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CERTAIN CONFIDENTIAL TREATMENT CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
EXHIBIT 10.13
[COMPANY LETTERHEAD]
BAY NETWORKS COMMUNICATIONS, INC.,
and
FIRST VIRTUAL CORPORATION.
ORIGINAL EQUIPMENT MANUFACTURING AGREEMENT
This Agreement is entered into as of this 3rd day of November, 1995, ("Effective
Date") by and between Bay Networks, Inc., a Delaware corporation having its
principal place of business at 4401 Great America Parkway, P.O. Box 58185, Santa
Clara, California, 95052-8185 ("Bay Networks"), and First Virtual Corporation
("First Virtual") having its principal place of business at 3393 Octavius Drive,
Suite 102, Santa Clara, CA 95054.
BACKGROUND
A. Bay Networks is engaged in the design, manufacture and sale of a wide
range of networking products including hubs, routers, switches and ATM
equipment.
B. First Virtual is engaged in the design, manufacture and sale of
multimedia networking products, including 25 Mb/s ATM switches, 25 Mb/s
ATM network interface cards and a multimedia operating system known as
'MOS'.
C. The parties wish to provide for the right and option of Bay Networks
to purchase private labeled versions of products, manufactured by First
Virtual, for resale by Bay Networks, as described in this Agreement.
AGREEMENT
Accordingly, in consideration of the mutual promises, rights and obligations
described in this Agreement, the parties agree as follows:
1. SCOPE OF WORK TO BE PERFORMED BY FIRST VIRTUAL.
1.1 PRIVATE LABELED PRODUCTS. First Virtual will design, test,
manufacture and support private labeled versions of the 25Mb/s modular ATM Media
Switch 11 models, the 25Mb/s ATM PCI and ISA Media Adapter Card models and
Multimedia Operating System models as described in Schedule A to this Agreement,
which have been modified to meet the requirements of the specifications attached
as Schedules B, C and D to this Agreement. The products are collectively
referred to in this Agreement as the "Private Labeled Products". Specifications
for private labeling is set forth in Schedule E. First Virtual shall deliver 2
working prototype units for use in Alpha, Beta and other testing. The price for
these units to Bay Networks will be equal to First Virtual cost of goods sold
("COGS").
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1.2 DOCUMENTATION. First Virtual will provide a complete set of the
applicable technical publications and illustrations which First Virtual ships
with the corresponding First Virtual products, as well as user documentation to
Bay Networks in an agreed upon format. Bay Networks will modify such
publications and will deliver master copies of this documentation to Bay
Networks standard printer or other printer designated by First Virtual. First
Virtual will purchase this documentation at a rate agreed upon between the
printer and First Virtual. First Virtual will acquire, pack and ship this
documentation with the applicable OEM product when such product is delivered to
Bay Networks. The complete documentation list is set forth in Schedule E.
1.3 PROJECT MANAGEMENT. First Virtual designates Douglas Tsui as the
First Virtual Project Manager and Bay Networks designates Jim Nielsen as the Bay
Networks Project Manager for this Agreement . The Project Managers, or their
representatives, shall meet on a regular basis throughout the development phase
of this Agreement for the purpose of joint progress reporting and
relationship/program management.
2. PURCHASE AND SALE OF PRIVATE LABELED PRODUCTS.
2.1 OPTION TO PURCHASE PRIVATE LABELED PRODUCTS; OBLIGATION TO SELL
PRIVATE LABELED PRODUCTS; EXCLUSIVE PURCHASE RIGHTS. Bay Networks may, at its
option, purchase Private Labeled Products, including products with the options
described in Schedules A, B, C and D from First Virtual for resale by Bay
Networks, directly and indirectly through its sales channels, by placing written
orders under this Agreement. Bay Networks has no obligation to order a minimum
amount of any type of Private Labeled Product. First Virtual agrees to
manufacture and deliver to Bay Networks Private Labeled Products in response to
all orders placed under this Agreement, provided that such orders comply with
the terms of this Agreement. First Virtual agrees not to sell Private Labeled
Products manufactured under this agreement to any other party without Bay
Networks' prior written consent.
2.2 LICENSE OF UPDATES TO MOS SOFTWARE FOR USE IN CONNECTION WITH SALE
OF MEDIA SWITCH EQUIPMENT. The parties acknowledge that the Private Labeled
Products encompass hardware and software. First Virtual grants Bay Networks the
right to reproduce as required, and distribute (directly and through its
distributors and resellers worldwide) all "bug fixes" to the Private Labeled
Products software provided under this Agreement, for use solely in connection
with the operation of the Private Labeled Products for the term of this
Agreement.
2.3 ORDERS FOR PRIVATE LABELED PRODUCTS. Each order placed by Bay
Networks for First Virtual equipment shall be governed by the terms of this
Agreement; conflicting or additional terms provided in any order by Bay Networks
or acknowledgment by First Virtual shall be of no effect unless specifically
accepted in writing by an authorized representative of Bay Networks and First
Virtual. Each order shall specify:
- Description of Private Labeled Products models and any options
(including applicable item numbers and part numbers)
- Purchase price
- Required Ship date
- Specified delivery schedule
- Addresses: "ship-to" and "invoice-to".
2.4 CANCELLATION OR POSTPONEMENT OF ORDERS. Bay Networks may cancel or
reduce the quantity of any order without liability on or before 60 days in
advance of the ship date specified in Bay Networks' order without cancellation
charge. Bay Networks may cancel, or
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reduce the quantity of any order on or before 30 to 59 days in advance of the
ship date specified in Bay Networks' order by paying First Virtual a
cancellation charge equal to 10% of the purchase price of the order canceled.
Bay Networks may postpone the delivery of any portion of an order one time for
up to 180 days without any liability by delivering written notice to First
Virtual on or before 60 days in advance of the ship date specified in Bay
Networks' order.
2.5 DELIVERY OF PRIVATE LABELED PRODUCTS IN RESPONSE TO ORDERS. In
general, orders shall be placed at least 90 days prior to the requested shipment
date. First Virtual will use all commercially reasonable efforts to deliver
Private Labeled Products to Bay Networks in the quantities ordered by Bay
Networks by the shipment date specified in Bay Networks' order and acknowledged
by First Virtual. The parties acknowledge that time is the essence of this
Agreement. For any order placed at least 90 days prior to the requested shipment
date, in the event that First Virtual fails to deliver Private Labeled Products
within the time period described in this subsection, Bay Networks shall be
entitled to a credit against the corresponding order in the amount calculated
from the table below applied against the quantity of Private Labeled Products
which was not delivered within the specified time period, subject to adjustment
as provided below:
Actual delivery date Percentage of price credited
- ------------------- ----------------------------
[*] days from shipment date No discount
specified in Bay Networks' order
[*] days from shipment date [*]
specified in Bay Networks' order
[*] or more days from shipment date [*]
specified in Bay Networks' order
Bay Networks may choose to cancel at any time any order which remains
unfulfilled by First Virtual after 29 days from the shipment date specified in
Bay Networks' order. Private Labeled Product which is delivered but which does
not conform to the warranties and specifications described in this Agreement,
and which the non-conformance is not cured within five days after notice thereof
from Bay Networks, shall not be deemed to have been delivered for purposes of
this Section 2. First Virtual's obligations under this section shall be subject
to the provisions of Section 14.2 entitled "Failure and Delay".
2.6 PRICES; PAYMENT. Subject to adjustment as provided by this Section,
prices for the Private Labeled Products shall be those set forth in Schedule F,
less all applicable discounts. Prices include all costs of freight and insurance
as provided by this Agreement. All prices are exclusive of any tax levied or
based on the equipment, (collectively "Taxes"). Bay Networks shall pay such
Taxes (other than income and franchise taxes of First Virtual), or provide First
Virtual with a certificate of exemption acceptable to the appropriate taxing
authority. Payment for the Private Labeled Products shall be due within 30 days
of shipment, subject to acceptance of the products by Bay Networks as provided
for in this Agreement. For payment purposes, products will be deemed accepted
unless rejected within 30 days. Payment for all other charges shall be due
within 30 days of receipt of invoice, unless otherwise specified in this
Agreement.
2.7 SHIPMENT; CHANGES; TITLE; RISK OF LOSS. Private Labeled Products
shipped in response to Bay Networks' orders will be shipped F.O.B. Bay Networks'
manufacturing facility, Santa Clara County California. Title to the Acceptance
Tests and Procedures shall pass to Bay Networks upon acceptance of the
respective shipment of products. First Virtual shall bear risk of all loss,
damage and theft of products until delivered to Bay Networks' manufacturing
facility.
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* CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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2.8 NON-BINDING ROLLING FORECAST. To assist First Virtual in delivering
Private Labeled Products, Bay Networks agrees to provide First Virtual monthly
with 6 month rolling forecasts for its projected orders for Private Labeled
Product. The provision of such forecast shall in no way bind Bay Networks to
actually place orders for any such quantities nor otherwise expose Bay Networks
to liability.
2.9 MINIMUM ORDERS FOR PRIVATE LABELED PRODUCTS. Nothing in this
Agreement shall be construed as requiring that Bay Networks order any specific
minimum amount of Private Labeled Product.
3. ACCEPTANCE.
3.1 TESTING AT FIRST VIRTUAL. The parties acknowledge the requirement
that the Private Labeled Products be supplied with as close to a "zero defect
rate" as is practically possible. Each Private Labeled Product is subject to
final inspection and acceptance at Bay Networks' facility within 30 days after
delivery. First Virtual will follow good manufacturing practices (equivalent to
IPC Class II for electrical assembly) utilizing materials, techniques, and
procedures which conform to industry standards. First Virtual will make
available to Bay Networks, upon request, information regarding First Virtual's
quality assurance procedures. Bay Networks may conduct and observe tests and
inspections at First Virtual' manufacturing plant if Bay Networks notifies First
Virtual one day in advance.
3.2 TESTING AT BAY NETWORKS. Bay Networks shall have the right to
perform the acceptance tests and procedures described in Schedule G
(collectively the "Acceptance Tests") to confirm that the Private Labeled
Product conforms to all criteria, specifications and warranties described in
this Agreement. First Virtual will provide Bay Networks with a complete set of
toplevel assembly drawings of the Bay Networks Private Labeled Product, which
Bay Networks may use in incoming inspection. If one or more pieces of Private
Labeled Product in a shipment fails to successfully pass the Acceptance Tests,
Bay Networks shall deliver a deficiency report to First Virtual promptly
following the completion of the acceptance period. First Virtual shall, in
response to such report immediately accept the return of and then repair or
replace the non-conforming Private Labeled Product so that it successfully
passes all Acceptance Tests, all at First Virtual's sole expense.
3.3 PAYMENT PRIOR TO ACCEPTANCE. Payment shall be made in accordance
with paragraph 2.6, however, payment prior to acceptance shall not constitute
acceptance. In the event that Bay Networks does not notify First Virtual in
writing of deficiencies in the Private Labeled Product within 30 days of receipt
thereof, the Private Labeled Product shall be deemed accepted. Exercise by Bay
Networks of its right to inspect and test any products shall not preclude or
limit Bay Networks' ability to assert any claim for breach of warranty.
4. WARRANTIES; REMEDIES.
4.1 FREE FROM DEFECTS. For the hardware components of this Agreement,
First Virtual warrants that each Private Labeled Product delivered to Bay
Networks shall be free from defects in material and workmanship for one year
after shipment to the corresponding end-user customer, but in no event later
than 18 months from delivery to Bay Networks (the "Warranty Period"), and shall
conform to the designs and specifications described in the Schedules to this
Agreement. For the software components of this Agreement the warranty is 90 days
on the media only.
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4.2 TESTING. First Virtual warrants that it will test each and every
Private Labeled Product to ensure conformance to the design and specifications
referenced in the Schedules before delivery to Bay Networks. First Virtual
warrants that during the Warranty Period the Private Labeled Products delivered
under this Agreement will successfully pass the diagnostic tests devised by Bay
Networks, and meet all quality standards described in Schedule G, Quality
Standards.
4.3 FREE FROM LIENS, POWER TO PERFORM. First Virtual warrants that the
Private Labeled Products delivered under this Agreement shall be free from all
liens, encumbrances and restrictions or will advise Bay Networks of restrictions
under First Virtual's license agreements with other third parties. First Virtual
warrants that it has all rights and powers necessary to performs its obligations
under this Agreement and to grant the licenses and other rights provided to Bay
Networks by this Agreement.
4.4 SERVICES. First Virtual warrants that all services performed under
this Agreement will be performed in a professional manner and in accordance with
the applicable specifications under this Agreement.
4.5 REMEDIES. If Bay Networks discovers a defect or non-conformance
during the Warranty Period, Bay Networks shall promptly notify First Virtual of
any non-conforming material to obtain a Return Material's Authorization number
("RMA"). First Virtual agrees to accept the return of Private Labeled Products
that Bay Networks determines does not meet the warranties described in this
Section. Upon Bay Networks' receipt of the RMA, Bay Networks shall cause the
return of the non-conforming Private Labeled Product to First Virtual. Upon its
receipt, First Virtual shall promptly either repair or replace it, at First
Virtual's option and cost. Properly repaired or replaced Private Labeled Product
shall promptly be delivered to Bay Networks and the Warranty Period therefor
shall continue for 90 days following delivery of the returned Private Labeled
Product to Bay Networks or the balance of the Warranty Period, whichever is
longer. First Virtual shall bear the cost for shipment of products for warranty
repair from and to Bay Networks' Santa Clara County manufacturing facilities. If
the defect is attributable to a problem with software, First Virtual shall
promptly provide Bay Networks with a suitable patch, fix or work-around
sufficient to enable the Private Labeled Product to operate in accordance with
this Agreement. These remedies are in addition to any others which may be
provided by this Agreement or by law.
4.6 LIMITATIONS. This warranty does not include damages due to
inadequate operating environment, accident, disaster, neglect, abuse, misuse, or
alterations made without approval by First Virtual. THE FOREGOING WARRANTIES ARE
IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE.
4.7 AFTER WARRANTY REPAIRS. First Virtual shall provide repairs of
Private Label Products returned outside of the warranty period for a unit cost
of 30% of the current Bay Networks US list purchase price of the relevant piece
of equipment.
5. TECHNICAL ASSISTANCE, SUPPORT AND TRAINING.
5.1 TECHNICAL ASSISTANCE. First Virtual shall provide Bay Networks with
the technical assistance and maintenance support as is more specifically
described in Schedules H. The parties anticipate that Bay Networks or its
resellers and maintenance co-providers will perform "first call" maintenance for
Private Labeled Products delivered to end-users in accordance with this
Agreement, and that First Virtual will provide "factory level" support to Bay
Networks to enable it to perform satisfactory maintenance of the Private Labeled
Product for Bay Networks' customers.
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Bay Networks shall have the right to return to First Virtual Private Labeled
Product which is out of the Warranty Period and which has failed for repair or
replacement by First Virtual at the rates described in Section 4.7. In addition,
Bay Networks shall have the right to obtain consulting services from First
Virtual to generally assist in the enhancement of the Private Labeled Products
and in the development of technology intended to operate in conjunction with the
Private Labeled Products, at the rates described in Schedule F.
5.2 TRAINING. First Virtual shall provide Bay Networks with training as
is more specifically described in Schedules I, including a general introduction
to the First Virtual products and detailed training on the Private Labeled
Products and updates, sales and support training.
6. REFERENCE SELLING OF PRODUCTS.
6.1 FIRST VIRTUAL REFERENCE SELLING. First Virtual will reference sell
the products of Bay Networks. This will allow First Virtual to position a
complete solution including both Bay Networks and First Virtual equipment with
end user customers. First Virtual will acquire Bay Networks product through the
existing Bay Networks distribution channel.
6.2 BAY NETWORKS REFERENCE SELLING. Bay Networks will reference sell the
products of First Virtual other than the Private Labeled Products. This is
intended to allow the Bay Networks direct sales force and channel access to a
complete solution for our end user customers. First Virtual or its resellers
will provide sales support to Bay Networks as available to enable Bay Networks
to be effective in this process.
7. LIMITED EXCLUSIVITY; INDEMNIFICATION; PROPRIETARY RIGHTS.
7.1 LIMITED EXCLUSIVITY. First Virtual agrees to refrain from making
disclosure to any party or any public announcement regarding joint sales,
marketing, OEM or private label agreements with the following networking vendors
for the 90 days following the execution of this Agreement: Cabletron Systems,
Inc., Cisco Systems, Inc., Hewlett Packard Company, International Business
Machines Corporation, 3Com Corporation and Fore Systems, Inc.
7.2 INDEMNIFICATION BY FIRST VIRTUAL. First Virtual will defend at its
own expense any action brought against Bay Networks, to the extent that it is
based on a claim by a third party (i) that the Private Labeled Products
infringes a patent or copyright, or contains misappropriated trade secrets, or
(ii) which is based upon the use, operation or performance of the Private
Labeled Products, anywhere in the world, and will pay any costs and damages
finally awarded against Bay Networks in any such action which are attributable
to any such claim. First Virtual's obligations under the preceding are subject
to the conditions that: (i) Bay Networks promptly notifies First Virtual in
writing of any such claim, and (ii) First Virtual will have sole control of such
defense and all negotiations for any settlement or compromise, although Bay
Networks may participate in the same at its expense. If First Virtual receives
notice of an alleged infringement or if use of any product shall be prevented by
an injunction based on alleged infringement, First Virtual shall have the right,
at its option to (i) obtain the rights to continue use of such product or
technology, (ii) substitute other suitable Private Labeled Product, software
and/or technology or (iii) modify such product so that it is no longer
infringing. First Virtual shall have no liability to Bay Networks, or its
distributors or end-user customers with respect to any claim of patent,
copyright, or any other intellectual property right infringement which (i)
arises solely from the combination or utilization of the product with any item
of hardware with any machine, device, computer or software not furnished or
approved by First Virtual Corporation, (ii) based upon a product which has been
used in a manner for which it was not designed, (iii) use of a superseded or
altered release of a product if such infringement would have been avoided by the
use of current unaltered
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releases of the product that First Virtual provides to distributor or its
end-user customers or dealers, or (iv) components or software which are licensed
to First Virtual Corporation.
7.3 INDEMNIFICATION BY BAY NETWORKS. Bay Networks will defend at its own
expense any action brought against First Virtual by a third party, to the extent
that it is based on promises or assertions made by Bay Networks to a third party
in excess of its authority under this Agreement or to the extent that Bay
Networks expands the liability of First Virtual beyond that provided in First
Virtual's standard terms and conditions provide by First Virtual to Bay Networks
to provide to customers or to the extent the claim is based on specifications
provided by Bay Networks to First Virtual. Bay Networks' obligations under the
preceding are subject to the conditions that: (i) First Virtual promptly
notifies Bay Networks in writing of any such claim, and (ii) Bay Networks will
have sole control of such defense and all negotiations for any settlement or
compromise, although First Virtual may participate in the same at its expense.
7.4 PROPRIETARY RIGHTS OF BAY NETWORKS. Bay Networks reserves all
proprietary rights in all original works, computer programs, discoveries,
inventions, patents, know-how, techniques, designs, maskworks, engineering
details and other data developed by Bay Networks, including all information
relating to the network management interface circuitry and technology disclosed
to First Virtual by Bay Networks.
7.5 PROPRIETARY RIGHTS OF FIRST VIRTUAL. First Virtual reserves all
proprietary rights in all original works, computer programs, discoveries,
inventions, patents, know-how, techniques, designs, maskworks, engineering
details and other data developed by First Virtual Corporation, including all
information relating to the network management interface circuitry and
technology disclosed to Bay Networks by First Virtual Corporation.
8. ENGINEERING CHANGES.
8.1 REQUIRED CHANGES. First Virtual reserves the right to make
engineering changes at any time to the Private Label Products (i) which do not
adversely impact the operation of the Private Label Products with Bay Networks
systems, (ii) which are necessary to comply with changed safety or environmental
standards and other governmental regulations, (iii) which are necessary to make
the product non-infringing with respect to any patent, copyright or other
proprietary interest, or (iv) which are for the purpose of improving the
quality, reliability or manufacturability of the Private Label Products,
provided that all such changes reflect changes being made by First Virtual
simultaneously to the corresponding First Virtual standard products.
8.2 NOTICE OF CHANGES. First Virtual will notify Bay Networks' project
manager by electronic mail or facsimile of all planned permanent or temporary
changes to the Private Label Products which impact form, fit or function, or
safety, environmental or other governmental compliance of the Private Label
Products. The notice will include a summary of the expected impact of any such
planned change on the above listed characteristics of the Private Label
Products.
8.3 ACCEPTANCE OF CHANGE. Within 10 business days after receipt by Bay Networks
of notification of a planned change, Bay Networks shall either accept the
proposed change or request additional information regarding the same. Within 5
business days after receipt by First Virtual of a request by Bay Networks for
additional information, First Virtual will provide additional documentation
and/or direct consultation to Bay Networks regarding the planned change. Should
Bay Networks fail to either accept the proposed change or request additional
information from First Virtual regarding the same within such ten day period
after notification, the proposed change will be deemed to have been accepted by
Bay Networks as of the end of such ten
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day period. Bay Networks shall not unreasonably withhold its acceptance of any
changes planned by First Virtual.
8.4 EFFECTIVE DATE OF CHANGE. If the change is accepted by Bay Networks,
the effective date thereof will be established by First Virtual but in no event
shall such effective date be earlier than 10 days after the date of acceptance
of the change by Bay Networks. If the proposed change is not acceptable to Bay
Networks, the parties will meet within 5 working days after receipt by Bay
Networks of the additional information and/or consultation provided pursuant to
Section 8.3 above, to attempt to reach a resolution through good faith
negotiations. It should be noted that the intent of this agreement is to produce
Private Label Product that is as far as practicable identical to First Virtual
product except as provided for in Schedules B, C and D.
9. UPGRADE OF TECHNOLOGY
9.1 NOTICE. First Virtual will notify Bay Networks of upgrades of
technology for corresponding First Virtual standard products not otherwise
included as engineering changes in accordance with Section 8. If requested by
Bay Networks, subject to this Section 9, such upgrades will be incorporated in
Private Label Products available for shipment within 90 days of when such
upgrades are incorporated in corresponding First Virtual standard products.
9.2 MATERIAL MODIFICATIONS. The above 90 day period shall not apply if
Bay Networks requests material modifications to an upgrade other than to the
extent necessary to enable the upgrade to be incorporated in the Private Label
Products. Pricing of any material modifications to the Private Label Products
will be agreed to by First Virtual and Bay Networks.
9.3 CHARGES FOR UPGRADES. If such upgrades or enhancements are provided
to other customers at no additional charge, there will be no increase in the
unit price for products under this Agreement. If First Virtual charges its other
customers for such upgrades, First Virtual shall only be required to provide
such upgrades to Bay Networks upon agreement with Bay Networks regarding an
increased unit price. It should be noted that the intent of this agreement is to
produce Private Label Product that is as far as practicable identical to First
Virtual product except as provided for in Schedules B, C and D.
10. SUPPLY OF PRODUCT AND SPARES
10.1 END-OF-LIFE PURCHASES. In the event of termination or expiration of
this Agreement, Bay Networks will be entitled, at its option, to place a
non-cancelable order for a "life cycle purchase" of the Private Label Products
at least 15 days prior to the effective date of such termination or expiration,
for delivery within 180 days after the effective date of Agreement termination
or expiration.
10.2 AVAILABILITY OF PRODUCT AND SPARES. First Virtual will make
available to Bay Networks spare, replacement, and maintenance parts necessary to
enable Bay Networks to support the Private Label Products for a period of at
least five years after the date of the last delivery of the product to Bay
Networks. First Virtual will make these parts available to Bay Networks at
prices that are at least as low as the prices being charged to First Virtual's
other customers with similar terms and conditions.
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11. BACK-UP MANUFACTURING LICENSE
11.1 MANUFACTURING LICENSE. First Virtual grants to Bay Networks a
non-exclusive license to manufacture or have manufactured for Bay Networks the
Private Label Products for the term of this Agreement; provided that such
license shall be exercisable only in the event that First Virtual becomes
bankrupt or insolvent, makes a general assignment for the benefit of creditors,
or if a receiver is appointed to take possession of any part of First Virtual's
assets. As further conditions to the exercise of the license under this
paragraph, Bay Networks (1) shall pay to First Virtual an appropriate license
fee and/or royalty, to be negotiated in good faith, for the license pursuant to
this paragraph, and (2) shall purchase from First Virtual all quantities of
Private Label Products then ordered.
11.2 DELIVERY OF DOCUMENTATION. Within 60 days after the license granted
pursuant to Section 11.1 becomes exercisable, First Virtual shall deliver to Bay
Networks all documentation and other information necessary, desirable or
appropriate to enable a reasonably skilled party to manufacture Private Label
Products complying with the specifications. These materials shall include the
particular items in use at that time, without limitation:
1. Bill of materials and vendor listing
2. Assembly drawing(s)
3. Schematics
4. Printed circuit fabrication drawing
5. Printed circuit mechanical layout
6. Printed circuit film
7. CAD Tape
8. Functional description
9. Engineering test report
10. Engineering design specification
11. Manufacturing procedures, work instructions and test procedure
Thereafter, but only during the term of this Agreement, in response to
requests from Bay Networks, First Virtual shall deliver to Bay Networks
revisions and updates to the foregoing information in order to permit Bay
Networks to manufacture or have manufactured Private Label Products which are as
current as the most current versions of the First Virtual standard products. All
information delivered by First Virtual to Bay Networks under this Section 11
shall be deemed to be Proprietary Information belonging to First Virtual for
purposes of Sections 12 and 7.5.
11.3 SCOPE OF LICENSE. The license granted under Section 11.1 shall be
deemed to be a license of all of First Virtual's proprietary rights in the
Private Label Products and in the materials described in Section 11.2, whether
such rights arise under patents, issued or which may issue, copyrights, maskwork
rights or trade secrets. Bay Networks' license rights are limited to, and may be
exercised solely for the purpose of, manufacturing the Private Label Products,
but such rights shall include the right to grant sub-licenses to Bay Networks'
manufacturing affiliates. The license granted under this Section 11 shall
terminate upon termination of this Agreement.
12. CONFIDENTIAL INFORMATION.
12.1 CONFIDENTIAL AND PROPRIETARY INFORMATION. The parties understand
that each will disclose to the other in connection with this Agreement, certain
of its proprietary or confidential information which is to be protected in
accordance with the terms of this Agreement.
12.2 DEFINITION. The term "Confidential Information" as used herein shall mean
any and all information disclosed by a party in written or other tangible form
which is clearly marked as
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being confidential or proprietary information of the party; oral information
designated as confidential by the disclosing party at the time of disclosure and
summarized and identified as being confidential in writing within 30 days after
disclosure; or any other information of the kind which is commonly considered to
be confidential in nature. In addition First Virtual and Bay Networks anticipate
that they may exchange information about their respective marketing and sales
plans and strategies, and about specific, potential business opportunities, all
of which shall be deemed confidential information and subject to the obligations
described in this Section.
12.3 OBLIGATIONS. The party receiving Confidential Information shall (i)
maintain it in confidence and shall not disclose it to anyone other than its
employees or others acting under its control, (ii) use at least the same degree
of care to maintain its secrecy as the party uses in maintaining the secrecy of
its own proprietary, confidential and trade secret information, (iii) always use
at least a reasonable degree of care in maintaining its secrecy, (iv) use it
only for the purpose of performing its obligations under this Agreement, and (v)
deliver to the other party, upon request, all copies, notes, diagrams, computer
memory, media or other materials containing any portion of the other party's
Confidential Information.
12.4 LIMITATIONS. Neither party shall have any obligation concerning
that part of the other's Confidential Information which (i) was known to it
before its receipt from the other party without an obligation of
confidentiality, (ii) is lawfully obtained from a third party under no
obligation of confidentiality, (iii) becomes publicly available other than as a
result of an act or failure to act of the receiving party, (iv) is independently
developed by the receiving party, (v) is required to be disclosed pursuant to a
legal, judicial or administrative proceeding, or (vi) is disclosed by the
receiving party with the other party's written permission. Neither party will
disclose any part of the other party's Confidential Information to anyone except
those of its employees or contractors having a need to know the same in order to
accomplish the purposes of this Agreement and who have, before receiving access
to the information, acknowledged its confidential, proprietary and/or trade
secret nature and have agreed to be bound by the terms of this Section.
12.5 REMEDIES. If any part of a party's Confidential Information is
wrongfully disclosed or used then, in addition to the remedies provided by this
Agreement or by law, the party which provided the Confidential Information will
be entitled to an injunction preventing further disclosure or use of the
information by the other party or by any third parties to whom the Confidential
Information has been wrongfully disseminated.
13. TERM AND TERMINATION.
13.1 TERM. Unless earlier terminated in accordance with its terms, this
Agreement shall commence upon the Effective Date and continue for a period of 2
years.
13.2 TERMINATION. Should either party: (a) cease conducting business in
the normal course, become insolvent or bankrupt, make a general assignment for
the benefit of creditors, become generally unable to pay its debts as they
become due, suffer or permit the appointment of a receiver for its business or
assets, become subject to any levy, seizure, attachment or execution against it
or become subject to any proceeding under any statute of any governing authority
relating to insolvency or the protection of rights of creditors; or (b) fail to
perform any obligation required to be performed under this Agreement for a
period of 30 days after receipt of notice from the other party of such failure;
then such other party shall have the right to terminate this Agreement
immediately by giving written notice to the other of its election to do so. The
foregoing rights of termination are in addition to all other rights and remedies
provided in this Agreement or by law Should Bay Networks fail to pay any sum
when due under this Agreement, then if such failure continues for a period of
fifteen days after receipt of notice from First Virtual of such failure, First
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Virtual shall have the right to terminate this Agreement immediately by giving
written notice to Bay Networks of its election to do so. The foregoing rights of
termination are in addition to all other rights and remedies which may be
provided under this Agreement or by law.
13.3 TERMINATION ON FAILURE OF PRODUCT OR SYSTEM. Bay Networks will
conduct testing of the First Virtual products and of the behavior of the First
Virtual products as a component of a larger system involving Bay Networks
products. If the First Virtual products fails to operate in the manner desired
by Bay Networks, as a stand alone product or part of a system, then Bay Networks
may terminate this contract by providing 30 days notice of such intention to
terminate to First Virtual.
14. GENERAL PROVISIONS.
14.1 NOTICES. Any notices required to be given under this Agreement
shall be in writing and sent to the address of the appropriate party indicated
on the first page of this Agreement or to such other address as may have been
substituted by written notice. All such notices sent to Bay Networks shall be
addressed "Attention: Director, ATM Business Unit" with a copy to "General
Counsel".
14.2 FAILURE AND DELAY. Except as expressly provided in this Agreement
neither party shall be liable for its failure or delay in performance of its
obligations under this Agreement due to strikes, wars, revolutions, fires,
floods, explosions, earthquakes, government regulations, or other causes beyond
its control.
14.3 FOREIGN RESHIPMENT. This Agreement is made subject to all laws,
regulations, orders or other restrictions on the export from the U.S.A. of
products, documentation, or of other information about products, which may be
imposed from time to time. Neither party shall export, directly or indirectly,
any such products or information to any country for which an export license or
other governmental approval is required at the time of export without first
obtaining such license or approval.
14.4 ASSIGNMENT. This Agreement may not be assigned by either party
without prior written permission from the other. Any attempt by a party to
assign any right, or delegate any duty or obligation which arises under this
Agreement, without such permission, will be voidable.
14.5 WAIVER, AMENDMENT OR MODIFICATION. Any waiver, amendment or
modification of any right, remedy or other term under this Agreement will not be
effective unless in writing and signed by the party against whom enforcement is
sought.
14.6 LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE
FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES OR LOST PROFITS
OR COSTS OF SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY ARISING OUT OF THIS
AGREEMENT OR ANY PROVISION HEREOF, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY. THIS LIMITATION SHALL APPLY EVEN IF THE OTHER PARTY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.
14.7 RELATIONSHIP OF THE PARTIES; COSTS. The parties are each
independent contractors. No agency relationship between Bay Networks and First
Virtual is created by this Agreement. Neither party shall have any right or
authority to act on behalf of the other and neither party will represent that it
has such right or authority. Except as expressly provided in this Agreement,
each party shall bear its own costs in connection with the performance of it
obligations.
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14.8 PUBLICITY; MUTUAL APPROVAL. The parties acknowledge the importance
of maintaining as confidential the existence and terms of this Agreement, and
the business relationship it reflects. Neither party shall disclose the
existence or terms of this Agreement to any third party without the written
consent of the other party. All publicly distributed materials prepared by
either party that mention the other party, the products of the other party, or
this Agreement, shall be approved by both parties in writing before publication.
14.9 ENTIRE AGREEMENT; GOVERNING LAW. This Agreement, including its
schedules, constitutes the entire agreement between parties with respect to its
subject matter and shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
BAY NETWORKS, INC. FIRST VIRTUAL CORPORATION
By: /s/ Ronald V. Schmidt By: /s/ Ralph Ungermann
Name: Ronald V. Schmidt Name: Ralph Ungermann
Title: Chief Technical Officer Title: CEO
Date: November 3, 1995 Date 11/3/95
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INDEX TO SCHEDULES
Schedule A: Complete list of product that is the subject of this OEM agreement
Schedule B: Specifications of the Bay Networks Private Label Media Switch II
Schedule C: Specifications of the Bay Networks Private Label Media Adapter
Schedule D: Specifications of the Bay Networks Private Label 'MOS'
Schedule E: Private Labeling Specification
Schedule F: Pricing
Schedule G: Quality Standards
Schedule H: Support Services
Schedule I: Training
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Schedule A
COMPLETE LIST OF FIRST VIRTUAL PRODUCT THAT BAY NETWORKS INTENDS TO OEM
(I) Media Switch II
MS-BASE-FLEX Modular 8 x 25 Ports, 2 x 155 Ports,
I x Ethernet Port & Console Port
SDC-4A25 Daughter Card 4 x ATM 25 Mb/s Ports
MS-SNMP SNMP Agent for MS-BASE-FLEX
(II) Media Adapters
MA-PCI-BA25 PCI bus Modular Adapter
MA-ISA-BA25 ISA bus Modular Adapter
(III) Multimedia Operating System
MOS-1 Single User MOS
MOS-10 10 User MOS
MOS-30 30 User MOS
MOS-100 100 User MOS
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Schedule B
SPECIFICATION FOR THE BAY NETWORKS PRIVATE LABEL
MEDIA SWITCH II
1. The specific model Media Switch II that forms the 'base' of this Bay Networks
specific version is the First Virtual part # MS-BASE-FLEX. It consists of a
double height enclosure with various empty slots. The bottom slot row shall
contain two 4 x 25Mb/s ATM modules, one 2 x OC-3 ATM module, one Ethernet module
(also supporting management and console connection). The top slot row shall be
empty and covered by the appropriate face plates.
2. Also available to complete the above system shall be a separate 4 x 25Mb/s
ATM module (First Virtual part #SDC-4A25). A fully populated Media Switch II
shall be able to support a total of 20 25Mb/s ATM ports in five discreet
modules.
3. The Bay Networks OEM version of the First Virtual Media Switch II shall be
identical in all respects to standard product shipped by First Virtual, and from
time to time modified or enhanced by First Virtual in the normal course of
business except that:
a. The Media Switch II shall be painted in the standard Bay Networks corporate
colors.
b. The Media switch II shall bear the standard Bay Networks corporate logo in
standard corporate logo colors
C. The Media Switch II shall bear the Bay Networks name for the Media Switch II
on the front panel.
d. The Media Switch II will be packaged in the standard packaging of Bay
Networks.
e. The Media Switch II will be supplied with complete standard documentation
reformatted for Bay Networks use. The documentation will not be changed except
that all references to First Virtual shall be changed to Bay Networks as
appropriate, covers and design to be standard Bay Networks layout.
f. The Media Switch shall be equipped with MAC address chips that conform to the
standard Bay Networks MAC addressing range to facilitate simple identification
and management.
4. The Media Switch II shall support:
a. UNI 3.0 signaling from FCS until August 1996
b. UNI 3.1 signaling from June 1996 until August 1997
c. UNI 4.0 signaling from June 1997 until product EOL.
d. IISP from March 1996 until product EOL
e. PNNI from March 1997 until product EOL.
5. First Virtual will undertake to provide a complete SNMP graphical management
application to support all aspects of management and configuration of the First
Virtual switch. This application will support operation on all three of the
following platforms: SunNet Manager, HP OpenView and IBM Netview 6000. First
Virtual understands that this management application is required as a part of
its general access to the marketplace, and is not developed specifically for
this Bay Networks Agreement. The general purpose SNMP graphical application is
agreed to be available on all three platforms no later that June 30, 1996.
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6. First Virtual will undertake to incorporate Bay Networks MIB information into
the 'Private Label Manufactured' versions of the Media switch II's that will
allow the automatic discovery of the First Virtual switches and subsequent
placement on a topology map for the purpose of launching the above application
with respect to a particular switch (Bay Networks Sphere Topology). First
Virtual understands that this development will be a key aspect of the value
added solution that Bay Networks will provide to the marketplace. The
incorporation of software into the First Virtual switch to allow the automatic
discovery as outlined above shall be fully implemented no later that June 30,
1996. Bay Networks will provide all information required for First Virtual to
commence this development no later than October 31st, 1995. For each day after
October 31st. 1995 that Bay Networks fails to provide the required information,
First Virtual will have an additional day after June 30th, 1996 to complete the
development process.
7. First Virtual will work with Bay Networks to ensure that the LEC client
software on all supplied ATM NIC cards interoperates fully with the LAN
Emulation software produced by Bay Networks. Bay Networks will make all
reasonable attempts to ensure that its LANE software complies with the relevant
specifications of the ATM Forum.
8. First Virtual will ship the Bay Networks version of the Media Switch II with
the MS-SNMP (SNMP agent for the Media Switch II) packaged with each supplied
Media switch II.
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Schedule C
SPECIFICATION FOR THE BAY NETWORKS PRIVATE LABEL
MEDIA ADAPTER
1. The Bay Networks OEM version of the First Virtual 25Mb/s ATM Media Adapter
shall be identical in all respects to standard product shipped by First Virtual,
and from time to time modified or enhanced by First Virtual in the normal course
of business except that:
a. The First Virtual 25Mb/s ATM Media Adapter will be packaged in the standard
packaging of Bay Networks Private Labeled Product
b. The First Virtual 25Mb/s ATM Media Adapter will be supplied with complete
standard documentation reformatted for Bay Networks use. The documentation will
not be changed except that all references to First Virtual shall be changed to
Bay Networks as appropriate, covers and design to be standard Bay Networks
layout.
c. The First Virtual 25Mb/s ATM Media Adapter driver software will be supplied
on diskettes bearing the standard Bay Networks diskette labeling.
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Schedule D
SPECIFICATION FOR THE BAY NETWORKS PRIVATE LABEL
MOS: MULTIMEDIA OPERATING SYSTEM
The Bay Networks OEM version of the First Virtual MOS shall be identical in all
respects to standard product shipped by First Virtual, and from time to time
modified or enhanced by First Virtual in the normal course of business except
that:
a. The First Virtual MOS will be packaged in the standard packaging of Bay
Networks Private Labeled Product
b. The First Virtual MOS will be supplied with complete standard documentation
reformatted for Bay Networks use. The documentation will not be changed except
that all references to First Virtual shall be changed to Bay Networks as
appropriate, covers and design to be standard Bay Networks layout.
c. The First Virtual MOS software will be supplied on diskettes bearing the
standard Bay Networks diskette labeling.
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Schedule E
PRIVATE LABELING SPECIFICATION
Bay Networks shall provide engineering drawings, camera-ready artwork
film, and all other materials and instructions necessary to manufacture,
product labels and shipping boxes without supplemental documentation.
All Bay Networks Private Labeled Products delivered by First Virtual
shall comply with the following specifications regarding the private
labeling by First Virtual:
a) Bay Networks Private Labeled Product labels will bear the logos, trade
names and trademarks of Bay Networks as specified by Bay Networks. No
First Virtual logos, trademarks and trade names will be externally
visible on installed Bay Networks Private Labeled Products. Bay Networks
agrees not to affix any labels containing First Virtual logos,
trademarks or trade names to the Bay Networks Private Labeled Products.
b) Preprinted boxes with Bay Networks logos will be provided by First
Virtual and used for packaging the Bay Networks Private Labeled Product.
These individual product boxes must be placed within larger protective
shipping boxes for transit from First Virtual to Bay Networks.
c) Boxes containing the Bay Networks Private Labeled Product will include
Bay Networks versions of the appropriate Bay Networks Private Labeled
Product hardware installation manuals and documentation provided by
First Virtual as described in the Agreement and this Schedule, and
end-user warranty cards provided by Bay Networks.
d) The following documentation will be included with the Private Labeled
Products.
Media Switch: Installation and Configuration Guide
MOS: Installation and Configuration Guide
NIC Cards: Installation and Configuration Guide
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Schedule F
PRICING
PRODUCT PRICING
PRICING FOR OEM VERSION OF THE MEDIA SWITCH II AND OTHER ATM 25MB/S SWITCHES:
First [ * ] Units: [ * ] off the prevailing First Virtual List (Units [ * ])
Next [ * ] Units: [ * ] off the prevailing First Virtual List (Units [ * ])
Next [ * ] Units: [ * ] off the prevailing First Virtual List (Units [ * ])
Over [ * ] Units: [ * ] off the prevailing First Virtual List (Units [ * ])
PRICING FOR THE OEM VERSION OF THE OPTIONAL 25Mb/S MODULES:
This shall be at the discount level in effect for the above switches when the
order for the Optional 25Mb/s modules is placed.
PRICING FOR THE SNMP AGENT FOR THE SWITCH:
This shall be at the discount level in effect for the above switches when the
order for the SNMP agent is placed.
PRICING FOR OEM VERSION OF THE 25Mb/S ATM NETWORK INTERFACE CARDS: [ * ] off
the prevailing First Virtual List
PRICING FOR OEM VERSION OF THE MULTIMEDIA OPERATING SYSTEM: [ * ] off the
prevailing First Virtual List
PRICING FOR ALL OTHER FIRST VIRTUAL PRODUCT FOR RESALE TO OTHERS: [ * ] off the
prevailing First Virtual List
PRICING FOR BAY NETWORKS DEMONSTRATION SYSTEMS FOR TESTING, TRAINING AND SUPPORT
REQUIREMENTS: [ * ] for up to 100 switch units in the first year following the
execution of this Agreement. These units will not be used in calculating
discounts set forth above.
PRICING FOR ALL OTHER FIRST VIRTUAL CONSULTING SERVICES IF REQUIRED BY BAY
NETWORKS FOR THE PURPOSES OF SECTION 5.1: Engineer: [ * ], Lead Engineer [ * ],
Manager [ * ].
NON RECURRING ENGINEERING
GENERAL CUSTOM WORK AS DESCRIBED IN THESE SCHEDULES: [ * ] - Payable 30
days after signing this Agreement.
IMPLEMENTATION OF THE BAY NETWORKS SPHERE TOPOLOGY MIB FOR THE PURPOSES OF
`AUTODISCOVERING' THE FIRST VIRTUAL SWITCH: [ * ] - Payable [ * ] on delivery
of the [ * ] and [ * ] on acceptance of the [ * ]
GRAPHICAL USER INTERFACE DEVELOPMENT: [ * ] - Payable [ * ] on acceptance of
[ * ] on acceptance of the [ * ]
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Schedule G
BAY NETWORKS QUALITY WORKMANSHIP STANDARDS
1. Color, texture and workmanship of any sheet metal shall meet the requirements
of Bay Networks Procedure QAI-001-D. If the First Virtual procures sheet metal
from a supplier not listed on Bay Networks AVL, paint chips will be provided to
First Virtual by Bay Networks and shall be used as minimum acceptable, maximum
acceptable and preferred criteria for paint shade and texture.
2. Bare printed wiring boards shall meet the workmanship requirements of
ANSI/IPC-A- 600D, Class 2.
3. Printed circuit assemblies shall meet the requirements of ANSI/IPC-A-610A,
Class 2 for plated through hole technology. Printed circuit assemblies with
surface mount devices shall meet the requirements of SMT/Fine Pitch Technology
Workmanship Guidelines, Class 2, published by Phil P. Marcoux (PPM Associates).
The SMT Workmanship Guidelines will be provided to First Virtual by Bay
Networks.
4. First Virtual Corporation's product shall be subject to Bay Networks Quality
Assurance Procedure (QAP-019-A), which outlines the sample inspection plan and
qualification requirements for First Virtual Corporation's product to meet
"Dock-to-Stock" status
5. First Virtual must document and execute testing strategy that achieves a 95%
confidence level of no greater than 0.5% infant mortality of the finished
product. The test strategy shall include stress testing to validate the
functional design requirements as well as demonstrating the infant mortality
rate.
6. Bay Networks reserves the right to audit the First Virtual Corporation's
production or subcontract facilities to observe the manufacturing processes and
inspect product designated for use as specified in this agreement.
7. It is preferred (but not required) that the First Virtual be in compliance
with ISO 9002 (International Quality Assurance Management System Standard for
Production and Installation).
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SCHEDULE H
SERVICE AND SUPPORT SERVICES
GENERAL
The availability of support for the Bay Networks Private Label 25Mb/s ATM
products from First Virtual shall continue for at least the lesser of:
(i) Five years after a product is removed from the Bay Networks price list.
(ii) Five years after a base product is removed from the First Virtual
Corporations price list.
TECHNICAL SUPPORT
Bay Networks Customer Service Organization shall have direct access to technical
support from First Virtual Corporation. Bay Networks shall define up to four
people who shall have this direct technical support access. The Director of Bay
Networks Technical Operations will modify the personnel list as is time to time
required.
ESCALATION PROCESS
First Virtual will provide access to the technical support resources sufficient
to effect their support responsibilities under this agreement for a minimum of
five days a week 8 hours a day (5 X 8). Technical information requests from Bay
Networks must be responded to within two (2) hours. Escalations shall generally
follow this path:
FIRST EVENT: The end-use customer or Bay Networks business partner calls
Bay Networks to report a problem with the First Virtual Private Label
equipment.
SECOND EVENT: Bay Networks attempts to solve the problem using its
internal support resources.
THIRD EVENT: Bay Networks escalates the problem if unsolved at Second
Event to higher level internal technical support
FOURTH EVENT: Bay Networks escalates the problem if unsolved at Third
Event to First Virtual technical support.
In the event of failure of the general escalation process to resolve the
technical problems with the Bay Networks Private Label Product, First Virtual
shall provide on-site technical support capable of identifying/isolating any
design deficiency of First Virtual product or interoperability problem with Bay
Networks products or other third party products. If requested by Bay Networks
following the failure to resolve a technical problem, First Virtual shall
provide technical support to a location determined by Bay Networks (but within
the USA) within two business days.
MTBF
First Virtual will provide actual field MTBF numbers for the Private Label
25Mb/s product set assembly and subassembly modules.
MTTR
First Virtual will provide restoral times and demonstrate the capability to
perform fault isolation to the field replaceable parts of the Private Label
Products. First Virtual shall demonstrate the ability to satisfactorily use
applicable product, technology, tools and test equipment to maintain the
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equipment. For equipment which Bay Networks will install and maintain First
Virtual must demonstrate that MTTR objectives can be met.
MTTI
First Virtual must be able to define the installation times for each component
of the purchased equipment. Hardware and Software installation includes
unpacking, inspection, rack mount or table top installation, and installation
and configuration of operational software including any SNMP agent software,
device driver, operating system or the like. First Virtual shall demonstrate the
ability to satisfactorily use applicable product, documentation, tools and test
equipment to install the equipment. For equipment which Bay Networks will
install and maintain First Virtual must demonstrate that MTTI objectives can be
met.
TEST EQUIPMENT REQUIREMENTS / AVAILABILITY
First Virtual shall make available to Bay Networks for a reasonable and agreed
price any test equipment to include diagnostics, test fixtures, test devices so
as to ensure that Bay Networks may adequately provide services to Bay Network's
customers. Bay Networks shall have the right to purchase or reproduce and
distribute diagnostic tools for internal and Third Party Service use only.
TOOLS REQUIREMENTS / AVAILABILITY
First Virtual shall make available to Bay Networks for a reasonable and agreed
price any special tools necessary to install and maintain First Virtual
equipment should Bay Networks agree to install and maintain First Virtual
equipment. Tools may include but are not limited to special physical tools,
software debug utilities, special diagnostics, etc. Bay Networks shall have the
right to purchase or reproduce and distribute diagnostic tools for internal and
Third Party Service use only.
DOCUMENTATION
Documentation may be but is not limited to: User documentation, Application
documentation, performance tests, test procedures, white papers, notes,
technical bulletins, functional specifications, design specifications,
schematics, parts lists, source code, field service documentation etc. Bay
Networks may use and reproduce First Virtual's documentation in the interest of
First Virtual.
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SCHEDULE I
TRAINING
TRAINING DOCUMENTATION
First Virtual will provide three sets of its standard training material
including where appropriate, handouts, overheads, outlines,syllabus, labs,
manuals etc. Additional material should be available for an agreed price. If the
training course is updated three copies of updated training materials will be
provided to Bay Networks 60 days prior to product release.
COURSE AVAILABILITY
First Virtual will provide training courses for the Technical Response Centers
and internal training developers within 30 days prior to product availability at
Bay Network's facility of choice. First Virtual will make training courses
available for U.S. Field Operations & Third Party Service Providers prior to
product availability at Bay Network's facility of choice. Details regarding type
of class, content, audience, location and size will be negotiated. Training for
future options, functional enhancements and upgrades must be offered by First
Virtual and participation is solely at Bay Networks option.
PRICING
Pricing for the courses provided by First Virtual at Bay Networks will be as
follows:
[ * ] Per instructor (including travel time), plus [ * ], Bay Networks to
provide [ * ].
[ * ] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Amendment to
BAY NETWORKS COMMUNICATIONS, INC.
and
FIRST VIRTUAL CORPORATION,
ORIGINAL EQUIPMENT MANUFACTURING AGREEMENT
Bay Networks, Inc. and First Virtual Corporation have entered into an Original
Equipment Manufacturing Agreement (the "Agreement") dated November 3,1995. This
Amendment, upon execution by both parties, is made effective and deemed part of
the Agreement. The parties hereby agreed to modify the Agreement as follows.
1. The following is inserted as paragraph 7.6
7.6 OWNERSHIP OF JOINT TECHNOLOGY. The parties shall be joint owners respecting
all intellectual property embodied in or related to jointly developed technology
without right of accounting for royalties to the other party.
2. The parties agree that the SNMP graphical management application as described
in Schedule B, Item 5 of the Agreement will be Joint Technology and will be
jointly owned as set forth in paragraph 7.6. The parties further agree that Bay
Networks will bundle and market the SNMP graphical management application as
part of its Optivity management offering and First Virtual will market it as a
standalone network management application.
Except as explicitly stated in this Amendment, the terms and conditions of the
Agreement shall remain in full force and effect.
Bay Networks, Inc. First Virtual Corporation
By: /s/ Rob Newman By: /s/ J.O. Mitchell
Name: Robert Newman Name: J.O. Mitchell
Title: VP Switch Products Title: COO
Date: June 14, 1996 Date: 6/14/96
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Amendment 2 to
Original Equipment Manufacturing Agreement
Bay Networks, Inc. and First Virtual Corporation have entered into an Original
Equipment Manufacturing Agreement (the "Agreement") dated November 3,1995 and
amended on June 14,1996. This Amendment 2, upon execution by both parties, is
made effective and deemed part of the Agreement. The parties hereby agreed to
modify the Agreement as follows. Paragraph and Schedule references below
correspond to the Paragraph and Schedule numbers in the Agreement.
1. Paragraph 1.1 Private Labeled Products, is modified to delete "the 25Mb/s ATM
PCI and ISA Media Adapter Card models and Multimedia Operating System models",
resulting in the 25Mb/s modular ATM Media Switch II models, as the only Private
Label Product.
2. Beginning with the effective date of this Amendment 2, and upon placement of
purchase orders for demonstration systems, and product as provided for in this
Amendment 2, pricing for all First Virtual products purchased by Bay Networks
under the Agreement, as amended, shall be [ * ] off the prevailing First Virtual
List Price and the Schedule F, Product Pricing is no longer in effect.
3. Bay Networks will place an order for [ * ] Demonstration Systems, as
described in Attachment 1 to this Amendment 2 not later than [ * ]; and [ * ]
will be scheduled for delivery in [ * ] and [ * ]. The remaining [ * ]
Demonstration Systems will be scheduled for future delivery, at Bay's option.
The price of these Demonstration Systems so described in Attachment 1 will be
[ * ]. Such Demonstration Systems may be resold by Bay Networks.
4. Not later than October 15, 1996, Bay Networks will place two Purchase Orders:
(1) for [ * ] BRI gateways, [ * ] PRI gateways, [ * ] V Casters, [ * ] 50hr
cache, to be received [ * ] and (2) for [ * ] switches, for delivery as
follows: [ * ] to be received [ * ] and [ * ] in [ * ].
5. Paragraph 2.4 is deleted and the following is substituted:
"2.4 CANCELLATION OR POSTPONEMENT OF ORDERS. Bay Networks may cancel or
reduce the quantity of any order without liability on or before 30 days
in advance of the ship date specified in Bay Networks' order without
cancellation charge. Bay Networks may postpone the delivery of any
portion of an order one time for up to 180 days without any liability by
delivering written notice to First Virtual on or before 30 days in
advance of the ship date specified in Bay Networks' order."
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
27
6. The parties agree to make a commitment to market the First Virtual products
and their use with Bay Networks products, including participation in trade
shows, publication of white papers, advertisement and other such activities, as
each party may determine is appropriate in its own discretion. Bay Networks
agrees that it will budget and it intends to expend approximately [ * ] for such
in marketing and First Virtual agrees that it will budget and it intends to
expend approximately [ * ] for such in marketing.
7. Bay Networks and First Virtual will collaborate on video for distribution for
internal and external marketing and sales. The video will include an appropriate
business leader from Bay Networks and will be distributed to all Bay Networks
and First Virtual sales personnel. The video be completed on a best effort
basis, targeted to be completed within 60 days of this signing this Amendment 2.
Each party will be responsible for its own expenses in the production of the
video and such expenses will be considered part of the joint marketing described
in paragraph 6 of this Amendment 2.
8. On or before October 15,1996, Bay Networks will make a public announcement
that it is now carrying the entire First Virtual product line and will include
in that announcement the reason for selecting First Virtual, in accordance with
the terms of Paragraph 14.8.
9. Bay Networks' resellers outside of the United States may purchase First
Virtual products directly from Bay Networks. To compensate First Virtual for
providing [ * ] support for such international sales of First Virtual products
by Bay Networks resellers, Bay Networks will pay First Virtual an amount equal
to [ * ] of the actual [ * ] paid to Bay Networks (in U.S. dollars). Bay
Networks will disburse payments to First Virtual, on a quarterly basis, within
30 days following quarter-end of March 31, June 30, September 30 and December
31, based on [ * ] for First Virtual products during the preceding quarter.
Except as explicitly stated in this Amendment 2, the terms and conditions of the
Agreement, as amended, shall remain in full force and effect.
Bay Networks, Inc. First Virtual Corporation
By: /s/ Rob Newman By: /s/ J.O. Mitchell
Name: Robert M. Newman Name: J.O. Mitchell
Title: VP LAN BACKBONE Title: COO
Date: September 30TH, 1996 Date: 9/30/96
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Amendment 3 to Original Equipment Manufacturing Agreement
Bay Networks, Inc. and First Virtual Corporation have entered into an Original
Equipment Manufacturing Agreement (the "Agreement") dated November 3rd, 1995 and
amended on June 14th, 1996 and further amended September 30th, 1996. This
Amendment 3, upon execution by both parties is made effective and deemed part of
the agreement. The parties hereby agree to modify the agreement as follows.
Paragraph and Schedule references below correspond to the Paragraph and Schedule
numbers in the Agreement.
1. Beginning on the effective date of this amendment pricing for new
orders for First Virtual product placed under this agreement shall be.
(a) [ * ] off the prevailing First Virtual list price for
[ * ] products except that
(b) Products falling under the [ * ] subsection of the First
Virtual price list shall be at [ * ] off the prevailing First
Virtual list price.
(c) Any current or future [ * ] products priced at [ * ] or less,
[ * ] shall be at [ * ] off the prevailing First Virtual list
price.
Bay Networks, Inc.
By: /s/ John Jaeger By: /s/ J.O. Mitchell
Name: John Jaeger Name: James O. Mitchell
Title: Director, Switched Internetworking Title: COO/CFO
Date: 4/7/97 Date: 4/9/97
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.