SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
Amendment No. 1 to Form 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 28, 1996
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition period from to
----- -----
Commission File Number 0-24918
SHIVA CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2889151
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
28 Crosby Drive, Bedford, MA 01730
(Address of principal executive offices, including Zip Code)
(781) 270-8300
(Registrant's telephone number, including area code)
---------------------
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
Series A Junior Participating Preferred Stock, $.01 par value
(title of class)
Indicate by check mark whether the registrant (1) has filed all reports re-
quired to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-affiliates of the
registrant was approximately $483,592,478 based on the closing price of the
Common Stock on the Nasdaq Stock Market on January 31, 1997. The number of
shares outstanding of the registrant's Common Stock as of January 31, 1997
was 28,989,583.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the registrant's Proxy Statement for the Annual Meeting of
Stockholders to be held May 14, 1997 are incorporated by reference in Part
III hereof.
2. Portions of the registrant's 1996 Annual Report to Stockholders for the
fiscal year ended December 28, 1996 are incorporated by reference into
Parts I, II and IV hereof.
<PAGE> 1
EXPLANATORY NOTE
This Form 10-K/A of Shiva Corporation is filed solely to amend the Exhibit
Index included herein.
<PAGE> 2
Item 14. Exhibits, Financial Statement Schedules And Reports On Form 8-K
(a)(1) Consolidated Financial Statements.
----------------------------------
The following consolidated financial statements and the Report of Independent
Accountants are included in the Company's 1996 Annual Report to Stockholders
and are incorporated herein by reference.
Report of Independent Accountants for the years ended December 28, 1996,
December 30, 1995 and December 31, 1994
Consolidated Balance Sheet as of December 28, 1996 and December 31, 1995
Consolidated Statement of Operations for the years ended December 28,
1996, December 30, 1995 and December 31, 1994
Consolidated Statement of Changes in Stockholders Equity for the years
ended December 28, 1996, December 30, 1995 and December 31, 1994
Consolidated Statement of Cash Flows for the years ended December 28,
1996, December 30, 1995 and December 31, 1994
Notes to Consolidated Financial Statements.
The Company's 1996 Annual Report to Stockholders is not to be deemed filed as
part of this report except for those parts thereof specifically incorporated
herein by reference.
<TABLE>
(a)(2) Financial Statement Schedules.
----------------------------
<CAPTION>
Page
<S> <C> <C>
Schedule I Report of Independent Accountants on
Financial Statement Schedule S-1
Schedule II Valuation and Qualifying Accounts S-2
</TABLE>
Schedules not listed above have been omitted because they are not applicable,
not required, or the information required to be set forth therein is included
in the consolidated financial statements or the notes thereto.
(a)(3) List of Exhibits. The following exhibits are filed as part of,
or incorporated by reference into, this report on Form 10-K:
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibits
- ----------- -----------------------
<S> <C>
3.1* Restated Articles of Organization of the Company. (1)(5)
3.2* Restated By-Laws of the Company. (1)
4.1* Specimen certificate representing the Common Stock. (8)
4.2* Rights Agreement dated as of September 29, 1995, between the
Company and American Stock Transfer & Trust Company, which
includes as Exhibit A the Form of Certificate of Vote of
Directors Establishing a Series of a Class of Stock, as Exhibit
B the Form of Rights Certificate, and as Exhibit C the Summary
Rights to Purchase Preferred Stock. (4)
10.1* Registration Rights Agreement dated as of September 3, 1991 by
and among the Company and the Investors named therein, as amended
by the Amendment to Registration Rights Agreement dated as of
March 29, 1993, as further amended by the Amendment No. 2 to
Registration Rights Agreement dated as of July 28, 1993 and as
further amended by an Amendment dated June 13, 1995. (3)
<PAGE>
10.2* Amended and Restated 1988 Stock Plan, as further amended. (3)(6)
10.3* 1994 Non-Employee Director Stock Option Plan. (1)(6)
10.4* 1994 Employee Stock Purchase Plan. (1)(6)
10.5+* 1997 Employee Bonus Plan (6)
10.6* Employment Agreement dated September 15, 1994 by and between the
Company and Frank A. Ingari. (1)(6)
10.7* Letter Agreement dated January 27, 1994 by and between the
Company and Cynthia M. Deysher. (2)(6)
10.8* Letter Agreement dated January 2, 1996 by and between the
Company and Guy A. Daniello. (6)
10.9* Incentive and Non-Qualified Stock Option Agreement dated October
19, 1993 between the Company and Frank A. Ingari. (1)(6)
10.10* Incentive and Non-Qualified Stock Option Agreement dated January
29, 1994, between the Company and Cynthia M. Deysher. (1)(6)
10.11* Agreement dated May 15, 1995 between the Company and Northern
Telecom Limited ("Nortel") (3)
10.12* Letter Agreement dated March 15, 1996 between the Company and
Nortel to amend the Agreement dated May 15, 1995 between the
Company and Nortel (7)
10.13* First Amendment dated May 16, 1996 to the Agreement dated May
15, 1995 between the Company and Nortel (7)
10.14+ Memorandum of Understanding ("MOU") dated September 11, 1996
between the Company and Nortel
10.15+ Second Amendment dated October 15, 1996 to the Agreement dated
May 15, 1995 between the Company and Nortel
10.16+ Memorandum of Understanding ("MOU") dated December 23, 1996
between the Company and Nortel
10.17* Letter Agreement dated January 29, 1997 amending the Memorandum
of Understanding dated December 23, 1996 between the Company and
Nortel
10.18* Lease by and between Beacon Properties, L.P., Landlord, and the
Company, Tenant, ("Beacon Lease") dated September 5, 1995. (4)
10.19* Amendment #1 to the Beacon Lease, dated October 23, 1995 (8)
10.20* Amendment #2 to the Beacon Lease, dated January 17, 1996 (8)
10.21* Lease by and between Walford Company c/o Bernard H. Kayden,
Landlord, and the Company, Tenant, ("Walford Lease") dated May
24, 1996 (7)
11.1* Statement re: Computation of Per Share Earnings
13.1* 1996 Annual Report to Stockholders, certain portions of which
have been incorporated herein by reference.
<PAGE>
21.1* Subsidiaries of the Company.
23.1* Consent of Price Waterhouse LLP
23.2* Consent of Deloitte & Touche LLP
27* Financial Data Schedule
- -------------
<FN>
* Previously filed.
+ Confidential treatment requested as to certain portions, which portions
are omitted and filed separately with the Securities and Exchange
Commission.
(1) Incorporated herein by reference to the Company's Registration Statement
on Form S--1 (File No. 33-84884)
(2) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994
(3) Incorporated herein by reference to the Company's Registration Statement
on Form S-1 (File No. 33-94134)
(4) Incorporated herein by reference to the Company's Registration Statement
on Form S-1 (File No. 33-97216)
(5) Incorporated herein by reference to the Company's Registration Statement
on Form S-3 (File No. 333-602)
(6) Indicates a management contract or any compensatory plan, contract or
arrangement with officers who are designated as named executive officers
in the Company's 1997 Proxy Statement.
(7) Incorporated herein by reference to the Company's Quarterly Report on Form
10-Q for second quarter 1996.
(8) Incorporated herein by reference to the Company's Annual Report on Form
10-K for fiscal year 1995.
</TABLE>
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the last quarter of the fiscal
year ended December 28, 1996.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this Amendment No. 1 to Form 10-K
to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: October 8, 1997 SHIVA CORPORATION
(Registrant)
By: /s/ Larry Whitman
-----------------
Larry Whitman
Vice President - Corporate
Controller
(Principal Financial and
Accounting Officer)
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibits
- ----------- -----------------------
<S> <C>
3.1* Restated Articles of Organization of the Company. (1)(5)
3.2* Restated By-Laws of the Company. (1)
4.1* Specimen certificate representing the Common Stock. (8)
4.2* Rights Agreement dated as of September 29, 1995, between the
Company and American Stock Transfer & Trust Company, which
includes as Exhibit A the Form of Certificate of Vote of Directors
Establishing a Series of a Class of Stock, as Exhibit B the Form
of Rights Certificate, and as Exhibit C the Summary Rights to
Purchase Preferred Stock. (4)
10.1* Registration Rights Agreement dated as of September 3, 1991 by and
among the Company and the Investors named therein, as amended by
the Amendment to Registration Rights Agreement dated as of March
29, 1993 as further amended by the Amendment No. 2 to Registration
Rights Agreement dated as of July 28, 1993 and as further amended
by an Amendment dated June 13, 1995. (3)
10.2* Amended and Restated 1988 Stock Plan, as further amended. (3)(6)
10.3* 1994 Non-Employee Director Stock Option Plan. (1)(6)
10.4* 1994 Employee Stock Purchase Plan. (1)(6)
10.5+* 1997 Employee Bonus Plan (6)
10.6* Employment Agreement dated September 15, 1994 by and between the
Company and Frank A. Ingari. (1)(6)
10.7* Letter Agreement dated January 27, 1994 by and between the Company
and Cynthia M. Deysher. (2)(6)
10.8* Letter Agreement dated January 2, 1996 by and between the Company
and Guy A. Daniello. (6)
10.9* Incentive and Non-Qualified Stock Option Agreement dated October
19, 1993 between the Company and Frank A. Ingari. (1)(6)
10.10* Incentive and Non-Qualified Stock Option Agreement dated January
29, 1994, between the Company and Cynthia M. Deysher. (1)(6)
10.11* Agreement dated May 15, 1995 between the Company and Northern
Telecom Limited ("Nortel") (3)
10.12* Letter Agreement dated March 15, 1996 between the Company and
Nortel to amend the Agreement dated May 15, 1995 between the
Company and Nortel (7)
10.13* First Amendment dated May 16, 1996 to the Agreement dated May 15,
1995 between the Company and Nortel (7)
10.14+ Memorandum of Understanding ("MOU") dated September 11, 1996
between the Company and Nortel
10.15+ Second Amendment dated October 15, 1996 to the Agreement dated May
15, 1995 between the Company and Nortel
10.16+ Memorandum of Understanding ("MOU") dated December 23, 1996 be-
tween the Company and Nortel
10.17* Letter Agreement dated January 29, 1997 amending the Memorandum of
Understanding dated December 23, 1996 between the Company and
Nortel
10.18* Lease by and between Beacon Properties, L.P., Landlord, and the
Company, Tenant, ("Beacon Lease") dated September 5, 1995. (4)
10.19* Amendment #1 to the Beacon Lease, dated October 23, 1995 (8)
10.20* Amendment #2 to the Beacon Lease, dated January 17, 1996 (8)
10.21* Lease by and between Walford Company c/o Bernard H. Kayden,
Landlord, and the Company, Tenant, ("Walford Lease") dated May 24,
1996 (7)
11.1* Statement re: Computation of Per Share Earnings
13.1* 1996 Annual Report to Stockholders, certain portions of which have
been incorporated herein by reference.
21.1* Subsidiaries of the Company.
23.1* Consent of Price Waterhouse LLP
23.2* Consent of Deloitte & Touche LLP
27* Financial Data Schedule
- -------------
<FN>
* Previously filed.
+ Confidential treatment requested as to certain portions, which portions
are omitted and filed separately with the Securities and Exchange
Commission.
(1) Incorporated herein by reference to the Company's Registration Statement
on Form S--1 (File No. 33-84884)
(2) Incorporated herein by reference to the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 1994
(3) Incorporated herein by reference to the Company's Registration Statement
on Form S-1 (File No. 33-94134)
(4) Incorporated herein by reference to the Company's Registration Statement
on Form S-1 (File No. 33-97216)
(5) Incorporated herein by reference to the Company's Registration Statement
on Form S-3 (File No. 333-602)
(6) Indicates a management contract or any compensatory plan, contract or
arrangement with officers who are designated as named executive officers
in the Company's 1997 Proxy Statement.
(7) Incorporated herein by reference to the Company's Quarterly Report on Form
10-Q for second quarter 1996.
(8) Incorporated herein by reference to the Company's Annual Report on Form
10-K for fiscal year 1995.
</TABLE>
<PAGE> 5
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Exhibit 10.14
Memorandum of Understanding between Nortel and Shiva for the OEM Development,
and Support of the Shiva AccessPort********************
The purpose of this M.O.U. is to summarize the discussions between Shiva and
Nortel to date, and to confirm the respective intent with respect to the
proposed transaction. Nortel and Shiva plan to develop and sign a contract,
by October 15, 1996, which will be based on the terms and conditions as
outlined in this M.O.U.
Manufacturing Rights
- - Nortel shall have the option to manufacture the Rapport*******************
********, within the duration of the contract, according to Shiva's design
specifications. A proposed ****** fee, paid to Shiva for the manufacturing
license, will be negotiated. Reasonable manufacturing transfer and
consulting assistance, will be negotiated. Shiva will make the final
decision as to ******************* the AccessPort. If ********************
the Shiva AccessPort for *******, the *************************.
- - With Shiva's agreement, Nortel shall be *********** to manufacture the
AccessPort, for Shiva ************* and Shiva's **********************
***********. Shiva has the right to ********** from a ******************.
- - Nortel shall pay Shiva a royalty, as defined in the royalty structure
section, below, for the ************ shipped to Nortel ********** directly,
or via Nortel's ***************************.
Royalty Structure
- - Nortel shall pay Shiva a royalty equivalent to a **************** of *** of
the ****** price of the product for volumes of ***** units or greater, over
a ******** period, or a *************** of **** of the ******* price of the
product for volumes less than ****** units, over a ******* period. In each
case, Nortel will pay a ***** of **** royalty for each product within the
********** of the agreement, or for the ********* units (whichever comes
first), if the **** or **** royalty is below *****. After the ********, or
********* units, the *** or *** royalty shall only apply. Shiva and Nortel
will negotiate an ******** royalty structure ***** **** units (or ********,
whichever comes first), and for Nortel *********, in the contract.
- - A three months rolling forecast will be provided on a monthly basis (same
as with ********) as well as a first year forecast for business planning
purposes, independent of *************** direction.
- - Prior to Nortel **************, Nortel will work with Shiva to ***********
product/components ***************************. Any ************* or
*********************** will be ***************** to Nortel.
Annual Maintenance and Support
- - Shiva will provide ******** level support to Nortel, for the *************,
similar to that described in Section 7 and Exhibit H of the Shiva/Nortel
Agreement of May 15, 1995 for the ************ product.
- - Nortel agrees to pay Shiva ****** for support of the **********, as
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
described in Section 7 and Exhibit H of the Shiva/Nortel Agreement of May
15, 1995 for the ********* product, in the ************** period, with
support fees for subsequent years to be negotiated by the parties.
Shiva Software Upgrades
- - During the term of any period for which Nortel has paid the agreed-upon
annual maintenance and support fee, Shiva agrees to provide all Shiva
software upgrades to Nortel *************************************. Any
*************** of Shiva upgrades will be negotiated between the parties.
- - Nortel will be the ************* of ******************* software to Nortel
customers (e.g. alpha trial, beta trial, early adopter trial, release
version) ************************************************************
************************.
Nortel OEM Requirements
- - Nortel will re-label (Nortel branding) the Shiva AccessPort, similar to the
Rapport*********** and ************* products.
- - Shiva shall, on an ongoing basis, ************** the software, hardware and
documentation, as is currently done for the ************. Details will be
identified in the contract.
- - Shiva shall certify Nortel's ************* based on the Nortel priority
certification list as used for the Rapport*********, for those ***********
which both Shiva and Nortel intend to sell their respective products.
Nortel will only be responsible for Nortel specific certification in those
countries where Nortel intends to sell the ************and which Shiva has
no intention of seling their AccessPort. If Nortel manufactures the ****
******and recertification is required in countries where Nortel intends to
sell, or is selling, the *************then Nortel will be responsible for
Nortel specific certification.
- - Shiva shall provide Nortel with a project plan for each release of the
AccessPort software and/or hardware (including *************).
- - Nortel shall have the option to ************** the *********** for specific
Nortel customers, requiring ************************.
****************************** Features
- - It is Nortel's intention to ******************* with ************ features
and functions *******************************. Nortel and Shiva will
determine which **************** is most appropriate for ************* the
requested features ********************************************************
****************************************************************. These
functions will include, but are not limited to, the following:
*******************************
*****************************
***********Rapport***************
*****************************
***********************
*********************************
Notes: 1. The**********Rapport*********************** will be sold as part of
the ******Rapport brand.
Intellectual property rights associated with *********************** that
***********************************************************************.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Intellectual property rights associated with ********************************
*****************************************************************************
with ******************************************************** determined by
agreement between the parties. Intellectual property rights associated with
****************************************************************************
*************************** with *******************************************
*********** determined by agreement between the parties.
This document is a M.O.U. only. Both parties will, in good faith, adhere to
the terms and conditions as outlined in this M.O.U. until a contract is
signed, at which point the contract will be legal and binding and supersede
this M.O.U. Both parties agree to negotiate and sign a contract no later than
October 15, 1996, *********************************************.
/s/ Micky Tsui /s/ Ed Gregory
- ------------------------ -----------------------------
Micky Tsui Ed Gregory
AVP Internet Solutions VP Business Development
Nortel Shiva Corporation
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Exhibit 10.15
AMENDMENT 2
Shiva/Nortel Agreement
This Second Amendment to the Agreement dated as of 15 May 1995 (the
"Agreement') is made as of the 15th day of October, 1996, by and between
Northern Telecom Limited ("Nortel"), on behalf of itself and its affiliates
(as defined in the Agreement), a Canadian corporation having its principal
place of business 8200 Dixie Road, Suite 100, Brampton, Ontario, Canada, and
Shiva Corporation ("Shiva"), a Massachusetts corporation having its
principal place of business at 28 Crosby Drive, Bedford, Massachusetts,
01730, USA.
WHEREAS, Nortel and Shiva want to amend the Agreement to reflect the
following changes to the original Agreement;
OEM AccessPort**************** Amendment
A ************************* of Shiva's current Shiva AccessPort*********
************* product (OEM AccessPort************** or *****************
*******) will be added to the Agreement. *********** will include ******
******* and ********** of the AccessPort to ********* in the ***********
******** and specified *******************. Nortel will have the right to
manufacture the Rapport*********** pursuant to the manufacturing rights set
forth in this Amendment.
NOW, THEREFORE, the parties agree to amend the Agreement as follows,
1.0 Definitions
1.1 New Definition. In addition to the terms defined in the Agreement,
each of the following additional terms shall have the meaning ascribed to it
below:
1.1.1 OEM AccessPort or Rapport *********** shall mean the *********
Shiva AccessPort***************** product as described in Exhibit R and
Exhibit S;
2.0 ****************** of the OEM AccessPort
2.1 Shiva's Obligations. Shiva will ********* the OEM AccessPort
********************************, as described in the Nortel AccessPort
**************** as set forth in Exhibit R and Exhibit S.
2.2 Nortel's Obligations. Nortel will ****** the ******* contemplated in
Section 2.1 and ************ for the OEM AccessPort as set forth in Exhibit
R.
2.3 Ownership of the OEM AccessPort. Intellectual property rights
associated with ************* features that ************** using *********-
provided tool kits shall be owned by ********.
Intellectual property rights associated with *************** features that
********** using ******* software and/or hardware shall be owned by ********
with **************************************** of such features determined by
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
agreement between the parties. ******* hereby grants, with a full reservation
of rights, to ******* a worldwide, ************, ************** perpetual
license of such intellectual property rights to use, modify, sublicense,
support, copy and distribute through multiple tiers of distribution,
including ********* distributors, these intellectual property rights solely
as they are incorporated into the OEM AccessPort. ********* hereby grants
back to ******* a **********, worldwide, ***********, perpetual license
to such modifications. ***************************************************
**************************************************************************
*************************OEM AccessPort.
Intellectual property rights associated with ****** developed modifications
using ******* developed software and/or hardware, including, but not limited
to, ******************** and the ********************************** product,
(**** will be reviewed and determined between the parties), as described in
Exhibit S, shall be owned by ***** with ************************************
of such features to ****** to be determined by agreement between the parties.
****** hereby grants to ****** a worldwide, *************, ****************
perpetual license of such intellectual property rights to use, modify, create
derivative works, support, and copy these intellectual property rights solely
as they are incorporated into the Shiva AccessPort. ***** hereby grants back
to ******* a **************, worldwide, *************, perpetual licwense to
modifications.
3.0 Manufacturing Rights
3.1 License Grant. Shiva hereby grants Nortel the option to manufacture
the Rapport*************** at anytime, within the duration of the contract,
according to Shiva's design specifications.
3.2 Shiva's Obligations. If Nortel elects to manufacture the OEM AccessPort
subject to the terms of this Amendment, Shiva shall provide reasonable
manufacturing transfer and consulting assistance as part of the license fee
described in Section 3.3. Reasonable manufacturing transfer and consulting
assistance shall include the following:
(1) **********************************
(2) *************************
(3) ****************************************
(4) *********************************************
(5) **************************************
(6) *********************************
(7) ***************************
(8) *****************************************
(9) *********************************
(10) ******************************************
(11) ******************************************************************
**********
3.3 Nortel's Obligations. Nortel shall pay ***************************
********** to Shiva for rights to manufacture the OEM AccessPort and for
reasonable consultation and training to assist Nortel with their initial
manufacturing production run, as well as reasonable ongoing manufacturing
support. Nortel will share with Shiva, product and quality improvement
ideas as part of the ongoing process, as referenced in items 3.5 and 3.6, as
well as include a comment such as "Access By Shiva" (to be determined by
Shiva) in all ********** documentation, to *******************************
**********************************. In addition Nortel shall
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
pay Shiva a royalty, as defined in the royalty structure section 4.0 below,
for the **************** to Nortel *************** directly, or via Nortel's
******************************.
3.4 Shiva Manufacturing Option. If Nortel is ********************** the
Shiva AccessPort *********, the *******************************************
license fee shall **********. With Shiva's agreement, Nortel shall be
*********************** the AccessPort for Shiva ************ and Shiva's
********************************. Shiva has the right to ********** from ***
*****************************.
3.5 Shiva Manufacturing Consulting Support. Shiva will provide Nortel with
reasonable consultation and training to assist Nortel with their initial
manufacturing product run at Nortel as well as reasonable ongoing
manufacturing support. Nortel will share with Shiva, product and quality
improvement ideas as part of the ongoing process.
Reasonable consultation, training and ongoing manufacturing support are
defined as follows:
A total of ****************** of support will be provided to Nortel by
Shiva ******************************************************************* to
assist Nortel with their initial manufacturing production run, and will be
effective with the signing of this Amendment. *****************************
****************************************************************************.
This *************** ongoing support related to changes resulting from the
ECO/ECR process as well as Shiva's quarterly Manufacturing/Design review
meetings.
3.6 Qualification Support. Nortel and Shiva agree to discuss proposed
design and/or component changes, as well as share component sourcing
information, on an ongoing basis. Nortel will be proactively included in
Shiva's ECO/ECR process as well as Shiva's quarterly Manufacturing/Design
review meetings. Major design discontinuities will require agreement
between the parties and costs associated with the design discontinuities
will be determined by the parties.
Shiva will ********************************************************
(as listed in the document "Functional Specification for the Nortel
AccessPort") for the Rapport*************. Nortel will not generally be
responsible for the associated costs. In those countries where *********
*************************************requires incremental cost over and
above that incurred by*******for the AccessPort********will review those
costs with*******and decide whether or not to*****************************
*******************************will incur the cost of******************
*************************.
4.0 Royalty Structure
Nortel shall pay Shiva a royalty equivalent to a ****************** of ***
************* of the ******* price ************ of the product for volumes
of ***************** units or greater, over a ****************** period,
or a ********************************** of the *************** price of the
product for volumes less than ************************ units, over a ******
******* period. In each case, Nortel will pay a ******* of a *************
******** royalty for each product within the *********** of the Agreement,
or for the ********************* units (whichever comes first), if the
*************** or *************** royalty is ************************.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
******** After the ********, or ****************** units, **************
************* royalty shall apply with a************************* in the
********** and a ************************** in the *********************.
Royalties for ****************** will be negotiated between the parties. A
three months rolling forecast will be provided on a monthly basis (same as
with **********) as well as a first year forecast for business planning
purposes, independent of ***************** direction. Prior to Nortel
manufacturing, Nortel will work with Shiva to purchase product/components
directly from current Shiva suppliers, with the option to source from Nortel
vendors of choice, with Shiva's prior agreement. In addition, Nortel and
Shiva will discuss the options of sharing costs and sourcing of metal/
plastics components of tooling. Any component or overhead cost reductions
will be passed through to Nortel.
Royalties for Nortel's ********************* will be calculated ***********
**********************************************************, e.g. royalties
owed would be calculated *************************************************
**************************************************************************
*****************************.
5.0 Annual *************, Maintenance and Software Support
5.1 Maintenance and Support
Shiva will provide ******** level support to Nortel, for the ************,
similar to that described in Section 7 and Exhibit H of the Shiva/Nortel
Agreement of May 15, 1995 for the ******* product. Nortel agrees to pay
Shiva ********************************************* for maintenance and
support of the *********, as described in Section 7 and Exhibit H of the
Shiva/Nortel Agreement of May 15, 1995 for the ********* product, for the
duration of this Agreement. During the term of any period for which Nortel
has paid ************************************************, Shiva agrees to
provide all Shiva software upgrades to Nortel ******************************
*******************.
5.2 **************************
Shiva will provide Nortel with a ********* of **************************
*************** and *****************************************************.
Nortel agrees to pay Shiva ***********************************************
*********************************. Nortel will be the **************** of
Nortel ************ software to **************** (e.g., alpha trial, beta
trial, early adopter trial, release version) *****************************
****************************************************************************
****************************************************************************
*****************************************************************************
****************************************************************************
***************************************.
6.0 General Changes to Agreement.
6.1 Exhibit R. Exhibit R is added to the Agreement.
Exhibit S. Exhibit S is added to the Agreement
6.2 Other Terms. Except as set forth above, all other terms and conditions
of the Agreement remain unchanged.]
<PAGE>
IN WITNESS of this Second Amendment to the Agreement the parties have
executed this document on the dates set forth below.
SHIVA CORPORATION NORTHERN TELECOM LIMITED
Signature:/s/ Cynthia M. Deysher Signature:/s/ John Ryan
---------------------- ---------------------
Name: Cynthia M. Deysher Name: John Ryan
Title: Senior Vice President, Title: Vice President/General Manager,
Finance and Administration, Multimedia and Internet Solutions
and CFO Enterprise Networks
Signature:/s/ David Archibald
-------------------
Name: David Archibald
Title: VP and Deputy General Counsel
<PAGE>
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Exhibit R
OEM AccessPort Project Plan
NORTEL AccessPort Project Plan
Rapport ************
Revision History
Version Author Date Comments
1.2 John Terzakis 10/15/96 Added review comments
1.1 John Terzakis 09/06/96 Added review comments
1.0 John Terzakis 08/28/96 Draft
Table of Contents
1. Executive Summary
2. Scope and Target Audience 4
3. Related Documents 4
4. Deliverables 5
5. Engineering and Documentation 5
5.1 Hardware 5
5.2 Standards and Approvals 5
5.3 Firmware 5
5.4 Software 6
5.5 Documentation and Online Help 6
5.6 Quality Assurance and Testing 6
6. Manufacturing 6
7. Support and Service 6
8. Training 7
9. Marketing 7
10. Estimated Costs 7
10.1 Hardware 7
10.2 Standards and Approvals 7
10.3 Firmware 7
10.4 Software 8
10.5 Documentation and Online Help 8
10.6 Quality Assurance 8
10.7 Project Management 9
10.8 Manufacturing Costs 9
10.9 Overall Cost - Phase I 10
11. Schedule of Deliverables 10
12. Staffing 11
13. Nortel Dependencies 11
14. Shiva Dependencies 11
15. Risks and Issues 12
Executive Summary
The Rapport *********** is a family of ************************************
******************************************************************The first
release of the Rapport *********** supports the following major features:
*************************************************************************
**********************
*************************
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********************
**********************************************
***************************************************
****************************************
**********************************
*********************************************************
****************************************************************
*****************************************************************
********
The Rapport *********** family is based on the Shiva AccessPort product line.
All labels, software and other markings will be ******************.
At initial release, the Rapport *********** will be available ******
****************************. ***************** will be distributed in
************************************* will be distributed in ***************
*****. The software and documentation will be on 3.5" diskettes (subsequent
releases may be on CD-ROM). In addition to the system unit and diskettes,
the shipping box will also include ************************************
*****************. The Reference Guide will be packaged external to the
shipping box. It may be included inside the box in a subsequent release,
space permitting.
Scope and Target Audience
This document is intended for use by Shiva and Nortel engineering,
documentation/information engineering, support, marketing, and
manufacturing/operations departments for the development and planning of the
Nortel Rapport *******************.
This document does not provide detailed descriptions of the features of the
Rapport *********** family, nor does it provide a full functional and
technical specification of the product family. For a complete functional
and technical specification, see the related document ***********
****************************************.
This document does include the following information:
An explanation of the primary features of the Rapport *********** product
family
Shiva and Nortel deliverables for the project
Manpower and cost estimates for the Nortel modifications
A schedule for the project
Related Documents
**********************************************************************
****************************
***************************************************************************
*************************************
****************************************************************************
****************************
***************************************************************************
***************************************************
Deliverables
The deliverables for the Rapport *********** are listed below.
***********************************
************
************
*****************************************
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*****************************************
**************************************
********************************************
**************************************
**********************
*************
****************
***************
*****************
**********************************************************
***************************************
************************************
**********************
***********************
*****
**********
Note: All software, firmware, documentation, labels and other markings will
be **************.
Engineering and Documentation
This section describes the modifications required to the standard Shiva
AccessPort product to create a Nortel Rapport *********** product.
Hardware
The hardware components for the Shiva AccessPort include:
***
*************************************
*********
******
No modifications are presently required for ***********************. Shiva
will obtain **********************************************************
********. ****************************************************** Shiva or
AccessPort **************************** Nortel or Rapport ***********.
Standards and Approvals
Shiva has obtained (and is in the process of obtaining) various ************
*************** approvals for the AccessPort product. ***** will submit the
required paperwork to the same regulatory agencies to obtain approvals for
the Nortel Rapport *******************. A list of the required approvals
can be found in the document ****************************************
***********. The costs of these approvals are ***********************
*********************. Approvals for ************* will have **************.
Firmware
******************************** AccessPort firmware **********. The
following items will have to be modified:
************
************
*************
**********************************************. For a complete list of
firmware features, consult the document *********************************
******************.
Software
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
The standard software components for the Shiva AccessPort include:
*********************************************************
******************************************
*************************************************************************
*******
***************************************************
The parts of the software that will require modification for Nortel include:
*****
******************************
*********************************************
*********************************
*************************
*************
In addition, labels on diskettes and/or CD-ROMs will be ******************.
A detailed description of these software components and the specific
modifications required to them appear in the document ***********
****************************************.
Documentation and Online Help
The standard components of the Shiva AccessPort documentation and online help
include:
**********************************************************************
*******
***************************
******************************
*******************************************************************
********************
************************************
****************************************************
Shiva will *************************** with the ******************
**********. Shiva will provide Nortel with the release notes, readme
documents, Reference Guide and Quick Start Guide so that Nortel can ********
****************. The *********************** will not be available for the
first release. Nortel may produce its own version based on the Shiva
AccessPort ******.
All software and documentation will be on 3.5" diskettes for Nortel.
Quality Assurance and Testing
Once the Nortel ********************** have been made to the software and
firmware, the entire product will be subjected to ****************** by the
*****************************. In addition, the online help files and
documentation will be checked for **********************.
It is anticipated that there will be close collaboration between the Nortel
and Shiva Quality Assurance groups during the entire development process.
****************************************************************************
Rapport ****************************************************.
Manufacturing
***** will manufacture the initial production units of the Rapport ****
*****************. It is anticipated that *******************************
manufacture of the product. ***** will provide *******************
****************** to manufacture the product, as specified in the contract
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Support and Service
****** will provide level 1 and level 2 support for the Rapport ***********.
***** will provide level 3 support. Details and cost of this support and
service are specified in the contract.
Training
******************************************************Rapport*************
and the AccessPort******************************************************
********************AccessPort**************************. Any additional
training requirements (on site at Nortel, instructor notes, etc.) will have
to be negotiated. *****************************************************
********************************************************************
***************************.
Marketing
Project-specific marketing tasks will be developed in the context of an
overall Nortel marketing plan developed through the close collaboration of
the Shiva and Nortel marketing teams. These tasks will not be tracked as
part of the project.
However, the Nortel marketing team is expected to provide information and
updates on any requirements for marketing activities (e.g., equipment for
trade shows, photo shoots, demonstration purposes, etc.) as soon as possible
to the Nortel and Shiva project leaders. This ensures proper planning and
assists in determining the existence of any schedule conflicts.
Estimated Costs
The estimated manpower and costs for the tasks associated with the*******
**********************AccessPort appear in the following sections. These
are for reference purposes only and *************************************
*******************************************************.
Hardware
All changes to the AccessPort hardware required for *************** will be
handled by *******************. ************************** are presently
anticipated.
Standards and Approvals
***** will submit the necessary paperwork to obtain agency approvals (as
listed in the document **************************************** AccessPort")
for the Rapport ***********.
Task Estimated Cost
(man-weeks)
Engineering support for agency approvals *
# of man-weeks *
TOTAL *****
Firmware
The Shiva AccessPort firmware ****************************************.
Task Estimated Cost
(man-weeks)
***** Firmware *
# of man-weeks *
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TOTAL *****
Software
The *********************************************************************
***************************************************************************
***************************** in the Shiva AccessPort software *******
************************************ will be **************.
Task Estimated Cost
(man-weeks)
Modifications to ************** *
Modifications to ************************** *
Modifications to ****************** *
# of man-weeks *
TOTAL ****
NOTE: The initial release of the Rapport *********************************
******************************. When a Shiva AccessPort module is
******************************************************************** will be
required to *******************.
Documentation and Online Help
**************** the online help files with the appropriate ******
**********. All other documentation will be *****************. Shiva will
provide Nortel with those documents.
Task Estimated Cost
(man-weeks)
********* Customization & Testing *
Project Management *
# of man-weeks *
TOTAL *****
NOTE: The initial release of the Rapport *********************************
******************************. When a Shiva AccessPort module is
*************************************************************************
****** will be required to *******************.
Quality Assurance
In addition to the development testing of each of the components of the
project, ******************************** is responsible for testing the
Rapport *********** product as a whole, including *************************
*****************. These tests will be run based upon the standard test
plans used for the base Shiva product line.
The Quality Assurance cost estimate does not include ************************
*************************************************************
Task Estimated Cost
(man-weeks)
Design Test Plan *
Execute Test Plan *
# of man-weeks *
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TOTAL *****
Project Management
The Rapport *********** project will require ********************************
************************************************* has overall project
responsibility: *****************************************************
***********************************************************************
**********************************************************************
********************************************. The elapsed time for the
project is *******. Project management will be required at about ********
for most of the project.
Description Estimated Cost
(man-weeks)
Project Management *
# of man-weeks *
TOTAL *****
Manufacturing Costs
The Rapport *********** will require **********************************
**************************************************************************
(************************. In addition, manufacturing support will be
required for *******************************************************
***********************************.
Task Estimated Cost
(man-weeks)
Manufacturing Support ******************** *
# of man-weeks *
TOTAL *****
NOTE: This estimate does not include *************************************
**********************************************. ********************.
Overall Cost - Phase I
The total non-reoccurring engineering and additional costs for the first
phase of project are as follows:
Task Estimated Cost
(dollars)
Hardware **
Standards and Approvals *****
Firmware *****
Software *****
Documentation & Online Help *****
Quality Assurance *****
Project Management *****
Manufacturing costs *****
TOTAL *****
Schedule of Deliverables
The initial milestones for the Rapport *********** project are shown below.
Milestone Who Date
Preliminary ************************************ ***** *******
Preliminary ************************************************ ***** *******
********** AccessPort ************************** ***** *******
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********** AccessPort ************************** ***** *******
Shiva AccessPort *** ***** *******
********** AccessPort *********************** ***** ******
Nortel *********************************************** ****** ******
Preliminary ********************** ***** ******
Preliminary ********************************** ***** ******
Nortel ************************** ***** ********
Nortel ************************** ***** ********
Nortel *********************************** ***** ********
Nortel ************************ ****** ********
Nortel *************************** ****** ********
Nortel AccessPort *** ***** ********
Nortel AccessPort *** ***** ********
Nortel AccessPort ************************* ***** ********
Staffing
Shiva
*********************************************
**********************
**********************
**********************
***********************************************
****************************************************
*****************************************************
****************************************************
Nortel
***********************************************
****************************
************************************************
*************************************************
**************************
******************************
Nortel Dependencies
The following is a list of Nortel dependencies that affect the schedule.
*****************************************************************************
*****
*************************************************
*****************************************
**************************************************
*************************************************************
********************************************
***********************************************
Shiva Dependencies
The following is a list of Shiva dependencies that affect the schedule.
****************************************************
Risks and Issues
The following will be a list of risks and open issues that affect the
schedule.
Risks:
** ********* in the Shiva AccessPort ************************************
****** the Rapport ********************.
<PAGE>
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EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Issues:
1. ****** requirements ********************************** of the Rapport
****
******.
2. Any change in the ******************** for the Rapport *****************
*******************.
<PAGE>
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Exhibit S
Nortel OEM Requirements
Nortel will ************************** the Shiva AccessPort, similar to the
Rapport ******************************. Shiva shall, on an ongoing basis,
**************************************************************************
***************, for the annual *************************.
Shiva shall certify Nortel's *********** based on the Nortel priority
certification list as used for the Rapport *********, for those countries
which both Shiva and Nortel intend to sell their respective products.
Nortel will only be responsible for Nortel specific certification in those
countries where Nortel intends to sell the *********** and which Shiva has
no intention of selling their AccessPort. If Nortel manufactures the ****
****** and re-certification is required in countries where Nortel intends to
sell, or is selling, the ***********, then Nortel will be responsible for
Nortel specific certification.
***** shall provide ****** with a project plan for each release of the
AccessPort software and/or hardware (**************************.
Nortel shall have the option to ******************************************
**************************************************. An annual fee *******
********** and is *******************************************************
***********************.
Nortel Specific (Proprietary) Features
It is Nortel's intention to **********************************************
*************************************************. Nortel and Shiva will
determine which development approach is most appropriate for delivering the
requested features *******************************************************
*****************************************************************. These
functions will include, but are not limited to, the following:
************************
***********************
**************************************
**********************************
********************
*******************************
Notes: 1. ***************************************** will be sold as part
of the Nortel Rapport *****.
The project plan for the ***************************** product will be
developed by **************** and will be finalized ***********************
**********************************************************************
************************************************************************
***********************************.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Exhibit 10.16
Memorandum of Understanding
This Memorandum of Understanding (MOU), effective as of December 23,
1996 between Shiva Corporation, (hereinafter "Shiva"), having executive
offices 28 Crosby Drive, Bedford Massachusetts, 01730, U.S.A., and
Northern Telecom Inc. on behalf of itself and its Affiliates,
Subsidiaries, and for the benefit of Joint Venture partners (hereinafter
"Nortel") having offices at 2221 Lakeside Blvd., Richardson, TX 75083.
This MOU is intended by the parties to be used solely for the purpose of
negotiating a new agreement which would supersede the existing agreement
between the parties dated May 15, 1995. The new agreement will reflect
the following items:
a) The transition from a **************** payment schedule to a
************** payment model.
b) Right to Manufacture and ******************* Distribution for
Rapport *****************************************************
*********** into the ********** and ********** (herein referred to
*********** *********** are defined as *************************
****************************************************************
*****************************************************************
**********************************************************.
c) Right to Distribute Worldwide into the ***************** will be
in accordance with the terms outlined in Section 5.1.
d) Under this new agreement, the parties will make Joint Investments
in product development. ***** investments will be directed toward
************************* while ****** investments will focus on
**************************************************************.
Rights to the resultant intellectual property is as described in
Paragraph 4.3 of this MOU.
The following sections of this MOU are legally binding on both
parties; Sections 1.1, 1.4, 2.1.1, 2.1.2, 2.2.1, 2.2.2, 2.2.4, 2.3, 5.2.
Any further agreement resulting from such negotiation is subjected to
management and legal approval of both companies.
Overall Objective: The ************************** and ****************
***** is in ****************************************************. The
joint resources and skills, together with the ********************* of
both companies ***************************************************.
This new agreement allows for ***** to be ****************************
**********************************************************************
****************************************************.
Intent: It is the intention of both parties to proceed in good faith
negotiations for all activities and to conclude a definitive agreement of
************* term before January 31, 1997.
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AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
Points of Contact:
Shiva: Bob Darabant Nortel: Micky Tsui
Senior Director, Worldwide OEMs AVP, Internet Solutions
MOU Terms and Conditions
1. **********************:
1.1 ****** grants ******** worldwide ***********************, whereby
************ is defined as ******************************************
************************************** ****************************
*******************************. ***************** will be ******* in
the definitive agreement. Both parties agree to update ****************
************* on a quarterly basis to ********************* subject to
mutually acceptable criteria.
1.2 ****** will, upon signing of this MOU ****************************
***********, where possible, *******************************************
**********, and will work with ********************************. This
includes, but is not limited to, the **********************************
*****************************. The parties understand that ***********
***************************************************************.
1.3 In the event that ***********************************************
***************************************, ***** will *******************,
where possible, with Nortel Rapport and *******************************
***********************************************************************
****************.
1.4 This ************ set forth in Section 1.1 may only be ***********
subject to mutually agreed upon ********** performance measured against
specific ********* metrics, which may *******************************,
**********************************************************************
***************************. The ******************* metrics will be
established as part of the definitive agreement and will be reviewed and
adjusted on a periodic basis. A notification period, which will be
agreed upon in the definitive agreement, is required under any situation
whereby this ***************************************. In the event the
parties are unable to reach a definitive agreement, ********************
************************************************************************
************************************************************************
********************************, will be due.
1.5 ***** agrees that the ******************************* will not,
during the period of ************************************************
**********************************************************************
***********************************************************************
**********************************************************************
***************************************************. ******* reserves
the right to **********************************************************
***********************************************************************
*******************************.
2. Right to Manufacture and Royalties
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
2.1 Shiva grants Nortel worldwide manufacturing rights for the Rapport
*** and for **********************************************************
*********************. The **** fee covers all manufacturing rights for
hardware and software associated with the product, transfer
manufacturing know-how package, and assistance for manufacturing start-
up in one Nortel manufacturing facility. Reasonable additional
assistance will be provided with the ******************************* to
be determined in the definitive agreement. Nortel has the right to
manufacture in multiple facilities globally.
2.1.1 ******* agrees to a ************************* fee ***********
******* for the worldwide manufacturing rights of the Rapport****. This
payment will be due ***************************************. Nortel
further agrees to an additional ************* for paid up manufacturing
rights to all ******************for the Rapport**** including, but not
limited to, ********************************************. This *******
*********** fee will be paid ******* after the acceptance of the **
**************. This combined **************************************
for Rapport *** product, which ****************************************
**********************************************************to the Rapport
******************.
2.1.2 Shiva grants Nortel worldwide manufacturing rights for *********
**************************************************** product ***** or
********************** and all *************************, for a *******
************************. This product *****************************
*****. This *** payment will be due ******* after Nortel acceptance of
the product.
2.2 Royalties
2.2.1 Shiva grants to Nortel worldwide distribution rights of the
products listed in Section 2.1 for the ******************* as defined in
Section 1.1 at a royalty rate of *********************** price of the
product.
2.2.2 Upon signing of this MOU, Nortel agrees to ********************
***********************************************************************
*************************************************************. Nortel
will issue purchase orders committing ********************************
************************************************************************
This payment will give Nortel ****************************************
******************** described in Section 2.2.1 and ******************
**************************************** as described in Section 1.4.
2.2.3 In 1997 and prior to any notification of *********** of the
**********************, Nortel agrees to *********************** of
************ on the *********************************** with payment
terms of ***********. Payment of these ************************* is
******** upon ****** meeting its *****************************. These
*************** will be further defined and scheduled as part of the
definitive agreement. Purchase orders for these *********** will be
issued prior to the end of each **********************. These payments
will also give **************************************** as defined in
Section 2.2.1 above.
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2.2.4 At the end of 1997, ******************************************
****************************************************************. These
***********************************************************************
**********************************. The amount applied will not exceed
*****************************************************. In the event of
notification that **************************************, there will be
no *******************************************. In the event that total
**********************************************, the difference will be
calculated within *********************************** and *************
********************** payment terms.
2.2.5 For product obtained by ****** for ***************, **********
will owe ********************** calculated on the ********************
******************************************. These ******************
will be included in the ******************* as described in paragraph
2.2.4.
2.3 In the event the definitive agreement is not reached within the
allotted time frame stated above, the ******************************* of
********* (referenced in paragraph 2.2.2) will fully apply to ********
***************. These ************ will be ******* under the ********
***************************** through *******************************
********************************************
2.4 ****** grants to ******* access to *****************************
********** under the terms of this Agreement. During this period,
rights for ***************, including *******, will be granted by *****
on substantially similar conditions as agreed to in this Amendment,
subject to the mutual agreement of both parties.
2.5 ***** grants to ******* the right to ************** from *****
******** at ******* plus handling and inventory services fee at *****
**********************. ******* agrees to provide a firm forecast
for such orders subject to a mutually agreed forecast schedule and
process. This process will be further defined in the definitive
agreement. Shiva agrees to ***************************************
********* to Nortel.
3. Service **************************
3.1 ****** agrees to ********* provided ****************************
***************** dedicated to support ****** global *****************
and ******. The intent of this ****** is to increase ****** sales into
****************************** worldwide. The ******* structure,
functions, mode of operations between ****** and *** will be established
as part of the definitive agreement.
3.2 ******* agrees to ***** the ***** of this ***** to ********* in
*****, ** in *****, ** in *****, and to ** in *****. Only the first two
******** are ******** (***************** will be charged to ******, but
not more than ***************** in ***** and **************** in *****,
unless mutually agreed). *********** for *****************************
will be reviewed and approved in early ****. ******* will only **** the
*********** incurred by this *******
3.3 Shiva agrees to ************************************************
subject to the **********. ********* has right to review and approve
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the ***************************** to this ***** for the sole purposes of
********************************************. These ************* will
continue to be on *************** but ************** to *******. Shiva
and *************** will be subjected to ************************** and
**************************, as part of the definitive agreement.
4. R&D
4.1 ****** agrees, *****************, to ****** the ************ with
************************************* for a total of **************** in
****. The *************** will be based on specific ******************
which **************************** within the **************** and is
agreed to by ********
4.2 ****** agrees to ****************************** in ***** in R&D
related to **************************************************** which
also apply to the **************************.
4.3 As additional *********************, ***************** as described
in paragraph 4.1, ********* shall receive the following:
(a) rights to *****************************************************
**************************************, as required by *******;
(b) a list of committed ******************************************
*************;
(c) for those ****** that are specific to **************************
******************************, at a minimum, at the time the
agreement is terminated, each party will ***** the other party a
**************************************************************
*************************************************************
****************************, during the term of the agreement,
Shiva agrees *************************************************
******************************************************.
The parties agree to determine the specific rights in the definitive
agreement.
4.4 Shiva agrees to include ************************************* and
****************** as part of the ****************************.
4.5 Both parties agree to include *********************************
********************** as part of definitive agreement.
5. Product Purchases
5.1 ******** has the option to purchase product from Shiva at the
following ****************************************
5.1.1: ************************************
5.1.2: *************************************************
*******************************************************
The equivalent of ******************************************* will
be ******** to the **************************************** as described
in Section 2.2.2 provided the ******************* does *****************
******Nortel Rapport *****.
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AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
5.2 Upon signing of this MOU, ****** agrees to *********************
******************for Rapport *****************************************
*********************************************************************
******* also agrees to **********************************************
******************for Rapport ****************************************
Shiva agrees to ******************************************************
************************************************************************
**************** The terms of ************************, will be agreed
to as a part of the definitive agreement, ****************************
******************************* shall apply with appropriate changes.
6. General
6.1 This agreement does not affect in any form the existing contract
on ******** and ****************.
6.2 Services and Support: Shiva agrees to provide service and support
levels *************************************, including but not
limited to *****************************************************, and
*******************************. Modifications to the current service
and support agreement will be agreed to as part of the definitive
agreement.
7. Co-Marketing: Nortel agrees to provide ********************** of
************* in the Rapport product consistent with the ***********
********** concept. Label and art work to be mutually agreed to.
8. Termination:
Both parties agree to address in the definitive agreement conditions and
disposition of ********************************************************
**********************************************:
-*********************************;
-************************.
9. Disclosure
9.1 Disclosure by either party ************************************
**************************** will be made only pursuant to the terms
and conditions of the ************************************************
****************************
9.2 ***************************************************************
**********************************************************************
*********************************************.
This MOU shall remain in force and effect until January 31, 1997, or if
canceled in writing by either party. Cancellation of this MOU shall not
release both parties regarding sections: 1.1, 1.4, 2.1.1, 2.2.2, 2.2.1,
2.2.2, 2.2.4, 2.3, and 5.2. This MOU may only be extended by the mutual
agreement of both parties.
AGREED BY:
SHIVA CORPORATION NORTHERN TELECOM INC.
<PAGE>
By: /s/ Woody Benson By: /s/ Richard Faletti
- -------------------- -----------------------
Name: Woody Benson Name: Richard Faletti
Title: Senior Vice President Title: Vice Presdient, NTI
Date: 12/24/96 Date: 12/23/96
<PAGE>
