's indemnity obligations
hereunder except to the extent such other Party's delay in notifying the
Owning Party materially prejudices the Owning Party's defense of such
matter. If an injunction or exclusion order preventing the use of the
Products results from such a claim or, if the other Party reasonably
believes such an injunction is likely, the Owning Party shall, at its
expense, and at the other Party's request, use commercially reasonable
efforts to either (i) obtain for the other Party the right to continue
using the Products, or (ii) modify the Products to make them non-
infringing. In the event that the Owning Party cannot obtain such right
for the other Party, or perform such modification the Owning Party shall
repurchase all such Products from the other Party at the purchase price,
provided that for any Products no longer in the inventory of the other
Party or such Party's resellers, the repurchase price will be the purchase
price subject to straight line five year depreciation.
8. Notices -Where electronic communication is available, the Parties may
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communicate with each other by electronic means. The Parties agree that
when electronic communications are used, they are the equivalent of written
and signed documents except for Notices given under this MOA which if
transmitted electronically, shall also be sent via facsimile transmission
(with a copy by U.S. mail or overnight courier (signature required)).
Notices shall be deemed effective upon receipt or refusal to accept
delivery. Routine business communications (such as Product discontinuance
announcements and changes to prices) shall not be deemed to be a Notice.
All Notices required by this MOA shall be made:
If to GNTS:
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to it at: GlobalNetwork Technology Services, Inc.
35 Industrial Way
Building 28
Rochester, NH 03867
Attention: President
Telecopier No.: (603) 337-3402
With a copy to: Ropes & Gray
One International Place
Boston, MA 02110
Attention: David A. Fine
Telecopier No.: (617) 951-7050
If to Riverstone:
to it at: Riverstone Networks, Inc.
5200 Great America Parkway
Santa Clara, CA
Attention: President
Telecopier No.: (408) 878-6501
With a copy to: Ropes & Gray
One International Place
Boston, MA 02110
Attention: David A. Fine
Telecopier No.: (617) 951-7050
Copies of all Notices provided under this MOA shall simultaneously be given
to Cabletron at:
Cabletron Systems, Inc.
35 Industrial Way
Rochester, NH, USA 03867
Attention: Eric Jaeger or Chief Financial Officer
Facsimile No. 603-337-2388
With a copy to: Ropes & Gray
One International Place
Boston, MA 02110
Attention: David A. Fine
Telecopier No.: (617) 951-7050
9. Dispute Resolution
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9.1 Consultation - The Parties shall make good faith efforts to resolve any
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dispute arising under this MOA ("Dispute") through consultations between
their chief executive officers or their designated representatives. These
individuals shall meet in person or speak via conference call for the
purposes of resolving the Dispute within seven (7) Business Days of a
Notice of the Dispute being received. Notwithstanding the existence of any
Dispute, the Parties shall continue to operate under the MOA as if no
dispute exists.
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9.2 Unresolved Disputes - If the Parties are unable to resolve a Dispute
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through the consultation in 9.1, the Dispute shall be resolved by the Chief
Executive Officer of Cabletron or such other officers or directors of
Cabletron as the Chief Executive Officer of Cabletron may deem appropriate
under the circumstances.
10. General Terms
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10.1 Entire Agreement and Amendment - This MOA, its Exhibits and all documents
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incorporated by reference, constitute the entire and only understanding
between the Parties. Unless otherwise provided herein or in Section 10 of
the Transformation Agreement, no amendment or modification to this MOA
shall be binding on either Party unless made in writing and signed by duly
authorized representatives of both Parties.
10.2 Choice of Laws - This MOA and all Orders for products or services placed
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under the terms of this MOA shall be governed by the laws of the State of
New Hampshire, regardless of the laws that might otherwise govern under
applicable conflict and choice of laws principles.
10.3 Assignment - Except as set forth below, any assignment of this MOA shall be
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null and void. Assignment shall include any change in control of a Party.
This MOA may be assigned by either Party: (i) in connection with any sale
or merger of such Party (or a major group or division of such Party),
provided that written notice is provided to the non-assigning Party at
least thirty (30) days before such transaction closes; (ii) in whole or in
part to one or more wholly owned subsidiaries of the assigning Party; or
(iii) with the written consent of the non-assigning Party.
10.4 Relationship of the Parties - This MOA creates no relationship of joint
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venture, franchise or partnership, and neither Party has the authority to
assume or create any obligation or responsibility on behalf of the other
Party. Except as expressly provided in this MOA, neither Party shall hold
itself out as the representative, agent, franchisee or employee of the
other Party.
10.5 Force Majeure - Except in the case of one Party's failure to pay any
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amounts due hereunder, neither Party shall be liable for any damages or
penalties for delay in delivery nor for failure to give notice when such
delay is due to the elements, acts of God, acts of the other Party, acts of
civil or military authority, fires, or floods, epidemics, quarantine
restrictions, war, riots, strikes, lockouts or other labor disputes, delays
in transportation, delays in delivery by vendors, or any other causes,
without limitation, which are beyond the reasonable control of the delayed
Party. The delivery date shall be considered extended by a period of time
equal to the time lost because of any delay, which is excusable under this
provision.
10.6 Import and Export Controls - Certain products, services or information that
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are to be sold, licensed or otherwise provided by one Party to the other
pursuant to this MOA may be subject to import or export control laws of the
United States government and other governments. Each Party assures the
other that the Shipping Party will comply with those regulations at the
Shipping Party's expense when ever the Shipping Party exports or re-exports
controlled products, controlled technical data or any product produced
directly from controlled technical data.
10.7 Waiver or Severability - No provision of this MOA shall be deemed to have
----------------------
been waived because a Party fails to enforce the provision. If any term of
this MOA shall be declared illegal, invalid or unenforceable, such term
shall be construed to be enforceable to the maximum extent permitted and,
if not so construable, shall be deemed deleted from this MOA, provided that
if such construction or deletion substantially alters the commercial basis
of this MOA, the Parties shall negotiate in good faith to amend the terms
of this MOA to give effect to their original intent.
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10.8 Survival - Appropriate provisions of this MOA, including but not limited to
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the following shall survive after the Term has expired: Sections 3, 4, 6,
7, 9 and 10.
End of Exhibit A
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EXHIBIT B GNTS SERVICES REFERRAL AGREEMENT
Any capitalized terms not defined in this Exhibit shall have the meanings
ascribed to them in the MOA and the other Exhibits thereto. This Exhibit,
together with the MOA, governs referral fees for the sale of GNTS Services by
Riverstone.
1. Prices & Discounts:
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GNTS agrees to provide to Riverstone a six percent (6%) Referral Fee on Net
Revenue on sales of GNTS Services to End User Customers by Riverstone where GNTS
is Prime Contractor. The Referral Fee shall not apply to any internal sales of
GNTS Services to any Partner Subsidiary, including Riverstone.
2. Special Terms:
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The parties agree to comply with the special terms detailed below provided that
no such term shall alter the terms of the MOA, or any other Exhibit to the MOA.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
3. Certain Defined Terms:
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Capitalized Terms not defined herein shall have the meaning ascribed to them in
the Agreement and its other Exhibits.
End User Customer shall mean the customer which purchases the GNTS Services
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directly for its specific ownership and internal use.
Net Revenue shall mean all revenue to GNTS from the sale of all GNTS Services to
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the End User Customer by Riverstone.
Prime Contractor shall mean the contractor responsible for servicing the End
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User Customer and insuring that any service project involving GNTS Services is
completed.
Referral Fee shall mean payments for actual sales of GNTS Services to an End
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User Customer by a Riverstone employee.
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EXHIBIT C GNTS SERVICES RESALE AGREEMENT
Any capitalized terms not defined in this Exhibit shall have the meanings
ascribed to them in the MOA and the other Exhibits thereto. This Exhibit,
together with the MOA, governs the sale of GNTS Services by Riverstone.
Definitions are contained in Section 3 below.
1. Prices & Discounts:
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GNTS Packaged Services:
(a) Direct Sales: GNTS agrees to sell Packaged Services to Riverstone at a
twenty percent (20%) discount off of GNTS List Price for Direct Sales by
Riverstone.
(b) Channel Sales: GNTS agrees to sell to Riverstone Packaged Services at a
twenty-five percent (25%) discount off of GNTS List Price for sales to
Riverstone Channel Partners.
GNTS Custom Services: GNTS agrees to sell GNTS Custom Services to Riverstone at
a ten percent (10%) discount off of GNTS suggested retail price for an End User
Customer.
2. Special Terms:
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The parties agree to comply with the special terms detailed below provided that
no such term shall alter the terms of the MOA, or any other Exhibit to the MOA.
1) GNTS agrees that it may negotiate with Riverstone in competitive situations
for better Discounts.
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
3. Certain Defined Terms:
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Capitalized Terms not defined herein shall have the meaning ascribed to them in
the Agreement and its other Exhibits.
Channel Partner shall mean an entity contracted by Riverstone to resell
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Riverstone Products.
Custom Services shall mean services which have a customized statement of work
---------------
and a customized price which is defined for a specific End User Customer
Direct Sales shall mean sales directly to End User Customers.
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Discount shall mean the discounts set out in Section 1 of this Exhibit.
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End User Customer shall mean the customer which purchases the GNTS Services
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directly for its specific ownership and internal use.
Discount shall mean the discounts set out in Section 1 of this Exhibit.
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GNTS List Price shall mean the price for GNTS Services published on the GNTS
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Price List.
GNTS Price List shall mean the price list provided to Riverstone by GNTS.
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GNTS Services shall mean the services listed on the GNTS Price List.
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Net Revenue shall mean all revenue to GNTS from the sale of all GNTS Services to
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the End User Customer by Riverstone.
Packaged Services are services with a pre-defined part number, a pre-defined
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statement of work, and a pre-defined price.
Prime Contractor shall mean the contractor responsible for the End User Customer
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and insuring that any service project involving GNTS Services is completed.
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