Exhibit 10.19
COLLABORATION AGREEMENT
OEM AGREEMENT (the "Agreement") dated August 6, 1999, between Phasecom
Ltd., an Israeli company having its principal address at 11, Kiryat Hamada
Street, Har Hotzvim, P. O. Box 45017, Jerusalem 91450, Israel, ("Phasecom") and
ADC Telecommunications, Inc., a Minnesota corporation having its principal
address at P. O. Box 1101, Minneapolis, Minnesota 55440-1101, USA ("Buyer" or
"ADC").
WHEREAS, the Parties wish to collaborate with each other with respect to
the development, manufacture, and marketing of certain Products (as defined
herein) on the terms and condition set forth in this Agreement and in its
various Exhibits, which are as follows:
Exhibit A: Products and Pricing
Exhibit B: Specifications
Exhibit C : Product Developments
Exhibit D : Statement of Work
Exhibit E : Marketing
Exhibit F: Change Procedures
Exhibit G: Product Qualification and Regulatory Approvals Process
Exhibit H: Terms and Conditions of Sale
Exhibit I: Training
Exhibit J: Quality and Inspection
Exhibit K: Packaging Standards
Exhibit L: Form of Escrow Agreement
Exhibit M: Support of Products; Problem Escalation
Exhibit N: MAC License and Supply Agreement
Exhibit O: IP Disclosure
WHEREAS, ADC and Phasecom wish to collaborate in connection with the
development, supply, and marketing of the Products (defined below) covered by
this Agreement;
WHEREAS, Phasecom intends to devote sufficient energy and resource to the
development and supply of the Products (defined below) to achieve commercial
success of the collaboration; and
WHEREAS, ADC intends to devote sufficient energy and resource to the
marketing of the Products to achieve commercial success of the collaboration.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties agree as follows:
1. COLLABORATION.
a. The parties agree to collaborate with each other with respect to the
development, production and marketing of the products specified in Part I of
Exhibit A and any new products made subject hereto pursuant to Section 2, below
(collectively the "Products") in accordance with the terms of this Agreement. In
addition, the parties intend to enter into future
COLLABORATION AGREEMENT PAGE 1
negotiations to expand their collaboration to wireless LMDS products, either via
amendment to this Agreement or via a separate agreement.
b. Phasecom hereby grants to Buyer the right to purchase the Products
(as they are and become available) for resale and distribution to Buyer's
customers ("Customers") worldwide (subject to those exceptions, if any, set
forth in Exhibit E) and for internal, evaluation, demonstration, and marketing
uses incident thereto; and to service and maintain the Products for such
Customers subject to the terms and conditions set forth in this Agreement. It is
understood that Buyer's subsidiaries and affiliates will have the same right as
Buyer to purchase the Products under the terms of this Agreement; provided, that
Buyer will guaranty payment for any purchases of Product made by any such
subsidiary or affiliate.
c. The foregoing rights granted to Buyer will be subject to the
exclusivity and non-exclusivity provisions of Exhibit E.
d. Buyer is fully familiar with the existing Products and will assume
responsibility for the marketing of the Products to the Customers as a
value-added reseller and will provide the level of after-sales technical support
normally associated with value-added resellers.
e. Each party shall at all times act as an independent contractor in
fulfilling its obligations in accordance with the terms of this Agreement.
Nothing in this Agreement shall constitute or be deemed to create an agency or
partnership or employment relationship between the parties hereto for any
purpose whatsoever. Neither party shall have any authority or power to bind the
other, to give any representation, warranty or other commitment except as
expressly authorized in writing by the other party.
f. This Collaboration Agreement shall be effective and binding on the
parties on and after the date that the purchase of shares contemplated under the
terms of that certain Series C Preferred Stock Purchase Agreement closes.
2. PRODUCT SPECIFICATIONS, NEW PRODUCTS, QUALIFICATION; APPROVALS
a. The functional requirements and performance specifications for the
Products will be as set out in Exhibit B to this Agreement (the
"Specifications"). Once established and made a part of Exhibit B, such
Specifications will not be changed other than through the engineering change
procedures set out in Exhibit F hereto. The parties may, by mutual agreement,
add new Products to the scope of this Agreement on the basis described in
Exhibit C. For new Products thus added to this Agreement, the Parties will
negotiate in good faith to establish separate Specifications to be included as
part of Exhibit B. For Products which are not yet fully developed, Phasecom will
develop such Products in accordance with the provisions of Exhibits C and D to
comply with all applicable Specifications for such Products. The ownership of
intellectual properties arising out of such developments will be as set out in
Exhibit C.
b. The allocation of responsibilities and the processes to be used for
qualifying each Product covered by this Agreement are set out in the attached
Exhibit G.
c. The allocation of responsibilities and the processes to be used for
obtaining applicable regulatory approvals for each Product covered by this
Agreement are set out in the attached Exhibit G.
COLLABORATION AGREEMENT PAGE 2
3.BUYER'S PURCHASE AND PAYMENT.
a. Phasecom agrees to sell Buyer the Products in accordance with
purchase orders placed by Buyer and accepted by Phasecom pursuant to this
agreement. All purchase orders submitted by Buyer to Phasecom shall: (i) specify
a delivery date no sooner than thirty (30) days from the date of the purchase
order; (ii) contain definitive list prices, Product numbers, quantities and
discounts to the extent applicable; and (iii) shall be signed and dated by an
authorized representative of Buyer. Purchase orders shall be binding on Phasecom
only when accepted in writing by Phasecom. Phasecom shall accept all Buyer
orders which conform to the above requirements and are consistent with Buyer's
forecasts. Phasecom will use all reasonable commercial endeavors to accept and
fill orders which differ from Buyer's forecasts. Phasecom will confirm each
order by Buyer and notify Buyer of the date of delivery within seven (7) days of
receipt of the order. All purchase orders will be subject to the terms and
conditions of sale set out in Exhibit H to this Agreement, as such may be from
time-to-time amended by written agreement between the parties.
b. For any Product, the Purchase Price will be as set forth in Part II
of Exhibit A. New or customized versions of the Products will be sold at prices
and discounts to be negotiated by Phasecom and Buyer consistent with the pricing
principles underlying the pricing described in Part II of Exhibit A.
c. Buyer's Purchase Price does not include any excise, sales, use,
value added or other taxes, tariffs, duties or fees that may be applicable to
the Products which amounts shall be paid by Buyer.
d. Buyer will be entitled to [***] for wireless applications of the
Product, meaning that:
(1) if Phasecom makes a Product (or substantially similar
Product) [***] then Phasecom shall notify Buyer [***]; and
(2) if such other Phasecom [***] is an [***], rather than a
[***] will be understood to mean [***].
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
e. The parties contemplate that during the term of this Agreement, ADC
may become a supplier to Phasecom of wireless modems which incorporate the
Phasecom MAC Product (as defined in Exhibit N). In that event, it is the
intention of the Parties that Phasecom
COLLABORATION AGREEMENT PAGE 3
would be extended comparable MFC status for its purchases of such wireless
modems from ADC.
f. In order to assist Phasecom in planning its production, Buyer shall
provide Phasecom with twelve (12) month rolling forecasts of its anticipated
purchases of Products. The first such forecast shall be provided within five (5)
days after execution of this Agreement. Thereafter, subsequent forecasts will be
provided on a monthly basis. The first two months of any forecast will be
considered to be a binding forecast. The third and fourth months of the forecast
will be subject to change in the subsequent forecast provided that for each
month, the forecast may not be less than xxx of the preceding value and not more
than xxx greater than the preceding value. The fifth and subsequent months of
the forecast will be subject to change without restriction. Phasecom will not be
obligated to accept orders which exceed the forecast quantities for the most
current (i.e. binding) month, but will use all reasonable endeavors to
accommodate such orders.
g. Buyer shall pay for all Products ordered in US dollars (to one or
more US depository accounts designated in writing by Phasecom) by paying the
Purchase Price [***] days after confirmed receipt of conforming goods (per
Exhibit B) by Buyer, or [***] after Phasecom's invoice date, whichever is
later (the "Payment Terms"). Receipt of goods will be confirmed via dock
receipt or equivalent documentation. Payment according to the Payment Terms
is subject to credit approval by Phasecom prior to delivery of Products. If
Phasecom does not approve Buyer's credit, Buyer shall pay the Purchase Price
cash on delivery (COD) for all Products. At Buyer's request and expense,
Phasecom shall re-evaluate Buyer's credit for approval by Phasecom. If upon
such review Phasecom approves Buyer's credit, then Buyer may (as long as
Buyer's credit remains approved by Phasecom) pay Phasecom according to the
Payment Terms for all purchase orders submitted after the date of such
approval . Past due balances shall be subject to a late fee of [***] per
month computed from the due date of each invoice previously issued, or the
maximum legal rate, whichever is lower. If Buyer remains delinquent with
regard to the payment of any invoice due more than [***] days after receipt
of written notice, Phasecom may terminate this Agreement for material breach.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
h. Buyer agrees to pay the cancellation charges specified below in the
event Buyer cancels any purchase order. The cancellation charges are as follows
(days referred to are days between Phasecom's receipt of the written
cancellation and Phasecom's scheduled delivery date):
Cancellation Fee
Days Prior to Scheduled Delivery as a Percentage of List Price
-------------------------------- -----------------------------
[***] [***]
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
The parties agree that it would be extremely difficult to determine the exact
damages incurred by Phasecom from Buyer's cancellation of a purchase order. The
parties agree that the foregoing amounts represent the parties' best estimates
of such damages, and that the amounts to be paid as cancellation fees as
specified above are fair and reasonable, and will be the exclusive remedy
available to Phasecom for cancellation.
COLLABORATION AGREEMENT PAGE 4
i. ADC may not reschedule any orders less than [***] prior to the
scheduled delivery date. At least [***] prior to the scheduled delivery date
for an order, ADC may reschedule the delivery of the order for a period not
to exceed [***]; provided that ADC may reschedule any order only one time.
j. In the case where Phasecom makes a change to any Product which
enhances product safety or corrects a product safety defect in any way, Phasecom
shall notify Buyer and afford Buyer a right to return any of its stock of the
affected Product for an equal and offsetting quantity of the improved Product,
at no charge to Buyer other than the cost of return freight to a US destination.
k. Phasecom will negotiate in good faith with ADC on a case-by-case
basis to make such changes in the terms of this Agreement (e.g. - warranty and
delivery terms) as may reasonably be necessary for ADC to win business with its
Customers and prospects while maintaining reasonable margins for Phasecom and
ADC. When agreed in advance by the parties before a Customer contract is made by
ADC, back-to-back provisions from the Customer contract will supersede
inconsistent portions of these standard terms and conditions. Likewise, when
warranted by the circumstances and agreed in advance in writing by the parties,
the "first deliveries" of a particular product will be subject to the same
acceptance procedures as specified in the corresponding Customer contract,
whereby acceptance of the Product will take place upon acceptance by the
Customer of such Product.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
4. DELIVERY AND SHIPPING.
a. All deliveries will be [***] Phasecom's shipping locations,
provided however, if for any calendar quarter, the shipping and other costs
associated with a shipping location exceed those from [***] by more than [***],
the incremental costs are to be borne by Phasecom. In this Agreement, the
term [***] will be as defined in the [***] published by the [***]. With the
exception of [***], Buyer will have [***].
b. All Products shipped to Buyer shall contain at least one packing
slip for each order, which shall state the quantity, Product numbers, country of
origin, applicable purchase order number, Buyer's name as importer and Buyer's
address.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
5. DUTIES OF BUYER.
a. Buyer shall not acquire any rights in respect of Phasecom's name or
marks, including without limitation "Phasecom"; provided, however, that Buyer
may represent itself as an authorized reseller of the Products during the term
of this Agreement. After the termination of this Agreement, Buyer will not use
names or marks of Phasecom or any words so similar to such names or marks as to
be likely to cause confusion or deception.
b. Except as permitted by Section 12, Buyer agrees not to reverse
engineer, reverse assemble, reverse compile, copy, modify or remanufacture any
Product or any part
COLLABORATION AGREEMENT PAGE 5
thereof. Buyer agrees that all mask sets, design types, processing information
and other intellectual property of Phasecom shall be and remain the sole
property of Phasecom.
c. Buyer will demonstrate, sell and support Phasecom's Products
purchased or licensed under this Agreement and will provide first tier
maintenance for those Products. Buyer shall employ, train, and maintain
sufficient personnel with technical skill and sales experience to demonstrate,
sell and support such Products and to provide such first tier maintenance.
Except as may be otherwise specified in Exhibit M, "first tier maintenance" will
mean basic customer support and diagnostics relative to claimed Product
problems. For modem units, first tier maintenance will not include any
diagnostics or repairs which require opening the housing. For MTS Products,
first tier maintenance will include board replacements, software/firmware
upgrades and replacements, but will not include any lower-level repairs or
component changes.
d. Buyer shall at all times during the term of this Agreement use all
reasonable commercial efforts in the promotion of the Product consistent with
good business ethics and in a manner that will reflect favorably on Phasecom's
Products and on the good will and reputation of Phasecom. During the term of
this Agreement, Buyer will not supply any wireless data-only modem products
(other than the Products or Products manufactured by ADC under the terms of this
Agreement) to any account which remains "exclusive" to ADC in accordance with
the terms of Exhibit E.
e. Regardless of any disclosure made by Buyer to Phasecom of an
ultimate destination of the Product, Buyer agrees not to export, either directly
or indirectly, any Product without first obtaining a license to export or
re-export from the United States Government, as may be required, and to comply
with the United States Government Export Regulations, as applicable.
f. Buyer shall comply with all applicable legal requirements respecting
the Products and this Agreement and shall refrain from engaging in any illegal
trade practices with respect to the Products.
6. DUTIES OF PHASECOM.
a. In furtherance of the distribution of the Products pursuant to this
Agreement, Phasecom shall, at its expense unless otherwise specified:
i. provide for training relative to the Products on the basis set
out in Exhibit I. Training shall be provided at Buyer's facilities at times to
be mutually agreed upon.
ii. promptly provide Buyer with copies of all internal Phasecom
problem reports respecting issues affecting the safety, performance, or
reliability of the Products covered by this Agreement.
iii. notify Buyer of changes to the Products in accordance with
Exhibit F. In the event Phasecom decides to discontinue any Product, it shall
provide Buyer with [***] and afford Buyer an opportunity to make a last time
buy of the Products.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
COLLABORATION AGREEMENT PAGE 6
iv. supply technical support and spare parts for the Products
at charges to be set in the reasonable discretion of Phasecom for [***] from
the date of supply, or, if any of the Products are discontinued, for [***]
from the date of discontinuance.
v. make available to Buyer for distribution hereunder such new
Products, upgrades and fixes, if any, as Phasecom may introduce to supplement or
replace the Products. Unless otherwise agreed in writing by the parties, the
discounts and terms for such Products will be those set out in this Agreement.
vi. promptly provide Buyer with all applicable product manuals,
brochures, and other reseller and user documentation, in electronic format, as
such is developed and released by Phasecom to its resellers and customers.
b. Phasecom agrees to deliver Products having Buyer's trademarks and
logos as directed by Buyer. Phasecom shall not use any names or trademarks of
Buyer in any way without the prior written consent of Buyer and shall not
acquire any rights in respect of Buyer's name or trade marks; provided, however
that upon receipt of prior written approval from Buyer, Phasecom may state that
it is manufacturing the Products for Buyer during the term of Agreement. After
the termination of this Agreement, Phasecom will not use names or marks of
Buyer.
c. Phasecom shall comply with all applicable legal requirements
respecting the Products and this Agreement and shall refrain from engaging in
any illegal trade practices with respect to the Products.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
7. MAINTENANCE AND BACK UP SUPPORT.
a. Buyer shall be responsible for providing ongoing after-sales
technical support to its Customers for the Products.
b. In addition to the repair of Products in accordance with the
warranty contained in Section 9, Phasecom will make available to Buyer, upon
request, any technical information or assistance that Buyer may reasonably
require to meet its obligations under Section 5.c., above.
8. QUALITY; INSPECTION TESTING.
a. Phasecom will provide all Products to Buyer in accordance with
Buyer's Quality Control Procedures, attached hereto as Exhibit J.
b. Phasecom will use its best efforts to achieve certification by
the International Standards Organization (ISO) by [***]. All Products
supplied by Phasecom will be designed and manufactured in accordance with all
applicable ISO 9001 standards and processes following Phasecom's ISO
certification.
c. Phasecom shall operate and maintain a quality system of documented
processes and procedures and shall endeavor to achieve zero defects in
connection with the Products.
COLLABORATION AGREEMENT PAGE 7
d. Following the execution of this Agreement and semi-annually
thereafter, Buyer shall have the right to perform an audit of the quality
processes and procedures of Phasecom and its vendors (to the extent permitted by
such vendors). Buyer shall provide Phasecom with at least fifteen days prior
notice of such audit and shall conduct the audit in a manner that avoids
unnecessary disruption to Phasecom's business activities. Any third party
auditors engaged by ADC to perform the auditing function will be bound by
confidentiality provisions consistent with those set out in Section 13.
e. Phasecom will inspect all Products prior to shipment in accordance
with the Joint Test Plan set out in Exhibit J, or such higher standards as
Phasecom normally applies to its own products.
f. Phasecom will support the initial Product qualification testing
process (described in Exhibit G) at a designated Buyer facility. Reasonable
travel, board, and living expenses for the supporting Phasecom team and any
transportation cost for material/equipment used in the testing shall be at
Buyer's expense.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
9. LIMITED WARRANTY, DISCLAIMER AND LIMITATION OF LIABILITY.
a. Phasecom warrants that the Products are free from defects in
material and workmanship for a period of [***] from delivery date of Product
to Buyer at the FCA point, or [***] from the date of Buyer's invoice to its
Customer, whichever occurs first (provided, however, that for any system sold
by ADC, the warranty on the Products included in the system will not extend
beyond the warranty term for other hardware components of the system.) This
warranty period may be extended by negotiated agreement of the parties, and
Phasecom will in good faith negotiate with ADC with respect to any longer
warranty periods reasonably required by ADC Customers. During the warranty
period, Phasecom will repair or replace any defective Product or component of
Product which is promptly reported or sent to Phasecom. Buyer will pay
transportation and insurance costs to ship the Product to the repair depot.
Phasecom will pay the transportation cost of returning Product to Buyer if
the Product, or a component of Product, was defective. If the Product is
determined to be out of warranty or not defective, Phasecom will promptly
advise Buyer and offer to repair the Product at standard out-of-warranty
rates.
b. The warranty does not cover repair of damage attributable to (i)
alterations to the Product made by a person other than Phasecom; (ii) accidents,
misuse, negligence or failure of Buyer or an end-user to follow instructions for
proper use, care and cleaning of Product; (iii) external factors (e.g., failure
or fluctuation of electrical power, fire, flood, or other act of God); (iv)
failure of Buyer or end-user to comply with the environmental specifications
contained in the Phasecom manual; or (v) wear and tear.
c. The warranty does not cover any indirect damage and/or any damage
caused to people, animals, equipment and property.
COLLABORATION AGREEMENT PAGE 8
d. Phasecom further warrants that any services provided by Phasecom
under this agreement shall be performed in a fully workmanlike manner and in
accordance with the prevailing professional standards of Phasecom's industry.
Any repaired Product shall have the benefit of the remaining period of the
warranty [***] which shall begin upon Buyer's receipt of such repaired period.
e. Phasecom is not responsible for the accuracy of any content supplied
as part of the Products, or for the validity of any links or cross references
provided to the end-user as part of the Product.
f. Phasecom has taken commercially reasonable measures to verify that
the Products are "Year 2000 Compliant," which means that such measures have been
taken to verify that the Products are designed to:
1. Correctly and unambiguously handle and process date information
before, during and after 1 January 2000.
2. Correctly process functions that are programmed to commence
and/or end at a particular date, including month-end, year-end, leap year and
any combination thereof, irrespective of the change in the century identifier.
3. Function accurately and without interruption before, during,
and after 1 January 2000 without any change in operations and/or parameters
associated with the advent of the new century.
4. Respond to two-digit year input in a way that resolves the
ambiguity as to the century, and to store and provide output of date information
in ways that are unambiguous as to the century.
Provided, however, that PhaseCom does not makes any representations as to the
ability of the product to be Year 2000 compliant when used or interfaced with
non-Phasecom system(s), software, hardware, data or equipment which is not Year
2000 Compliant or which does not properly exchange date-related data.
Furthermore, the above representations shall not apply in the event that
applicable hardware/operating system platform or any module of the Product is
altered, modified or adjusted in any manner by any party without Phasecom's
prior written authorization.
g. THE ABOVE WARRANTIES AND REMEDIES ARE EXCLUSIVE AND ARE EXPRESSLY IN
LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED. PHASECOM SPECIFICALLY
DISCLAIMS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE AND MAKES NO REPRESENTATIONS REGARDING SUITABILITY FOR USE OR
PERFORMANCE NOT CONTAINED IN THIS AGREEMENT. THE PARTIES' LIABILITIES ARE
FURTHER LIMITED BY SECTION 19, BELOW.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
COLLABORATION AGREEMENT PAGE 9
10. PACKAGING
All Products will be packed or packaged for U.S. shipment in accordance with the
packaging standards specified in Exhibit K.
11. SOFTWARE LICENSE.
a. Subject to the terms and conditions contained herein, Phasecom
grants Buyer a nontransferable, nonexclusive license solely to use (i) the
embedded software only in connection with the use of the Products (or with other
wireless modem products, herein called the "MAC Products," which are
manufactured by or for ADC and sold by ADC and which contain the MAC Products
provided by Phasecom); (ii) the non-embedded Phasecom software provided with the
Products or the MAC Products, which shall be in machine readable object code
form, and (iii) all Related Documentation (collectively, the "Software"). This
grant shall be limited to use with Products listed in Part I of Exhibit A, as
such is amended to include new Products in accordance with Section 2.b., and
with the MAC Products. This license shall continue during the useful life of the
Products (or MAC Products, as the case may be), or until the license is
terminated in accordance with the Agreement, whichever is sooner.
b. Buyer shall not sublicense the software or otherwise transfer any of
its rights in the software, except as provided in the Agreement. Buyer may grant
sublicenses to its Customers and end-users of the Products and of the MAC
Products; solely for their use of the software in connection with the use of the
Products or the MAC Products, as the case may be. Such sublicenses will survive
termination of this Agreement.
c. Buyer may not modify or copy the software without the prior written
consent of Phasecom. Buyer agrees to refrain from taking any steps, including
without limitation reverse engineering, reverse assembly or reverse compilation,
to obtain or develop a source code equivalent of the software.
d. Unless otherwise agreed in writing, all Software supplied in
whatever form is supplied under license and not by way of sale, and will be the
Software release current at the time of offer.
e. Buyer hereby acknowledges that copyright and all other intellectual
property rights and patent ownership in the software and all connected,
modified, improved or enhanced versions or derivatives thereof and the relevant
documentation is owned by and will remain vested in Phasecom. Title and all
intellectual property rights in or relating to the Product and the Products
documentation are and shall remain owned by Phasecom. Buyer shall include
Phasecom's copyright and/or trade secret notices on all copies and authorized
adaptations in any form of the software contained in the Products.
f. Except as otherwise provided in Section 17(b), if Buyer fails to
comply with its license obligations hereunder and does not cure such default
within ten (10) days after receipt of notice from Phasecom, then Phasecom may
terminate such license grant and require the immediate return to Phasecom of all
Products containing the software. Upon request by
COLLABORATION AGREEMENT PAGE 10
Phasecom, Buyer shall certify, in writing, that it has returned all copies of
the software and Product.
g. During the term of this Agreement, Phasecom will promptly notify
Buyer of the planned availability of any upgrades and/or enhancements to the
Products and to new products which are based on the Products and will make all
such upgrades, enhancements, and new products available to Buyer under the terms
of this Agreement.
12. LICENSING AND ESCROW; OTHER ADC RECOURSE.
a. ESCROW. Within thirty (30) days after the execution of this
Agreement, the parties shall negotiate and execute an Escrow Agreement in
substantially the form set out in Exhibit L among themselves and an independent
third party escrow agent. The Escrow Agreement will require Phasecom to place on
deposit with the escrow agent complete engineering design and manufacturing
documentation and any vendor authorizations (such materials collectively called
the "Documentation") reasonably required for Buyer to acquire tooling and
components and to manufacture the Products and the MAC Product with minimal
delay.
b. CONTINGENT LICENSE. In the event Phasecom ceases to generate any net
revenue from the sale of any wireless product for any three consecutive calendar
months, then Buyer may immediately upon notice invoke a perpetual, royalty-free,
fully-paid license under all Phasecom intellectual properties (other than
trademarks) to develop, have developed, manufacture, have manufactured, use and
sell Products (and derivatives thereof) and, if ADC's access to the MAC Product
is affected by the event giving rise to the license, the right to source the
chip for the MAC Product from Phasecom's chip vendor.
c. RELEASE OF ESCROW. At the time Buyer invokes a license under this
Section 12, Buyer may instruct the escrow agent to release all of the
Documentation to Buyer on the basis described in the Escrow Agreement.
d. DELIVERY, QUALITY, OTHER PROBLEMS. In the event that:
(1) in any calendar quarter, deliveries representing more than xxx
of Products to be delivered by Phasecom during that quarter are at least x weeks
late and Phasecom cannot reasonably demonstrate that the lateness is not caused
by Phasecom's gross negligence or willful misconduct, or
(2) for [***] consecutive calendar quarters, ADC experiences any
of the following chronic quality problems:
(a) the return rate [i.e. the number of Products returned in
a quarter divided by the number of Products shipped in that quarter] for each
quarter exceeds [***],
(b) the "dead on arrival" rate [i.e. for any quarter, the
number of Products which fail to operate at all when first powered during that
quarter] for each quarter exceeds [***], or
COLLABORATION AGREEMENT PAGE 11
(c) the ADC incoming inspection failure rate for Products for
both calendar quarters exceeds [***],
provided that within [***] business days after the end of the first such
quarter, ADC has provided Phasecom with notice of such quality problem; or
(3) any other material breach of this Agreement remains uncured
more than [***] after notice hereunder by ADC;
then, in addition to any other remedies ADC may have, ADC may demand the
opportunity to work with Phasecom to correct the subject problem and Phasecom
will be obligated to pay all reasonable and documented expenses ADC incurs in
connection with such corrective actions. Phasecom will cooperate fully and in
good faith with ADC to develop and implement a practical corrective action plan.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
13. CONFIDENTIALITY AND PUBLICITY.
a. "Confidential Information" means any information, technical data, or
know-how, including, but not limited to, that which relates to research,
Products, software, services, development, invention, processes, designs,
drawing, engineering, marketing or finances of either party, or information
obtained in the course of the audit described in Section 8.d.; provided that
such information is transmitted in written or other tangible form and
conspicuously marked as being "Confidential" or "Proprietary." Confidential
Information does not include information, technical data or know-how which (i)
is in the possession of receiving party at the time of disclosure as shown by
written documentation; or (ii) prior to or after the time of disclosure becomes
part of the public knowledge or literature, not as a result of any inaction or
action of the receiving party; or (iii) is disclosed to the receiving party by a
third party who lawfully acquired and has no obligation not to disclose such
information, or (iv) can be shown in written documentation to have been
independently developed by the receiving party without reference to information
provided by the disclosing party.
b. Each party agrees not to use Confidential Information disclosed to
it by the other for purposes other than related to performance of this
agreement. Except as permitted in Subsection 13.c., neither party will disclose
Confidential Information of the other to a third party unless such disclosure is
specifically consented to in writing by the other party. Each party hereby
consents to the disclosure of Confidential Information to affiliates (i.e.
parent corporations, sister corporations, and subsidiaries) which are bound to
comparable obligations of confidentiality.
c. Each party will restrict access of the other's Confidential
Information to those of its employees or independent contractors who require
such access and have agreed in writing to hold the same in confidence and abide
by the terms hereof. Each party agrees that it will take all responsible steps
to protect the security of and avoid the unauthorized disclosure and use of
Confidential Information of the other to prevent it from falling into public
domain or the possession of unauthorized persons. Each party agrees to notify
the other in writing of any misuse or misappropriation of Confidential
Information of the other that may come to its attention.
COLLABORATION AGREEMENT PAGE 12
d. These non-disclosure and non use obligations shall survive
termination of this agreement for a period of [***]. Any Confidential
Information disclosed under any confidentiality agreement previously signed by
the parties shall be deemed Confidential Information under this Section 13.
e. The parties acknowledge that the unauthorized use, disclosure or
transfer of Confidential Information will (i) substantially diminish the value
to the other party of the Confidential Information; (ii) render the injured
party's remedy at law for such unauthorized use, disclosure or transfer
inadequate; and (iii) cause irreparable injury in a short period of time.
f. If either party breaches any of its obligations with respect to the
use or confidentiality of the Confidential Information, then the other party
shall be entitled to equitable relief to protect its interests therein,
including, but not limited to, preliminary and permanent injunctive relief.
g. The parties will treat the terms of this Agreement as Confidential
Information and will not issue any press release or other public disclosure
relative to the content of this Agreement without the prior written consent of
the other party.
h. For the avoidance of doubt, the parties acknowledge that there are
no implied licenses granted hereunder other than the limited right to use
confidential information in connection with this agreement. Specifically,
neither party will have any implied license under the patents or patent
applications of the other party except for the purposes of providing products
under this agreement.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
14. INTELLECTUAL PROPERTY; INDEMNIFICATION.
a. Phasecom represents and warrants that it is the sole owner of all
intellectual property incorporated into the Products, free and clear of all
liens or adverse claims by third parties. Except as disclosed to ADC in the
attached Exhibit O, Phasecom is unaware of any claim by any third party upon the
basis of which Phasecom has any reason to believe that ADC's use of any of the
Products will infringe or misappropriate any patent, trade secret or other
intellectual property rights of a third party except as are later proved to be
technically necessary to implement DOCSIS or other recognized industry standards
and Phasecom is unaware that ADC's use of any of the Products will infringe or
misappropriate any patent, trade secret or other intellectual property right of
a third party, except as are later proved to be technically necessary to
implement DOCSIS or other recognized industry standards. Phasecom will keep ADC
informed relative to material developments relative the matters disclosed in
Exhibit O.
b. Subject to subsection (c) below, Phasecom agrees to defend Buyer
against any proceeding or action to the extent the proceeding or action alleges
that any Product sold to Buyer hereunder directly infringes any patent,
copyright, mask work right, or other intellectual property right, and Phasecom
will indemnify Buyer against all liabilities, damages, costs and expenses,
including negotiated royalties payable and reasonable attorneys fees in
connection therewith, provided that (i) Buyer provides Phasecom written notice
of the proceeding or action
COLLABORATION AGREEMENT PAGE 13
within ten (10) business days of receipt by Buyer of such proceeding or action,
(ii) Buyer allows Phasecom to control the defense and the settlement of the
proceeding or action, and (iii) Buyer provides to Phasecom reasonable assistance
in connection therewith, at no charge to Phasecom. In the event Phasecom
resolves any infringement claims or suits with any party made the subject of the
attached Exhibit O and such resolution involves the payment of license fees or
royalties, ADC will in good faith negotiate with Phasecom to share a portion of
the costs of such fees or royalties related to Products sold by ADC hereunder.
c. In the event there is a claim, or Phasecom believes a claim is
likely, alleging intellectual property infringement with respect to any Product
sold to Buyer hereunder, Phasecom shall be entitled, without obligation to do
so, at its option and expense and in full satisfaction of its obligations
hereunder, to (i) modify the Product so it is no longer infringing, (ii) obtain
a license with respect to the applicable intellectual property rights, or (iii)
accept the return of each such Product purchased by Buyer hereunder and in
Buyer's possession and control, and provide to Buyer a refund of the price paid
by Buyer to Phasecom therefor, subject to deductions for damage.
d. Notwithstanding the foregoing, Phasecom will have no liability or
obligation, and buyer shall defend and indemnify Phasecom to the same extent as
Phasecom's defense and indemnity of Buyer in subsection 14(b) above (and not
including the limitations in subsection 14(c)), with respect to any proceeding
or action arising out of (i) modification of the Product other than by Phasecom,
(ii) combination of the Product with any other item (including without
limitation any claim for contributory infringement or inducing infringement), or
(iii) compliance with Buyer's specifications or design.
e. THE FOREGOING SUBSECTIONS 14(A) THROUGH 14(D) STATE PHASECOM'S SOLE
LIABILITY AND OBLIGATION, AND BUYER'S EXCLUSIVE REMEDY, ARISING OUT OF ANY
ACTUAL OR ALLEGED THIRD PARTY INTELLECTUAL PROPERTY INFRINGEMENT OF ANY KIND
THROUGHOUT THE WORLD. In no case will the liability of either party to the other
under this Section exceed the cumulative value of Products sold hereunder prior
to the date of the resolution of the claim.
15. PRODUCT LIABILITY.
a. Phasecom agrees to defend Buyer against any proceeding or action for
products liability based on a claim that any Product provided by Phasecom
hereunder is defective in respect of its design, manufacture, or warnings or
instructions provided by Phasecom, and Phasecom will indemnify Buyer against all
liabilities, damages, costs and expenses, including reasonable attorneys fees in
connection therewith, provided that (i) Buyer provides Phasecom written notice
of the proceeding or action within ten (10) business days of receipt by Buyer of
such proceeding or action, (ii) Buyer allows Phasecom to control the defense and
the settlement of the proceeding or action, and (iii) Buyer provides to Phasecom
reasonable assistance in connection therewith, at no charge to Phasecom.
b. Notwithstanding the foregoing, Phasecom will have no liability or
obligation, and Buyer shall defend and indemnify Phasecom to the same extent as
Phasecom's defense and indemnity of Buyer in subsection 15(a) above (and not
including the limitations in subsection 15(b)), with respect to claims arising
out of (i) modification of the Product other than
COLLABORATION AGREEMENT PAGE 14
by Phasecom, (ii) representations or warnings supplied by Buyer, to the extent
such differ from those provided by Phasecom, or (iii) compliance with Buyer's
specifications or design.
c. THE FOREGOING SUBSECTIONS 15(A) AND 15(B) STATE PHASECOM'S SOLE
LIABILITY AND OBLIGATION, AND BUYER'S EXCLUSIVE REMEDY, ARISING OUT OF ANY
ACTUAL OR ALLEGED PRODUCT LIABILITY OF ANY KIND THROUGHOUT THE WORLD.
16. TERM OF AGREEMENT.
a. This agreement shall be effective from the date hereof, and continue
for [***] thereafter, unless earlier terminated pursuant to subsection
b. hereof (the "Term"). Thereafter, this Agreement may be extended by mutual
consent in writing.
b. This Agreement may be terminated by notice in writing:
i. by either party, in the event of the insolvency, bankruptcy or
liquidation of, or the appointment of a receiver or trustee of the assets or
business of, or the filing for relief under any status providing for such events
by, the other party; or
ii. by Buyer if Phasecom ceases active operation of its business
or discontinues the sale, licensing or maintenance of the Documentation and
related software in material breach of the OEM Agreement or applicable
maintenance agreement; or
iii. by either party, in the event of any material breach of the
terms of this Agreement by the other party, which breach is not remedied within
[***] of written notice from the terminating party, or
iv. by either party, if a new law, new ordinance or new regulation
prevents substantial performance by such party of its obligations hereunder.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
17. RIGHTS AND OBLIGATIONS ON TERMINATION OF AGREEMENT.
a. Upon termination of this Agreement for any reason, each party will
return immediately to the other all Confidential Information of the other that
it has received pursuant to this Agreement and that is not necessary for
performance of obligations continuing after termination.
b. The software license granted by Phasecom to Buyer in Section 11
shall cease except to the extent necessary to enable Buyer to fulfill its
contractual obligations existing at the date of termination and to support
sub-licenses granted by Buyer to its Customers pursuant to this Agreement. All
end user Customer sub-licenses shall continue notwithstanding termination of
this Agreement.
c. Phasecom shall continue to supply to Buyer, and Buyer is obligated
to receive and pay, according to the terms of this agreement, the Products
required to fulfill contractual obligations entered into by Buyer prior to the
termination of the Agreement. In addition, in the event that Buyer fails to pay
any amount due under this Agreement, then Phasecom shall not be
COLLABORATION AGREEMENT PAGE 15
obligated to deliver any more Product to Buyer. After termination, Phasecom
shall continue to provide Product support in accordance with section 6(a),
section 9 and section 11 at Phasecom's standard prices (unless such Product is
under warranty as provided in Section 9, in which event such support shall be
free of charges).
d. The obligations of the parties pursuant to section 5.a, e, and f;
6.a.(iv), b, and c.; 7, 9, 11.a, b, e and f; 13, 14, 15, 17, 18, 19 and 22, and
all rights to payment previously accrued hereunder, shall survive termination of
this Agreement. All provisions of the Exhibits which are referenced in any of
such sections and which are continuing in nature will also survive termination.
18. GOVERNING LAW, DISPUTES AND ARBITRATION.
a. This Agreement shall be governed by and interpreted in accordance
with the law of the state of [***].
b. The parties shall to the greatest extent possible endeavor to
resolve any technical issues, channel conflicts, and disputes through
executive-level negotiations in accordance with the Problem Escalation
procedures set out in Exhibit M.
c. The parties desire to reduce the cost of any dispute by agreeing
that any dispute between the parties arising out of this Agreement shall be
submitted to final and binding arbitration upon written notification and
demand by one of the parties. If arbitration is invoked by Buyer, the
arbitration shall take place in the [***]. If arbitration is invoked by
Phasecom, the arbitration shall take place in the [***]. Such arbitration
shall be conducted under the rules of the American Arbitration Association.
In making the award, the arbitrator shall award recovery of costs and
expenses of the arbitration and reasonable attorneys' fees to the prevailing
party. Any award may be entered as a judgment in any court of competent
jurisdiction. Notwithstanding the reference to binding arbitration, in the
event a party is exposed to the prospect of irreparable harm as a result of a
material breach by the other party, it may seek appropriate injunctive relief
through the courts. Should judicial proceedings be commenced to enforce or
carry out this provision, or any arbitration award, the prevailing party in
such proceedings shall be entitled to reasonable attorneys' fees and costs in
addition to other relief.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
19. LIMITATION ON DAMAGES.
a. EXCEPT AS OTHERWISE SPECIFIED HEREIN OR IN SECTIONS 14 OR 15,
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, DIRECT, INDIRECT OR
CONSEQUENTIAL DAMAGES EXPENSES OR LOSSES OF ANY KIND, INCLUDING BUT NOT LIMITED
TO LOSS OF PROFITS, USE, CONTRACTS, REVENUE OR GOODWILL, OR ANY THIRD PARTY
CLAIM AGAINST THE OTHER NOT SPECIFICALLY INDEMNIFIED AGAINST HEREUNDER, EVEN IF
THE PARTY KNEW OR HAD BEEN ADVISED OF THE POSSIBILITY OF THE OTHER PARTY
INCURRING THE SAME.
b. EXCEPT AS SPECIFIED IN SECTIONS 14 AND 15, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER FOR AN AMOUNT IN EXCESS OF THE AMOUNT PAID BY
COLLABORATION AGREEMENT PAGE 16
BUYER TO PHASECOM HEREUNDER FOR THE PRODUCT GIVING RISE TO THE LIABILITY.
c. THE PARTIES ACKNOWLEDGE THAT THE PROVISIONS ON LIMITATIONS OF
LIABILITY AND WARRANTIES IN THIS AGREEMENT ALLOCATE THE RISKS BETWEEN THE
PARTIES AND THIS ALLOCATION IS REFLECTED IN THE PRICING OF THE PRODUCTS AND IS
AN ESSENTIAL ELEMENT OF THE BARGAIN BETWEEN THE PARTIES.
d. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
20. FORCE MAJEURE.
a. If the performance by either party to this agreement or of any
obligation arising out of, or in connection with, this Agreement (except for the
payment of money), is prevented, restricted or interfered with by any event of
the force majeure, including, but not limited to, fire, flood, war, civil
disturbance, labor disputes, shipping delays, material shortage, any law, order,
proclamation, regulation, ordinance, demand or requirement having the legal
effect of any government or any judicial authority, or any other event
whatsoever, whether similar or dissimilar to those referred to herein, that is
beyond the responsible control of any party affected, then the party so affected
shall, upon giving prior written notice to the other party, be excused from any
non-performance under this Agreement to the extent of such prevention,
restriction or interference, provided that the parties so affected shall use
best effort to avoid or remove such cause of non-performance under this
Agreement, and shall continue to perform hereunder whenever such cause or causes
are removed or avoided.
b. In the event an event of force majeure continues for a cumulative
period of three (3) months, the other party may terminate this Agreement.
21. ASSIGNMENT. Buyer agrees that Phasecom may assign its rights and duties
hereunder to any related corporation, provided such corporation has the
capability to fully and faithfully discharge all obligations of Phasecom
hereunder. Phasecom shall provide Buyer with prompt notice of any such
assignment, and Phasecom will remain responsible for the performance of the
assignee hereunder.
22. MISCELLANEOUS.
a. Headings are inserted for convenience of reference only and shall
not be used to interpret this Agreement.
b. Where there exists any conflict between this Agreement and the
standard terms and condition of sales shown on either party's purchase order,
invoice form or other standard form, this agreement shall govern.
c. No waiver by any party of any breach by the other hereunder shall be
inferred from any omission or failure to take action; and no express waiver by a
party shall affect any of such party's rights other than with respect to the
breach specified in such wavier shall be
COLLABORATION AGREEMENT PAGE 17
operative only for the time and to the extent therein stated. Waiver by a party
of any particular breach shall not be construed as a waiver of any subsequent
breach.
d. This Agreement is made and entered solely for the benefit and
protection of the parties hereto and their successors, and no other person or
entity shall have any right or right of action hereunder.
e. The terms of this Agreement shall be binding upon and inure to the
benefit of the successors and permitted assign of the parties hereto. Subject to
Section 21 herein, neither party may, without the prior written consent of the
other party (except to a controlling parent, controlled subsidiary or controlled
affiliate or by way of merger, consolidation, or sale or transfer of all or
substantially all of the assets or outstanding shares of the party), assign any
right or duty under this agreement. Consent to sale, assignment or transfer
shall not be unreasonably withheld. Any assignment without such consent shall be
void.
f. All notices required or contemplated under this Agreement shall be
deemed given ten (10) days after deposition registered or otherwise certified
first class air mail, postage prepaid, addressed to the parties as follows, or
upon telephone confirmation of receipt of a facsimile transmission sent to the
fax number set forth below:
To Phasecom:
Phasecom, Ltd.
11, Kiryat Hamada Street
Har Hotzvim,
P. O. Box 45017
Jerusalem 91450
Israel
Attn: President
Copy to: President and to General Counsel
Phasecom, Inc.
20400 Stephens Creek Blvd.
Cupertino, CA 95014
Copy to: Stephen Pezzola,
1999 Harrison Street
Suite 1300
Oakland, CA 94612
To Buyer:
ADC Telecommunications, Inc.
P. O. Box 1101
Minneapolis, MN 55440-1101
Attn: President, Broadband Wireless Group
Copy to: General Counsel
COLLABORATION AGREEMENT PAGE 18
A party may change the address at which it will receive notice upon the given,
as provided above, of reasonable notice to the other parties.
g. If any provision of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate or
render unenforceable the entire agreement, but rather the entire agreement shall
be construed as if not containing the particular invalid or unenforceable
provision or provisions, and the rights and obligations of the parties shall be
construed and enforced accordingly.
h. This agreement, including all exhibits hereto which are incorporated
herein by reference and made a part hereof, represent the complete and entire
agreement of the parties hereto, superseding all prior negotiation,
representation and agreements. This agreement may not be amended except by a
writing executed by the parties hereto.
[***]
PAGE 19
EXHIBIT A
PRODUCTS AND PRICES
I. PRODUCTS
A. In this Agreement, "Products" will be understood to mean Phasecom's
present and future head-end modem termination system ("MTS") products
and user-end modem units ("MU") products, including the following:
1. [***] of Phasecom's MTS and MU products (existing)
a) Proprietary modem termination system (MTS) and related
components and sub-assemblies
b) Proprietary modem unit (MU)
c) Proprietary configuration and network management software
(NMS) for the MTS and MU.
2. [***] of Phasecom's MTS and MU products (to be developed)
a) Proprietary modem termination system (MTS) and related
components and sub-assemblies
b) Proprietary modem unit (MU)
c) Proprietary configuration and network management software
(NMS) for the MTS and MU.
3. [***] of Phasecom's MTS and MU products (to be
developed)
a) Proprietary modem termination system (MTS) and related
components and sub-assemblies
b) Proprietary modem unit (MU)
c) Proprietary configuration and network management software
(NMS) for the MTS and MU.
4. Such new Products as may be added to this Agreement by mutual
agreement of the Parties on the basis specified in Exhibit C.
B. All of the Products are intended to enable end-to-end telephony, data
and video communications between a head end modem termination system
and an customer-premise modem unit.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
II. PRICES
A. Unless otherwise agreed in writing, all Products supplied to Buyer
will be at the prices set out in this Exhibit. For any Head-End
Product (as defined in the following subsection) for [***], the
price will be [***] (1) the price in effect as of
COLLABORATION AGREEMENT PAGE 20
the effective date of this Agreement or (2) the price determined in
accordance with the following subsection B.
B. PRICING
Prices for Products covered by this Agreement will be based on market
prices (the "Market Prices") to be established by good faith
negotiations between the Parties in accordance with Section C.2. of
this Exhibit. For exclusive accounts (listed in Section I.A.1 of
Exhibit E), the Market Price will be established by ADC in
consultation with Phasecom. The initial Market Prices for
currently-available Products for non-exclusive accounts are as
follows:
Product Market Price
----------------------------------------------- ----------------------
P2001 - 1.5W Network Ctlr Package w/SNMP [***]
P2001 - 1.5W Network Ctlr Package no SNMP [***]
P2001 - RCVR Single Channel Upstream Card [***]
P2001 - RCVR Dual Channel Upstream Card [***]
P2001 - QoS Quality of Service Module [***]
P200 - EX Speed-Demon Wireless Modem [***]
P200 - SH SOHO Speed-Demon Wireless Modem [***]
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
The price for a Product to be sold hereunder will be the [***]. The
[***] will depend whether the Product is intended for use on customer
premises (a "CPE Product") or at the head-end of a system (a "Head-End
Product"). The [***] will also depend whether ADC's customer will be
an exclusive account (as listed in Section I.A.1 of Exhibit E) or a
non-exclusive account. The [***] will be determined as follows:
[***]
----------------------------------------------------------------------
----------------------------------------------------------------------
Type of Equipment
--------------------------------------------
Type of Account CPE Product Head-End Product
------------------------ -------------------- ----------------------
Exclusive [***] [***]
Non-Exclusive [***] [***]
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
COLLABORATION AGREEMENT PAGE 21
C. GENERAL
1. All prices will be [***] Phasecom's [***] (per Section 4.a. of
the Agreement), unless mutually agreed upon otherwise in
an applicable negotiated Annex. Although Phasecom may publish
suggested wholesale or retail prices, these are suggestions only
and Buyer will be entirely free to determine the actual prices
and license fees at which the Products will be sold or licensed
to its Customers.
2. Market Prices will be valid until superseded by new Market
Prices. Marked Prices will be subject to [***] on a quarterly
basis, in February, May, August and November, beginning in
November 1999. Key considerations for the establishment of
Market Prices will be (1) those prices charged by Phasecom and
ADC to their respective customers for comparable products, and
(2) competitive pricing in the market. It is acknowledged by
Phasecom that, in general, ADC will endeavor to sell above the
Market Price. [***] Market Prices will be reduced to written
Annexes, which, when signed and dated by both parties, will
serve as an amendment to this Agreement, and will supersede any
earlier Market Price determinations.
3. All prices are subject to the provisions of Section 3.d. of the
Agreement.
4. The parties agree that obtaining accurate information regarding
sales prices charged by the other party will be vital to the
calculation under subsection 2, above. The parties therefore
agree that sales by each party may be audited by the other party
in accordance with reasonable procedures to be agreed upon by the
parties at the time of audit.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
COLLABORATION AGREEMENT PAGE 22
EXHIBIT B
PRODUCT SPECIFICATIONS
I. GENERAL PRODUCT SPECIFICATION
The Specifications for the initial Products to be covered by this Agreement
are as follows:
Version 1.X Products -- see attached Exhibit B.1
Version 2.X Products -- the parties will negotiate in good faith to
agree on these specifications and to attach them as Exhibit B.2
within 30 days after the date of this Agreement.
Version 3.0 & 3.X Products -- the parties will negotiate in good
faith to agree on these specifications and to attach them as
Exhibit B.3 within 30 days after the date of this Agreement B.3
II. DOCUMENTATION
A. User documentation: Phasecom will supply soft copy (in Microsoft Word
format) of user documentation describing installation, use,
user-configurable options, function and interface.
B. Operation documentation: Phasecom will supply soft copy (in Microsoft
Word format) of operation documentation that describes the theory of
operations, installation and turn-up, problem diagnosis and
resolution, system and functional description, and maintenance.
C. ADC will be responsible for any changes it makes to documentation
supplied by Phasecom. ADC will at its discretion provide Phasecom with
copies of such documentation which ADC has changed to meet customer
requirements.
III. COMMERCIAL OR AGENCY REQUIREMENTS
A. At the request of ADC, Phasecom will assist Buyer with obtaining
certification and homologation of products in countries where Buyer
has rights to sell the Products, as described in Exhibit E.
B. At the request of ADC, Phasecom will assist Buyer with obtaining
Product power supplies that meet homologation requirements of
specified countries.
C. When appropriate, the parties will negotiate on a case-by-case basis
for fees to be paid by ADC to Phasecom for assistance provided under
this section.
IV. MARKING AND LABELLING
A. HARDWARE LABELING.
ADC will provide Phasecom with either (1) artwork and specifications
for labels to be furnished by Phasecom or (2) actual labels to be
applied to the Product bearing ADC's name and logo. Phasecom will
apply the resulting labels in accordance with ADC's written
instructions.
B. SOFTWARE LABELING. Through any of the configuration ports, the
software in the Product will transmit to the configuration device a
start-up screen which shows the
COLLABORATION AGREEMENT PAGE 23
C. ADC logo and company information (to be provided or approved by ADC)
and makes no references to Phasecom other than a copyright notice.
V. APPEARANCE
A. Buyer will specify Product appearance and supply artwork and color
specifications to Phasecom. Additional costs to implement appearance
changes will be borne by Buyer.
COLLABORATION AGREEMENT PAGE 24
EXHIBIT C
PRODUCT DEVELOPMENTS
Phasecom hereby agrees to develop or complete the development of the Products
listed in Exhibit A (other than those for which development is already complete)
to comply with the applicable Specifications (set out in Exhibit B), in
accordance with the applicable Statements of Work (attached as Exhibit D), and
in accordance with the terms and conditions set out in this Exhibit.
For any new Product which is to be developed and subsequently added to this
Agreement, the Parties will negotiate in good faith for appropriate
Specifications, test plans, development Schedule, and other requirements
relative to such new Product, and will amend this Agreement accordingly to
include documents reflecting such requirements.
1. DEVELOPMENT. Unless otherwise agreed in writing, Phasecom will perform all
of the development of the Products and will bear its own costs associated
with such development.
2. DELIVERABLES; MILESTONES; SCHEDULE. For each Product to be developed,
Phasecom will be responsible for delivering all Deliverables (f.o.b.
Phasecom's facilities in either the US or Israel) and for achieving all
Milestones in full compliance with the Schedule set out in the applicable
Statement of Work.
3. DEVELOPMENT LIAISONS. In the Statement of Work for each Product to be
developed hereunder, each party hereunder will designate a person to be its
Development Liaison for that Product. A Party may designate a new
Development Liaison by notice to the other Party.
4. MANUALS. Unless otherwise agreed in a Statement of Work, Phasecom will be
responsible for the development of all user, installation and maintenance
manuals (in English) for the subject Products. Master copies of such
manuals will be Deliverables and will be provided in both hard copy and
electronic form. ADC will have a license under Phasecom's copyrights to
translate, reproduce, and make derivative works of any such manuals
provided by Phasecom, provided that ADC makes appropriate copyright
notices, giving proper copyright attribution, and will be fully responsible
for any changes to content made by ADC. ADC grants Phasecom a license under
any ADC copyrights in the resulting derivative works to translate,
reproduce and make further derivative works thereof; provided that Phasecom
makes appropriate copyright notices, giving proper attribution, and will be
fully responsible for any changes to content made by Phasecom.
5. DESIGN REVIEW PROCESS. From time to time, as identified in the applicable
Schedule, the parties will have design review meetings. ADC will be
actively involved in the critical design review for each Product to be
developed hereunder.
COLLABORATION AGREEMENT PAGE 25
6. DESIGN TEST PLAN AND DESIGN ACCEPTANCE. ADC and Phasecom will collaborate
to develop a mutually agreed design verification test plan for each Product
to be developed hereunder. Phasecom will take the lead in the development
of such plan, but ADC will be actively involved in the development of such
plan. Phasecom will notify and demonstrate to ADC when each designed
Product has successfully passed the verification test plan. ADC will
provide its written acceptance of the Product's design [***] from
such demonstration by Phasecom.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
7. PRODUCTION TEST PLAN AND PRODUCTION ACCEPTANCE. As part of development of
each Product, ADC and Phasecom will collaborate to develop a
mutually-agreed production verification test plan for such Product.
Phasecom will take the lead in the development of such plan but ADC will be
actively involved in the development of such plan. Phasecom will notify and
demonstrate to ADC that such Product has successfully passed the production
verification test plan. ADC will provide its written acceptance of the
Product for production [***] from such demonstration by Phasecom.
8. INTELLECTUAL PROPERTY RIGHTS. For each Product to be developed hereunder,
the parties will specify the ownership of any new intellectual property
rights arising out of the subject development ("Foreground IPR"). In the
event ownership is not so specified, the default rules are as follows: (1)
each Party retains ownership of its own pre-existing intellectual property
rights ("Background IPR"); (2) each party will own whatever Foreground IPR
it develops at its own expense in connection with the development; (3) if
one party pays for a development effort by the other, any intellectual
property arising out of such development will be owned by the funding
party; and (4) intellectual property that is either jointly-developed or
developed by one party with partial funding by the other will be
jointly-owned, and either party may exploit such jointly-owned intellectual
property without obligation or accounting to the other.
9. DESIGN CHANGES; MAINTENANCE; MODIFICATIONS AND ENHANCEMENTS.
Phasecom will work with ADC regarding modifications to the Product
reasonably required to capture business with the exclusive ADC accounts
listed in Exhibit E. Phasecom will be required to maintain prioritized
listing and documentation of maintenance changes, modifications and
enhancements.
10. RIGHTS OF INDEPENDENT ACTIVITY.
Other than as specifically provided by this agreement, each party shall be
free to pursue, either by itself or with third parties, technology or
products in the same field as that pertaining to the Products covered by
this Agreement.
11. PRE-PRODUCTION UPGRADES. It is understood that ADC intends to purchase
reasonable quantities of the pre-production (Alpha release, Beta release,
or other pre-productions units) Products at Market Prices, provided that if
these units cannot later be upgraded to production release specifications,
then Phasecom will replace such units with production release units when
they become available.
COLLABORATION AGREEMENT PAGE 26
EXHIBIT D
STATEMENT OF WORK
[Statements of Work for all Products to be developed hereunder are to be
negotiated in good faith and added to this Agreement [***] (or such longer
period as the parties may agree in writing) after the execution of this
Agreement]
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
COLLABORATION AGREEMENT PAGE 27
EXHIBIT E
MARKETING AND EXCLUSIVITY
I. MARKETING RIGHTS
A. [***] Rights.
1. Phasecom hereby grants ADC the [***] right to market, sell, and
otherwise distribute the Products directly and indirectly for resale to the
following Customers (and their majority-owned subsidiaries):
a. [***]
b. [***]
c. [***]
d. [***]
e. [***]
2. For as long as ADC retains [***] with respect to a particular
account:
a. Phasecom will grant ADC the [***] right to market, sell and
otherwise distribute [***] (i.e. those other than the Products covered by
this Agreement, such products herein called "Other Phasecom Products")
directly and indirectly for resale to that account. Except as otherwise
agreed in writing, the terms of this Agreement will apply to Phasecom's
supply of such Other Phasecom Products to ADC; and
b. ADC will employ all reasonable commercial efforts to market and
sell the Other Phasecom Products to that account;
c. In the event ADC declines to sell a particular Other
Phasecom Product to that account, Phasecom may [***] with respect to that
Other Phasecom Product for that account. Phasecom will promptly notify ADC in
writing (in accordance with Section 22(f) of the Agreement when a new
Phasecom wireless product has become available ("New Other Phasecom
Product"). ADC will have 30 days after such notice to decline to sell such
product or to have it included among the Other Phasecom Products. If ADC
fails to provide such notice, ADC will be deemed to have declined the
inclusion of it among the Other Phasecom Products covered under this
Agreement.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
B. Loss of [***]
1. Phasecom will have the option to terminate ADC's [***] with
respect to any such Customer prospect if: (a) the prospect declines to offer
ADC a request for quotation (RFQ), (b) the prospect eliminates ADC from
consideration during the RFQ process; or (c) if ADC ceases to actively bid
and sell Products(s) to such prospect. In any of these instances, ADC may
present a business case for retaining the [***] and Phasecom will give due
consideration to the business case and to any ADC proposals for the retention
of [***].
COLLABORATION AGREEMENT PAGE 28
2. It is understood that, to address the needs of the [***] accounts
for customer premise equipment ("CPE"), ADC may plan to sell three different
types of products, as follows: (1) Products covered by this Agreement which
are for customer premise applications ("CPE Products"), (2) CPE products
which have different functions and capabilities from the Products covered by
this Agreement ("Complementary CPE Products"), and (3) in certain cases, ADC
may elect to sell CPE products which are not sourced from Phasecom but which
perform the same function and provide essentially the same capabilities as
the CPE Products ("Substitute CPE Products") available hereunder. (It is
understood, however, that in the event Phasecom discontinues selling a
specific CPE Product, CPE products which correspond to the discontinued CPE
Product will not be considered to be "Substitute CPE Products"). For any
calendar quarter, the "Non-Phasecom Percentage" will be determined by
dividing (a) ADC's total sales of both Complementary CPE Products and
Substitute CPE Products to the exclusive accounts during that quarter by (b)
ADC's total sales of CPE Products, Complementary CPE Products and Substitute
CPE Products to the exclusive accounts during that quarter.
Phasecom will have the following rights to modify ADC's [***] if the
Non-Phasecom Percent for any [***] consecutive calendar quarters exceeds a
specified percentage, as follows:
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
Non-Phasecom
Percentage for two
consecutive calendar Phasecom rights to modify [***]
quarters (to be exercised by written notice)
- --------------------------- ---------------------------------------------------------------
Less than [***] No right to change [***].
At least [***] Phasecom may cancel [***] to the limited extent that it may
market and sell to [***] a CPE product which is comparable
in terms of functions and features to the [***] CPE
Product provided by ADC to [***].
At least [***] Phasecom may cancel ADC's [***] on ALL [***] Products.
At least [***] Phasecom may cancel ADC's [***] on all Products.
3. If ADC desires to add a new account to the list in Subsection I.A.1
of this Addendum, it may provide Phasecom with a request and a business case for
such addition, and Phasecom will give due consideration to such request and
business case.
4. It is understood that the foregoing [***] will be unaffected by
ADC's invocation of [***] under Section 12.b. of the Agreement.
C. [***] Rights. Phasecom hereby grants ADC the [***] right to market,
sell, and otherwise distribute the Products directly and indirectly for
resale to any other Customers [***] except that ADC shall not have the right
to market, sell or otherwise distribute the Products to [***] (which is an
existing house account for Phasecom) within the [***].
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
D. MARKETING COLLABORATION.
1. For [***] accounts, the Parties will cooperate with each other to
market the Products and to determine which will take the lead for specific
accounts. To the
COLLABORATION AGREEMENT PAGE 29
greatest extent permitted by law, the parties will use their best efforts to
prevent channel conflicts.
2. During the term of this Agreement, ADC shall keep Phasecom informed
about ADC high-level marketing plans and requirements relating to wireless modem
products.
E.AUDIT RIGHTS. The parties agree that obtaining accurate information
regarding sales made by ADC will be vital to the calculation determination of
the marketing and exclusivity rights under this Exhibit E. The parties therefore
agree that sales by ADC may be audited by Phasecom party in accordance with
reasonable procedures to be agreed upon by the parties at the time of audit.
COLLABORATION AGREEMENT PAGE 30
EXHIBIT F
CHANGE PROCEDURES
The following change procedure requirements shall apply to Products that are not
in an alpha or beta test stage and have been accepted by ADC as Products that
are ready for final production under the terms of Exhibit C, Sections 6 and 7:
I. Phasecom may, at any time, make changes to the Products or modify the
drawings and specifications relating thereto, or substitute Products of
later design to fill an order (hereinafter referred to as "Product
Change"), provided that any such Product Change, under normal and proper
use, does not affect price, operation, reliability, look, feel, or life
of the Products or the interchangeability and interoperability of the
Products with other Products, and that Phasecom notifies Buyer in
writing thereof [***] days prior to shipment of the planned change. In
the event any Product Change affects price, operation, reliability,
look, feel or life of the Products, or the interchangeability and
interoperability of the Products with other Products, Phasecom shall
notify Buyer in writing thereof [***] days prior to any planned change.
In the event Buyer may reject the planned change and so notifies
Phasecom within thirty (30) days and Phasecom fails to reach agreement
thereon, Buyer shall have the right to terminate any and all orders, in
whole or in part for the Products affected by such change.
Notwithstanding any notice requirement above to the contrary, Phasecom
shall immediately notify Buyer when it determines that a Class A Product
Change (as defined hereinafter) shall be made. Phasecom shall be
authorized to make Class A Product changes as soon as practical. Buyer's
manufacturing process uses Bellcore Generic Requirements for Product
Change Notices (Document GR-209-CORE, Issue 2, January 1996) to
determine classes of Product Change Notices contained herein. Change
class definitions shall be governed by the referenced Bellcore document.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
II. Notwithstanding any notice requirements to the contrary elsewhere in this
Agreement, all Class A Product Change Notices shall be provided, at no
charge, and forwarded in accordance with the section "Notices". All Product
Change Notices for Class A, Class AC, Class C, Class D or Class E (as
hereinafter defined) shall contain a filled-in Product Change Notice (See
attachment), which has detailed reasons of the change, technical
description of the change, supporting user documentation, affect of change
on product line, any compatibility information, and effective date of first
shipment of planned change in addition to the information set forth in
Notices. If Phasecom cancels a Product Change Notice, Phasecom must provide
notification in accordance with clause title "Notices" hereto and state the
reason for cancellation and what action, if any, is to be taken in
locations where the change may already have been implemented. All notices
shall be sent to BUYER Product Management.
III. Phasecom shall determine the classification of any proposed Product Change.
If Buyer disagrees with any classification assigned by Phasecom, Buyer
shall have the right to
COLLABORATION AGREEMENT PAGE 31
challenge the classification, and Phasecom shall, in good faith,
re-evaluate its classification. In the event that Buyer and Phasecom fail
to reach agreement on any such classification, then Buyer shall have the
right to terminate any or all Orders, in whole or in part, for Products
affected by such Product Change without penalty or obligation of any kind.
Phasecom shall provide Buyer copies of all Product Change Notices and
copies of Phasecom ECOs including the cognizant engineer's name, that
affect products.
A. Class A Product Change - A classification code used to indicate a
product recall for all shipped product.
1. Changes which are:
a) needed to correct conditions which result in safety hazards,
b) conditions which result in safety hazards where the
conditions in (a) or (b) are caused by circuit combinations
or options that exist only on certain hardware;
c) needed to compensate for marginal (worse circuit) cases
where the inoperative or unsatisfactory conditions exist on
certain hardware and cannot be associated with specific
circuit combinations or options. Such changes shall be made
on Product in process and if requested by Buyer on Product
in stock or returned to an authorized repair center.
2. Class A Product changes require immediate action by Phasecom to
correct all affected products, whether in the hands of Phasecom
or Buyer or their Customers including spare Products. In some
cases, however, it may be necessary to make a change to only a
limited number of a particular type or Product. (This occurs when
it is necessary to correct a condition that occurs only in
certain Product combinations or with the use of certain options).
Such conditions shall be described in the Product Change Notice.
3. Phasecom shall, no later than [***] from the date of the
notification of a Class A Product Change, provide a schedule,
acceptable to Buyer, for promptly implementing such changes
with respect to Products in the possession of Buyer or its
Customers. The resulting implementation shall include the
deinstallation, if necessary, of existing Products and the
engineering and installation of replacement or modified
Products or any additional materials. Phasecom will bear the
costs of its own engineering personnel and the costs of
replacement parts and subassemblies associated with the
implementation of the changes.
4. For Class A Product Changes which involve only an exchange of
products, Phasecom may, at Buyer's option, provide such products
and Buyer shall implement such change and invoice Phasecom for
associated costs. Unless otherwise agreed to between the Parties,
Phasecom shall not furnish component parts for Class A Product
Changes to Buyer for Buyer assembly into product.
COLLABORATION AGREEMENT PAGE 32
5. Notices.
Phasecom shall furnish monthly status reports to BUYER for all
Class A
6. Product Changes of which Phasecom has notified Buyer. This report
shall contain the following information:
a) Product Change Notice number.
b) Identity of the Products.
c) Model or part number and issue.
d) Date Product Change Notice issued.
e) Product ship date.
f) Installation or application responsibility.
g) Locations at which change is to be made (supplied by Buyer).
h) Date completed, by location.
i) Changes on hold at any location.
j) Serial numbers of the affected products.
B. Class AC Product Change -
Class AC Product changes are:
1. needed to correct:
a) inoperative electrical or mechanical conditions,
b) unsatisfactory maintenance or operating conditions,
c) conditions which result in safety hazards, where the
conditions in (a) or (b) are caused by circuit combinations
or options which exist only on certain hardware; and
2. needed to compensate for marginal (worse circuit) cases where the
inoperative or unsatisfactory condition exist on certain hardware
and cannot be associated with specific circuit combinations or
options. Such changes shall be made on Product in process and if
requested by Buyer on Products in stock or returned to an
authorized repair center.
C. Class C Product Change - product upgrade or improvement which is
suggested to be implemented on shipped products.
COLLABORATION AGREEMENT PAGE 33
1. This would be used when the change would result in better
operation, improved testing and maintenance, longer life, service
improvements, cost reductions to the Customer, and additional new
features. The decision to apply these changes would be the
Customer's responsibility.
2. All products shipped to Buyer after the effective date of any
Class C product Change shall incorporate such change. Any
Products shipped to Buyer prior to such date may be modified by
Buyer at its option and expense.
3. No Class C changes shall affect the interoperability of the
product.
D. Class D Product Change - a product upgrade/improvement which is not
require to be implemented on shipped products
1. The Product Change Notice will be used for notification purposes
only. Class D changes would incorporate minor new features and
design improvements that do not affect existing functionality or
other minor service improvement and test capabilities.
2. No Class D changes shall affect the interoperability of the
product.
E. A Class D Product Change is one in which any single or combination of
the following apply:
1. A changed plug-in product is not bi-directional interchangeable
physically, electrically or functionally with its predecessor.
2. A changed hard-wired Product is substantially different than its
predecessor.
3. Phasecom's part, model, drawing or identification number is
changed for that Product.
4. Phasecom's company name is changed.
5. Phasecom shall furnish in accordance with the "Notices" section a
quarterly report listing all Product Change Notices released
during the previous twelve (12) months. This report will contain
the following information:
a) Product Change Notice Number,
b) Issue date of change,
c) Drawing number,
d) Change classification,
e) Modification expiration date.
Phasecom will provide Buyer a copy of all change notices as soon
as they become available.
COLLABORATION AGREEMENT PAGE 34
F. Class E Product Changes - indicates a routine product/design
upgrade/improvement which does not impact form, fit or function or
diminish product reliability or quality.
1. No class E changes shall affect the interoperability of the
product.
IV. Support and upgrade
A. This section describes the responsibilities of Phasecom and Buyer with
respect to hardware and software upgrades that are required to resolve
demonstrated problems with the equipment. These are known as "problem
fix upgrades." Hardware and software upgrades whose purpose is to
enhance the functionality of the equipment ("feature upgrades") are
quoted by Phasecom on a case-by-case basis and are not covered in this
Exhibit.
B. For software problems that are reported by Buyer, verified and/or
recreated by Phasecom and which are fixed on a subsequent revision of
software, Phasecom shall provide to Buyer two (2) master copies of the
software revision that incorporates the fix., and the accompanying
Engineering Change Request notification. The software will be
accompanied by a completed "Engineering Change Request (Software" form
which, among other information, stated the severity of the problem
("Class of Change") and a non-binding recommendation to Buyer on the
handling of the change in the field ("Field Effectivity Status"). The
decision on the deployment, if any, of the software fix to one or more
end-users in the field is the responsibility of the Buyer and all
costs associated with that deployment will by borne entirely by Buyer.
C. For hardware problems that are reported by Buyer, verified and/or
recreated by Phasecom and which are fixed by a hardware modification
to the card, module or subsystem, Phasecom shall provide to Buyer a
completed "Engineering Change Request (Hardware)" form which, among
other information, states the severity of the problem ("Class of
Change"). The Class of Change defines Phasecom's responsibilities with
regard to the performance of the hardware upgrade to units that are
already in the field.
1. If assigned as a Class A Product Change, then Phasecom will
perform the required hardware upgrade at no charge to ADC
2. If assigned as a Class AC Product Change, then Phasecom will
perform the required hardware upgrade to affected units at no
charge if Buyer so requests in writing [***] of receipt of
the associated ECR.
3. If assigned as a Class C, D or E Product Change, then Phasecom
will not upgrade any installed units an no charge. At Buyer's
request, Phasecom will quote such upgrades on a case-by-case
basis.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
D. In all instances where the Class of Change obligates Phasecom to
perform no-charge hardware upgrades, Buyer shall request and receive a
Return Authorization and shall promptly return all parts requiring the
upgrade, freight prepaid by Buyer to Phasecom's service department.
Phasecom will use its best efforts to perform the
COLLABORATION AGREEMENT PAGE 35
E. upgrade and return the part, freight prepaid, to Buyer [***] days
after receipt.
F. For enhancements or new feature upgrades, Buyer may send the Product
to be upgraded freight prepaid to Phasecom's service department. Buyer
must issue a purchase order for the upgrade cost as specified in
Phasecom's then current upgrade price list. A Return Authorization
must be included with the Product sent to Phasecom. The upgraded
product will be returned to Buyer within [***] business days.
G. Advance replacement service. If necessary, Buyer may request an
advance replacement exchange for the unit to be upgraded for those
cases in which Buyer can not wait the standard return period. Buyer
may arrange for this service as follows:
1. Secure a Return Authorization for the product to be exchanged
2. Issue a purchase order for the product required at Buyer's then
current contract price plus the cost of the upgrade.
3. Upon receipt of the proper purchase order, Phasecom will ship to
Buyer an upgrade product for exchange. Upon receipt of the
product Buyer will immediately return the exchanged product in
the same container.
4. Upon receipt of the returned product Phasecom will issue a credit
against Buyers purchase order for the list price of the returned
product.
If the exchanged product is not returned [***], Buyer will be
invoiced for the product shipped at the contract price and Buyer
agrees to pay said invoice due upon receipt.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
COLLABORATION AGREEMENT PAGE 36
EXHIBIT G
REGULATORY APPROVALS PROCESS
Phasecom will be responsible for the following regulatory certification on all
Products (additional requirements may be contained in Exhibit D):
I. SAFETY
The WMTS shall be certified to:
1. [***]
2. [***]
3. [***]
The WMU shall be certified to:
1. [***]
2. [***]
3. [***]
4. [***]
II. ELECTRO-MAGNETIC CONFORMANCE
The WMTS shall be certified to:
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
The WMU shall be certified to
1. [***]
2. [***]
3. [***]
4. [***]
5. [***]
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
COLLABORATION AGREEMENT PAGE 37
EXHIBIT H
TERMS AND CONDITIONS OF SALE
[Note: The parties will negotiate in good faith to reach agreement on this
Exhibit within 30 days after execution of this Agreement.]
COLLABORATION AGREEMENT PAGE 38
EXHIBIT I
TRAINING
Training curriculum will be in modules consisting of Overview, Products and
Applications, Design and Engineering, Installation and Maintenance.
Each training module is directed toward the user of the information. Buyer
assumes the responsibility for the attendees' ability and background skills
levels to be able to benefit from the curriculum.
Phasecom will provide up to 3 trainer-days of training for each new Product
release. Phasecom will provide such additional training as may be requested by
ADC, but will be entitled to charge for such additional training at reasonable
rates, not to exceed Phasecom's then-current standard training rates.
Training materials will be available as follows:
15 sets Product Overview
15 sets Products & Applications
5 sets Design & Engineering
5 sets Installation & Maintenance
Training shall be at Buyer's provided facility. Reasonable travel, board, and
living expenses for instructor(s) and any transportation cost for
material/equipment used in class shall be at Buyer's expense. Travel and living
expenses for each of Buyer's attendees shall be the responsibility of Buyer.
COLLABORATION AGREEMENT PAGE 39
EXHIBIT J
QUALITY AND INSPECTION
I. Buyer shall be notified prior to changes in location of Product
manufacture. Buyer has the right to perform an audit of any new
manufacturing locations prior to receiving Product produced from the new
location. Buyer and seller must mutually agree on corrective action if
issue arise out of this audit prior to Product being produced for the
buyer.
II. Buyer shall be notified and allowed to review new Product designs and
major Product revisions for compliance to industry standard design,
quality and workmanship standards.
III. Seller shall, at buyers request, provide a list of recommended test
equipment and procedures to be used for testing of incoming Product and
verification of returned Product.
IV. The Products will meet all applicable quality standards published by the
[***], as such are from time to time amended. These will include, but
not be limited to the following:
[***]
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
COLLABORATION AGREEMENT PAGE 40
EXHIBIT K
PACKAGING STANDARDS
Products will be packed or packaged for U.S. shipment in accordance with
standard commercial practices in containers bearing labels to be provided or
approved by Buyer.
1.0 BAGS
All product is to be placed in a bag. The type of bag is dependent upon the
assembly to be bagged. Clear polyethylene (3 mil minimum thickness) is
acceptable for those assemblies not being sensitive to Electrostatic Discharge
(ESD).
If the product itself is sensitive to ESD, a static shielding bag should be used
to protect the product. The bag is to be sealed or folded over (closed with a
re-sealable ESD label) so as to complete a faraday cage.
2.0 CUSHIONING MATERIAL
Foam cushioning should be made of expanded polystyrene, polyethylene or a
polyurethane foam. Antistatic versions of the above are required when the
product is sensitive to ESD or is used in an ESD area/facility.
Corrugated cushioning may be constructed of appropriate weight corrugated
material which is required to protect the product during the normal distribution
cycle. Kraft color is acceptable.
3.0 CARTONS
The corrugated carton is to be at a minimum, 200# B or C flute (32 ECT), mottle
white one side. The ADC logo is to be printed in black ink on the carton. On a
standard Regular Slotted Container (RSC), the ADC logo shall be located on the
two length body panels. Current approximate logo sizes are as follows:
1.0" x 4.0"
1.5" x 6.0"
2.0" x 8.0"
3.5" x 16.0"
4.0" x 17.0"
COLLABORATION AGREEMENT PAGE 41
4.0 PRODUCT/PACKAGE SYSTEM TESTING
Product/package systems shall pass, at a minimum, the International Safe Transit
Association (ISTA) Preshipment Test Procedures (Procedure 1 or 1A). All
product/package systems shall be approved by Buyer prior to use.
5.0 PACKAGE LABELING
The unit carton is to be labeled with the ADC Catalog Number, the quantity per
unit package (usually 1 each), the date code (date product is packaged) and the
serial number of the assembly if it is a serialized product. This information is
to be both human readable and bar coded per the Telecommunications Industry
Forum (TCIF) Product Package Label Specification.
6.0 OVERPACKS
Unit packs are to be overpacked in cartons and on a pallet. Carton weights
should not exceed 40 lb.. Pallet dimensions should be 40" x 48". Pallet loads
are to be stretch wrapped at a minimum to secure load to pallet.
COLLABORATION AGREEMENT PAGE 42
EXHIBIT L
FORM OF ESCROW AGREEMENT
[NOTE: THE PARTIES WILL NEGOTIATE IN GOOD FAITH TO REACH AGREEMENT ON THIS
EXHIBIT WITHIN 30 DAYS AFTER EXECUTION OF THIS AGREEMENT.]
COLLABORATION AGREEMENT PAGE 43
EXHIBIT M
SUPPORT OF PRODUCTS; PROBLEM ESCALATION
A. PHASECOM SUPPORT RESPONSIBILITIES
1. Problem Severity Definitions - Buyer will determine the severity level
in conjunction with the end user or service provider.
a. Severity 1 - A "Network Emergency" which is defined as the
failure of a previously operating Phasecom product or system
which renders the product or system inoperable. Further defined
as any problem causing service unavailability or severe
degradation to the lesser of [***] customers or [***] of the
installed base.
b. Severity 2 - Problems resulting in some loss of functionality
and/or some degradation of performance. The system is still
available.
c. Severity 3 - Problems resulting in degraded performance not
deemed significant to the end user or the service provider.
System availability is not affected.
d. Severity 4 - Problems resulting in a nuisance to operations, a
minor feature enhancement or a bug not deemed significant. System
availability is not affected.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
2. Response Levels
Except as otherwise provided in this Exhibit M, PhaseCom shall be
required to respond to service requests within a reasonable time. If
and only if ADC has sold Products in commercial quantities to
exclusive accounts will PhaseCom be required to meet the service
response times set forth in this Section 2.
a. Phasecom will respond to service requests initiated by the Buyer
in the time frames contained in the following table:
--------------------------------------------------------------------
Severity Response Time Targeted Remedy Time
--------------------------------------------------------------------
1 [***] [***]
2 [***] [***]
3 [***] [***]
4 [***] [***]
Severity 1 and 2 times are measured in calendar hours 24 hours
per day, 7 days per week. Severity 3 and 4 times correspond with
standard business hours of the respective parties.
b. Subject to Buyer's obligation to provide first-tier maintenance
(as defined in Section 5.c. of the Agreement), Phasecom will,
once a problem has been
COLLABORATION AGREEMENT PAGE 44
identified as originating with the system or device, respond to
Buyer within the Response Time (see preceding table) and provide
workarounds promptly within the Targeted Remedy Time (see
preceding table). For a Severity 1 (see preceding table) network
emergency, Phasecom will assign a systems engineer to follow
through and report status to Buyer, when information is requested
by Buyer, until the problem is resolved.
Phasecom will report to Buyer's technical support director any
problems received and unresolved by Phasecom according to the
following timeframes:
i. Severity one: [***]
ii. Severity 2: [***]
iii. Severity 3: [***]
iv. Severity 4: [***]
c. Each product change will include a written correction notice to
Buyer and a new issuance of software or hardware, or hardware
repair, and will be accompanied by documentation as outlined in
Exhibit F.
d. Phasecom will provide Buyer access to Phasecom technical support
engineers via a telephone "Hot Line" to assist Buyer with
Severity One and Two Network Emergencies twenty-four (24) hours a
day, seven (7) days a week. Phasecom will provide access to
Phasecom technical support engineers via a telephone "Hot Line"
to assist Buyer with Severity Three and Four problems during
Phasecom's normal business hours.
e. Phasecom will provide reasonable support services to Buyer during
the term of this Agreement at no charge to Buyer.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
B. SUPPORT RESPONSIBILITIES OF BUYER
1. Buyer will maintain a technically competent staff sufficiently
trained to provide direct support for Phasecom Products to the
End User. Problem determination and resolution will be
communicated between Phasecom and Buyer, and not the Phasecom and
the End User, unless mutually agreed otherwise beforehand.
2. Buyer technical support representatives will attend Phasecom
training program prior to the start of any support services
requests.
3. To the extent reasonably required for maintenance, Buyer shall be
responsible for maintaining a database regarding Product
installations, including Product identity, version numbers,
serial numbers and date of installation, and will share this
database with PhaseCom.
C. PROBLEM DISPUTE ESCALATION
1. Disputed problems may occur when the parties' support staffs
disagree as to Buyer's characterization of problem severity,
resolution priority, adequacy of
COLLABORATION AGREEMENT PAGE 45
Phasecom's response, or other disputes relative to field support
of products. In order to provide minimum levels of customer
service, disputed problems will be escalated to increasingly
senior management levels to achieve resolution.
2. Phasecom will establish problem resolution priorities that are
consistent with the Problem Severity Definitions in section A.1.
of this Exhibit.
3. In the case of Severity 1 problems which Phasecom staff
believes are inappropriately characterized by Buyer, problem
ownership may be referred by the parties' respective staffs to
Buyer's Technical Support Director and Phasecom's Technical
Service Director if no agreement is reached within [***]. If
no agreement is reached between this management level within
an additional [***], problem ownership will be referred to
Buyer's Program Manager or higher level representative, and
Phasecom's Sales Account Manager. If no agreement is reached
at this management level within an additional xxxxx (x) xxxxx,
problem ownership is escalated to Buyer's Vice Presidential
level and Phasecom's CEO level.
4. In the case of Severity 2 and lower problems, problem
ownership may be referred by the parties' respective staffs to
Buyer's Technical Support Director and Phasecom's Technical
Service Director if no agreement is reached within [***]. If
no agreement is reached between this management level within
an additional [***], problem ownership will be referred to
Buyer's Program Manager or higher level representative, and
Phasecom's Sales Account Manager. If no agreement is reached
at this management level within an additional [***] hours,
problem ownership is escalated to Buyer's Vice Presidential
level and Phasecom's CEO level.
5. In the event that Phasecom's response to a Severity 1 problem
is judged to be inadequate by Buyer problem ownership may be
referred by the parties' respective staffs to Buyer's
Technical Support Director and Phasecom's Technical Service
Director if no agreement is reached within [***]. If no
agreement is reached between this management level within an
additional [***], problem ownership will be referred to
Buyer's Program Manager or higher level representative, and
Phasecom's Sales Account Manager. If no agreement is reached
at this management level within an additional [***], problem
ownership is escalated to Buyer's Vice Presidential level and
Phasecom's CEO level.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
D. MAINTENANCE FEES
If ADC is able to generate on-going revenue for maintenance of
Products covered by this Agreement, ADC and Phasecom will negotiate in
good faith to equitably divide the revenue based on the level of
support each is providing.
COLLABORATION AGREEMENT PAGE 46
EXHIBIT N
MAC PRODUCT LICENSE AND SUPPLY AGREEMENT
[NOTE: THE PARTIES WILL NEGOTIATE IN GOOD FAITH TO REACH AGREEMENT ON THIS
EXHIBIT WITHIN 30 DAYS AFTER EXECUTION OF THIS AGREEMENT. THIS EXHIBIT WILL BE A
COMPLETE, STANDALONE AGREEMENT FOR THE SUPPLY AND LICENSING TO ADC OF "MAC
PRODUCTS," TO BE DEFINED TO INCLUDE THE PHASECOM MAC CHIP AND RELATED
TECHNOLOGY. THIS EXHIBIT WILL ALSO PROVIDE, AMONG OTHER THINGS, THAT:
1. UNTIL SUCH TIME AS PHASECOM NO LONGER USES COMMERCIALLY-AVAILABLE MAC CHIPS
IN THE PRODUCTS, PHASECOM WILL PROVIDE ADC WITH ACCESS TO ANY AND ALL
INFORMATION REASONABLY REQUIRED FOR ADC TO DEVELOP ITS OWN CPE PRODUCTS THAT
WILL BE FULLY INTEROPERABLE WITH THE PHASECOM WMTS PRODUCT COVERED BY THIS
AGREEMENT.
2. WHEN PHASECOM HAS COMPLETED THE DEVELOPMENT OF ITS OWN CPE MAC CHIP,
[***].
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
COLLABORATION AGREEMENT PAGE 47
EXHIBIT O
IP DISCLOSURES
PhaseCom was contacted by [***] in approximately [***] with an offer to
license [***]. PhaseCom has opened a dialog with [***] regarding this license
offer and has undertaken an analysis of [***] to determine whether they are
relevant to PhaseCom products. [***] has offered to forward copies of these
[***] file histories to PhaseCom [***] counsel for analysis. However, such
copies have not yet been received. PhaseCom expects to gain an understanding
of these [***] relevance, if any, to PhaseCom products [***] of the file
history copies from [***]. It is unclear at this time whether PhaseCom's
products or technology does, or will, infringe on any of [***] intellectual
property.
[***] Denotes language for which Vyyo has requested confidential treatment
pursuant to the rules and regulations of the Securities Act of 1933, as
amended.
COLLABORATION AGREEMENT PAGE 48