<PAGE> 1
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 14, 1999
REGISTRATION NO. 333-76385
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 6
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
PARADYNE NETWORKS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 3670 75-2658219
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification Number)
incorporation or organization)
</TABLE>
---------------------
8545 126TH AVENUE NORTH
LARGO, FLORIDA 33773
(727) 530-2000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
---------------------
JAMES L. SLATTERY
SENIOR VICE PRESIDENT, CHIEF LEGAL AND INTELLECTUAL PROPERTY OFFICER AND
CORPORATE SECRETARY
PARADYNE CORPORATION
8545 126TH AVENUE NORTH
LARGO, FLORIDA 33773
(727) 530-2000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
COPIES TO:
<TABLE>
<S> <C>
KENNETH L. GUERNSEY BRYAN E. DAVIS
SUZANNE SAWOCHKA HOOPER ADAM V. BATTANI
LAURA A. BEREZIN ASHLEY E. HUFFT
PAUL D. HUIE ALSTON & BIRD LLP
COOLEY GODWARD LLP ONE ATLANTIC CENTER
FIVE PALO ALTO SQUARE 1201 WEST PEACHTREE STREET
3000 EL CAMINO REAL ATLANTA, GA 30309-3424
PALO ALTO, CA 94306 (404) 881-7000
(650) 843-5000
</TABLE>
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement
---------------------
If any of 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") check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) of 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. [ ] ---------------
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 registration statement for the same
offering. [ ] ---------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON
SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 6 to the Form S-1 Registration Statement is being filed
for the sole purpose of filing amended exhibits.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by the Registrant in
connection with the sale of the common stock being registered. All of the
amounts shown are estimates, except for the SEC registration fee, the NASD
filing fee and the Nasdaq National Market application fee.
<TABLE>
<CAPTION>
AMOUNT TO
BE
PAID
<S> <C>
Registration fee............................................ 26,880
NASD filing fee............................................. 10,660
Nasdaq Stock Market Listing Application fee................. 17,500
Blue sky qualification fees and expenses.................... 15,000
Printing and engraving expenses............................. 200,000
Legal fees and expenses..................................... 425,000
Accounting fees and expenses................................ 250,000
Transfer agent and registrar fees........................... 10,000
Miscellaneous............................................... 44,960
Total............................................. 1,000,000
</TABLE>
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its Directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act.
The Registrant's Certificate of Incorporation and Bylaws include provisions
to (i) eliminate the personal liability of its directors for monetary damages
resulting from breaches of their fiduciary duty to the extent permitted by
Section 102(b)(7) of the General Corporation Law of Delaware (the "Delaware
Law") and (ii) require the Registrant to indemnify its Directors and officers to
the fullest extent permitted by Section 145 of the Delaware Law, including
circumstances in which indemnification is otherwise discretionary. Pursuant to
Section 145 of the Delaware Law, a corporation generally has the power to
indemnify its present and former directors, officers, employees and agents
against expenses incurred by them in connection with any suit to which they are,
or are threatened to be made, a party by reason of their serving in such
positions so long as they acted in good faith and in a manner they reasonably
believed to be in or not opposed to, the best interests of the corporation and
with respect to any criminal action, they had no reasonable cause to believe
their conduct was unlawful. The Registrant believes that these provisions are
necessary to attract and retain qualified persons as Directors and officers.
These provisions do not eliminate the Directors' duty of care, 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 the Registrant, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
acts or omissions that the Director believes to be contrary to the best
interests of the Registrant or its stockholders, for any transaction from which
the Director derived an improper personal benefit, for acts or omissions
involving a reckless disregard for the Director's duty to the Registrant or its
stockholders when the Director was aware or should have been aware of a risk of
II-1
<PAGE> 3
serious injury to the Registrant or its stockholders, for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the Director's duty to the Registrant or its stockholders, for improper
transactions between the Director and the Registrant and for improper
distributions to stockholders and loans to Directors and officers. The provision
also does not affect a Director's responsibilities under any other law, such as
the federal securities law or state or federal environmental laws.
At present, there is no pending litigation or proceeding involving a
Director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or Director.
The Registrant has an insurance policy covering the officers and Directors
of the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since June 14, 1996, Registrant has issued and sold the following
securities, which numbers do not reflect the 1-for-2 reverse split Registrant's
common stock to be effected prior to this offering:
(1) On June 14, 1996, Registrant issued 1,000 shares (not accounting
for the 17,000 for 1 split effected on January 7, 1997 or the 3 for 1 split
effected on April 24, 1997) in a private placement of its common stock at a
purchase price of $1.00 per share, for cash in the aggregate amount of
$1,000, to Communication Partners, L.P. pursuant to the divestiture of
Paradyne.
(2) As of June 30, 1999, Registrant has sold and issued 906,608 shares
of its common stock to employees, officers and directors pursuant to direct
issuances and exercises of options under its 1996 Equity Incentive Plan.
The sale of the above securities was deemed to be exempt from registration
under the Securities Act in reliance upon Section 4(2) of the Securities Act or
Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by
an issuer not involving any public offering or transactions pursuant to
compensation benefit plans and contracts relating to compensation as provided
under such Rule 701. 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 the Registrant, to information about the Registrant.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(A) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
<C> <C> <S>
1.1** -- Form of Underwriting Agreement.
3.1** -- Amended and Restated Certificate of Incorporation.
3.2** -- Amended and Restated Bylaws.
4.1 -- Reference is made to Exhibits 3.1, 3.2 and 3.3.
4.2** -- Specimen Stock Certificate.
5.1** -- Opinion of Cooley Godward LLP.
10.1** -- Amended and Restated 1996 Equity Incentive Plan.
10.2** -- Form of Stock Option Agreement pursuant to the 1996 Equity
Incentive Plan.
10.3** -- Form of Early Exercise Stock Purchase Agreement.
10.4** -- 1999 Employee Stock Purchase Plan and related offering
documents.
10.5** -- 1999 Non-Employee Director's Stock Option Plan.
10.6** -- Key Employee Stock Option Plan
10.7** -- Loan and Security Agreement between Paradyne and Bank of
America NT&SA, dated July 31, 1996.
</TABLE>
II-2
<PAGE> 4
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
<C> <C> <S>
10.8** -- Amended and Restated Subordinated Revolving Promissory Note
between Paradyne and Paradyne Partners, L.P., dated October
16, 1998.
10.9** -- Lease Agreement between Paradyne and Shav Associates, dated
October 8, 1996.
10.10** -- Sublease Agreement between Paradyne and GlobeSpan
Semiconductor, Inc. dated December 10, 1997.
10.11** -- Amendment to Sublease Agreement between Paradyne and
GlobeSpan Semiconductor, Inc. dated January 1, 1999.
10.12** -- Lease Agreement between Paradyne and Townsend Property Trust
Lease, dated June 27, 1997.
10.13** -- Key Employee Agreement between Paradyne and Thomas Epley,
dated April 1, 1999.
10.14** -- Employment Agreement between Paradyne and Andrew May, dated
December 3, 1996.
10.15** -- Key Employee Agreement between Paradyne and Patrick Murphy,
dated August 1, 1996.
10.16** -- Key Employee Agreement between Paradyne and James Slattery,
dated August 1, 1996.
10.17** -- Change in Control Agreement between Paradyne and Sean
Belanger.
10.18** -- Promissory Note, dated May 5, 1997, by James L. Slattery.
10.19** -- Promissory Note, dated March 29, 1999, Sean E. Belanger.
10.20** -- Promissory Note, dated March 26, 1999, Paul H. Floyd.
10.21** -- Promissory Note, dated March 26, 1999, Paul H. Floyd.
10.22** -- Promissory Note, dated March 26, 1999, Frank J. Weiner.
10.23** -- Promissory Note, dated March 26, 1999, by Frank J. Weiner.
10.24** -- Promissory Note, dated April 2, 1999, Frank J. Weiner.
10.25** -- Promissory Note, dated March 27, 1999, Mark Housman.
10.26** -- Promissory Note, dated March 31, 1999, Andrew S. May.
10.27** -- Promissory Note, dated March 31, 1999, Patrick M. Murphy.
10.28** -- Promissory Note, dated April 2, 1999, Patrick M. Murphy.
10.29** -- Indemnification Agreement between Paradyne and William
Stensrud, dated November 6, 1996.
10.30+ -- Supply Agreement between Paradyne and Lucent Technologies,
Inc., dated July 31, 1996.
10.31+** -- Exclusivity and Amendment Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc. dated
August 6, 1998.
10.32+** -- Noncompetition Agreement between Paradyne, Communication
Partners, L.P., Lucent Technologies, Inc., and GlobeSpan
Semiconductor, Inc. dated July 31, 1996.
10.33** -- Trademark and Patent Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc. dated
July 31, 1996.
10.34** -- Tax Matters Agreement between Paradyne, Lucent Technologies,
Inc., and GlobeSpan Semiconductor, Inc. dated July 31, 1996.
10.35** -- Intellectual Property Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc. dated
July 31, 1996.
10.36+** -- OEM Agreement between Paradyne and Xylan Corporation, dated
March 16, 1999.
10.37+** -- Distribution Agreement between Paradyne and Tech Data
Corporation, dated September 21, 1993.
10.38+ -- OEM Agreement between Paradyne and Premisys Communications,
Inc., dated December 4, 1992.
10.39** -- Network Management Partners Agreement between Paradyne and
Ascend Communications, Inc., dated November 3, 1998.
10.40+ -- Joint Development and Distribution Agreement between
Paradyne and AG Communication Systems Corporation, dated
June 10, 1998.
</TABLE>
II-3
<PAGE> 5
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
<C> <C> <S>
10.41+ -- Marketing & License Agreement between Paradyne and NetScout
Systems, Inc., dated January 26, 1998.
10.42** -- Amendment No. 2 to Loan and Security Agreement.
10.43+** -- Amendment to Supply Agreement between Paradyne and Lucent
Technologies, Inc., dated as of May 5, 1999.
23.1** -- Consent of Independent Accountants.
23.2 -- Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** -- Power of Attorney (see page II-5).
27.1** -- Financial Data Schedule for EDGAR Filing for SEC use only.
</TABLE>
- ------------------------------
** Previously filed
+Confidential treatment has been requested for certain portions which have been
blanked out in the copy of the exhibit filed with the Securities and Exchange
Commission. The omitted information has been filed separately with the
Securities and Exchange Commission pursuant to the application for confidential
treatment.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreement, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to provisions described in Item 14 or otherwise, the registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant 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, the registrant 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 whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Act, 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 the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) That, for purposes of determining any liability under the Act each
post-effective amendment that contains a form 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> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 6 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Largo, County of Pinellas, State of Florida, on July 14, 1999.
By: /s/ ANDREW S. MAY
------------------------------------
Andrew S. May
President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<C> <S> <C>
/s/ ANDREW S. MAY President, Chief July 14, 1999
- ----------------------------------------------------- Executive Officer, and
Andrew S. May Director (Principal
Executive Officer)
/s/ PATRICK M. MURPHY Senior Vice President, July 14, 1999
- ----------------------------------------------------- Chief Financial
Patrick M. Murphy Officer, and Treasurer
(Principal Financial
and Accounting
Officer)
* Chairman of the Board July 14, 1999
- -----------------------------------------------------
Thomas E. Epley
* Director July 14, 1999
- -----------------------------------------------------
David Bonderman
* Director July 14, 1999
- -----------------------------------------------------
Keith B. Geeslin
* Director July 14, 1999
- -----------------------------------------------------
David M. Stanton
* Director July 14, 1999
- -----------------------------------------------------
William R. Stensrud
* Director July 14, 1999
- -----------------------------------------------------
Peter F. Van Camp
*By: /s/ ANDREW S. MAY July 14, 1999
------------------------------------------------
Andrew S. May
Attorney-in-Fact
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
<C> <C> <S>
1.1** -- Form of Underwriting Agreement.
3.1** -- Amended and Restated Certificate of Incorporation.
3.2** -- Amended and Restated Bylaws.
4.1 -- Reference is made to Exhibits 3.1, 3.2 and 3.3.
4.2** -- Specimen Stock Certificate.
5.1** -- Opinion of Cooley Godward LLP.
10.1** -- 1996 Equity Incentive Plan.
10.2** -- Form of Stock Option Agreement pursuant to the 1996 Equity
Incentive Plan.
10.3** -- Form of Early Exercise Stock Purchase Agreement.
10.4** -- 1999 Employee Stock Purchase Plan and related offering
documents.
10.5** -- 1999 Non-Employee Director's Stock Option Plan.
10.6** -- Key Employee Stock Option Plan
10.7** -- Loan and Security Agreement between Paradyne and Bank of
America NT&SA, dated July 31, 1996.
10.8** -- Amended and Restated Subordinated Revolving Promissory Note
between Paradyne and Paradyne Partners, L.P., dated October
16, 1998.
10.9** -- Lease Agreement between Paradyne and Shav Associates, dated
October 8, 1996.
10.10** -- Sublease Agreement between Paradyne and GlobeSpan
Semiconductor, Inc. dated December 10, 1997.
10.11** -- Amendment to Sublease Agreement between Paradyne and
GlobeSpan Semiconductor, Inc. dated January 1, 1999.
10.12** -- Lease Agreement between Paradyne and Townsend Property Trust
Lease, dated June 27, 1997.
10.13** -- Key Employee Agreement between Paradyne and Thomas Epley,
dated April 1, 1999.
10.14** -- Employment Agreement between Paradyne and Andrew May, dated
December 3, 1996.
10.15** -- Key Employee Agreement between Paradyne and Patrick Murphy,
dated August 1, 1996.
10.16** -- Key Employee Agreement between Paradyne and James Slattery,
dated August 1, 1996.
10.17** -- Change in Control Agreement between Paradyne and Sean
Belanger.
10.18** -- Promissory Note, dated May 5, 1997, by James L. Slattery.
10.19** -- Promissory Note, dated March 29, 1999, Sean E. Belanger.
10.20** -- Promissory Note, dated March 26, 1999, Paul H. Floyd.
10.21** -- Promissory Note, dated March 26, 1999, Paul H. Floyd.
10.22** -- Promissory Note, dated March 26, 1999, Frank J. Weiner.
10.23** -- Promissory Note, dated March 26, 1999, by Frank J. Weiner.
10.24** -- Promissory Note, dated April 2, 1999, Frank J. Weiner.
10.25** -- Promissory Note, dated March 27, 1999, Mark Housman.
10.26** -- Promissory Note, dated March 31, 1999, Andrew S. May.
10.27** -- Promissory Note, dated March 31, 1999, Patrick M. Murphy.
10.28** -- Promissory Note, dated April 2, 1999, Patrick M. Murphy.
10.29** -- Indemnification Agreement between Paradyne and William
Stensrud, dated November 6, 1996.
10.30+ -- Supply Agreement between Paradyne and Lucent Technologies,
Inc., dated July 31, 1996.
10.31+** -- Exclusivity and Amendment Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc. dated
August 6, 1998.
10.32+** -- Noncompetition Agreement between Paradyne, Communication
Partners, L.P., Lucent Technologies, Inc., and GlobeSpan
Semiconductor, Inc. dated July 31, 1996.
10.33** -- Trademark and Patent Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc. dated
July 31, 1996.
10.34** -- Tax Matters Agreement between Paradyne, Lucent Technologies,
Inc., and GlobeSpan Semiconductor, Inc. dated July 31, 1996.
</TABLE>
II-6
<PAGE> 8
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
<C> <C> <S>
10.35** -- Intellectual Property Agreement between Paradyne, Lucent
Technologies, Inc., and GlobeSpan Semiconductor, Inc. dated
July 31, 1996.
10.36+** -- OEM Agreement between Paradyne and Xylan Corporation, dated
March 16, 1999.
10.37+** -- Distribution Agreement between Paradyne and Tech Data
Corporation, dated September 21, 1993.
10.38+ -- OEM Agreement between Paradyne and Premisys Communications,
Inc., dated December 4, 1992.
10.39** -- Network Management Partners Agreement between Paradyne and
Ascend Communications, Inc., dated November 3, 1998
10.40+ -- Joint Development and Distribution Agreement between
Paradyne and AG Communication Systems Corporation, dated
June 10, 1998
10.41+ -- Marketing & License Agreement between Paradyne and NetScout
Systems, Inc., dated November 4, 1998
10.42** -- Amendment No. 2 to Loan and Security Agreement.
10.43+** -- Amendment to Supply Agreement between Paradyne and Lucent
Technologies, Inc., dated as of May 15, 1999.
23.1** -- Consent of Independent Accountants.
23.2 -- Consent of Counsel. Reference is made to Exhibit 5.1.
24.1** -- Power of Attorney (see page II-5).
27.1** -- Financial Data Schedule for EDGAR Filing for SEC use only.
</TABLE>
- ------------------------------
** Previously filed
+Confidential treatment has been requested for certain portions which have been
blanked out in the copy of the exhibit filed with the Securities and Exchange
Commission. The omitted information has been filed separately with the
Securities and Exchange Commission pursuant to the application for confidential
treatment.
II-7
<PAGE> 1
Exhibit 10.30
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 230.406
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement") is entered into as of
July 31, 1996 by and among LUCENT TECHNOLOGIES INC., a Delaware corporation,
having a principal office at 211 Mt. Airy Road, Basking Ridge, New Jersey 07920
and its affiliates ("Company"), AT&T Paradyne Corporation, a Delaware
corporation, having a principal office at 8545 126th Avenue North, Largo,
Florida 33773 and CAP Acquisition Corp., a Delaware corporation, having a
principal office at 8545 126th Avenue North, Largo, Florida 33773 ("CAPCO"),
collectively referred to herein as "Supplier".
1. TERM
This Agreement shall become effective as of the date here of
and shall continue in effect for a period of four (4) years. The amendment or
termination of this Agreement shall not affect the obligations of either party
to the other under then existing Orders issued pursuant to this Agreement, but
such Orders shall continue in effect as though this Agreement had not expired or
been terminated and was still in effect with respect to said Orders.
2. ORDER
For the purpose of this Agreement, an "Order" shall mean
Company's form of purchase order or contract used for the purpose of ordering
Material. Each Order shall reference this Agreement, thereby incorporating in
such Order the terms and conditions stated in this Agreement. In addition,
orders from affiliates (excluding AT&T Corp. and NCR Corp. when purchasing as
affiliates but not when purchasing as subcontractors) and subcontractors shall
be considered Orders for purposes of the Volume/Price Letter as outlined in a
letter agreement between Texas Pacific Group and Company dated the date of this
Agreement ("Volume/Price Letter").
3. MATERIAL
For the purpose of this Agreement, "Material" shall be defined
as those services performed by Supplier for Company and those communications
products that are identified by comcode numbers and described on Exhibit A to
this Agreement ("Existing Products"); which attachment shall be continuously
updated, to include Enhanced and New Products if such products satisfy the
requirements of the clause ENHANCED AND NEW PRODUCTS.
4. ENHANCED AND NEW PRODUCTS
For the purpose of this Agreement, "Enhanced Product" or
"Enhanced Products" shall mean any product which results out of Company's desire
to have Supplier redesign, modify, or enhance an Existing Product or family of
Existing Products. For the purpose of this Agreement, "New Product" or "New
Products" shall mean any product which is not an Enhanced Product or Existing
Product but which is substantially similar to an of this Agreement, "New
Product" or "New Products" shall mean any product which is not an Enhanced
Product or
<PAGE> 2
Existing Product but which is substantially similar to an Existing Product with
respect to design and function and possesses reasonable performance
improvements. If Company desires to purchase an Enhanced or New Product(s) from
Supplier, Company shall so notify Supplier and provide Supplier the opportunity
to manufacture such Enhanced or New Product(s), subject to the following
conditions and procedures.
Supplier shall, within thirty (30) days from the date of
Supplier's receipt of Company's notice, inform Company whether Supplier desires
to manufacture and supply such Enhanced or New Product(s) to Company. If
Supplier desires to manufacture and supply such Enhanced or New Product(s),
Supplier shall provide Company (a) a written production plan demonstrating
Supplier's ability to satisfy the Performance Requirement, as described in the
next sentence, for such Enhanced or New Product(s) (such plan shall include
production locations and proposed dates for prototypes, sample production and
full production) and (b) Supplier's proposed Price for such Enhanced or New
Product(s). "Performance Requirement" shall mean the Company's reasonably
prescribed performance standards for Material, including, but not limited to,
quality, compliance with Specifications, delivery and service support, each
determined in the case of an Enhanced Product with reference to standards for an
Existing Product or family of Existing Products.
The parties shall then negotiate in good faith to reach an
agreement on such production plan's ability to satisfy the Performance
Requirements and the Price to be charged for the Enhanced or New Product(s). In
the event the parties agree on the production plan's satisfaction of the
Performance Requirement and the Price for such Enhanced or New Product(s), and
Supplier fulfills its obligations under the production plan (including the
commencement of full production runs), then such Enhanced or New Product(s) will
be added to Exhibit A for the purposes of this Agreement. All work performed by
Supplier under this clause will be at Supplier's sole risk and expense, unless
otherwise agreed to by the parties.
If despite good faith negotiations the parties fail to agree
(i) that the Enhanced or New Product(s) production plan satisfies the
Performance Requirement or (ii) on a Price for the Enhanced or New Product(s),
the parties agree to resolve the dispute through mediation as set forth in the
Clause MEDIATION. In the event that as a result of such mediation, if necessary,
the production plan is deemed to not satisfy the Performance Requirement, or the
product plan slips the Company may purchase the Enhanced or New Product(s) from
another source or sources and, the Volume/Price levels as outlined in the
("Volume/Price Letter") shall be adjusted to reflect the dollar amount purchased
by Company from the other source or sources.
If the Supplier desires not to make available for order by
Company any Enhanced or New Product, the Company may purchase the Enhanced or
New Product(s) from another source or sources and, the Volume/Price levels as
outlined in the Volume Price Letter shall be adjusted to reflect the dollar
amount purchased by Company from the other source or sources.
2
<PAGE> 3
5. MATERIAL PURCHASE
During the term of this Agreement, Company shall purchase and
Supplier shall sell Material to Company in accordance with the terms and
conditions set forth in this Agreement and the Exhibits shown which are hereby
made a part of this Agreement.
In the event the terms and conditions of the Exhibits shown
above conflict with the terms and conditions of the Agreement, the terms and
conditions of this Agreement shall prevail.
6. PRICE
For the purposes of this Agreement, the "Price" for Material
shall mean base price less the applicable Company discount and shall be as set
forth on Exhibit A which attachment shall be revised from time to time as
provided in this Agreement. Supplier agrees to accept Orders directly from any
of Company's subcontractors as designated by Company and extend to Company's
subcontractors the Prices set forth for Material.
7. BEST PRICE
Supplier's Prices to Company for Material contained herein
with applicable discounts and with any increases permitted hereunder, shall be
at least as low as those Prices (with applicable discounts) offered by Supplier
to any of its customers for comparable Material and services in comparable
quantities and terms. If Supplier at any time extends to any other customer
lower Prices or higher discounts for comparable quantities and material under
comparable terms, Supplier shall promptly notify company of such Prices or
discounts and grant to Company the benefit of such Price or discounts for all
Material sold to Company retroactive to the effective date of Supplier's Price
or discount arrangement with its other customer. For purposes of determining if
Supplier's prices are Best Prices, within the meaning of this paragraph only.
Supplier's Prices shall [***].
8. MARKET RIGHTS
Company has selected Supplier as a preferred supplier for the
Material described in Exhibit A during the four (4) year term of this Agreement.
"Preferred Supplier" means that Company will use commercially reasonable efforts
to purchase Material from Supplier over equivalent (i.e., price, functionality
or performance) material offered by another supplier pursuant to the terms and
conditions of this Agreement. Except for the Preferred Supplier status described
in the foregoing sentence, it is expressly understood and agreed that this
Agreement neither grants to Supplier an exclusive right or privilege to
manufacture, repair, or source all Material of the type described in this
Agreement, nor requires the purchase of any manufactured, repaired, or sourced
Material from Supplier by Company. It is, therefore, understood that Company may
contract with other manufacturers and suppliers for the manufacture or repair of
Material and other products.
9. BENCHMARKING
On a semi-annual basis, or "as needed" by either party,
Supplier and Company shall undertake to benchmark price, quality, product
functionality, and service performance of the Material
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offered by Supplier here under. The Material benchmarked shall be the comcodes
that comprise the top eighty percent (80%) of the volume purchased by Company.
Supplier and Company shall review such benchmark information and Supplier shall
develop a plan of action for improving Material Price, quality, product
functionality, and service performance if such benchmark information indicates
improvements are needed when compared to the then existing standards of the
industry of comparable Price, quality, product functionality and service. Should
Supplier fail to introduce improvements that assure Company that Material is
meeting or exceeding competitive benchmarks with respect to: (1) Material Price
within ten (10) days of such review, and (2) for Material quality, product
functionality, or service performance within ninety (90) days of such review
(with Supplier to provide a plan for introducing such improvements within the
first thirty (30) days of such review) then Company shall have the right to
competitively quote such Material in the marketplace. Company will give Supplier
a thirty (30) day prior written notice of an intent to place business with any
other supplier and provide Supplier that thirty (30) day period to match or beat
such other offer received by Company. If Supplier matches or beats such other
offer, Company agrees to continue to place Orders with Supplier at the new
Price, quality, product functionality, and service levels subject to the terms
and conditions of this Agreement. If Supplier does not match or beat Company's
offer, Company may elect to purchase Material from another source and the
Volume/Price levels set forth in the Volume Price Letter shall be adjusted to
reflect the dollar amount purchased by Company from the other source or sources.
In the event of a dispute with respect to the approach,
procedures or results of the benchmarking, the parties agree to promptly retain
an independent, nonaffiliated consultant experienced in the industry to provide
an objective assessment of the issue(s) in dispute. The determination of the
consultant shall be final and binding.
10. PAYMENT TERMS
Except as otherwise provided in an individual Order issued
hereunder, net thirty (30) days from the later of the date of shipment of
Material to Company or receipt of the invoice therefor by Company.
11. TRANSPORTATION TERMS
FOB Origin, unless both parties mutually agree otherwise.
12. FLEXIBLE DELIVERY ARRANGEMENTS
During the term of this Agreement, Company may give written
notice to Supplier requesting that Supplier implement "Demand Pull", "Pull
Replenishment", "Consignment", and/or some other form of flexible delivery
arrangement for one or more types of Material. Upon mutual agreement between
Company and Supplier, Company shall have the right to implement such flexible
delivery arrangements by providing written notice to Supplier at least thirty
(30) days prior to the agreed upon implementation date. Such notice shall
specify the particular Company facility which will be covered by such flexible
delivery arrangement, the Material covered by such flexible delivery arrangement
and the agreed upon implementation date. The proposed terms and
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conditions of Company's Demand Pull, Pull Replenishment, and Consignment
arrangements are set forth on Exhibits B, C and D of this Agreement.
13. FLEXIBLE ORDERING AND PAYMENT ARRANGEMENTS
During the term of this Agreement, Company may give written
notice to Supplier requesting that Supplier implement Electronic Data
Interchange ("EDI") ordering and payment arrangements for one or more types of
Material. Upon mutual agreement between Company and Supplier, Company shall have
the right to implement such ordering and payment arrangements by providing
written notice to Supplier at least thirty (30) days prior to the implementation
date. Such notice shall specify the particular Company facility which will be
covered by such ordering and payment arrangement, the Material covered by such
ordering and payment arrangement and the requested implementation date. The
parties acknowledge and agree that the implementation of an EDI program will
entail the cooperation of both parties and that such parties will work in good
faith to implement such program as soon as practicable. The proposed terms and
conditions of the applicable ordering and payment arrangement are set forth on
Exhibit E of this Agreement.
14. SPECIFICATIONS OR DRAWINGS
All technical, functional, and safety specifications, designs,
drawings, schematics, test procedures, and packaging, packing, and container
marking specifications (collectively "Specifications"), as mutually agreed upon
by the parties are hereby made a part of this Agreement. Specifications may be
modified from time to time with agreement of the parties and the parties shall
promptly endeavor to mutually agree to equitable adjustments to the Price and/or
delivery schedules resulting from any such modifications. Supplier shall
manufacture Material in accordance with Specifications, so that Material
conforms to such Specifications.
Company's ownership, design, inspection, and/or approval of
Material shall in no way limit Supplier's responsibility for its obligations
under this or any other part of this Agreement.
15. MANUFACTURE DISCONTINUED
Supplier shall provide Company at least one (1) year prior
written notice that any Material covered by this Agreement is recommended as a
candidate to be manufacture discontinued by Supplier. Company shall, within
sixty (60) days after receipt of Supplier's written notice, provide Supplier a
written response indicating Company's approval or disapproval of the manufacture
discontinued status of such Material based upon such Material's impact on the
Company's business, including but not limited to the Company's obligations to
its customers.
If Company does not approve of the Material being manufacture
discontinued, the parties shall negotiate in good faith to determine the final
disposition of such Material.
If the parties agree that Material shall become manufacture
discontinued, Supplier shall accept Company's Orders for such manufacture
discontinued Material under the terms and conditions of this Agreement for one
(1) year from the Supplier's notification date of manufacture discontinued
status. Once the manufacture discontinued Material is no longer available to
order
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by Company, Supplier agrees that the Volume/Price levels set forth in the
Volume/Price Letter shall be adjusted to reflect the dollar amount that can no
longer be purchased by Company.
16. PROCESS CERTIFICATION
In regard to Supplier's manufacturing processes, Company
reserves the right to perform periodic quality surveys and evaluations
including, but not limited to, analysis of manufacturing or assembly position
procedures, equipment calibration, and operator performance, as well as
evaluation of quality control/quality assurance and data collection and analysis
procedures.
Supplier shall conduct appropriate incoming inspection of
components in accordance with its standard practices. Such practices may be
modified from time to time to address specific conditions as requested by
Company after any increases or decreases to Price resulting from such
modifications have been mutually agreed upon.
17. COMPANY ACCEPTANCE AND QUALIFICATION TESTS
Prior to Supplier initiating volume manufacture of Material at
any new facility, Company shall have the right to conduct acceptance or
qualification tests of manufactured Material and associated piece parts and
processes, including but not limited to technical acceptance tests to ensure
conformance to Company's specifications.
18. RIGHT OF ENTRY AND PLANT RULES
Each party shall have the right upon reasonable notice to
enter the premises of the other party during normal business hours with respect
to the performance of this Agreement, subject to all plant rules and
regulations, security regulations and procedures and U.S. Government clearance
requirements if applicable.
19. ATTENDANCE AT SUPPLIER'S PLANT
Company reserves the right to place, at any time, with
reasonable prior notice one or more personnel in Supplier's facility to carry
out the inspection and acceptance tests, process certification, and other
functions Company may deem reasonably necessary ("Inspection Representatives").
The salaries of said personnel, as well as their travel and
living expenses, shall be [***]. Supplier agrees to furnish said personnel with
reasonable working facilities, as necessary, to perform their work and, if
needed, provide office space and support services as required [***]. Supplier
will make suitable arrangements so that said personnel will have access to the
areas where Material is manufactured, tested, stored and shipped. Personnel
authorized in writing by Company shall be empowered to reject the Material to be
delivered to Company in the event that such Material fails to meet required
Specifications and/or acceptance tests.
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20. SHIPPING AND BILLING
For shipments against an Order placed pursuant to this
Agreement Supplier shall: (1) ship such Order complete unless instructed
otherwise; (2) ship to the destination designated in the Order; (3) ship
according to routing instructions given by Company; (4) place the Order number
on all subordinate documents; (5) enclose a packing memorandum with each
shipment and when more than one package is shipped, identify the package
containing the memorandum; (6) mark the Order number on all packages and
shipping papers; (7) render invoices in duplicate or as otherwise specified,
showing the Order number, (8) render invoices for shipments, (9) render invoice
containing carrier name, waybill number and date of shipment; and (10) mail
invoices, bills, and notices to the address shown in the Order. If prepayment of
transportation charges is authorized, Supplier shall include the transportation
charges from the FOB point to the destination as a separate item on the invoice
stating the name of the carrier used. Adequate protective packaging shall be
furnished at no additional charge. Shipping and routing instructions may be
altered as mutually agreed without a writing. [***] permitted [***].
21. MARKING
All Material furnished under this Agreement shall be marked
for identification purposes in accordance with the Specifications set forth in
this Agreement and at a minimum as follows:
(a) Supplier model/serial number; and
(b) Month and year of manufacture.
In addition, Supplier agrees to add any other identification
which might be reasonably requested by Company such as but not limited to
distinctive marks conforming to Company's Serialization Plan or to Company's
Bar-coding Plan after charges, if any, for such additional identification
marking have been agreed upon by Supplier and Company.
22. SUPPLIER INTERVAL
For the purpose of this Agreement, "Lead Time" or "Supplier
Interval" shall mean the period of time expressed in days commencing on the date
an Order for Material is placed with Supplier by Company and ending upon
delivery of such Material to Company's point of destination.
If, during the course of this Agreement, Supplier determines
that it will no longer be able to deliver Material within the then existing Lead
Times, Supplier shall immediately notify Company's Buyer to that effect.
Supplier is encouraged to quote reduced Lead Times when responding to Orders
placed under this Agreement if required to meet Company's requested delivery
date.
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23. TAXES AND INSURANCE PAYMENTS
All [***], and [***] will be paid by [***]. The parties agree
that the charges stated herein include [***] and will not be changed hereafter
as a result of [***], [***] shall indemnify and hold [***] harmless from any
loss which [***] may incur as a result of [***] failure to make tax or insurance
payments.
24. TITLE AND RISK OF LOSS
Title and risk of loss and damage to Material purchased by
Company under this Agreement shall vest in Company when the Material has been
delivered to the FOB point.
25. VARIATION IN QUANTITY
Company assumes no liability for Material produced, processed
or shipped in excess of the amount specified in this Agreement or any Order.
26. UTILIZATION OF MINORITY AND WOMEN OWNED BUSINESS ENTERPRISES
It is Company's policy that Minority and Women-Owned Business
Enterprise ("MWBEs") shall have the maximum practicable opportunity to
participate in the performance of contracts. Supplier agrees to use its good
faith efforts to award subcontracts to carry out this policy to the fullest
extent consistent with the efficient performance of this Agreement. Supplier
agrees to conduct a program which will enable MWBEs to be considered fairly as
subcontractors and suppliers under this Agreement. Supplier shall submit to
Company periodic reports of subcontracting with known MWBEs in such manner and
at such time (not more than quarterly) as Company's representative may
prescribe. Such periodic report shall state separately for Minority and Women
Owned Businesses the subcontracted work which is attributable to Company. In
instances where direct correlation cannot be determined, such MWBE payments may
be established by Supplier comparing Company's payments to Supplier, in that
period, to total payments to Supplier from all of its customers, in that period,
and then arriving at Company's apportionment of such MWBE payments. Nothing in
this clause shall affect or diminish the Supplier's obligations as set forth in
the assignment and subcontracting provisions or any other provision of this
Agreement. Supplier's record of compliance with the provisions of this clause
will be a factor Company will consider favorably in making procurement decisions
about future business with Supplier.
27. RECORDS
Supplier shall identify all records associated with this
Agreement and maintain accurate and complete records including charges payable
by Company under this Agreement. These records shall be maintained in accordance
with recognized commercial accounting practices and shall be readily available
to review and audit by Company.
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28. REPORTS
Supplier agrees to maintain the following auditable Order and
shipment reports and provide copies to Company on or before the fifth working
day of each month:
(1) Order and shipment reports for each shipment, including
Bill of Lading information, if applicable.
(2) At the request of Company, monthly summaries of actual
shipping intervals achieved on Material ordered and manufactured hereunder,
identifying the number of units and such other information as Company may
reasonably request, consistent with Supplier's current practices.
Supplier further agrees to maintain and render quality and
yield data of the type and frequency reasonably specified by Company to assure
proper control of Material quality and reliability. This data may include such
items as in-process daily yields, quality control, and quality assurance daily
records. Supplier shall furnish and render additional reports as may be
reasonably requested by Company.
29. FORECASTS BY COMPANY
The parties acknowledge and agree that the implementation of
an improved forecasting process is important to both parties. The parties agree
to cooperate and will work in good faith to implement such program as soon as
reasonably practicable.
30. SERVICE
Company shall have the right to monitor the delivery
performance of Supplier via special performance reports. Delivery for such
purposes shall mean arrival at the final destination specified in the Order.
Company's goal is that Supplier will strive to achieve or exceed an Average
Percent Received By Lead Time and an Average Percent Received To Required Date
(Past And Current) of [***] of the Orders. "Average Percent Received by Lead
Time" shall mean the required percentage of Material (based in units) delivered
within the applicable lead time for such Material, which percentage will be
calculated monthly. "Average Percent Received to Required Date (Past and
Current)" shall mean the required percentage of Material (based in units)
delivered on the date such Material was requested to be delivered by the
Company, which percentage shall be calculated monthly.
Supplier is expected to make every effort to deliver Material
in accordance with Company's required delivery schedule as contained in
Company's Orders, and as the delivery schedule may be subsequently modified by
Company. Supplier will promptly notify Company of its "Acknowledged Delivery
Schedule", the schedule by which Supplier can deliver Material requested by
Company. Supplier is also expected to communicate to Company any foreseeable
change to Supplier's Acknowledged Delivery Schedule. Supplier's compliance with
the foregoing
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expectations will not relieve Supplier of the minimum service requirements
established in the preceding paragraph.
If Supplier advises Company that it will be unable to meet its
Acknowledged Delivery Schedule, and Company elects to call for expedited
shipment, Supplier will be required to pay the difference in cost between the
method of shipping specified in the Order and the actual cost incurred for
expedited shipment.
31. 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
chlorofluorocarbons, halons, and certain chlorinated solvents. Supplier hereby
warrants that manufactured and/or repaired Material will conform to applicable
requirements established pursuant to such agreements, legislation, or
regulations, and that manufactured and repaired Material will be able to be
imported into and used lawfully in (and without additional taxes associated with
ODCs not reported to Company by Supplier as set forth in this clause) the United
States and other countries designated by Company, under all such agreements,
legislation, and regulations. Supplier also warrants that it is currently
reducing, and is currently using good faith efforts to cause all of its parts
and component manufacturing vendors to reduce, in an expeditious manner,
eliminate and cause its parts and component manufacturing vendors to eliminate,
the use of ODCs in the manufacture and repair of Material and all of its parts
and components.
Supplier shall, upon execution of this Agreement, and at any
time that New Products or Enhanced Products are ordered under this Agreement or
changes are made to Material manufactured and/or repaired under this Agreement,
complete, sign, and return to Company an ODC Content Certification, in the form
requested by Company. The ODC Content Certification must be signed by Supplier's
facility manager, corporate officer, or delegate.
The term "ODC content" on the ODC Content Certification means
the total pounds of ODC used directly in the manufacture and/or repair of each
unit of Material. This includes all ODCs Supplier uses in its manufacturing,
assembly, and repair operations. Supplier will use good faith efforts to include
all ODC information, used by Supplier's vendors and any other vendors in
producing parts, components, or other products incorporated into Material.
Supplier warrants to Company that all information furnished by
Supplier on each ODC Content Certification will be 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 agrees to defend, indemnify, and hold Company harmless
of and from any claims, demands, suits, judgments, liabilities, costs, and
expenses (including additional ODC taxes 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 or reliance on inaccurate or incomplete information furnished
to Company by Supplier on any ODC Content Certification or by reason of
Supplier's breach of this clause.
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Supplier agrees to cooperate with Company in responding to any
inquiry concerning the use of ODCs to manufacture and/or repair 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 and/or repair Material or components thereof.
32. COMPLIANCE WITH ENVIRONMENTAL/HEALTH AND SAFETY/TRANSPORTATION LAWS
Supplier agrees to comply with applicable country or state
environmental, health and safety, and transportation laws and regulations
including but not limited to applicable United States environmental, health and
safety, and transportation laws and regulations. Supplier agrees to indemnify
and hold Company harmless from any loss or damage that may be sustained by
Company by reason of Supplier's failure to comply with this clause.
33. OZONE DEPLETING SUBSTANCES LABELING
Supplier warrants and certifies that all products, including
packaging and packaging components, provided to Company under this Agreement
will be 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."
Supplier agrees to indemnify, defend, and save harmless
Company, its officers, directors, and employees from and against any losses,
damages, claims, demands, suits, liabilities, fines, penalties, and expenses
(including reasonable attorney's fees) that may be sustained by Company by
reason of Supplier's noncompliance with such applicable law or the terms of this
warranty and certification.
34. CFC PACKAGING
Supplier warrants that all packaging materials furnished under
this Agreement and all packaging associated with Material furnished under this
Agreement will not have been manufactured using and will not contain
chlorofluorocarbons. "Packaging" means all bags, wrappings, 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.
35. 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. Supplier further warrants to Company that the sum of the
concentration levels of lead, cadmium, mercury, and hexavalent chromium in the
packaging or packaging component provided to Company under this Agreement will
not exceed one hundred (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
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above in this clause. 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
warranties or any Certificates Compliance.
36. INDEMNITY AND INFRINGEMENT
All Work performed by Supplier under this Agreement shall be
performed by Supplier as an independent contractor and not as an agent of
Company. All persons furnished by Supplier shall be considered solely Supplier's
Employees or agents, and Supplier shall be responsible for compliance with all
applicable laws, rules, and regulations relating to labor, working conditions,
wages, and payment of all unemployment, social security, and other payroll
taxes, including contributions when required by law.
Supplier agrees to indemnify and save harmless Company, its
affiliates and its customers and their officers, directors, employees,
successors and assigns (all hereinafter referred to in this clause as "Company")
from and against any losses, damages, claims, demands, suits, liabilities, and
expenses (including reasonable attorneys' fees) that arise out of or result
from: (1) injuries or death to persons or damage to property, including theft,
in any way arising out of or occasioned by, caused or alleged to have been
caused by or on account of the Material, or the performance of Work or Services
performed by Supplier or persons furnished by Supplier; (2) assertions under
Workers' Compensation or similar acts made by persons furnished by Supplier or
by any subcontractor or by reason of any injuries to such persons for which
Company would be responsible under Workers' Compensation or similar acts if the
persons were employed by Company; (3) any failure by Supplier to perform
Supplier's obligations under this Indemnity and Infringement Section; and/or (4)
any infringement or claim of infringement of any patent, trademark, copyright,
trade secret, or other intellectual property right of third parties based on the
manufacture, repair, sale, use, importation, reproduction and/or distribution of
Material furnished to Company hereunder, and/or any part, component, feature or
design of such Material, except that this infringement indemnity shall not apply
to the extent that such claims or infringements arise solely and directly from
Company supplied parts or components, or from Supplier's required adherence to
Company's written instructions or Specifications which are so specified that
such adherence directly causes such claims or infringement and which
instructions or Specifications require the use of Material other than (i)
commercial material which is available on the open market or the same as such
Material or (ii) Material of Supplier's origin, design or selection.
In the case of the infringement indemnity, if Company's or its
customers' manufacture, repair, use, sale, importation, reproduction and/or
distribution of Material is restricted or prevented by injunction, court order
or negotiated settlement on account of such infringement, Supplier shall, at its
expense: (i) procure for Company and Company's customers the right to continue
manufacturing, using, selling, importing, reproducing and/or distributing such
Material; or (ii) replace such Material with a noninfringing product
substantially complying with such Material's Specifications and satisfactory to
Company; or (iii) modify such Material so it becomes noninfringing and performs
in a substantially similar manner to the original Material and satisfactory to
Company; or (iv) in the event of inability to reasonably perform any of the
foregoing, refund to Company the purchase price for affected Material. All
payments refunded
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pursuant to the foregoing provision would continue to be counted toward the
Company's revenue commitment as set forth in the Volume/Price Letter.
Supplier agrees to defend Company, at Company's request,
against any of the referenced claims, demands, or suits at Supplier's expense.
Company agrees to notify Supplier within a reasonable time of any written claims
or demands against Company for which Supplier is responsible under this Clause.
37. TECHNICAL SUPPORT
Ongoing technical support via telephone to Company or
Company's customers will be [***] and shall include but not be limited to the
following: (a) answering technical questions, (b) explaining proper operation
procedures for Material, (c) providing up-to-date information on the status of
Material returned to Supplier for repair, and (d) quoting and explaining any
repair or replacement charges for Material.
38. LATE DELIVERY / LIQUIDATED DAMAGES AND CANCELLATIONS
Supplier agrees that in the event that Company is able to
provide to Supplier demonstrable evidence that any delay by Supplier in
delivering any Material committed to by Supplier under any Order caused the loss
of a contract of Company or caused Company to obtain substitute material from a
third party in order to fulfill the contract, then Company shall be permitted to
offset the amount of such loss or the cost of such substitute material against
the volume commitment set forth in the Volume/Price Letter for the applicable
period.
These provisions concerning late delivery of conforming
Material are intended to be and shall be cumulative and in addition to every
other remedy now or hereafter possessed by Company, including but not limited to
its right to recover damages under the clause entitled WARRANTY.
39. AUDIT
Supplier shall maintain accurate and complete records
including termination charges payable by Company under this Agreement. These
records shall be maintained in accordance with recognized commercial accounting
practices so they may be readily audited and shall be held until costs have been
finally determined under this Agreement and payment or final adjustment of
payment, as the case may be, has been made. Supplier shall permit Company or
Company's Representative to examine and audit these records and all supporting
records at all reasonable times. Audits shall be made not later than one (1)
calendar year after the final delivery date of Material ordered or completion of
services rendered or one (1) calendar year after the expiration date of this
Agreement, whichever comes later. In addition, Supplier shall permit a third
party audit of its sales records to determine compliance with the Volume/Price
Letter.
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40. CLAUSE HEADINGS
The headings of the clauses in this Agreement are inserted for
convenience only and are not intended to affect the meaning or interpretation of
this Agreement.
41. DEFAULT
In the event Supplier shall be in breach or default of any of
the material terms, conditions, or covenants of this Agreement and if such
breach or default shall continue for a period of forty-five (45) days after the
giving of written notice to Supplier thereof by Company that Company intends to
cancel because of such default, then, in addition to all other rights and
remedies which Company may have at law or equity or otherwise, Company shall
have the right to cancel this Agreement and/or Orders without any charge or
obligation or liability of Company, including the right to make appropriate
adjustments to the Volume/Price Levels set forth in the Volume/Price Letter.
42. TERMINATION OF ORDER FOR CAUSE
In the event Supplier exceeds the shipping interval, plus five
(5) working days as specified in an Order issued hereunder because of reasons
attributable to Supplier (other than those contained in the FORCE MAJEURE
Section of this Agreement), then in addition to all other rights and remedies of
law or equity or otherwise and without liability or obligation to Supplier,
Company shall have the right to: (a) cancel the affected Order without any
charge to or obligation or liability of Company and adjust the Volume/Price
levels set forth in the Volume/Price Letter to reflect the dollar amount being
canceled; or (b) extend such delivery date to a later date and adjust the
Volume/Price levels set forth in the Volume/Price Letter to reflect such
extension, subject, however, to the right to terminate if delivery is not made
or performance is not completed by such extended date.
43. TERMINATION OF ORDER WITHOUT CAUSE
Company may at any time terminate without cause any or all
Orders placed by it hereunder. Unless otherwise specified herein, Company's
liability to Supplier with respect to such terminated Order or Orders shall be
limited to [***]. However, no such termination charges will be invoiced, if
within sixty (60) days of notice of termination, manufactured or repaired
Material equivalent in volume to that being terminated is ordered by Company. If
requested, Supplier agrees to substantiate such costs with proof satisfactory to
Company.
Supplier shall use its best efforts to cancel, stop, return,
or otherwise dispose of all Supplier sourced parts not used in manufacture or
repair of Material. Upon request, Supplier shall identify its parts suppliers
and cancellation terms, and shall permit and assist Company in discussions
concerning cancellation charges with such parts suppliers.
44. EMERGENCY BACKUP PLAN
Supplier will furnish to Company for Company's approval,
within sixty (60) days of execution of this Agreement a written plan of action
(an "Emergency Backup Plan") that covers Supplier's plans on how it will
continue to perform its obligations under this Agreement in case of an
unforeseen catastrophe, including a force majeure condition, or any other
condition in which Supplier will be unable to produce and ship Material for four
(4) consecutive weeks. The
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Emergency Backup Plan will identify Supplier's secondary manufacturing
location(s) and include the estimated time for the implementation of such
Emergency Backup Plan and production of Material.
The Emergency Backup Plan shall provide, among other things,
that in the event of any unforeseen catastrophe, including a force majeure
condition, or any other condition in which Supplier will be unable to produce
and ship acceptable Material for four (4) consecutive weeks, Supplier shall use
its reasonable best efforts to (a) manufacture and ship the Material from one or
more of its other manufacturing facilities to meet Company's requirements for
Material; (b) commence shipments of Material to Company from such secondary
manufacturing facilities no later than thirty (30) days after the commencement
of the unforeseen catastrophe or other condition; and (c) achieve the following
levels of shipments from such secondary manufacturing facilities: (i) a minimum
of forty (40) percent of Company's then current forecast after thirty (30) days
of the commencement of the unforeseen catastrophe or any other condition; (ii) a
minimum of sixty (60) percent of Company's then current forecast after
forty-five (45) days of the commencement of the unforeseen catastrophe or any
other condition; and (iii) one hundred (100) percent of Company's then current
forecast after sixty (60) days from the commencement of the unforeseen
catastrophe or any other condition.
45. EXPORT CONTROL
Supplier acknowledges that any software and technical
information (hereinafter referred to as "technology"), including but not limited
to services and training, provided under this Agreement may in fact be subject
to United States export laws and regulations, and may require the prior written
approval of the U.S. Department of Commerce for export or reexport. Supplier
further acknowledges that it has the responsibility for obtaining such approval,
and will, in fact, do so prior to exportation.
Supplier and Company agree that they will not, without the
prior written approval of the U.S. Department of Commerce, transfer or release
(directly or indirectly) any unpublished technology, written, oral, or
otherwise, acquired from Lucent Technologies Inc. or Supplier (as applicable),
or any direct product of such technology (including processes, materials, and
services) to any country listed below, or to any resident or national of such
country, or to any party listed on the U.S. Table of Denial Orders or any other
blocked or denied parties list published by the U.S. Government:
Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Cambodia,
Cuba, Estonia, Georgia, Iran, Iraq, Kazakhstan, Krygystan, Laos, Latvia, Libya,
Lithuania, Moldova, Mongolia, North Korea, People's Republic of China, Romania,
Russia, Syria, Tajikistan, Turkmenistan, Ukraine, Uzbekistan, Vietnam, and the
Bosnian-Serb controlled areas of Bosnia/Herzegovina.
It is understood that this restriction does not apply to
technology (1) that has been made generally available to the public in any form
including technology released orally or visually in public conferences, lectures
and trade shows; (2) in publications that may be obtained without cost or at
minimal cost, or are readily available in public libraries; and, (3) which can
not be used
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or adapted for use in design, manufacture, production, utilization or
reconstruction of articles or materials.
46. NOTICES
Any notice 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 addressed to the respective parties as stated in the applicable
Order. Notices shall deemed to have been given or made when sent by telegram,
telex, confirmed facsimile, certified or registered mail. Addresses may be
changed at any time by giving prior written notice.
47. INSURANCE
Supplier shall maintain and cause Supplier's subcontractors
performing work for Company in connection with this Agreement to maintain during
the term of this Agreement: (1) Workers Compensation insurance as prescribed by
the law of the state or nation in which the Work is performed, (2) employer's
liability insurance with limits of at least [***] each occurrence, and (3)
comprehensive automobile liability insurance if the use of motor vehicles is
required, with limits of at least [***] for bodily injury and property damage
for each occurrence and (4) Comprehensive General Liability ("CGL") insurance,
including Blanket Contractual Liability, and Broad Form Property damage, with
limits of at least [***] combined single limit for personal injury and property
damage for each occurrence, and (5) 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
[***] for each occurrence. All CGL insurance shall designate LUCENT TECHNOLOGIES
INC., its assigns, affiliates, and their officers, directors and employees (all
hereinafter referred to in this clause as "Company") as an additional insured.
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 applicable subcontractors performing work for Company shall
furnish prior to the start of work certificates or adequate proof of the
foregoing insurance including, if specifically requested by Company, copies or
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.
48. SEVERABILITY
If any of the provisions of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability 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
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unenforceable provision or provisions, and the rights and obligations of
Supplier and Company shall be construed and enforced accordingly.
49. 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.
50. SUPPLIER'S INFORMATION
Except as otherwise provided for in a Nondisclosure Agreement,
no Specifications, drawings, sketches, models, samples, tools, computer or other
apparatus programs, technical or business information, or data, written, oral,
or otherwise, furnished by Supplier to Company under this Agreement or any
Order, or in contemplation of this Agreement shall be considered by Supplier to
be confidential or proprietary.
51. USE OF INFORMATION
Any Developed Information, Specifications, drawings, sketches,
models, samples, tools, computer or other apparatus programs, technical or
business information or data, written, oral, or otherwise, owned or controlled
by Company (information") and furnished to or acquired by Supplier under this
Agreement, or in contemplation of this Agreement, shall remain Company's
property. All copies of such Information in written, graphic, or other tangible
form shall be returned to Company at its request. Unless such Information was
previously known to Supplier free of any obligation to keep it confidential, or
has been or is subsequently made public by Company or a third party, it shall be
kept confidential by Supplier, shall be used only in performing under this
Agreement, and may not be used for any other purposes except upon such terms as
may be agreed upon between Supplier and Company in writing.
52. FUNDED DEVELOPMENT/INTELLECTUAL PROPERTY
Supplier agrees not to engage and nor to perform for Company
specific development or design work ("Development") without an advance written
agreement defining ownership of the Development.
53. SURVIVAL OF OBLIGATIONS
Company's and Supplier's obligations and warranties under this
Agreement, which by their nature would continue beyond the termination or
expiration of this Agreement, including, by way of illustration only and not
limitation, those in the clauses COMPLIANCE WITH LAWS, RELEASES VOID, IMPLEADER,
USE OF INFORMATION, FUNDED DEVELOPMENT/INTELLECTUAL PROPERTY, WARRANTY,
INSURANCE, and INDEMNITY AND INFRINGEMENT, shall survive termination,
cancellation, or expiration of this Agreement.
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54. 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.
55. ASSIGNMENT
Except as set forth below, neither Company nor Supplier shall
assign any right or interest under this Agreement and the Volume/Price Letter or
(with respect to Supplier) under an Order issued pursuant to this Agreement
(excepting monies due or to become due) or delegate any Work or other obligation
to be performed or owed under this Agreement and the Volume/Price Letter or an
Order either in whole or in part without the prior written consent of the other
party which consent shall not be unreasonably withheld. Any attempted assignment
or delegation in contravention of the above provisions shall be void and
ineffective. Any assignment of monies shall be void and ineffective to the
extent that (1) Supplier shall not have given Company at least thirty (30) days
prior written notice of such assignment or (2) such assignment attempts to
impose upon Company obligations to the assignee additional to the payment of
such monies, or to preclude Company from dealing solely and directly with
Supplier in all matters pertaining to this Agreement including the negotiation
of amendments or settlements of charges due.
Notwithstanding the provisions set forth above, Company shall
have the right to assign this Agreement and the Volume/Price Letter and to
assign its rights and delegate its duties under this Agreement and the Volume
Price Letter either in whole or in part, at any time and without Supplier's
consent; provided however that such assignment shall only be permitted to an
affiliate or subsidiary of Company having assets greater than [***]. Company
shall give Supplier thirty (30) days prior written notice of any such
assignment. The assignment shall neither affect nor diminish any rights or
duties that Supplier or Company may then or thereafter have as to services or
Material ordered by Company prior to the effective date of the assignment.
Upon the acceptance of the assignment and assumption of the
duties under this Agreement and the Volume/Price Letter by the assignee, Company
shall be released and discharged, to the extent of the assignment, from all
further duties under this Agreement and the Volume/Price Letter as to services
or Material not ordered by Company by the effective date of the assignment.
56. CHOICE OF LAW
The construction, interpretation and performance of this
Agreement and all transactions under it shall be governed by the laws of the
State of New York excluding its choice of laws rules and excluding the
Convention for the International Sale of Goods. The parties agree
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that the provisions of Article 2 "Sales" of the New York Uniform Commercial Code
apply to this Agreement and all transactions under it, including agreements and
transactions relating to the furnishing of services, the lease or rental of
equipment or Material, and the license of software. Supplier agrees to appear in
any court wherein an action is commenced against Company based on a claim for
which Supplier has agreed to indemnify Company under this Agreement.
57. COMPLIANCE WITH LAWS
Supplier and all persons furnished by Supplier shall at their
own expense comply with all applicable laws, ordinances, regulations, and codes
in their performance of this Agreement. Supplier and all persons furnished by
Supplier shall at their own expense be responsible for identifying and obtaining
any and all approvals (except for foreign country homologation and foreign
country approvals or certifications as set forth under the clause COMPLIANCE
WITH FEDERAL COMMUNICATIONS COMMISSION'S RULES AND REGULATIONS PARTS 15 AND 68),
permits, licenses, certificates, insurance, inspections, or the like which may
be required to perform their obligations under the Agreement including, but not
limited to, any licenses required for export of Material Supplier agrees to
indemnify and hold Company harmless from any loss or damage that may be
sustained by Company by reason of Supplier's or Supplier's suppliers failure to
do so.
58. LICENSES
No licenses, express or implied, under any patents,
copyrights, trademarks, or other intellectual property rights are granted by
Company to Supplier under this Agreement or any contract or Order issued
pursuant to this Agreement.
59. IMPLEADER
Supplier shall not implead or bring an action against Company
or its customers or the employees of either based on any claim by any person for
personal injury or death to an employee of Company or its affiliates or their
respective customers occurring in the course or scope of employment and that
arises out of Material or services furnished under this Agreement.
60. FORCE MAJEURE
Neither party shall be held responsible for any delay or
failure in performance of any part of this Agreement or Order to the extent such
delay or failure is caused by fire, flood, explosion, war, strike, embargo,
government requirement, civil or military authority, act of God, act or omission
of carriers or other similar causes beyond its control and without the fault or
negligence of the delayed or nonperforming party or its subcontractors ("force
majeure conditions"). Notwithstanding the foregoing, Supplier's liability for
loss or damage to Company's Material in Supplier's possession or control shall
not be modified by this clause. If any force majeure condition occurs, the party
delayed or unable to perform shall give immediate notice to the other party and
the party affected by the other's delay or inability to perform may elect to:
(1) suspend this Agreement or Order for the duration of the force majeure
condition and (i) at its option obtain elsewhere manufacturing or repair
services to have been furnished under this
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Agreement or Order and deduct from any commitment the quantity obtained or for
which commitments have been made elsewhere and the Volume/Price levels set forth
in the Volume Price Letter shall be adjusted to reflect the dollar amount
purchased by Company from the other source or sources, and (ii) once the force
majeure condition ceases, resume performance under this Agreement or Order with
an option in the affected party to extend the period of this Agreement or Order
up to the length of time the force majeure condition endured and/or (2) when the
delay or nonperformance continues for a period of at least thirty (30) days,
terminate, at no charge, the applicable Order or the part of it relating to
Material not already shipped or Services not already performed. Unless written
notice is given within forty-five (45) days after the affected party is notified
of the force majeure condition, (1) shall be deemed selected.
61. IDENTIFICATION
Supplier shall make no use of any identification of Company or
its affiliated companies in its advertising or promotional efforts in reference
to activities undertaken by Supplier under this Agreement without Company's
prior written consent. The term "identification" includes any trade name,
trademark, service mark, insignia, symbol, or any simulation thereof, and any
code, drawing, specification, or evidence of Company's inspection. Supplier
agrees to remove any such identification prior to any sale, use or disposition
of Material or equipment rejected or not purchased by Company, and shall
indemnify. Company, Lucent Technologies Inc. and its affiliated companies
against any claim arising out of Supplier's failure to do so. This clause does
not modify the USE OF INFORMATION clause.
62. COMPLIANCE WITH FEDERAL COMMUNICATIONS COMMISSION'S RULES AND
REGULATIONS PARTS 15 AND 68
Material sold to, manufactured and/or repaired for Company
hereunder for sale or use within the United States shall comply with the
requirements of Parts 15 and 68 of the FCC Rules and Regulations. Material sold
to, manufactured and/or repaired for Company hereunder for sale or use outside
the United States shall comply with the requirements of those targeted
countries. All countries not previously identified as acceptable by Supplier
must be approved in advance by Supplier.
In the event that Supplier does not obtain such Agency
approvals and/or certifications as required by law, Supplier agrees to indemnify
and save Company harmless from any damages, liabilities, claims, or demands,
costs, expenses (including but not limited to rework expressly necessary to
bring Material into compliance) and reasonable attorney's fees which Company may
incur on account thereof.
Nothing herein shall be deemed to diminish or otherwise limit
Supplier's obligations under the clause WARRANTY clause of this Agreement.
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63. FIELD RETURNS (REPAIR SERVICE)
Supplier agrees to provide repair services on all Material
ordered hereunder both during the term of, and for a period of five (5) years
after the expiration of this Agreement. Company agrees to obtain a Return
Material Authorization prior to returning the Material.
Field Returns are Material returned to Supplier that has been
purchased by a customer and either used or not used. This Material may represent
both defective and non-defective units. Supplier agrees to repair all Material,
returning it to a state of repair whereby it will satisfy all terms and
conditions of this Agreement, and applicable Orders. All Material furnished for
repair will remain the property of Company. The interval for this repair shall
not exceed seven (7) working days from receipt of product at Supplier's
facility. The price and any new terms for Repairs not covered by this Agreement
shall be mutually agreed upon by the parties. The price for these repairs shall
be set forth in the applicable Orders.
Supplier agrees to identity all costs associated with this
repair activity. Complete and accurate records will be maintained by Supplier so
as to enable Company and Supplier to effectively evaluate this Field Return
procedure.
Material repaired by Supplier shall have the repair completion
date stenciled on the bottom of the base of Material or otherwise identified in
a permanent manner at a readily visible location on Material as mutually agreed
upon.
All invoices originated by Supplier for repair services must
be clearly identified as such, and must contain a reference to Company's Order
for these repair services. Further, the provisions of the clause SHIPPING AND
BILLING, 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. Company shall give Supplier six (6) months notice if
Company decides to terminate repair services performed by Supplier.
64. INITIALLY DEFECTIVE MATERIAL
"Initially Defective" as used in this clause shall mean any
defective Material returned by Company within thirty (30) days from the date of
sale to end-user. Such Initially Defective Material may be returned to Supplier
by Company for replacement with risk of in transit loss or damage borne by and
freight paid by Company.
Accompanying the Initially Defective Material will be a repair
order, which will include the following:
(1) Identify Material as Initially Defective and contain a
brief description of the defect, if possible.
(2) Identify whether Material is used.
(3) Ship-to address of Company.
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In the event Supplier decides that Initially Defective
Material should be replaced, and Supplier has a "Refurbishment Replacement
Program" in place for Material, then Supplier shall ship a new replacement unit
within seven (7) days of receipt of the defective Material. Supplier shall bear
the transportation cost and risk of loss for the return of such Material. If
Supplier does not have a "Refurbishment Replacement Program" currently in place,
and then implements a program, Supplier shall notify Company within thirty (30)
days and extend to Company the seven (7) day replacement provision for Initially
Defective Material. Until Supplier implements the "Refurbishment Replacement
Program", Supplier shall repair Initially Defective Material as set forth above.
After the initial thirty (30) day period for Company's return
of defective Material to Supplier, defective Material shall be returned to
Supplier by Company accompanied by the Repair Order, with risk of loss borne and
freight paid by Company. At the option of Supplier, such Material will be
repaired or replaced by Supplier at no cost to Company for in warranty returns.
Unless otherwise agreed upon, Supplier shall complete repairs
and ship returned Material to Company within twenty (20) days of receipt of the
defective Material. Supplier shall bear the cost of freight and assume the risk
of loss for shipment to Company of repaired or replaced Material.
If Material returned to Supplier for repair as provided for in
this clause is determined to be beyond repair, Supplier shall promptly so notify
Company and, unless otherwise agreed to by Supplier and Company, ship
replacement Material without charge within seven (7) days of receipt of in
warranty Material if Supplier has a "Refurbishment Replacement Program" in place
for Material. If Supplier does not have a "Refurbishment Replacement Program"
currently in place, and then implements a program Supplier shall notify Company
within thirty (30) days and extend to Company the seven (7) day replacement
provision for in warranty Material. Until Supplier implements the "Refurbishment
Replacement Programs, Supplier shall repair Initially Defective Material as set
forth above.
Any Material which is repaired, modified, replaced, or
otherwise serviced by Supplier shall be warranted as provided in the clause
WARRANTY for the remainder of the warranty period or ninety (90) days after
Material is shipped to Company, whichever is later (based upon the date repair,
modification, or other service is completed and accepted by Company).
A repair and/or replacement report detailing the repairs or
modification to all units returned by Company will be provided on a monthly
basis.
65. EPIDEMIC CONDITION
In the event that during the term of this Agreement and for
one year after the last shipment date of Material hereunder, Company notifies
Supplier (in accordance with the NOTICES clause) that Material shows evidence of
an Epidemic Condition, Supplier shall prepare and propose a "Corrective Action
Plan" (CAP) with respect to such Material within ten (10)
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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 agreement of the parties.
Upon notification of the Epidemic Condition to Supplier,
Company shall have the right to postpone 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 Corrective Action Plan, 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, excluding potential safety hazards,
will be considered to exist when one or more of the following conditions occur:
1. Failure reports or statistical sampling showing that three
percent (3%) or more of any consecutive one hundred (100) units of Material
delivered to Company or Company's customers are rejected for defective materials
or workmanship; or repair reports indicate nonconformance for the same defect of
five percent (5%) of the installed Material base.
2. Reliability plots of relevant data indicate that Material
has actual Mean Time Between Failures (MTBF) of less than eighty (80%) percent
of the MTBF stipulated in Specification for Material. The MTBF parameter of
Material is defined as the total operation 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 Specification. The
total operating time for 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 eighty (80%) percent statistical confidence.
3. Material Dead on Arrival ("DOA") failures exceed the
Epidemic DOA failure rate which is defined as two percent (2%) of Material
delivered to Company or Company's customer within a one (1) month period.
Only major functional visual/mechanical/appearance defects are
considered for determining Epidemic Condition. Material could be either sampled,
or at Company option, one hundred (100%) percent audited at Company warehouses,
factories, or Company's customers' locations. If Material is sampled, the data
must have eighty (80%) percent or better statistical confidence.
For the purpose of this Agreement, functional DOA shall not
include Material for which no defect is found and shall be defined as any
Material that during the test, installation or upon its first use fails to
operate as expected or specified. Visual/mechanical/appearance DOA is defined as
any Material containing one or more major defects that would make Material unfit
for use or installation.
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An Epidemic Condition shall not include failure due to
customer misapplication, misuse, abuse, lightning, 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, Supplier shall:
(a) Incorporate the remedy in the affected Material in
accordance with Engineering Change Control procedures or manufacturing
procedures, as applicable, agreed to by the parties.
(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 at Supplier's option Material that
caused the Epidemic Condition. In the event that Company incurs costs due to
such repair and/or replacement, including but not limited to labor and shipping
costs, Supplier shall reimburse Company for such costs, as mutually determined
and agreed upon by both parties. Supplier shall bear such risk of in transit
loss and damage for such repaired and/or replaced Material shipped to Company.
Supplier and Company shall mutually agree in writing as to the
remedy's implementation schedule. Supplier agrees to utilize its best efforts to
implement in accordance with agreed-upon schedule.
In the event that 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 such remedy and implementation cost and risk of in transit loss and
damage shall be allocated between the parties as set forth in this clause,
and/or (2) cancel postponed Orders without liability and return all confirmed
Material affected by such Epidemic Condition for full refund, payable by
Supplier within thirty (30) days after receipt of returned Material (with risk
of loss of in transit damage borne by Supplier) and Company shall have the right
to adjust the Volume/Price levels set forth in the Volume/Price Letter to
reflect the dollar amount being canceled, and/or (3) terminate this Agreement
without further liability.
66. TITLE TO PARTS FURNISHED BY COMPANY
All parts furnished by Company shall remain Company's property
and be kept segregated and marked PROPERTY OF LUCENT TECHNOLOGIES INC. Supplier
agrees to be responsible for any loss or damage to such parts while in
Supplier's possession or under Supplier's control. Company may inspect,
inventory, and authenticate the amount of parts that are furnished under this
Agreement during Supplier's normal business hours. Supplier shall provide
Company access to the premises wherein all such parts are located. Supplier
shall at Company's option, return to Company or hold for Company's disposition
any and all of such parts and any scrap produced remaining in Supplier's
possession upon termination of this Agreement.
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Supplier will not assert or file common law or statutory lien
against parts furnished by Company, and hereby waives any such common law and
statutory liens. Supplier shall, within ten (10) days of receipt of Company's
parts, notify Company in writing of any claims for quantity variation in the
parts furnished to Supplier.
Supplier shall store Company parts in protected areas approved
by Company. In case of removal from one building to another, Supplier's
responsibility for loss or damage shall continue and Supplier shall give Company
advance notice in writing of the removal, except when the removal is required
during Supplier's manufacturing process.
Supplier shall list parts furnished by Company on all
documents covering manufactured and/or repaired Material shipped from Supplier
to Company.
67. TITLE TO SPECIAL TOOLING AND TEST EQUIPMENT
Special tooling and test equipment ("Tooling") furnished by
Company for use by Supplier under this Agreement shall remain Company's property
at all times, and Supplier shall:
(1) Be responsible for the safekeeping of Tooling and assume
all risks of loss or damage to same, except for reasonable wear and tear.
(2) Maintain and use Tooling in accordance with all applicable
local and country occupational safety and health requirements and other safety
requirements, codes, or standards. Supplier agrees to indemnify and hold
harmless Company from and against any and all losses, damages, claims, demands,
suits, and liabilities (including reasonable attorney's fees) of any kind and
nature whatsoever (including but not limited to claims resulting from injuries
or death to persons or damage to property) in any way arising out of or
resulting from the maintenance, ownership, possession, operation, use,
condition, storage, or movement of Tooling or any accident in connection
therewith.
(3) Permanently mark or if impracticable to do so then affix
labeling stating that Tooling is the PROPERTY OF LUCENT TECHNOLOGIES INC.
(4) Store Tooling, when not in use, on racks or in sections of
Supplier's plant marked PROPERTY OF LUCENT TECHNOLOGIES INC., and, in case of
removal of all or any part of it from one building to another, Supplier's
responsibility for loss or damage shall continue and Supplier shall give Company
advance notice in writing of the removal, except when the removal is required
during Supplier's manufacturing process.
(5) Use Tooling only in the manufacture and/or repair of
Material furnished to Company, unless otherwise agreed in writing by Company,
and deliver it to Company upon demand FOB Supplier's plant without additional
charge for removal, packing, or crating.
(6) Repair or replace parts of Tooling as needed from time to
time without charge to Company. This includes, among other things, adjusting,
replaces punches or die sections, and sharpening and keeping tools in good
working condition. At any time when Supplier proposes replacing the entire tool
because (a) tool life has been expended or worn
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beyond economical repair, or (b) design changes by Company necessitate
modification or complete replacement, Supplier shall first obtain Company's
written approval, and the replacement Tooling shall be subject to the terms of
this Agreement. Company shall bear the cost of components needed to repair its
test equipment.
(7) Permit Company to inspect, inventory, and authenticate the
account of Tooling furnished under this Agreement during Supplier's normal
business hours. Supplier shall provide Company access to the premises where all
such Tooling is located. The obligations assumed by Supplier with respect to
Tooling as furnished under this Agreement are for the protection of Company's
property. Supplier shall, at Company's option, return to Company or hold for
Company's disposition any or all of such Tooling and associated drawings in
Supplier's possession free of restrictions at (a) the completion of the
applicable Order, if such tooling relates to such Order, or (b) termination of
this Agreement.
68. WARRANTY
Supplier warrants to Company that the Material furnished will
be new product free from defects in design, material, and workmanship, and will
conform to the Specifications, drawings, and samples referred to in this
Agreement or any Order under this Agreement and will perform satisfactorily for
a period of twenty-four (24) months or such longer period as may be agreed to
from time to time from the date of delivery to Company. Supplier warrants that
at time of delivery of the Material, such Material shall be free of any security
interest or any other lien or any other encumbrance whatsoever. Supplier also
warrants to Company that Services will be performed in a first class workmanlike
manner. In addition, if Material furnished contains components subject to one or
more manufacturer's warranties, Supplier hereby assigns such warranties to
Company to the extent permissible. All warranties shall survive inspection,
acceptance, and payment. Material not meeting the warranties will be repaired or
replaced at no cost to Company.
At Company's option, defective or nonconforming Material will
be returned to Supplier for repair or replacement at no cost to Company, with
risk of in-transit loss and damage borne by Company and freight paid by Company.
Unless otherwise agreed upon by Supplier and Company, Supplier shall complete
repairs and ship the repaired Material within seven (7) working days of receipt
of defective or nonconforming Material.
Supplier shall bear the risk of in-transit loss and damage and
shall prepay and bear the cost of freight for shipments to Company of repaired
or replaced Material.
Supplier should be contacted for a Return Material
Authorization Number prior to the return of any Material.
69. QUALITY
Supplier commits to ensure that all manufacturing and design
operations which contribute to the design, development, production and services
of Material remain ISO 9001 or 9002 certified and with respect to certain of
Supplier's subcontractors, are on a plan to achieve
26
<PAGE> 27
such certification. Furthermore, Supplier will use its reasonable best efforts
to attain and maintain acceptable ratings in any future quality programs as
agreed to by the parties hereto.
70. MEDIATION
If a dispute arises out of or relates to this Agreement or its
breach and the parties have not been successful in resolving such dispute
through negotiation, the parties agree to attempt to resolve the dispute through
non-binding 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. The
parties, their representatives, other participants and the mediator shall hold
the existence, content and result of the mediation in confidence. If such
dispute is not resolved by such mediation or either party elects to terminate
such mediation, the parties shall have the right to resort to any remedies
permitted by law. All defenses based on passage of time shall be tolled pending
the termination of the mediation. Nothing in this clause shall be construed to
preclude any party from seeking injunctive relief in order to protect its rights
pending mediation. A request by a party to a court for such injunctive relief
shall not be deemed a waiver of the obligation to mediate. During the pendency
of the mediation, pricing for Material shall be held at the then existing
levels.
71. ENTIRE AGREEMENT
This Agreement shall incorporate any additional typed or
written provisions on the front side of Company's Orders issued and accepted
pursuant to this Agreement and shall constitute the entire agreement between the
parties with respect to the subject matter of this Agreement, and this Agreement
and the Order(s) and shall not be modified or rescinded, except by a writing
signed by Supplier and Company. In the event of a conflict between this
Agreement and the typed provisions on the Order, this Agreement shall prevail.
All references in these terms and conditions to this Agreement or to work,
services, Material, equipment, products, software or information furnished
under, in performance of, pursuant to, or in contemplation of, this Agreement
shall also apply to any Orders issued pursuant to this Agreement. Printed
provisions on the reverse side of Company's Orders and all provisions on
Supplier's forms shall be deemed deleted, alterations, addenda, or otherwise,
shall be of no force and effect, unless expressly consented to by the parties in
writing. 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 quotations, communications, agreements
and understandings of the parties with respect to the subject matter of this
Agreement. The term "Work" as used in this Agreement may also be referred to as
"services."
AT&T PARADYNE CORPORATION LUCENT TECHNOLOGIES INC.
By: /s/ W. Preston Granbery By: /s/ Carleton S. Fiorina
----------------------------- ------------------------------
Name: W. Preston Granbery Name: Carleton S. Fiorina
----------------------------- ------------------------------
27
<PAGE> 28
Title: Authorized Agent Title: Vice President
----------------------------- ------------------------------
Date: 7/31/96 Date:
----------------------------- ------------------------------
CAP ACQUISITION CORP.
By: /s/ David M. Stanton
-----------------------------
Name: David M. Stanton
-----------------------------
Title: President
-----------------------------
Date: 7/31/96
-----------------------------
28
<PAGE> 29
EXHIBIT A
MATERIAL PRICE AND LEAD TIME
[***]
- -------------------
*Confidential Treatment Requested
A-1
<PAGE> 30
EXHIBIT B
MATERIAL ON CONSIGNMENT
The terms set forth herein (the "Consignment Arrangement")
will govern any Material on Consignment ("Consigned Material") at a Company
location, each as mutually agreed upon by Company and Supplier and as set forth
in Schedule(s) in the form attached hereto.
1. TERM OF CONSIGNMENT ARRANGEMENT - The term of the
Consignment Arrangement shall be specified in the acknowledged Consignment
Purchase Order.
2. FOB - Consignment site.
3. MATERIAL MANAGEMENT - Supplier shall ship all Consigned
Material via any nationally recognized carrier selected by Company and Supplier.
At the beginning of each 12 month period of this Consignment
Arrangement or otherwise agreed to by Company and Supplier, Company shall issue
to Supplier a "Master Purchase Order" for each Consigned Material. The Master
Purchase Order shall contain Company's twelve (12) month good faith estimated
annual usage for each Consigned Material. The estimated annual usage will be
provided by the Company solely for administrative purpose and shall not
constitute a commitment by the Company to purchase from Supplier the amount set
forth in the estimated annual usage.
Each week the Company shall send to Supplier a Forecast (the
"Weekly Consignment Forecast") for each Consigned Material. The Weekly
Consignment Forecast shall contain an updated twelve (12) month forecast,
including the Company's good faith weekly estimated requirements for a minimum
of the next 26 weeks, for each Consigned Material. Such Forecast shall be issued
by the Company solely for Supplier's Material planning purposes and shall not
constitute a commitment by the Company to purchase from Supplier the amount of
Material set forth in such Weekly Consignment Forecast. The Weekly Consignment
Forecast may differ from the Master Purchase Order estimated annual usage. In
addition, the Weekly Consignment Forecast shall (a) show the quantities
delivered by Supplier that are currently in Consigned Material storage (as
hereinafter defined) and (b) list by part number the amount of Material
withdrawn by Company from Consigned Material storage during such week and the
balance of such Consigned Material Storage. Supplier shall invoice Company each
month for Consigned Material withdrawn by Company in the previous month.
Supplier shall review the Weekly Consignment Forecast and
shall adjust Consigned Material Storage Stock support levels and Supplier's work
in process as set forth herein for the mutually agreed to quantities. Supplier
shall manufacture and ship enough Material into Consigned Material Storage so
that Consigned Material Storage contains the following: one (1) week forecast
plus a level of safety stock not to exceed the next three (3) weeks of Company's
forecast for such part numbers based on the then current Weekly Consignment
Forecast.
B-1
<PAGE> 31
Supplier shall have the Material Management (which shall be
based upon the Weekly Consignment Forecast) responsibility for Company's
Consignment Site for the Consigned Material. Supplier shall be responsible for
notifying Company of inventory fluctuations considered to be excessive by
Supplier. If upside fluctuations are deemed excessive by Supplier, Supplier and
Company shall work together on a delivery plan mutually agreeable to both
parties.
Company's commitment to purchase Consigned Material shall be
only those quantities withdrawn by Company from Consigned Material Storage and
as set forth below. Returns to Consigned Material Storage must be with the prior
written approval of Supplier.
If at any time during the twelve (12) month period covered by
a Master Purchase Order, this Consignment Arrangement is terminated by either
party as set forth below, or if Company changes its Weekly Consignment Forecast
to eliminate or materially reduce the quantities forecasted under the Master
Purchase Order, or if this Consignment Arrangement expires and is not renewed
during the term of this Agreement, Company's liability to Supplier shall be to
purchase the sum of the first four (4) weeks of gross forecasted amounts for
such terminated, eliminated or materially reduced or expired items (as
forecasted in the previous week's Weekly Consignment Forecast) and Supplier's
work in process and/or raw materials and components. Company's liability for
work in process and/or raw materials and components should not exceed the
Supplier's Lead Time referenced on Exhibit A of gross forecasted amounts for
such terminated, eliminated or materially reduced or expired items (as
forecasted in the previous week's Weekly Consignment Forecast), Such total of
gross forecasted amounts shall be referred to in this clauses as "Forecasted
Material". For that portion of the Forecasted Material at Supplier's location,
Company's obligation under this subsection shall be limited to the sum of (a)
[***] and (b) [***], (i) [***] and (ii) [***] other customers in the ordinary
course of business over a reasonable period of time); [***] set forth in
(a) and (b) above. If requested by the Company, Supplier agrees to substantiate
such costs and purchase Price with proof reasonable satisfactory to Company.
Upon such termination, elimination, material reduction or
expiration the parties shall meet promptly to determine the finished Materials,
work in process, components and raw materials for which Company is responsible
as set forth above. Supplier shall, at Company's option and expense, ship to
Company or scrap such finished Materials, work in process and raw materials and
components for which Company is liable under this clause.
4. MATERIAL ON CONSIGNMENT - Supplier shall deliver the
Consigned Material as set forth below:
a. Contact Person - The Company's contact person for
each Consignment Arrangement shall be set forth in Company's Weekly Consignment
Forecast.
b. Consigned Material Storage - Upon receipt of each
shipment of Consigned Material, Company shall cause it to be placed in
segregated storage ("Consigned Material Storage") at the Consignment Site
partitioned or marked to evidence Supplier's
- -------------------
*Confidential Treatment Requested
B-2
<PAGE> 32
ownership and in such a way that the Consigned Material may be readily
distinguished from other inventory by physical inspection. Supplier may
physically inspect Consigned Material in Consigned Material Storage at mutually
agreeable times during normal business hours. After such inspection, Supplier
may invoice Company for any unaccounted for inventory of Consigned Material at
the Price then in effect under this Agreement.
c. Title and Risk of Loss - Upon receipt of
Consignment Material, risk of loss of such lot shall pass to Company. Upon
withdrawal of any item in such lot by Company from Consigned Material Storage,
title to such item shall pass to Company and sale of that lot shall be deemed to
occur.
d. Terms of Payment - Net 30 days.
e. Withdrawal from Consigned Material Storage -
Company may withdraw or cause to be withdrawn Consigned Material from Consigned
Material Storage at any time. Company shall keep or cause to be kept records and
report to Supplier weekly the quantities withdrawn and the balance of Consigned
Material in Consigned Material Storage as set forth in the clause MATERIAL
MANAGEMENT. Supplier's invoices for the Consigned Material shall be based upon
such withdrawal reports. Supplier shall regularly replace quantities withdrawn
to maintain mutually agreed upon stock support levels as set forth in the clause
MATERIAL MANAGEMENT.
f. Shipping Information - Promptly after each
shipment of Consigned Material under this Agreement, Supplier shall furnish to
Company and if Company so requests, to a designated party at the Consignment
Site, a written report setting forth at least the following (i) Company's Order
number; (ii) Consignment Destination; (iii) Origin location; (iv) Name of
Carrier and Truck number (v) lot identification number of each lot; (vi) net
weight of each lot; and (vii) description and quantity of Material in each lot.
g. Personal Property Taxes - Supplier shall be
responsible for the reporting and payment of personal property taxes, if any, on
any Consigned Material in such Consigned Material Storage by Company, except
state and local sale use taxes, as applicable.
h. Transportation Loss - As to loss of or damage to
Consigned Material which is reasonably apparent upon delivery from the carrier,
Company shall cause the following to be done:
(i) At time of delivery, mark the delivery
receipt before signing with appropriate exceptions describing the damage;
(ii) At the time of delivery, request the
carrier to either inspect the loss or damage and forward to Supplier a signed
exception report outlining the extent of loss or damage, or issue a written
waiver of inspection and forward it to Supplier; and
(iii) Within ten days after delivery,
inspect the damaged Material and notify Supplier whether Company will (a) accept
it at a mutually agreed lower Price reflecting the transportation damage (if
Supplier had the risk of loss), or (b) reject it. Rejected items shall
B-3
<PAGE> 33
be set aside by Company pending disposition by Supplier as soon as reasonably
possible but no later than sixty days following delivery, after which time any
such damaged Consigned Material remaining undisposed of shall be deemed to be
abandoned and Company may dispose of it as it sees fit without any obligation to
Supplier.
As to concealed transportation damage, if after withdrawal of
any Consigned Material from Consigned Material Storage, Company discovers
concealed transportation damage, Company shall notify Supplier within five days
of such discovery, take reasonable steps to preserve evidence of how such damage
occurred and take all actions provided in for (b)(iii) above. Where Consigned
Material Storage is located on premises other than Company premises, Company
shall direct the owner of such other premises to comply with the procedure set
forth in this clause.
5. OPTION TO EXTEND - Company shall have the right to extend
the period specified in the clause TERM OF CONSIGNMENT ARRANGEMENT with the
consent of Supplier for up to six(6) months without any increase in Price by
giving Supplier at least thirty (30) days prior written notice.
6. TERMINATION (Consignment Arrangement Only) - Either party
may terminate the Consignment Arrangement with prior written notice of at least
sixty (60) days. Upon receipt or sending such notice, as applicable, Supplier
shall immediately stop work as specified in the notice. Company's liability to
Supplier with respect to such termination shall be limited to the purchase of
the quantities set forth in Clause 3 above, such quantities to be counted as of
the termination date set forth in the notice.
7. CONSIGNMENT SERVICE PERFORMANCE - The Company intends to
monitor the delivery performance of Supplier via special performance reports as
set forth in the Clause SERVICE in the Supply Agreement. In addition, so long as
Company complies with its obligations pursuant to Section 4, Material for
Consignment purposes, Supplier shall strive to achieve or exceed [***]
performance rating for percent of forecasted quantity on hand when measured.
- -------------------
*Confidential Treatment Requested
B-4
<PAGE> 34
EXHIBIT C
PULL REPLENISHMENT ARRANGEMENT
The terms set forth herein (the "Pull Replenishment
Arrangement") will govern any Material on Pull Replenishment at a Company
location, each as mutually agreed upon by Company and Supplier.
1. TERM OF PULL REPLENISHMENT ARRANGEMENT - The term of the
Pull Replenishment Arrangement shall be specified in the Pull Replenishment
Purchase ("PRP") Order acknowledged by Supplier.
2. PULL REPLENISHMENT PROCESS - For Pull Replenishment
Material, Company shall prepare and deliver to Supplier an annual PRP order(s)
establishing the minimum release quantity for Material. On Monday of each week,
Company shall provide Supplier with an updated twelve (12) month forecast,
including the Company's reasonable and good faith estimated requirements for a
minimum of the next twenty six (26) weeks, for each Pull Replenishment Material
(the "Forecast"). Supplier will receive "Request to Ship" notices as Company
uses Material and requires replenishment of Material. Supplier will deliver
within two to three days of Supplier's receipt of the Request to Ship" 100% of
the quantity designated in the "Request to Ship" notice. Supplier shall
reference the annual PRP order number on its shipping and invoicing documents.
The Forecast received weekly from Company shall be for planning purposes only
and, except to the extent set forth below, shall not be deemed a commitment by
the Company to purchase from Supplier the amount set forth in the Forecast.
Company will acknowledge receipt of Material delivered in the prior week via the
succeeding week's Forecast.
Supplier shall maintain (a) an inventory of inspected finished
Pull Replenishment Material equal to the amount of such Material forecasted to
be used by the Company during weeks one (1) through three (3) of the then
current Forecast and (b) work in process and/or raw materials and components in
the aggregate sufficient to manufacture such Pull Replenishment Material
equivalent to weeks four (4) through eight (8) of then current Forecast. From
time to time, the parties will review the foregoing levels of inventory, work in
process and/or raw material and components and will negotiate on lower inventory
levels, work in process and materials and components based on Supplier's
satisfactory Pull Replenishment service performance.
Supplier shall review the weekly Forecast and make adjustments
to Supplier's inspected inventory of Pull Replenishment Material, work in
process and raw materials and components based upon increases/decreases in the
Forecast. Supplier shall be responsible for notifying Company of inventory
fluctuations considered to be excessive by Supplier. If upside fluctuations are
deemed excessive by Supplier, Supplier and Company shall work together on a
delivery plan mutually agreeable to both parties.
The Company's commitment for the purchase of Pull
Replenishment Material shall be limited to (a) the quantities set forth in the
"Request to Ship" notice of the Forecast and (b) the finished and inspected by
Supplier inventory of Pull Replenishment Materials, work in process, raw
materials and components as set forth above.
C-1
<PAGE> 35
The Company's liability for the items above shall be limited
to the sum of (a) [***]; (b) [***]; and (c) for [***].
3. TERMINATION OF PULL REPLENISHMENT ARRANGEMENTS - Company
may at any time terminate any or all annual PRP orders, in whole or in part,
upon thirty (30) days written notification to Supplier. Upon receipt of such
notice, Supplier shall immediately stop work as specified in the notice to
Supplier. Company liability to Supplier with respect to such termination shall
be as set forth in paragraph 2 above. Upon such termination, the parties shall
meet promptly to determine the finished Pull Replenishment Material, work in
process and raw material and components for which Company is responsible as set
forth above. Supplier shall, at Company's option and expense, ship to Company or
scrap such finished Material, work in process and raw materials and components
for which Company is liable under this Agreement.
4. PULL REPLENISHMENT SERVICE PERFORMANCE - The Company
intends to monitor the delivery performance of Supplier via special performance
report set forth in the clause SERVICE of the Supply Agreement. Supplier will
strive to achieve or exceed the service goals established in the clause SERVICE.
- -------------------
*Confidential Treatment Requested
C-2
<PAGE> 36
EXHIBIT D
DEMAND - PULL
The terms set forth herein (the "Demand Pull Arrangement")
will govern any Material on Demand Pull at a Company location, each as mutually
agreed upon by Company and Supplier.
1. TERM OF DEMAND PULL ARRANGEMENT - The term of the Demand
Pull Arrangement shall be specified in the Demand Pull purchase (DPP) order
acknowledged by Supplier.
2. DEMAND PULL PROCESS - For Demand Pull Material, Company
shall prepare and deliver to Supplier an annual DPP order(s). On Monday of each
week, Company shall provide Supplier with an updated twelve (12) month forecast,
including the Company's reasonable and good faith estimated requirements for a
minimum of the next twenty six (26) weeks, for each Demand Pull Material (the
"Forecast"). The Forecast may also contain authorization by Company to Supplier
to ship within twenty-four hours and Supplier will deliver within the week of
Supplier's receipt of the Forecast provided said Forecast is actually received
on Monday, 100% of the quantity designated in the column entitled "Ship Action"
to be received by Thursday of the current week. Supplier shall reference the
annual DPP order number on its shipping and invoicing documents. The Forecast
shall be for planning purposes only and except to the extent set forth below,
shall not be deemed a commitment by the Company to purchase from Supplier the
amount set forth in the annual DPP order or the Forecast. Company will
acknowledge receipt of Material delivered in the prior week via the succeeding
week's Forecast.
Supplier shall maintain (a) an inventory of inspected finished
Demand Pull Material equal to the amount of such Material forecasted to be used
by the Company during weeks one (1) through three (3) of the then current
Forecast and (b) work in process and/or raw materials and components in the
aggregate sufficient to manufacture such Demand Pull Material equivalent to
weeks four (4) through eight (8) of then current Forecast. From time to time,
the parties will review the foregoing levels of inventory, work in process
and/or raw material and components and will negotiate on lower inventory levels,
work in process and materials and components based on Supplier's satisfactory
demand pull service performance.
Supplier shall review the weekly Forecast and make adjustments
to Supplier's inspected inventory of Demand Pull Material, work in process and
raw materials and components based upon increases/decreases in the Forecast.
Supplier shall be responsible for notifying Company of inventory fluctuations
considered to be excessive by Supplier. If upside fluctuations are deemed
excessive by Supplier, Supplier and Company shall work together on a delivery
plan mutually agreeable to both parties.
The Company's commitment for the purchase of Demand Pull
Material shall be limited to (a) the quantities set forth in the "Ship Action"
column of the Forecast and (b) the finished and inspected by Supplier inventory
of Demand Pull Materials, work in process, raw materials and components as set
forth above.
D-1
<PAGE> 37
The Company's liability for the items above shall be limited
to the sum of (a) the [***]; (b) [***]; and (c) [***]; less (d) [***] set forth
in (a), (b), and (c) of this paragraph. If requested by the Company, Supplier
will substantiate such costs and purchase prices with proof reasonably
satisfactory to the Company.
3. TERMINATION OF DEMAND PULL ARRANGEMENTS - Company may at
any time terminate any or all annual DPP orders, in whole or in part, upon
thirty (30) days written notification to Supplier. Upon receipt of such notice,
Supplier shall immediately stop work as specified in the notice to Supplier.
Company liability to Suppliers with respect to such termination shall be as set
forth in paragraph 2 above. Upon such termination, the parties shall meet
promptly to determine the finished Demand Pull Material, work in process and raw
material and components for which Company is responsible as set forth above.
Supplier shall, at Company's option and expense, ship to Company or scrap such
finished Material, work in process and raw materials and components for which
Company is liable under this Agreement.
4. DEMAND PULL SERVICE PERFORMANCE - The Company intends to
monitor the delivery performance of Supplier via special performance report set
forth in the clause SERVICE. Supplier will strive to achieve or exceed the
service goals established in the clause SERVICE of the Supply Agreement.
- -------------------
*Confidential Treatment Requested
D-2
<PAGE> 38
EXHIBIT E
FLEXIBLE ORDERING AND PAYMENT SPECIFICATIONS
"How to Get Started on Electronic Procurement Communications
with AT&T" dated May 1, 1995 is attached hereto and made part of this
Attachment.
<PAGE> 1
Exhibit 10.38
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 230.406
OEM AGREEMENT
# LGSC103DS
THIS AGREEMENT IS MADE AND ENTERED INTO BY PREMISYS COMMUNICATIONS, INC. AND ITS
PARENT PREMISYS COMMUNICATIONS HOLDINGS, INC., HAVING THEIR PRINCIPAL PLACE OF
BUSINESS AT 1032 ELWELL COURT, PALO ALTO, CALIFORNIA, 94303, A CALIFORNIA
CORPORATION, HEREINAFTER COLLECTIVELY REFERRED TO AS, "SELLER", AND AT&T
PARADYNE CORPORATION, A DELAWARE CORPORATION, HAVING ITS PRINCIPAL PLACE OF
BUSINESS AT 8545 126TH AVENUE NORTH, P.O. BOX 2826, LARGO, FLORIDA 34649-2826,
HEREINAFTER REFERRED TO AS "BUYER".
WHEREAS, Buyer desires to purchase from Seller certain Products as defined
hereinafter.
WHEREAS, Seller desires to supply Buyer with such Products,
The above parties therefore agree that the following mutual promises and
covenants shall govern the sale by Seller, and the purchase by Buyer, of such
Products.
01.0. DEFINITIONS
01.1. EFFECTIVE DATE
The "Effective Date" of this Agreement shall be the date of execution.
01.2. TERM OF AGREEMENT
The initial term of this Agreement shall commence upon the Effective
Date of this Agreement by Seller and Buyer and shall terminate FIVE (50) years
after the Acceptance Date, unless sooner terminated as hereinafter provided.
01.3. PRODUCT
"Product" or "Products" shall mean the Seller's Channel Bank product
line as set forth in Exhibit A, including all associated hardware, software,
firmware, documentation and any enhancements or modifications thereof. This
shall include "New Products" that have been mutually agreed to between the
parties for inclusion into this Agreement.
01.4. RELEASE
"Release" shall mean Buyer's printed, written or Electronic Data
Interchange (EDI) order to Seller specifying Product shipment, quantities and
Buyer's shipment dates.
01.5. SPECIFICATIONS
1.
<PAGE> 2
"Specifications" shall mean those purchase specifications
(#351-0047-0031) for the Product as now set forth in Exhibit B and as modified
from time to time in accordance with this Agreement.
01.6. EPIDEMIC
"Epidemic" shall mean the occurrence of one or more of the following
events:
a. Products that are dead on arrivals (DOA's) exceeding the
greater of three (3) percent of the Products delivered to Buyer or Buyer's
customer within a one month period.
b. Four (4) percent or more of any consecutive one hundred
Products delivered to Buyer or Buyer's customer that are rejected for defective
materials or workmanship.
c. Field repair reports indicate a non conformance to the
Specifications for the same defect of four (4) percent or more of the installed
Product base.
d. Reliability plots of field data for two (2) consecutive
months indicate that Products have an actual mean time between failure (MTBF)
less than eighty percent (80%) of the MTBF specified at one hundred and one
thousand (101,000) hours.
01.7. NEW PRODUCT
"New Product" shall mean any of Seller's products distributed after
execution of this Agreement, that would (i) replace or obsolete existing Product
or (ii) include all existing functions of the Products plus any Enhancements or
(iii) create a more favorable price/performance ratio than the Products.
Further, New Product shall include any new, jointly developed with Buyer or
existing models that offer new features, options or other new technology not
previously offered on existing Products but would otherwise not be offered to
Buyer under the existing Product specifications.
01.8. DELIVERY SCHEDULE
"Delivery Schedule" shall mean the mutually agreed upon date(s) of
shipment of Product to Buyer's customer. This date, that Product is to ship to
Buyer's designated customers, shall also be referred to as the "Scheduled Ship
Date".
01.9. ENHANCEMENT
"Enhancements" shall mean minor modifications or additions to the
Products which shall not materially alter its architecture or fundamental
functionality. Enhancements include substantial cost reductions of Products, or
portions of the Products.
01.10. SOFTWARE
2.
<PAGE> 3
"Software" shall mean any binary product in the form of object code,
whether residing on media loadable into the Products or in the Products as
firmware, and all documentation related to its use.
01.11. SOFTWARE BUG FIX
A "Software Bug Fix" shall mean any Software related defect that has
been fixed in a later revision of software.
01.12. SOFTWARE MAINTENANCE RELEASE
A "Software Maintenance Release" shall mean any Software that has been
revised by including one or more Software Bug Fixes into the base Software.
01.13. SOFTWARE FEATURE RELEASE
A "Software Feature Release" shall mean any Software that has been
revised to include new features or functionally.
01.14. ACCEPTANCE DATE
The "Acceptance Date" of the Product shall mean the date in which the
Buyer agrees that the Product has successfully passes the Buyer's internal
system tests and field beta tests and the product can be introduced into the
Buyer's controlled introduction process.
02.0. PURCHASE AND SALE OF PRODUCTS
02.1. PURCHASE AND SALE
Seller agrees to manufacture the Products released hereunder by Buyer
in accordance with the Specifications and to sell such Products, including any
Enhancements, to Buyer, and Buyer agrees to purchase from Seller the Products on
the terms and conditions and at the prices as hereinafter provided.
02.1.1 NO RESALE RESTRICTIONS
Except as provided herein, nothing contained herein shall be deemed in
any way restrict the rights of Buyer with respect to the resale of the Products
purchased hereunder.
02.2. EXPORTATION
Buyer agrees not to export the Products, or any systems containing the
Products, or any technical data relating to the Products without first obtaining
licenses or any other approvals required by the United States Department of
Commerce or other United States governmental agencies. Buyer agrees not to
export to any prohibited countries listed under the United States Export
Administration Act of 1979 as amended and updated from time to time and the
regulations promulgated thereunder.
3.
<PAGE> 4
02.3. MARKET RIGHTS
02.3.1. WORLDWIDE MARKET RIGHTS
Both Seller and Buyer intend that Buyer and the Buyer's distributors
shall be a primary distribution channel for the Products to end-user customers
for both the domestic and international markets. The Buyer shall have worldwide
distribution rights to sell the Products.
Seller shall assist Buyer in obtaining type approvals and homologation
for Buyer to distribute Products worldwide. Homologation schedules and
distribution of homologation costs are to be mutually agreed upon between the
Buyer and Seller. Seller further agrees where applicable to list Buyer's OEM
name on certificates already earned, where possible.
With respect to non domestic market rights Seller and Buyer agree to
the following:
a. On ore before the effective date of this Agreement, Buyer
will provide to Seller a confidential list (Buyer's list) of those
countries in which Buyer will support sales of the Products through
Buyer's direct sales operations or its in-country distributors. The
Buyer's list will also indicate the names of the distributors that
Buyer intends to use for resale of the Products in each country. Seller
will review the Buyer's list and within ten (10) days after receipt of
such list: i.) Seller shall provide to the Buyer a list (Seller's list)
that specifies any areas of potential conflicts or problems with the
Buyer's list and will specify the names of the distributors within the
countries on the Buyer's list that the Seller is currently in
negotiation with, ii.) Seller further agrees that it will not enter
into any new discussions to add other in-country distributors to the
countries on the Buyer's list for at least six (6) months after the
Effective Date without Buyer's written consent. After Seller has
received Buyer's list and returned to the Buyer the Seller's list, the
Buyer agrees to grant Seller forty five (45) day in which to close on
any distribution agreements that the Seller may have in process.
b. Any time within one year after the Effective Date Buyer may
add countries to the Buyer's list as Buyer requires. The same
guidelines as outlined in item a. of this Section will be used for each
country, with the six month time period starting after Seller receives
Buyer's written request to add the countries to the Buyer's list.
c. Beginning one year after the Effective Date any new
countries added to the Buyer's list, per item a. and b. above, will be
subject to a four month rather than a six month window.
d. Buyer and Seller agree to review at least semi-annually
Buyer's sales performance in each country where it is selling the
Products. If minimal performance objectives are not being met in any
country, Buyer and Seller will implement mutually agreeable programs to
improve sales performance in those countries.
4.
<PAGE> 5
e. Notwithstanding paragraphs a. through d. above, Seller at
its option may sell directly to carriers and service providers, and
OEMs who may sell to these carriers and service providers. However,
Seller agrees to inform Buyer, whenever practical of any opportunity
for sales of Product in those international countries where Buyer has
direct sales channels, except when Seller is unable to do so due to
business conditions including, but not limited to, non-disclosure
agreements, RFPs directed to Seller, and opportunities brought to
Seller by its other partners.
If Buyer wishes to pursue an opportunity brought to Buyer by Seller,
Buyer will provide to Seller a plan to pursue the opportunity in a time
frame in accordance with the following applicable situation:
1) Pursuit of an opportunity for which there is no
pressing deadline from an external entity: Buyer will submit
to Seller a plan within 60 days.
2) Pursuit of an opportunity which is constrained by
a deadline imposed by an external entity. Buyer must submit a
plan to Seller within a time period as required to meet
Seller's needs. Seller shall make every reasonable effort to
maximize the amount of time that the Buyer has to respond.
If rejected by the Seller, Seller will inform Buyer
of the reasons for rejection within four (4) business days and
conversely Buyer has four days to remedy reasons for
rejection, if practical. If accepted, Seller will assist Buyer
in Buyer's plan to pursue that opportunity. Furthermore,
Seller will not pursue direct sales to the identified customer
unless such customer indicates that its does not wish to do
business with Buyer.
In those cases where Buyer has proposed the Product
into an account, and that account subsequently contacts Seller
directly, Seller will inform Buyer as soon as practicable. In
addition, Seller will use all reasonable efforts to maintain
sales of Product through Buyer. If the account informs Seller
that it does not want to purchase from Buyer, Seller may
pursue that business directly. In such cases, Seller will
provide compensation to Buyer in the form of a commission on
revenue for all Products sold to that customer for a 12 month
period. Such commission will be based on the discount that
Seller offers to that customer according to the following
schedule:
<TABLE>
<CAPTION>
Seller's Discount to Purchaser Buyer's Commission
<S> <C>
0 to 15% [***]
15 to 20% [***]
21 to 25% [***]
26 to 30% [***]
31 to 35% [***]
36 to 40% [***]
</TABLE>
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5.
<PAGE> 6
<TABLE>
<S> <C>
41% or more [***]
</TABLE>
All such commission will be in the form of a credit
which Buyer may apply up to 50% of the purchase price of any
future purchases of Products.
In addition, any U.S.-based reseller with which
Seller may have an agreement is not precluded from providing
Product to any of its international customers.
f. Seller agrees to support Buyer's international sales
efforts for the Products without preferential treatment to other
resellers.
With respect to domestic (US) market rights and obligations, Buyer and Seller
agree to the following:
g. For a period of twelve months from the general availability
of the Products to the Buyer's customers ("General Availability
Date"), Seller agrees to limit to twenty (20) the number of
distributors authorized by Seller to sell its products. These
distributors can be either stocking or non-stocking distributors
classified as "VADs" (Distributors) and resellers (exclusive of
OEMs).
h. The limit of twenty (20) distributors in (a) does not apply
to OEMs, telcos, Inter-Exchange Carrier's or other providers or
resellers of telecommunications services. It also does not apply
to wholesale distributors which primarily sell to such
telecommunications service providers. For a period of twelve
months from General Availability Date, such wholesale distributors
shall be limited to four (4) and shall be reviewed with Buyer.
Specific wholesale distributors may change from time to time,
although the number shall be limited to four.
i. If Buyer wishes to pursue an opportunity brought to Buyer
by Seller, Buyer will provide to Seller a plan to pursue the
opportunity in a time frame in accordance with the following
applicable situation:
1) Pursuit of an opportunity for which there is no
pressing deadline from an external entity: Buyer will submit
to Seller a plan within 60 days.
2) Pursuit of an opportunity which is constrained y a
deadline imposed by an external entity: Buyer must submit a
plan to Seller within a time period as required to meet
Seller's needs. Seller shall make every reasonable effort to
maximize the amount of time that the Buyer has to respond. If
rejected by the Seller, Seller will inform Buyer of the
reasons for rejection within four (4) business days and
conversely Buyer has four (4) days to respond, if practicable.
j. Seller agrees to review Seller's present distributors and
future distributors before authorizing distribution or sale of its
Products with the Buyer in order to minimize sales channel
conflict and sales expense for both parties. The intent of these
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6.
<PAGE> 7
reviews is to assure Seller that its desired market coverage is
being met and to assure Buyer that its sales penetration is
maximized.
k. Seller agrees to maintain a minimum differential of 19%,
referenced to Seller's published list price, between the most
favorable VAD or Distributor (not OEM's) contract pricing and that
of the Buyer. In the event of an exception to this for specific
distributor sales opportunities, the Seller shall notify the Buyer
and gain the Buyer's agreement as to the special pricing for that
opportunity.
l. In those cases where Buyer has proposed the Product into an
account, and that account subsequently contacts Seller directly,
Seller will inform Buyer as soon as practicable. In addition,
Seller will use all reasonable efforts to maintain sales of
Product through Buyer. If the account informs Seller that it will
not purchase from Buyer, Buyer shall inform Seller and Seller with
Buyer's approval may pursue that business directly. In such cases,
Seller will provide compensation to Buyer in the form of a
commission on net revenue on all Product sold to that customer for
a 12 month period. Such commission will be based on the discount
that Seller offers to that customer according to the following
schedule:
<TABLE>
<CAPTION>
Seller's Discount to Purchaser Buyer's Commission
<S> <C>
0 to 15% [***]
15 to 20% [***]
21 to 25% [***]
26 to 30% [***]
31 to 35% [***]
36 to 40% [***]
41% or more [***]
</TABLE>
All such commission will be in the form of a credit
which Buyer may apply up to 50% of the purchase price of any
future purchases of Products.
02.3.2. OTHER MARKET RIGHTS
Seller will agree not to enter into any technology transfers,
joint development efforts, manufacturing rights, or distribution agreements for
Products with the following: Codex, Racal-Milgo, N.E.T., Timeplex, Newbridge,
Stratacom, G.D.C., or Gandalf. Buyer and Seller may from time to time add
companies to this list by mutual agreement.
Buyer may provide Seller with a list of it's customers (not to
exceed 1,600) and Seller agrees that it will not pursue direct sales with said
customers. This list may be updated from time to time. Seller agrees that if its
direct sales force attempts to sell Products to customers of Buyer, then Seller
at the request of Buyer will support Buyer in the sale, unless that customer has
stated that it only buys product directly from the manufacturer or will not
purchase Products from the Buyer. Seller in these cases will not show
preferential financial consideration to any of the Sellers
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7.
<PAGE> 8
distribution channels in competitive sales situations. In the event that Seller
does sell under this paragraph, the commission schedule applicable to domestic
sales in sub paragraph 1. shall apply.
02.3.3. RETENTION OF MARKET RIGHTS
In order to retain the preferential market rights specified in
paragraphs 2.3.1. a-d with respect to the international rights, paragraphs
2.3.1. g-j with respect to domestic rights and paragraph 2.3.2 (hereinafter
collectively called "Preferential Market Rights"), Buyer and Seller agree to the
following:
a. From the Effective Date of this Agreement the Buyer agrees to
attempt to achieve purchase objectives of Products of six hundred (600) units by
September 1, 1993, purchases of an additional seven hundred (700) units by March
1, 1994, purchases of an additional one thousand (1,000) units by September 1,
1994, and an additional one thousand four hundred and fifty (1,450) units by
March 1, 1995.
b. Buyer and Seller will review Seller's purchase performance on
said dates. Buyer's Preferential Marketing Rights may thereafter terminate, at
the election of Seller after thirty days written notice, if Buyer failed to meet
the purchase objectives unless Seller was unable to meet Buyer's requested
deliveries during such period, if such requests were consistent with the
forecast provided under section 03.3. The above state performance objectives and
remedies apply solely to the Preferential Marketing Rights and shall in no way
be construed to affect Buyer's other rights under this Agreement or any other
terms and conditions of this Agreement.
c. On or before March 1, 1995, Buyer and Seller shall in good
faith meet and negotiate the six month purchase targets for the remainder of the
term of this Agreement. Absent reaching agreement the Preferential Marketing
Rights shall terminate on March 1, 1995, unless Buyer has offered to attempt to
purchase at least in the aggregate the same number of units purchased during the
prior six months and thereafter such Preferential Marketing Rights shall
terminate.
03.0. ORDERING OR PRODUCTS
03.1. USE OF RELEASES
Buyer shall issue Releases via Buyer's purchase orders, or
customer drop ship orders confirmed in writing and/or via Electronic Data
Interchange (EDI), specifying Buyer's part numbers and/or model numbers,
quantities, prices, destination and Delivery Schedule(s) for the Products
furnished under this Agreement. Releases for Products which are the subject of
this Agreement will be considered released under the provisions of this
Agreement unless otherwise specified in writing. This Agreement will take
precedence over any preprinted terms of Buyer's Releases in the event there are
conflicting or additional terms and conditions.
Seller shall have EDI available, in a format compatible with
Buyer's current software, within six (6) months of the Effective Date of this
Agreement.
8.
<PAGE> 9
Seller shall drop ship Releases and logistics spare parts at
Buyer's request to Buyer or Buyer's customer at locations specified by Releases
as defined, above. Seller shall utilize freight carriers designated by Buyer in
Buyer's Corporate Routing Guide, a copy of which is attached hereto as Exhibit
C, unless otherwise specified on Buyer's Release.
0.3.2. RELEASE ACKNOWLEDGMENT
Seller shall acknowledge to Buyer each Release within 24 hours
where possible, but no more than 48 hours of Seller's receipt of same. Such
acknowledgment shall constitute acceptance of the Release, and Seller will at
the same time confirm the Scheduled Ship Date.
03.3. FORECAST
Buyer will provide a rolling monthly forecast of Buyer's demand
for the Product with visibility for the next six (6) months. The quantity of
Products forecast for the first month of a given forecast will be no more than
one hundred twenty percent (120%) of the Products forecast for the second month
of the immediately prior forecast. This shall hold true for any ninety (90) day
period of the then current monthly rolling forecast. The forecast given for any
period beyond this ninety (90) day window may be increase by any amount.
This forecast will be for planning purposes only.
03.4. RELEASE RESCHEDULE BY BUYER
Buyer has the right to reschedule any Release up to an including
twenty one (21) calendar days before a Release's Scheduled Ship Date. Buyer may
reschedule any Release one (1) time without surcharge within twenty one (21)
calendar days of the Release's Schedule Ship Date. Buyer may reschedule the same
Release additional times upon payment of two (2) percent of the Buyer's purchase
price of such Release or five hundred dollars ($500.00), whichever is less, for
each time the Buyer makes such additional reschedulings. All rescheduled ship
date under this Section shall be no more than thirty (30) days after the then
current ship date for the Release.
Notwithstanding the above, Buyer may reschedule in any manner 100%
of any Release under this Agreement without surcharge or penalty in the event of
Seller's delay in delivery of production quantities of the products ordered in
conformity with this Agreement.
03.5. RELEASE RESCHEDULE BY SELLER
At no time can the Seller reschedule any of the Buyer's Releases
that were previously committed and assigned Scheduled Ship Dates by the Seller
without the express advance authorization of the Buyer. This advance notice of
the Seller's potential rescheduling of the Buyer's Release must be provided to
the Buyer, with all reasonable effort, five (5) business days before the
Release's Scheduled Ship Date.
03.6. RELEASE INCREASE AND RELEASE DECREASE
Notwithstanding anything else in this Agreement to the contrary,
Buyer may, up to and including twenty (21) business days before a Scheduled
Shipment Date, without surcharge or
9.
<PAGE> 10
penalty, increase or decrease the quantity of Products previously ordered for
such shipment. If Buyer increases a Release within twenty (21) business days
before Scheduled Shipment Date for that Release, Seller shall use reasonable
commercial efforts to meet such increased Release. Buyer and Seller shall
negotiate in good faith any associated expediting fees, provided Seller provides
documented evidence of such charges which are agreed to and accepted by Buyer.
03.7. CANCELLATION
Buyer may cancel a Release up to and including twenty one (21)
calendar day before the scheduled ship date without surcharge. Releases
cancelled within twenty one (21) calendar days of the Scheduled Ship Date will
be subject to a [***] percent cancellation charge. This cancellation charge
shall not exceed [***] ($[***]) for any one (1) Release. A Release shall not be
considered to be cancelled where it is immediately replaced by another identical
Release.
Cancellation charges are expressed as a percentage of the Buyer's
purchase price of a Release which would have been applicable had it not been
canceled. Payment of the applicable cancellation charges shall be invoiced by
Seller and paid by Buyer within thirty (30) calendar days of its receipt of such
invoice.
03.8. PRODUCT SHIPMENT AND DELIVERY
03.8.1. EQUIPMENT PACKAGING
Seller shall package Products for shipment in conformance with the
specifications as contained in Exhibit D and will utilize only Electro-Static
Discharge (ESD) protective packaging.
All logistics spares shall be packaged in reusable containers
capable of withstanding shipment to multiple destinations and packaged at the
Field Replacement Unit level (FRU). The outer package will be marked with the
Buyer's model or part number, serial number (if applicable), manufacturing date
and the description of the part ordered.
All Product chassis will be labeled with the Buyer's part number,
model number, serial number and manufacturing date.
All Products will be labeled on the outside of the box with the
Buyer's part number, unit model number, serial number and manufacturing date.
The shipping label and packing slips will state, at a minimum, the
customer's name and telephone number, street address, city, state, zip code,
Buyer's Release number, Buyer's customer purchase order number (if supplied),
and the number of each box of a total box count.
03.8.2. DELIVERY
Until such time as Releases issued and accepted require shipment
in a given month of Products aggregating more than one hundred ten percent
(110%) of the then current forecast
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10.
<PAGE> 11
quantity (pursuant to Section 03.3 above) for that month all shipments will be
made within twenty one (21) calendar days after receipt of Buyer's Release by
Seller, unless a later date is specified on the Release. Otherwise, Seller shall
use reasonable commercial efforts to deliver Products in accordance with the
Delivery Schedules set forth in any Release issued and accepted in conformity
with this Agreement. Seller shall ship to the locations designated by Buyer.
Seller will provide proof of delivery for all shipments to Buyer's customers, if
requested by Buyer. Seller will drop ship Product to Buyer's customers. Seller
will not ship any of the Buyer's Release short any parts on the Release without
the approval of Buyer.
03.8.3. F.O.B. POINT
Shipments of Product shall be F.O.B. Seller's manufacturing
facility in the domestic United States. Freight charges for shipments of Product
will be billed third party to Buyer's freight account unless otherwise specified
on the Release. Seller will comply with all shipping instructions specified in
the Buyer's Routing Guide. Title to shipped Products and risk of loss passes to
Buyer upon delivery of the Product to Buyer, Buyer's Customer, Buyer's Agent, or
designated common carrier at the F.O.B. point specified above. Insurance
coverage on all shipments will be the responsibility of the Buyer.
Seller will bear the cost of transportation for non-conforming,
and defective in warranty material.
03.9. SHIPMENT ACKNOWLEDGMENT
Seller will provide Buyer with a shipment acknowledgment form
within twenty four (24) hours of the shipment to the Buyer's customer. Buyer
will include at a minimum, the serial number of the unit, the date shipped, the
part number and quantity shipped, the carrier name, and the waybill number on
the shipment acknowledgment form.
04.0. PRICES
Buyer and Seller agree that the Seller's list prices, Buyer's
purchase prices and discount levels for the Products are as set forth in Exhibit
A for the term of this Agreement unless changed and amended as mutually agreed
by the parties. The parties agree that it is in their mutual interest to meet
semi-annually to review market position, market pricing, competition, pricing
structures, manufacturing costs, product improvements and sales plans to
determine ways to increase market shares and reduce costs. Based on the above
semi-annual meeting the then current pricing and discount structures will be
established. Mutually agreed upon recommendations will be set forth for the
relevant party to pursue to enhance market position, reduced costs, increased
sale efficiency or gain additional market share. Both parties agree to
establish, on or before three months after the Effective Date of this Agreement,
the appropriate measurements and to share the cost information with one another
in an effort to establish a baseline for these evaluations. The parties will
make every reasonable effort to reduce cost in their respective areas, as a
goal, by seven (7) percent per year.
11.
<PAGE> 12
Should any recommendation result in a cost savings to either
party, the parties agree to share in these benefits. Information regarding the
savings or cost reductions will be shared between the parties. Resulting savings
will be allocated between the parties semi-annually on a [***] percent ([***]%)
- - [***] percent ([***]%) basis. The party responsible for implementing the
saving will receive [***] percent ([***]%), and the other party will receive
[***] percent ([***]%) of the resulting saving.
Prices are exclusive of all sales, use, property, and the like
taxes. Any such tax Seller may be required to collect or pay upon the sale or
delivery of the Product shall be paid or collected by the Buyer and such sums
shall be promptly due and payable to Seller by Buyer under the payment terms of
the Agreement; however, Seller agrees to accept valid tax exemption documents in
lieu of payment where applicable.
04.1. TERMS OF PAYMENT
Seller shall render and date its invoice and shipment
acknowledgment form for any Products it shall deliver hereunder to Buyer or
Buyer's customer concurrent with the shipment of such Product. Terms of payment
are net thirty (30) days from the date of invoice. Incorrect invoices will be
returned unpaid for correction, with every reasonable effort, within seventy-two
(72) hour of receipt.
0.4.2. TAXES
Buyer shall bear all applicable federal, state, municipal, and
other government taxes (such as sales, use or similar taxes) and all personal
property taxes assessable on the Products after delivery to the carrier by
Seller unless Buyer provides Seller with a proper tax exempt certificate. Custom
duties and brokerage fees incurred due to a shipment to Buyer's customer shall
be borne by Buyer.
04.3. CASH ADVANCE
Buyer agrees to provide Seller certain cash advances in accordance
with Exhibit G. The amounts reflected in Exhibit G represent the parties' best
estimate of shipments to occur during the period specified; in the event actual
shipments vary from those set forth in Exhibit G, the amounts will be adjusted
accordingly. In addition, if the Agreement terminates before the Net Balance on
Account (as set forth in Exhibit G) reaches zero, Seller will remit to Buyer any
such outstanding balance within thirty (30) days of the effective date of
termination.
05.0. WARRANTY AND LIMIT OF LIABILITY
05.1. WARRANTY PERIOD
Seller warrants that the Products will conform to the applicable
Specifications set forth in Exhibit B and will be free from defects in materials
and workmanship under normal use for a period of sixty (60) months after
shipment from Seller's plant. Buyer's inspection, approval,
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12.
<PAGE> 13
acceptance, use of or payment for all or any such Product shall be deemed not to
constitute a waiver of any warranty or of any term or condition hereof.
05.2. BREACH
In the event of a breach of warranty, Buyer shall provide Seller
with the opportunity to inspect and test product claimed to be defective on
Buyer's premises, or if Seller deems it necessary, at Seller's factory.
Corrective action required on the part of Seller is contingent upon Seller's
examination disclosing that claimed defects have not been caused by misuse,
abuse, neglect, unauthorized alteration or modification, improper installation
or mishandling. The liability of Seller is limited, at the option of Seller, to
either (1) repair of the defective Product or (2) the replacement by Seller at
its cost of the defective Product, or (3) refund of the purchase price of the
defective Product, in the event that the previously stated remedies are not
reasonably available. Whenever the preceding remedies are not practicable, Buyer
may, at its option, remedy any defect in the Product using available parts and
other resources to accomplish such repair or replacement. Buyer's actions under
such condition will be considered to be "authorized" by Seller so that warranty
and the correction of further deficiencies will not be affected. Unless
otherwise agreed to in writing, Seller will bear all costs associated with
correction of the Product, including Buyer's labor, incurred to identify,
remove, package, ship, reinstall and test the replacement for the defective
Product up to a maximum of two (2) times the Buyer's total purchase price of the
defective Product. All transportation and insurance costs, whether incurred by
Buyer or Seller are Seller's responsibility. In the event that Seller can
demonstrate to Buyer's satisfaction that Buyer's claim of breach of warranty is
invalid, e.g., the claimed defect cannot be duplicated or was caused by Buyer's
actions (except as provided above), or that the Product was incorrectly
diagnosed as defective by Buyer, then the above remedies do not apply to the
respective Product which Buyer claimed to be defective. Other remedies and
obligations pertaining to other equipment/Product are unaffected.
05.3. WARRANTY RESPONSE TIME
Buyer, if practicable, shall use its spare parts inventory to
effect immediate replacement of the defective item(s) and return the defective
item(s) to Seller for repair/replacement. Seller will effect the
repair/replacement and return the item(s) to Buyer within fifteen (15) days
after receipt of the defective item(s); however, Seller will respond to
emergency situations by immediately shipping Product on hand within twenty four
(24) hours.
05.4. WARRANTY LIMITATION
THE ABOVE WARRANTIES COVERING THE PRODUCTS DO NOT INCLUDE AND
SELLER DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. THE PROVISIONS OF THIS CONTRACT ARE SELLER'S SOLE OBLIGATIONS, AND
BUYER'S EXCLUSIVE REMEDIES, FOR BREACH OF ANY WARRANTY, EXCEPT FOR THE
PROVISIONS OF THE PARAGRAPH ENTITLED "EPIDEMIC". UNDER NO CIRCUMSTANCES SHALL
SELLER BE LIABLE IN ANY WAY TO BUYER FOR INDIRECT, SPECIAL OR CONSEQUENTIAL
DAMAGES, INCLUDING BUT NOT LIMITED TO, ANY LOSS OF BUSINESS OR PROFITS,
13.
<PAGE> 14
WHETHER OR NOT FORESEEABLE AND WHETHER OR NOT BASED ON BREACH OF WARRANTY, IN
CONNECTION WITH THE SALE OF PRODUCTS.
05.5. WARRANTY EXCLUSIVITY
The warranties of Seller contained herein extend solely to Buyer
and shall only be enforceable by Buyer. Seller makes no warranty to any persons
other than Buyer.
06.0. QUALITY ASSURANCE
Notwithstanding the post-acceptance obligations of Seller, Buyer
has a significant interest in the quality of the Product. Because the Product
has a useful life expectancy greater than the warranty obligation period and
because of the goodwill lost by malfunctioning Products even though they may be
corrected at Seller's expense, it is agreed by Buyer and Seller that without
limiting or abridging Buyer's rights to inspect the Product prior to acceptance
or Seller's post-acceptance obligations, the following provisions shall apply to
ensure acceptable quality for Products manufactured for Buyer under the terms of
this Agreement:
06.1. QUALITY CONTROL MONITORING
At any and all reasonable times during the term of this Agreement,
provided Buyer has notified Seller at least two (2) days in advance, Buyer's
representatives shall have access to Seller's facilities to monitor its quality
control system.
06.2. QUALITY CONTROL MAINTENANCE
Seller shall maintain the quality control system mutually agreed
upon at the Effective Date and as specified in the Specifications. Changes to
such documents must be submitted to Buyer.
06.3. ACCEPTANCE TESTS
Acceptance test procedures for final manufacturing testing are as
set forth in Exhibit E of this contract.
06.4. SOURCE INSPECTION
All Products shall be subject to inspection and test by Buyer at
Seller's facility if Buyer so desires. Buyer may, at its option, implement a
sampling inspection with lot rejection in accordance with an appropriate
sampling plan and inspection procedure to be accomplished at Seller's facility.
If any inspection or test is made on Seller's premises, Seller shall, without
additional charge, provide all reasonable facilities and assistance for the
safety and convenience of Buyer's inspector subject to the security and safety
regulations existing at the facilities.
06.5. WORKMANSHIP STANDARDS
14.
<PAGE> 15
All Products shall be in compliance to the Buyer workmanship
standards, IPC 610, as a minimum criteria of workmanship.
06.6. ISO 9000 COMPLIANCE
Seller shall, with every reasonable effort, apply for ISO 9001
registration by October 30, 1993 and be registered by March 30, 1994.
06.7. SELLER/BUYER CONTINUOUS IMPROVEMENT EFFORTS
Buyer and Seller mutually agree to develop continuous improvement
task teams in an effort to reduce costs in both processes and Products that will
mutually benefit both parties in the areas of:
a. Target Costs
b. Cost Reduction Efforts, including both materials and processes
c. On Time Shipments as measured by Customer Request Date and
Scheduled Ship Date.
d. Repair Data, including DOA's, Infant mortality and Root Cause
Analysis.
e. Cycle Time Reductions, including Manufacturing, Repair, Release
Processing Spare Parts Delivery and Others.
f. Electronic Data Interchange (EDI).
07.0. INSPECTION
07.1. INSPECTION AT DESIGNATED DELIVERY LOCATION
Within thirty (30) days of the receipt of any Product at its
designated delivery location, Buyer may submit such Product to the criteria as
set forth in the Specification, Section 4.2, entitled "Acceptance Testing",
attached hereto and made a part of this Agreement. Buyer shall be entitled to
reject any product that fails to conform to the Purchase Specifications. Notice
of any such rejection shall be issued within five (5) business days by Buyer to
Seller.
Upon rejection, Buyer will notify Seller of such rejection and
cause for rejection and return the entire shipment or any portion, to Seller.
Seller accepts all cost of rejected lots, including but not limited to shipping
charges back to Buyer, any insurance costs, and all risk of loss (F.O.B.
Destination) for rejected Products. If Seller does not receive such notice of
any such rejection from Buyer within thirty (30) calendar days after shipment of
Product, such Product shall be deemed accepted by Buyer for purposes of this
Section 7. Any Products returned under this Section 7 will be shipped by a
carrier selected by Seller, or Seller will be liable for freight charges at a
rate equivalent to Buyer's documented freight rates. If it is determined that
any Products returned by Buyer under this Section 7 are conforming to the
Specification then (i) Seller shall utilize such Products for Buyer's releases
and Buyer shall, notwithstanding anything to the contrary in this Section 7, pay
for the expenses associated with Buyer's original return of such Products to
Seller under this Section 7.
15.
<PAGE> 16
Notwithstanding the foregoing, damage to Products caused by
Buyer's Shipper shall not be considered a nonconformity to the Specification.
07.2. INSPECTION AT SELLER'S LOCATION
Buyer may, at its option, inspect the Product at Seller's facility
prior to shipment. Buyer's inspection shall be done by its designated
representative (hereinafter referred to as "Representative") who will be
permitted by Seller to witness the Acceptance Test of Product purchased by Buyer
hereunder. In the event that the Representative ascertains that an item of
Product is defective, said Representative will advise Seller's authorized
personnel and such defect shall be remedied prior to shipment. Rejected lots (or
Products) will then be corrected and re-submitted for re-inspection at Seller's
expense. All Products shall be subject to inspection and test by Buyer at
Seller's facility if Buyer so desires. Buyer may, at its option, implement a
sampling inspection with lot rejection in accordance with an appropriate
sampling plan and inspection procedure to be accomplished at the Seller's
facility. If any inspection or test is made on Seller's premises, Seller shall
without additional charge, provide all reasonable facilities and assistance for
the safety and convenience of Buyer's inspectors subject to the security and
safety regulations existing at the facility. Seller shall take the
responsibility to coordinate all source inspection schedules to allow Seller to
meet the Scheduled Ship Dates committed by Seller to Buyer.
07.3. QUALITY LEVEL REQUIREMENTS
Seller shall maintain the quality levels specified in the
Specifications. Seller shall be responsible for any and all reasonable
inspection costs resulting from Seller being disqualified from the surveillance
plan as set forth in the Specifications after the first six (6) months from the
initial shipment of the Products under this Agreement. The first six (6) months
will be the quality history and data collection period.
07.4. FIRST INSTALL SUPPORT
Seller will provide, at Buyer's request, at locations selected by
Buyer and at no cost to Buyer, technically competent personnel and any
necessary spare parts to assist in the identification and resolution of any
performance problems which jeopardize the progress of the first four (4)
installations of the Product in the continental United States. Seller will also
provide, at Buyer's request, any performance information available which could
assist Buyer in an evaluation of Product performance.
08.0. SELLER'S LEGAL AUTHORITY
Seller represents and warrants that it presently has and will
retain the unencumbered legal authority to convey to Buyer the title, rights
and licenses to the Products, and that the performance by Seller of its
obligations hereunder is not and will not be in violation of the rights of any
third party. The foregoing representation and warranty does not apply to the
infringement by the Products of proprietary rights, for which Section 16.7.
below sets forth the exclusive remedy.
09.0. COMPLIANCE TO STANDARDS
09.1. SELLER'S CERTIFICATION REQUIREMENTS
Seller agrees, at its expense and a mutually agreeable schedule,
to obtain the applicable approvals and certifications of FCC, UL, CSA, BSI,
BABT, DOC and VDE, and other safety and emission standards as listed in the
Purchase Specifications # 351-0047-0031, for equipment supplied by Seller.
Sellers shall obtain such approvals and certifications prior to
the shipment of any Products requiring such approvals. If Seller cannot meet
his requirement, Seller shall so advise Buyer in writing. Buyer, at its option,
may grant limited waivers to receive such non-compliant Product. Seller agrees
to assure that all Product shipment made to countries outside of the
Continental United States will be certified and approved to the appropriate
levels as required by said countries. All cable purchased under this Agreement
must meet the applicable UL and CSA requirements.
09.2. BUYERS CERTIFICATION REQUIREMENTS
Buyer shall be responsible for obtaining all required approvals
and certifications for its product incorporating Seller's Product, at its
expense. Seller agrees to consult with Buyer in connection with Buyer's
applications for such approvals and certifications and to provide testing, data,
and documentation in connection therewith.
09.3. BUYERS REMEDY FOR NON-COMPLIANCE
If Seller ships Product to Buyer or Buyer's customer in violation
of Section 09.1 above then Buyer may, at its option, (1) terminate this contract
in its entirety, (2) terminate its obligations within the contract for the
Product or Products not in compliance (including terminating any outstanding
Releases for such Products) without liability or consequence and without
affecting any other Products that may be a part of this contract, (3) waive any
or all of these compliance requirements for any Release of such Product(s)
without waiving the requirement for full compliance of all other Products
shipped if applicable, such waiver to be in accordance with Section 16.14.,
"WAIVER", (4) hold the Seller responsible for the reimbursement of all costs
incurred by the Buyer or Buyer's customer, to include but not be limited to
penalties, agency fees and shipping charges, for such non-compliant product.
10.0. PRODUCT CHANGES
10.1. PRODUCT CHANGES BY BUYER
In the event that a change to the Specifications or a modification
to the Products is requested by Buyer:
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a. Buyer shall advise Seller of the requested change.
b. Seller, after reviewing the requested change, shall within the
time periods specified in Section 7.0 of the Specification advise Buyer of the
costs and length of time to effect such change. The lead time into production
and the per unit price change, if any. Seller shall not implement such change
without Buyer's prior written consent. Seller is under no obligation to make any
changes requested by Buyer without Seller's agreement.
Seller shall not implement such change without producing required
engineering change requests in accordance with Section 7.0 of the
Specifications.
In the event Seller's quote time to effect the requested change
and the lead time into production is not acceptable to Buyer based on Buyer's
good faith analysis of its market requirements, Buyer will so notify Seller. At
Buyer's request, the parties will negotiate in good faith a mutually acceptable
development and production schedule and Seller will provide Buyer a revised
non-reimbursable engineering ("NRE") cost and per unit price change estimate
within sixty (60) days of such request. Buyer will then have thirty (30) days to
elect to have Seller implement such modification at Buyer's expense. In the
event Seller wishes to provide the modification to its third party customers,
Seller and Buyer will negotiate, prior to delivery of the modification to any
such customer, a reasonable schedule for reimbursing Buyer for its payments of
NRE costs.
If Seller is unwilling or unable to undertake the requested
modification project, it will promptly inform Buyer, and Buyer will have the
option, exercisable within sixty (60) days of Seller's notification, to
undertake the modification project itself. If Buyer exercises such option,
Seller will promptly provide Buyer such Manufacturing Information reasonably
required to product a Modified Product (as defined below), and will grant Buyer
a non-exclusive, non-transferable license (i) to use, copy and modify the
applicable Manufacturing Information to product the Modified Product, and (ii)
subject to agreement on appropriate license and/or royalty fees to be paid to
Seller (to be negotiated in good faith by the parties), to use and distribute
the Modified Product Developed by Buyer in accordance with the terms of this
Agreement.
Notwithstanding the foregoing, the obligations of Seller under the
preceding paragraph are conditional upon Buyer's ability to secure such
manufacturing licenses or other proprietary rights of third parties, if any, as
may be required to undertake any modifications or produce or distribute Modified
Products. Seller agrees to provide reasonable assistance to Buyer to secure such
rights. Moreover, Seller's obligations under this Section shall not apply to any
requested modification to the extent Seller's compliance with the provisions of
this Section would breach Seller's obligations to a third party.
For the purposes of this Section, "Modified Product" shall mean a
Product (such as a voice card, WAN card or other separately identified product)
which is the subject of the modification and in which the modification is
incorporated.
10.2. NEW PRODUCT DEVELOPED BY SELLER
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If Seller develops a New Product, Seller shall notify Buyer in
writing at least thirty (30) days prior to the time of the initial public
announcement of such New Product, unless other terms are mutually agreed upon,
in advance and in writing, by the parties. At the time of such written notice,
Seller shall also provide to Buyer the available specifications, description,
and technical data necessary to evaluate the New Product. Further, Seller shall
notify Buyer when a working model of the New Product is available for an
engineering evaluation. Buyer reserves the right to replace an existing Product
with the New Product for all future Releases at the time the New Product is
offered commercially and at a price which is mutually agreeable.
10.3. PRODUCT CHANGES BY SELLER
Seller shall not change the Specifications or make any engineering
changes to the Products affecting form, fit, function, backward compatibility,
or spare parts without Buyer's prior written approval. Buyer will approve or
disapprove any such change within the time periods as specified in Section 7.0
of the Specification. If the Buyer's disapproval is not given within such time
periods of receipt of such notice, Seller shall be authorized to make the
necessary change, unless otherwise mutually agreed to by the parties. However,
Seller may change the Specifications or Products without Buyer's prior written
approval if such changes are for reasons of Product safety, certification
compliance or to avoid or eliminate any actual or alleged infringement or
potential infringement by the Product of any patent or copyright. Seller will
provide Buyer all necessary documentation concerning any change by Seller, as
outlined in Section 7.0 of the Specification, at least 30 days prior to the
first shipment of changed Product.
10.4. PRODUCT DISCONTINUANCE
Seller agrees to notify Buyer at least fifteen (15) months prior
to the discontinuance of any Products listed in Exhibit A of this Agreement
provided Buyer agrees to reasonably cooperate with Seller to shorten this notice
period. New Products that are introduced to replace a discontinued Product will
be functionally equivalent or better than the Products being replaced, and the
terms and conditions in section 10.0. of this Agreement related to functional
equivalence will apply to all proposed New Products.
10.5. PRODUCT COLOR AND LOGO
Seller will paint, logo and label the Product to the
specifications provided by the Buyer, which include the Buyer's Paint/Finish and
Color, Corporate Logo Guidelines, and Corporate Product Marking Specifications.
Seller agrees to complete this task, with every reasonable effort, 90 days after
a written request has been received from the Buyer. All non-recurring expenses
will be the responsibility of the Seller. If this Agreement is terminated prior
to the Buyer purchasing one thousand (1000) Products than the Buyer will
reimburse the Seller for all reasonable non-recurring expenses.
11.0. MARKETING LITERATURE/MANUALS
11.1. SALES KITS/LITERATURE
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Sample sales literature, specification sheets and other materials
of an inexpensive nature will be provided free of charge as these materials
become available. Seller shall, at the time of execution of this agreement,
provide Buyer an initial quantity of one thousand five hundred (1500) marketing
brochures. Costlier items such as point of purchase kits, merchandising kits,
demonstration programs, etc., will be provided free of charge in single
quantities or in quantities deemed reasonable by the Seller. Additional
quantities of such items as previously stated will be offered by Seller to Buyer
at Seller's cost.
11.2. MANUAL UPDATES
Seller shall provide, in electronic format where possible, Buyer
with timely updates for manuals designated as deliverable with the Product and
those necessary for Product support.
11.3. MANUAL DEVELOPMENT
Seller and Buyer agree to jointly develop a marketing guide for
this Product. This marketing guide should be completed three (3) months after
this agreement has been executed. Buyer agrees to bear the costs of the
production and duplication for this document.
12.0. SELLER'S COPYRIGHTED MATERIALS
Seller agrees to grant and hereby grants to Buyer a worldwide,
paid-up right to reproduce and distribute any copyrightable materials owned by
Seller that Seller makes generally commercially available to end-users of the
Products. Such materials shall include, but not be limited to, end-user
documentation, software and firmware fixes and maintenance releases (provided
that Buyer may only distribute such updates to end-users of the Products solely
for use with the Products), marketing materials, and technical bulletins. The
Buyer's name and trademarks can be used on such material. The Seller's name and
trademarks can be used on such material provided that each item of such material
shall contain trademark notices as may be reasonably requested by Seller to
protect Seller's trademark rights. Each item of such material shall the
statutory copyright notices.
13.0. CUSTOMER SERVICE SUPPORT
13.1. INITIAL DOCUMENTS
Upon the execution of this Agreement, if not previously furnished,
or as soon thereafter as possible, but in no event later than sixty (60) days
prior to the schedule delivery of the first production unit, the Seller shall
furnish, at Buyer's option, and if generally commercially available from Seller,
the following:
13.1.1. SELLER TECHNICAL MANUALS
One reproducible copy of the Seller technical manuals.
13.1.2. LINE ART AND ILLUSTRATIONS
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Reproducible (quality black on white first generation printed
copy) full sized copy of all line art and illustrations.
13.1.3. PARTS LIST
Parts breakdown within each Technical Manual. The parts breakdown
will list the part numbers of the typical field replaceable assemblies, to
include, but not be limited to, printed circuit board assemblies, power
supplies, and socket mounted chips.
13.2. DOCUMENT UPDATES
During the term of this Agreement, Seller shall provide the
following to Buyer Customer Service, if generally available from Seller:
13.2.1. TECH BULLETINS/SERVICE AIDS
A copy of Seller generated technical bulletins, subsystem service
aids and other instructions to the field covering problems, changes in
maintenance practices, parts, tools, etc.
13.2.2. DATA PACKAGE
For each Product model the applicable current data package shall
include, but is not limited to, flyers, boilerplates technical specification
lists, and other pertinent documentation intended for use by the Buyer's
customer or support personnel.
13.2.3. SPECIFICATION CHANGE REPORTS
Provide Buyer with copies of any changes of the Specifications of
the Product or any part, or any changes in the documentation or publications
itself. Such reports must be submitted within 30 days of publication by Seller.
13.2.4. SERVICE LITERATURE
Service literature shall consist of, but is not limited to,
troubleshooting guides, test data, service bulletins, training guides, other
media training tools (videos, computer based training software, course
development tools and information, self-study guides, etc.), application notes,
part numbers, and catalogs and will be made available to Buyer at Seller's cost.
Buyer may copy these materials for providing maintenance to its own customers
(in accordance with Section 12.0.).
13.3. TRAINING
13.3.1. INITIAL TRAINING
Seller shall provide free of charge, at a mutually agreed upon
time, training at Buyer's Customer Service Headquarters in Largo, Florida in the
selling, marketing, operation, installation, maintenance and board level
diagnosis, if board level diagnosis is applicable, of Product for the Buyer's
personnel. Training will be of a level and of such depth that qualified Buyer's
personnel
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so trained can, in turn, train other qualified Buyer's personnel. This training
shall be jointly developed and reviewed for acceptance by the Buyer. Such
training shall include the following courses and materials offered at no charge:
a. Three (3) training sessions for up to twelve (12) of Buyer's
Customer Service employees which may be recorded in audio or video by the Buyer
for its later use in training employees and any third party support as approved
by Seller.
b. Two (2) training sessions for up to a total of twenty-five (25)
of Buyer's Sales, Marketing and/or System Engineering personnel. This training
shall consist of sufficient information to properly sell and market the Products
and should include subject matter concerning the following items: new or
enhanced applications, new or enhanced feature/functionality, and competitive
market information.
c. All manuals and other course materials will be provided free of
charge for such training courses. Buyer may copy such materials in accordance
with Section 12.0. of this agreement.
13.3.2. NEW OR IMPROVED PRODUCT TRAINING
If additional or New Products (as defined in 1.7.) are added to
this Agreement or improvements or Enhancements are made by Seller to Products
purchased by Buyer then as mutually agreed to by the parties Seller shall
provide training in accordance with Section 13.3.1.
13.3.3. SUPPLEMENTAL TRAINING
Supplemental training will be provided at times and locations
mutually agreeable to both parties at Seller's then-current most favorable
charges for training.
If the training is to be performed in Seller's facilities, Seller
shall furnish all necessary course material required for such training. Buyer
shall bear the cost of travel and living expenses of its personnel.
If training is to be performed at other than Seller's facilities,
Buyer shall reimburse Seller for reasonable travel expenses incurred by Seller's
personnel to the extent that such expenses arise directly from training being
performed at other than Seller's facilities. In such cases Buyer shall provide
adequate training facilities and training equipment. Seller will provide all
appropriate training materials as specified in Section 13.3.1.
13.4. SUPPORT
Seller shall, at all times, have available to Buyer qualified
System Engineering and/or Customer Service Engineering support and personnel to
provide telephone assistance in resolving field installation, configuration, and
maintenance problems encountered by Buyer. If Seller is unable to solve Buyer's
problems via telephone, Seller shall, at Buyer's expense and within twenty-four
(24) hours after notice from Buyer, supply technical personnel competent to
resolve the problem at Buyer's designated location at Seller's then prevailing
rate per day, plus travel, living, and incidental expenses, (excluding First
Install Support Section 7.4). However, to the extent that the problems
encountered by Buyer are due to "Epidemics" as defined in Section 1.6,
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Seller shall provide personnel, if necessary, at a representative site until the
problems are resolved, without charge to Buyer.
13.5. SPARE PARTS
13.5.1. SPARE PARTS DELIVERY
Subject to the provisions of Section 13.5.2. below, Seller shall
use best efforts to ship spare parts in accordance with Buyer's schedules;
provided, however, such schedules allow Seller at least the following
lead-times, after receipt of Buyer's Releases, to ship the parts Release(s):
TYPE OF RELEASE LEAD-TIME FOR SHIPMENT (ARO)
Emergency Releases 24 HOURS
Initial Provisioning 90 Calendar Days
Replenishment Releases 21 Calendar Days (if forecasted)
90 Calendar Days (if unforecasted)
Buyer requests for shipments sooner than the lead-time set forth above are
subject to Seller's agreement.
13.5.2. LIST OF SPARE PARTS AND SUPPLIERS
Seller will provide Buyer with a list of those Seller's vendors
who are suppliers to Seller of spare parts for Products. Seller will also
provide Buyer with a recommended spare parts list. Such lists will be provided
to Buyer within thirty (30) days after execution of this Agreement.
13.5.3. SPARE PARTS AVAILABILITY WARRANTY
Seller shall stock sufficient quantities of spare units and spare
parts to insure twenty-four (24) hour response time. Seller will ship such
emergency Releases to the location identified by Buyer. Buyer will pay for any
shipping and handling charges.
13.6. REPAIR AND REFURBISHMENT SERVICES
13.6.1. REPAIR COST PRICE WARRANTY
Seller warrants that the prices charged and/or discounts granted
for the sale and repair of Products and spare parts will not be any less
favorable than prices charged and/or discounts granted by Seller to any Seller's
authorized wholesale distributors who purchase similar value of spare parts
under similar terms and conditions. This section shall survive the termination
of this agreement until Seller is no longer obligated to provide support under
Section 13.6.3.
13.6.2. REPAIR/REFURBISHMENT SERVICES BY SELLER
Seller shall provide repair and refurbishment services for
Products listed under Exhibit A which are no longer under warranty. For Products
manufactured by Seller within three (3)
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years of the date such repair or refurbishment is requested, prices for such out
of warranty repair and refurbishment shall not exceed twenty percent (20%) of
the then current Buyer's purchase prices. For Products returned for repair and
refurbishment under this section for which no defect is found, a charge not to
exceed seven percent (7%) of the then current Buyer's purchase price or fifty
(50) US dollars, whichever is greater, will be assessed for test and handling.
Products shall be returned to Seller freight prepaid. Seller shall complete
authorized services and reship to Buyer freight prepaid within fifteen (15) days
after receipt of the Products and authorization from Buyer. Seller warrants that
any out of warranty Products repaired and/or refurbished by Seller will be in
conformance with the Specifications and free from defects in material and
workmanship for a period, from date of shipment to Buyer, of 12 months.
Seller agrees to provide information and training to Buyer that
will allow Buyer to establish and maintain an authorized pass/fail test for the
Products. Seller further agrees to provide Buyer, if necessary, any special
materials, piece parts or test equipment required for this pass/fail test at
Seller's current cost for such items.
13.6.3. REPAIR PERIOD
Seller agrees to repair a particular type of Product for a period
of at least five (5) years following delivery of the last unit of such Product
delivered under this Agreement. Seller agrees to provide and maintain an
adequate stock of parts peculiar to the Product during this time period.
Further, Seller will provide Buyer a last buy opportunity on any components or
sub-assemblies to be discontinued or no longer available.
13.6.4. REPAIR/REFURBISHMENT SERVICES BY BUYER
Buyer shall have the right to perform repair and refurbishment of
the Product. Seller shall, not later than thirty (30) days after Buyer's written
request, provide Buyer with a reproducible copy of all normal Product
documentation and manuals necessary for Buyer to repair/refurbish and test the
Products, and shall throughout the term of this Agreement furnish reproducible
copies of any changes to such information. In the event that
repair/refurbishment of the Products require use of special material, tools,
fixtures, jigs, apparatus or parts of Seller's design, Buyer shall have the
right to purchase such items from Seller or its suppliers.
This information shall be treated as proprietary.
14.0. REMEDIES
14.1. TERMINATION
14.1.1. INSOLVENCY
If either party ceases doing business as a going concern, becomes
insolvent, suffers or permits the appointment of a receiver for its business or
assets or shall avail itself of, or become subject to, any proceeding under the
Federal Bankruptcy Code of 1978, (as amended), or any statute of any state
relating to insolvency or the protection of the rights of creditors, then (at
option of the other party) this Agreement shall terminate and be of no further
force and effect.
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14.1.2. FOR BREACH
Either party may terminate this Agreement if the other party is in
material breach and has failed to cure such breach within forty-five (45) days
after receipt of written notice thereof. Amounts withheld from Seller for reason
of valid dispute shall be excluded.
14.2. MANUFACTURING RIGHTS
A perpetual, royalty free, license to manufacture the Products
listed in Exhibit A shall be granted to Buyer under the following conditions:
a. Discontinuance of Product or support of Product listed in
Exhibit A.
b. New Product (as defined) replaces or obsoletes existing
Product but New Product fails to meet Buyer's Specification.
c. Seller becomes insolvent.
If more than thirty percent of the voting stock of Seller shall be under the
control of a competitor of Buyer, Buyer shall have, upon such occurrence, an
immediate right and license to manufacture the Products subject to a reasonable
license fee, to be agreed upon by the parties. Absent such agreement, the
determination of such fee shall be subject to arbitration under Section 16.19.
Buyer will have the right to withdraw the Manufacturing Information contained in
the escrow account for manufacturing the Products.
Notwithstanding the foregoing, the obligations of Seller under the
preceding sentence are conditional upon Buyer's ability to secure such
manufacturing licenses or other proprietary rights of third parties, if any, as
may be required to manufacture such Product. Seller agrees to provide reasonable
assistance to Buyer to secure such rights including the assignment of its rights
under such licenses.
Furthermore Seller will grant to Buyer the license to manufacture
the Products listed in Exhibit A under the following conditions: (1) Seller is
in material breach of this Agreement and such breach in not cured within the
time period specified in Section 14.1.2.; and (2) Buyer is not currently
manufacturing the Products, listed in Exhibit A, under a different agreement
with the Seller. The parties agree that the following will apply:
a. The Seller shall retain all the intellectual property rights to
the Products.
b. Seller shall maintain full Product revenue recognition for the
Products during this period. The transfer pricing guidelines between the parties
shall be as follows:
1. The Buyer's Manufacturing Costs shall consist of materials,
labor, overhead and a fifteen (15) percent profit margin for
each Product manufactured.
2. The Transfer Price shall be the price as stated in Exhibit
A, under the heading "AT&T Purchase".
3. The Seller's Current Manufacturing Cost shall be that price
which is being paid by the Seller to its current subcontract
manufacturer.
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4. If the Buyer's Manufacturing Costs are less than the
current Transfer Price but greater than the Seller's Current
Manufacturing Cost then the Buyer will sell the Product to the
Seller at the Buyer's Manufacturing Costs, and the Seller will
in turn sell the Product back to the Buyer at a price which is
the higher of (1) the Transfer Price or (2) one hundred six
(106) percent of the Buyer's Manufacturing Costs.
5. If the Buyer's Manufacturing Costs are greater than the
Seller's Current Manufacturing Cost and is greater than or
equal to the Transfer Price then the Buyer will sell the
Product to the Seller at the Buyer's Manufacturing Costs, and
the Seller will in turn sell the Product back to the Buyer at
a price not to exceed one hundred six (106) percent of the
Buyer's Manufacturing Cost.
6. If the Buyer's Manufacturing Costs are less than or equal
to the Seller's Current Manufacturing Cost then the Buyer will
sell the Product to the Seller at the Seller's Current
Manufacturing Cost, and the Seller will in turn sell the
Product back to the Buyer at the Transfer Price.
7. Both parties agree to share cost data sufficient to
evaluate adherence to the above requirements.
c. Where the Seller is able to cure the material breach outside of
the time periods specified in Section 14.1.2. and has proven to the Buyer that
the material breach has been cured, the Seller will be granted the option to
discontinue the Buyer's right to manufacture the Products under the following
conditions:
1. The Seller must reimburse the Buyer for all customary and
reasonable costs incurred in the start up phases of the Buyer
manufacturing processes; and
2. Seller cannot discontinue the Buyer's right to manufacture
until one (1) year has expired after the Buyer has begun
manufacture of Products.
14.3 ESCROW
Seller certifies it will deposit all Manufacturing Information,
including the items listed in Exhibit F, for Buyer to manufacture the Products
listed in Exhibit A, with an escrow agent within forty five (45) days of signing
this Agreement. The escrow account will be updated on a monthly basis or as
appropriate, but no less than every three (3) months, to insure that all
technical information remains current.
A mutually acceptable escrowee is to be selected within forty-five
(45) days of the effective date of this Agreement. Seller and the escrowee agree
to maintain materials in escrow. Seller agrees to initiate the immediate release
of all materials in escrow upon receipt of request from Buyer under the
existence of the conditions for release specified in Section 14.2., of this
Agreement entitled "Manufacturing Rights".
14.4. EPIDEMIC
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If an Epidemic shall occur at any time prior to the expiration of
this Agreement, then Seller shall, as mutually agreed to by the parties, do the
following at Seller's expense:
a. Forthwith investigate the same and determine its cause;
b. Supply on-site technical support and all necessary parts to
repair or replace Product known to be affected by the Epidemic;
c. Permit Buyer to return all known defective Product of the same
model designation and all effected spare parts not field repaired or replaced
which were affected by the Epidemic to Seller's factory for either repair or
replacement at no charge to Buyer (and Seller shall pay all shipment costs both
to and from Seller's factory);
d. Ensure that the appropriate quality controls and other measures
are taken so that all Product of similar type supplied subsequent to the date of
such an Epidemic shall not have the problems which caused the Epidemic.
15.0. FORCE MAJEURE
Neither party hereto shall be deemed to be in default of any
failure in performance of this Agreement, resulting from acts beyond the control
of such party but only during the time period that such Force Majeure event is
in affect. For the purposes of this Agreement, such acts shall include but not
be limited to, Acts of God, civil or military authority, civil disturbances,
war, strikes, fires, other catastrophes, or other "force majeure" events beyond
the parties control. The party whose performance is affected by a force majeure
event must provide to the other party a written notice of a force majeure event
within two (2) days after the force majeure event occurs. If the force majeure
condition precludes performance for more than forty five (45) days, then the
other party may elect to terminate this Agreement without additional liability
to either party.
16.0. GENERAL
16.1. RENEWAL
This Agreement may be renewed, as mutually agreed to by the
parties, for successive one (1) year periods after the expiration of the initial
term. Notice of renewal must be in writing and submitted to the other party at
least sixty (60) days prior to the end of the initial term or any renewal term,
provided that prior to the commencement date of a renewal term the parties shall
have agreed to the purchase price and purchase commitments applicable to such
renewal term.
16.2. SUCCESSORS AND ASSIGNS
Except as otherwise provided in this section, the rights and
duties of Buyer and Seller hereunder are personal to them and are not assignable
or delegable; any assignment or attempted assignment of rights or delegation of
duties shall be void except for the assignment of receivables for financial
reasons. Either party may assign this Agreement to a parent, subsidiary, or
affiliated entity or to another entity in connection with the sale or transfer
of substantially all of its business assets provided the non-assigning party is
notified promptly of such assignment and such assignee undertakes in writing to
assume the obligations of this Agreement.
16.3. MOST FAVORED CUSTOMER
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Notwithstanding any other provisions of this Agreement, all of the
prices, warranties, and terms granted by Seller to Buyer hereunder are hereby
warranted by Seller to be comparable to, or more favorable to Buyer than the
equivalent prices, warranties, and terms that have been offered by Seller to any
other Customer during the period from the effective date of this Agreement to
its termination. If at any time during this period, Seller shall have contracted
with any other Customer for the identical or substantially similar Product as
listed in Exhibit A hereto, on a basis that provides prices, warranties or terms
to that customer more favorable than those provided to Buyer hereunder, then:
Seller shall within thirty (30) days after the effective date of such other
contract 1) notify Buyer in writing of such fact, explaining the more favorable
basis in detail and 2) regardless of whether such notice is sent by Seller or
received by Buyer, this Agreement shall be deemed to be automatically amended,
effective retroactively to the effective date of such other contract, to offer
the same prices, warranties, or terms to the Buyer. The provision of this clause
shall survive the closing and termination of this Agreement.
16.4. INDEMNITY
Seller agrees that it will indemnify and hold harmless Buyer
against and from any and all claims, damages, and liability, including expenses
and reasonable attorneys' fees, suffered by Buyer resulting from personal injury
and/or tangible property damage to third parties, including without limitation,
Buyer's employees, caused by the failure of the Products to conform to
Specifications or defects in materials and workmanship of the Products, or the
negligent acts of Seller, arising out of the performance under this Agreement or
Seller's breach of this Agreement; provided, however, that this obligation shall
not cover any damage to the Products themselves. Buyer agrees that it will
indemnify and hold harmless Seller against and from any and all claims, damages
and liability, including expenses and reasonable attorneys' fees, suffered by
Seller resulting from personal injury and/or tangible property damage to third
parties, including without limitation Seller's employees, caused by defects in
components supplied by Buyer and incorporated into the Products, or the acts of
Buyer or buyer's breach of this Agreement provided that such defects in such
components do not result from defects in the Products. In the event any claim
covered by this indemnity is asserted against either party, the other party
shall provide reasonable cooperation and assistance in the defense thereof and
the other party will grant the indemnifying party control over the defense of
any action.
16.5. TRADEMARKS AND TRADENAMES
Buyer may use Seller's trade name, trademarks and product names
only in connection with Buyer's distribution of the Products and in a format and
style approved by Seller. Buyer will use such trademark notices as may be
reasonably requested by Seller to protect Seller's trademark rights.
16.6. PROPRIETARY INFORMATION
Certain data or information disclosed by the Seller may be
proprietary in nature and must be so marked or identified ("Proprietary
Information") or if provided orally or visually the aforementioned information
must be claimed as such and provided to the other party in writing, within
thirty (30) calendar days of the date of disclosure. Buyer agrees to take all
reasonable
27.
<PAGE> 28
measures to protect Proprietary Information and, without limiting the foregoing,
agrees to exert at least the same effort to prevent disclosure of such
Proprietary Information as it would its' own proprietary information and to not
disclose any part thereof without the Seller's written consent (such consent not
be unreasonably withheld). Notwithstanding any provisions herein concerning
non-disclosure of the Proprietary Information, Buyer shall have no obligations
hereunder for any such information which Buyer can document 1) is already known
to Buyer at the time Seller disclosed such Proprietary Information to Buyer, 2)
is or becomes known to the general public through publications, inspection of
Product or otherwise and through no wrongful act of Buyer, 3) is received from a
third party without that party's breach of disclosure restriction and without
breach of this Agreement, 4) is shown to have been independently developed by
Buyer, 5) is disclosed to a third party by Seller without a similar restriction
on the third party's rights, or 6) is approved for release or use by written
authorization of Seller. The obligations of this section shall survive
termination of this Agreement for a period of two (2) years. Seller retains
exclusively for itself all proprietary rights in and to all designs, engineering
details, and other data pertaining to all Products.
16.7. PATENT/COPYRIGHT INFRINGEMENT INDEMNIFICATION
Seller is unaware of any claim, either threatened or impending,
that the Products infringe any patent, trademark or copyright. Seller agrees to
indemnify and hold harmless Buyer from and against all damages, liability and
cost suffered or incurred as a result of any claim that any Products furnished
pursuant to this Agreement constitutes an infringement of any patent, trademark
or copyright provided that Buyer gives Seller reasonable notice of any such
claims. Said indemnification shall extend only to damages assessed against or
costs incurred by Buyer as the result of a judgment rendered by a court of last
resort or a court of lower jurisdiction from which no appeal has been taken
holding that any Product, spare parts and documentation furnished pursuant to
this Agreement constitutes an infringement of any patent, trademark or
copyright, or to any settlement of such claim consented to in writing by Seller.
Buyer shall not be entitled to recover from Seller any loss of profits suffered
by Buyer as a result of such infringement or alleged infringement.
At the request and expense of Seller, Buyer shall assist and
cooperate with Seller in defending against any such alleged infringement. It is
agreed that Seller shall undertake the sole and complete defense of any such
claim of infringement through counsel of its own choice and at its expense. In
case any Product is held to constitute an infringement in such suit or
proceeding and the use of said Product is enjoined, Seller shall, at its own
expense and option, either (a) procure for Buyer the right to continue using
such Product, (b) modify said Product so as to render it non-infringing, or (c)
accept the return of said Product and refund the purchase price. The provisions
of this Section shall not apply with respect to any claim of patent, trademark,
or copyright infringement based solely on the components added to the Products
by Buyer. Further the provisions of this Section shall not apply if the
infringement arises out of a modification of said Products after delivery by
Seller. The rights granted to Buyer under this section 16.7. are Buyer's sole
and exclusive remedy for any alleged infringement of any proprietary rights of
any kind.
16.8. INDEPENDENT CONTRACTOR
28.
<PAGE> 29
It is understood and agreed that nothing stated in the Agreement
shall be construed as creating the relationship of employer and employee or
principal and agent between the parties hereto. Buyer and Seller shall be deemed
independent contractors at all times with respect to their performance and
neither shall have the right or authority to assume or create any obligation,
express or implied, on behalf of the other except as may be otherwise provided
herein. Neither Buyer nor Seller will use any words, perform any act, or make
any statement, written or oral, which would imply or indicate, or tend to imply
or indicate, that it or its business is an agent or representative of the other
party; an agency, division, subsidiary, or branch of the other; or that one, in
any manner, either directly or indirectly, owns, controls, maintains, or
operates the other or its business. Neither party is in any manner responsible
or liable for the other's obligations; nor does any relationship exist between
Seller and Buyer, other than that of independent contractor.
16.9. GOVERNING LAW
This Agreement shall be governed by and construed according to the
laws of the State of Florida.
16.10. SEVERABILITY
If any provisions of the Agreement shall be held invalid, illegal
or unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
16.11. NOTICES
Every notice or other communication required or contemplated by
this Agreement by either party shall be delivered by (a) personal delivery, (b)
certified or registered mail (postage prepaid, return receipt requested), or (c)
"tested telecopy" (a telecopy for which the proper answer back has been
received) addressed to the parties for whom intended at the following address:
If to Seller, at the following address:
Premisys Communications, Inc.
1032 Elwell Court
Suite 111
Palo Alto, California 94303
Attn: Robert Dilfer
Telecopy Number: (415) 940-7713
If to Buyer, at the following address:
AT&T Paradyne
8545 126th Avenue North
P.O. Box 2826
Largo, Florida 34649-2826
29.
<PAGE> 30
Attn: Subcontracts Manager
Telecopy Number: (813) 530-2623
or at such other address as the intended recipient previously shall have
designated by written notice to the other party. Notice by mail shall be
effective on the date it is officially recorded as delivered to the intended
recipient by return receipt or equivalent. All notices and other communication
required or contemplated by this Agreement delivered in person or sent by
"tested" telecopy shall be deemed to have been delivered to and received by the
addressee and shall be effective on the date of the personal delivery or on the
date sent, respectively. Notice not given in writing shall be effective only if
acknowledged in writing by a duly authorized representative of the party to whom
it was given.
16.12. ENTIRE AGREEMENT
This Agreement, including any exhibits attached hereto,
constitutes the entire Agreement and supersedes all prior communications,
representations, agreements, understandings, either verbal or written, between
the parties with respect to the subject matter hereof. This Agreement may not be
altered, modified, amended or otherwise changed except by supplemental written
agreement signed by duly authorized officers of both parties.
16.13. AUTHORITY TO COMMIT
Buyer and Seller each represent and warrant that the
representatives executing this Agreement are duly authorized and empowered to
sign on their behalf.
16.14. WAIVER
A waiver by either party of any default of the other party shall
not be deemed to be a continuing waiver or a waiver of any other default or of
any other provision of this Agreement, but shall apply solely to the instance to
which the waiver is directed.
16.15. PRIVACY
Neither Buyer nor Seller shall, without first obtaining the other
party's written authorization, in any manner disclose the terms and conditions
of this Agreement; (except as may be necessary to perform in accordance with the
terms of this Agreement or as required by law), or any information in any way
related to this Agreement, or any Release or the business of the other party.
16.16 SURVIVING PROVISIONS
The rights and obligations of Buyer and Seller arising under the
Sections 5.0., 13.6.3., 16.4., 16.5., 16.6., and 16.7. shall survive the
termination of this Agreement for a period of three (3) years unless otherwise
stipulated elsewhere.
16.17. ORDER OF PRECEDENCE
30.
<PAGE> 31
If acknowledgments and invoices are issued on Seller's standard
forms containing printed terms and conditions therein, then such printed terms
and conditions shall be of no force and effect. The terms and conditions of this
Agreement shall take precedence over Buyer's Releases terms and conditions. The
Specifications and other such documents made as part of this Agreement shall
take precedence over any other such documents not attached or referenced within
this Agreement.
16.18. HEADINGS NOT CONTROLLING
Headings used in this contract are for reference only and shall
not be deemed a part of this contract.
16.19. ARBITRATION
Except as provided herein, any controversy or claim arising out of
or related to this Agreement, or the breach hereof, will be settled by
arbitration before a panel of one arbitrator in ORLANDO, FLORIDA, in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitrator will have knowledge of and
experience with the telecommunications industry. The arbitration hearing will
commence within ninety (90) days after appointment of the arbitrator. Unless the
arbitrator finds that exceptional circumstances justify delay, the hearing will
be completed and an award will be rendered in writing within ninety (90) days
after the commencement of the hearing. The arbitrator shall include in the award
the prevailing party's costs of arbitration and reasonable fees of attorneys,
accountants and other professionals connected with the arbitration.
Seller or Buyer will not be required to arbitrate any dispute
relating to actual or threatened unauthorized use or disclosure of its
confidential information or violation of its proprietary rights in the Products,
jointly or individually developed products or enhancements thereto, or their
designs.
16.20. FEES
In any suit or arbitration to enforce this agreement, the
prevailing party will have the right to recover its costs and reasonable fees of
attorney, accountants, and other professionals.
17.0. ADDITIONAL AGREEMENTS
It is the intent of both the Buyer and the Seller to review as
required the need to amend this agreement or to enter into new agreements for
the mutual benefit of the parties.
Buyer and Seller agree to meet at least every six (6) months to
review market conditions and business opportunities that may require new
agreements to increase sales, market share and/or market position. Such
agreements may include, but are not limited to bi-lateral technology transfer,
joint development of new products, or enhancements to existing Products.
31.
<PAGE> 32
Should these meeting identify a market opportunity for either
party, Buyer and Seller agree to enter into "Good Faith" negotiations toward an
Agreement that benefits both parties.
18.0. MANUFACTURING
Buyer shall have the right to become a primary manufacturing
source for the Seller's Products and New Products, at the Buyer's or any of it
affiliate's manufacturing locations, if it can meet or beat the material terms
and conditions of Seller's then current primary manufacturing source. All bids
shall be fairly reviewed by the Seller for meeting product manufacturing and
quality standards that the Seller would propose to any other sub-contract
manufacture. Seller agrees to share all manufacturing cost data for the Products
with the Buyer and to actively pursue the exchange of the manufacturing
information required for the Buyer to submit such a bid. If the bid to
manufacture the Products is rejected by Seller, Seller will within ten (10) days
of such rejection submit to the Buyer a memorandum detailing the reason why the
bid was rejected.
If during the term of this Agreement Buyer elects to manufacture
the Products for its customers at its facilities or any affiliated facility,
then Buyer shall have such right provided the transfer price to Seller is no
greater than the aggregate of the costs Seller would have otherwise incurred if
manufacturing had been done by its then existing supplier, assembly was done by
the Seller (including freight, duty, testing, inspection) and any other costs
that Seller would have otherwise incurred.
For any products or enhanced products jointly developed by the
parties pursuant to Section 17.0., both parties will have the rights to
manufacture and market (such marketing rights subject to limitations contained
in this agreement) such products. If Buyer develops enhanced products it shall
have the right to manufacture and sell such products subject to a reasonable
royalty for any incorporated Seller proprietary technology.
19.0. SOFTWARE
19.1. SOFTWARE LICENSE
Buyer acknowledges and agrees that the Products contain software
and firmware (the "Software") that is not sold to Buyer. Seller hereby grants
Buyer and Buyer's authorized distributors a license to reproduce and distribute
the Software to and sublicense end-users of the Product to use the Software
solely in connection with the Products.
The Buyer shall sublicense the Software under a license agreement
with the Buyer's end user customer that contains substantially the same
provisions as are contained herein and Buyer will ensure that its distributors
also comply with this requirement.
19.2. SOFTWARE AVAILABILITY
All software will be made available to the Buyer in both a hard
coded (firmware EPROM, etc.) and a soft coded copy (diskette, tape, etc.) as
deemed necessary by the Buyer for the particular application.
32.
<PAGE> 33
19.3 SOFTWARE WARRANTY
Seller agrees that the Software shall be warranted to the same
terms and conditions as specified for the Products.
19.4 SOFTWARE MODIFICATIONS
Seller agrees to provide Buyer with two (2) master copies of all
requested Software Bug Fixes, Software Maintenance Releases and the associated
documentation at no charge for the term of this Agreement. All Software Feature
Releases will be provided to the Buyer at a cost mutually agreed to by the
parties and in accordance with Section 16.3 of this Agreement. If Software Bug
Fixes are incorporated into the Software Feature Releases and not made available
as a Software Maintenance Release then the Software Feature Release will be
provided, as requested, to the Buyer at no charge.
All Software Bug Fixes and Software Maintenance Releases will be
made available to the Buyer on the day that it is generally available. All
Software Feature Releases will be available to the Buyer as required by the
Buyer. All technical documentation for a Software Feature Release will be
available to the Buyer in a camera ready state thirty (30) days prior to the
general availability of such release.
19.5. SOFTWARE SUPPORT
Seller agrees to provide support services to the Buyer for the
Software in accordance with the support provisions as defined for the Products
of this Agreement. Seller further agrees to coordinate the prioritization of all
Software problems as reported by the Buyer into the follow on releases based
upon the priorities reviewed with the Buyer. The Seller will issue monthly
reports to the Buyer covering status of the Software problems, current time
frames for repair, current development testing and results. Software for which
new versions have been issued will continued to receive support for two (2)
years post issuance of versions by Seller.
Seller agrees to provide a single point of contact within their
development organizations for consultation, defining unique features,
establishing priorities for unique features, new Software Feature Releases
information, establishing priorities, status and results for Software Bug Fixes.
Seller agrees to provide support service response times for
Buyer's Software reported problems, proposed changes and Enhancements (also
referred to by Buyer as Modifications Requests (MR)) as specified in the
Specification.
20.0. SIGNATURE
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date(s) set forth below.
AT&T PARADYNE CORPORATION
33.
<PAGE> 34
BY: /s/ J. P. Hectus
TITLE: Sr. V.P., CEO and Treasurer
DATE: 12/4/92
PREMISYS COMMUNICATIONS, INC.
BY: /s/ Raymond Lin
TITLE: President / CEO
DATE: 12/4/92
PREMISYS COMMUNICATIONS HOLDINGS, INC.
BY: /s/ Raymond Lin
TITLE: President / CEO
DATE: 12/4/92
34.
<PAGE> 35
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 1
PAGE 1 OF 4
DATE: 7/8/93
PREMISYS COMMUNICATIONS, INC.
1032 ELWELL COURT
PALO ALTO, CALIFORNIA 94303
Agreement number LGSC103DS, dated and signed, December 24, 1992, by and between
Premisys Communications Inc. and AT&T Paradyne will be amended as follows:
1.0 Exhibit A, Product Model Numbers/Descriptions/List Prices/Discount Levels,
is hereby deleted in its entirety and replaced by a new Product Model
Numbers/Descriptions/List Prices/Discount Levels, Exhibit A, revision 1, dated
7/8/93, attached hereto and made a part hereof.
2.0 All other term and conditions of the above stated Agreement remain
unchanged.
This Amendment shall be effective for all Releases received by Premisys for AT&T
Paradyne on or after August 1, 1993.
ACCEPTED: July 16, 1993 ACCEPTED: July 19, 1993
AT&T Paradyne Premisys Communications, Inc.
By: /s/ James L. Slattery By: /s/ Raymond Lin
Title: Sr. Vice President, Secretary & Title: President / CEO
General Counsel
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTION
AMENDMENT NUMBER 1 - LGSC103DS
1 - 07/08/93
<PAGE> 36
COMPANY CONFIDENTIAL INTERNAL USE ONLY
PREMISYS COMMUNICATIONS, INC.
IMACS/800
PRICE LIST EFFECTIVE AUGUST 1, 1993
<TABLE>
<CAPTION>
U.S.
LIST AT&T AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE DISCOUNT
<S> <C> <C> <C> <C> <C>
Common Equipment:
8901 25801 AC power supply [***] [***] [***]
8902 25802 DC power supply [***] [***] [***]
8903 25803 -48V DC converter [***] [***] [***]
8904 25804 -48V Ringing generator [***] [***] [***]
8918 25800 Universal enclosure with installation kit [***] [***] [***]
8920 25816 Interface card with 2,400 baud modem [***] [***] [***]
8800 25806 CPU control card with 2 T1/E1 bus-connect [***] [***] [***]
(non-redundant) [***] [***] [***]
8804 CPU control card with 4 T1/E1 bus-connect [***] [***] [***]
(redundant-capable) [***] [***] [***]
8801 25807 CPU control card with cross-connect [***] [***] [***]
(redundant-capable) [***] [***] [***]
T1/E1 WAN Cards:
8000 25811 Single T1/E1 line interface [***] [***] [***]
8010 25812 Dual T1/E1 line interfaces [***] [***] [***]
8014 Dual T1/E1 line interfaces with 1 x 3 relays [***] [***] [***]
811 25814 DSX/CEPT plug-in module [***] [***] [***]
812 25815 CSU plug-in module [***] [***] [***]
Voice Cards:
8108 25819 8-port, 2-wire E&M/TO [***] [***] [***]
8118 25821 8-port, 4-wire E&M/TO [***] [***] [***]
8119 8-port, 4-wire E&M/TO - Extended Range [***] [***] [***]
8128 25823 8-port, 2-wire FXS/FXSDN/PLAR/DPO - 900 Ohm [***] [***] [***]
8129 8-port, 2-wire FXS/FXSDN/PLAR/DPO - 600 Ohm [***] [***] [***]
8138 25826 8-port, 2-wire FXO/FXODN/MRD/DPT - 900 Ohm [***] [***] [***]
8139 8-port, 2-wire FXO/FXODN/MRD/DPT - 600 Ohm [***] [***] [***]
Data Cards:
8202 25826 2-port RS-530/V.35 super-rate data [***] [***] [***]
8212 25827 2-port V.35 super-rate data [***] [***] [***]
8215 4-port RS-530/V.35 super-rate data [***] [***] [***]
8220 25828 10-port RS-232C sub-rate data [***] [***] [***]
8248 5-port OCU-DP [***] [***] [***]
8249 25829 2-port OCU-DP with error correction [***] [***] [***]
8254 25883 4-port DSO-DP/G.703 co/contra directional [***] [***] [***]
Other Cards:
8401 25830 External alarm card [***] [***] [***]
</TABLE>
* Confidential Treatment Requested
2.
<PAGE> 37
<TABLE>
<CAPTION>
U.S.
LIST AT&T AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE DISCOUNT
<S> <C> <C> <C> <C> <C>
Cables and Accessories: [***] [***] [***]
1106 RJ48 to 2 BNC Adapter (for E1) [***] [***] [***]
1114X 25881 5-ft RJ48M to DB25M Cross-Over Cable (for SRU) [***] [***] [***]
1114M 25882 5-ft RJ48M to DB25M Straight-Thru Cable (for SRU) [***] [***] [***]
1121 25888 50-Pin to 2 RJ48 Adapter with Test Jacks (for T1) [***] [***] [***]
1161 25880 50-Pin to 8 RJ48 Adapter (for T1) [***] [***] [***]
1203X 25858 5-ft DB25M to V.35M Cross-Over Cable (for V.35 HSU) [***] [***] [***]
1203M 25885 5-ft DB25M to V.35M Straight-Thru Cable (for V.35 HSU) [***] [***] [***]
1204X 25858 5-ft DB25M to RS530M Cross-Over Cable (for RS530M HSU) [***] [***] [***]
1204M 25857 5-ft DB25M to RS530M Straight-Thru Cable (for RS530M HSU) [***] [***] [***]
1207 25863 6-ft 3-to-4 50-Pin E&M Cable (All Male Connectors) [***] [***] [***]
1208 25860 6-ft 3-to-1 50-Pin FXS Cable (All Male Connectors) [***] [***] [***]
1208 6-ft 3-to-1 50-Pin TO Cable (All Male Connectors) [***] [***] [***]
1210 25861 5-ft 50-Pin Male to Male Amphenol Cable (for Multiple Uses) [***] [***] [***]
1212X 25883 5-ft DB25M to RS449M Cross-Over Cable (for RS449 HSU) [***] [***] [***]
1212M 25882 5-ft DB25M to RS449M Straight-Thru Cable (for RS449 HSU) [***] [***] [***]
1215X 25885 5-ft RJ48M to DB15F Cross-Over Cable (for PBX) [***] [***] [***]
1215M 25864 5-ft RJ48M to DB15M Straight-Thru Cable (for CSU) [***] [***] [***]
1216F 25852 15-ft RJ48M to DB25F Straight-Thru Cable (for VT100) [***] [***] [***]
1216M 25851 15-ft RJ48M to DB25M Straight-Thru Cable (for VT100) [***] [***] [***]
1217 25854 25-ft RJ11M to RJ11M Cable (for Modem) [***] [***] [***]
1220 25877 25-ft 50-Pin Male to Female Amp/Champ Extension Cable [***] [***] [***]
1221 25878 25-ft DB25M to DB25F Extension Cable (for RS232 operation) [***] [***] [***]
1222 25875 25-ft DB25M to DB25F Extension Cable (for RS530 operation) [***] [***] [***]
1224 25874 25-ft DB25M to DB25F Extension Cable (for V.35 operation) [***] [***] [***]
1230 1-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***] [***]
1231 25853 25-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***] [***]
1232 25873 50-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***] [***]
1233 25872 100-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***] [***]
1239 Y Adapter for WAN Card Redundancy (Bus Connect Systems) [***] [***] [***]
1240 5-inch DB25M to DB25F RS530 Adapter Cables [***] [***] [***]
1251 25869 RS-530 to V.35 Personality Module [***] [***] [***]
1252 25870 RS-530 to RS-232 Personality Module [***] [***] [***]
1255 25871 RS232/RS-232 DB25 Female-to-Female Gender Changer [***] [***] [***]
1257 25885 V.35 M34 Female-to-Female Gender Changer [***] [***] [***]
1258 25888 RS449 DB37 Female-to-Female Gender Changer [***] [***] [***]
1263X 5-ft DB28M to V.35M (M34) Cross-Over Cable (for 4-port HSU) [***] [***] [***]
1263M 5-ft DB28M to V.35M (M34) Straight-Thru Cable (for 4-port HSU) [***] [***] [***]
1264X 5-ft DB28M to RS530M (DB25) Cross-Over Cable (for 4-port HSU) [***] [***] [***]
1264M 5-ft DB28M to RS530M (DB25) Straight-Thru Cable (for 4-port HSU) [***] [***] [***]
1265X 5-ft DB28M to RS449M (DB37) Cross-Over Cable (for 4-port HSU) [***] [***] [***]
1285M 5-ft DB28M to RS449M (DB37) Straight-Thru Cable (for 4-port HSU) [***] [***] [***]
1288 25-ft DB28M to DB28F Extension Cable (for V.35 operation) [***] [***] [***]
1289 25-ft DB28M to DB28F Extension Cable (for RS530/RS449 operation) [***] [***] [***]
1604 25888 M88 Block with 2 Female 50-Pin Amp/Champ Connectors [***] [***] [***]
1609 25887 Type 1 Dual Tap Adapter with 2 RJ48X Jacks (for T1) [***] [***] [***]
</TABLE>
* Confidential Treatment Requested
3.
<PAGE> 38
<TABLE>
<CAPTION>
U.S.
LIST AT&T AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE DISCOUNT
<S> <C> <C> <C> <C> <C>
Factory Upgrades:
6001 Model 8800 CPU to Model 8804 CPU [***] [***] [***]
6002 Model 8800 CPU to Model 8801 CPU [***] [***] [***]
6003 Model 8804 CPU to Model 8801 CPU [***] [***] [***]
</TABLE>
- --------------------------
* Confidential Treatment Requested
4.
<PAGE> 39
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 2
PAGE 1 OF 5
DATE: 3/17/94
PREMISYS COMMUNICATIONS, INC.
1032 ELWELL COURT
PALO ALTO, CALIFORNIA 94303
Agreement number LGSC103DS, dated and signed, December 4, 1992, by and between
Premisys Communications Inc. and AT&T Paradyne will be amended as follows:
1.0 Exhibit A, Product Model Numbers/Descriptions/List Prices/Discount Levels,
dated 7/8/93, is hereby deleted in its entirety and replaced by a new Product
Model Numbers/Descriptions/List Prices/Discount Levels, Exhibit A, dated
3/17/94, attached hereto and made a part hereof.
2.0 All other term and conditions of the above stated Agreement remain
unchanged.
This Amendment shall be effective for all Releases received by Premisys for AT&T
Paradyne on or after March 15, 1994.
ACCEPTED: March 30, 1994 ACCEPTED: March 30, 1994
AT&T Paradyne Premisys Communications, Inc.
By: /s/ Mike Kazban By: /s/ Robert M. Lefkowits
Title: Product Manager Title: V.P. of Marketing
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTION
AMENDMENT NUMBER 2 - LGSC103DS
1 - 3/17/94
<PAGE> 40
COMPANY CONFIDENTIAL
PREMISYS COMMUNICATIONS, INC.
IMACS
PRICE LIST EFFECTIVE MARCH 15, 1994
<TABLE>
<CAPTION>
U.S.
LIST AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE
<S> <C> <C> <C> <C>
Common Equipment:
8901 25801 AC power supply [***] [***]
8902 25802 DC power supply [***] [***]
8903 25803 -48V DC converter [***] [***]
8904 25804 -48V Ringing generator [***] [***]
8916 IMACS/600 Universal enclosure with installation kit [***] [***]
(cover not included)*
8918 25800 IMACS/800 Universal enclosure with installation kit [***] [***]
8920 25816 Interface card with 2,400 baud modem [***] [***]
8800 25806 CPU control card with 2T1/E1 bus-connect (non [***] [***]
redundant)
8801 25807 CPU control card with cross-connect (redundant-capable) [***] [***]
8804 CPU control card with 4 T1/E1 bus-connect (redundant- [***] [***]
capable)
T1/E1 WAN Cards:
8000 25811 Single T1/E1 line interface [***] [***]
8010 25812 Dual T1/E1 line interfaces [***] [***]
8014 Dual T1/E1 line interfaces with 1 x 3 relays [***] [***]
811 25814 DSX/CEPT plug-in module [***] [***]
812 25815 CSU plug-in module [***] [***]
Voice Cards:
8108 25815 8-port, 2-wire E&M/TO [***] [***]
8118 25821 8-port, 4-wire E&M/TO [***] [***]
8119 8-port, 4-wire E&M/TO - Extended Range [***] [***]
8128 25823 8-port, 2-wire FXS/FXSON/PLAR/DPO - 900 ohm [***] [***]
8129 8-port, 2-wire FXS/FXSDN/PLAR/DPO - 600 ohm [***] [***]
8138 25825 8-port, 2 wire FXO/FXODN/MRD/DPT - 900 ohm [***] [***]
8139 8-port, 2-wire FXO/FXODN/MRD/DPT - 600 ohm [***] [***]
Data Cards:
8202 25826 2-port RS-530/V.35 super-rate data [***] [***]
8212 25827 2-port V.35 super-rate data [***] [***]
8213 2-port RS-530/RS-368/V.25bls super-rate data* [***] [***]
8215 4-port RS-530/V.35 super-rate data [***] [***]
8220 25828 10-port RS-232C sub-rate data [***] [***]
8224 4-port RS-232C sub-rate data* [***] [***]
8230 8-port subrate FRAD card* [***] [***]
8248 5-port OCU-DP [***] [***]
845 5-port OCU-DP child card* [***] [***]
8249 25829 2-port OCU-DP with error correction [***] [***]
8254 25883 4-port DSO-DP/G.703 co/comtra directional [***] [***]
Server Cards:
8840A ISDN PRI server card - 1 D channel* [***] [***]
8840B ISDN PRI server card - 2 D channels* [***] [***]
8840C ISDN PRI server card - 8 D channels* [***] [***]
Other Cards:
8401 25830 External alarm card [***] [***]
Network Management Software:
7002B PremLink Network Management (base license)* [***] [***]
7002U PremLink Network Management (additional user workstation) [***] [***]
* - consult factory for delivery lead times
</TABLE>
* Confidential Treatment Requested
2.
<PAGE> 41
<TABLE>
US
LIST AT&T
MODEL NUMBER PEC CODE DESCRIPTION PRICE PRICE
<S> <C> <C> <C> <C>
Cables and Accessories: [***] [***]
1106 RJ48 to 2 BNC Adapter (for E1) [***] [***]
1114F 25882 5-ft RJ48M to DB2SF Straight-Thru Cable (for SRU) [***] [***]
1114M 25882 5-ft RJ48M to DB2SM Straight-Thru Cable (for SRU) [***] [***]
1114X 25881 5-ft RJ48M to DB25M Cross-Over Cable (for SRU) [***] [***]
1118 25-ft RJ48M to RJ48M Silver-Satin Cable (for OCU-DP) [***] [***]
1121 25866 50-Pin to 2 RJ48 Adapter with Test Jacks (for T1) [***] [***]
1181 25880 50-Pin to 8 RJ48 Adapter (for T1) [***] [***]
1201F 15-ft DB9 to DB2SF Straight Thru [***] [***]
1201M 15-ft DB9 to DB25M Straight Thru [***] [***]
1203F 25855 5-ft DB25M to V.3SF Straight-Thru Cable (for V.35 HSU) [***] [***]
1203M 25855 5-ft DB25M to V.35M Straight-Thru Cable (for V.35 HSU) [***] [***]
1203X 25856 5-ft DB25M to V.35M Cross-Over Cable (for V.35 HSU) [***] [***]
1204F 25857 5-ft DB25M to RS59OF Straight-Thru Cable (for RS530 HSU) [***] [***]
1204M 25857 5-ft DB25M to RS53OM Straight-Thru Cable (for RS530 HSU) [***] [***]
1204X 25858 5-ft DB25M to RS53OM Cross-Over Cable (for RS530 HSU) [***] [***]
1207 25859 6-ft 3-to-4 50-Pin E&M Cable (All Male Connectors) [***] [***]
1208 25860 6-ft 3-to-1 50-Pin FXS Cable (All Male Connectors) [***] [***]
1209 6-ft 3-to-1 50-Pin TO Cable (All Male Connectors) [***] [***]
1210 25861 5-ft 50-Pin Male to Male Amphenol Cable (for Multiple Uses) [***] [***]
1212F 25862 5-ft DB25M to RS449F Straight-Thru Cable (for RS449 HSU) [***] [***]
1212M 25862 5-ft DB25M to RS449M Straight-Thru Cable (for RS449 HSU) [***] [***]
1212X 25863 5-ft DB25M to RS449M Cross-Over Cable (for RS449 HSU) [***] [***]
1215M 25864 5-ft RJ48M to DB15M Straight-Thru Cable (for CSU) [***] [***]
1215X 25865 5-ft RJ48M to DB15F Cross-Over Cable (for PBX) [***] [***]
1216F 25852 15-ft RJ48M to DB2SF Straight-Thru Cable (for VT100) [***] [***]
1216M 25851 15-ft RJ48M to DB25M Straight-Thru Cable (for VT100) [***] [***]
1217 25854 25-ft RJ11M to RJ11M Cable (for Modem) [***] [***]
1220 25877 25-ft 50-Pin Male to Female Amp/Champ Extension Cable [***] [***]
1221 25876 25-ft DB25M to DB25F Extension Cable (for RS232 operation) [***] [***]
1222 25875 25-ft DB25M to DB25F Extension Cable (for RS530 operation) [***] [***]
1224 25874 25-ft DB25M to DB25F Extension Cable (for V.35 operation) [***] [***]
1230 1-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1231 25853 25-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1232 25873 50-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1233 25872 100-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1239 Y Adapter for WAN Card Redundancy (Bus Connect Systems) [***] [***]
1240 5-inch DB26M to DB25F RS530 Adapter Cables [***] [***]
1251 25869 RS-530 to V.3S Personality Module [***] [***]
1252 25870 RS-530 to RS-232 Personality Module [***] [***]
1253 25871 RS232/RS530 DB25 Female-to-Female Gender Changer [***] [***]
1257 25885 V.35 M34 Female-to-Female Gender Changer [***] [***]
1258 25886 RS449 DB37 Female-to-Female Gender Changer [***] [***]
1263F 5-ft DB26M to V.35F (M34) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1263M 5-ft DB36M to V.35M (M34) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1263X 5-ft DB26M to V.3SM (M34) Cross-Over Cable (for DB26 HSUs) [***] [***]
1264F 5-ft DB26M to RS53OF (DB25) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1264M 5-ft DB26M to RS53OM (DB25) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1264X 5-ft DB26M to RS53OM (DB25) Cross-Over Cable (for DB26 HSUs) [***] [***]
1265F 5-ft DB26M to RS449M (DB37) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1265M 5-ft DB26M to RS449M (DB37) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1265X 5-ft DB26M to RS449M (DB37) Cross-Over Cable (for DB26 HSUs) [***] [***]
1268 25-ft DB26M to DB26F Extension Cable (for V.35 operation) [***] [***]
1269 25-ft DB26M to DB26F Extension Cable (for RS53O/RS449 [***] [***]
operation)
1504 25868 M66 Block with 2 Female 50-Pin Amp/Champ Connectors [***] [***]
Reference Manuals:
1901 IMACS/800 Reference Guide [***] [***]
1902 PremLink Reference Guide [***] [***]
1903 Cable and Equipment Guide [***] [***]
1904 IMACS/600 Reference Guide [***] [***]
</TABLE>
NOTE: Cables, accessories, and manuals are not subject to discount.
* Confidential Treatment Requested.
3.
<PAGE> 42
<TABLE>
U.S.
LIST AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE
<S> <C> <C> <C> <C>
Advanced Replacement Upgrades: [***] [***]
CPU Cards
5001AR 25889 Model 8800 CPU to Model 8804 CPU [***] [***]
6002AR 25890 Model 8800 CPU to Model 8801 CPU [***] [***]
6003AR 25891 Model 8804 CPU to Model 8801 CPU [***] [***]
CPU Cards
9001AR 20111 8800 CPU card firmware upgrade to latest version [***] [***]
9002AR 20112 8801 CPU card firmware upgrade to latest version [***] [***]
9003AR 8804 CPU card firmware upgrade to latest version [***] [***]
Data Cards
8202AR 20104 2-port RS-530/V.35 super-rate data [***] [***]
8212AR 20105 2-port V.35 super-rate data [***] [***]
8213AR 2-port RS-530/RS-366/V.25bis super-rate data [***] [***]
8215AR 20106 4-port RS-530/V.35 super-rate data [***] [***]
8220AR 20107 10-port RS-232C sub-rate data [***] [***]
8224AR 4-port RS-232C sub-rate data [***] [***]
8230AR 20107 8-port subrate FRAD card [***] [***]
8248AR 20108 5-port OCU-DP [***] [***]
8249AR 20109 2-port OCU-DP with error correction [***] [***]
8254AR 20110 4-port DSO-DP/G.703 co/contra directional [***] [***]
Terms and conditions on advanced replacement upgrades:
User must order an advanced replacement upgrade from Premisys.
Advanced replacement board will be sent, with return label for old board.
Old board must be returned freight pre-paid to Premisys within 21 days of receipt of replacement board.
If old board is not received within 21 days, user will be billed for the list price of the board.
Upgraded boards retain the warranty period of the original board.
Factory Upgrades:
CPU Cards
6001FG Model 8800 CPU to Model 8804 CPU [***] [***]
6002FG Model 8800 CPU to Model 8801 CPU [***] [***]
6003FG Model 8804 CPU to Model 8801 CPU [***] [***]
CPU Cards
9001FG CPU card firmware upgrade to latest version [***] [***]
Data Cards:
8202FG 2-port RS-530/V.35 super-rate data [***] [***]
8212FG 2-port V.35 super-rate data [***] [***]
8213FG 2-port RS-530/RS-366/V.25bis super-rate data [***] [***]
8215FG 4-port Rs-530/V.35 super-rate data [***] [***]
8220FG 10-port RS-232C sub-rate data [***] [***]
8224FG 4-port RS-232C sub-rate data [***] [***]
8230FG 8-port subrate FRAD data [***] [***]
8248FG 5-port OCU-DP [***] [***]
8249FG 2-port OCU-DP with error correction [***] [***]
8254FG 4-port DSO-DP/G.703 co/contra directional [***] [***]
Terms and conditions on factory upgrades:
User must obtain an RA number from Premisys before returning board for upgrade.
Board must be sent freight pre-paid to Premisys.
Premisys will return the upgraded board via standard ground freight within 21 days of receipt.
Upgraded boards retain the warranty period of the original board.
Advanced replacement is not included in upgrade price.
</TABLE>
* Confidential Treatment Requested
4.
<PAGE> 43
<TABLE>
<CAPTION> U.S.
LIST AT&T
MODEL NO. PEC CODE DESCRIPTION PRICE PRICE
<S> <C> <C> <C> <C>
EEPROM Upgrade
CPU Cards
9001EP CPU card firmware upgrade to latest version [***] [***]
Data Cards:
8202EP 2-port RS-530/V.35 super-rate data [***] [***]
8212EP 2-port V.35 super-rate data [***] [***]
8213EP 2-port RS-530/RS-366/V.25bls super-rate data [***] [***]
8215EP 4-port RS-350/V.35 super-rate data [***] [***]
8220EP 10-port RS-232C sub-rate data [***] [***]
8224EP 4-port RS-232C sub-rate data [***] [***]
8230EP 8-port sub-rate FRAD card [***] [***]
8248EP 5-port OCU-DP [***] [***]
8249EP 2-port OCU-DP with error correction [***] [***]
8254EP 4-port DSO-DP/G703 co/contra directional [***] [***]
</TABLE>
- --------------------------
Terms and conditions on EEPROM upgrades:
A non-discountable handling fee of $150 will be added to each order for EEPROM
upgrades.
EEPROM upgrades are available only to authorized Premisys service
organizations.
Improper installation of EEPROM(s) may void the Premisys warranty.
Upgraded boards retain the warranty period of the original board.
Advanced replacement is not included in upgrade price.
* Confidential Treatment Requested
5.
<PAGE> 44
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 3
PAGE 1 OF 1
DATE: 5/24/94
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DR.
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS, dated and signed, December 4, 1992, by and between
Premisys Communications Inc. and AT&T Paradyne will be amended as follows:
1.0 Exhibit B, the purchase specification (Specification), AT&T Paradyne part
number 351-0047-0031, revision A, is hereby deleted in its entirety and replaced
with, revision B, attached hereto and made apart hereof.
2.0 All other term and conditions of the above stated Agreement remains
unchanged.
This Amendment shall be effective upon the parties' acceptance of the same, as
signed and dated below.
ACCEPTED: June 20, 1994 ACCEPTED: July 8, 1994
AT&T Paradyne Premisys Communications, Inc.
By: /s/ By: /s/
Title: Title: V.P.
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTION
AMENDMENT NUMBER 3 - LGSC103DS
1 - 5/24/94
<PAGE> 45
EXHIBIT B
PURCHASE SPECIFICATION
<PAGE> 46
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
REV. ECF # INITIALS
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
A 57744 INITIAL RELEASE
B 58198 ADDED AT&T PARADYNE COLORS & ARTWORK
B1 HL/3066 UPDATED SHEETS TO REFLECT CHANGES CAUSED BY
REFORMATTING
- -----------------------------------------------------------------------------------------
</TABLE>
PURCHASE SPECIFICATION
FOR THE
PREMISYS DSS/800
(DISTRIBUTIVE SWITCHING SYSTEM)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
REV. B A B A A A A A A A A A
- --------------------------------------------------------------------------------------------------------------------------
SHT. 1 2 3 4 5 6 7 8 9 10 11 12
- --------------------------------------------------------------------------------------------------------------------------
REV. B B B B B B B
- --------------------------------------------------------------------------------------------------------------------------
SHT. 13 14 15 16 17 18 19 20 21 22 23 24
- --------------------------------------------------------------------------------------------------------------------------
REV.
- --------------------------------------------------------------------------------------------------------------------------
SHT. 25 26 27 28 29 30 31 32 33 34 35 36
- --------------------------------------------------------------------------------------------------------------------------
** AT&T Paradyne Corporation ** Largo, FL **
- --------------------------------------------------------------------------------------------------------------------------
WRITER: T. ECKERSON KNG: C. TROTTO Q.A.: T. ECKERSON
- --------------------------------------------------------------------------------------------------------------------------
SAFETY: D. BITUME C.S. C. WILEY MECH. ENG: C. FRIES
- --------------------------------------------------------------------------------------------------------------------------
TITLE: PREMISYS DSS DWG. 351-0047-0031 REV B SHT 1 OF 19
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 47
<TABLE>
<S> <C>
1.0 SCOPE
2.0 SPECIAL REQUIREMENTS
3.0 ORDER OF PRECEDENCE/APPLICABLE DOCUMENTS
4.0 QUALITY ASSURANCE PROVISIONS
4.1 Workmanship Standards
4.2 Acceptance Testing
4.3 Warranty
5.0 RELIABILITY/MAINTAINABILITY
6.0 LOGISTICS
6.1 Special Fixtures/Tools/Accessories
6.2 Packing and Shipping
6.3 Documentation Requirements
7.0 GENERAL AND PRODUCT CHANGES
8.0 ITEM SPECIFICATIONS
8.1 Functional Description
8.2 Identification and Markings
8.3 Mechanical Specifications
8.4 Electrical Specifications
8.5 ASD Requirements
8.6 Controls and Indicators
8.7 Strapping Options
8.8 Interface Requirements
8.9 Test Requirements
8.10 Safety/Emissions Certification
8.11 Environmental Parameters
8.12 Special/Additional Characteristics
9.0 NON-DISCLOSURE AGREEMENT
A APPENDIX A - PREMISYS SURVEILLANCE PLAN
</TABLE>
<PAGE> 48
1.0 SCOPE
This specification describes the Logistical, Mechanical, and electrical
requirements of the Products. The Products described herein will be
marketed and/or installed only in the United States of America and Canada.
2.0 SPECIAL REQUIREMENTS
N/A
3.0 ORDER OF PRECEDENCE/APPLICABLE DOCUMENTS
ORDER OF PRECEDENCE
As stated in the O.E.M. agreement
APPLICABLE DOCUMENTS
AT&T Paradyne OEM Agreement, Terms, and Conditions
AT&T Paradyne Packaging Specification, No. 782-0051
AT&T Paradyne Workmanship Standards, Document No. 788-0107
AT&T Practices - Use and Elimination of Chlorofluorocarbons and
Halons No. AT&T 010-160-290
AT&T Paradyne Environmental Qualification Criteria, No. 788-0735
AT&T Paradyne Temperature and Humidity Tests, No. 788-0459
AT&T Paradyne Test for AC Line Conditions, No. 788-0460
AT&T Paradyne Shock Test for AT&T Pdn Products, No. 788-0465
AT&T Paradyne Vibration Test of AT&T Pdn Products, No. 788-0466
AT&T Pdn Transportation Testing of Shipping Pkgs, No. 788-0734
AT&T Paradyne ESD Procedure, No. 788-0468
AT&T Paradyne General Spec. for Wire/Cable, No. 835-5022-0131
AT&T Paradyne Paint/finish and Color Control, No. 782-0033
AT&T Paradyne Graphics Application Spec., No. 782-0099
AT&T Paradyne Artwork, number 800-1674-9082/A
Guidelines for AT&T Paradyne Logo's and Color on OEM Products,
No. OEM-30
Premisys User/Operators Manual, No. 1901 Rev 1.05
Military Standard MIL-STD-105D
Military Standard MIL-HDEX-217
FCC Rules and Regulations, Part 15
Canadian DOC Radio Interference Regulation
Code of Federal Regulations (CFR), Parts 1000-1020
FCC Rules and Regulations, Part 68
VCCI Regulations For Voluntary Control Measures
4.0 QUALITY ASSURANCE PROVISIONS
4.1 WORKMANSHIP STANDARDS
Prior to shipment of the product, the supplier shall submit their
workmanship standards to Supplier Quality Engineering, via the purchasing agent
for approval. If the supplier's workmanship standards are not submitted or
approved, then AT&T Paradyne Corporation's workmanship standards, procedure no.
794-0107, shall apply.
<PAGE> 49
4.2 ACCEPTANCE TESTING
Buyer Corporation reserves the right to perform any test, including
Source and/or Process inspection, necessary to assure that each device
conforms to the specifications and requirements outlined in this
document.
The detailed Surveillance Plan is outlined in Appendix A.
4.3 WARRANTY - Per OIK Agreement.
5.0 RELIABILITY/MAINTAINABILITY
The predicted MTBF (Mean Time Between Failures) calculations shall be
formulated in accordance with MIL-HDSK-217. Detailed calculations shall
be furnished upon request to Vendor Quality Engineering of the AT&T
Paradyne Corporation.
A minimum of 24 hour burn-in at 25 degrees C. with power applied, shall
be required, unless the supplier can show, through documented evidence
of an on-going nature an acceptable, alternate plan to eliminate infant
mortality failures. Written approval by Buyer is required prior to
substitution.
6.0 LOGISTICS
6.1 CUSTOM FIXTURES/TOOLS/ACCESSORIES
If any custom fixtures/tools/accessories are required for
assembly/disassembly, installation or operation of this product, written
notification of this fact shall be made known to Buyer Corporation prior
to shipment.
6.2 PACKING AND SHIPPING
The Products, shall be packaged and shipped in accordance with Buyer
Packaging Specification 782-0031. In addition all packaging used for
AT&T shall be free of CVCs. That is, the packaging shall not contain
CVCs nor shall CVCs have been used in its manufacture. (See AT&T
Practices - Use and Elimination of Chlorfluorocarbons and Halons).
6.3 DOCUMENTATION REQUIREMENTS
If available the following information/documentation shall be available
to Component Engineering of Buyer via the Purchasing Agent. Any
additional information required to support this procurement will be
negotiated as needed.
- Installation drawings/manuals - Testing & troubleshooting
- Operating instructions guides
- Strapping lists - Marking Drawings
- Such other literature as
required to test, install,
operate and maintain the equipment.
<PAGE> 50
7.0 GENERAL AND PRODUCT CHANGES
7.1 This Specification establishes the requirements for the Products as
described in Section 8.0. (All reference to "Section" numbers shall mean
the Sections of this Specification.) Seller's obligations set forth in
this Specification shall not diminish Seller's obligations set forth in
the "Warranty" clause or any other clauses in this Agreement.
7.2 This Specification does not cover the manufacture of the Products in
detail but is intended only to define the special arrangements and
operational requirements in which Buyer is directly interested. All
aspects not covered by this Specification shall be in accordance with the
standard practice of Seller.
7.3 Prior to the first shipment of Products, Seller shall submit to Buyer
copies of the Documentation in accordance with Section 6.3 and shall have
received production sample approval from Buyer.
A production sample of the Products, identical to the proposed production
units, shall be qualified at Seller's facility for conformity to this
Specification and Seller's production test requirements as set forth in
Section 8.9. Prior to qualification, Seller shall submit to the Buyer
written test procedure which Seller intends to use for the qualification
program. If the production sample conforms with the requirements of
Section 6.3 documentation and all other parts of this Specification,
final approval of the production sample will be granted.
7.4 Any change proposed to be made by Seller in the PRODUCT (hardware or
software) furnished in accordance with this Agreement, or in the
Specification and Documentation covered by this Agreement that would
impact upon (1) reliability, (2) the requirements of the Specification,
or (3) form, fit, or function (as defined below) requires advanced written
notification to and approval by the Buyer in accordance with the following
procedures.
In order for Buyer to review these proposed changes advance written notice
in the form of an Engineering Change (EC) will be required except for
those cases where an extremely unsatisfactory condition requires immediate
action. In that instance, verbal notification to Buyer shall be used,
followed by Seller's immediate written confirmation. Such written proposal
shall be reviewed by the Buyer within the following times from receipt of
the EC:
a) Emergency EC's - one week
b) Urgent EC's - two weeks unless otherwise agreed upon in writing
by Buyer.
c) Normal EC's - one month unless otherwise agreed upon in writing
by Buyer.
<PAGE> 51
7.0 GENERAL AND PRODUCT CHANGES (continued)
7.4.1. "Form" shall mean changes in appearance visible to the user
(customer, repair personnel, developer) of the PRODUCT.
7.4.2. "Fit" shall mean changes in parts or components, that are not
physically interchangeable.
7.4.3. "Function" shall mean changes that affect operational
characteristics of the PRODUCT or require the operator to
change the method of operation.
7.5. Buyer may propose changes or enhancements (collectively "changes") to
the design of existing PRODUCT covered by this Agreement by submitting a
Modification Request (MR) to Seller. All MR's require internal Buyer
approval. Properly approved MR's will be forwarded to the Seller by Buyer's
responsible Purchasing and Transportation contract Manager.
7.5.1. The MR will include details of the suggested changes; including but
not limited to priority, functional requirements, development work
statements, physical drawings, etc., and reason for the request.
7.5.2. MR's will be generally classified as:
a) Emergency: Changes are being requested to correct Severity 1
or Class A problems when detected by Buyer.
b) Urgent: Changes are being requested to correct Severity 2 or
Class AC and AR conditions when detected by Buyer.
c) Normal: Changes being requested to enhance PRODUCT features
such as Class B, BU and U, or Severity 3 or 4 changes.
7.5.3 Seller will submit a formal response to the MR in the form of a
written proposal to Buyer, specifically documenting all cost factors,
implementation schedules, Documentation changes, test procedure changes,
service and repair changes associated with the MR. Such written proposal
shall be furnished to Buyer within the following times from receipt of the
MR:
a) Emergency MR's - one week
b) Urgent MR's - two weeks unless otherwise agreed upon in writing
by Buyer.
c) Normal MR's - one month unless otherwise agreed upon in writing
by Buyer.
7.5.4. If Buyer accepts Seller's proposal, the Specification and other
applicable sections of this Agreement will be amended to reflect the agreed
upon MR.
<PAGE> 52
7.0 GENERAL AND PRODUCT CHANGES (continued)
7.6 Any change proposed by Seller or Buyer in hardware shall be
classified into one of the following six classifications:
Class A - Corrections
A. Changes which are (1) needed to correct (a) inoperative electrical
or mechanical conditions, or unsatisfactory maintenance or operating
conditions, (b) conditions which result in safety hazards, or (c)
conditions which result in non-compliance with federal registration or
radiation requirements or other federal, state or local safety regulations
or UL requirements; and (2) judged by Buyer severe enough to have to be
made to all hardware in process, in stock or installed.
AC. Changes in which are (1) needed to correct (a) inoperative
electrical or mechanical conditions, or unsatisfactory
maintenance or operating conditions or (b) conditions which
result in safety hazards where the conditions in (a) or (b) are
caused by circuit combinations or options which exist only on
certain hardware; (2) needed to compensate for marginal (worse
circuit) cases where the inoperative or unsatisfactory
conditions exist on certain hardware and cannot be associated
with specific circuit combinations or options. Such changes
shall be made on Products in process and if requested by Buyer
on Products in stock or already installed.
AR. Changes which are needed to correct unsatisfactory electrical,
mechanical or operating conditions, which may be allowed to
exist on a temporary basis. Such changes shall be made to
Products in process, except that in some cases, if Buyer gives
written consent, Products may be shipped for a period of time
specified by Buyer without incorporating the change at that
time to Products in process. If Buyer requests that such
changes be made to Products in stock or already installed,
supplier shall make such changes.
Class B - Enhancements
B. Changes which are sufficiently important to require their
application to Products being manufactured (as soon as
reasonably possible) and/or which may also be recommended for
application to existing stock and installations in the field.
Examples of this class of changes may include, but are not
limited to:
a) Providing new features that directly affect customer
service or operability.
<PAGE> 53
7.0 GENERAL AND PRODUCT CHANGES (continued)
b) Providing design improvements which result in better service
capabilities, longer life or improved operability margins.
c) Providing changes in design which result in important cost
savings to Buyer.
BU. For conditions of a mandatory nature, for example, the
fulfillment of future federal registration or future
compatibility requirement or for conditions of sufficient
importance to be intended for universal application. Such changes
would only be required of Products in process.
Class D - Non-Customer Affecting
D. Other changes not sufficiently important to justify application
to Products being manufactured within any specified time frame
and not sufficiently important to recommend for application to
existing stock and installations in the field.
7.7. Any change proposed by Seller or Buyer in software (firmware,
operating system or applications software) shall be classified into one of
the following four classes:
Severity 1 - Changes needed to correct significant portion(s) of the
software which has been identified as unusable, and which use
has been suspended pending the resolution of the program
error.
Severity 2 - Changes needed to correct the subsystem portion(s) of the
software which has been identified as usable, and which has
been suspended pending the resolution of the subsystem error.
Severity 3 - Changes needed to correct a difficulty in programming or
processing difficulty experienced by users and which require
inconvenient circumvention to get around the program error.
Severity 4 - Changes needed to correct a difficulty in programming or
processing for which there exists an easy method to avoid the
program error.
7.8. The format of Seller's notification document required by Section 7.4
above shall be the responsibility of the Seller but said notification
document shall contain at least the following information:
1. Seller name
2. Agreement number
3. Products description
<PAGE> 54
7.0 GENERAL AND PRODUCT CHANGES (continued)
4. Classification (as described in Section 7.6 and 7.7 above)
5. Change number
6. Products affected
7. Reason for change (reference to the original EC, if applicable)
8. Description for Change (including impact upon (1) reliability,
(2) the requirements of the Specification, and (3) form, fit or
function)
9. Cost impact (including but not limited to costs for field
modification kits
10. Marking and method of identifying changed units
11. Documentation: (a) marked up documents and drawings shall be
provided until the document or drawing is reissued, (b) listing
of documents and drawings to be changed, and (c) field repair or
modification kit documentation (if applicable)
12. Units in process, in stock and installed affected by change
13. Date changes are proposed to be implemented
14. All necessary and relevant temporary changes affected by this
notice
15. All necessary and relevant attachments
16. Additional comments
7.9. Chart 1-1 describes Seller's obligations with respect to Products
(hardware and software) changes which have been agreed to by Buyer
pursuant to the procedures set forth above. Seller shall, at Buyer's
request, perform those obligations set forth in Chart 1 which obligations
are selected by Buyer.
7.10. If, in the judgment of Buyer, sufficient changes have been made to
warrant a Products re-qualification, such re-qualification will be
performed at not cost to Buyer unless otherwise agreed.
7.11. The Products shall be in accordance with the latest information
stated or referenced in the Specification.
7.12. This Specification and all Buyer drawings and technical information
referred to or contained in this Specification are Buyer property, except
insofar as they cover the Seller's standard Products.
<PAGE> 55
7.0 GENERAL AND PRODUCT CHANGES (continued)
7.13. The quality of the materials used and the method of manufacturing,
handling and shipping shall be such that the finished Products meets the
properties and requirements specified or referenced in this Specification
and in the other clauses in this Agreement.
7.14. Where dimensions are given in this Specification without specific
tolerances, or where no dimensions are given, the tolerances and dimensions
shown in Seller's drawings or permitted by good shop practices, shall be
considered acceptable.
7.15. Seller shall be responsible for providing Products under this
Specification which complies with the applicable Federal Communication
Commission (FCC) requirements, federal, state and local regulations,
Underwriter's Laboratories (UL) requirements and the other requirements
listed in Section 8.10. If changes are made by Seller to the Products to
comply with FCC rules, safety regulations or UL regulations not presently
required, the extent to which the Products will be evaluated and tested
for its intended application shall be mutually agreed upon between Seller
and Buyer.
SELLER'S OBLIGATION
<TABLE>
<CAPTION>
Seller OBLIGATION CHANGE CLASSIFICATION
----------------- ---------------------
<S> <C> <C>
1. Update Documentation in process at no A, AC, AR, 1, 2
charge to Buyer
2. Update Documentation in stock at no A, AC, 1, 2
charge to Buyer
3. Update Documentation to customer's site A, 1
at no charge to Buyer
4. Upgrade and/or repair, Products in A, AC, AR, 1, 2
process at no charge to Buyer
5. Upgrade and/or repair, Products in A, AC, 1, 2
stock at no cost to Buyer
6. Upgrade and/or repair Products at A, 1
Customer's site at no charge to
Buyer
7. Make available to Buyer, at no charge, A, AC, AR, 1, 2
upgrade or repair kits.
</TABLE>
CHART 1-1
<PAGE> 56
SELLER'S OBLIGATION (continued)
<TABLE>
<CAPTION>
Seller OBLIGATION CHANGE CLASSIFICATION
----------------- ---------------------
<S> <C> <C>
8. Make available to Buyer, at prices to be agreed B, BU, D, 3, 4
upon, upgrade or repair kits.
9. Reimburse Buyer for Buyer's labor costs to upgrade A, AC, AR, 1, 2
or repair Products in Buyer's stock and installed
at Customer's site.
10. Provide at no charge to Buyer replacement (swap A, AC, AR, 1, 2
out) units for Products installed at Customers'
site.
11. Reimburse Buyer's transportation cost both ways A, AC, AR, 1, 2
for swap out of Products in stock and installed
at Customer's site.
12. Accept return of Products installed for refund A, AC, AR, 1, 2
of price paid for Products less depreciation.
13. Provide, at no charge to Buyer, on-site technical A, AC, AR, 1, 2
assistance for repair or upgrade of Products in
stock and installed.
14. Make available to Buyer technical assistance for B, BU, D, 3, 4
repair or upgrade of Products in stock and
installed.
15. Provide Buyer at no charge, repair procedures and A, AC, AR, 1, 2
training.
16. Make available to Buyer repair procedures and B, BU, D, 3, 4
training.
17. Reimburse Buyer for Buyer's reprints and A, AC, AR, 1, 2
redistribution costs of support documentation
i.e., sales brochures, technical manuals, user
manuals.
</TABLE>
<PAGE> 57
8.0 ITEM SPECIFICATIONS
8.1 FUNCTIONAL DESCRIPTION
See Premisys User/Operators Manual for details.
8.2 IDENTIFICATIONS AND MARKINGS
- An I.D. plate with all electrical/amperage information.
- NRTL logo and CSA logo
- FCC Compliance Labels.
- Supplier name and logo.
- Manufacturing Date Code.
- Country of Origin if not U.S.A.
8.3 MECHANICAL SPECIFICATION
Product Marking
The Products meet the requirements of the AT&T Paradyne Marking
Guidelines.
Approval for product marking shall be made using the Guidelines for AT&T
Paradyne Logo's and Colors on OEM Products, no. OPM-30.
Paint and Artwork
Logotype, Trade mark and Common Name (Product Name), etc. and all
topography shall match Dark Gray no. 305. (For silk-screening use color
no. 213-G, Nasdar no. 6009000, Atlanta. For Pad print use color no. 215-G,
Transfer no. TP300-60-203TP). All colors per AT&T Paradyne Specification,
no. 782-0033.
The paint colors and artwork colors for the Products shall meet the
requirements in the AT&T Paradyne Paint/Finish and Color Control
Specification, no. 782-0033.
Use AT&T Paradyne Artwork, no. 800-1647-9082/A.
Packaging Graphics
The packaging for the Products shall meet the requirements of AT&T
Paradyne Graphics Application Specifications, no. 782-0099.
Plastic Parts
Plastic parts, use (General Electric) GM ML5670L or Nobay Bayblend FR
1441. Color no. 2549, to match AT&T Paradyne Paint/finish and Color
Control Specifications, no. 782-0033.
Exterior Metal Parts
Exterior metal parts (cover), shall be painted color light gray no.
303-MT, Medium Texture per AT&T Paradyne Specifications, no. 782-0033.
Samples of color and texture must be submitted to Supplier Quality
Engineering for approval.
<PAGE> 58
8.4 ELECTRICAL SPECIFICATIONS
See Premisys User/Operators Manual for details.
8.5 FSD REQUIREMENTS
The Products must comply with Buyer Procedure No. 788-0468, Electrostatic
Discharge Procedure, Rev B. (This is comparable to IEC 801-2).
8.6 CONTROLS AND INDICATORS
See Premisys User/Operators Manual for details.
8.8 INTERFACE REQUIREMENTS
See Premisys User/Operators Manual for details.
8.9 TEST REQUIREMENTS
Each unit shall be functionally tested and inspected by the supplier to
assure full compliance with this specification.
<PAGE> 59
8.10 SAFETY/EMISSIONS CERTIFICATIONS
UL Listing or Recognition
The Products shall be Listed or Recognized, whichever is applicable, by a
Nationally Recognized Test Laboratory (NRTL), to comply with the UL
Standard for Safety which is applicable for the Product and shall be
marked accordingly.
CSA Certification
The Products shall be Certified by the Canadian Standards Association
(CSA), to comply with a CSA Standard which is applicable for the Product
and shall be marked accordingly.
FCC Part 15
The Products shall meet the provisions of FCC Rules and Regulations, Part
15, for Class A digital devices and shall be marked accordingly.
FCC Part 68
The Products shall meet the provisions of FCC Rules and Regulations Part
68.
Canadian Department of Communications Radio Interference Regulations -
(Radio Act Registration SOP/68-4751)
The following information shall be placed on the digital apparatus, its
container or user manual;
Notice to Users of Digital Apparatus in Canada;
This digital apparatus does not exceed the Class A limits for radio noise
emissions from digital apparatus set out in the Radio Interference
Regulation of the Canadian Department of Communications.
DOC C8-03
The Products shall meet the provisions of C8-03, "Standard for Terminal
Equipment, Systems, Network Protection Devices and Connection
Arrangements".
VDE Certification
The Products shall be Certified by the Verband Deutscher Electrotechniker
(VDE) or the Technischer Uberwschunge Verein (TUV) to comply with VDE
specification 0805. European Standard EN 41003 and European Standard EV
60950 and shall be marked accordingly.
BABT Certification
The Engineering and Manufacturing facility for the Products shall be
approved by the British Approval Board for Telecommunications (BABT),
under BABT 340, "The Facility Certificate Scheme for the Approval of
Telecommunications.
<PAGE> 60
8.10 SAFETY/EMISSIONS CERTIFICATIONS (continued)
Apparatus Manufacturing Facilities". Other facilities may act as the agent
for the Product's manufacturing with approval from the BABT.
The Products shall be Certified by the BABT to comply with British
Standards BS 6301:1989, Electrical Safety Requirements For Apparatus for
Connection To British Telecommunications Networks.
VDE
The Products shall be designed to comply with the requirements of German
Std. VDE 0878.
8.11 ENVIRONMENTAL REQUIREMENTS
See Premisys User/Operators Manual for details.
8.12 SPECIAL/ADDITIONAL CHARACTERISTICS
N/A
9.0 NON-DISCLOSURE AGREEMENT
As stated in the O.E.M. Agreement
<PAGE> 61
APPENDIX A
PREMISYS SURVEILLANCE PLAN
1.0 GENERAL INFORMATION
2.0 QUALIFICATION
3.0 SUPPLIER RESPONSIBILITIES
4.0 SAMPLING PLANS
5.0 DISQUALIFICATION
6.0 REQUALIFICATION
7.0 PRODUCT DISPOSITION
8.0 TRACTABILITY
<PAGE> 62
1.0 GENERAL INFORMATION
1.1 The intent of this surveillance plan is to achieve a Supplier/Buyer
relationship based on mutual cooperation and trust, and to assist the
Supplier in attaining customer satisfaction through ongoing quality
improvement processes.
2.0 QUALIFICATION
2.1 Qualification for this surveillance plan will consist of the following
criteria. In the event the supplier fails to qualify under this criteria,
then Lot by Lot sampling shall be instituted using the plans identified
in sections four and five of this specification. While in the Lot by Lot
mode, the Supplier Quality Engineer will assist the Supplier in
identifying and making the improvements necessary to qualify under this
plan.
2.1.1 The Quality System Audits (QSA) conducted by AT&T Paradyne Quality
Engineering result in a rating of at least "ACCEPTABLE" (700 Points).
NOTE: This audit may be waived if Supplier has a quality system which is
registered with an accredited quality system registrar.
2.1.2 The supplier demonstrates a commitment to continuous quality improvement
through the application of statistical process control techniques and
process analysis.
2.1.3 The supplier maintains measurements which reflect current operating
quality levels and improvement.
2.1.4 Flow diagrams for each production process have been provided to Buyer
Quality Engineering.
2.1.5 Three consecutive successful source inspections have been conducted or
witnessed by Buyer Quality Engineering using acceptance tests methods
approved by AT&T (refer to section 4).
3.0 SUPPLIER RESPONSIBILITY
3.1 Supplier will be responsible to conduct product audits on finished
product in accordance with the sampling plans in section 4, and will
provide summarized quality results to AT&T on a monthly basis. Supplier
also agrees to provide data from other processes which are identified as
critical by AT&T Paradyne Quality Engineering.
3.2 Supplier will allow AT&T to conduct process audits in accordance with
recognized standards on a quarterly basis to verify processes are in
control. The process audit is based on ANSI/ASQC Q93-1987 "Quality
Systems - Model for Quality Assurance in Final Inspection and Test."
Results of this audit will be documented and provided to Supplier.
Supplier agrees to implement effective corrective action on any
deficiencies identified in the audit.
<PAGE> 63
3.0 SUPPLIER RESPONSIBILITY (continued)
3.2.1 The initial frequency of the process audit will be quarterly, however,
the frequency is subject to change based on the audit results and
product quality levels.
3.3 Supplier agrees to collect and analyze Data on Buyer returned Products
as defined by Premisys's internal processes, and report this
information to Buyer in a summarized format, by product type, on a
monthly basis.
4.0 SAMPLING PLANS
4.1 Samples will be selected using an Acceptable Quality Level (AQL) of
0.65%, single, normal, level II. Systems will be audited using suppliers
acceptance test procedures, which have been approved by Buyer, prior to
shipment. The approved supplier workmanship standards or the Buyer
workmanship standards will apply for visual criteria.
4.2 Spare boards will be tested at the system level using the test
procedures and workmanship standards referenced above.
<TABLE>
<CAPTION>
---------------------------------------------------------
SECTION GROUP CHARACTERISTICS AQL LEVEL
---------------------------------------------------------
<S> <C> <C> <C> <C>
A 1 Major Visual & Mech. 0.65 II
---------------------------------------------------------
A 2 Major Functional 0.65 II
---------------------------------------------------------
A 3 Minor Visual & Mech. 2.5 II
---------------------------------------------------------
</TABLE>
5.0 DISQUALIFICATION FROM SURVEILLANCE
(LOT BY LOT INSPECTION)
5.1 The existence of any of the following conditions will constitute
immediate termination of this surveillance plan and lot by lot
inspection shall be performed by Buyer or their designated agent, using
the sampling criteria specified in section 4.0. The supplier may be
responsible to burden the cost of this inspection (refer to contract):
5.1.1 MAJOR COMPLAINT FOR WHICH SUPPLIER FAILS TO TAKE PROMPT EFFECTIVE ACTION
5.1.2 DEFICIENCIES IDENTIFIED DURING PROCESS AUDITS OR QUALITY SYSTEM SURVEYS
THAT ARE NOT SATISFACTORILY CORRECTED BY SUPPLIER
5.1.3 FAILURE TO PROVIDE QUALITY DATA
5.1.4 RESULTS OF QUALITY DATA INDICATE LACK OF PROCESS CONTROL OR UNACCEPTABLE
DEFECT RATES
5.1.5 FAILURE TO PROVIDE NOTIFICATION TO Buyer QUALITY ENGINEERING OF CHANGES
IN PRODUCT OR PROCESSING
<PAGE> 64
6.0 RE-QUALIFICATION FOR SURVEILLANCE
6.1 In the event Supplier is disqualified, Buyer Vendor Quality Engineering
will determine the appropriate action plan for requalification based on
the nature of the problem. Lot by lot inspection will be instituted.
7.0 DISPOSITION
7.1 All material found nonconforming in any respect during product audits
shall be rejected, and the associated product shall be screened for
similar defects.
7.2 If Supplier believes that any of the material which is rejected may be
satisfactory to the customer, the material shall be held pending
disposition from Buyer Vendor Quality Engineering.
8.0 EVIDENCE OF SURVEILLANCE & TRACEABILITY
8.1 Supplier will apply the AT&T Ship-To-Stock labels (see figure 1) to all
material that passes the product audit. Each label and the associated
report containing the quality data (see figure 2) will be identified with
a stamp containing the MONTH, DAY, and YEAR the product audit was
performed.
<PAGE> 65
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 4
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DR.
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS, dated and signed December 4, 1992 by and between
Premisys Communications Inc. and AT&T Paradyne Corporation is hereby amended as
follows. In the event there are conflicts in the terms of this Amendment and the
OEM Agreement, the terms of the Amendment will apply.
1.0 BASE PRICES
1.1 For Product shipped under this amendment, AT&T PDN will pay Base Prices
per attachment "B", which will average an additional [***] off the
current Price List as of January 1, 1995. Such Base Pricing in
Attachment B will be decreased an additional [***] and an additional
[***] in 1997.
1.2 The new Base Prices and discounts will become effective on the date the
contract amendment is signed and will be applied to all unshipped
orders as well as future orders. Discount levels will reflect date of
order receipt. In such cases where special pricing has been agreed upon
between Premisys and AT&T PDN in response to special bids, present or
future, the discount structure will reflect the lower of the special
pricing or the discounts under the terms of this amendment.
1.3 Pricing and discounts under this amendment are warranted by Premisys to
be comparable to or more favorable to AT&T PDN than equivalent prices,
warranties and terms offered by Premysis to any other customer for the
term of this amendment.
2.0 DISCOUNT STRUCTURE
2.1. AT&T PDN will be granted additional price discounts off of the Base
Price according to the discount tables below.
a. Product discounts will depend upon AT&T PDN's shipment volumes and
will include current Products as listed in the then-current
Attachment B and any "new" Products which AT&T PDN might choose to
ship in the future (exclusive of Product(s) which might be
developed through any joint development efforts). Shipments will
be valued at the prices actually paid by AT&T PDN during the same
period.
- --------------------------
* Confidential Treatment Requested
AMENDMENT NUMBER 3 - LGSC103DS
USE PURSUANT TO PROPRIETARY DOCUMENT PROCEDURE
1
<PAGE> 66
AGREEMENT NUMBER LSC103DS
AMENDMENT NUMBER 4
CALENDAR YEAR 1995
Shipment Volume Discount
($million)
[***] [***]%
[***] [***]%
[***] [***]%
[***] [***]%
CALENDAR YEAR 1996
Shipment Volume Discount
($million)
[***] [***]%
[***] [***]%
[***] [***]%
[***] [***]%
CALENDAR YEAR 1997
Shipment Volume Discount
($million)
[***] [***]%
[***] [***]%
[***] [***]%
[***] [***]%
3.0 ECLIPSE PRODUCT DEVELOPMENT
AT&T PDN within 60 days of execution of this amendment will cease its
current development of the Eclipse Product as defined by the Eclipse
Architecture Specification Draft Issue 1.0, dated October 21, 1994, and
the Eclipse Release One System Requirements Specification Draft Issue
1, dated February 13, 1995. This decision will be represented by an
internal announcement, which will be provided under confidentiality to
Premisys. This does not preclude any future developments from using the
technology and know-how gained from the Eclipse Product development
effort.
4.0 DISTRIBUTION AGREEMENT
4.1 Distribution to AT&T entities - It Is agreed that AT&T PDN will have
sole marketing and sales rights to all AT&T entities. If Premisys knows
or has reason to know that AT&T or any AT&T entity (to include Business
Units, divisions or majority-owned subsidiaries) is
- --------------------------
* Confidential Treatment Requested
Amendment Number 3 - LGSC103DS
Use Pursuant to Propriety Document Procedure
2
<PAGE> 67
AGREEMENT NUMBER LSC103DS
AMENDMENT NUMBER 4
the end-user customer or is in the distribution chain of any sale by
Premisys' Distributors or OEMs, then Premisys will provide no other
than standard Product support or pricing in support of such sale.
4.2 In the event that AT&T has the ability to enter international markets
based on its local manufacturing capabilities or content and where
Premisys has no current form of distribution, AT&T Paradyne will be
able to request and, upon agreement of mutually agreed to objectives,
be granted an exclusive marketing and sales rights in that country.
Buyer and Seller will establish mutually agreeable performance
objectives for each country in which it is selling Products and will
review at least semi-annually Buyer's sales performance in those
countries. If minimal performance objectives are not being met in any
country, Buyer and Seller will implement mutually agreeable programs to
improve sales performance in those countries. In the event that AT&T
Paradyne does not meet performance objectives agreed upon, such
exclusive marketing rights will be forfeited. Upon forfeiting such
exclusive marketing and sales rights, AT&T PDN will immediately be
granted nonexclusive marketing and sales rights for those same
countries.
4.3 Except for the provisions of this amendment upon execution of this
amendment Premisys will not be limited in any fashion in having
relationships with other companies.
4.4 It is the intent of AT&T PDN to more fully utilize Premisys and their
partners as a distribution vehicle for products developed and/or
bundled with other Premisys Products and Technologies. These
developments may include, but not be limited to CAP and related
Transmission Products, [MU] Law modem Products and other complementary
Network Access Products. This relationship will be developed and
defined under a separate Distribution Agreement.
5.0 JOINT DEVELOPMENT
5.1 AT&T PDN will develop and submit to Premisys a Technology Plan which
will be updated quarterly. The Technology Plan will include AT&T PDN's
plans for integrating technologies and features into the Premisys
Product platform as well as any other plans for joint development
activities. Such planned technologies and features to be integrated
will be reasonably achievable and will be in support of AT&T Paradyne's
then-current Technology Roadmap. Premisys agrees to implement the
Technology Plan of which an implementation schedule will be mutually
agreed upon. Such implementation schedule will reflect commercially
reasonable project start dates and completion dates which will be
incorporated into a documented project plan and the Premisys Master
Release Plan. In the event AT&T PDN wishes to undertake additional
integration or joint development efforts not included in the Technology
plan, AT&T PDN and Premisys will negotiate such projects in good faith.
5.2 The terms of the current joint Development Agreement LGSC104DS, dated
September 30, 1993, and as amended from time to time, will remain in
effect.
Amendment Number 3 - LGSC103DS
Use Pursuant to Propriety Document Procedure
3
<PAGE> 68
AGREEMENT NUMBER LSC103DS
AMENDMENT NUMBER 4
6.0 TRAINING AND SUPPORT
Premisys agrees to provide training and support to AT&T Tier 4 Support
group. Such training and support will consist of one Tier 4 training
class as soon as practicable, one Tier four training class by end of
1995, and one Tier 4 class for each major release. Classes will be held
at a location of AT&T PDN's choosing and will include all training
materials. Training and materials will be adequate to ensure that AT&T
PDN has the ability to be self-sustaining in internal training and Tier
4 support.
7.0 GENERAL
7.1 The term of this amendment and OEM Agreement LGSC103DS will, be five
years from the execution of this amendment with an option to extend the
agreement an additional two years at AT&T Paradyne's sole discretion.
Pricing for the fourth and fifth years of this agreement period will be
negotiated in good faith prior to December 31, 1997.
7.2 This terms of this amendment are confidential except for any
disclosures which might be necessary to meet the minimum disclosure
requirements of the SEC.
7.3 Within 30 days of the execution of this amendment, AT&T PDN and
Premisys will issue a mutually agreed-to news release describing its
key elements.
This amendment shall be effective upon the parties' acceptance of the same, as
signed and dated below.
ACCEPTED: March 20, 1995 ACCEPTED: April 1, 1995
AT&T Paradyne Premisys Communications, Inc.
By: /s/ By: /s/
Title: V.P. & GM Access Products Title: CFO
Amendment Number 3 - LGSC103DS
Use Pursuant to Propriety Document Procedure
4
<PAGE> 69
COMPANY CONFIDENTIAL ATTACHMENT B
Premisys Communications, Inc.
IMACS Pricing
Effective March 5, 1995
<TABLE>
<CAPTION>
U.S. AT&T
Model No. Description List Price Price
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Equipment
- ----------------
8901 AC power supply [***] [***]
8902 48V DC power supply [***] [***]
8903 48V DC converter [***] [***]
8904 48V Plinging generator [***] [***]
8907 24V DC power supply [***] [***]
8916 IMACS/500 universal enclosure with installation kit (cover not included) [***] [***]
8915 IMACS/500 universal enclosure with installation kit [***] [***]
8918 IMACS/500 universal enclosure with installation kit **(2) [***] [***]
8920 8 T1/E1 interface card with 2,400 baud modem - 32 Kb NVRAM [***] [***]
8922 8 T1/E1 interface card with 2,400 baud modem - 125Kb NVRAM (2) [***] [***]
922 2-port external synchronization module for 8922 **(2) [***] [***]
8925 2 T1 interface card without modem [***] [***]
8926 2 T1 interface card with modem **(1) [***] [***]
8927 2 E1 interface card without modem **(1) [***] [***]
CPU Control Card
- ----------------
NOTE: Firmware version must be specified for the following CPU control cards.
See IMACS Firmware Options on page 2.
8800 CPU control card with 2 T1/E1 bus-connect (non-redundant) - 258K [***] [***]
8801 CPU control card with cross-connect (redundant capable) - 258K [***] [***]
8802 CPU control card with cross-connect (redundant capable) - 258K [***] [***]
8804 CPU control card with 4 TU/E1 bus-connect (redundant capable) - 258K [***] [***]
8805 CPU control card with 4 T1/E1 bus-connect redundant capable) - 512K **(2) [***] [***]
(2)
T1/E1 WAN Cards
- ---------------
8000 Single T1/E1 line interface [***] [***]
8010 Dual T1/E1 line interfaces [***] [***]
8014 Dual T1/E1 line interfaces with 1 x 3 retrys [***] [***]
811 DSX/CEPT plug-in module [***] [***]
812 CSU plug-in module [***] [***]
Voice Cards
- -----------
8108 8-port, 2-wire E&M/TO [***] [***]
8115 4-port, 4-wire E&M/TO - Extended Range **(1) [***] [***]
8118 8-port, 4-wire E&M/TO [***] [***]
8119 5-port, 4-wire E&M/TO - Extended Range [***] [***]
8124 4-port, 2-wire FXS/FXSON/PLAR/DPO - 900 Ohm **(1) [***] [***]
8125 4-port, 2-wire FXS/FXSON/PLAR/DPO - 800 Ohm **(1) [***] [***]
8128 8-port, 2-wire FXS/FXSON/PLAR/DPO - 900 Ohm [***] [***]
8129 6-port, 2-wire FXS/FXSON/PLAR/DPO - 800 Ohm [***] [***]
8134 4-port, 2-wire FXS/FXSON/MRD/DPT - 900 Ohm **(1) [***] [***]
8135 4-port, 2-wire FXS/FXSON/MRD/DPT - 800 Ohm **(1) [***] [***]
8138 8-port, 2-wire FXS/FXSON/MRD/DPT - 900 Ohm [***] [***]
8139 8-port, 2-wire FXO/FXDON/MRD/DPT - 600 Ohm [***] [***]
** consult factory for delivery lead times
(1) requires version 3.2 or higher host firmware
(2) requires version 4.0 or higher host firmware
</TABLE>
[***] Confidential treatment has been requested for certain portions of this
document.
Page 1 of 6
<PAGE> 70
COMPANY CONFIDENTIAL ATTACHMENT B
Premisys Communications, Inc.
IMACS Pricing
Effective March 5, 1995
<TABLE>
<CAPTION>
U.S. AT&T
Model No. Description List Price Price
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Data Charts
- -----------
8202 2-port RS-630/V 35 super-rate data [***] [***]
8212 2-port V35 super-rate data [***] [***]
8213 2-port MS-630/RS-300/V.25 bis super-rate card [***] [***]
8215 4-port RS-530V 35 supermate data [***] [***]
8220 10-port RS-2320 super-rate data [***] [***]
8228 8-port sub-rate B7R IP concentrator card (1) [***] [***]
8230 8-port sub-rate PRAD card [***] [***]
8248 5-port OCU-DP [***] [***]
8247 5-port OCU-DP (expandable) **(1) [***] [***]
846 5-port CCU-DP child card [***] [***]
8249 2-port CCU-DP with error correction [***] [***]
8254 4-port D&O-DP 705 [***] [***]
8260 8-port, 2-wire (251Q) ISDN BR1 card (1) [***] [***]
8261 8-port, 2-wire (251Q) ISDN BRI card (2), open power [***] [***]
Server Cards
- ------------
8810 Frame relay server (58 ports, 16 MB RAM, with accelerator) **(2) [***] [***]
8811 Frame relay server (35 ports, 4 MB RAM, no accelerator) **(2) [***] [***]
8820 IP concentrator (125 ports, 8 MB RAM, no accelerator) **(2) [***] [***]
8840A ISDN PRI server card - 1 D channel [***] [***]
8840B ISDN PRI server card - 2 D channels [***] [***]
8840C ISDN PRI server card - 8 D channels [***] [***]
8870 ADPCM Server (3) [***] [***]
8880 4 channel inverse mix server with BONDING modes 0 and 1 software **(1) [***] [***]
Other Cards
- -----------
8401 External alarm card [***] [***]
IMACS Firmware Options
- ----------------------
8000-30 Version 3.0 host firmware with Reference Manual [***] [***]
6000-32 Version 3.2 host firmware without TCP/1P/SNMP with Reference Manual [***] [***]
6000-32T Version 3.2 host firmware with TCP/1P/SNMP with reference manual [***] [***]
6000-33 Version 3.5 host firmware without TCP/1P/SNMP with Reference Manual [***] [***]
6000-33T Version 3.5 host firmware with TCP/1P/SNMP with Reference Manual [***] [***]
6000-40 Version 4.0 host firmware without TCP/1P/SNMP with Reference Manual (4) [***] [***]
6000-40T Version 4.0 host firmware with TCP/1P/SNMP with Reference Manual (4) [***] [***]
** consult factory for delivery lead times
(1) requires version 3.2 or higher host firmware
(2) requires version 4.0 or higher host firmware
(3) requires 8501 Rev 81 CPU when used with 3.X host
firmware; requires 8802 or 8305 CPU card when used with
4.0 host firmware
(4) requires 8322 interface card and either 8802 or 6605 CPU
card
</TABLE>
[***] Confidential treatment has been requested for certain portions of this
document.
Page 2 of 6
<PAGE> 71
COMPANY CONFIDENTIAL ATTACHMENT B
Premisys Communications, Inc.
IMACS Pricing
Effective March 5, 1995
<TABLE>
<CAPTION>
U.S. AT&T
Model No. Description List Price Price
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PremLink 2.0 Software
- ---------------------
7100-20 PremLink Version 2.0 - Single CPU licensed for Sun Solaris 1x [***] [***]
</TABLE>
NOTE: The above license is for a single workstation. For a corporate license,
please consult the factory.
[***] Confidential treatment has been requested for certain portions of this
document.
Page 3 of 6
<PAGE> 72
COMPANY CONFIDENTIAL ATTACHMENT B
Premisys Communications, Inc.
IMACS Pricing
Effective March 5, 1995
<TABLE>
<CAPTION>
U.S. AT&T
Model No. Description List Price Price
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cables and Accessories
- ----------------------
NOTE: Cables and accessories are not subject to discount.
1106 FU48 to 2 BHC Adapter (for B1) [***] [***]
1114F 5-ft. RJ48M to DE825F Straight-Thru Cable (for SRU) [***] [***]
1114M 5-ft. RJ48M to DE825F Straight-Thru Cable (for SRU) [***] [***]
1114X 5-ft. RJ48M to Cross-Over Cable (for SRU) [***] [***]
1114CX 5-ft. RJ48M to DE825F External Clock Cable (for SRU) [***] [***]
1118 25-ft. RJ48M to FJ Silver Satin Cable (for OCU-DP) [***] [***]
1121 50-Ptn to 2 RJ481J Adaptor with Test Jacks (for T1) [***] [***]
1181 50-Ptn to 8 RJ48 Adaptor (for T1) [***] [***]
1201F 15-ft DB9 to C825F Straight Thru [***] [***]
1201M 15-ft DB9 to C825F Straight Thru [***] [***]
1203F 5-ft D825M to V56F Straight-Thru Cable (for V35 HSU) [***] [***]
1203M 5-ft D825M to V56F Straight-Thru Cable (for V35 HSU) [***] [***]
1203X 5-ft D825M to V56F Cross-Over Cable (for V35 HSU) [***] [***]
1204F 5-ft D825M to Straight-Thru Cable (for RS530 HSU) [***] [***]
1204M 5-ft D825M to RS820W Straight-Thru Cable (for RS530 HSU) [***] [***]
1204X 5-ft D825M to V56F Cross-Over Cable (for RS530 HSU) [***] [***]
1206F 5-ft D515M to D825F Straight-Thru Cable (for R5366 HSU Port) [***] [***]
1207 6-ft 3-to-4 50-Ptn E&W Cable (All Main Connectors)) [***] [***]
1208 6-ft 5-to-1 50-Ptn FXS Cable (All Main Connectors) [***] [***]
1209 6-ft 5-to-1 50 Ptn TO Cable (All Main Connectors) [***] [***]
1210 5-ft 50-Ptn Amphenol Cable (for Multiple Uses) [***] [***]
1212F 5-ft D825M to RS44PF Straight-Thru Cable (for RS448 HSU) [***] [***]
1212M 5-ft D825M to RS44PM Straight-Thru Cable (for RS448 HSU) [***] [***]
1212X 5-ft D825M to RS44PM Cross-Over Cable (for a T1 Interface Card) [***] [***]
1213 5-ft 50-Ptn Ampherol Cable to 2 RJ-48 Cable (for a T1 Interface Card) [***] [***]
1215M 5-ft RJ48M to OS15W Straight-Thru Cable (for CPU) [***] [***]
1215X 5-ft RJ48W to D615F Cross-Over Cable (for PEX) [***] [***]
1216F 15-ft. RJ48M to D825F Straight-Thru Cable (for VT100) [***] [***]
1216W 15-ft. RJ48M to D825M Straight-Thru Cable (for VT100) [***] [***]
1217 25-ft. RJ11M to RJ11M Cable (for Modem) [***] [***]
1220 25-ft. 50-Ptn Extension Cable [***] [***]
1221 25-ft D825M to D825F Extension Cable (for RS232 operation) [***] [***]
1222 25-ft. D825W to D825F Extension Cable (for R3530 operation) [***] [***]
1224 25-ft. D825M to D825F Extension Cable (for V35 operation) [***] [***]
1230 1-ft. RJ48W to FJ48M Extended Cable (for T1) [***] [***]
1231 25-ft. RJ48W to FJ48M Extended Cable (for T1) [***] [***]
1232 50-ft. RJ48M to RJ48M Extended Cable (for T1) [***] [***]
1233 100-ft. FJ48W to RJ48M Shielded Cable (for T1) [***] [***]
1239 Y Adaptor for WAN Card Redundancy (BU Connect Systems) [***] [***]
1240 5-inch D825W to D825F R8530 Adaptor Cables [***] [***]
</TABLE>
[***] Confidential treatment has been requested for certain portions of this
document.
Page 4 of 6
<PAGE> 73
COMPANY CONFIDENTIAL ATTACHMENT B
Premisys Communications, Inc.
IMACS Pricing
Effective March 5, 1995
<TABLE>
<CAPTION>
U.S. AT&T
Model No. Description List Price Price
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Cables and accessories (continued):
NOTE: Cables and accessories are not subject to discount.
1251 RS-830 to V.35 Personality Module [***] [***]
1252 RS-830 to RS-832 Personality Module [***] [***]
1255 RS232/RS530 D825 Female-to-Female Gender Changer [***] [***]
1257 V.35 M34 Female-to-Female Gender Changer [***] [***]
1258 R8449 D857 Female-to-Female Gender Changer [***] [***]
1263F 5-ft. D825M to V3.5F (M34) Straight-Thru Cable (for D825 HSUs) [***] [***]
1263M 5-ft. D825M to V3.5F (M34) Straight-Thru Cable (for D825 HSUs) [***] [***]
1263X 5-ft. D825M to V3.5F (M34) Straight-Thru Cable (for D825 HSUs) [***] [***]
1264F 5-ft. D825M to RS830F (D825) Straight-Thru Cable (for D825 HSUs) [***] [***]
1264W 5-ft. D825M to RS830W (D825) Cross-Over Cable (for D825 HSUs) [***] [***]
1284X 5-ft. D825M to RS830 (D825) Cross-Over Cable (for D826 HSUs) [***] [***]
1285F 5-ft. D825M to RS448M (D837) Straight-Thru Cable (for D825 HSUs) [***] [***]
1265W 5-ft. D825M to RS449M (D837) Straight-Thru Cable (for D825 HSUs) [***] [***]
1265X 5-ft. D825M to RS448M (D837) Cross-Over Cable (for D825 HSUs) [***] [***]
1266 25-ft. D825W to D825F Extension Cable (for V.35 operation) [***] [***]
1269 25-ft. D825M to D825F Extension Cable (for RS530/RS448 operator) [***] [***]
1504 M86 Block with 2 Female 60-Ptn AmpChamp Connectors [***] [***]
Reference Manuals
- -----------------
NOTE: Manuals are not subject to discount.
1901 IMACS Reference Guide [***] [***]
1902 PremLine Reference Guide [***] [***]
1903 Cable and Equipment Guide [***] [***]
</TABLE>
[***] Confidential treatment has been requested for certain portions of this
document.
Page 5 of 6
<PAGE> 74
COMPANY CONFIDENTIAL ATTACHMENT B
Premisys Communications, Inc.
IMACS Pricing
Effective March 5, 1995
<TABLE>
<CAPTION>
U.S. AT&T
Model No. Description List Price Price
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Advanced Replacement Upgrades
- -----------------------------
CPU Cards
3001AR Model 8800 CPU to Model 8804 CPU [***] [***]
3002AR Model 8800 CPU to Model 8801 CPU [***] [***]
3003AR Model 8804 CPU to Model 8801 CPU [***] [***]
3100AR Add TCP/RF/8HMP firmware to any CPU card [***] [***]
Advanced Replacement Enhancements
- ---------------------------------
3010AR Firmware enhancement to any card [***] [***]
3020AR Any other enhancement to any module [***] [***]
Terms and conditions on advanced replacements:
User must order an advanced replacement upgrade from Premisys.
Advanced replacement board will be sent, with return label for old board.
Old board must be returned freight pre-paid to Premisys within 21 days of receipt of replacement board.
If old board is not received within 21 days, user will be billed for the list price of the board.
Replaced board retains the warranty period of the original board.
Return-to-Factory Upgrades
- --------------------------
CPU Cards
3001FG Model 8800 CPU to Model 8504 CPU [***] [***]
3002FG Model 8800 CPU to Model 8801 CPU [***] [***]
3003FG Model 8804 CPU to Model 8801 CPU [***] [***]
3100FG Add TCP/1F/8HMP firmware to any CPU card [***] [***]
Return-to-Factory Enhancement
- -----------------------------
3010FG Firmware enhancement to any card [***] [***]
3020FG Any other enhancement to any module [***] [***]
Terms and conditions on return-to-factory enhancements and upgrades:
User must obtain an FLA number from Premisys before returning board for upgrade.
Board must be sent freight pre-paid to Premisys.
Premisys will return the upgraded board via 2nd day air freight within 21 days
or receipt.
Upgraded boards retain the warranty period of the original board.
Advanced replacement is not included in upgrade price.
EEPROM Upgrades
- ---------------
3010EP Firmware upgrade to any CPU card [***] [***]
3020EP Firmware upgrade to any other card [***] [***]
Terms and conditions on EEPROM upgrades:
User is responsible for proper handling of EEPROMS and circuit boards.
Improper handling by user may result in voiding of warranty.
</TABLE>
[***] Confidential treatment has been requested for certain portions of this
document.
Page 6 of 6
<PAGE> 75
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 5
PAGE 1 OF 4
DATE: 03/15/95
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DR.
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS dated and signed December 4, 1992, by and between
Premisys Communications Inc. and AT&T Paradyne will be amended as follows:
1.0 Seller agrees to repair free of charge all, defective returned circuit card
assemblies (CCA's), to the latest engineering change order (ECO) of the printed
wiring board (PWB) (minor hardware Enhancements) and the latest Software
Maintenance Release of any Software that may reside on the CCA. Seller further
agrees that if any hardware defect is a class A(x) or any Software defect is a
class one (1) or two (2) severity code a defined in the Specification of this
Agreement and requires a new PWB, the new PWB totally populated to produce the
new CCA shall be provided to Buyer free of charge as replacement for the CCA's
as returned to Seller by Buyer.
For Enhancements to CCA's, Enhancement is further defined as class B(x)
and D defects for hardware and Severity code three (3) and four (4) for
Software, as defined in the Specification, and release to release Software
Enhancements, Seller agrees to upgrade the CCA's to the current shippable
revision, including all Enhancements, to the CCA for the following costs:
SOFTWARE AND MINOR HARDWARE ENHANCEMENTS
User Data Modules [***]
25826 - 8202
25827 - 8212
25895 - 8215
20121 - 8213
25828 - 8220
25829 - 8249
20122 - 845
25833 - 8245
25896 - 8248
25830 - 8401
20123 - 8230
User Voice Modules [***]
25819 - 8108
25821 - 8118
25823 - 8128
25825 - 8138
25894 - 8119
25892 - 8129
25893 - 8139
CPU's [***]
25806 - 8800
25807 - 8801
25888 - 8804
WAN's [***]
25811 - 8000
25812 - 8010
25814 - 811
25887 - 811B
25815 - 812
25813 - 8014
- ---------------------------
* Confidential Treatment Requested
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 4 - LGSC103DS
3 -03/15/95
<PAGE> 76
Server Cards [***]
20124 - 8840A
20125 - 8840B
20126 - 8840C
Common Equipment [***]
25801 - 8901
25802 - 8902
25803 - 8903
25804 - 8904
25816 - 8920
NO TROUBLE FOUND (NTF) [***]
HARDWARE ENHANCEMENT (Applies only where PWB's have under gone an artwork turn.)
User Data Modules [***]
25826 - 8202
25827 - 8212
25895 - 8215
20121 - 8213
25828 - 8220
25829 - 8249
20122 - 845
25883 - 8245
25896 - 8248
25830 - 8401
20123 - 8230
User Voice Modules [***]
25819 - 8108
25821 - 8118
25823 - 8128
25825 - 8138
25894 - 8119
25892 - 8129
25893 - 8139
CPU's
25806 - 8800 [***]
25807 - 8801 [***]
25888 - 8804 [***]
WAN's [***]
25811 - 8000
25812 - 8010
25814 - 811
25887 - 811B
25815 - 812
25813 - 8014
Server Cards [***]
20124 - 8840A
20125 - 8840B
20126 - 8840C
Common Equipment [***]
25801 - 8901
25802 - 8902
25803 - 8903
25804 - 8904
25816 - 8920
2.0 All other term and conditions of the above stated Agreement remain
unchanged.
AT&T Paradyne Premisys Communications, Inc.
* Confidential Treatment Requested
By: /s/ By: /s/
Title: V.P. & GM Access Products Title: CFO
Date: 3/20/95 Date: 4/1/95
- ---------------------------
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 4 - LGSC103DS
3 -03/15/95
<PAGE> 77
[AT&T PARADYNE LOGO]
AGREEMENT NUMBER LGSC103DS
AMENDMENT NUMBER 6
PAGE 1 OF 1
DATE: 03/15/95
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DR.
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS dated and signed December 4, 1992, by and between
Premisys Communications Inc. and AT&T Paradyne will be amended as follows:
1.0 Exhibit A, IMACS PRICING LIST, dated 03/17/94, is hereby deleted in its
entirety and replaced by a new IMACS PRICING List, Exhibit A, dated
March 06, 1995, attached hereto and made a part hereof.
2.0 All other terms and conditions of the above stated Agreement remain
unchanged.
3.0 This IMACS PRICING LIST, with stated AT&T pricing, will be the basis
for which all dollar volume discounts, as referenced and detailed in
Amendment #4, will, be applied against to calculate new AT&T pricing as
said discounts go into effect.
This amendment for new pricing shall be effective as of March 07, 1995 for all
current orders as of that date.
AT&T PARADYNE PREMISYS COMMUNICATIONS, INC.
By: By:
Title: V.P. & GM Access Products Title: CFO
Date: 3/20/95 Date: 4/1/95
AT&T PARADYNE - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 4 - LGSC103DS
3 -03/15/95
<PAGE> 78
COMPANY CONFIDENTIAL ATTACHMENT B
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
EFFECTIVE MARCH 6, 1995
<TABLE>
<CAPTION>
U.S. AT&T
MODEL NO. DESCRIPTION LIST PRICE PRICE
<S> <C> <C> <C>
Common Equipment: [***] [***]
8901 AC power supply [***] [***]
8902 48V DC power supply [***] [***]
8903 48V DC converter [***] [***]
8904 48V Ringing generator [***] [***]
8907 24V DC power supply** [***] [***]
8916 IMACS/600 universal enclosure with installation kit (cover not included) [***] [***]
8918 IMACS/800 universal enclosure with installation kit [***] [***]
8919 IMACS/900 universal enclosure with installation kit **(2) [***] [***]
8920 8 T1/E1 interface card with 2,400 baud modem - 32Kb NVRAM [***] [***]
8922 8 T1/E1 interface card with 2,400 baud modem - 128Kb NVRAM **(2) [***] [***]
922 2-port external synchronization module for 8922 **(2) [***] [***]
8925 2 T1 interface card without modem [***] [***]
8926 2 T1 interface card with modem **(1) [***] [***]
8927 2 E1 interface card without modem **(1) [***] [***]
CPU Control Cards:
NOTE: Firmware version must be specified for the following CPU control cards.
See IMACS Firmware Options on page 2.
8800 CPU control card with 2 T1/E1 bus-connect (non-redundant) - 256 K [***] [***]
8801 CPU control card with cross-connect (redundant-capable) - 256 K [***] [***]
8802 CPU control card with cross-connect (redundant-capable) - 512 K **(2) [***] [***]
8804 CPU control card with 4 T1/E1 bus-connect (redundant-capable) - 256 K [***] [***]
8805 CPU control card with 4 T1/E1 bus-connect (redundant-capable) - 512 K **(2) [***] [***]
T1/E1 WAN Cards:
8000 Single T1/E1 line interface [***] [***]
8010 Dual T1/E1 line interfaces [***] [***]
8014 Dual T1/E1 line interfaces with 1 x 3 relays [***] [***]
811 DSX/CEPT plug-in module [***] [***]
812 CSU plug-in module [***] [***]
Voice Cards:
8108 8-port, 2-wire E&M/TO [***] [***]
8115 4-port, 4-wire E&M/TO - Extended Range **(1) [***] [***]
8118 8-port, 4-wire E&M/TO [***] [***]
8119 8-port, 4-wire E&M/TO - Extended Range [***] [***]
8124 4-port, 2-wire FXS/FXSDN/PLAR/DPO - 900 Ohm**(1) [***] [***]
8125 4-port, 2-wire FXS/FXSDN/PLAR/DPO - 600 Ohm**(1) [***] [***]
8128 8-port, 2-wire FXS/FXSDN/PLAR/DPO - 900 Ohm [***] [***]
8129 8-port, 2-wire FXS/FXSDN/PLAR/DPO - 600 Ohm [***] [***]
8134 4-port, 2-wire FXO/FXODN/MRD/DPT - 900 Ohm**(1) [***] [***]
8135 4-port, 2-wire FXO/FXODN/MRD/DPT - 600 Ohm**(1) [***] [***]
8138 8-port, 2-wire FXO/FXODN/MRD/DPT - 900 Ohm [***] [***]
8139 8-port, 2-wire FXO/FXODN/MRD/DPT - 600 Ohm [***] [***]
** consult factory for delivery lead times
(1) requires version 3.2 or higher host firmware
(2) requires version 4.0 or higher host firmware
</TABLE>
*Confidential Treatment Requested
2.
<PAGE> 79
COMPANY CONFIDENTIAL ATTACHMENT B
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
EFFECTIVE MARCH 6, 1995
<TABLE>
<CAPTION>
U.S. AT&T
MODEL NO. DESCRIPTION LIST PRICE PRICE
<S> <C> <C> <C>
Data Cards
8202 2-port RS-530/V.35 super-rate data [***] [***]
8212 2-port V.35 super-rate data [***] [***]
8213 2-port RS-530/RS-366/V.25bis super-rate data [***] [***]
8215 4-port RS-530/V.35 super-rate data [***] [***]
8220 10-port RS-232C sub-rate data [***] [***]
8228 8-port sub-rate B7R IP concentrator card (1) [***] [***]
8230 8-port subrate FRAD card [***] [***]
8248 5-port OCU-DP [***] [***]
8247 5-port OCU-DP (expandable) ** (1) [***] [***]
845 5-port OCU-DP child card [***] [***]
8249 2-port OCU-DP with error correction [***] [***]
8254 4-port DSO-DP/G.703 co/contra directional [***] [***]
8260 8-port 2-wire (2B1Q) ISDN BRI card (1) [***] [***]
8261 8-port 2-wire (2B1Q) ISDN BRI card (2), span power [***] [***]
Server Cards: [***] [***]
8810 Frame relay server (68 ports, 16 MB RAM, with accelerator) ** (2) [***] [***]
8811 Frame relay server (36 ports, 4 MB RAM, no accelerator) ** (2) [***] [***]
8820 IP concentrator (128 ports, 8 MB RAM, no accelerator) ** (2) [***] [***]
8840A ISDN PRI server card - 1 D channel [***] [***]
8840B ISDN PRI server card - 2 D channels [***] [***]
8840C ISDN PRI server card - 8 D channels [***] [***]
8870 ADPCM Server (3) [***] [***]
8880 4 channel inverse mux server with BONDING modes 0 and 1 software ** (1) [***] [***]
Other Cards:
8401 External alarm card [***] [***]
IMACS Firmware Options:
6000-30 Version 3.0 host firmware with Reference Manual [***] [***]
6000-32 Version 3.2 host firmware without TCP/IP/SNMP with Reference Manual [***] [***]
6000-32T Version 3.2 host firmware with TCP/IP/SNMP with Reference Manual [***] [***]
6000-33 Version 3.3 host firmware without TCP/IP/SNMP with Reference Manual ** [***] [***]
6000-33T Version 3.3 host firmware with TCP/IP/SNMP with Reference Manual ** [***] [***]
6000-40 Version 4.0 host firmware without TCP/IP/SNMP with Reference Manual ** (4) [***] [***]
6000-40T Version 4.0 host firmware with TCP/IP/SNMP with Reference Manual ** (4) [***] [***]
** consult factory for delivery lead times
(1) requires version 3.2 or higher host firmware
(2) requires version 4.0 or higher host firmware
(3) requires 8801 Rev B1 CPU when used with 3.X host firmware; requires
8802 or 8805 CPU when used with 4.0 host firmware
(4) requires 8922 interface card and either 8802 or 8805 CPU card
PremLink 2.0 Software:
7100-20 PremLink Version 2.0 - Single CPU license for Sun Solaris 1.x [***] [***]
</TABLE>
* Confidential Treatment Requested
3.
<PAGE> 80
<TABLE>
<CAPTION>
U.S. AT&T
MODEL NO. DESCRIPTION LIST PRICE PRICE
<S> <C> <C> <C>
Cables and Accessories
NOTE: Cables and accessories are not subject to discount.
1106 RJ48 to 2 BNC Adapter (for E1) [***] [***]
1114F 5-ft RJ48M to DB25F Straight-Thru Cable (for SRU) [***] [***]
1114M 5-ft RJ48M to DB25M Straight-Thru Cable (for SRU) [***] [***]
1114X 5-ft RJ48M to DB25M Cross-Over Cable (for SRU) [***] [***]
1114CX 5-ft RJ48M to DB25M External Clock Cable (for SRU) [***] [***]
1118 25-ft RJ48M to RJ48M Silver-Satin Cable (for OCU-DP) [***] [***]
1121 50-Pin to 2 RJ48 Adapter with Test Jacks (for T1) [***] [***]
1181 50-Pin to 8 RJ48 Adapter (for T1) [***] [***]
1201F 15-ft D89 to DB25F Straight Thru [***] [***]
1201M 15-ft DB9 to DB25M Straight Thru [***] [***]
1203F 5-ft DB25M to V.35F Straight-Thru Cable (for V.35 HSU) [***] [***]
1203M 5-ft DB25M to V.35M Straight-Thru Cable (for V.35 HSU) [***] [***]
1203X 5-ft DB25M to V.35M Cross-Over Cable (for V.35 HSU) [***] [***]
1204F 5-ft DB25M to RS530F Straight-Thru Cable (for RS530 HSU) [***] [***]
1204M 5-ft DB25M to RS530M Straight-Thru Cable (for RS530 HSU) [***] [***]
1204X 5-ft DB25M to RS530M Cross-Over Cable (for RS530 HSU) [***] [***]
1206F 5-ft DB15M to DB25F Straight-Thru Cable (for RS366 HSU Ports) [***] [***]
1207 6-ft 3-to-4 50-Pin E&M Cable (All Male Connectors) [***] [***]
1208 6-ft 3-to-1 50-Pin FXS Cable (All Male Connectors) [***] [***]
1209 6-ft 3-to-1 50-Pin TO Cable (All Male Connectors) [***] [***]
1210 5-ft 50-Pin Male to Male Amphenol Cable (for Multiple Uses) [***] [***]
1212F 5-ft DB25M to RS449F Straight-Thru Cable (for RS449 HSU) [***] [***]
1212M 5-ft DB25M to RS449M Straight-Thru Cable (for RS449 HSU) [***] [***]
1212X 5-ft DB25M to RS449M Cross-Over Cable (for RS449 HSU) [***] [***]
1213 5-ft 50-Pin Male Amphenol Cable to 2 RJ-48F Cable (for 8 T1 [***] [***]
Interface Card) [***] [***]
1215M 5-ft RJ48M to DB15M Straight-Thru Cable (for CSU) [***] [***]
1215X 5-ft RJ48M to DB15F Cross-Over Cable (for PBX) [***] [***]
1216F 15-ft RJ48M to DB25F Straight-Thru Cable (for VT100) [***] [***]
1216M 15-ft RJ48M to DB25M Straight-Thru Cable (for VT100) [***] [***]
1217 25-ft RJ11M to RJ11M Cable (for Modem) [***] [***]
1220 25-ft 50-Pin Male to Female Amp/Champ Extension Cable [***] [***]
1221 25-ft DB25M to DB25F Extension Cable (for RS232 operation) [***] [***]
1222 25-ft DB25M to DB25F Extension Cable (for RS530 operation) [***] [***]
1224 25-ft DB25M to DB25F Extension Cable (for V.35 operation) [***] [***]
1230 1-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1231 25-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1232 50-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1233 100-ft RJ48M to RJ48M Shielded Cable (for T1) [***] [***]
1239 Y Adapter for WAN Card Redundancy (Bus Connect Systems) [***] [***]
1240 5-inch DB26M to DB25F RS530 Adapter Cables [***] [***]
</TABLE>
* Confidential Treatment Requested
4.
<PAGE> 81
<TABLE>
<CAPTION>
U.S. AT&T
MODEL NO. DESCRIPTION LIST PRICE PRICE
<S> <C> <C> <C>
Cables and Accessories (continued):
NOTE: Cables and accessories are not subject to discount.
1251 RS-530 to V.35 Personality Module [***] [***]
1252 RS-530 to RS-232 Personality Module [***] [***]
1255 RS232/RS530 DB25 Female-to-Female Gender Changer [***] [***]
1257 V.35 M34 Female-to-Female Gender Changer [***] [***]
1258 RS449 DB37 Female-to-Female Gender Changer [***] [***]
1263F 5-ft DB26M to V.35F (M34) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1263M 5-ft DB26M to V.35M (M34) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1263X 5-ft DB26M to V.35M (M34) Cross-Over Cable (for DB26 HSUs) [***] [***]
1264F 5-ft DB26M to RS530F (DB25) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1264M 5-ft DB26M to RS530M (DB25) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1264X 5-ft DB26M to RS530M (DB25) Cross-Over Cable (for DB26 HSUs) [***] [***]
1265F 5-ft DB26M to RS449M (DB37) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1265M 5-ft DB26M to RS449M (DB37) Straight-Thru Cable (for DB26 HSUs) [***] [***]
1265X 5-ft DB26M to RS449M (DB37) Cross-Over Cable (for DB26 HSUs) [***] [***]
1268 25-ft DB26M to DB28F Extension Cable (for V.35 operation) [***] [***]
1269 25-ft DB26M to DB28F Extension Cable (for RS530/RS449 operation) [***] [***]
1504 M66 Block with 2 Female 50-Pin Amp/Champ Connectors [***] [***]
Reference Manuals:
- -----------------
NOTE: Manuals are not subject to discount.
1901 IMACS Reference Guide [***] [***]
1902 PremLink Reference Guide [***] [***]
1903 cable and Equipment Guide [***] [***]
</TABLE>
*Confidential Treatment Requested
5.
<PAGE> 82
<TABLE>
<CAPTION>
U.S. AT&T
MODEL NO. DESCRIPTION LIST PRICE PRICE
<S> <C> <C> <C>
Advanced Replacement Upgrades:
CPU Cards
3001AR Model 8800 CPU to Model 8804 CPU [***] [***]
3002AR Model 8800 CPU to Model 8801 CPU [***] [***]
3003AR Model 8804 CPU to Model 8801 CPU [***] [***]
3100AR Add TCP/IP/SNMP firmware to any CPU card [***] [***]
Advanced Replacement Enhancements:
3010AR Firmware enhancement to any card [***] [***]
3020AR Any other enhancement to any module [***] [***]
Terms and conditions on advanced replacements:
User must order an advanced replacement upgrade from Premisys.
Advanced replacement board will be sent, with return label for old board.
Old board must be returned freight pre-paid to Premisys within 21 days of
receipt of replacement board.
If old board is not received within 21 days, user will be billed for the list
price of the board.
Replaced board retains the warranty period of the original board.
Return-to-Factory Upgrades:
CPU Cards:
3001FG Model 8800 CPU to Model 8804 CPU [***] [***]
3002FG Model 8800 CPU to Model 8801 CPU [***] [***]
3003FG Model 8804 CPU to Model 8801 CPU [***] [***]
3100FG Add TCP/IP/SNMP firmware to any CPU card [***] [***]
Return-to-Factory Enhancements:
3010FG Firmware enhancement to any card [***] [***]
3020FG Any other enhancement to any module [***] [***]
Terms and conditions on return-to-factory enhancements and upgrades:
User must obtain an RA number from Premisys before returning board for upgrade.
Board must be sent freight pre-paid to Premisys.
Premisys will return the upgraded board via 2nd day air freight within 21 days
of receipt.
Upgraded boards retain the warranty period of the original board.
Advanced replacement is not included in upgrade price.
EEPROM Upgrades:
3010EP Firmware upgrade to any CPU card [***] [***]
3020EP Firmware upgrade to any other card [***] [***]
Terms and conditions on EEPROM upgrades:
User is responsible for proper handling of EEPROMS and circuit boards.
Improper handling by user may result in voiding of warranty.
</TABLE>
* Confidential Treatment Requested
6.
<PAGE> 83
[PARADYNE LOGO]
AGREEMENT NUMBER GSC103DS
AMENDMENT NUMBER 7
PAGE 1 OF 1
DATE 12/02/96
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DRIVE
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS dated and signed December 4, 1992, by and between
Premisys Communications Inc. and Paradyne Corporation will be amended as
follows:
1.0 Exhibit A, IMACS PRICING LIST, dated 03/08/95, is hereby deleted in its
entirety and replaced by a new IMACS PRICING List, Exhibit A, dated
11/14/96, attached hereto and made a part hereof.
2.0 This IMACS PRICING LIST, with stated Paradyne Corporation Pricing, will
be the basis for which all dollar volume discounts, as referenced and
detailed in Amendment #4, will be applied against to calculate new
Paradyne pricing as said discounts go into effect.
3.0 The Price of all packages are the sum of the parts unless noted
otherwise in the attached Pricing List.
4.0 All other terms and conditions of the above stated Agreement remain
unchanged.
This amendment for new pricing shall be effective as of January 1, 1996 for all
orders current as of that date.
PARADYNE CORPORATION PREMISYS COMMUNICATIONS, INC.
By: /s/ Andrew May By: /s/
Title: President & COO Title: V.P. Controller
Date: 1/3/97 Date: 1/17/97
PARADYNE CORPORATION - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 7 - LGSC103DS
1 - 12/02/96
<PAGE> 84
Premisys Communications, Inc.
IMACS Pricing
For Paradyne
<TABLE>
<CAPTION>
Prod
number Description ATT Price
- ----------- ----------- ----------
<S> <C> <C>
8901 AC power supply [ ** ]x
8902 -48V DC power supply [ ** ]x
890220 -48V DC power supply - support OOS @ 39V [ ** ]x
8903 -48V DC converter (115 VAC input) [ ** ]x
8905 -48V DC Converter (115 - 240 VAC input) [ ** ]x
8904 -48V Ringing generator [ ** ]x
8906 -48V RINGING GENERATOR [ ** ]x
8907 24V DC power supply [ ** ]x
8916 IMACS/600 universal enclosure [ ** ]x
891620 IMACS/600 UNIVERSAL ENCLOSURE [ ** ]x
8918 IMACS/800 universal enclosure [ ** ]x
891820 IMACS/800 universal enclosure w/ instal
kit, dual feed pwr supply [ ** ]x
8919 IMACS/900 UNIVERSAL ENCLOSURE **(2) [ ** ]x
8920 8 T1/E1 interface card with 2,400 baud
modem - 32 Kb NVRAM [ ** ]x
8923### 8 T1/E1 interface card with 2,400 baud
modem - 128 Kb NVRAM (4) [ ** ]x
892320### 8 T1/E1 interface card with 2,400 baud
modem - 128 Kb NVRAM (4) [ ** ]x
8921 8 T1/E1 interface card w/out modem -
32 Kb NVRAM [ ** ]x
892120 8 T1/E1 interface card without modem -
32 Kb NVRAM [ ** ]x
892220 8 T1/E1 interface card without modem -
128Kb NVRAM with ext sync module for
framed T1/E1 (2) [ ** ]x
892221 8 T1/E1 interface card without modem -
128Kb NVRAM with ext sync module for
unframed T1/E1**(2) [ ** ]x
8925 2 T1 interface card without modem [ ** ]x
8926 2 T1 interface card with modem (1) [ ** ]x
8927 2 E1 interface card without modem(1) [ ** ]x
1183 E1 Distribution Panel (8 E1s) [ ** ]x
1184 Distribution Panel [ ** ]
</TABLE>
x indicates agreement on the price
NOTE: items in red italic are New products.
* Confidential Treatment Requested.
24
<PAGE> 85
<TABLE>
<S> <C> <C>
8800 CPU control card with 2 T1/E1 bus-connect
(non-redundant) - 256K [ ** ]x
880020 CPU control card with 2 T1/E1 bus-connect
(non-redundant) - 256K [ ** ]x
8801 CPU control card with 8 T1/E1
cross-connect (redundant-capable) - 256K [ ** ]x
880120 CPU control card with 8 T1/E1
cross-connect (redundant-capable) - 256 K [ ** ]x
8802# CPU control card with 8 T1/E1
cross-connect (redundant-capable) -
512 K (4) [ ** ]x
880220# CPU control card with 8 T1/E1
cross-connect (redundant-capable)-
512 K (4) [ ** ]x
8804 CPU control card with 4 T1/E1
bus-connect (redundant-capable) - 256 K [ ** ]x
880420 CPU control card with 4 T1/E1 bus-connect
(redundant-capable) - 256 K [ ** ]x
60342 Version 3.4.2 host firmware [ ** ]x
60343 Version 3.4.3 host firmware [ ** ]x
60344 Version 3.44 host firmware [ ** ]x
60400 Version 4.0.0 host firmware (5) [ ** ]x
60410 Version 4.1.0 host firmware (5) [ ** ]x
60420 Version 4.2.0 host firmware (5) [ ** ]x
60430 Version 4.3.0 host firmware (5) [ ** ]x
60440 Version 4.4.0 host firmware (5) [ ** ]x
60450 Version 4.5.0 host firmware (5) [ ** ]x
60101 TCP/IP/SNMP host code option [ ** ]x
60102 TR08 host code option [ ** ]x
8000 Single T1/E1 WAN [ ** ]x
800020 Single T1/E1 WAN [ ** ]x
8010 Dual T1/E1 WAN [ ** ]x
801020 Dual T1/E1 WAN [ ** ]x
801120 Universal Dual T1/E1 WAN** [ ** ]x
8014 Dual T1/E1WAN with 1 x 3 relays [ ** ]x
801420 Dual T1/E1WAN with 1 x 3 relays [ ** ]x
811 DSX/CEPT plug-in module [ ** ]x
81120 DSX/CEPT plug-in module [ ** ]x
812 CSU plug-in module [ ** ]x
81220 CSU plug-in module [ ** ]x
82020 1168 kbps HDSL plug-in mod for Uni
WAN 8011 [ ** ]x
8108 8-port, 2-wire E&M [ ** ]x
8115 4-port, 4-wire E&M - Extended
</TABLE>
* Confidential Treatment Requested.
25
<PAGE> 86
<TABLE>
<S> <C> <C>
Range (6) [ ** ]x
8119 8-port, 4-wire E&M - Extended Range [ ** ]x
8124 4-port, 2-wire FXS - 900 Ohm (1) [ ** ]x
8125 4-port, 2-wire FXS - 600 Ohm (1) [ ** ]x
8128 8-port, 2-wire FXS - 900 Ohm [ ** ]x
8129 8-port, 2-wire FXS - 600 Ohm [ ** ]x
8134 4-port, 2-wire FXO - 900 Ohm (1) [ ** ]x
8135 4-port, 2-wire FXO - 600 Ohm (1) [ ** ]x
8138 8-port, 2-wire FXO - 900 Ohm [ ** ]x
8139 8-port, 2-wire FXO - 600 Ohm [ ** ]x
8149 6 Port 16 KHz FXS Coin Card - 600 Ohm (2) [ ** ]x
8159 6 Port 16 KHz FXO Coin Card - 600 Ohm (2) [ ** ]x
8202 2-port HSU w/ RS-530/V.35 i/f [ ** ]x
8212 2-port HSU w/ V.35 i/f [ ** ]x
8213 2-port HSU w/ RS-530/RS-366/V.25bis i/f [ ** ]x
8215 4-port HSU w/ RS-530/V.35 i/f [ ** ]x
821520 4-port HSU w/ RS-530/V.35 i/f [ ** ]x
8220 10-port SRU w/ RS-232C/V.24 i/f [ ** ]x
8228 8-port sub-rate B7R IP concentrato
card (1) [ ** ]x
8230 8-port subrate FRAD card [ ** ]x
8231 8-port subrate FRAD card (HDLC only) [ ** ]x
8247 5-port OCU-DP (expandable) (6) [ ** ]x
845 5-port OCU-DP child card (6) [ ** ]x
8249 2-port OCU-DP with error correction [ ** ]x
8254 4-port DSO-DP/G.703 co/contra directional [ ** ]x
8260 8-port BRI U i/f card (1) [ ** ]x
826020 8-PORT BRI U I/F CARD (1) [ ** ]x
8261 8-port BRI U i/f card, with sealing
current (1) [ ** ]x
826120 8-PORT BRI U I/F CARD, WITH SEALING
CURRENT (1) [ ** ]x
8811 ACS-68 server (3) [ ** ]x
881120 ACS-68 server (3) [ ** ]x
8813 ACS-68 SERVER WITH EXP-64 MODULE (3) [ ** ]x
881320 ACS-68 server with Exp-64 module (3) [ ** ]x
8871 ADPCM Server [ ** ]x
887120 ADPCM Server [ ** ]x
8880 4 channel inverse mux server with
BONDING modes 0 and 1 software (1) [ ** ]x
8840A ISDN PRI server card - 1 D
</TABLE>
* Confidential Treatment Requested.
26
<PAGE> 87
<TABLE>
<S> <C> <C>
channel [ ** ]x
8840B ISDN PRI server card - 2 D channels [ ** ]x
8840C ISDN PRI server card - 8 D channels [ ** ]x
62100 Frame relay server software for AC
card (3) [ ** ]x
8401 External alarm card [ ** ]x
840120 External alarm card [ ** ]x
8402 External alarm card - 3 ports and power
fail alarm [ ** ]x
840220 External alarm card - 3 ports and
power fail alarm [ ** ]x
1500 External Sync Panel [ ** ]x
2001 Blank Card Filler Panel [ ** ]x
<CAPTION>
Notes
-----
<S> <C> <C>
** Consult factory for delivery lead times
# formerly 8801b
## formerly 8805
### formerly 8920b
(1) Requires version 3.2 or higher
(2) Requires version 4.0 or higher
(3) Requires version 4.1 or higher
(4) Required for Host 4.0 of higher
(5) Requires 8923 or 8922 and 8802
(6) Requires Host 3.4.1 or higher
(7) 8811 or higher ACS
Front panel types
Std = standard molded face plate
M/E = metal face plate with ejec
1106 RJ48 to 2 BNC Adapter (for E1) [ ** ]x
1114F 5-ft RJ48M to DB25F Straight-Thru
Cable (for SRU) [ ** ]x
1114M 5-ft RJ48M to DB25M Straight-Thru
Cable (for SRU) [ ** ]x
1114X 5-ft RJ48M to DB25M Cross-Over Cable
(for SRU) [ ** ]x
1114CX 5-ft RJ48M to DB25M External Clock Cable
(for SRU) [ ** ]x
1118 25-ft RJ48M to RJ48M Silver-Satin Cable
(for OCU-DP) [ ** ]x
1121 50-Pin to 2 RJ48 Adapter with Test Jacks
(for T1) [ ** ]x
1181 50-Pin to 8 RJ48 Adapter (for T1) [ ** ]x
1201F 15-ft DB9M to DB25F Straight Thru (for
Interface) [ ** ]x
1201M 15-ft DB9M to DB25M Straight Thru (for
Interface) [ ** ]x
1202F 15-ft DB9F to DB25F Straight Thru
(for Interface) [ ** ]x
1202M 15-ft DB9F to DB25M Straight
</TABLE>
* Confidential Treatment Requested.
27
<PAGE> 88
<TABLE>
<S> <C> <C>
Thru (for Interface) [ ** ]x
1203F 5-ft DB25M to V.35F Straight-Thru Cable
(for V.35 HSU) [ ** ]x
1203M 5-ft DB25M to V.35M Straight-Thru Cable
(for V.35 HSU) [ ** ]x
1203X 5-ft DB25M to V.35M Cross-Over Cable
(for V.35 HSU) [ ** ]x
1204F 5-ft DB25M to RS530F Straight-Thru Cable
(for RS530 HSU) [ ** ]x
1204M 5-ft DB25M to RS530M Straight-Thru Cable
(for RS530 HSU) [ ** ]x
1204X 5-ft DB25M to RS530M Cross-Over Cable
(for RS530 HSU) [ ** ]x
1206F 5-ft DB15M to DB25F Straight-Thru Cable
(for RS366 HSU Ports) [ ** ]x
1207 6-ft 3-to-4 50-Pin E&M Cable (All Male
Connectors) [ ** ]x
1208 6-ft 3-to-1 50-Pin FXS Cable (All Male
Connectors) [ ** ]x
1209 6-ft 3-to-1 50-Pin TO Cable (All Male
Connectors) [ ** ]x
1210 5-ft 50-Pin Male to Male Amphenol Cable
(for Multiple Uses) [ ** ]x
1212F 5-ft DB25M to RS449F Straight-Thru Cable
(for RS449 HSU) [ ** ]x
1212M 5-ft DB25M to RS449M Straight-Thru Cable
(for RS449 HSU) [ ** ]x
1212X 5-ft DB25M to RS449M Cross-Over Cable
(for RS449 HSU) [ ** ]x
1213 5-ft 50-Pin Male Amphenol Cable to 2
RJ-48F Cable (for 8 T1 Interface Card) [ ** ]x
1215M 5-ft RJ48M to DB15M Straight-Thru Cable
(for CSU) [ ** ]x
1215X 5-ft RJ48M to DB15F Cross-Over Cable
(for PBX) [ ** ]x
1216F 15-ft RJ48M to DB25F Straight-Thru Cable
(for VT100) [ ** ]x
1216M 15-ft RJ48M to DB25M Straight-Thru
Cable (for VT100) [ ** ]x
1217 25-ft RJ11M to RJ11M Cable (for Modem) [ ** ]x
1220 25-ft 50-Pin Male to Female Amp/Champ
Extension Cable [ ** ]x
1221 25-ft DB25M to DB25F Extension Cable
(for RS232 operation) [ ** ]x
1222 25-ft DB25M to DB25F Extension Cable
(for RS530 operation) [ ** ]x
1224 25-ft DB25M to DB25F Extension Cable
(for V.35 operation) [ ** ]x
1230 1-ft RJ48M to RJ48M Shielded Cable
(for T1) [ ** ]x
</TABLE>
* Confidential Treatment Requested
28
<PAGE> 89
<TABLE>
<S> <C> <C>
1231 25-ft RJ48M to RJ48M Shielded
Cable (for T1) [ ** ]x
1232 50-ft RJ48M to RJ48M Shielded Cable
(for T1) [ ** ]x
1233 100-ft RJ48M to RJ48M Shielded Cable
(for T1) [ ** ]x
1239 Y Adapter for WAN Card Redundancy (Bus
Connect Systems) [ ** ]x
1240 5-inch DB26M to DB25F RS530 Adapter Cables[ ** ]x
1251 RS-530 to V.35 Personality Module [ ** ]x
1252 RS-530 to RS-232 Personality Module [ ** ]x
1255 RS232/RS530 DB25 Female-to-Female Gender
Changer [ ** ]x
1257 V.35 M34 Female-to-Female Gender Changer [ ** ]x
1258 RS449 DB37 Female-to-Female Gender
Changer [ ** ]x
1263F 5-ft DB26M to V.35F (M34) Straight-Thru
Cable (for DB26 HSUs) [ ** ]x
1263M 5-ft DB26M to V.35M (M34) Straight-Thru
Cable (for DB26 HSUs) [ ** ]x
1263X 5-ft DB26M to V.35M (M34) Cross-Over
Cable (for DB26 HSUs) [ ** ]x
1264F 5-ft DB26M to RS530F (DB25) Straight-Thru
Cable (for DB26 HSUs) [ ** ]
1264M 5-ft DB26M to RS530M (DB25) Straight-Thru
Cable (for DB26 HSUs) [ ** ]x
1264X 5-ft DB26M to RS530M (DB25) Cross-Over
Cable (for DB26 HSUs) [ ** ]x
1265F 5-ft DB26M to RS449M (DB37) Straight-Thru
Cable (for DB26 HSUs) [ ** ]x
1265M 5-ft DB26M to RS449M (DB37) Straight-Thru
Cable (for DB26 HSUs) [ ** ]x
1265X 5-ft DB26M to RS449M (DB37) Cross-Over
Cable (for DB26 HSUs) [ ** ]x
1268 25-ft DB26M to DB26F Extension Cable
(for V.35 operation) [ ** ]x
1269 25-ft DB26M to DB26F Extension Cable
(for RS530/RS449 operation) [ ** ]x
1504 M66 Block with 2 Female 50-Pin Amp/Champ
Connectors [ ** ]x
</TABLE>
* Confidential Treatment Requested.
29
<PAGE> 90
<TABLE>
<S> <C> <C> <C>
1901 IMACS Reference Guide [ ** ]x
1902 EMS Reference Guide [ ** ]x
1903 Cable and Equipment Guide [ ** ]x
1904 TCP/IP Manual [ ** ]x
3001AR Model 8800 CPU to Model 8804 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3002AR Model 8800 CPU to Model 8801 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3003AR Model 8804 CPU to Model 8801 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3100AR Add TCP/IP/SNMP firmware to any CPU card [ ** ]x
3010AR Firmware enhancement to any card [ ** ]x
3020AR Any other enhancement to any module [ ** ]x
Terms and conditions on advance replacements:
User must order advanced replacement product from Premisys
Advanced replacement board will be sent with return label for old
board
Old board must be returned freight pre-paid to Premisys within 21
days of receipt of replacement board
If old board is not received within 21 days, the user will be
billed for the list price of the board
Replaced board retains the warranty period of the original board
</TABLE>
<TABLE>
<S> <C> <C> <C>
3001FG Model 8800 CPU to Model 8804 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3002FG Model 8800 CPU to Model 8801 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3003FG Model 8804 CPU to Model 8801 [ ** ]x [**] *Price if old part is not
CPU returned to Premisys
3100FG Add TCP/IP/SNMP firmware to any CPU card [ ** ]x
3010FG Firmware enhancement to any card [ ** ]x
3020FG Any other enhancement to any module [ ** ]x
Terms and conditions on return-to-factory enhancements and
upgrades:
User must obtain an RA number from Premisys before returning board
for upgrade.
Board must be sent freight pre-paid to Premisys.
Premisys will return the upgraded board via 2nd day air freight
within 21 days of receipt.
Upgraded boards retain the warranty period of the original board.
Advanced replacement is not included in upgrade price.
</TABLE>
<TABLE>
<S> <C> <C>
3010EP Firmware upgrade to any CPU card [ ** ]x
3020EP Firmware upgrade to any other card [ ** ]x
</TABLE>
Terms and conditions on EPROM upgrades:
* Confidential Treatment Requested.
30
<PAGE> 91
User is responsible for proper handling of EPROM's and circuit
boards.
Improper handling by user may result in voiding of warranty.
<TABLE>
<S> <C> <C>
1920 Corporate Brochure [ ** ]x
1921 Corporate Cover Folder [ ** ]x
1922 IMACS Data Sheet [ ** ]x
1923 ATM Data Sheet [ ** ]x
1924 Frame Relay Data Sheet [ ** ]x
1925 ISDN BRX Data Sheet [ ** ]x
1926 Assembly of collateral into folder [ ** ]x
1927 Complete set of collateral (1920, 1921,
1922, 1923, 1924, 1925, 1926) [ ** ]xx
</TABLE>
PACKAGE PRICING
The packages listed below are not a sum of the parts and are being included
in this agreement.
All other packages are a sum of the parts and will not be listed
individually on this agreement.
<TABLE>
<S> <C> <C>
UN 2525-TW1 1 LOW COST TIME WARNER PACKAGE [ ** ]x
GA 8916 1 AAC FRONT LOADING ENCLOSURE [ ** ]
GA 8800 1 BUS CONNECT CPU-NON REDUNDANT [ ** ]
GA 8000 1 SINGLE T1/E1 (WAN) [ ** ]
GA 811 1 DSX/CEPT PLUG IN MODULE [ ** ]
GA 8925 1 2 T1 Interface Card w/o modem [ ** ]
UN 2525-TWA 1 AC POWER PACKAGE FOR TIME WARNER [ ** ]x
GA 8901 1 AC POWER SUPPLY (110/220) [ ** ]
GA 8903 1 INTERNAL AC-DC CONVERTER [ ** ]
GA 8904 1 48V RINGING GENERATOR [ ** ]
UN 2525-TWD 1 DC POWER PACKAGE FOR TIME WARNER [ ** ]x
GA 8902 1 DC POWER SUPPLY (-48) [ ** ]
GA 8904 1 48V RINGING GENERATOR [ ** ]
UN 2525-41U 1 RELEASE 4.1 UPGRADE PACKAGE [ ** ]x
NR 880220/ 1 CPU Xcon 512K RAM w/4.1 FW-Metal [ ** ]
60410
NR 892320 1 128K NV RAM Interface
w/Modem-Metal [ ** ]
GA 61000 1 TCP/IP SNMP SW OPTION [ ** ]
UN 2525-FRU 1 FRAME RELAY UPGRADE PACKAGE [ ** ]x
NR 880220/ 1 CPU Xcon 512K RAM w/4.1 FW-Metal [ ** ]
60410
NR 892320 1 128K NV RAM Interface
w/Modem-Metal [ ** ]
UN 881120/ 1 Frame Relay Server/ACS-68
62100 Server [ ** ]
UN 60101 1 TCP/IP SNMP SW OPTION [ ** ]
</TABLE>
* Confidential Treatment Requested.
31
<PAGE> 92
[PARADYNE LOGO]
AGREEMENT NUMBER GSC103DS
AMENDMENT NUMBER 8
PAGE 1 OF 1
DATE 12/02/96
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DRIVE
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS dated and signed December 4, 1992, by and between
Premisys Communications Inc. and Paradyne Corporation will be amended as
follows:
1.0 Notwithstanding the provisions of Paragraph 4.1 of Amendment Number 4
of this Agreement, it is agreed that Premisys will be allowed to accept
orders from BCS Division of Lucent Technologies (BCS) for the purpose
of repair and upgrade of Field returns alone and for no other
purpose(s). Premisys may accept such orders directly from BCS and shall
bill BCS directly for services provided pursuant to those orders.
2.0 It is further agreed that the pricing charged BCS for such repair and
upgrades shall be the same as that charged to Paradyne under Amendment
Number 5 of this Agreement.
3.0 All other terms and conditions of the above stated Agreement remain
unchanged.
PARADYNE CORPORATION PREMISYS COMMUNICATIONS, INC.
By: /s/ Andrew May By:
Title: President & COO Title: V.P. Controller
Date: 1/3/97 Date: 1/17/97
PARADYNE CORPORATION - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 7 - LGSC103DS
1 - 12/02/96
<PAGE> 93
[PARADYNE LOGO]
AGREEMENT NUMBER GSC103DS
AMENDMENT NUMBER 9
PAGE 1 OF 1
DATE 05/13/97
PREMISYS COMMUNICATIONS, INC.
48664 MILMONT DRIVE
FREMONT, CALIFORNIA 94538
Agreement number LGSC103DS dated and signed December 4, 1992, by and between
Premisys Communications Inc. and Paradyne Corporation will be amended as
follows:
1.0 Exhibit A, IMACS PRICING LIST, dated 11/14/96, is hereby deleted in its
entirety and replaced by a new IMACS PRICING List, Exhibit A, dated
1/1/97 (printed 3/28/97), which shall be attached hereto and made a
part hereof.
2.0 This IMACS PRICING LIST, with stated Paradyne Corporation Pricing, will
be the basis for which all dollar volume discounts, as referenced and
detailed in Amendment #4, will be applied against to calculate new
Paradyne pricing as said discounts go into effect.
3.0 The Price of all packages are the sum of the parts unless noted
otherwise in the attached Pricing List.
4.0 All other terms and conditions of the above stated Agreement remain
unchanged.
This amendment for new pricing shall be effective as of January 1, 1997 for all
orders current as of that date.
PARADYNE CORPORATION PREMISYS COMMUNICATIONS, INC.
By: /s/ Andrew May By: /s/
Title: President & CEO Title: V.P. Controller
Date: 6/27/97 Date: 6/3/97
PARADYNE CORPORATION - PROPRIETARY
USE PURSUANT TO COMPANY INSTRUCTIONS
AMENDMENT NUMBER 9 - LGSC103DS
1 - 5/13/97
<PAGE> 94
PREMISYS COMMUNICATION, INC.
IMACS PRICING
FOR PARADYNE
<TABLE>
<CAPTION>
1997
PRODUCT NUMBER DESCRIPTION PRICE
- -------------------------------------------------------------------------------
<S> <C> <C>
8901 AC power supply [**]
8902 (48V DC power supply) [**]
890220 (48V DC power supply - support OOS @ 39V) [**]
890250 SSTE '-48V DC power supply - support OOS @ 39V [**]
8903 (48V DC converter (115 VAC input)) [**]
8905 (48V DC Converter (115 - 240 VAC input)) [**]
8904 (48V Ringing generator) [**]
8906 (48V Ringing generator) [**]
8907 24V DC power supply [**]
8916 IMACS/600 universal enclosure [**]
891620 IMACS/600 universal enclosure [**]
8918 IMACS/800 universal enclosure [**]
891820 IMACS/800 universal enclosure w/ install kit, dual
feed pwr supply [**]
891822 IMACS/800 universal enclosure w/ install kit, dual
feed pwr supply, NEBS [**]
891850 SSTE IMACS/800 universal enclosure w/ install kit,
dual feed pwr supply [**]
8919 IMACS/900 universal enclosure **(2) [**]
8920 8 T1/E1 interface card with 2,400 baud modem - 32
Kb NVRAM [**]
892020 8 T1/E1 interface card with 2,400 baud modem - 32
Kb NVRAM metal [**]
8923### 8 T1/E1 interface card with 2,400 baud modem - 128
Kb NVRAM (4) [**]
892320### 8 T1/E1 interface card with 2,400 baud modem - 128
Kb NVRAM (4) [**]
8921 8 T1/E1 interface card w/out modem - 32 Kb NVRAM [**]
892120 8 T1/E1 interface card without modem - 32 Kb NVRAM [**]
892220 8 T1/E1 interface card without modem - 128Kb NVRAM
with ext sync module for framed T1/E1 (2) [**]
892250 SSTE 8 T1/E1 interface card without modem - 128Kb
NVRAM with ext sync module for framed T1/E1 (2) [**]
892221 8 T1/E1 interface card without modem - 128Kb NVRAM
with ext sync module for unframed T1/E1**(2) [**]
8925 2 T1 interface card without modem [**]
8926 2 T1 interface card with modem (1) [**]
8927 2 E1 interface card without modem(1) [**]
1183 E1 Distribution Panel (8 E1s) [**]
1184 Distribution Panel [**]
8800 CPU control card with 2 T1/E1 bus-connect (non-
redundant) - 256K [**]
880020 CPU control card with 2 T1/E1 bus-connect (non-
redundant) - 256K [**]
8801 CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 256 K [**]
880120 CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 256 K [**]
8802# CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 512 K (4) [**]
880220# CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 512 K (4) [**]
880221 CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 512 K (4) [**]
880250 SSTE CPU control card with 8 T1/E1 cross-connect
(redundant-capable) - 512 K (4) [**]
8804 CPU control card with 4 T1/E1 bus-connect
(redundant-capable) - 256 K [**]
880420 CPU control card with 4 T1/E1 bus-connect
(redundant-capable) - 256 K [**]
60342 Version 3.4.2 host firmware [**]
60343 Version 3.4.3 host firmware [**]
60344 Version 3.44 host firmware [**]
60400 Version 4.0.0 host firmware (5) [**]
60410 Version 4.1.0 host firmware (5) [**]
</TABLE>
* Confidential Treatment Requested
Page 1
<PAGE> 95
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
FOR PARADYNE
<TABLE>
<CAPTION>
1997
PRODUCT NUMBER DESCRIPTION PRICE
- --------------------------------------------------------------------------------
<S> <C> <C>
60420 Version 4.2.0 host firmware (5) [**]
60430 Version 4.3.0 host firmware (5) [**]
60440 Version 4.4.0 host firmware (5) [**]
60450 Version 4.5.0 host firmware (5) [**]
60101 TCP/IP/SNMP host code option [**]
60102 TR08 host code option [**]
63100 MCC Firmware [**]
8000 Single T1/E1 WAN [**]
800020 Single T1/E1 WAN [**]
8010 Dual T1/E1 WAN [**]
801020 Dual T1/E1 WAN [**]
801050 SSTE Dual T1/E1 WAN [**]
801120 Universal Dual T1/E1 WAN** [**]
8014 Dual T1/E1WAN with 1 x 3 relays [**]
801420 Dual T1/E1WAN with 1 x 3 relays [**]
811 DSX/CEPT plug-in module [**]
81120 DSX/CEPT plug-in module [**]
81150 SSTE DSX/CEPT plug-in module [**]
812 CSU plug-in module [**]
81220 CSU plug-in module [**]
82020 1168 kbps HDSL plug-in mod for Univ WAN 8011 [**]
8108 8-port, 2-wire E&M [**]
8119 8-port, 4-wire E&M - Extended Range [**]
811920 8-port, 4-wire E&M - Extended Range metal [**]
8128 8-port, 2-wire FXS - 900 Ohm [**]
8129 8-port, 2-wire FXS - 600 Ohm [**]
8138 8-port, 2-wire FXO - 900 Ohm [**]
8139 8-port, 2-wire FXO - 600 Ohm [**]
8149 6 Port 16 KHz FXS Coin Card - 600 Ohm (2) [**]
8159 6 Port 16 KHz FXO Coin Card - 600 Ohm (2) [**]
8202 2-port HSU w/ RS-530/V.35 i/f [**]
8212 2-port HSU w/ V.35 i/f [**]
8213 2-port HSU w/ RS-530/RS-366/V.25bis i/f [**]
8215 4-port HSU w/ RS-530/V.35 i/f [**]
821520 4-port HSU w/ RS-530/V.35 i/f [**]
821550 SSTE 4-port HSU w/ RS-530/V.35 i/f [**]
8220 10-port SRU w/ RS-232C/V.24 i/f [**]
8228 8-port sub-rate B7R IP concentrator card (1) [**]
8230 8-port subrate FRAD card [**]
8231 8-port subrate FRAD card (HDLC only) [**]
8247 5-port OCU-DP (expandable) (6) [**]
845 5-port OCU-DP child card (6) [**]
8249 2-port OCU-DP with error correction [**]
8254 4-port DSO-DP/G.703 co/contra directional [**]
8260 8-port BRI U i/f card (1) [**]
826020 8-port BRI U i/f card (1) [**]
8261 8-port BRI U i/f card, with sealing current (1) [**]
826120 8-port BRI U i/f card, with sealing current (1) [**]
8811 ACS-68 server (3) [**]
881120 ACS-68 server (3) [**]
8813 ACS-68 server with Exp-64 module (3) [**]
881320 ACS-68 server with Exp-64 module (3) [**]
8871 ADPCM Server [**]
887120 ADPCM Server [**]
8880 4 channel inverse mux server with BONDING modes
0 and 1 software(1) [**]
8840A ISDN PRI server card - 1 D channel [**]
8840B ISDN PRI server card - 2 D channels [**]
8840C ISDN PRI server card - 8 D channels [**]
62100 Frame relay server software for ACS card (3) [**]
8401 External alarm card [**]
840120 External alarm card [**]
8402 External alarm card - 3 ports and power fail alarm [**]
</TABLE>
* Confidential Treatment Requested
Page 2
<PAGE> 96
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
FOR PARADYNE
<TABLE>
<CAPTION>
1997
PRODUCT NUMBER DESCRIPTION PRICE
- --------------------------------------------------------------------------------
<S> <C> <C>
840220 External alarm card - 3 ports and power fail alarm [**]
840250 SSTE External alarm card - 3 ports and power fail
alarm [**]
1500 External Sync Panel [**]
150050 SSTE External Sync Panel [**]
2001 Blank Card Filler Panel [**]
Notes
** Consult factory for delivery lead times [**]
# formerly 8801b [**]
## formerly 8805 [**]
### formerly 8920b [**]
(1) Requires version 3.2 or higher [**]
(2) Requires version 4.0 or higher [**]
(3) Requires version 4.1 or higher [**]
(4) Required for Host 4.0 or higher [**]
(5) Requires 8923 or 8922 and 8802 [**]
(6) Requires Host 3.4.1 or higher [**]
(7) 8811 or higher ACS [**]
Front panel types [**]
Std = standard molded face plate [**]
M/E = metal face plate with ejec [**]
1106 RJ48 to 2 BNC Adapter (for E1) [**]
1114F 5-ft RJ48M to DB25F Straight-Thru Cable (for SRU) [**]
1114M 5-ft RJ48M to DB25M Straight-Thru Cable (for SRU) [**]
1114X 5-ft RJ48M to DB25M Cross-Over Cable (for SRU) [**]
1114CX 5-ft RJ48M to DB25M External Clock Cable (for SRU) [**]
1118 25-ft RJ48M to RJ48M Silver-Satin Cable (for OCU-DP) [**]
1121 50-Pin to 2 RJ48 Adapter with Test Jacks (for T1) [**]
1181 50-Pin to 8 RJ48 Adapter (for T1) [**]
1201F 15-ft DB9M to DB25F Straight Thru (for Interface) [**]
1201M 15-ft DB9M to DB25M Straight Thru (for Interface) [**]
1202F 15-ft DB9F to DB25F Straight Thru (for Interface) [**]
1202M 15-ft DB9F to DB25M Straight Thru (for Interface) [**]
1203F 5-ft DB25M to V.35F Straight-Thru Cable (for V.35
HSU) [**]
1203M 5-ft DB25M to V.35M Straight-Thru Cable (for V.35
HSU) [**]
1203X 5-ft DB25M to V.35M Cross-Over Cable (for V.35 HSU) [**]
1204F 5-ft DB25M to RS530F Straight-Thru Cable (for RS530
HSU) [**]
1204M 5-ft DB25M to RS530M Straight-Thru Cable (for RS530
HSU) [**]
1204X 5-ft DB25M to RS530M Cross-Over Cable (for RS530 HSU) [**]
1206F 5-ft DB15M to DB25F Straight-Thru Cable (for RS366
HSU Ports) [**]
1207 6-ft 3-to-4 50-Pin E&M Cable (All Male Connectors) [**]
1208 6-ft 3-to-1 50-Pin FXS Cable (All Male Connectors) [**]
1209 6-ft 3-to-1 50-Pin TO Cable (All Male Connectors) [**]
1210 5-ft 50-Pin Male to Male Amphenol Cable (for Multiple
Uses) [**]
1212F 5-ft DB25M to RS449F Straight-Thru Cable (for RS449
HSU) [**]
1212M 5-ft DB25M to RS449M Straight-Thru Cable (for RS449
HSU) [**]
1212X 5-ft DB25M to RS449M Cross-Over Cable (for RS449 HSU) [**]
1213 5-ft 50-pin Male Amphenol Cable to 2 RJ-48F Cable
(for 8 T1 interface) [**]
1215M 5-ft RJ48M to DB15M Straight-Thru Cable (for CSU) [**]
1215X 5-ft RJ48M to DB15F Cross-Over Cable (for PBX) [**]
1216F 15-ft RJ48M to DB25F Straight-Thru Cable (for VT100) [**]
1216M 15-ft RJ48M to DB25M Straight-Thru Cable (for VT100) [**]
1217 25-ft RJ11M to RJ11M Cable (for Modem) [**]
1220 25-ft 50-Pin Male to Female Amp/Champ Extension
Cable [**]
1221 25-ft DB25M to DB25F Extension Cable (for RS232
operation) [**]
1222 25-ft DB25M to DB25F Extension Cable (for RS530
operation) [**]
1224 25-ft DB25M to DB25F Extension Cable (for V.35
operation) [**]
1230 1-ft RJ48M to RJ48M Shielded Cable (for T1) [**]
</TABLE>
* Confidential Treatment Requested
Page 3
<PAGE> 97
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
FOR PARADYNE
<TABLE>
<CAPTION>
1997
PRODUCT NUMBER DESCRIPTION PRICE
- --------------------------------------------------------------------------------
<S> <C> <C>
1231 25-ft RJ48M to RJ48M Shielded Cable (for T1) [**]
1232 50-ft RJ48M to RJ48M Shielded Cable (for T1) [**]
1233 100-ft RJ48M to RJ48M Shielded Cable (for T1) [**]
1239 Y Adapter for WAN Card Redundancy (Bus Connect
Systems) [**]
1240 5-inch DB26M to DB25F RS530 Adapter Cables [**]
1251 RS-530 to V.35 Personality Module [**]
1252 RS-530 to RS-232 Personality Module [**]
1255 RS232/RS530 DB25 Female-to-Female Gender Changer [**]
1257 V.35 M34 Female-to-Female Gender Changer [**]
1258 RS449 DB37 Female-to-Female Gender Changer [**]
1261F 5-ft DB25(M) to M34(F) Straight-Thru Cable V.35
cable [**]
1261M 5-ft DB25(M) to M34(M) Straight-Thru Cable V.35
cable [**]
1263F 5-ft DB26M to V.35F (M34) Straight-Thru Cable (for
DB26 HSUs) [**]
1263M 5-ft DB26M to V.35M (M34) Straight-Thru Cable (for
DB26 HSUs) [**]
1263X 5-ft DB26M to V.35M (M34) Cross-Over Cable (for
DB26 HSUs) [**]
1264F 5-ft DB26M to RS530F (DB25) Straight-Thru Cable
(for DB26 HSUs) [**]
1264M 5-ft DB26M to RS530M (DB25) Straight-Thru Cable
(for DB26 HSUs) [**]
1264X 5-ft DB26M to RS530M (DB25) Cross-Over Cable (for
DB26 HSUs) [**]
1265F 5-ft DB26M to RS449M (DB37) Straight-Thru Cable
(for DB26 HSUs) [**]
1265M 5-ft DB26M to RS449M (DB37) Straight-Thru Cable
(for DB26 HSUs) [**]
1265X 5-ft DB26M to RS449M (DB37) Cross-Over Cable (for
DB26 HSUs) [**]
1268 25-ft DB26M to DB26F Extension Cable (for V.35
operation) [**]
1269 25-ft DB26M to DB26F Extension Cable (for RS530/
RS449 operation) [**]
1504 M66 Block with 2 Female 50-Pin Amp/Champ Connectors [**]
1901 IMACS Reference Guide [**]
1902 EMS Reference Guide [**]
1903 Cable and Equipment Guide [**]
1904 TCP/IP Manual [**]
3001AR Model 8800 CPU to Model 8804 CPU [**]
3002AR Model 8800 CPU to Model 8801 CPU [**]
3003AR Model 8804 CPU to Model 8801 CPU [**]
3100AR Add TCP/IP/SNMP firmware to any CPU card [**]
3010AR Firmware enhancement to any card [**]
3020AR Any other enhancement to any module [**]
</TABLE>
Terms and conditions on advanced replacements:
User must order an advanced replacement upgrade
from Premisys.
Advanced replacement board will be sent with return
label for old board.
Old board must be returned freight pre-paid to
Premisys within 21 days of receipt of replacement
board.
If old board is not received within 21 days, the user
will be billed for the list price of the board
Replaced board retains the warranty period of the
original board.
<TABLE>
<S> <C> <C>
3001FG Model 8800 CPU to Model 8804 CPU [**]
3002FG Model 8800 CPU to Model 8801 CPU [**]
3003FG Model 8804 CPU to Model 8801 CPU [**]
3100FG Add TCP/IP/SNMP firmware to any CPU card [**]
3010FG Firmware enhancement to any card [**]
3020FG Any other enhancement to any module [**]
</TABLE>
Terms and conditions on return-to factory
enhancements and upgrades.
User must obtain an RA number from Premisys before
returning board for upgrade.
Board must be sent freight pre-paid to Premisys.
Premisys will return the upgraded board via 2nd day air
freight within 21 days of receipt.
Upgraded boards retain the warranty period of the
original board.
Advanced replacement is not included in upgrade price.
* Confidential Treatment Requested
<TABLE>
<S> <C> <C>
3010EP Firmware upgrade to any CPU card [**]
3020EP Firmware upgrade to any other card [**]
</TABLE>
* Confidential Treatment Requested
Page 4
<PAGE> 98
PREMISYS COMMUNICATIONS, INC.
IMACS PRICING
FOR PARADYNE
<TABLE>
<CAPTION>
1997
PRODUCT NUMBER DESCRIPTION PRICE
- --------------------------------------------------------------------------------
<S> <C> <C>
Terms and conditions on EPROM upgrades.
User is responsible for proper handling of EPROM's
and circuit boards.
Improper handling by user may result in voiding of
warranty.
1920 Corporate Brochure [**]
1921 Corporate Cover Folder [**]
1922 IMACS Data Sheet [**]
1923 ATM Data Sheet [**]
1924 Frame Relay Data Sheet [**]
1925 ISDN BRX Data Sheet [**]
1926 Assembly of collateral into folder [**]
1927 Complete set of collateral (1920, 1921, 1922,
1923, 1924, 1925, 1926) [**]
</TABLE>
PACKAGE PRICING
The packages listed below are not a sum of the parts and are being included in
this agreement.
All other packages are a sum of the parts and will not be listed individually on
this agreement.
The pricing on these packages is good thru December 31, 1997
<TABLE>
<S> <C> <C>
2525-TWA AC POWER PACKAGE FOR TIME WARNER [**]
8901 AC POWER SUPPLY (110/220) [**]
8903 INTERNAL AC-DC CONVERTER [**]
8904 48V RINGING GENERATOR [**]
2525-TWD DC POWER PACKAGE FOR TIME WARNER [**]
8902 DC POWER SUPPLY (-48) [**]
8904 48V RINGING GENERATOR [**]
2525-41U RELEASE 4.1 UPGRADE PACKAGE [**]
880220/60410 CPU Xcon 512K RAM w/4.1 FW-Metal [**]
892320 128K NV RAM Interface w/Modem-Metal [**]
60101 TCP/IP SNMP SW OPTION [**]
2525-FRU FRAME RELAY UPGRADE PACKAGE [**]
880220/60410 CPU Xcon 512K RAM w/4.1 FW-Metal [**]
892320 128K NV RAM Interface w/Modem-Metal [**]
881120/62100 Frame Relay Server/ACS-68 Server [**]
60101 TCP/IP SNMP SW OPTION [**]
</TABLE>
* Confidential Treatment Requested
Page 5
<PAGE> 1
EXHIBIT 10.40
Paradyne Corporation ***Text Omitted and
and Filed Separately
AG Communication Systems Corporation Confidential Treatment
Requested Under
Joint Development and Distribution Agreement 17 C.F.R. Sections
200.80(b)(4),
200.83 and
230.406
This Joint Development and Distribution Agreement ("Agreement")
as of June 10, 1998 ("Effective Date") by and between Paradyne Corporation
("Paradyne"), a Delaware corporation, having its principal place of business at
8545 126th Avenue North, Largo, FL 33773 and AG Communication Systems
Corporation ("AGCS"), a Delaware corporation having its principal place of
business at 2500 West Utopia Road, Phoenix, AZ 85027.
WHEREAS, the parties each manufacture and sell certain telecommunications
hardware and software;
WHEREAS, the parties desire to enter into a non-exclusive arrangement to
develop and market a telephony product solution for the Network Service
Provider market (the Derived Telephony Product, as further defined below);
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
promises and covenants set forth below, Paradyne and AGCS mutually agree as
follows:
1. Definitions
a. "DLC" shall mean Digital Loop Carrier technology.
b. "DSLAM" shall mean Digital Subscriber Loop Access Multiplexer
technology.
c. "MVP Endpoints" shall mean the hardware and software intended for use
at the customer premises developed by Paradyne pursuant to this Agreement and
which shall be part of the Derived Telephony Product.
d. "Network Service Providers" shall mean a business with a
telecommunication infrastructure that sells voice and data telecommunication
services to the business and/or consumer market.
e. "Paradyne MVP Technology" shall mean Paradyne's proprietary Multiple
Virtual Phone (MVP) technology, as previously disclosed to AGCS pursuant to a
Confidentiality Agreement dated January 21, 1998 and more fully described on
Appendix A, that is included in both the MVP Endpoint and Switch Product
developed hereunder.
f. "Switch Product" shall mean the Central Office switch, DLC, or DSLAM
(including central office and remote versions) equipment of AGCS incorporating
the Paradyne MVP Technology supporting voice-only traffic or a combination of
voice and data traffic (but excluding data-only traffic) on copper loops, which
is developed by AGCS pursuant to this
<PAGE> 2
Agreement as further specified on Appendix A and which shall be part of the
Derived Telephony Product.
g. "Derived Telephony Product" shall mean the derived telephony product
line jointly developed by the parties hereunder comprised of both the MVP
Endpoint and the Switch Product. The Derived Telephony Product shall have ports
supporting derived voice-only traffic and/or ports supporting both derived
voice and data traffic.
2. Technology Licensing
a. Subject to the terms and conditions of this Agreement, Paradyne hereby
grants to and only to AGCS a non-exclusive, non-sublicensable (except as
expressly provided herein), non-transferable license to use the Paradyne MVP
Technology during the term of this Agreement solely (i) for the purpose of
incorporating the Paradyne MVP Technology into the AGCS-developed Switch
Product and to manufacture, or have manufactured, such Switch Product; and (ii)
to distribute, sell and/or lease solely to Network Service Providers the Switch
Product that incorporates the MVP Technology in accordance with the terms of
this Agreement. AGCS may use distributors provided that each such distributor
may not use other subdistributors and each distributor shall be bound by an
enforceable writing to substantially the same limitations, conditions and
restrictions as those set forth in this Agreement.
b. AGCS agrees that if Paradyne identifies certain AGCS-owned technology
to which Paradyne desires a license for the purpose of developing the Derived
Telephony Product, AGCS shall grant Paradyne a license to use such technology
for such purpose and will negotiate in good faith with Paradyne to establish a
reasonable license fee.
3. Development and Product Availability
a. Paradyne will use reasonable best efforts to develop and manufacture
the MVP Endpoints, and AGCS will use reasonable best efforts to develop and
manufacture the Switch Product in accordance with the schedule set forth below
and the Statement of Work attached hereto as Appendix B. If either party's
performance is delayed beyond the times specified in the Statement of Work, any
dates or time periods relevant to performance by the other party hereunder
shall be appropriately and equitably extended to account for any delays
resulting therefrom if such delays affect that other party's ability to timely
perform. If either party proposes a change to the Statement of Work, the other
party will reasonably and in good faith consider and discuss with the proposing
party the proposed change.
i) Phase 1 - GTE Demonstration product was completed in March 1998.
ii) Phase 2 - Derived Telephony Product based on the integrated line
card and voice-only MVP Endpoints will be available on 7/15/98.
iii) Phase 3 - Derived Telephony Product based on a standalone shelf
unit and voice-only, FCC Class A certified MVP Endpoints will be
available on 8/23/98.
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iv) Phase 4 - Derived Telephony Product based on a standalone shelf
unit and Paradyne voice and data MVP Endpoints with FCC Class B
testing completed and certification requested and will be
available on 9/5/98
v) Phase 5 - The enhancement of the Derived Telephony Product which
includes a standalone shelf unit or integrated card, Paradyne
multidrop voice and data MVP Endpoints, and development, testing,
certification and delivery of a Burr Brown or equivalent AFE.
This enhancement is targeted for 4/15/99, but is subject to
change based on the results of detailed product definition and
associated milestones that will be established by October 30,
1998.
b. The parties will use reasonable best efforts to ensure the
compatibility and interoperation of the MVP Endpoints and the Switch Product.
c. If either party desires to have any third party develop or integrate
new features or products intended for use with the Derived Telephony Product,
such party must obtain the written consent of the other party. In addition, if
such development would infringe the other party's intellectual property or
proprietary rights, the parties will negotiate additional appropriate license
fees for such development.
d. During the design phase of development hereunder, the parties will
cooperate to review the other party's product component selection and, where
appropriate, will use reasonable best efforts to use and jointly purchase common
components.
4. MVP Technology License Fee
In consideration for the license granted by Paradyne to AGCS hereunder,
AGCS shall pay to Paradyne the license fees set forth on Appendix C. If AGCS
desires to use the Paradyne MVP Technology to develop applications other than
the Derived Telephony Product, Paradyne shall use reasonable best efforts to
negotiate with AGCS to establish additional license fees and other parameters
for such use.
5. Ownership and Restrictions
a. Paradyne shall retain all right, title and interest in the Paradyne MVP
Technology and MVP Endpoints. AGCS shall retain all right, title and interest in
the Switch Product (subject to Paradyne's ownership of the MVP Technology
incorporated therein). No rights or licenses are granted by either party except
as expressly set forth herein.
b. Without the express written consent of Paradyne, AGCS shall not (nor
shall it allow others to): delete or fail to reproduce any copyright or other
proprietary notices appearing in or on the Paradyne MVP Technology or MVP
Endpoints, (ii) modify, disassemble, decompile or otherwise reverse engineer the
software comprising the Paradyne MVP Technology or MVP Endpoints or otherwise
attempt to learn the source code, structure, or algorithms
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underlying such software, or (iii) distribute, sell and/or lease the MVP
Endpoints except as part of the Derived Telephony Product.
c. Without the express written consent of AGCS, Paradyne shall not (nor
shall it allow others to): (i) delete or fail to reproduce any copyright or
other proprietary notices appearing in or on the Switch Product, (ii) except
with regard to the Paradyne MVP Technology contained therein, modify,
disassemble, decompile or otherwise reverse engineer the software comprising
the Switch Product or otherwise attempt to learn the source code, structure, or
algorithms underlying such software, or (iii) distribute, sell and/or lease the
Switch Product except as part of the Derived Telephony Product.
6. Distribution
a. Subject to the terms and conditions of this Agreement, Paradyne hereby
grants to and only to AGCS a non-exclusive, worldwide right to purchase MVP
Endpoint units from Paradyne for distribution and sale to Network Service
Providers only as part of the Derived Telephony Product in accordance with the
terms of this Agreement. Subject to the terms and conditions of this Agreement,
Paradyne grants to and only to AGCS a non-exclusive, worldwide,
non-sublicensable (except as expressly provided herein), non-transferable
license to distribute and sublicense directly to Network Service Providers such
software that is part of the MVP Endpoint in accordance with the terms of this
Agreement, provided that (i) all such use and distribution is in object code
form only; and (ii) such distribution and sublicense shall be pursuant to a copy
of AGCS' standard end user license agreement. AGCS may use distributors provided
that each such distributor may not use other subdistributors and each
distributor shall be bound by an enforceable writing to substantially the same
limitations, conditions and restrictions as those set forth in this Agreement.
b. Subject to the terms and conditions of this Agreement, AGCS hereby
grants to Paradyne a non-exclusive, worldwide right to purchase the Switch
Product units from AGCS for distribution and sale to Network Service Providers
only as part of the Derived Telephony Product in accordance with the terms of
this Agreement. Subject to the terms and conditions of this Agreement, AGCS
grants to Paradyne a non-exclusive, worldwide, non-sublicensable (except as
expressly provided herein), non-transferable license to distribute and
sublicense directly to Network Service Providers in accordance with the terms
of this Agreement such software that is part of the Switch Product that is not
already owned by Paradyne pursuant to this Agreement, provided that (i) all
such use and distribution is in object code form only; and (ii) such
distribution and sublicense shall be pursuant to a copy of Paradyne's standard
end user license agreement. Paradyne may use distributors provided that each
such distributor may not use other subdistributors and each distributor shall
be bound by an enforceable writing to substantially the same limitations,
conditions and restrictions as those set forth in this Agreement.
7. Public Announcement
a. The parties will use reasonable best efforts to create the following
joint public announcements: (i) an announcement of the development of the
voice-only application of the Derived Telephony Product; and (ii) an
announcement of the development of the data
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application of the Derived Telephony Product no more than ninety (90) days
prior to the first commercial availability of such product (as defined in the
Statement of Work attached hereto as Appendix B). Should market conditions
require, either party may request the other party to accelerate the
announcement set forth in this Section (a); provided, however, that neither
party shall issue a press release with regard to the Derived Telephony Product
or the subject matter of this Agreement without the other party's prior written
approval, which shall not be unreasonably withheld.
b. (i) Each party shall provide to the other party thirty (30) days
advance notice of any material press release by that party prior to July 1,
1999 regarding distribution of derived voice or derived voice and data
products, and (ii) Paradyne shall provide to AGCS thirty (30) days notice of
any material press release by Paradyne prior to July 1, 1999 regarding third
party partnerships using Paradyne MVP Technology; provided, however, that the
notifying party is not required to disclose the name of any involved third
party or the terms of any third party agreement if such name or terms are
protected by a confidentiality agreement with such third party, unless the
third party consents in writing to such disclosure.
8. Confidentiality
Each party (the "Receiving Party") agrees that the technology, and all
code, inventions, algorithms, know-how and ideas it obtains from the other
party (the "Disclosing Party") and all other business, technical and financial
information it obtains from the Disclosing Party are the confidential property
of the Disclosing Party ("Confidential Information"). Except as expressly and
unambiguously allowed herein, the Receiving Party will hold in confidence and
not use or disclose any Confidential Information of the Disclosing Party and
shall ensure that its employees comply with such obligations. The Receiving
Party's nondisclosure obligation shall not apply to information it can
document: (a) was rightfully in the Receiving Party's possession without
restriction as to confidentiality before receipt from the Disclosing Party; (b)
is or becomes a matter of public knowledge through no breach of any
confidentiality agreement by the Receiving Party; (c) is rightfully received by
the Receiving Party from a third party without a duty of confidentiality; (d)
is independently developed by the Receiving Party without use of the
Confidential Information by employees without access to such Confidential
Information; (e) is required to be disclosed by court order, provided that the
Receiving Party uses diligent efforts to limit disclosure and to obtain
confidential treatment or a protective order and has notified the Disclosing
Party reasonably in advance of such disclosure and has allowed the Disclosing
Party to participate in the proceeding.
9. Standardization of MVP
After [***] MVP Endpoints have been sold pursuant to this Agreement,
Paradyne may, at its discretion, consider standardizing the Paradyne MVP
Technology. If Paradyne proceeds with such standardization efforts. AGCS will
cooperate in good faith with Paradyne to support Paradyne's efforts.
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10. Product Pricing
a. AGCS agrees to pay Paradyne the prices set forth on Appendix D for the
units of MVP Endpoints ordered by AGCS and accepted by Paradyne hereunder.
Paradyne agrees to pay AGCS the prices set forth on Appendix D for the units of
Switch Product ordered by Paradyne and accepted by AGCS hereunder. Both parties
mutually agree that the prices set forth in Appendix D shall not increase during
the term of this agreement unless mutually agreed upon by the parties CEOs in
order to address market or manufacturing conditions.
b. AGCS agrees that it will purchase all MVP Endpoints from Paradyne.
Paradyne agrees to not financially compensate its sales force nor accept
financial compensation for itself or its employees from a third party Derived
Telephony DSLAM provider of which compensation is attributed to the sales of
such third party's Derived Telephony DSLAM products.
c. All payments due by either party hereunder shall be paid in U.S.
dollars in the U.S. not later than thirty (30) days following the date of the
applicable invoice. The purchasing party shall be responsible for all taxes
(except the selling party's U.S. income taxes), duties, withholdings or other
governmental assessments due on any amounts owed by the purchasing party
hereunder. All shipping, rigging and other destination charges will be invoiced
by the selling party and paid by the purchasing party. At the selling party's
option, interest charges may be added to any past due amounts at the rate of
[***]% per month; or if this interest rate exceeds the maximum allowed by
applicable law, then at the maximum lawful rate. Risk of loss to products
shipped hereunder shall pass to the purchasing party upon delivery to a common
carrier. The selling party shall cooperate in every reasonable way to facilitate
the purchasing party's claims, if any, to the transportation agent for lost
products. Notwithstanding the passage of title and risk of loss, the selling
party shall retain a security interest in the products shipped hereunder until
full payment is made by the purchasing party to the selling party. The
purchasing party agrees to execute and deliver all documents requested by the
selling party to protect and maintain the selling party's security interest.
d. If a customer requests a specific feature enhancement to the Derived
Telephony Product, the parties shall negotiate in good faith to determine any
appropriate additional fees to be charged to the customer for such enhancements
(including but not limited to upfront payments and/or purchase commitments). The
party that has the primary customer relationship (as mutually agreed upon by the
parties) shall take the lead in such negotiations with the customer.
e. If Paradyne and AGCS mutually determine that the general market demands
enhancements or corrections to the initial Derived Telephone Product, Paradyne
and AGCS will make such enhancements or corrections to the MVP Endpoint and the
Switch Product, respectively, at no cost to the other party.
f. In the event that during the term of this Agreement either party
identifies a one-time key sales opportunity of extraordinarily large volumes,
the parties agree in good faith to negotiate special one-time pricing for
purchases by the other for such an opportunity. As specified under Section 1
Rule 2 and Section 2 Rule 2 of Appendix D products sold to the other party
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under this arrangement shall not be further discounted. However, the quantity
shipped under theses opportunities will be included in determining the
cumulative number of products shipped for purposes of determining the discount
level under Appendix D.
11. Forecasts/Ordering
a. Paradyne and AGCS, respectively, will commence to provide to the other
four weeks after the Effective Date of the Agreement a rolling twelve (12) month
non-binding forecast of their quantity requirements for the Switch Product or
the MVP Endpoints, respectively, revised on a monthly basis and submitted by the
fifth business day of each month. The start month of each forecast shall the be
the fifth month after the date the forecast is submitted. (e.g. the forecast
submitted in January reflect product needs for May of that year through April of
the next year) If no forecast is timely submitted for a particular month, the
last forecast submitted by the forecasting party shall become the new forecast.
Succeeding forecasts after the initial one shall not reflect increases greater
then 25% of the first month, 50% of the second month and 100% of the months
thereafter. Such percentages shall be calculated on the immediately preceding
forecast for the same month. If orders exceed the limitations set forth in the
preceding sentence, the manufacturing party will have no obligation with respect
thereto, but the parties will discuss in good faith the additional amount, if
any, that the manufacturing party is willing to attempt to supply consistent
with its other obligations and the ordering party will adjust its order
accordingly.
If the parties determine that certain component parts required in the
manufacture of the MVP Endpoints and/or the Switch Product require more than
sixteen (16) weeks lead time prior to shipment date, the parties will negotiate
in good faith a separate agreement whereby the parties can share in the cost of
pre-purchasing and storing inventory of such components in order to expedite the
ordering and manufacturing process.
b. Rescheduling - Upon written notice prior to ten (10) business days
before scheduled shipment of an order, the ordering party may place any order on
hold or reschedule any order once and only once for shipment not later than
ninety (90) days from the originally scheduled ship date.
c. Cancellation of Orders - Upon written notice either party may cancel
all or any part of any Purchase Order upon payment of the following restocking
charges as a percentage of the discounted price of the Product so canceled:
If within 0 to 4 weeks from schedule ship date [***]%
If within 5 to 8 weeks from schedule ship date [***]%
If within 9 to 12 weeks from schedule ship date [***]%
If within 13 to 16 weeks from schedule ship date [***]%
d. Ordering - All orders must allow at least sixteen (16) weeks lead time
prior to the requested shipment date. All orders placed by the parties hereunder
shall reference this
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Agreement and are subject to acceptance by the other party. Paradyne agrees to
use reasonable best efforts to sell to AGCS such quantities of MVP Endpoints as
AGCS may order in accordance with the terms of this Agreement, and AGCS agrees
to use reasonable best efforts to sell to Paradyne such quantities of Switch
Product as Paradyne may order in accordance with the terms of this Agreement.
Each party shall submit the orders to the other party in writing or
electronically and may be sent by facsimile, e-mail or EDI. Within forty-eight
(48) hours of receipt of an order from the purchasing party, the selling party
shall acknowledge the order and confirm the requested ship date by return
facsimile. In the event that the selling party is unable to meet the purchasing
party's requested ship date(s), the parties will negotiate an acceptable ship
date. Furthermore, it is the intention of the parties that this Agreement be
controlling over additional or different terms of any order, confirmation,
invoice or similar document, and that waivers and amendments shall be effective
only if made by non-preprinted agreements clearly understood by both parties to
be an amendment or waiver to this Agreement.
Each order submitted shall include (i) a description of the product being
ordered, inclusive of any numerical and or alphabetical identification which may
be referenced on the selling party's applicable price list; which may now or
hereafter be attached to this Agreement (ii) the requested delivery date; (iii)
the applicable price, (iv) the location to which the product is to be shipped,
(v) quantity to be shipped and (vi) purchase order number.
12. Product Changes
a. Subject to compliance with the other terms and conditions of this
Agreement, Paradyne may at any time, make changes in the MVP Endpoints or modify
the drawings and specifications relating thereto,or substitute MVP Endpoints of
later design to fill an order provided the changes, modifications or
substitutions under normal and proper use do not impact upon the form, fit or
function or are required for safety purposes. Subject to compliance with the
other terms and conditions of this Agreement, AGCS may at any time, make changes
in the Switch Product or modify the drawings and specifications relating
thereto, or substitute Switch Products of later design to fill an order provided
the changes, modifications or substitutions under normal and proper use do not
impact upon the form, fit or function or are required for safety purposes.
b. Each party will provide prior notice to the other party of all changes
to an MVP Endpoint or Switch Product that changes the revision level of such
product ("Change Notice") at least thirty (30) days in advance of scheduled
shipment. In the Change Notice, the party will identify changes, which affect
interchangeability with previously shipped product or compatibility at a higher
level of assembly. Upon request from the other party, that party will supply a
small number of sample products for test. If the party notifies the other that
the changes are unacceptable within ten (10) days of notification, or if samples
are involved, within fifteen (15) days of receiving the samples, the parties
will meet and in good faith develop mutually acceptable alternative solutions to
the requirement that gave rise to the need for the revision. If the other party
does not provide written notification of objection to the requesting party
within the time period specified above, the requesting party shall have no
obligation to accommodate the other party's objections.
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13. Most Favored Nations
a. Product Pricing. Each party ("the Selling Party") agrees that while
this Agreement is in effect, the product pricing terms set forth on Appendix D
offered to the other party hereunder ("the Purchasing Party") shall be [***] the
product pricing offered by the Selling Party [***] (not including an agreement
that is entered as a result of court order or primarily to settle a bona fide
dispute regarding infringement of the MVP Endpoints or Switch Products or
proprietary rights relating thereto) with a similarly situated third party who
offers products directly competing with the Purchasing Party for the sale of
similar products to Network Service Providers. The Selling Party agrees to
provide the Purchasing Party, within (10) days after the close of any agreement
that the Selling Party reasonably believes to fall within the scope of this
section 13(a), with notice of the relevant terms of such agreement. Within ten
(10) days of such notice, the Purchasing Party may elect to substitute such
product pricing terms for the product pricing terms of this Agreement; provided,
however, that: (1) any consideration previously provided to the Selling Party
hereunder shall be non-refundable, and (2) the Purchasing Party shall adopt all
of the additional restrictions, obligations and license limitations imposed in
such agreement. In determining whether an agreement falls within the scope of
this section 13(a), all of the terms of this Agreement and such agreements shall
be analyzed as a whole.
b. License Fee. Paradyne agrees that for a period of [***] months after
the Effective Date of this Agreement, the license fees set forth on Appendix C
hereto shall be [***] percent [***] lower than the license fees offered by
Paradyne for the use of the Paradyne MVP Technology under any agreement of
similar scope under similar terms and conditions (not including an agreement
that is entered as a result of court order or primarily to settle a bona fide
dispute regarding infringement of the MVP Endpoints or proprietary rights
relating thereto) with a similarly situated third party who offers products
directly competing with the Purchasing Party for the sale of similar products to
Network Service Providers. Paradyne agrees to provide AGCS, within (10) days
after the close of any agreement that Paradyne reasonably believes to fall
within the scope of this section 13(b), with notice of the relevant terms of
such agreement. Within ten (10) days of such notice, Paradyne shall offer to
AGCS similar consideration terms; provided, however, that: (1) any consideration
previously provided to Paradyne hereunder shall be non-refundable, and (2) AGCS
shall adopt all of the additional restrictions, obligations and license
limitations imposed in such agreement. In determining whether an agreement falls
within the scope of this Section 13(b), all of the terms of this Agreement and
such agreements shall be analyzed as a whole.
14. Branding
a. Each party hereby grants to the other party a non-exclusive,
non-sublicensable license to use that party's trademarks identified on Appendix
E (the "Marks") solely for the purpose of marketing, distributing and selling
the Derived Telephony Product in accordance with the terms of this Agreement
and the terms of the party's respective marketing guidelines as provided in
writing to the other party. In the event that a party reasonably determines
that the other party is not in compliance with such provisions and guidelines,
that party shall, upon thirty (30) days prior written notice, have the right to
suspend the other party's use of
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the Marks until such time as the other party meets such standards and
provisions to Mark owner's reasonable satisfaction.
b. Neither party shall at any time do or permit any act to be done which
may in any way impair the rights of the other party in its Marks and the
parties will discontinue all use of the other party's Marks immediately upon
the termination or expiration of this Agreement.
c. Co-Branding. During the term of this Agreement, the parties agree to
co-brand the Derived Telephony Product as follows: Subject to the terms and
conditions of section 14(a): (i) Paradyne agrees to include the AGCS Marks on
all MVP Endpoints sold pursuant to this Agreement, [***] to AGCS and in a manner
to be agreed upon by the parties, and (ii) AGCS agrees to include Paradyne's
Marks on all Switch Products sold pursuant to this Agreement, [***] to Paradyne
and in a manner to be agreed upon by the parties. Provided, however, that on or
before January 1 of each calendar year during the term of this Agreement, if at
least [***] MVP Endpoints were not shipped to AGCS during the prior year, then
the parties shall discuss in good faith the appropriateness of continued
co-branding and the fees for such when annual shipments are expected to be below
[***] MVP Endpoints and/or [***] Switch Products for AGCS and Paradyne
respectively. Notwithstanding the foregoing, this Section 14(c) shall apply only
to the respective products and shall not obligate either party to include the
other party's Marks on any product packaging or other relevant product
documentation (which either party may do at its discretion, subject to the other
party's approval of such use and under the terms and conditions of Section
14(a)).
d. Private Labeling. If requested in writing by AGCS, Paradyne shall
include a particular customer's trademark on the MVP Endpoints and associated
documentation (in a manner to be agreed upon by the parties), solely for sales
of the Derived Telephony Product to a Network Service Provider of more than
100,000 units per year. In consideration of the foregoing, AGCS shall pay to
Paradyne, within thirty days of the date of invoice from Paradyne, an additional
fee of [***] dollars [***] per MVP Endpoint. If the customers require private
labeling to include packaging, the parties agree to negotiate a mutually agreed
upon fee.
15. Sales and Marketing
a. Within ninety (90) days of the Effective Date of this Agreement, the
parties shall jointly approach GTE, Lucent, Brooks Fiber, Alltel and AT&T
WorldNet in order to convince such companies to adopt the Derived Telephony
Product as their Derived POTS solution.
b. Each party agrees to use reasonable best efforts to market and
distribute the Derived Telephony Product. Either party shall have the right to
separately market and distribute its respective portion of the Derived
Telephony Product on a standalone basis or as bundled with other products.
c. If requested by a customer or mutually agreed to by the parties, the
parties will use reasonable best efforts to established direct fulfillment
structures.
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16. Second Source Requirement
In the event that a potential Network Service Provider customer demands
that a second source for the manufacture of the Derived Telephony Product be
available (a "Second Source Manufacturer"), the party negotiating with such
customer will use diligent efforts to ensure that Paradyne and AGCS are the
Primary Source for the Derived Telephony Product for at least a period of three
(3) years. "Primary Source" for the purpose of this Section 16 shall mean the
provider of at least ninety percent (90%) (or other percentage negotiated with
the particular customer and mutually agreed upon by the parties) of the total
dollar amount and quantity for each party's portion of the Derived Telephony
Product purchased by the customer over the three-year period. Both parties shall
cooperate to mutually negotiate acceptable terms and conditions with such
Second Source Manufacturer with regard to the manufacture of the Derived
Telephony Product.
17. Escrow
a. Paradyne and AGCS each agree to place and periodically update, for
the benefit of the other party, the source code and all reasonable
documentation necessary to manufacture, have manufactured and/or maintain the
MVP Endpoints and the Switch Product, respectively (the "Escrow Materials"), in
escrow with a mutually agreeable escrow agent (the "Escrow Agent"). Both
parties shall enter into a mutually acceptable escrow agreement substantially
in the forms attached hereto as Appendix G ("Escrow Agreement") with the Escrow
Agent setting forth the terms stated herein.
b. The "Release Condition" shall mean that the Releasing Party is unable
to supply or maintain its respective portion of the Derived Telephony Product
in material breach of its obligations to do so hereunder. Upon release of the
Escrow Materials in accordance with the Escrow Agreement, the Escrow
Beneficiary shall have a non-transferable, non-sublicensable, non-exclusive
license, to use the Releasing Party's Escrow Materials solely to sell,
distribute, lease, manufacture, have manufactured, support and maintain the
Releasing Party's portion of the Derived Telephony Product as developed
pursuant to this Agreement only to the extent necessary to fulfill the
Releasing Party's obligations under section 11(d) of this Agreement and only
for so long as such Release Condition continues to include a reasonable phase
back period. The Escrow Beneficiary shall maintain the Releasing Party's Escrow
Materials in confidence as "Confidential Information" of the Releasing Party
and disclose the Escrow Materials to employees or contractors only as necessary
to exercise the rights granted herein.
18. Covenants
a. Each party shall use reasonable best efforts to: (i) keep the other
party informed as to any problems encountered with the Derived Telephony
Product and any resolutions arrived at for those problems, (ii) communicate
promptly to each other any and all modifications, design changes or
improvements of the Derived Telephony Product suggested by any customer,
employee or agent, and (iii) cause quarterly, their respective Chief Executive
Officers (CEO) and one other representative chosen by the CEO to meet and
review Derived Telephony Product cost reductions and pricing to each other.
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b. Paradyne agrees that AGCS shall have any and all right, title and
interest in and to any such suggested modifications, design changes or
improvements of the Switch Product, without the payment of any additional
consideration therefor either to Paradyne, or its employees, agents or
customers, and that it will reasonably cooperate with AGCS in this regard; and
AGCS agrees that Paradyne shall have any and all right, title and interest in
and to any such suggested modifications, design changes or improvements of the
MVP Technology and MVP Endpoints, without the payment of any additional
consideration therefor either to AGCS, or its employees, agents or customers,
and that it will reasonably cooperate with Paradyne in this regard.
c. Each party agrees to comply with the U.S. Foreign Corrupt Practices
Act (regarding, among other things, payments to government officials) and all
export laws and restrictions and regulations of the Department of Commerce, the
United States Department of Treasury Office of Foreign Assets Control ("OFAC"),
or other United States or foreign agency or authority, and agrees not to
export, or allow the export or re-export of any Derived Telephony Product or
any portion thereof in violation of any such restrictions, laws or regulations;
the exporting party shall obtain and bear all expenses relating to any
necessary licenses and/or exemptions with respect to the export from the U.S. of
all material or items deliverable by the other party to any location and shall
demonstrate to the other party compliance with all applicable laws and
regulations prior to delivery thereof by the other party.
19. Warranty and Disclaimer
WARRANTIES AND DISCLAIMERS OF THE RESPECTIVE PARTIES ARE CONTAINED IN APPENDIX
F.
20. Service and support
a. Paradyne and AGCS each shall provide to the other reasonable training
at the providing party's facility at no cost, however, the attending party
shall pay travel and living expenses. The intent of this training is to ensure
that the sales, technical and engineering forces have a competent understanding
of the functionality, maintenance, support and installation of the MVP Endpoint
and the Switch Product, respectively. The frequency and extent of such training
during the term on this Agreement will be agreed upon with the intent of
optimizing each other's success. Initial training will be conducted within 60
days of the commercial availability of the Derived Telephony Product.
b. Each party agrees to use reasonable best efforts to provide first
level support for the Derived Telephony Product for each party's own customer
base within North America and will establish a mutually acceptable means of
support for Derived Telephony Products sold outside of North America.
c. Paradyne shall use reasonable best efforts to provide second and third
level support to AGCS for the MVP Endpoints, and AGCS shall use reasonable best
efforts to provide second and third level support to Paradyne for the Switch
Products, sold pursuant to this Agreement in accordance with the terms set
forth on Appendix F.
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d. At each parties expense, each will furnish the other party with such
quantities as shall be determined appropriate, of its standard information,
marketing literature, brochures, manuals, Product information letters, etc.
relating to the Products, Services and Licensed Materials, and thereafter, upon
request each party shall furnish additional quantities at the respective
party's current cost.
21. Indemnification
a. Paradyne hereby agrees to defend, indemnify and hold AGCS harmless
from any third party claims that the Paradyne MVP Technology infringes a third
party's U.S. patent, copyright trademark or other proprietary right or
misappropriates a trade secret; provided that Paradyne shall have received
prompt written notice of the claim from AGCS, Paradyne shall have the option to
solely control the defense and settlement of such claims, and AGCS shall
provide reasonable assistance to Paradyne in the defense or settlement of such
claims. The foregoing obligation of Paradyne does not apply with respect to
Paradyne MVP Technology or portions or components thereof (i) modified by AGCS
or a third party after shipment by Paradyne, if the alleged infringement
relates to such modification, or (ii) where AGCS' use or distribution of the
Paradyne MVP Technology is not in accordance with the licenses granted in this
Agreement. The foregoing sets forth Paradyne's entire liability, and AGCS' sole
remedy, with respect to any alleged infringement of the Paradyne MVP Technology.
b. AGCS hereby agrees to defend, indemnify and hold Paradyne harmless
from any third party claims that the Switch Product infringes a third party's
U.S. patent, copyright, trademark or other proprietary right or misappropriates
a trade secret; provided that AGCS shall have received prompt written notice of
the claim from Paradyne, AGCS shall have the option to solely control the
defense and settlement of such claims, and Paradyne shall provide reasonable
assistance to AGCS in the defense or settlement of such claims. The foregoing
obligation of AGCS does not apply with respect to Switch Product or portions or
components thereof (i) modified by Paradyne or a third party after shipment by
AGCS, if the alleged infringement relates to such modification, or (ii) where
Paradyne's use or distribution of the Switch Product is not in accordance with
the licenses granted in this Agreement. The foregoing sets forth AGCS' entire
liability, and Paradyne's sole remedy, with respect to any alleged infringement
of the Switch Product.
22. LIMITED LIABILITY. EXCEPT WITH REGARD TO THE PARTIES' RESPECTIVE
INDEMNITY OBLIGATIONS SET FORTH IN SECTION 21 ABOVE, IN NO EVENT SHALL EITHER
PARTY BE LIABLE WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT UNDER ANY
CONTRACT, TORT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY (I) FOR ANY
INCIDENTAL, CONSEQUENTIAL, SPECIAL, INDIRECT DAMAGES, LOST PROFITS OR LOST DATA
OR COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES, EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, OR (II) IN
EXCESS OF THE AMOUNTS PAID BY THE OTHER PARTY HEREUNDER.
13
<PAGE> 14
23. Term and Termination
a. This Agreement shall continue in effect for a period of five (5) years
from the Effective Date hereof (the "Initial Term") and shall renew
automatically for additional one-year periods ("Renewal Terms") unless either
party provides written notice of termination to the other party at least ninety
(90) days prior to the expiration of the Initial Term or any Renewal Term or
earlier terminated as provided in Section 23(b) below. If this Agreement is
terminated by either party upon ninety (90) days notice pursuant to this
Section 23(a): (i) the other party may make one last purchase of the other
party's portion of the Derived Telephony Product, in accordance with the terms
of this Agreement, for delivery within up to three (3) months of termination of
the Agreement, and (ii) either party may purchase continuing support from the
other party, if such support is available, upon payment of the other party's
standard support fee.
b. If Paradyne terminates the Agreement pursuant to Section 23(a) and the
license fee in Section 2a has been paid in full: (i) AGCS' license under
Section 2(a) shall become perpetual following termination of this Agreement,
provided that AGCS complies with all of the other applicable surviving terms
and restrictions as set forth herein, and (ii) if the MVP Endpoints are no
longer commercially available on competitive terms, from either Paradyne or any
other third party, then, Paradyne shall grant to AGCS a royalty free license,
specified in Section 14b, to manufacture, have manufacture, distribute, sell
and/or lease the MVP Endpoints at no charge, provided that AGCS shall provide
all necessary support and maintenance for such MVP Endpoints.
c. If AGCS terminates the Agreement pursuant to Section 23(a): (i) AGCS
shall have a continuing royalty free Paradyne MVP technology license to
maintain the embedded base of Switch Product and a royalty bearing license to
continue to sell the Switch product. Such royalty shall be mutually agreed
upon, and if failing to agree will be resolved using arbitration procedures in
Section 25n and (ii) if the Switch Products are no longer commercially
available on competitive terms from either AGCS or any other third party, then
AGCS will grant to Paradyne a perpetual, royalty free license to manufacture,
have manufactured, distribute, sell and/or lease the Switch Products at no
charge, provided that Paradyne shall provide all necessary support and
maintenance for such Switch Products.
d. Either party may terminate this Agreement as follows: (i) upon thirty
(30) days written notice if the other party materially defaults in the
performance of its obligations hereunder and such default is not corrected
within the thirty (30) day period, or (ii) immediately if the other party files
a petition in bankruptcy, makes an assignment for the benefit of creditors, is
adjudicated bankrupt or insolvent, petitions or applies for a receiver or
trustee for a substantial part of its property, or commences any proceeding
under any reorganization arrangement, dissolution or liquidation law or statute
of any jurisdiction or if there is commenced against such party any proceeding
which has not been dismissed within one hundred twenty (120) days of such
commencement. In the event of the termination of this Agreement in accordance
with the terms of this Section 23.d. the defaulting party under 23(d)(i) above
and the party that is the subject of the bankruptcy or other proceeding under
23(d)(ii) above shall be deemed the terminating party, and the rights and
obligations of the parties set forth in Sections 23.b and 23.c shall apply.
14
<PAGE> 15
e. Except as otherwise expressly provided herein, upon expiration or
termination of this Agreement: (i) all rights and licenses granted herein shall
terminate, (ii) the parties shall each return to the other party, or destroy,
the other party's Confidential Information, and (iii) the provisions of Sections
5, 8, 17, 18(b) & (c), 19, 21, 22, 23 and 25 shall remain in effect. Termination
is not the sole remedy under this Agreement and whether or not termination is
effected, other remedies will remain available in accordance with the terms of
this Agreement as further defined in Section 25n.
24. Paradyne Restriction
a. Paradyne agrees that it will not develop, or have developed, for the
North American or Taiwanese markets, a Paradyne DSLAM which uses the Paradyne
MVP Technology to provide derived POTS applications and which is designed to
directly compete with the Switch Product ("Paradyne Voice DSLAM") prior to
December 31, 1998.
b. Paradyne will not "Introduce" a Paradyne Voice DSLAM in North America
or Taiwan prior to December 31, 1998. The term "Introduce" or "Introduction" for
the purpose of this Section 24 shall mean the first time Paradyne enters into
substantive discussions intended to lead to a definitive agreement for the
distribution of the Paradyne Voice DSLAM to any Network Service Provider in the
North American or Taiwanese markets.
c. In addition, Paradyne will delay Introduction of the Paradyne Voice
DSLAM in North America and Taiwan as follows:
i. until April 1, 1999 if AGCS provides to Paradyne before December 31,
1998 a letter authored by GTE which states that GTE has successfully tested the
Derived Telephony Product in GTE's labs and has certified the Derived Telephony
Product for deployment within GTE's internal network; and that GTE plans to
conduct Derived Telephony Product field trial activity during the fourth quarter
of 1998 and if successful, plans on deploying at least 100,000 lines of Derived
Telephony Product during the calendar year of 1999.
ii. until July 1, 1999 if Paradyne receives by March 31, 1999 a non-
cancelable purchase order from either AGCS or GTE for a minimum of 20,000 MVP
Endpoints, which order is shipped complete by May 31, 1999.
d. If Paradyne fails to produce and make available in accordance with the
acceptance criteria established in the Statement of Work any material milestone
contained in any of the five product phases as further defined in the Statement
of Work set forth on Appendix B, which materially affects AGCS ability to
perform, the parties may mutually agree to extend the dates set forth in
Sections 24(b) and (c) above; provided, however, that the foregoing shall not
apply if Paradyne's failure to meet such milestones was due in whole or in part
to a delay or failure by AGCS hereunder which materially affected Paradyne's
ability to perform.
e. Both parties agree that the restrictions set forth in this Section 24
apply only to North America and Taiwan and that Paradyne may develop Paradyne
Voice DSLAM for, and introduce a Paradyne Voice DSLAM into, any other country or
region at any time.
15
<PAGE> 16
f. Notwithstanding the foregoing, if an entity acquires substantially all
of the business or assets of Paradyne involved in the direct performance of
this Agreement, and such new entity is developing or markets another DSLAM
product, Paradyne may enhance, market, sell and fully exploit such DSLAM
product using Paradyne MVP Technology to provide derived POTS functionality in
any market at any time, provided that, during the period in which any of the
restrictions set forth in this Section 24 above may be applicable, Paradyne
provides written notice to AGCS of such change and does not sell such product
until ninety (90) days from the date of such written notice.
25. Miscellaneous
a. Governing Law. This agreement shall be governed by and interpreted in
accordance with the laws of the State of New York, without reference to
conflict of laws principles and without regard to the United Nations Convention
on Contracts for the International Sale of Goods. In any action or proceeding
to enforce rights under this Agreement, the prevailing party shall be entitled
to recover costs and attorneys' fees.
b. Independent Contractors. The parties hereto are independent
contractors. Nothing contained herein or done in pursuance of this Agreement
shall constitute either party the agent of the other party for any purpose or
in any sense whatsoever, or constitute the parties as partners or joint
ventures. Each party is solely responsible for all of its employees and agents
and its labor costs and expenses arising in connection therewith.
c. No Assignment. Neither party may, without the other party's prior
written consent, which consent shall not be unreasonably withheld, assign or
delegate this agreement or any of the party's rights or duties hereunder.
d. Amendment. No alteration, amendment, waiver, cancellation or any
other change in any term or condition of this Agreement shall be valid or
binding on either party unless mutually agreed to in writing by both parties.
e. No Waiver. The failure of either party to enforce at any time any of
the provisions of this Agreement, or the failure to require at any time
performance by the other party of any of the provisions of this Agreement,
shall in no way be construed to be a present or future waiver of such
provisions, nor in any way affect the validity of either party to enforce each
and every such provision thereafter. The express waiver by either party of any
provision, condition, or requirement of this Agreement shall not constitute a
waiver of any future obligation to comply with such provision, condition, or
requirement.
f. Severability. If for any reason a court of competent jurisdiction
finds any provision of this Agreement, or portion thereof, to be unenforceable,
that provision of the Agreement will be enforced to the maximum extent
permissible to as to effect the intent of the parties, and the remainder of
this Agreement will continue in full force and effect. The parties agree to
negotiate in good faith an enforceable substitute provision for any
unenforceable provision that most nearly achieves the intent and economic
effect of the unenforceable provision.
16
<PAGE> 17
g. Notices. All notices, requests, demands, waiver, and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given: (i) when delivered by hand or confirmed
facsimile transmission; (ii) one day after delivery by receipted overnight
delivery; or (iii) four days after being mailed by certified or registered mail,
return receipt requested, with postage prepaid to the appropriate address as
set forth below:
Paradyne Corporation
8545 126th Avenue North
Largo, Florida 33773
Attention: President
Copy to: Corporate Secretary
AG Communication Systems Corporation
2500 West Utopia Road
Phoenix, AZ 85027
Attention: VP, Business Operation, New Ventures
Copy to AGCS General Counsel
h. Headings. The heading used in this Agreement are use for convenience
only and are not to be considered in construing or interpreting this Agreement.
i. Entire Agreement. The terms and conditions herein contained and the
referenced exhibits and appendices which are incorporated herein by this
reference constitute the entire agreement between the parties with respect to
the subject matter hereof and supersede all previous and contemporaneous
agreements and understandings, whether oral or written, between the parties
hereto with respect to the subject matter hereof.
j. Counterparts. This Agreement may be executed in counterparts or
duplicate originals, all of which shall be regarded as one and the same
instrument, and which shall be the official and governing version in the
interpretation of this Agreement.
k. Non-Solicitation. During the term of this Agreement and for a period
of one year thereafter, the parties agree that they will not directly solicit
the employees of the other to induce them to come to work for the other party.
This section shall not be construed to prohibit a party from considering
unsolicited requests for employment received from the other party's employees.
l. Force Majeure. A party shall not be liable for nonperformance or delay
in performance caused by any event reasonably beyond the control of such party
including but not limited to wars, hostilities, revolutions, riots, civil
commotion, national emergency, strikes, lock-outs, unavailability of supplies,
epidemics, fire, flood, earthquake, force of nature, explosion, embargo or any
other Act of God, or any law, proclamation, regulation, ordinance or other act
or order of any court, government or governmental agency.
17
<PAGE> 18
m. EQUITABLE RELIEF. The parties agree that a breach by a party, or its
employees or agents, of the obligations under Sections 5 or 3 of this Agreement,
will result in irreparable harm to the other party for which monetary damages
may be inadequate, and the injured party shall be entitled to seek appropriate
equitable or injunctive relief.
n. ARBITRATION. Any controversy or claim arising out of the
interpretation, performance or breech of any provision of this Agreement, shall
be settled by arbitration to be held in New Orleans, Louisiana in accordance
with and through the American Arbitration Association Rules for Commercial
Arbitration in effect on the date of this Agreement. The arbitration shall be
conducted by a single arbitrator selected by the American Arbitration
Association. The arbitrator shall take evidence directly from witnesses and
documents as presented by the parties; all witnesses shall be made available
for cross-examination. The arbitrator shall render an award within six (6)
months of the request for arbitration. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court of competent jurisdiction in any
country, or application may be made to such court for a judicial acceptance of
the award and an enforcement as the law of such jurisdiction may require or
allow. The foregoing shall not prevent either party from seeking equitable
relief as otherwise permitted by the terms of this Agreement.
AG COMMUNICATION SYSTEMS PARADYNE CORPORATION
CORPORATION
Signature: /s/ Mark Somer Signature: /s/ Andrew May
Name: Mark Somer Name: Andrew May
Title: VP & GM AG Communication Systems Title: President & CEO
Date: 10 June 98 Date: 6/10/98
<PAGE> 19
APPENDIX A
Description of Paradyne Multiple Virtual Phone (MVP) Technology:
MVP is a subscriber line technology includes layer 1 Physical Media Dependent
and Transmission Convergence (TC) layers (TC-cell, TC-frame and TC-bit-sync)
that includes multi-drop concepts for derived POTS services and data services.
Generally, MVP includes invention from the premises POTS interface to the
central office PSTN interface. MVP provides additional POTS services to the
premises. MVP is exclusive of any data communication, including non-POTS
bit-sync data. Multiple Virtual Line (MVL) technology supports data multi-drop
concepts and is a subset and a separately licensed component of the MVP
Technology and which is not licensed under this Agreement.
Description of the Switch Product:
SuperLine(TM) Products are products that provide high speed data access and
multiple lines of telephony service -- allocating bandwidth only on demand; all
over, single cable pair with splitterless POTS support.
One of the product offerings is a SuperLine(TM) platform -- comprising a high
density central site modem that is hardened for use in remote terminal
environments as well as central offices -- combines high speed data services
with additional telephone lines, all without a truck roll to the customer
premises. In addition to the survivable (POTS) telephone service, one or two
additional telephone lines can be provided using SuperLine(TM) bandwidth, when
required. The additional telephony services support all custom features such
as: 911, Caller ID, distinctive ringing, etc., and support FAX and modem calls
up to the V90 standard. Standard analog telephone sets and the existing
telephony infrastructure of local digital switches, CO wiring billing and OAM&P
are used with these SuperLine(TM) lines. Interface to the local digital switch
is TR303, DDI and in the future TR008. Many data services are supported
including: Internet access; work at home access (corporate, governmental and
educational LANs); video meetings, IP telephony, etc.
This SuperLine(TM) platform has capacity for 96 customer links, with each line
card providing 8 ports. Each link to the customer supports 2 derived lines, as
well as, the existing POTS service and data. The shelf telephony interface
supports both DDI for the GTD5 and TR303 for GTD5, 5ESS, DMS100 and most other
digital switching product deployed throughout the network today including
Digital Loop Carrier equipment. The platform's WAN data interface is two 10/100
base T links.
The other product offerings are integrated SuperLine(TM) circuit packs designed
specifically for a particular digital switch or digital loop carrier (i.e.
Server Cards). These Server Cards bring the same technology and capability
inherent in the SuperLine(TM) platform to a single card, which can be inserted,
into an existing digital switch or digital loop carrier's line shelf. This
allows the network provider to use existing switch, power and trucking capacity
to generate additional subscriber revenue with minimum additional investment.
A-1
<PAGE> 20
Appendix B
Statement of Work
Attached hereto
B-1
<PAGE> 21
Appendix C
Paradyne MVP Technology License Fees
AGCS shall select one of the following two license fee options:
Option One - $[***]
AGCS shall pay $[***] to Paradyne as follows: (Note: the Phases denoted below
are further defined in the Statement of Work)
a) Within thirty (30) days of execution of the Agreement - $[***]
b) Within thirty (30) days of Completion of Product Phase 2 - $[***]
c) Within thirty (30) days of Completion of Product Phase 3 - $[***]
d) The later of February 1, 1999 or thirty (30) days after
Completion of Product Phase 4 - $[***]
e) Within thirty (30) days of Completion of Product Phase 5 - $[***]
Option Two - $[***]
1. AGCS shall pay $[***] to Paradyne as follows: (Note: the Phases denoted
below are further defined in the Statement of Work)
a) Within thirty (30) days of execution of the Agreement - $[***]
b) Within thirty (30) days of Completion of Product Phase 2 - $[***]
c) Within thirty (30) days of Completion of Product Phase 3 - $[***]
d) Within thirty (30) days of Completion of Product Phase 4 - $[***]
e) Within thirty (30) days of Completion of Product Phase 5 - $[***]
and
2. AGCS shall pay to Paradyne a fee of $[***] per unit of MVP Endpoint
Technology (Options A, B, E and F) for the first [***] units purchased
hereunder.
For the purpose of this Appendix C, "Completion" of a product phase shall mean
acceptance by AGCS of the deliverable resulting from the applicable Product
Phase as defined by the test and acceptance criteria set forth in the Statement
of Work.
- -------
*** Confidential Treatment Requested
C-1
<PAGE> 22
Appendix D
Equipment Pricing
The parties agree that the pricing set forth in this Appendix D shall
apply to purchases of products under this Agreement up to and including
December, 31, 1999. Thereafter, either party may change the prices listed
hereunder once per year during the term of this Agreement upon sixty-(60) days
written notice to the other party. Notwithstanding, such notice, any mutually
approved outstanding quotes or orders will be honored.
1. MVP Premise Equipment Pricing for 1998 and 1999
A. The first [***] MVP Endpoints purchased by AGCS from Paradyne will be
priced at the [***] unit discount level. AGCS will then market the Derived
Telephony Product to prospective customers. Should AGCS sell the Derived
Telephony Product for more than the combined [***] unit discounted price
(AGCS' port price plus Paradyne's endpoint price), then AGCS shall pay to
Paradyne [***] percent [***] of the incremental revenue. If additional units
are required in 1998, both paries will mutually agree on the discount level.
B. After the sale of the initial [***] MVP Endpoints, the following
pricing shall apply to all purchases by AGCS hereunder:
<TABLE>
<CAPTION>
List Price 25,000 50,000 75,000 100,000
MVP Premise Equipment units. units. units. units.
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
A. Voice Only MVP Endpoint, [***] [***] [***] [***] [***]
POTS / 1 Derived POTS
B. Voice Only MVP Endpoint, [***] [***] [***] [***] [***]
POTS / 2 Derived POTS
C. Ethernet -- Data Only MVP [***] [***] [***] [***] [***]
Endpoint,
POTS / Data
D. USB -- Data Only MVP Endpoint, [***] [***] [***] [***] [***]
POTS / Data
E. Ethernet -- MVP Full [***] [***] [***] [***] [***]
Configuration,
POTS / 2 Derived POTS / Data
F. USB -- MVP Full Configuration, [***] [***] [***] [***] [***]
POTS / 2 Derived POTS / Data
</TABLE>
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*** Confidential Treatment Requested
D-1
<PAGE> 23
EARNED DISCOUNT
The parties mutually agree that:
a) The earned discount period (ED Period) is defined as
January 1 to December 31 of any calendar year.
b) The initial discount level for 1999 will be at the 50,000
unit level. All MVP Endpoints shipped in 1998 will be added to the accumulated
volume shipped in 1999 ED period and will be eligible for earned discount for
the 1999 ED period.
c) The discount level achieved in a ED period will be the
initial discount level for the next ED period (e.g. if Paradyne shipped AGCS
75,000 units during the 1999 ED period, then the initial discount level for the
2000 ED period would be at the 75,000 unit level).
d) The discount level for an order will be based upon the
greater of the earned discount or the total number of all MVP Endpoints (A-F)
shipped prior to the specific order during that year (e.g., if Paradyne has
shipped AGCS 35,000 unit A's, 42,000 unit B's and 45,000 unit E's, the volume
discount level would be at the 1000,000 unit level because the total equals
100,000 units).
e) Earned discount will be determined annually. The calculation
of earned discount will be completed during January and is based on the MVP
Endpoints shipped in the previous ED period. The earned discount is the
difference between the actual discount applied to the individual orders and the
discount earned based on the accumulative total units shipped during the ED
period. Paradyne will determine if further discounts are due based upon the
discount schedule set forth above and the rules stated below. If a credit is
due, Paradyne will issue a credit to AGCS for the total amount due. Paradyne
will apply this credit to subsequent orders by AGCS hereunder. If the credit is
not fully consumed within the first calendar quarter of the current year then
Paradyne will remit to AGCS the excess amount by March 31st of the current year.
If monies are due, Paradyne will issue an invoice to AGCS for the outstanding
amount having net thirty day terms.
Rule 1 -- Application of discount on orders during the ED period:
Higher level discounts will be applied to all shipments
when the number of units shipped exceeds the next
higher discount level. (e.g. during the 1999 the
initial discount level is at the 50,000 unit level. All
orders for MVP Endpoints will be priced at the 50,000
unit level until 75,000 units have been shipped to
AGCS. The 75,000 unit level discount will be applied to
all orders after 75,000 units have been shipped to
AGCS).
Rule 2 -- Special pricing on large orders:
Due to market conditions, an order may receive special
pricing. The units shipped as part of these orders will
not be eligible for earned discount monies, however the
shipped unit volume will be used in calculating the
D-2
<PAGE> 24
total units shipped during the ED period and to determine
the initial discount for the next ED period.
Rule 3 -- Annual True Up of earned discount:
Rule 3a -- Determination of the discount level achieved
At the end of the ED period Paradyne will review all
orders and calculate the actual number of units shipped
to determine the discount level to be applied to all
units shipped during the ED period. The discount level
achieved will be rounded to the unit level nearest to
the number of units shipped. (e.g. if Paradyne shipped
65,000 units to AGCS during 1999 then the level
achieved would be 75,000, if only 60,000 units were
shipped then the discount level achieved would be the
50,000 unit level discount).
Rule 3b -- Calculation of the earned discount
The earned discount will be the different between the
initial discount applied to the units shipped and the
actual discount level achieved using Rule 3a. The
earned discount amount is determined on a per endpoint
type basis for each order. The total earned discount
for the order is the sum of earned discount amounts for
each endpoint type shipped with the order. If a credit
or invoice is required they be issued via the terms and
conditions defined in Section 1 B (e) of this Appendix.
Rule 3c -- Earned discount on units shipped in different ED
periods
The units in an order are given a discount level at the
time the order is placed based on the actual number of
units shipped. The discount level determined at the
date of order will be used for all units shipped as
part of that order. This applies even when the shipment
schedule spans ED periods. Only the units actually
shipped in a given ED period will be used to determine
the earned discount level.
D-3
<PAGE> 25
Example 1: If AGCS places four (4) orders throughout the year, and each order
placed contains various MVP Endpoint types totaling 25,000 units, the pricing
and invoicing would be as shown below: All orders were shipped within the ED
period. The discount level for all orders in the next ED period would be at
100,000 unit level.
Orders placed during 1999
Note Initial discount is at the [***] unit level
<TABLE>
<CAPTION>
Endpoint Order Invoice Earned
Order Type Volume Price Amount Discount Net Amount Comments
- ------- -------- ------- ------- ------- -------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 A 25,000 $[xxx] $[xxx] $[xxx] $[xxx]
2 B 25,000 $[xxx] $[xxx] $[xxx] $[xxx]
3 C 25,000 $[xxx] $[xxx] $[xxx] $[xxx] unit level discount achieved
4 D 25,000 $[xxx] $[xxx] $[xxx] $[xxx] [***]
TOTAL 100,000 $[xxx] $[xxx] $[xxx]
</TABLE>
Earned discount calculation for previous orders
100,000 unit level discount achieved
<TABLE>
<CAPTION>
Endpoint Order Invoiced Earned Earned
Order Type Volume Price Price Discount
- ------- -------- ------- -------- ------- --------
<S> <C> <C> <C> <C> <C>
1 A 25,000 $[xxx] $[xxx] $[xxx]
2 B 25,000 $[xxx] $[xxx] $[xxx]
3 C 25,000 $[xxx] $[xxx] $[xxx]
4 D 25,000 $[xxx] $[xxx] $[xxx]
TOTAL 100,000 $[xxx]
</TABLE>
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*** Confidential Treatment Requested
D-4
<PAGE> 26
Example 2: The earned discount level achieved in the previous period was at the
100,000 unit level. An order for 50,000 units is placed in March 99 with a
delivery schedule over the next 12 months. However, the shipment schedule
resulted in delivery of only 25,000 units during the ED period. Two other
orders totaling 40,000 units were placed and shipped during the ED period.
Therefore, earned discount must be recaptured for the ED period based on Rule
3b. The discount level for the next ED period is at the 75,000 unit level using
Rule 3c.
<TABLE>
<CAPTION>
SCHEDULE ACTUAL
SHIPMENT SHIPMENT ENDPOINT SHIPPED GROSS EARNED
DELIVERY DATE DATE TYPE VOLUME PRICE AMOUNT DISCOUNT NET AMOUNT
- -------- -------- -------- -------- ------- ----- ------ -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Order 1
a Mar-99 Mar-99 A 12,500 $[***] [***] [***] [***]
b Jun-99 Jun-99 B 12,500 $[***] [***] [***] [***]
c Aug-99 Feb-00 E 0 $[***] [***] [***] [***]
d Feb-00 Apr-00 E 0 $[***] [***] [***] [***]
Order 2 May-99 Oct-99 B 20,000 $[***] [***] [***] [***]
Order 3 Jun-99 Nov-99 E 20,000 $[***] [***] [***] [***]
------ ------ ----- ------ ----- ------ -------- ----------
TOTAL 66,000 [***] [***] [***]
</TABLE>
Earned Discount Calculations
<TABLE>
<CAPTION>
ENDPOINT SHIPPED INVOICED EARNED
ORDER TYPE VOLUME PRICE EARNED PRICE DISCOUNT
- ----- -------- ------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
Order 1
a A 12,500 [***] [***] [***]
b B 12,500 [***] [***] [***]
c E 0 [***] [***] [***]
d E 0 [***] [***] [***]
Order 2 B 20,000 [***] [***] [***]
Order 3 E 20,000 [***] [***] [***]
----- ------ -------- ------------ --------
TOTAL 65,000 [***]
</TABLE>
- -----------------------
*** Confidential Treatment Requested
D-5
<PAGE> 27
2. AGCS Switch Product Pricing for 1998 and 1999
A. The initial discount level to Paradyne for 1999 will be at the [***]
unit level
<TABLE>
<CAPTION>
Port List Price/ 25,000 Ports 50,000 Ports 75,000 Ports 100,000
Description Port Price/Port Price/Port Price/Port Ports Price/
Port
- ----------- ----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
A - [***] [***] [***] [***] [***]
Integrated
Voice and
Data Port
B - DSLAM [***] [***] [***] [***] [***]
Voice and
Data Port
C - Integrated [***] [***] [***] [***] [***]
Voice Only
Port
D - DSLAM [***] [***] [***] [***] [***]
Voice Only
Port
</TABLE>
Earned Discount
The parties mutually agree that:
a) The earned discount period (ED Period) is defined as January 1 to
December 31 of any calendar year
b) All Switch Products shipped to Paradyne in 1998 will be added to the
accumulated volume shipped to Paradyne in 1999 ED period and will be
eligible for earned discount for the 1999 ED period.
c) The discount level achieved in a ED period will be the initial
discount level for the next ED period (e.g. if AGCS shipped Paradyne
75,000 ports during the 1999 ED period, then the initial discount
level for the 2000 ED period would be at the 75,000 port level).
d) The discount level for an order will be based upon the greater of the
earned discount or the total number of all Switch Products (A-D)
shipped prior to the specific order during the year (e.g., if AGCS has
shipped Paradyne 35,000 unit A type ports, 42,000 units B type ports
and 45,000 unit E type ports, the
- -----------------------
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D-6
<PAGE> 28
volume discount level would be at the 100,000 port level because the
total equals 100,000 ports).
e) Earned discount will be determined annually. The calculation of earned
discount will be completed during January and is based on the Switch
Product shipped in the previous "ED period". The earned discount is
the difference between the actual discount applied to the individual
orders and the discount earned based on the accumulative total of
units shipped during the ED period. AGCS will determine if further
discounts are due based upon the discount schedule set forth above and
the rules stated below. If a credit is due AGCS will issue a credit
for the total amount due. If the credit is not fully consumed within
the first calendar quarter of the current year then AGCS will remit to
Paradyne the excess amount by March 31st of the current year. If
monies are due AGCS will issue an invoice to Paradyne for the
outstanding amount having net thirty day terms.
Rule 1 -- Application of discount on orders during the ED period:
Higher level discounts will be applied to all shipments when the
number of port shipped exceeds the next higher discount level, (e.g.
during the 1999 the initial discount level is at the 50,000 port level.
All orders for Switch Product will be priced at the 50,000 port level
until 75,000 units have been shipped to Paradyne. The 75,000 port
level discount will be applied to all orders after 75,000 ports have
been shipped to Paradyne).
Rule 2 -- Special pricing on large orders:
Due to market conditions, an order may receive special pricing. The
port shipped as part of these orders will not be eligible for earned
discount monies, however the shipped port volume will be used in
calculating the total ports shipped during the ED period and to
determine the initial discount for the next ED period.
Rule 3 -- Annual True Up of earned discount:
Rule 3a -- Determination of the discount level achieved
At the end of the ED period AGCS will review all orders and
calculate the actual number of ports shipped to determine the
discount level to be applied to all ports shipped during the ED
period. The discount level achieved will be rounded to the unit
level nearest to the number of units shipped. (e.g. if AGCS shipped
65,000 ports to Paradyne during 1999 then the level achieved would
be 75,000, if only 60,000 ports were shipped then the discount
level achieved would be 50,000 port unit level discount).
D-7
<PAGE> 29
Rule 3b - Calculation of the earned discount
The earned discount will be the different between the initial
discount applied to the ports shipped and the actual discount level
achieved using Rule 3a. The earned discount amount is determined on
a per Switch Product Port type basis for each order. The total
earned discount for the order is the sum of earned discount amounts
for each Switch Product Port type shipped with the order. If a
credit or invoice is required, they will be issued via terms and
conditions defined in Section 2e of this Appendix.
Rule 3c - Earned discount on units shipped in different ED periods
The ports in an order are given a discount level at the time the
order was placed based on the actual number of ports shipped. The
discount level determined at the date of order will be used for all
ports shipped as part of that order. This applies even when the
shipment schedule spans ED periods. Only the ports actually shipped
in a given ED period will be used to determine the earned discount
level.
D-8
<PAGE> 30
Example 1: If Paradyne places four (4) orders throughout the year, and each
order placed contains various Switch Product types totaling 25,000 ports, the
pricing and invoicing would be as shown below: All orders were shipped within
the ED period. The discount level for all orders in the next ED period would be
at 100,000 port level.
Orders placed during 1999
Note: Initial discount is at the [***] unit level
<TABLE>
<CAPTION>
ENDPOINT ORDER INVOICE EARNED
ORDER TYPE VOLUME PRICE AMOUNT DISCOUNT NET AMOUNT COMMENTS
- ----- -------- ------ ------- ------------- ------------ ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
1 A 25,000 $[***] $ [***] $ [***] $ [***]
2 B 25,000 $[***] $ [***] $ [***] $ [***]
3 C 25,000 $[***] $ [***] $ [***] $ [***] [***] unit level discount achieved
4 D 25,000 $[***] $ [***] $ [***] $ [***]
TOTAL 100,000 $ 33,025,000 $ 3,500,000 $ 29,525,000
</TABLE>
Earned discount calculation for previous orders
[***] unit level discount achieved
<TABLE>
<CAPTION>
ENDPOINT ORDER INVOICE EARNED EARNED
ORDER TYPE VOLUME PRICE PRICE DISCOUNT
- ----- -------- ------ ------- ------------- ------------
<S> <C> <C> <C> <C> <C>
1 A 25,000 $[***] $ [***] $ [***]
2 B 25,000 $[***] $ [***] $ [***]
3 C 25,000 $[***] $ [***] $ [***]
4 D 25,000 $[***] $ [***] $ [***]
TOTAL 100,000 $ [***]
</TABLE>
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*** Confidential Treatment Requested
D-9
<PAGE> 31
Example 2: The earned discount level achieved in the previous period was at the
100,000 unit level. An order for 50,000 ports is placed in March 99 with a
delivery schedule over the next 12 months. However, the shipment schedule
resulted in delivery of only 25,000 ports during the ED period. Two other orders
totaling 40,000 ports were placed and shipped during the ED period. Therefore,
earned discount must be recaptured for the ED period based on Rule 3b. The
discount level for the next ED period is at the 75,000 port level using Rule 3c.
<TABLE>
<CAPTION>
Schedule Actual
Shipment Shipment Endpoint Shipped Earned
Delivery Date Date Type Volume Price Gross Amount Discount Net Amount
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Order 1
a Mar-99 Mar-99 A 12,500 S [***] [***] [***] [***]
b Jun-99 Jun-99 B 12,500 S [***] [***] [***] [***]
c Aug-99 Feb-00 C 0 S [***] [***] [***] [***]
d Feb-00 Apr-00 D 0 S [***] [***] [***] [***]
Order 2 May-99 Oct-99 C 20,000 S [***] [***] [***] [***]
Order 3 Jun-99 Nov-99 D 20,000 S [***] [***] [***] [***]
TOTAL 55,000 [***] [***] [***]
</TABLE>
Earned Discount Calculations
<TABLE>
<CAPTION>
Endpoint Shipped Invoiced Earned
Order Type Volume Price Earned Price Discount
<S> <C> <C> <C> <C> <C>
Order 1
a A 12,500 [***] [***] [***]
b B 12,500 [***] [***] [***]
c C 0 [***] [***] [***]
d D 0 [***] [***] [***]
Order 2 C 20,000 [***] [***] [***]
Order 3 D 20,000 [***] [***] [***]
TOTAL 65,000 [***]
</TABLE>
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*** Confidential Treatment Requested
D-10
<PAGE> 32
Appendix E
Marks
TRADEMARKS AND OTHER INDICIA - Paradyne
Products and Licensed Materials purchased hereunder and the packaging therefor
may bear certain trade names, trademarks, trade devices, logos, codes or other
symbols of Paradyne, (herein "Indicia"). Paradyne hereby grants AGCS permission
to use Indicia in the AGCS marketing and advertising of, and in AGCS' publicity
relating to, the Products, Services and Licensed Materials PROVIDED such use
conforms to Paradyne standards and guidelines relating thereto which Paradyne
may furnish from time to time. AGCS may not conduct business under Paradyne's
name or logo. AGCS may not use any of Paradyne's Indicia or variations thereof
to identify AGCS or AGCS' products or services, and AGCS may not use any of
Paradyne's Indicia in a manner that is likely to confuse the public concerning
the relationship of the parties. AGCS' use of Indicia shall inure to the
benefit of Paradyne and shall not invest in AGCS any rights in or to the
Indicia. All uses of Indicia by AGCS shall be subject to pre-publication or
pre-use review and written approval by Paradyne. If, in Paradyne's judgment,
any use of Indicia by AGCS is deemed detrimental to the Indicia or Paradyne's
reputation, or is deemed otherwise undesirable, Paradyne may withdraw such
permission without liability as a result thereof.
TRADEMARKS AND OTHER INDICIA - AGCS
During the Term of this Agreement, AGCS authorizes Paradyne to display and use
the trademarks "AGCS" and "ATTUM(r)" and "SuperLine(tm)", in connection with
Paradyne sales, advertisement, service and promotion of Product(s). Paradyne
will indicate in all publicity and printed material relating to the Product(s)
that such trademarks are the property of AGCS. No rights are granted to
Paradyne to use trademarks and trade names of third parties used concerning
Product(s).
Paradyne shall not change or remove any trademark, trade name, logo, copyright
notice, model or serial number, or other such designation affixed to any
Product(s) without the prior written consent of AGCS.
Paradyne shall not, at any time, use or register, any such AGCS designation, as
a business, corporate or trade name nor shall it use, display or register any
trademark, trade name, business or corporate name which is in whole or in part
similar to or confusing with any such designation.
Nothing contained in this Agreement shall grant Paradyne interest in any
trademark, name, logo or other trade designation of AGCS, and Paradyne agrees
that it will not at any time during or after this Agreement assert or claim any
interest in, or do anything which may adversely affect the validity or
enforceability of, any trademark, trade name, or logo belonging or licensed to
AGCS or the rights of AGCS thereon. On termination of this Agreement, and after
a reasonable phase out period, Paradyne shall forthwith cease all display,
advertising, and use of all such names, marks, logos and designations and shall
not thereafter use, advertise or display any name, mark or logo which is, or
any part of which is, similar to or confusing with any such designation
associated with any Product(s).
E-1
<PAGE> 33
Appendix F
Support and Maintenance Terms
Warranty Policy - AGCS
Hardware Warranty
AGCS warrants that the goods sold hereunder will be free from defects in
material and workmanship; that such goods will be fit for the ordinary purposes
for which such goods are used; and that goods title thereto is conveyed to
Paradyne. The warranty period for Hardware Defects shall be two (2) years from
date of shipment. Other then as expressed herein Paradyne shall not make any
warranties on behalf of AGCS.
This Warranty does not extend to substitute equipment and components specified
by Paradyne, to products not of AGCS' manufacture which are peripheral to or
not integrated into AGCS' manufactured assemblies, including, without
limitation, power equipment, test equipment, traffic data collection equipment
and protective equipment; to equipment normally consumed in operation or which
has a normal life shorter than twelve (12) months; or to purchased products not
sold by AGCS. As to such products, AGCS conveys to Paradyne the Warranty, if
any, of AGCS' supplier. This Warranty does not extend to damage to goods
resulting from extraneous causes not attributable to AGCS, including, without
limitation, damage caused in whole or in part by improper storage,
installation, operation or maintenance; misuse, neglect or abuse; or
unauthorized alteration or repair.
THE FOREGOING IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED
INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTY OF MERCHANTABILITY.
Software Warranty
AGCS warrants that each Software release will perform substantially in
accordance with the User's Guide or documentation provided with the product for
a period of ninety (90) days after in-service.
This Warranty shall be voided, both as to the Licensed Software and as to any
goods used in connection therewith if any Licensed Software is modified or
otherwise changed other than by or at the direction of AGCS.
The failure to insert or permit AGCS to insert any Release (Modification
Release or Point Release or similar instruction provided for the purpose of
correcting deficiencies) into the Licensed Software shall void the Warranty,
both as to the Licensed Software and as to any goods used in connection
therewith.
ANY UNAUTHORIZED USE OF THE LICENSED SOFTWARE TO IMPLEMENT ANY OPTIONAL
FEATURES WHICH HAVE NOT BEEN PURCHASED SHALL
F-1
<PAGE> 34
IMMEDIATELY VOID THIS WARRANTY FOR THAT SITE BOTH AS TO THE LICENSED SOFTWARE
AND AS ANY GOODS USED IN CONNECTION THEREWITH, AND TERMINATE ANY OBLIGATION OF
AGCS TO FURTHER SUPPORT THE LICENSED SOFTWARE FOR THAT SITE.
In Warranty Support
Unlimited, toll-free telephone assistance is provided with AGCS' standard
warranty service, including:
- Seven days a week, twenty-four hours a day (7x24) technical phone
support available through the AGCS Customer Support Center (CSC).
- Telephone response within two (2) hours of reporting a problem.
- Telephone assistance in the diagnosis and resolution of system problem.
- Routine telephone assistance in the support of the initial installation,
daily operation or implementation of system upgrades.
If Paradyne requires warranty service, it should call 1-888-888-AGCS and provide
sufficient, relevant information to enable the CSC to understand, analyze and
resolve the problem.
- - Hardware Support - In case of a defect, AGCS will issue a Customer Return
Authorization (CRA). Based on criticality of need as determined by CSC, CSC
will either; (i) ground ship a replacement unit within two (2) business days;
or (ii) repair and ship the original product within ten (10) business days of
its receipt. For both repairs and replacements, Paradyne shall ship the
warranted Product to AGCS' designated location in its original or equivalent
packaging with the applicable CRA number, prepay shipping charges and bear
the risk of loss or damage during shipment. AGCS will pay freight costs to
return repaired equipment to Paradyne's or a designated U.S. location. If CSC
provided a replacement unit, the hardware unit returned for repair will
remain the property of AGCS.
- - Software Support - For Critical Defects, AGCS will provide ongoing support
until mitigated or resolved. AGCS will provide resolutions to Major Defects
within a reasonable time after they have been reported to, confirmed and
agreed to by AGCS. Resolutions for Minor Defects, that have been reported to,
confirmed and agreed to by AGCS, may be included in subsequent software
modification releases, point releases and feature releases, as AGCS deems
appropriate.
AGCS REPAIRS NOT COVERED UNDER WARRANTY
Paradyne will be charged for second level support for out of warranty Products.
Second level support will be at no charge for in warranty Products.
F-2
<PAGE> 35
AGCS agrees to provide repair services on Products purchased for which the
warranty period has lapsed. Repair charges for hardware will be at 30% of
discounted price of equipment in effect at the time of repair.
Paradyne shall be responsible for all costs associated with returning Product
for repair to AGCS' facility in Genoa. AGCS will pay freight costs to return
repaired Product to specified location within the continental United States.
If Product returned for repair is determined to be irreparable, AGCS shall
promptly notify Paradyne. AGCS shall, at Paradyne's option, sell to Paradyne a
replacement Product, if available, at the then current discounted price or
return the Product in it's irreparable state.
Price for Additional AGCS Services
Product Support
AGCS offers support services in three (3) areas of expertise: Sales and
Marketing, System Integration Engineering and Customer (technical) Support. The
pricing for these services is denoted below:
<TABLE>
<CAPTION>
Support Service Type Price/Hour (US$)*
-------------------- -----------------
<S> <C>
Sales and Marketing [***]
System Integration Engineering [***]
Customer Support [***]
</TABLE>
- -------------------
* Prices do not include AGCS travel and expenses which shall also be the
responsibility of Paradyne should travel be required.
Product Training
Other than the training defined in Section 20(a), AGCS provides both
Installation and Technical training for all their Products in English. The
duration of the class varies depending on content. This training is available
at AGCS' Phoenix, Arizona facility. Airfare for the training in Phoenix and the
related travel cost incurred will be the responsibility of the Paradyne.
<TABLE>
<CAPTION>
Number of Students Price/Student/Dav (US$)
------------------ -----------------------
<S> <C>
One to Four [***]
Five to Six [***]
Seven to Eight [***]
</TABLE>
AGCS will also provide training at a mutually agreed to location within the
United States, for a flat fee of [***] per week. Paradyne shall also be
responsible for AGCS' instructor airfare and reasonable travel expenses during
the duration of the course. Maximum class size for any training course shall be
eight (8) people.
- -------
*** Confidential Treatment Requested
F-3
<PAGE> 36
Note: AGCS reserves the right to adjust the pricing defined in this Appendix
annually. Prices shown are as of January 1, 1998. Discounts do not apply to
Services pricing.
WARRANTY Policy - Paradyne
A. Hardware WARRANTY
Paradyne shall provide a return to factory warranty for two (2) years from the
later of (1) shipping from Paradyne or (2) shipment from AGCS' distributors, but
in no event later than one year from shipment from Paradyne, and provided that
AGCS provides a Point of Sales Report for that Product which AGCS directly ships
to their Distributors and/or their end users identifying (1) the Product by
serial number, (2) the customer to which the Product is shipped, and (3) the
date of shipment. Paradyne warrants to AGCS that the products will, during the
warranty period and under proper and normal use, be free from defects in
material or workmanship and will conform to the specifications contained in the
MVP Endpoint data sheets.
If any failure to conform to the WARRANTY appears in any Product(s), which are
in possession of AGCS or its identified distributors, or any end users,
Paradyne will, at its sole option, either (i) repair or replace the Product(s),
or thereafter (ii) will refund or credit AGCS' purchase price of the defective
Product(s), provided that Paradyne is provided written notification of the
purported failure to conform to this WARRANTY within the applicable Products(s)
warranty period and Paradyne determines that the Product(s) fails to conform to
its specification as defined in the applicable datasheets.
AGCS shall follow Paradyne's then current instructions in the Return Policy
section, regarding return of readily returnable Product(s). No such Product(s)
will be accepted for repair, replacement, refund or credit absent such
instructions being followed. In the case of any such return, AGCS shall assume
risk of loss and damage during shipment to Paradyne and shall pay all
transportation charges. Repaired or replacement Product(s) shall be shipped to
a designated destination within the contiguous forty-eight United States or the
District of Columbia by Paradyne at its expense and risk of loss and damage.
AGCS shall be responsible for any requested premium transportation of repair or
replacement part(s) or Product(s). If Paradyne determines that the Product(s)
do not fail to conform to the specification, AGCS shall pay Paradyne all costs
of handling, inspection, repairs and transportation at Paradyne's then
prevailing rates.
Paradyne shall not be responsible under this WARRANTY for deinstallation or
reinstallation or for related expenses arising out or the alteration of AGCS or
a third party's premise or building, or removal, replacement or relocation of
other items not purchased hereunder.
Repaired and replaced part(s) provided under the above WARRANTY are warranted as
set forth above, but for only sixty (60) days from the date of repair or
replacement or for the remainder of the Product WARRANTY period, whichever is
greater, and such parts may be new, remanufactured or refurbished, at the sole
discretion of Paradyne.
The foregoing WARRANTY does not extend to Licensed Materials; to expendable
items; to experimental or developmental Product(s); or to Product(s) which have
been altered by anyone
F-4
<PAGE> 37
other than Paradyne or Paradyne's authorized service provider; have been used
in material violation of Paradyne's instructions; or have had their serial
numbers or month and year of manufacture of shipment removed, defaced or
altered. AGCS shall not make any warranties on behalf of Paradyne.
THE FOREGOING WARRANTY IS IN LIEU OF ALL EXPRESS AND IMPLIED WARRANTIES,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. AGCS'S SOLE AND EXCLUSIVE REMEDY SHALL BE PARADYNE'S
OBLIGATION TO REPAIR, REPLACE, CREDIT OR REFUND AS SET FORTH ABOVE.
B. LICENSED MATERIAL (SOFTWARE) WARRANTY
Paradyne warrants to AGCS that, upon shipment, Licensed Materials will be free
from defects which result in a material failure of the applicable Product(s) to
execute instructions. If under normal and proper licensed use, the Licensed
Materials prove to have such a defect (1) within the later of ninety (90) days
from the date of shipment thereof to AGCS, or shipment from AGCS' distributors;
or (2) within ninety (90) days after installation completion, Paradyne at its
sole option, will either correct or replace the same without charge at its
facility or provide a full refund or credit. No Licensed Materials will be
accepted for correction or replacement except upon the written authorization
and in accordance with instructions of Paradyne as defined in the Return Policy
section. Any transportation expenses and risk of loss associated with returning
such Licensed Materials to Paradyne shall be borne by AGCS. At Paradyne's sole
option, correction may be incorporated into a new release of the Licensed
Materials which will be made available to AGCS at no charge. Such
corrections may be performed by Paradyne at AGCS' facility.
In the event that Paradyne determines after investigation that the Licensed
Materials are not defective, AGCS shall pay all costs of handling, inspection,
testing and transportation, including travel and living costs incurred by
Paradyne's personnel.
Paradyne makes no warranty with respect to defective conditions or
non-conformities caused by any of the following acts: misuse, neglect, accident
or abuse by anyone other than Paradyne or its subcontractors; improper actions
(i.e. wiring, repairing, alteration, installation, storage or maintenance) by
anyone other than Paradyne or its subcontractors; use in a manner not in
accordance with specifications, operating instructions or license-to-use;
failure of AGCS, its distributors, or end-users to apply previously applicable
Paradyne modifications and corrections. In addition, Paradyne makes no warranty
with respect to Software defects other than those which materially affect
performance in accordance with Paradyne's specification and defects related to
the Direct VAR's data base errors.
WARRANTY EXCLUSIONS AND LIMITATION OF LIABILITY: THE FOREGOING WARRANTY IS
EXCLUSIVE AND IN LIEU OF ALL OTHER EXPRESS AND IMPLIED WARRANTIES IN CONNECTION
WITH THE LICENSED MATERIALS COVERED BY THIS ARTICLE INCLUDING BUT NOT LIMITED
TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. AGCS'
SOLE AND EXCLUSIVE REMEDY SHALL BE
F-5
<PAGE> 38
PARADYNE'S OBLIGATION TO CORRECT, REPLACE, CREDIT OR REFUND, AS SET FORTH ABOVE.
C. Repair Procedure
Paradyne shall provide or arrange for in-warranty or out-of-warranty repair
services in accordance with the Return Policy. For all in-warranty or
out-of-warranty repairs AGCS shall pay transportation charges to Paradyne.
Paradyne shall pay transportation charges back to AGCS, its distributors, or its
end-users. AGCS shall be responsible for all customs, duties, brokerage fees,
and taxes.
Upon attaining a cumulative quantity of [***] units in purchases under this
Agreement or upon a firm commitment for such quantity, Paradyne will provide to
AGCS a mutually agreed to amount of consignment Product within thirty (30) days
of an agreement as to quantity which in no event shall exceed [***] percent
([***]%) of the quantity purchased to date. AGCS will use this consignment for
the sole purpose of meeting its end user's demand for immediate replacement of
failed in Warranty MVP Endpoints. AGCS will provide a consignment report monthly
detailing the usage of the consignment stock. Additionally, AGCS will return all
defective MVP Endpoints, at its expense. If consignment MVP Endpoints are used
to satisfy out of warranty repair then AGCS will pay Paradyne the applicable
discounted price for the MVP Endpoint.
D. Return Policy
Warranty Verification
Paradyne product warranty's are verified upon the receipt of your call. If a
warranty has not been registered the support personnel may request proof of
purchase and will use the date of shipment shown on the bill or invoice. If the
warranty has not been registered and proof of purchase cannot be provided we
will access the Paradyne equipment base and date the warranty from the time the
unit was shipped to AGCS or its distributor.
Services Available
In Warranty and Out of Warranty Repair Service
Standard Warranty repair service has a fifteen day turn around time. For rush
repairs we provide same day expedite service. Customers must return equipment
overnight, first business day and the repair center will repair and ship
overnight on the day of receipt. The fee for this service is [***] in addition
to the repair fees, if any. Some defects may preclude this service being
available. In the event this were to occur you would be contacted with an
explanation on the same day and other available options would be explored to
meet your needs. Forty eight hour service is available for an additional [***].
Expedited shipping is available in the event a repair has been completed and you
find you cannot wait for standard carrier service. This fee is [***]. All
repairs are quoted at a flat rate which includes standard freight services
within the USA. Customs brokerage, duties, export fees, etc. are the
responsibility of the customer. Evaluation
- --------------------
*** Confidential Treatment Requested
F-6
<PAGE> 39
without repair, cosmetic repairs, test only and update for operational
equipment are available by special quote. Quotes and RMA's are provided on the
same day if the request is made during business hours, 8 a.m. to 5 p.m., EST.
Messages or faxed requests during off hours will be answered promptly the next
business day.
Obtaining Service
In Warranty and Out of Warranty
To obtain service:
Please have the following information available before you call:
- Company Name and address
- Contact name and telephone number
- Ship to, bill to, and attention to
- Model number and serial number of the unit
- Description of the problem you are experiencing
1. Call the number from the list below, Monday through Friday, between the
hours of 8 a.m. and 5 p.m. EST, excluding holidays, or fax the required
information to:
1-800-772-7691 (Phone, USA and Canada only)
1-813-530-8099 (International)
1-813-530-8690 (Fax)
Telephone or fax messages are accepted 24 hours a day.
2. The Repair Center personnel will provide you with a Return Material
Authorization (RMA) number and a repair cost if applicable. If the unit is
submitted as a warranty repair but it is determined that the defect is not
covered a repair center representative will contact you with a flat rate repair
cost. Work on out of warranty units/defects will not commence until your
purchase order has been received.
3. Pack the unit securely, put the RMA Number# in a visible location on the
outside of the package.
4. Ship the package insured and prepaid to:
Paradyne
Attn.: Repair Center Dock A
8545 126th Avenue North
Largo, Florida 33773
5. Our repair center will update if applicable, repair and return the unit to
you.
E. TRAINING
Other then the training defined in Section 20(a), Paradyne provides the
following MVP Endpoint Product training classes, at a standard rate of $[***]
per student, per day, with all classes being held in Largo, FL. --
- --------------------
*** Confidential Treatment Requested
F-7
<PAGE> 40
AGCS will be responsible for all travel and lodging expenses associated with
these training classes.
<TABLE>
<CAPTION>
Training Course Duration
- --------------- --------
<S> <C>
SALES 2 DAYS
OPERATIONS 2-3 DAYS
INSTALLATION & MAINTENANCE 2-3 DAYS
</TABLE>
Note: Paradyne reserves the right to adjust the pricing defined in this
Appendix annually. Prices shown are as of January 1, 1998. Discounts do not
apply to Services Pricing.
F-8
<PAGE> 41
Appendix G
Escrow Agreement
ESCROW AGREEMENT
This Source Material Escrow Agreement ("Escrow Agreement") dated this ____ day
of June __, 1998, is entered into among AG Communication Systems Corporation, a
Delaware corporation, having its principal place of business at 2500 West
Utopia Road, Phoenix, Arizona 85027 ("AGCS"), Paradyne Corporation, a Delaware
corporation, having its principal place of business at 8545 126th Avenue North,
Largo, Florida 33773 ("Company"), and _______________a _______________
corporation, with offices at ____________________ ("Escrow Agent").
WITNESSETH
WHEREAS, Company and AGCS are parties to a Joint Development Agreement dated
_______________ ("Agreement") pursuant to which AGCS has agreed to become a
distributor of Company's End Points product (the "Product") which incorporates
Company's MVP technology; and
WHEREAS, the Agreement provides, among other things, that Company shall place
the source code and related documentation for the Product in escrow, all as
more fully set forth in the Agreement; and
WHEREAS, Escrow Agent has agreed to serve as Escrow Agent for the Product
source code and documentation pursuant to the terms and conditions contained
herein;
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and
for other valuable consideration, the adequacy and receipt of which are hereby
acknowledged, Company, AGCS and Escrow Agent hereby agree as follows.
1. Deposits
(a) Within thirty (30) days after delivery to AGCS of the first commercial unit
of the Product as provided for by the Agreement, Company shall deposit with
Escrow Agent, the source material described on Schedule A (the "Source
Material"), attached hereto and made a part hereof, which Schedule lists
software tapes and other materials and documentation related thereto that
would be reasonably necessary for the manufacture and maintenance of the
Product required to be placed into escrow.
G-1
<PAGE> 42
(b) All additions to the Source Material listed on Schedules A, together with
revisions thereto, shall be deposited into escrow as provided in Section 2
below. The Escrow Agent will issue to Company a receipt for each delivery
of Source Material.
(c) The Source Material held by the Escrow Agent shall remain the exclusive
property of Company. The Escrow Agent shall not use the Source Material or
disclose the same to any third party except as specifically provided for
herein and nothing in this Escrow Agreement shall be construed as a
conveyance by Company of all or any of its rights, title or interest in the
Source Material to the Escrow Agent, except as specifically provided
herein.
(d) The Escrow Agent will hold the Source Material in safekeeping pursuant to
the terms and conditions set forth herein, and act as custodian thereof, at
its offices hereinabove indicated, unless and until the Escrow Agent
receives notice pursuant to the terms of this Escrow Agreement that the
Escrow Agent is to deliver the Source Material to AGCS or Company, in which
case the Escrow Agent shall deliver the Source Material to the party
identified therein, subject, however, to the provisions of this Escrow
Agreement. The Source Material shall be retained by Escrow Agent on its
premises at all times, under the express control of an officer designated
by it, whose identity shall be made known to AGCS and Company promptly upon
designation.
2. Representation of Company to AGCS
(a) Company states that:
(i) The Source Material delivered to Escrow Agent constitutes the most
recent Source Material for the Product; and
(ii) The Source Material delivered to the Escrow Agent will be reviewed,
inspected and supplemented with all revisions, corrections,
enhancements or other changes, as necessary, but at least annually,
at AGCS' request, to ensure its current status for each release
thereof made after the date of this Escrow Agreement. AGCS shall
provide Escrow Agent and Company with at least ten (10) business
days' notice of the date and time of the inspection, which shall be
during normal business hours. Escrow Agent shall make the Source
Material available to Company and AGCS for such inspection.
(iii) Each party shall be responsible for its own costs associated with
any inspection of the Escrow Material.
3. Release from Escrow
3.1 Delivery by Escrow Agent to AGCS.
G-2
<PAGE> 43
Escrow Agent agrees that the Source Material shall be held by it for release
and delivery to AGCS, under the terms and conditions hereinafter set forth, but
only in the event that:
(a) Company notifies Escrow Agent in writing to effect delivery to AGCS at a
specific address or
(b) Escrow Agent has received from AGCS:
(i) written notification that Company is unable to supply Product to
AGCS as required by the Agreement, or to maintain the Product as
required by the Agreement ("Company Default");
(ii) evidence satisfactory to Escrow Agent that AGCS has previously
notified Company of such Company Default in writing;
(iii) a written demand, signed by an elected officer of AGCS, that the
Source Material be released and delivered to AGCS;
(iv) a written undertaking from the AGCS, signed by an elected officer of
AGCS, that the copy of the Source Material being supplied to AGCS
will be used only as permitted under the terms of the License
Agreement;
(v) specific instructions from AGCS for this delivery, and
(c) In the event that the provisions of paragraph 3.1(b) are met, Escrow Agent
shall, within five (5) days of receipt of all of the items specified in
paragraph 3.1(b), send by certified mail a copy of all such documents
received by it to Company. Company shall have thirty (30) days from the
date Escrow Agent shall have sent the documents to Company to send to
Escrow Agent a copy of a temporary or final injunction or temporary
restraining order issued by the court granting such relief prohibiting the
transfer of the Source Material to AGCS. In such a case, the Escrow Agent
will retain the Source Material in its possession. In the event the
injunctions or restraining orders obtained by Company are vacated or
released and AGCS again requests the release of the Escrow Material, AGCS
and Company will repeat the procedures set forth in paragraphs 3.1(b) and
3.1(c) hereof.
(d) If, within thirty (30) days after mailing the items specified in paragraph
3.1(b) to Company, Escrow Agent has not received from Company a copy of the
injunctions or restraining order referred to in paragraph 3.1(c) above,
then Escrow Agent shall release the Source Material to AGCS in accordance
with the instructions specified in paragraph 3.1(b)(v).
3.2 Delivery By Escrow Agent to Company
Escrow Agent shall release and deliver the Source Material to Company upon the
occurrence of any of the following:
G-3
<PAGE> 44
(a) Mutual Termination.
The presentation to Escrow Agent of a written notice of termination,
executed by authorized representatives of Company and AGCS, stating that
this Escrow Agreement has been terminated by the mutual agreement of
Company and AGCS and directing Escrow Agent to release and deliver the
Source Material to Company by a specified method within ten (10) days of a
specified date, or
(b) Non-Payment.
Non-payment of any fees or charges invoiced by Escrow Agent to AGCS. Escrow
Agent shall give notice of non-payment of any fee due and payable hereunder
to both AGCS and Company and, in such event, AGCS shall have the right to
pay the unpaid fee within ten (10) days from the date of receipt of notice
from Escrow Agent. Upon timely payment of the unpaid fee by AGCS, this
Agreement shall continue in force and effect. Should the fee not be paid by
AGCS within the notice period, Escrow Agent shall promptly release the
Source Material to Company upon payment of the unpaid fee to Escrow Agent.
4. Use of Source Material
Upon delivery of the Source Material to AGCS, AGCS agrees that its use (and
modification, as required) of the Source Material shall be strictly limited
to the manufacture, sale and/or license and maintenance of the Product.
AGCS shall not duplicate, sell or license the Source Material to others or
market the Source Material in any manner.
5. Duties and Limited Obligations of Escrow Agent
(a) Escrow Agent shall be under no obligation or responsibility to either
Company or AGCS to determine the existence, relevance, completeness,
accuracy or other aspects of the Source Material or any portions thereof
deposited from time to time by Company. Escrow Agent shall have no
obligation or responsibility to determine whether what is deposited or
accepted by it for deposit is or is not Source Material as defined herein.
Furthermore, this Escrow Agreement shall constitute notice to any third
person or entity who may acquire a right of access to the Source Material
that Escrow Agent's duty is limited as set forth herein and that Escrow
Agent is not liable to any such third person or entity. Company and AGCS
further agree that Escrow Agent shall not be liable for any forgeries or
impersonations concerning any documents of record or other documents it is
handling in its capacity as Escrow Agent.
(b) Escrow Agent agrees to prevent any unauthorized person or persons from
gaining access to the Source Material, except as specifically provided by
this Escrow Agreement.
G-4
<PAGE> 45
(c) Escrow Agent agrees not to use the Source Material for any purpose except
as provided hereunder.
(d) Company and AGCS further agree that if they disagree on any matter
connected with this Escrow Agreement, Escrow Agent will not be required to
settle the matter. If Escrow Agent is made a party to legal proceedings,
Escrow Agent will be entitled to such reasonable compensation for services,
costs and attorneys' fees as may be awarded, which compensation shall be
paid by the non-prevailing party.
6. Limitation of Liability
(a) Escrow Agent agrees to exercise care in protecting the Source Material in
the same manner that it would exercise care in protecting its own trade
secrets and materials of this nature. Except for actual frauds gross
negligence or intentional misconduct, Escrow Agent shall not be liable to
Company or to any party claiming beneficiary status under this Agreement
for an act, or failure to act, by Escrow Agent in connection with this
Agreement. In the event Escrow Agent commits said fraud, gross negligence
or misconduct, Escrow Agent shall be liable for direct and actual provable
damages that result from Escrow Agent's violation of the terms of this
Agreement, but Escrow Agent shall not be liable for special, indirect,
incidental or consequential damages. Notwithstanding anything contained in
this Section to the contrary, in the event Escrow Agent discloses the
Source Material to any party other than Company or AGCS in violation of the
terms of this Agreement, Escrow Agent shall be liable, without limitation,
for any and all damages related thereto or resulting therefrom, including
actual, special, indirect, incidental or consequential damages.
(b) The Escrow Agent shall not be liable for any damages due to causes beyond
its reasonable control, including but not limited to, acts of God.
(c) EXCEPT AS SET FORTH HEREIN, AND EXCEPT FOR ACTS WHICH ARE THE RESULT OF ITS
NEGLIGENCE OR MALFEASANCE, THE ESCROW AGENT DISCLAIMS ALL WARRANTIES,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
(d) Nothing herein contained shall limit Escrow Agent's liability, if any, to
AGCS or Company for damages directly resulting from Escrow Agent's failure
to perform its duties as set forth in this Escrow Agreement.
7. Indemnification
Company and AGCS agree to indemnify Escrow Agent for and hold it harmless
against, any loss, cost or expense incurred or suffered in connection with,
as a result of, service as Escrow Agent under this Escrow Agreement, except
for any costs or expenses suffered as a result of Escrow Agent's misconduct
or negligence.
G-5
<PAGE> 46
UNLESS SPECIFICALLY SET FORTH HEREIN, IN NO EVENT SHALL EITHER AGCS OR
COMPANY, WHETHER AS A RESULT OF BREACH OF CONTRACT, TORT (INCLUDING
NEGLIGENCE) OR OTHERWISE, HAVE ANY LIABILITY TO THE ESCROW AGENT OR ANY
THIRD PARTY FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES.
8. Confidentiality
Escrow Agent and its employees agree to hold confidential the Source
Material and to exercise the same degree of care that a reasonable and
careful company would exercise with similar records of its own.
9. Payment to Escrow Agent
As payment for its services hereunder, the Escrow Agent shall receive
annual charges as set forth in Escrow Agent's Escrow Storage Price List.
The first such annual charges will be paid by AGCS within ten (10) days of
the execution of this Escrow Agreement by all parties hereto. Each year
thereafter, AGCS will pay the appropriate charges on or before the
anniversary of the effective date of this Escrow Agreement. The annual fee
may be adjusted by the Escrow Agent on an annual basis by the lesser of ten
(10%) percent or the change in the Producers Price Index over the preceding
twelve (12) months. The Escrow Agent shall notify AGCS of any such
adjustment to the annual fee at least thirty (30) days prior to the annual
fee due date.
10. Termination
Unless the delivery of the Source Material to AGCS is disputed by Company,
this Escrow Agreement shall terminate: (i) on the delivery of the Source
Material to Company; or (ii) one year from the delivery of the Source
Material to AGCS. This Escrow Agreement may also be terminated by Escrow
Agent, Company or AGCS upon sixty (60) days advance written notice provided
that within fifteen (15) days after delivery of the above-referenced sixty
(60) day notice, a successor escrow agent, (agreed to by AGCS and Company),
has been appointed, and a procedure for the orderly transfer of the Source
Material from the Escrow Agent to the successor escrow agent, has been
formalized and agreed to by all parties.
11. Survival of Provisions
The parties agree that where the context of any provision indicates an
intent that it shall survive the completion, expiration, termination or
cancellation of this Escrow Agreement, then it shall so survive.
12. Notices
G-6
<PAGE> 47
All notice and other communications hereunder or in connection herewith shall
be deemed to have been given if delivered personally or sent by registered or
certified mail in writing, return receipt requested and first class postage
prepaid;
(a) If to AGCS: General Counsel
AG Communication Systems Corporation
2500 West Utopia Road
Phoenix, Arizona 85027
(b) If to Company: General Counsel
Paradyne Corporation
8545 126th Avenue North
Largo, Florida 33773
(c) If to Escrow Agent:
13. Waiver, Amendment or Modification, Severability
This Escrow Agreement shall not be waived, amended or modified except by
the written agreement of all of the parties affected by such waiver,
amendment or modification. Any invalidity, in whole or in part, of any
provision of this Escrow Agreement shall not affect the validity of any
other of its provisions, provided that the invalidity of any such provision
does not affect the intention of the parties with respect to the escrow
established hereunder.
14. Applicable Law and Dispute Resolution
This Escrow Agreement including any dispute which may be brought as a
result hereof, shall be construed and enforced in accordance with the laws
of the State of New York. The dispute resolution and/or arbitration
provisions of the Agreement are not applicable to this Escrow Agreement.
15. Subject Headings
The subject headings of this Escrow Agreement have been placed thereon for
the convenience of the parties and shall not be considered in any question,
interpretation or construction of this Escrow Agreement.
16. Disputes and Interpleader
G-7
<PAGE> 48
(a) In the event of any dispute between Company and AGCS or any third party
claiming beneficiary status under this Agreement, Escrow Agent may submit
this matter to any court of competent jurisdiction in an interpleader or
similar action. Any and all costs incurred by Escrow Agent in connection
therewith shall be borne by the third party seeking a copy of the Source
Material. Without limiting the generality of the foregoing, if Escrow
Agent shall be uncertain as to its duties or rights hereunder, shall
receive any notice, advice, schedule, report, certificate, direction or
other document from any person or entity with respect to the Source
Material, that, in the opinion of the management of Escrow Agent is in
conflict with any of the provisions of this Agreement, or shall be advised
that a dispute has arisen with respect to the ownership or right of
possession of the Source Material or any part thereof, Escrow Agent shall
be entitled, without liability to anyone, to refrain from taking any
action other than to exercise best efforts to keep safely the Source
Material until Escrow Agent shall be directed otherwise in writing by an
order, decree, or judgment of a court of competent jurisdiction that is
then finally affirmed on appeal or that by the lapse of time or otherwise
is no longer subject to appeal, but Escrow Agent shall be under no duty to
institute or defend any such proceeding.
17. Entire Agreement
This Escrow Agreement and referenced Schedules constitute the entire
agreement and understanding of the parties with respect to the escrowed
materials, and herein have merged all prior and collateral
representations, promises or conditions, whether oral or written.
G-8
<PAGE> 49
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be
duly executed and delivered by the proper and duly authorized officers of each
party as of the day and year first above written.
PARADYNE CORPORATION AG COMMUNICATION CORPORATION
SYSTEMS
By By
-------------------- --------------------
Name Name
-------------------- --------------------
Title Title
-------------------- --------------------
ESCROW AGENT
By
--------------------
Name
--------------------
Title
--------------------
G-9
<PAGE> 1
EXHIBIT 10.41
PARADYNE
- -------------------------------------------------------------------------------
MARKETING & LICENSE AGREEMENT ***Text Omitted and
BY AND BETWEEN NETSCOUT SYSTEMS, INC. Filed Separately
AND PARADYNE CORPORATION Confidential Treatment
AMENDMENT NUMBER 2 Requested Under
PAGE 1 OF 2 17 C.F.R. Sections
DATE 11/04/98 200.80(b)(4)
200.83 and
230.406
NETSCOUT SYSTEMS, INC.
4 TECHNOLOGY PARK
WESTFORD, MASSACHUSETTS 01886
The Marketing & Licensing Agreement dated and signed January 26, 1998
(hereinafter the "Agreement") by and between NetScout Systems, Inc.
(hereinafter "NetScout") and Paradyne Corporation (hereinafter "Paradyne")
shall be amended as follows:
1. Section 1.8 shall be deleted in its entirety and replaced by the following:
1.8 "Revision" shall mean any correction, modification, maintenance
release, update, enhancement, and/or new version of the Licensed
Product developed solely by NetScout.
2. Section 21.1 shall be deleted in its entirety and replaced by the following:
21.1 Term. The initial term of this Agreement shall be five (5) years from
the date set forth in the first sentence of this Agreement. Prior to
the end of this term, the parties shall meet and negotiate in good
faith an extension of this Agreement. Failing to agree upon such
extension, this Agreement shall terminate one hundred and eighty days
after the initial term. During such 180 day period, and
notwithstanding the terms of Section 2.1.3 of this Agreement, Paradyne
shall in preparation for the termination of the Agreement, have the
right to develop, have developed, market and sell, and/or establish
OEM and/or technology licensing agreements for RMON-based technologies
for the purpose of offering such RMON products to customers to sustain
and enhance the market position of Paradyne's RMON products without
detriment due to the pending or actual termination of the agreement.
3. The following Section 21.9 shall be appended to the Agreement:
21.9 Continuing rights. Notwithstanding anything in this Agreement to the
contrary, in the event of termination under this Section 21 or Section
23.3 of this Agreement Paradyne shall have the right to continue to
use and distribute the Licensed Product as necessary (1) to ship any
outstanding orders, (2) to meet ongoing contractual commitments, and
(3) to meet product requirements of Paradyne customers who have an
installed base of the Resale Products and require continued supply.
Such shipments shall be subject to royalties under Schedule A except
where termination is made necessary due to NetScout's default.
Further, in the event royalties are paid, NetScout shall agree to
provide reasonable continued support for bug fixes and maintenance of
the Licensed Product. Paradyne shall further have the right to use and
distribute the Licensed Product as required to support those Resale
Products having shipped prior to the date of final termination or
under the provisions of this Section.
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Amendment Number 2
Marketing and Licensing Agreement, NetScout Systems, Inc.
11/04/98
Page 1 of 2
<PAGE> 2
All other terms of the Agreement remain the same.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
date(s) set forth below.
PARADYNE CORPORATION NETSCOUT SYSTEMS, INC.
By: /s/ Andrew May By: /s/ Nathan Kalowski
-------------------------------- ----------------------------------
Title: CEO Title: VP, Business Development
----------------------------- -------------------------------
Date: 11/11/98 Date: 11/11/98
----------------------------- -------------------------------
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Amendment Number 2
Marketing and Licensing Agreement, NetScout Systems, Inc.
11/04/98
Page 2 of 2
<PAGE> 3
[PARADYNE LOGO]
________________________________________________________________________________
Marketing & License Agreement
By and Between NetScout Systems,
Inc. and Paradyne Corporation
Amendment Number 1
Page 1 of 10
Date 03/__/98
NetScout Systems, Inc.
4 Technology Park
Westford, Massachusetts 01886
Marketing & License Agreement dated and signed January 26, 1998 by and between
NetScout Systems, Inc. and Paradyne Corporation will be amended as follows:
1. Section 1.13: Add the words "or a unique customer application" before "that
cannot be resolved by Paradyne."
2. Section 3.1.3: Add the words "and its Authorized Service Providers" after
the word "Paradyne."
3. Section 3.1.4: Add the words "and Paradyne's Authorized Service Providers"
before the word "Customers."
4. Section 6.1: Add the words "for Licensed Product and Resale Product" before
the words "via a telephone support service as set forth in Exhibit D."
After the words "a paging service after hours, on weekends and holidays"
add the following sentence: "NetScout will make best efforts to reply to
the page within one (1) hour." Change reference to "Tier 1 and Tier 2
Support" to "Tier 3 Support."
5. Section 6.4: Delete last sentence and replace with the following sentence:
"In the event NetScout discontinues manufacture and license of the Licensed
Product, NetScout agrees to continue support and maintenance services for a
period of one (1) year for the software and for the period of five (5)
years for the hardware from such discontinuance.
6. Section 7.1: Add the following at the end of Section 7.1: "Exhibit F
outlines training classes, their locations, costs (if applicable), length
of courses, and complete description of the courses. In the event that
there are seats available for any of the above-mentioned training that are
unfilled by Paradyne employees, such seats may be filled by Paradyne's
Authorized Service Providers."
7. Section 8.2: Add the words "and Authorized Service Provider evaluations"
after the words "sales demonstrations."
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Marketing & License Agreement, NetScout Systems, Inc.
Amendment Number 1
<PAGE> 4
8. Section 8.3: Add the word "day" after "ninety (90)."
9. Section 11.1: Delete the entire last sentence and replace with the
following: "Notwithstanding the preceding sentence, in the event Paradyne
elects to price the RMON feature set separately, the NetScout royalty shall
be the [***] percent [(***%)] of the Paradyne price for the RMON feature or
[***] for each version of embedded RMON as listed in Exhibit A."
10. Section 12.3: Replace entire section as follows: "Purchase Orders. Resale
Product orders may be made via purchase orders, or customer drop ship orders
confirmed in writing by facsimile. Purchase orders shall include the
following details: Paradyne's part number for NetScout's products,
description, quantity, destination, delivery date(s), PO dollar total,
preferred shipper and customer number for billing."
Additionally, add the following paragraphs:
"At Buyer's request Seller shall drop ship orders for product to Buyer or
Buyer's customer at locations specified by purchase orders as defined,
above."
"NetScout will provide proof of delivery for all shipments to Paradyne's
customers, if requested by Paradyne and if specified shipper provides same
upon request from NetScout. NetScout will not ship any of Paradyne's
purchase order short of any parts on the purchase order without the approval
of Paradyne."
"Shipment Acknowledgment"
"Seller will provide Buyer with a shipment acknowledgment form within
twenty-four (24) hours of the shipment to the Buyer or Buyer's customer.
Seller will include, at a minimum, the serial number of the unit, the date
shipped, the part number and quantity shipped, the carrier name, and the
waybill number on the shipment acknowledgment form."
"At no time may NetScout reschedule any previously committed ship dates
without ten (10) days advance written authorization by Paradyne."
11. Add "Section 12.13 Forecast, Buyer will provide a rolling monthly forecast
of Buyer's demand for the Product with visibility for the next six (6)
months. This forecast will be for planning purposes only."
12. Section 12.4: Delete the second sentence and replace it as follows:
"NetScout's normal lead-time for NetScout Resale hardware products is
twenty-one (21) days from order replacement. NetScout's normal lead-time for
NetScout Resale software products is seven (7) days from order placement.
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Marketing & License Agreement, NetScout Systems, Inc.
Amendment Number 1
- --------------------
*** Confidential Treatment Requested
<PAGE> 5
13. Section 12.5: Replace in its entirety with the following:
"Cancellation/Reschedule. Paradyne reserves the right to reschedule or
cancel PO's or parts of PO's without penalty, provided that the requested
reschedule or cancellation is made more than ten (10) days from the
scheduled delivery of the products. Any cancellation requests made inside
the ten (10) day window shall be subject to [***] percent [(***%)]
cancellation fee. Paradyne also reserves the right to reschedule PO's or
parts of PO's within ten (10) days of the scheduled delivery date provided
that the requested delivery date does not extend beyond ninety (90) days
from the original scheduled delivery date."
14. Section 12.6: Add "(subject to Section 17.1, Product Discontinuance)"
after "attached price list" in the first sentence.
15. Section 12.7: Delete paragraph one in its entirety and replace as follows:
NetScout warrants the Resale Products for a period of one (1) year from a
Customer's acceptance and that the Resale Products will be free from
defects in material and workmanship. Paradyne's inspection, approval,
acceptance, use of or payment for all or any such Resale Product shall be
deemed not to constitute a waiver of any warranty or of any term or
condition hereof. NetScout shall repair or replace, at no charge, any
Resale Products returned to NetScout during the warranty period. In the
event that the above remedies are not reasonably available, NetScout shall
refund the purchase price. This is NetScout's sole remedy to Paradyne
and/or End Users under this Agreement for warranty claims.
Add the words, "EXCEPT FOR THE SECTION ENTITLED "EPIDEMIC", before the
words "THE WARRANTIES MADE IN THIS PARAGRAPH ARE MADE IN LIEU OF ALL OTHER
EXPRESS WARRANTIES, WHETHER ORAL OR WRITTEN."
16. Section 12.10: Change "thirty (30) business days" to "forty-five (45)
business days" and add ", and will make best efforts to provide within
thirty (30) days of the close of each calendar quarter," before "Point of
Sale...." Add "the state or the" before the word "zip" in the last
sentence.
17. Section 12.11: Add "or its designated Authorized Service Provider" after
the word "Paradyne" in the first sentence. Add this sentence at the end of
this section: "In addition, out of warranty maintenance agreements for the
Resale Products may be offered by Paradyne's Authorized Service Providers."
18. Add Section 12.14 Repair Period: "Seller will effect the
repair/replacement and return the item(s) to Buyer within fifteen (15)
days after receipt of the defective item(s); however, Seller will respond
to emergency situations by immediately shipping Product on hand within
forty-eight (48) hours. At the cost identified in Exhibit D, Seller agrees
to repair or replace a particular type of Product for a period of five
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Marketing & License Agreement, NetScout Systems, Inc.
Amendment Number 1
- --------------------
*** Confidential Treatment Requested
<PAGE> 6
(5) years following delivery of the last unit of such Product delivered
under this Agreement. Seller agrees to provide and maintain an adequate
stock of parts peculiar to the Product during this time to effect such
repair."
19. Add "Section 12.15 Quality: The Resale Products shall meet the quality
requirements of Exhibit E of this Agreement.
20. Section 18.4: Delete last sentence and replace with "However, such rights
will not become effective until such time as NetScout dissolves or ceases
to do business.
21. Section 18.5: Change reference to "Section 21, Termination" to read
"Section 21, Term and Termination."
22. Section 18: Add sub-section, Agreement to Negotiate Rights to the Resale
Produce:" Under the following conditions the parties agree to enter into
good faith negotiations for Paradyne to acquire the rights to manufacture,
further develop, market, service and sell NetScout Resale Products.
Discontinuance of the Resale Products defined in Exhibit A, provided
no functionally equivalent substitute is made available at or below
the specified price.
NetScout becomes insolvent, or ceases to honor its commitment to
deliver products under the terms of this Agreement.
Material Breach of this Agreement by NetScout that is not cured within
the time period as specified in Section 21, Term and Termination.
Notwithstanding the foregoing, the obligations of NetScout under this
Section are conditional upon Paradyne's ability to secure such
manufacturing usage licenses or other proprietary rights of third
parties, if any, as may be required to manufacture such Product.
NetScout agrees to provide reasonable assistance to Paradyne to secure
such rights."
23. EXHIBIT D: Add "and its Authorized Service Providers" after the word
"Paradyne" in the first sentence. Within the heading "Repair & Maintenance
Charges add "applicable to Paradyne and its Authorized Service Providers"
before the words "(single repair)". Within the heading "Maintenance
Agreements (h/w & s/w)" add "available to Paradyne and its Authorized
Service Providers". Under the heading "Repair Services" delete the last
sentence and replace with "Paradyne or Paradyne's customer shall be
responsible for transportation expenses to NetScout's facilities and
NetScout will be responsible for transportation expenses back to Paradyne
or Paradyne's customer." Under the heading "Priority Shipments" change
"twenty-four (24) hours" to "forty-eight (48) hours."
24. The Quality Agreement by and between the parties shall be attached hereto
and made a part of this Agreement as Exhibit E.
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Marketing & License Agreement, NetScout Systems, Inc.
Amendment Number 1
<PAGE> 7
25. All other terms and conditions of the above stated Agreement remain
unchanged.
26. SIGNATURE
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
date(s) set forth below.
PARADYNE CORPORATION NETSCOUT SYSTEMS, INC.
By: /s/ J. Slattery By: /s/ Nathan Kalowski
--------------------------------- ------------------------------
Title: SVP Title: VP Business Development
------------------------------ ---------------------------
Date: 3/20/98 Date: 4/22/98
------------------------------- ---------------------------
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Marketing & License Agreement, NetScout Systems, Inc.
Amendment Number 1
<PAGE> 8
EXHIBIT E
QUALITY
1.0 QUALITY ASSURANCE
Notwithstanding the post-acceptance obligations of Seller, Buyer has a
significant interest in the quality of the Product. Because the Product has a
useful life expectancy greater than the warranty obligation period and because
of the good will lost by malfunctioning Products, even though they may be
corrected at Seller's expense, it is agreed by Buyer and Seller that without
limiting or abridging Buyers rights to inspect the Product prior to acceptance
or Seller's post-acceptance obligations, the following provisions shall apply
to ensure acceptable quality for Products manufactured for Buyer under the
terms of this Agreement:
1.1 QUALITY CONTROL MONITORING & SOURCE INSPECTION
Buyer reserves the right, at any time during the term of this agreement,
with five (5) calendar days prior notice and subject to product availability,
to place one or more personnel in SELLER facilities to carry out inspection and
acceptance tests, process certifications, review of quality data, and other
functions Buyer may deem reasonably necessary to maintain quality objectives.
Personnel authorized by Buyer shall be empowered to reject the material
intended for the delivery to Customers in the event that such material fails to
meet required specifications or acceptance tests. In the event that the
Representative ascertains that an item of Product is defective, said
Representative will advise Seller's authorized personnel and such defect shall
be remedied prior to shipment. Rejected lots (or Products) will then be
corrected and re-submitted for re-inspection at Seller's expense.
Buyer may, at its option, implement a sampling inspection with lot
rejection in accordance with an appropriate sampling plan and inspection
procedure to be accomplished at Seller's facility. If any inspection or test is
made on Seller's premises, Seller shall, without additional charge, provide all
reasonable facilities and assistance for the safety and convenience of Buyer's
inspector subject to the security and safety regulations existing at the
facilities.
1.2 ACCEPTANCE TESTS
Acceptance test procedures for final manufacturing testing and for product
acceptance purposes will be mutually agreed upon buy the Buyer and Seller.
1.3 WORKMANSHIP STANDARDS
All Products shall be in compliance with the Buyer's workmanship
standards, IPC-A-610, as a minimum criteria of workmanship.
1.4 QUALITY CONTROL SYSTEM & ISO 9000 COMPLIANCE
Seller shall maintain the quality control system mutually agreed upon at
the Effective Date of this contract and as specified in the Specifications.
Seller shall, with every reasonable and timely effort, apply for and/or maintain
ISO 9001 registration. Seller is expected to use its reasonable best efforts to
attain and maintain acceptable ratings resulting from any future quality system
assessments.
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Marketing & License Agreement, NetScout Systems, Inc.
Amendment Number 1
<PAGE> 9
1.5 SELLER/BUYER CONTINUOUS IMPROVEMENT EFFORTS
Buyer and Seller mutually agree to develop a continuous improvement plan in
an effort to reduce overall costs and improve Quality in both Processes and
Products that will mutually benefit both parties in the areas of:
a. On Time Shipments as measured by requirements set forth in Contract.
b. Repair Data, including DOAs, Infant mortality and Root Cause Analysis.
c. Electronic Data Interchange (EDI).
d. Utilizing freight carriers designated by Buyer in Buyer's Corporate
Routing Guide.
1.6 NOTIFICATION OF QUALITY ISSUES
Buyer is to be notified within 24 hours of catastrophic failures affecting
customer safety or equipment performance of Buyer equipment. These failures
include, but are not limited to, Product failures which greatly exceed the
normal failure rate of Buyer product, or line down conditions at SELLER which
may impact the timely shipment or quality of Buyer products. Buyer product
produced at SELLER must maintain a demonstrated confirmed DOA defect rate not
exceeding SELLER supplied MTBF calculations for Product.
1.7 CORRECTIVE ACTION FOR QUALITY ISSUES
SELLER is expected to maintain a functioning and documented Quality system
to provide timely and effective corrective action(s) regarding quality issues.
Upon request from Buyer, SELLER is to determine the root cause of quality
defects, ensure that these defects are prevented from shipping to customers, and
provide effective corrective action to prevent the recurrence of these, or
similar, defects. Buyer reserves the right to stop shipment of Buyer product
from SELLER facilities until such actions deemed necessary to corrective the
defect have been completed.
1.8 INSPECTION AT DESIGNATED DELIVERY LOCATION
Within 30 days of the receipt of any Product at its designated delivery
location, Buyer may submit such Product to the criteria as set forth in the
agreed upon Specifications. Buyer shall be entitled to reject any product that
fails to conform to the Purchase Specifications. Notice of any such rejection
shall be issued within five (5) business days by Buyer to Seller.
Upon rejection, Buyer will notify Seller of such rejection and cause for
rejection and return the entire shipment or any portion, to Seller. Seller
accepts all cost of rejected lost shipping charges back to Seller and Buyer, any
insurance costs, all risk of loss [F.O.B. Destination], and for rejected
Products. If Seller does not receive such notice of any such rejection from
Buyer within thirty [30] calendar days after shipment of Product, such Product
shall be deemed accepted by Buyer for purposes of this Section of this
agreement. Any Products returned under this Section of the agreement will be
shipped by a carrier selected by Seller, or Seller will be liable for freight
charges at a rate equivalent to Buyer's documented freight rates. If it is
determined that any Products returned by Buyer under this Section of this
agreement are conforming to the Specification then (i) Seller shall utilize such
Products for Buyer's releases and Buyer shall, notwithstanding anything to the
contrary in this Section, pay for the expenses associated with Buyers original
return of such Products to Seller under this Section. Notwithstanding the
foregoing, damage to Products caused by Buyer's Shipper shall not be considered
a nonconformity to the Specification.
1.9 FIRST INSTALL SUPPORT
Seller will provide, at Buyer's request, at locations selected by Buyer and
at no cost to Buyer, technically competent personnel and any necessary spare
parts to assist in the identification and resolution of any performance problems
which jeopardize the progress of the installations of the Product in the
continental United States. Seller will also provide, at Buyer's request, any
performance information available which could assist Buyer in an evaluation of
Product performance.
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Marketing & License Agreement, NetScout Systems, Inc.
Amendment Number 1
<PAGE> 10
EXHIBIT F
NETSCOUT TRAINING
The following is a list of available NetScout Training Classes:
Available through March 31, 1998 from NetScout Training Department:
NETSCOUT MANAGER 5.0 - 3 DAY CLASS. STANDARD TUITION: $[***] PER STUDENT
This course is intended to provide network administrators and support
specialists with the knowledge and skills needed to extract the extensive
network monitoring data available through the deployment of NetScout
Manager in combination with NetScout RMON and Enterprise RMON probes.
At the conclusion of the class, participants will be able to:
Install and configure NetScout probes and NetScout Manager
Configure report data polling, report templates, and produce reports
created from polled data
Understand how RMON is used in managing and monitoring Ethernet, Fast
Ethernet, CDDI, FDDI, Token Ring, WAN and switched networks.
NETSCOUT WEBCAST - 1 DAY CLASS. STANDARD TUITION: $[***] PER STUDENT
At the conclusion of the class, participants will be able to:
Install and configure NetScout WebCast Software
Configure report data, report templates, and product reports created
from NetScout SQL database over the Web.
Starting April 1 Chesapeake will be NetScout's Authorized Training Partner
and the above two classes will be combined into
NETSCOUT MANAGER 5.0/WEBCAST TRAINING - 4 DAY CLASS, STANDARD TUITION $[***]
Starting April 1 NetScout will begin offering a class for partners such as
Paradyne:
NETSCOUT MANAGER FOR PARTNERS - 2 DAY CLASS, STANDARD TUITION $[***]
This course is intended to provide partner sales, sales engineers and
service support specialists with the knowledge and skills needed to extract
the extensive network monitoring data available through the deployment of
NetScout Manager in combination with NetScout RMON and Enterprise RMON
probes.
At the conclusion of the class, participants will be able to:
Use NetScout Manager to monitor network problems. The direction of
this new class will be to solve problems. It will be workstation
independent working more with the functionality of monitoring network
segments and trouble shooting problems, less on how to do the basics
such as installation and Unix command line actions.
NETSCOUT MANAGER ADVANCED TRAINING - 5 DAY CLASS, STANDARD TUITION $[***]
(Starting in May)
This course is intended to provide partner Technical Assistance Center
support specialists and Trainers
with the knowledge and skills needed
to provide first and second level TAC support to customers
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Marketing & License Agreement, NetScout Systems, Inc.
Amendment Number 1
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*** Confidential Treatment Requested
<PAGE> 11
and authorized distributors and to Trainers developing course
materials and may be required to answer questions and use NetScout
Manager in ways not covered in a basic class.
Paradyne Corporation - PROPRIETARY
Use Pursuant to Company Instructions
Marketing & License Agreement, NetScout Systems, Inc.
Amendment Number 1
<PAGE> 12
MARKETING & LICENSE AGREEMENT
BY AND BETWEEN
NETSCOUT SYSTEMS, INC.
AND
PARADYNE CORPORATION
January 26, 1998
<PAGE> 13
This Marketing & License Agreement ("Agreement") is made this 26th day of
January, 1998, by and between NetScout Systems, Inc., a Delaware corporation
having its principal place of business at 4 Technology Park, Westford, MA 01886
("NetScout") and Paradyne Corporation, a Delaware corporation having its
principal place of business at 8545 126th Avenue North, PO Box 2826, Largo, FL
34649-2826 ("Paradyne"), (mutually hereinafter referred to as the "Parties").
WHEREAS, NetScout and Paradyne have entered into a memorandum of understanding,
dated December 2, 1997 ("MOU"), for the purpose of summarizing the discussion
between the Parties concerning the integration and co-marketing of each other's
products and technologies; and
WHEREAS, the MOU further sets forth the agreement of the Parties respecting the
arrangement, engineering commitments, training, support, licensing and
royalties obligations; and
WHEREAS, it is the Parties' intentions to enter into a definitive written
agreement no later than thirty (30) days from the date of the MOU, which shall
incorporate the terms and conditions governing such activities as set forth in
the MOU, and shall further define and establish the respective
responsibilities, obligations and rights concerning the transactions associated
with such activities and contemplated by the Parties hereunder, and
WHEREAS, it is the Parties intentions to enter into good faith negotiations to
complete an amendment to this Agreement incorporating mutually acceptable
manufacturing terms within thirty (30) days of the signing of this Agreement.
Now, in consideration of the covenants and premises contained herein, the
parties agree as follows:
1 Definitions
The following words, terms or phrases, where initialized with a capital
letter, shall have the meanings indicated in this section.
1.1 "Affiliate" shall mean an entity that controls, is controlled by or is
under common control with Paradyne (with "control" meaning ownership
of more than fifty percent (50%) of the voting stock of the entity or,
in the case of a non-corporate entity, an equivalent interest).
1.2 "Business Day" shall mean Monday through Friday, excluding local
holidays.
1.3 "Documentation" shall mean a functional description of the Licensed
Product, direction for installation, and use, and any other
explanatory material necessary for a user to perform all of the
functions of the Licensed Product.
1.4 "Customer" for the purpose of this Agreement shall mean the person(s)
or entity properly licensed to use the Licensed Product."
1.5 "Licensed Product" shall mean any NetScout software product/NetScout
RMON feature set embedded into a Paradyne Hardware product (English
and all Foreign Language versions), in object code form, all future
Revisions to such Licensed Product, and all Documentation associated
with such Licensed Product.
1.6 "Paradyne" shall include its Affiliates.
1.7 "Problem" shall mean a demonstrable instance of adverse and incorrect
operation of a Licensed Product due to a material non-conformance to
the Licensed Product's specification or Documentation.
1.7 "Resale Product" shall have the meanings as set forth in Exhibit B.
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1.8 "Revision" shall mean any correction, modification, maintenance
release, update, enhancement, and/or new version of the Licensed Product.
1.9 "Software" shall mean all computer programs, databases and
firmware, (i) embedded in the Products or (ii) sold on a stand-alone basis as
Products, and all Documentation and technical specifications associated
therewith.
1.10 "Source Code" shall mean (i) all Software source code which has
been provided by NetScout (including from time to time each upgrade, enhancement
or other modification), together with, to the extent in existence, (A) any
pertinent commentary or explanation that may be necessary to render such Source
Code understandable and usable by a trained computer-programming expert, (B)
such system documentation, statements of principles of operation and schematics
as are necessary or useful for the effective understanding of such Source Code,
and (C) all devices, programming or documentation (including compilers,
workbenches, tools and higher-level proprietary languages) employed by NetScout
for the development, maintenance and implementation of such Source Code.
1.11 "Tier 1 Support" shall mean the services provided by Paradyne in
response to a Customer's initial notification of a suspected Problem.
1.12 "Tier 2 Support" shall mean the provision of diagnostics provided
by Paradyne to determine the severity of the Problem, attempt to reproduce and
correct the suspected Problem, or determine that the Problem cannot be
reproduced.
1.13 "Tier 3 Support" shall mean the provision of backup technical
and/or engineering services by NetScout the resolve a Problem that has been
determined to be, or is highly probable to be, the result of a design or
manufacturing defect that cannot be resolved by Paradyne.
2. THE ARRANGEMENT
2.1 Paradyne agrees, during the term of the Agreement, to conform to
the following:
2.1.1 to exclusively utilize NetScout's RMON network
management Software and related agent Software
applications in/with its RMON products during the term
of this Agreement; and
2.1.2 to market and offer for sale to customers the NetScout
Manager Plus Software and other NetScout software
modules as available, and exclusively recommend for
sale to customers head end probes in all FrameSaver
FRAUs with RMON technology networks, excepting sales to
customers whose RMON technology networks incorporate
hardware or software which has been purchased form
other source (e.g. through Cisco); and
2.1.3 not to: (i) directly or indirectly develop RMON-based
technologies which are competitive to NetScout, (ii)
position the FrameSaver or any other Paradyne product
as a probe; (iii) incorporate RMON support in any of
their network management platforms; or (iv)
manufacture, OEM or acquire third party probe products
for the purpose of offering such products to customers
as competitive products to NetScout's probes
2.2 NetScout agrees, during the term of the Agreement, to conform to
the following:
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<PAGE> 15
2.2.1 to reference Paradyne as a strategic partner for DSU's,
DSL's and Multiplexers; and
2.2.2 to provide Paradyne preference when sourcing DSU's or
integration of DSU technology into NetScout probe products,
provided Paradyne is meeting its obligations under this
Agreement and Paradyne's proposal is market competitive and
meets NetScout's functional specifications as defined by
NetScout's timely delivered Request for Proposal.
3. LICENSE
3.1 In accordance with the terms and conditions of this Agreement, Net
grants to Paradyne, and Paradyne accepts from NetScout, a worldwide,
perpetual, non-exclusive right and license to promote, market, sell,
license and distribute the Licensed Product as set out below. The
following terms and conditions govern the license granted by
NetScout, and NetScout's obligations thereunder.
3.1.1 NetScout has, upon execution of the MOU, provided Paradyne
with the Source Code for the Licensed Product for the
limited purpose of enabling Paradyne to port/embed the
following groups of RMON into its FrameSaver endpoint
devices:
3.1.1.1 RMON 1 - Statistics Group; RMON 1 - Alarm Group;
RMON 1 - Events Group; RMON 2 TOPN - IP Layer Host
Group, RMON 2 - Protocol Director Group; RMON 2 -
Protocol Distribution Group; NetScout WAN
Enterprise Extensions; and RMON 2 - User History
Group.
3.1.1.2 Paradyne shall further implement enhancements to
its FrameSaver FRAU's to provide mutually agreed
to MIB extensions which shall allow NetScouts
Manager Software access to Paradyne's patented
technology. Such patented technology provides
non-disruptive real-time monitoring of frame relay
parameters (e.g. latency on a per DLCI basis,
dropped packets and mapping of DLCI's to remote
end points.).
3.1.1.3 Paradyne expressly agrees to treat the Licensed
Product Source Code with the same degree of care
that Paradyne treats its own confidential source
code. Paradyne shall limit access to the Source
Code for the Licensed Product to Paradyne
employees to the extent that such employees need
access to perform their respective duties related
to embedding of the Licensed Product in
Paradyne's Framesaver endpoint devices.
3.1.2 Paradyne shall include license terms and conditions
substantially similar to those set forth in Exhibit C with
each Licensed Product sold.
3.1.3 Paradyne may use the Licensed Product for support
evaluation, maintenance, and other activities connected with
service of the Licensed Product including, without
limitation, the provision of updates and Revisions to
Customers.
3.1.4 Paradyne may copy and distribute Documentation for the
Licensed Product. Paradyne agrees to maintain NetScout's
copyright notices or
Marketing & License Agreement Paradyne and NetScout Confidential page 3
NetScout and Paradyne Use Pursuant to Company Procedures 01/26/98
<PAGE> 16
trademarks on all copies of Documentation that is
distributed to Customers.
3.1.5 Paradyne agrees: (i) not to create or attempt to create by
reverse engineering, disassembly, decompilation or
otherwise, the source code or internal structure, or
organization of the Products, or any part thereof, from any
object code or information that may be made available to
it, or aid, abet or permit others to do so; and (ii) not to
remove any Product identification or notices of any
proprietary or copyright restrictions from the Product or
any support material, except for one (1) archival copy.
3.1.6 Paradyne is prohibited from making any modifications,
adaptations, enhancements, changes, or derivative works of
the Licensed Product unless authorized in writing by
NetScout. Notwithstanding the preceding sentence, Paradyne
is expressly authorized to perform whatever work is
necessary or advisable by NetScout to embed the Licensed
Product in Paradyne's FrameSaver products as defined below.
To the extent NetScout authorizes the development of
derivative works, Paradyne shall thereafter retain title to
the derivative work developed by or on behalf of Paradyne,
provided that NetScout shall retain title to the underlying
work upon which such derivative work is based.
4 TITLE AND RIGHTS TO THE LICENSED PRODUCT
4.1 The Licensed Product and Revisions to the Licensed Product are
proprietary to NetScout, and NetScout shall retain all right,
title and interest in and to the Licensed Product including all
rights under applicable patents, copyrights, trademarks and
trade secrets, and to any foreign language version of the
Licensed Product developed or acquired by NetScout.
4.2 NetScout represents that it has at the time of execution of this
Agreement, and will continue to maintain during the term of this
Agreement, the full right and authority to grant this license,
and that neither this license nor performance under this
Agreement does or shall conflict with any other agreement or
obligation to which NetScout is a party or by which it is bound.
4.3 To the extent necessary to give effect to this Agreement, the
licenses granted to Paradyne shall include rights under any
applicable patents, copyrights, trademarks and trade secrets
belonging to NetScout or which NetScout has acquired or may
acquire.
4.4 Paradyne agrees to include NetScout's copyright notice on all
copies of the Licensed Product in substantially the following
form: "portions of this software licensed by NetScout Software,
Inc., Westford, Massachusetts, Copyright(c) [NetScout(TM)] 19__,
All rights reserves."
5. ENGINEERING REQUIREMENTS
5.1 In consideration of Paradyne's purchase obligation as defined
below, NetScout agrees to perform the following engineering
services:
5.1.1 to co-develop the revised RMON User History Group for
support of Paradyne's standard and enterprise MIB's;
Marketing & License Agreement Paradyne and NetScout Confidential page 4
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5.1.2 to deliver the device code for RMON User History Group
capability prior to the alpha availability of the
NetScout agent code version 4.5;
5.1.3 to deliver the updated NetScout Manager Plus Software
that supports configuration and graphical display of the
RMON User History Group capability prior to the beta
availability of the NetScout Manager Software, version 5.5.
5.1.4 NetScout agrees to negotiate in good faith any engineering
changes requested by Paradyne which represent changes in
functionality of the Products not currently included in
NetScout's specifications and user manuals, and not
addressed in NetScout's future development plans may be
identified by NetScout under non-disclosure during business
reviews. NetScout's decision to incorporate any such
engineering changes will be primarily based on Paradyne's
projected sales forecast for such functionally modified
products and the expense to institute the proposed changes.
5.2 NetScout further agrees to provide engineering consulting services to
Paradyne at a rate of [***] dollars per month ($[***] month)
during the porting of the Licensed Product into the Paradyne
FrameSaver endpoint devices. The recommended approach for such
engineering consulting services shall be for Paradyne to bring their
engineering environment to NetScout's facilities to enable Paradyne's
engineers to work more closely with NetScout's engineers and
resources (e.g. QA, testing labs, etc.).
5.3 Epidemic Failure. As a result of the limited purchase volumes
forecasted during the Initial Term of the Agreement, NetScout shall
not establish a definitive position regarding percentages, penalties
and/or specific action plans to address "Epidemic" failures which may
occur during the term of this Agreement. NetScout agrees, however, in
the event that Paradyne or its Customers identify an unreasonably
excessive amount of defective, failed or dead on arrival ("DOA")
products during any quarterly period, to establish an action plan to
effect an immediate remedy to the problem. NetScout further agrees to
provide on-site technical support and all necessary parts to repair
or replace product known to be affected by such Epidemic, and to use
commercially reasonable efforts to ensure that the appropriate
quality controls and other measures are taken so that all product of
similar type supplied subsequent to the date of such an Epidemic
shall be free from the problems which caused the Epidemic.
6. TECHNICAL SUPPORT
6.1 NetScout agrees to provide Tier 3 Support via a telephone
support service as set forth in Exhibit D. The telephone support
service will be delivered by a NetScout support person during
NetScout's normal working hours (8 am - 6 pm, EST.), and a best
effort paging service after hours, on weekends and holidays.
Paradyne shall pay a fee of [***] ($[***]) annually, billed
quarterly, for the first year of Tier 1 and 2 Support; fees for
years 2 and 3 and any subsequent extensions of the Agreement shall
be mutually determined thirty (30) days prior to the expiration of
the then current year. Fee considerations shall include a range of
[***] percent ([***]%) of install base dollar and escalation call
volumes.
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6.2 NetScout will provide Paradyne with updates and Revisions to Licensed
Product at the time NetScout makes such updates and Revisions for
beta to enable Paradyne to meet its Customer support requirements.
6.3 Thirty (30) days prior to the date of public distribution of a
Revision, NetScout will, if applicable, provide the source code of
such Revision to Paradyne to enable Paradyne to port/embed the
Revision to the FrameSaver endpoint devices. NetScout will make best
efforts to provide written notification to Paradyne at least
forty-five (45) days prior to any new release or new version of the
Licensed Product, or any change in the Licensed Product that would
materially affect its performance in the FrameSaver endpoint devices.
6.4 NetScout will support and maintain the most current version and one
(1) version immediately preceding the then most current version of
the Licensed Product as modified to run in the FrameSaver end point
devices. Such support and maintenance will be provided for the term
of this Agreement. In the event NetScout discontinues manufacture and
license of the Licensed Product, NetScout agrees to continue support
and maintenance services for a period of one (1) year from such
discontinuance.
7 TRAINING
7.1 NetScout agrees to provide initial Product training for a mutually
determined numbers of Paradyne employees at NetScout's Westford, MA
location. The initial training shall be provided at no charge,
excluding payment of travel and lodging of Paradyne's employees.
NetScout further agrees to provide no charge training (excluding
payment of travel and lodging of Paradyne's employees) for up to ten
(10) Paradyne employees prior to each major Software release.
Additional students may be added to the Software release training
classes at NetScout's published rates. Any other training required
beyond the initial and major release training will be performed at
NetScout's published rates. It is recommended that "train the
trainer" personnel participate in the initial and/or major release
training to support an efficient and cost effective training roll-out.
8 SALES DEMONSTRATION PRODUCTS
8.1 Paradyne shall procure, at the applicable hardware resale discounts,
a mutually determined number of hardware Products to be used for
sales, Customer demonstration and Beta Test purposes.
8.2 Paradyne shall procure, at a cost of [ *** ] dollars ($[ *** ]) per
copy, a mutually determined number of NetScout Manager Plus Software
packages to be used for sales demonstrations. Paradyne will keep such
demonstration Software current by procuring additional Software for
each Major release developed by NetScout. NetScout shall issue a
permanent license for each demonstration Software product purchased.
Paradyne shall be responsible for maintaining the licenses (serial
tracking and platform designations), and shall identify the serial
number and product platform (e.g. Unix or NT) when ordering upgrades
for the Software product.
8.3 Paradyne shall procure, at a cost of [***] dollars ($[*** ]) per copy,
a mutually determined number of NetScout Manager Plus Software
packages to be used for Customer evaluations. Paradyne will keep such
evaluation Software
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<PAGE> 19
current by procuring additional Software for each Major release
developed by NetScout. NetScout shall issue a limited ninety
(90) license for such Software product purchased. Such license
may only be extended by express written approval by NetScout.
8.4 The fee paid by Paradyne for demonstration and evaluation
Software products shall cover the cost of the CD, Documentation,
order processing and administration. Software product orders
shall comply with the purchase order process defined hereinbelow.
9 MARKETING
9.1 NetScout will assist Paradyne, as necessary, to develop
marketing materials to promote the sale of the FrameSaver end
point devices that contain the Licensed Product.
9.2 Paradyne agrees to allocate sufficient funding to complete
twelve (12) seminars per year and to institute direct mail
programs.
9.3 NetScout grants Paradyne the right and license to use NetScout's
name and trademarks in connection with the marketing and sale of
the FrameSaver products, the Licensed Product, and Resale
Products (NetScout Manager Plus and NetScout probes).
10 DOCUMENTATION
10.1 NetScout will provide sufficient copies of its Documentation,
including any applicable copies in electronic form, to enable
Paradyne to incorporate printed copies of the end user
Documentation with each FrameSaver product shipment. The
Documentation may be distributed either as a standalone manual
or in conjunction with Paradyne's standard documentation,
provided, however, that NetScout's proprietary markings remain in
place and are clearly marked. NetScout retains all underlying
rights and ownership to any pre-existing Documentation that may
be utilized by Paradyne to create end user marketing, sales and
technical documentation for the FrameSaver products.
10.2 NetScout grants Paradyne the right to copy NetScout's
Documentation to distribute internally to its sales and
engineering organization, and externally to Customers either in
promotion of the products or in conjunction with the delivery of
the FrameSaver products.
10.3 Any portion of NetScout documentation used in Paradyne
documentation may be promoted in manners consistent with current
tools available (e.g. the Paradyne Web page). Paradyne, however,
may not incorporate NetScout's entire manual(s) onto its Web
page.
11 ROYALTY FEES AND PAYMENT
11.1 Paradyne agrees to pay NetScout, net thirty (n/30) days after
the close of each quarter, a royalty, as defined in Exhibit A,
for each FrameSaver product (56k and T1 versions) sold with
embedded Licensed Product, during the previous quarter for the
term of this Agreement, any extensions to this Agreement, and
any resulting survival periods. Notwithstanding the preceding
sentence, in the event Paradyne elects to price the RMON feature
set separately, the NetScout royalty shall be [***] percent
([***]%) of the separate list price for the RMON
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feature or [***] as listed for each version of embedded RMON listed in
Exhibit A.
11.2 Payment of service support fees as described in Section 6.1
hereinabove shall be due net thirty (n/30) days after the close of
each quarter.
11.3 Any payments made to NetScout, whether as royalties for the Licensed
Product sales or for Resale Product purchases, shall be made without
deduction for any sales use, value-added or other taxes, duties or
levies, except that Paradyne shall have the right to withhold from
payments to NetScout any taxes that Paradyne is required to withhold
under applicable law. Paradyne shall provide NetScout with a
certificate form the applicable tax authorities or other evidence
reasonably required by NetScout to evidence such tax withholding
status.
11.4 Paradyne agrees to provide audit reports to NetScout on a quarterly
basis indicating the number of Licensed Products sold during the
previous quarter to assist the Parties in their quarterly royalty
reconciliation.
11.5 The Parties agree to meet twice annually to review royalty pricing in
light of competitive pressures. Royalty pricing shall be adjusted,
accordingly, to respond to competitive pricing pressures.
12 NETSCOUT RESALE PRODUCTS TERMS AND CONDITIONS
12.1 Paradyne Purchase Obligation. During the first twelve (12) months
following availability of the FrameSaver FRAU's incorporating the
Licensed Product Paradyne agrees to purchase [***] dollars ($[***]) of
NetScout products of which [***] dollars ($[***]) shall be Resale
Products.
12.2 Pricing & Discounts. In consideration of Paradyne's purchase
obligation as set forth in 11.1 above, NetScout extends to Paradyne
the right and license to resell NetScout's probes, management and
diagnostic applications (the "Resale Products"), set forth in Exhibit
B; and, grants Paradyne, for the initial term of this Agreement, a
purchase discount equal to [***] percent ([***]%) and [***] percent
([***]%) off of NetScout's then current list price for NetScout
Manager Software and probes, respectively.
Thirty (30) days prior to the end of the initial term and any
subsequent term of this Agreement, the Parties agree to meet to review
purchase volumes and determine the appropriate Resale Products'
discount level for the next term of the Agreement.
12.3 Purchase Orders. Resale Product orders may be initially made via
telephone or facsimile, provided Paradyne follows the orders with hard
copy purchase orders ("PO's") within a reasonable period of time
thereafter. PO's shall include the following details: Paradyne's part
number for NetScout's products, description, quantity, delivery
date(s) and PO dollar total.
12.4 Order Acceptance & Lead-time. NetScout will accept orders and confirm
delivery schedules within twenty-four (24) hours from receipt of
Paradyne's order placement. NetScout's normal lead-time for NetScout
products is twenty-one (21) days from order placement. NetScout,
however, will make the best efforts to meet, as necessary, Paradyne's
priority requirements.
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12.5 Cancellation/Reschedule. Paradyne reserves the right to cancel PO's or
parts of PO's, without penalty, provided the requested cancellation is
made more than ten (10) days from the scheduled delivery of the
products. Any cancellation requests made inside the eleven (11) day
window shall be subject to [***] percent ([***]%) cancellation fee.
Paradyne also reserves the right to reschedule PO's or parts of PO's
at any time prior to the scheduled delivery date provided the
requested delivery date does not extend beyond sixty (60) days from
the originally scheduled delivery date.
12.6 Price Changes. NetScout reserves the right to add/delete products from
the attached price list, and further reserves the right to modify
pricing, as required, at any time during the term of this Agreement.
NetScout shall make best efforts to notify Paradyne at least thirty
(30) days prior to any price changes. In the event of a price increase
for Resale Products after order acceptance by NetScout, the applicable
price shall be the price in effect at the time the order was accepted
by NetScout provided the order is scheduled to ship within sixty (60
days from the date of order placement. In the event of a price
decrease in the price of the Resale Products, NetScout shall, on the
effective date of the decrease in price(s), automatically adjust any
unshipped orders for all affected Resale Products to reflect the lower
pricing. In the event of a price increase, NetScout will provide price
protection (e.g. offer products at the lower pricing) for: (i) any
orders placed prior to the price increase and scheduled to ship within
sixty (60) days from the date of the price increase, and (ii) any new
orders placed within sixty (60) days after the price increase.
12.7 Limited Resale Product Warranty. NetScout warrants the Resale Products
for a period of ninety (90) days from a Customer's acceptance that the
Resale Products will be free from defects in material and workmanship.
NetScout shall repair or replace, at no charge, any Resale Products
returned to NetScout during the warranty period. This is NetScout's
sole remedy to Paradyne and/or End Users under this Agreement for
warranty claims.
NETSCOUT HEREBY DISCLAIMS ANY IMPLIED WARRANTIES OR MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. THE WARRANTIES MADE IN THIS
PARAGRAPH ARE MADE IN LIEU OF ALL OTHER EXPRESS WARRANTIES, WHETHER
ORAL OR WRITTEN.
12.8 Payment. Payment for the Resale Products shall be due net thirty
(n/30) days from the date of receipt by Paradyne. Any payments made to
NetScout for Resale Product purchases shall be made without deduction
for any sales, use, value-added or other taxes, duties or levies,
except that Paradyne shall have the right to withhold from payments to
NetScout any taxes that Paradyne is required to withhold under
applicable law. Paradyne shall provide NetScout with a certificate
from the applicable tax authorities or other evidence reasonably
required by NetScout to evidence such tax payment.
12.9 Title & Risk of Loss. All orders shall be shipped FOB, Westford, MA.
Title and risk of loss shall immediately pass upon delivery to the
respective carrier.
12.10 Point of Sale Reporting. Paradyne agrees to provide to NetScout,
within thirty (30) business days of the close of each calendar
quarter, Point of Sale (POS)
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<PAGE> 22
reports identifying the quantity and dollar value, and zip
code/country code, for the Resale Products sold by Paradyne in
the previous calendar quarter.
12.11 Service and Support. Paradyne shall be obligated to provide
customer service and support for Resale Products during the
applicable warranty period, with backup support from NetScout as
necessary. NetScout shall be responsible for providing customer
service and support for out of warranty Resale Products, provided
such Resale Products carry maintenance agreements. Escalation
guidelines and post warranty service charges are incorporated in
Exhibit D.
13 CONFIDENTIAL INFORMATION
All confidential information exchanged by the Parties during the term of
this Agreement shall be treated pursuant to a certain Non-Disclosure
Agreement, effective December 3, 1997, and incorporated herein by
reference.
14 LICENSED PRODUCT LIMITED WARRANTY AND DISCLAIMER OF LIABILITY
14.1 NetScout has no control over the conditions under which Paradyne
and Customers use the Licensed Product, and does not/cannot
warrant the results obtained by such use.
14.2 NetScout warrants that no security measures have been
incorporated in the Licensed Product which would impair its use
and operation except such measures as are disclosed to Paradyne
in writing and approved by Paradyne in writing.
14.3 In addition to warranting that it has the right to grant the
licenses contained in this Agreement, NetScout warrants under the
terms and conditions of the End User license agreement, attached
hereto as Exhibit C, that the magnetic media on which the
Licensed Product resides shall be free from defects in material
and workmanship under normal usage. NetScout further warrants
that the Licensed Product will perform substantially in
accordance with the current written functional specifications and
documentation. The warranties contained in this paragraph are
made for a period of ninety (90) days from the date that the
Licensed Product is delivered to the Customer.
14.4 NetScout warrants that it has the right and is duly authorized to
enter into this Agreement and has sufficient rights, title and
interest in and to the Licensed Product and related Documentation
to grant the licenses and shall not make commitments to others
inconsistent herewith.
14.5 NetScout does not warrant that the functions contained in the
Licensed Product will meet the requirements of Paradyne or the
Customer, or that the operation of the Licensed Product will be
uninterrupted or error free. The warranty shall not cover any
copy of the Licensed Product that has been altered or changed in
any way by Paradyne, excepting changes authorized by NetScout
pursuant to Section 3.1.6 hereinabove, or by the Customer.
NetScout further shall not be responsible for problems caused by
changes in or modifications to the operating characteristics of
any computer hardware or operating system on which the Licensed
Product was intended to be used, nor will NetScout be responsible
for problems which occur as a result of the use of the Licensed
Product in conjunction with hardware which is incompatible with
the operating system for which the Licensed Product was designed
for and/or intended to be used with.
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<PAGE> 23
14.6 THE FOREGOING LICENSED PRODUCT WARRANTIES OF NETSCOUT ARE IN LIEU
OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
14.7 The above warranties shall survive any delivery, acceptance,
payment, termination or expiration of this Agreement or any PO's
provided hereunder, and shall run to Paradyne, its successors,
assigns, Customers and users of the Licensed Product.
15. ENGINEERING CHANGES
15.1 NetScout may, without prior approval from or prior notice to
Paradyne, make changes to the Licensed Products (i) which do not
adversely affect interchangeability with previously shipped
Product or (ii) when required for safety, regulator, or legal
purposes.
15.2 NetScout will notify Paradyne forty-five (45) day in advance of
scheduled shipment of any changes to the NetScout software
product/NetScout RMON feature set embedded into a Paradyne
hardware product ("Embedded Products") which adversely affect
interchangeability with previously shipped Embedded Products.
NetScout further agrees to provide, with its forty-five (45) day
advanced notification, upgrade recommendations that will
reconcile any interchangeability problems which may result form
the proposed changes.
16. NEW PRODUCT DEVELOPED BY SELLER
16.1 If NetScout develops a new product that NetScout believes will
benefit both parties, NetScout shall notify Paradyne in writing
at least sixty (60) days prior to the time of the initial public
announcement of such new product, unless other terms are mutually
agreed upon, in advance and in writing, by the paries. At the
time of such written notice, NetScout shall also provide to
Paradyne a beta product along with any available specifications,
description, and technical data to enable Paradyne to perform an
engineering evaluation of the new product.
17. PRODUCT DISCONTINUANCE
17.l NetScout agrees to notify Paradyne at least twelve (12) months
prior to the discontinuance of any Resale Product listed in
Exhibit B of this Agreement. Paradyne shall be granted a right to
make a last time buy of the discontinued Resale Product during
the notice period, and shall receive technical support of the
Resale Product and all replacement Resale Products throughout the
term of this Agreement, and for a period of five (5) years after
the Agreement expires.
18. EXTENSION OF MANUFACTURING RIGHTS
18.1 A perpetual license to continue embedding the Licensed Products
during the manufacture of the Paradyne products listed in Exhibit
A, shall be granted to Paradyne under the following conditions:
18.2 Discontinuance of the Licensed Products defined in Exhibit A,
provided no functionally equivalent substituted is made available
at or below the specified price.
18.3 A new Licensed Product replaces or obsoletes existing Licensed
Product and the
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<PAGE> 24
new Licensed Product fails to meet the specifications defined herein
this Agreement.
18.4 NetScout becomes insolvent. Paradyne will have the right to withdraw
the Manufacturing Information contained in the escrow account in
preparation for manufacturing the Products. However, such rights will
not become effective until such time as NetScout dissolves or ceases
to do business.
18.5 Material Breach of this Agreement by NetScout that is not cured
within the time period as specified in Section 21, Termination.
18.6 Such perpetual license will be subject to the royalties set forth in
Exhibit A.
18.7 Notwithstanding the foregoing, the obligations of NetScout under this
Section are conditional upon Paradyne's ability to secure such
manufacturing usage licenses or other proprietary rights of third
parties, if any, as may be required to manufacture such Product.
NetScout agrees to provide reasonable assistance to Paradyne to
secure such rights.
19. LIMITATION OF REMEDIES
19.1 Except as set forth in the Indemnity section below, NetScout's
entire liability and Paradyne's exclusive remedy for breach of
Section 14 shall be the replacement by NetScout of any Licensed
Product which fails to meet NetScout's Limited Warranty defined in
such section. Neither party shall have any liability for special,
incidental or consequential damages, including lost profits, arising
out of this Agreement or with respect to the installation, use
operation or support of the Licensed Product and Resale Products,
even if such party has been apprised of the possibility of such
damages.
19.2 Except as set forth in the Indemnity section below, either party's
total liability arising from breach of warranty, breach of contract,
negligence, strict liability or tort, or any other legal theory shall
in no way exceed the greater of (i) the sum total of license fees
paid and Resale Products purchased by Paradyne, and (ii) [***]
dollars ($[***]). This limitation of liability shall not apply to
personal injury or direct damage resulting from claims of gross
negligence or willful misconduct, provided the injured party asserts
a right to recover those direct damages from the other Party.
20. INDEMNIFICATION
20.1 NetScout shall defend, hold harmless and indemnify Paradyne and its
Customers from and against any claim that NetScout's Licensed
Product, Resale Products and Documentation (collectively the
"Materials") supplied or licensed hereunder infringe any patent,
copyright, trade secret, trademark or other intellectual property
rights of a third party, and NetScout will pay the costs and damages
related thereto, including, without limitation, reasonable attorneys'
fees, provided that: (a) Paradyne promptly notifies NetScout in
writing of the claim; and (b) NetScout has sole control of the
defense and all related settlement negotiations.
20.2 The obligation of NetScout under paragraph 1 of this Section 20 is
conditioned on Paradyne's agreement that if the Materials or the
operation thereof, become, or in the opinion of NetScout, are likely
to become, the subject of such a claim, that Paradyne will permit
NetScout, at the sole option and expense of NetScout, either
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<PAGE> 25
to procure the right for Paradyne to continue marketing and
distributing the Materials or to replace or modify them so that they
become non-infringing, provided that such replacement or modification
does not materially degrade the performance or functionality of the
Materials NetScout shall have no liability for any claim based upon
the combination or use of any of the Materials supplied hereunder with
equipment, data or programming not supplied by NetScout, or based upon
alteration or modification of NetScout's Material by Paradyne,
provided the liability would not arise absent the combination,
alteration or modification.
20.3 The foregoing states the entire obligation of NetScout to Paradyne
with respect to infringement of patents, copyrights and trade secrets,
trademarks or other intellectual property rights.
21 TERMS AND TERMINATION
21.1 Term. The initial term of this Agreement shall be three (3) years from
the date set forth in the first sentence of this Agreement.
Thereafter, this Agreement shall automatically be renewed for
additional one (1) year terms, unless terminated by either party upon
ninety (90) days advance written notice to the other party.
21.2 If either party ceases doing business as a going concern, becomes
insolvent, suffers or permits the appointment of a receiver for its
business or assets or shall avail itself of, or become subject to, any
proceeding under the Federal Bankruptcy Code of 1978, (as amended), or
any statute of any state relating to insolvency or the protection of
rights of creditors, then (at the option and upon noticed from the
other party) this Agreement shall terminate and be of no further force
and effect.
21.4 In the event either party defaults any obligations in this Agreement,
the other party shall give written notice of such default, and, if the
party in default fails to cure within sixty (60) days of the notice,
the other party shall have the right to terminate. NetScout's right to
terminate, however, shall be immediate in the event of breach by
Paradyne of Section 2.1.3 hereinabove.
21.5 Upon termination of this Agreement, regardless of the reason, the
rights and licenses granted to Paradyne under this Agreement shall be
immediately revoked. Within ten (10) days after termination, Paradyne
shall return to NetScout or destroy, at NetScout's discretion, the
Source Code for the Licensed Product and all copies thereof, except
those copies necessary for continued maintenance and support as set
forth in Section 3.1.3 hereunder. Any such destruction shall require
certification in writing that the Source Code and any copies thereof
have been destroyed. TERMINATION SHALL NOT RELIEVE PARADYNE OR
NETSCOUT OF ITS OBLIGATIONS REGARDING THE CONFIDENTIALITY IN ANY
LICENSED PRODUCT(S).
21.6 Without limiting any of the provisions contained in the preceding
paragraphs of this section, in the event of termination as a result of
Paradyne's failure to comply with any of its obligations under this
Agreement, Paradyne shall continue to be obligated for any payments
due as of the date of termination. Termination of Paradyne's license
rights shall be in addition to an not in lieu of any equitable
remedies available to NetScout.
21.7 All notices of termination will be in writing and delivered pursuant
to Section
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<PAGE> 26
23.7 All notices shall be mailed to the name and address listed
below in the Notices section.
21.8 Rights and Obligations after Termination. Excepting any rights
provided hereinabove, the Parties mutually agree to return to each
other, no later than thirty (30) days after termination of this
Agreement, any Confidential Information which has been provided.
22 ARBITRATION
22.1 Any controversy or claim, whether based on contract, tort, or other
legal theory (including, but not limited to, any claim of fraud or
misrepresentation), arising out of or related to this Agreement
shall be resolved by arbitration pursuant to this Paragraph and
the then current rules and supervision of the American Arbitration
Association. The duty to arbitrate shall extend to any officer,
employee, agent, or subsidiary making or defending any claim which
would otherwise be arbitrable hereunder. The arbitration shall be
held in the headquarters city of the party not initiating the claim
before a single arbitrator who is knowledgeable in business
information and electronic data processing systems. The
arbitrator's decision and award shall be final and binding and may
be entered in any court having jurisdiction thereof. The arbitrator
shall not have the power to award punitive or exemplary damages.
Issues of arbitrability shall be determined in accordance with the
federal substantive and procedural laws relating to arbitration; all
other aspects shall be interpreted in accordance with the laws of
the State of New York. Each party shall bear its own attorney's
fees associated with the arbitration and other costs and expenses
of the arbitration shall be borne as provided by the rules of the
American Arbitration Association. If court proceedings to stay
litigation or compel arbitration are necessary, the party who
unsuccessfully opposes such proceedings shall pay all associated
costs, expenses and attorney's fees which are reasonably incurred
by the other party. If any portion of this Paragraph is held to be
unenforceable, it shall be served and shall not affect either the
duty to arbitrate hereunder or any other part of this Paragraph.
23. GENERAL
23.1 Governing Law. This Agreement and any PO's issued hereunder shall
be governed by and interpreted in accordance with the laws of New
York.
23.2 Compliance with Laws. All materials and products supplied and work
performed under this Agreement shall comply with all applicable
United States and foreign laws and regulations. Either party's
failure to comply with any of the requirements of this Section may
result in a material breach of this Agreement.
23.3 Assignment: Either party shall have the right to assign this
Agreement and to assign its rights and delegate its duties under
this Agreement either in whole or in part at any time upon written
notice to the non-assigning party and without the non-assigning
party's consent.
Upon an assignment by either party and with thirty days prior
written notice the non-assigning party may terminate the Agreement
in the event that the assignee, in the non-assigning party's
reasonable opinion, is a competitor of the non-assigning party or
is of questionable financial stability and/or soundness.
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<PAGE> 27
An assignment pursuant to this section shall neither affect nor
diminish any rights or duties that either party may then or
thereafter have as to Products, Licensed Materials or Services
delivered prior to the effective date of this assignment. Upon the
assumption of the duties under this Agreement by the assignee, the
assigning party shall be released and discharged, to the extent of
the assignment, from all further duties under this Agreement as to
Products, Licensed Materials or Services not delivered by the
assigning party by the effective date of the assignment.
23.4 Modification/Binding Effect. This Agreement shall not be valid until
signed and accepted by an authorized representative of each Party,
and no Party shall be bound by any change, alteration, amendment,
modification, termination or attempted waiver of any of the
provisions hereof unless in writing and signed by an authorized
representative of the Party against whom it is sought to be enforced.
This Agreement shall be binding on and inure to the benefit of the
Parties hereto and their prospective successors, legal
representatives and permitted assigns.
23.5 Nonwaiver.
23.5.1 All rights and remedies conferred by this Agreement, by any
other instrument, or by law are cumulative and may be
exercised singularly or concurrently. If any provision of this
Agreement is held invalid by any law or regulation of any
government or by any court, such invalidity shall not affect
the enforceability of any other provisions hereof.
23.5.2 No forbearance, delay or indulgence by either party in
enforcing the provisions of this Agreement shall prejudice or
restrict the rights of that party nor shall any waiver of its
rights operate as a waiver of any subsequent breach and no
right, power or remedy herein conferred upon or reserved for
either party is exclusive of any other right, power or remedy
available to the Party and each such right, power or remedy
shall be cumulative.
23.5.3 Either Party may seek injunction preliminary or other
equitable relief to remedy any actual or threatened dispute.
23.6 Independent Contractor. The relationship between the Parties is that
of independent contractors, and under no circumstances shall any of
the employees of one party be deemed to be employees of the other
party for any purpose. Except as specifically provided herein, this
Agreement shall not be construed (a) as authority for either party to
act for the other in an agency or any other capacity, or to make
commitments of any kind for the account of or on behalf of the other
or (b) to imply that Paradyne is an agent of NetScout as defined by
applicable law.
23.7 Notices.
Any legal notices ("Legal Notices") given under this Agreement shall
be written and shall be sent by registered or certified mail, postage
prepaid, return receipt requested, overnight courier services with
signature verification, personal delivery, or facsimile if followed
up with original document via any one of the aforementioned delivery
modes. Legal Notices shall be defined as any written correspondence
made by either party to amend or modify this Agreement, provide
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<PAGE> 28
notice of cure in the event of breach, provide notice of
termination/expiration, or to initiate legal proceedings, as provided
for by law, in the event of a contract dispute or tortious action
resulting from the negligence of either party in performing its
obligations hereunder. All Legal Notices shall be effective when first
received at the following addresses listed below:
If to NetScout: If to Paradyne:
NetScout Systems, Inc. Paradyne Corporation
4 Technology Park 8545 126th Avenue North
Westford, MA 01886 PO Box 2826,
Largo, FL 34649-2826
Attention: Charles Tillett Attention: Manager of Corporate
Contracts
with copies to: Nathan Kalowski with copies to: Director of
and Eileen Haggerty Frame Relay
Products
23.8 The Parties mutually agree that technical notices, sales, marketing
and business information shall not be considered Legal Notices, and
shall not follow the formal notice processes defined above, and may be
delivered to/from each other's office locations by personal delivery,
mail or express carrier, electronic means, or facsimile.
23.9 Force Majeure. Neither party will be liable for delay in performing
its obligations or for any failure to perform its obligations
hereunder, if the delay results from circumstances beyond the
reasonable control of the Party including, but not limited to, force
majeure, Act of God, refusal of license, law, ordinance, policy,
regulation, decree, order, judgment or governmental act, utility
curtailments, power failures, fire, flood, bad weather, explosion,
accident, civil commotion, war or act of war, industrial dispute, or
impossibility of commercial impracticability of obtaining materials or
services or providing service due to any of the above circumstances.
23.10 Headings Identification. The headings appearing at the beginning of
the sections contained in this Agreement have been inserted for
identification and reference purposes only, and shall not be used in
the construction and interpretation of this Agreement.
23.11 Entire Agreement/Order of Precedence. Each party acknowledges that it
has read this Agreement, understands it, and agrees to be bound by its
terms, and further agrees that this is the complete and entire
understanding between the Parties on this subject matter and
supersedes all prior agreements, proposals, representations,
statements, or understandings between them on this subject. The
provisions of this Agreement may be amended or waived only by a
writing executed by the authorized representatives of the Parties
hereto. In case of conflict of terms between the terms and conditions
of a PO or an invoice and the terms and conditions of this Agreement,
the terms and conditions of this Agreement shall prevail.
23.12 Survival. All sections, which by their nature should survive the
expiration or
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<PAGE> 29
termination of this Agreement, shall survive, including, without
limitation, Sections 4.2, 4.4, 5, 12, 13, 17, 18, 19, 20, 21 and 23
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement.
NETSCOUT SYSTEMS, INC. PARADYNE CORPORATION
/s/ Nathan Kalowski /s/ Pat Murphy
- ---------------------------- --------------------------------
Signature Signature
Nathan Kalowski Pat Murphy
- ---------------------------- --------------------------------
Name Name
VP, Business Development S.V.P. & CFO
- ---------------------------- --------------------------------
Title Title
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<PAGE> 30
EXHIBIT A
PRODUCT ROYALTY SCHEDULE
<TABLE>
<CAPTION>
T1 56k
Product Royalty Royalty Description
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
FrameSaver 9620/9120 $[***] $[***] Existing Products.
Contains no NetScout Intellectual
Property.
FrameSaver 962x/912x $[***] $[***] Contains NetScout mini-RMON1,
w/RMON mini-RMON2, IP Top Talkers, and
User History Group Intellectual
Property
FrameSaver 9621/912x $[***] $[***] Contains NetScout mini-RMON1
w/RMON buckets and User History Group Intellectual
Property.
All other Paradyne DSU's $[***] $[***] Existing products. Contains no
NetScout Intellectual Property.
</TABLE>
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<PAGE> 31
EXHIBIT B
RESALE PRODUCTS LISTING
NetScout Price List
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Model Description Price($)
- ----- ----------- --------
<S> <C> <C>
LAN PROBES
Ethernet
- --------
6010/8 Ethernet Probe (8 Meg) [***]
6010/16 Ethernet Probe (16 Meg) [***]
6010E2/16 Dual-Interface Ethernet Probe (16 Meg) [***]
Multi-port Ethernet
- -------------------
7301ET/32 Four Port Ethernet Probe (32 Meg) [***]
7302ET/64 Eight Port Ethernet Probe (64 Meg) [***]
7303ET/64 Twelve Port Ethernet Probe (64 Meg) [***]
Fast Ethernet
- -------------
7201ET/32 Half Duplex 100BaseTX/Ethernet (32 Meg) [***]
7211ET/32 Full Duplex 100BaseTX/Ethernet (32 Meg) [***]
7221ET/32 Dual-Interface Half Duplex 100BaseTX/Ethernet (32 Meg) [***]
Note: Full Duplex 100BaseTX probes include FDX-TX Tap Kit
7203ET/32 Half Duplex 100BaseFX/Ethernet (32 Meg) [***]
7213ET/32 Full Duplex 100BaseFX/Ethernet (32 Meg) [***]
7223ET/32 Dual-Interface Half Duplex 100BaseFX/Ethernet (32 Meg) [***]
Note: Full Duplex 100BaseFX probes include FDX-FX Tap Kit
Token Ring
- ----------
6020/8 Token Ring Probe (8 Meg) [***]
6020/16 Token Ring Probe (16 Meg) [***]
6020T2/16 Dual-Interface Token Ring Probe (16 Meg) [***]
Ethernet/Token Ring
- -------------------
6030/16 Ethernet/Token Ring Probe (16 Meg) [***]
</TABLE>
4.03P1M1 Rev D Effective January 15, 1998 2
<PAGE> 32
EXHIBIT B
RESALE PRODUCTS LISTING
NetScout Price List
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MODEL DESCRIPTION PRICE($)
- ----- ----------- --------
<S> <C> <C>
WAN PROBES
- ----------
T1/E1 WAN
- ---------
6050/8 T1/E1 WAN/Ethernet Probe (8 Meg) [***]
6050/16 T1/E1 WAN/Ethernet Probe (16 Meg) [***]
6070/8 T1/E1 WAN/Token Ring Probe (8 Meg) [***]
6070/16 T1/E1 WAN/Token Ring Probe (16 Meg) [***]
Note: T1/E1 WAN probes include a T1/E1 Tap Kit.
Please specify the cable interface. (V.35,X.21 single clock,
X.21 dual clock, RS422/RS449, EIA530, RS232) Default is V.35
T3/E3 WAN
- ---------
7401ET/32 T3/E3 WAN (HSSI)/Ethernet Probe (32 Meg) [***]
7401TR/32 T3/E3 WAN (HSSI)/Token Ring Probe (32 Meg) [***]
Note: T3/E3 WAN probes include a T3/E3 Tap Kit. (HSSI interface)
Multi-port Sub-rate WAN
- -----------------------
7502ET/32 Two Port Sub-rate WAN/Ethernet Probe (32 Meg) [***]
7502TR/32 Two Port Sub-rate WAN/Token Ring Probe (32 Meg) [***]
7504ET/32 Four Port Sub-rate WAN/Ethernet Probe (32 Meg) [***]
7504TR/32 Four Port Sub-rate WAN/Token Ring Probe (32 Meg) [***]
Note: Multi-port WAN probes include T1/E1 Tap Kits.
Please specify the cable interface. (V.35, X.21 single clock,
X.21 dual clock, RS422/RS449, EIA530, RS232) Default is V.35
FDDI/CDDI PROBES
- ----------------
CDDI (SAS)
- ----------
7101ET/32 CDDI/Ethernet Probe - Single Attached (32 Meg) [***]
7101TR/32 CDDI/Token Ring Probe - Single Attached (32 Meg) [***]
FDDI (SAS)
- ----------
7102ET/32 FDDI/Ethernet Probe - Single Attached (32 Meg) [***]
7102TR/32 FDDI/Token Ring Probe - Single Attached (32 Meg) [***]
FDDI (DAS)
- ----------
7103ET/32 FDDI/Ethernet Probe - Dual Attached (32 Meg) [***]
7103TR/32 FDDI/Token Ring Probe - Dual Attached (32 Meg) [***]
ATM (OC3)
- ---------
8100ET/32 ATM (OC3)/Ethernet Probe (32 Meg) [***]
</TABLE>
4.03P1M1 Rev D Effective January 15, 1998 3
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EXHIBIT B
RESALE PRODUCTS LISTING
<TABLE>
<CAPTION>
NETSCOUT PRICE LIST
- ----------------------------------------------------------------------------------------------------------------
Model Description Price ($)
----- ----------- ---------
<S> <C> <C>
SOFTWARE
NetScout Manager Plus
9115 NetScout Manger Plus of Unix (SUN, HP-UX, AIX) [***]
9125 NetScout Manger Plus for Windows (95 & NT) [***]
(Note: NetScout Manager Plus provides integrated tools for monitoring LANs, WANs,
Frame Relay links and Switched networks)
Upgrade NetScout Manager to NetScout Manager Plus
9116 Upgrade NSM for Unix to NSM Plus for Unix (Password Upgrade) [***]
9126 Upgrade NSM for Windows NT to NSM Plus for Windows NT [***]
(Password Upgrade)
Expert Visualizer
9130 Expert Visualizer for Unix (SUN, HP-UX, AIX) [***]
NetScout Server
9135 NetScout Server for Unix (SUN, HP-UX, AIX) [***]
9140 NetScout Server for WindowsNT [***]
NetScout WebCast
9145 NetScout WebCast for Unix (SUN, HP-UX, AIX) [***]
9150 NetScout WebCast for WindowsNT [***]
RMON2 Software Agent
5100 NetScout Agent for WindowsNT [***]
PROBE FIRMWARE OPTIONS
Resource Monitor
NRM Resource Monitor Option [***]
Proxy RMON Monitor
PRM Proxy RMON Monitor Option [***]
Note: Supported on Models 6010 and 6010E2 only.
Netflow Monitor
NFM Netflow Monitor Option [***]
</TABLE>
4.03P1M1 Rev D Effective January 15, 1998 4
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EXHIBIT B
RESALE PRODUCTS LISTING
<TABLE>
<CAPTION>
NETSCOUT PRICE LIST
- -------------------------------------------------------------------------------
Model Description Price($)
- ----- ----------- --------
<S> <C> <C>
UPGRADE OPTIONS FOR INSTALLED PROBES
- ------------------------------------
Memory Upgrade Options for 6000 Series
- --------------------------------------
6002M16 Memory Upgrade - 2 Meg to 16 Meg [***]
6004M16 Memory Upgrade - 4 Meg to 16 Meg [***]
6008M16 Memory Upgrade - 8 Meg to 16 Meg [***]
6016M32 Memory Upgrade - 16 Meg to 32 Meg [***]
Factory installed options - requires return of probe to factory for upgrade.
-------------------------
Memory Upgrade Options for 7000 Series
- --------------------------------------
7008M32 Memory Upgrade - 8 Meg to 32 Meg [***]
7016M32 Memory Upgrade - 16 Meg to 32 Meg [***]
7032M64 Memory Upgrade - 32 Meg to 64 Meg [***]
Factory installed options - requires return of probe to factory for upgrade.
-------------------------
Interface Upgrades for 6000 Series
- ----------------------------------
6000E2 2nd Ethernet Interface for Model 6010 [***]
6000T2 2nd Token Ring Interface for Model 6020 [***]
Note: Adding Interfaces to any 6000 Series probe requires a minimum
16 Meg Unit.
Factory installed options - requires return of probe to factory for upgrade.
-------------------------
Interface Upgrades for 7000 Series
- ----------------------------------
7200TX 2nd Half Duplex 100BaseTX Interface for Model 7201 [***]
7200FX 2nd Half Duplex 100BaseFX Interface for Model 7203 [***]
7300E4 Additional Four-Port Ethernet Interface for Model [***]
7300 probes
7500WN Additional WAN Interfaces for Model 7500 probes [***]
Note: Adding Interfaces to any 7000 Series probe requires a minimum
32 Meg Unit.
Factory installed options - requires return of probe to factory for upgrade.
-------------------------
MISCELLANEOUS OPTIONS
- ---------------------
Fast Ethernet FDX Tap Kits (includes cables)
- --------------------------------------------
FDX-TX Additional Full Duplex Fast Ethernet Tap Kit for [***]
100BaseTX
FDX-FX Additional Full Duplex Fast Ethernet Tap Kit for [***]
100BaseFX
T1/E1 WAN Tap Kits (includes cables)
- ------------------------------------
V35-Tap Additional Tap Kit for T1/E1 WAN (V.35) [***]
X21/1-Tap Additional Tap Kit for T1/E1 WAN (X.21) [***]
X21/2-Tap Additional Tap Kit for T1/E1 WAN (X.21) [***]
RS422-Tap Additional Tap Kit for T1/E1 WAN (RS422/RS449) [***]
EIA530-Tap Additional Tap Kit for T1/E1 WAN (EIA530) [***]
RS232-Tap Additional Tap Kit for T1/E1 WAN (RS232) [***]
</TABLE>
4.03P1M1 Rev D Effective January 15, 1998 5
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EXHIBIT B
RESALE PRODUCTS LISTING
<TABLE>
<CAPTION>
NetScout Price List
- --------------------------------------------------------------------------------------
Model Description Price
- ----- ----------- -----
<S> <C> <C>
T3/E3 WAN Tap Kit (includes cables)
- -----------------------------------
WAN-HSSI Additional Tap Kit for T3/E3 WAN (HSSI) [***]
Fiber Optic Splitters (Includes cables)
- ---------------------------------------
OPT-SPLT1 Additional 80/20 Multi-mode Fiber Optic Splitter [***]
Cables
- ------
2950-100 Additional Cat 5 CDDI Cable (15') [***]
2950-180 T3/E3 WAN (HSSI) Tap Cables [***]
2950-215 Additional Probe Console Cable (6') [***]
Fiber Cables & Couplers
- -----------------------
2950-60 Additional ST to ST Coupler [***]
2950-70 Additional ST to MIC Coupler [***]
2950-80 Additional Duplex SC to SC Cable (24') [***]
2950-90 Additional Duplex SC to ST Cable (24') [***]
Rack Mount
- ----------
RM-19 Shelf for Rack Mounting (holds three 7000 series probes) [***]
RMK-6000 Rack Mount Kit for 6000 Series Probes [***]
Documentation
- -------------
2930-170 NetScout Probe User Guide [***]
2930-610 NetScout Manager Plus User Guide [***]
2930-620 NetScout Manager Plus Administrator Guide [***]
2930-430 NetScout Expert Visualizer User Guide [***]
NetScout Training
- -----------------
NetScout Manager Plus Training (3 days) [***]
NetScout WebCast Training (1 day) [***]
</TABLE>
(Note: Training classes are held at NetScout Systems and the prices listed above
are per student. Prices for on-site training can be obtained by calling NetScout
Systems).
4.03P1M1 Rev D Effective January 15, 1998 6
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EXHIBIT B
RESALE PRODUCTS LISTING
NetScout Price List
- -------------------------------------------------------------------------------
NetScout Systems, Inc.
Support & Maintenance
Policy and Pricing
NetScout Systems, Inc.
4 Technology Park Drive Westford, MA 01886
TEL 978-614-4000 - FAX 978-614-4004
4.03P1M1 Rev D Effective January 15, 1998 7
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<PAGE> 37
EXHIBIT B
RESALE PRODUCTS LISTING
NETSCOUT PRICE LIST
- --------------------------------------------------------------------------------
If Extended Hardware Maintenance coverage is desired and was not purchased
at the same time the hardware was purchased, coverage will be offered at
NetScout Systems' sole discretion. Contact NetScout Systems' Sales
Administration for a price quote.
(Note: Hardware products covered under Extended Hardware Maintenance will
be repaired or replaced at NetScout Systems sole discretion upon return to
factory, freight prepaid. Hardware Warranty and Extended Hardware
Maintenance do not cover functional upgrades. Functional upgrades such as
faster processors, increased Memory/Flash, etc., are separately chargeable
at the current price listed in the NetScout Price List.)
NON-WARRANTY HARDWARE REPAIR
Hardware products no longer under warranty or Extended Hardware Maintenance
can be repaired on a single occurrence basis by returning a product,
freight prepaid, to NetScout Systems. NetScout Systems will repair and
return, freight included, for the one price indicated. The repaired unit
will be under warranty for a period of 90 days after return to the
customer. (Note: If the unit is not repairable, the customer will be
notified and the unit will be returned to the customer.)
BILLING
For ordering and billing convenience, all yearly prices will be pro-rated
on a monthly basis to provide a single yearly contract covering all
NetScout products.
PROFESSIONAL SERVICES
A new fee based Professional Service is now available to assist customer IT
staffs in the installation of NetScout products. A NetScout trained
technician will install, configure and test NetScout products at the
customer site and provide hands on training to the customer's technical
staff.
Professional Services will be billed at [***] per day plus expenses.
PRICING
<TABLE>
<CAPTION>
MANAGEMENT Software Technical Support
SOFTWARE Updates (only) & Updates
- ---------------------------------------------- -------------- -----------------
<S> <C> <C>
Model 9115 - NetScout Manager Plus for Unix $[***] $[***]
Model 9125 - NetScout Manager Plus for Windows $[***] $[***]
Model 9135 - NetScout Server for Unix $[***] $[***]
Model 9140 - NetScout Server for WindowsNT $[***] $[***]
Model 9145 - NetScout WebCast for Unix $[***] $[***]
Model 9150 - NetScout WebCast for WindowsNT $[***] $[***]
Model 9130 - Expert Visualizer for Unix $[***] $[***]
</TABLE>
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EXHIBIT B
RESALE PRODUCTS LISTING
NetScout Price List
- --------------------------------------------------------------------------------
GENERAL
Support will be provided, free of charge, for a period of 90 days from the
date of original shipment. Customers will have unlimited phone support
during normal business hours (Toll free 800-357-RMON). As a condition of
support, the user is required to identify the serial numbers of the products
involved. Support Coverage can be extended beyond the initial 90 day period
through the purchase of Technical Support Coverage.
Updates will be provided for Management Station and/or Probe software, free
of charge, for a period of 90 days from the date of original shipment.
Updates will include all bug fixes and enhancements which become elements
of the standard product. Eligibility for software updates can be extended
beyond the initial 90 day period through the purchase of either Software
Update Coverage or Technical Support Coverage.
TECHNICAL SUPPORT COVERAGE
Technical Support Coverage provides unlimited phone support during normal
business hours (Toll free 800-357-RMON) and access to Software Updates. If
Technical Support Coverage is desired, all products purchased by an
individual customer must be under contract.
SOFTWARE UPDATE COVERAGE
Software Update Coverage can be purchased for products not under Technical
Support Coverage. Software Updates will include all bug fixes and
enhancements which become elements of the standard product. If Software
Update Coverage is purchased, all copies of that product (Management
Software or Probe) must be placed contract.
7X24 SUPPORT SERVICES
For an additional charge, 7X24 Support Services can be purchased which
provides telephone support 7 days a week, 24 hours a day, with guaranteed
call back within 2 hours.
Please contact NetScout Systems' Customer Support department for price
quotes on 7X24 Support Services. (Note: This service requires that all
NetScout products be under Technical Support Coverage.)
HARDWARE WARRANTY
Hardware products are warranted for a period of 1 year after initial
shipment and will be repaired or replaced at NetScout System sole discretion
upon return to factory, freight prepaid.
EXTENDED HARDWARE MAINTENANCE
Hardware maintenance coverage can be extended an additional two years
(bringing the total to three years) through the purchase of Extended
Hardware Maintenance Coverage. The Extended Hardware Maintenance pricing
listed in this Price List is valid only if the coverage is purchased at the
same time the hardware is purchased.
4.03P1M1 Rev D Effective January 15, 1998 8
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EXHIBIT B
RESALE PRODUCTS LISTING
NetScout Price List
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TECHNICAL
SOFTWARE SUPPORT & EXTENDED NON-
PROBES & UPDATE SOFTWARE HARDWARE WARRANTY
SOFTWARE AGENTS ONLY UPDATE MAINTENANCE REPAIR
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Software Agent for NT $[***] $[***]
- ---------------------
Model 5100
- --------------------------------------------------------------------------------
LAN Probes
- ----------
Model 6010, 6020 $[***] $[***] $[***] $[***]
Model 6010E2, 6020T2, 6030 $[***] $[***] $[***] $[***]
- --------------------------------------------------------------------------------
WAN Probes
- ----------
Model 6040, 6050, 6060, 6070 $[***] $[***] $[***] $[***]
- --------------------------------------------------------------------------------
FDDI Probes
- -----------
Model 7101 $[***] $[***] $[***] $[***]
Model 7102 $[***] $[***] $[***] $[***]
Model 7103 $[***] $[***] $[***] $[***]
- --------------------------------------------------------------------------------
Fast Ethernet Probes
- --------------------
Model 7201 $[***] $[***] $[***] $[***]
Model 7203 $[***] $[***] $[***] $[***]
Model 7211 $[***] $[***] $[***] $[***]
Model 7213 $[***] $[***] $[***] $[***]
Model 7221 $[***] $[***] $[***] $[***]
Model 7223 $[***] $[***] $[***] $[***]
- --------------------------------------------------------------------------------
Multiport Ethernet Probes
- -------------------------
Model 7301 $[***] $[***] $[***] $[***]
Model 7302 $[***] $[***] $[***] $[***]
Model 7303 $[***] $[***] $[***] $[***]
- --------------------------------------------------------------------------------
T3 WAN Probes
- -------------
Model 7401 $[***] $[***] $[***] $[***]
- --------------------------------------------------------------------------------
Multiport WAN Probes
- --------------------
Model 7501 $[***] $[***] $[***] $[***]
Model 7502 $[***] $[***] $[***] $[***]
Model 7503 $[***] $[***] $[***] $[***]
Model 7504 $[***] $[***] $[***] $[***]
- --------------------------------------------------------------------------------
ATM LAN Probe
- -------------
Model 8100 $[***] $[***] $[***] $[***]
- --------------------------------------------------------------------------------
WAN TAPS
- --------
T1/E1 WAN Taps $[***] $[***]
T3/E3 WAN Taps $[***] $[***]
- --------------------------------------------------------------------------------
Fiber Optic Splitter
- --------------------
OPT-SPLT1 $[***] $[***]
- --------------------------------------------------------------------------------
100BaseT Full Duplex Taps
- -------------------------
FDX-TX $[***] $[***]
FDX-FX $[***] $[***]
- --------------------------------------------------------------------------------
</TABLE>
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<PAGE> 40
EXHIBIT C
LICENSE TERMS AND CONDITIONS
Paradyne shall license the Licensed Product, subject to terms and conditions
substantially similar to those set forth in the remainder of this Exhibit.
Terms and Conditions
The Licensed Product is owned by Paradyne and its suppliers, and is protected by
the copyright laws of the United States and other countries, and by
international treaty provisions.
Paradyne and its suppliers retain ownership of the Licensed Product and no
rights are granted to you other than a license to use the Licensed Product,
subject to the terms expressly set forth in this license agreement ("License").
This License imposes certain restrictions on your use of the License Product.
YOU MAY:
- - use the Licensed Product with Paradyne FrameSaver Products purchased
within this package;
- - make copies of the Licensed Product for backup purposes, but you may not
use the backup to make copies other than as a replacement for the original
copy. You must include on the backup copy all copyright and other notices
included on the Licensed Product.
YOU MAY NOT:
- - copy any part of the Licensed Product other than for backup or duplicate
any of the Licensed Product onto ROM or similar devices that were not
supplied by Paradyne unless permitted above;
- - copy any of the written materials accompanying the Licensed Product;
- - use the Licensed Product on ANY DSU/CSU, IMUX or xDSL product, or other
hardware except as permitted above;
- - transfer or assign your rights to use the Licensed Product except upon a
transfer of any associated Paradyne hardware with which or for which the
Licensed Product was supplied, and then only if the transferee agrees to be
bound by all of the terms of this License;
- - decompile, disassemble, reverse engineer, or modify, in any way, any part
of the Licensed Product, except to the extent that the foregoing
restriction is expressly prohibited by applicable law.
YOU ACKNOWLEDGE AND AGREE THAT:
- - the structure, sequence, organization and source code of the Licensed
Product are valuable trade secrets of Paradyne and its suppliers;
- - export of the Licensed Product may be restricted by the export control laws
of the United States of America and other countries. You agree to comply
with all such export control laws;
- - upon any violation of any of the provisions of this License, your rights to
use the Licensed Product shall automatically terminate and you shall be
obligated to return to Paradyne or destroy all of the Licensed Product;
- - your opening of this package or use of the Licensed Product signifies that
you have read and agreed to the terms of this License. You further agree
that it is the complete and exclusive
Marketing& license Agreement Paradyne and NetScout Confidential page 20
NetScout and Paradyne Use Pursuant to Company Procedures 01/26/98
<PAGE> 41
EXHIBIT C
LICENSE TERMS AND CONDITIONS (CONTINUED)
statement of the agreement between Paradyne and you, and that it
supersedes any proposal or prior agreement, oral, or written, and any
other communications between us relating to the subject matter of this
License. In addition, you agree that none of the foregoing terms and
conditions may be modified except in writing signed by you and
Paradyne;
- this License shall be governed by Florida law, other than its
provisions concerning the applicability of laws of other jurisdictions.
Limited Warranty
Limited Warranty. Paradyne warrants that under normal use and conditions the
Licensed Product will be free from significant defects in materials and
workmanship for a period of ninety (90) days from the date of purchase by you
from Paradyne or Paradyne's authorized reseller or distributor.
Customer Remedies. Paradyne and its suppliers' entire liability and your
exclusive remedy shall be, at Paradyne's option, (i) repair or replacement of
the Licensed Product that fails to meet Paradyne's Limited Warranty, or (ii)
return of the price paid. Paradyne and its suppliers shall have no
responsibility, warranty or other obligation whatsoever as a result of (a) the
use of the Licensed Product in a manner inconsistent with the accompanying
manuals and this License, (b) any modifications made to the Licensed Product,
or (c) failure of the Licensed Product as a result of accident, abuse, or
misapplication.
NO OTHER WARRANTIES. THE WARRANTIES SET FORTH ABOVE ARE EXCLUSIVE AND IN LIEU
OF ALL OTHER WARRANTIES. PARADYNE AND ITS SUPPLIERS MAKE NO OTHER WARRANTIES,
EXPRESS OR IMPLIED, AND PARADYNE AND ITS SUPPLIERS EXPRESSLY DISCLAIM ALL OTHER
WARRANTIES, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OR
SATISFACTORY QUALITY, MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AND
ANY WARRANTY OF NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS. MOREOVER, THE
PROVISIONS SET FORTH ABOVE STATE THE ENTIRE RESPONSIBILITY OF PARADYNE AND ITS
SUPPLIERS AND YOUR SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO ANY BREACH OF ANY
WARRANTY.
LIMIT OF LIABILITY. UNDER NO CIRCUMSTANCES AND UNDER NO THEORY OF LIABILITY
SHALL PARADYNE OR ITS SUPPLIERS BE LIABLE FOR COSTS OF PROCUREMENT OF
SUBSTITUTE PRODUCTS OR SERVICES, LOST PROFITS, LOST SAVINGS, LOSS OF INFORMATION
OR DATA, OR ANY OTHER SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES,
ARISING IN ANY WAY OUT OF THE SALE, LICENSE OR USE OF, OR INABILITY TO USE, THE
LICENSED PRODUCT, EVEN IF PARADYNE AND ITS SUPPLIERS HAVE BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL
PURPOSE OF ANY LIMITED WARRANTY.
Marketing & License Agreement Paradyne and NetScout Confidential page 21
NetScout and Paradyne Use Pursuant to Company Procedures 01/26/98
<PAGE> 42
EXHIBIT D
PRODUCT SUPPORT AND PRIORITIZATION GUIDELINES
Paradyne will provide Tier 1 and Tier 2 Support for Customers in the same manner
that it provides such support for its other similar products. NetScout will
provide Tier 3 Support via telephone or electronic mail, five (5) days per week,
during NetScout's normal business hours (8 am - 6 pm, EST), and, and via a
paging service for after hours, weekend and holiday escalations. Paradyne shall
provide NetScout feedback for any Licensed Product bugs and potential fixes to
the bugs, which will be reviewed by NetScout and subsequently incorporated into
the Licensed Product, as required. In the event Paradyne is unable to resolve a
Customer's problem and NetScout Tier 3 Support is required, Paradyne will
escalate the problem to NetScout per a Customer assigned priority level.
NetScout will respond as follows:
Priority 1: The Customer's production network is down, causing critical impact
to business operations.
NetScout Response: Within four (4) hours, NetScout will provide Paradyne with a
schedule for resolving the problem and will identify the resources which will be
committed to managing the problem resolution. NetScout will make best efforts to
resolve the problem within two (2) days. NetScout will dedicate an individual to
manage the problem until a satisfactory Customer solution has been provided.
Priority 2: The Customer's production network is severely degraded, impacting
significant aspects of business operations.
NetScout Response: Within eight (8) hours, NetScout will provide Paradyne with a
schedule for resolving the problem and will identify the resources which will be
committed to managing the problem resolution. NetScout will make best efforts to
resolve the problem within one (1) week's time. NetScout agrees to commit
whatever resources are commercially reasonable and necessary to manage the
problem until a satisfactory Customer solution has been provided.
Priority 3: The Customer's network performance is degraded, but with little
impact on business operations.
NetScout Response: Within one (1) week, Paradyne will provide Paradyne with a
schedule for resolving the problem. Resources will be assigned, upon
availability.
Critical On-Site Support. In the event critical on-site support is required,
NetScout will make such services available at a charge of [***] dollars per hour
($[***]), excluding travel and reasonable meal expenses.
Repair & Maintenance Charges (Single Repair)
6000 family $[***] unit
7000 family $[***] unit
Marketing & License Agreement Paradyne and NetScout Confidential page 22
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EXHIBIT D
PRODUCT SUPPORT AND PRIORITIZATION GUIDELINES
Maintenance Agreements (h/w & s/w)
6000 family $[***] year
7000 family $[***] year
Repair Services. NetScout will repair all defective Products within fifteen
(15) days of receipt of the NetScout Products at NetScout's Westford MA
facility. All returned units must be accompanied by a Return Authorization (RA)
number and defective tag which identifies the alleged failure with the unit.
Paradyne shall be responsible for transportation expenses to and from
NetScout's facilities.
Priority Shipments. Provided PRODUCTS are in NetScout's inventory, NetScout
will ship PRODUCTS within twenty-four (24) hours of order receipt to assist
Paradyne in its delivery of critical service and support to customers. In the
event PRODUCTS are not in NetScout's inventory, NetScout will make best efforts
to ship as expeditiously as possible.
Marketing & License Agreement Paradyne and NetScout Confidential page 23
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