EXHIBIT 10.21 DEVELOPMENT AGREEMENT THIS DEVELOPMENT AGREEMENT ("Agreement") is entered into as of __________________, 1994 (the "Effective Date"), by and between U.S. COMPUTER SERVICES, a California corporation doing business as CableData and having its principal place of business at 2969 Prospect Park Drive, Rancho Cordova, CA 95670 ("CableData"), and TANDEM COMPUTERS INCORPORATED, a Delaware corporation having a place of business at 19333 Vallco Parkway, Cupertino, CA 95014 ("Tandem"). RECITALS A. CableData owns, or has rights to, and currently licenses and distributes, certain computer application software products used in market segments of the cable television and telephony industries, including without limitation, DTH (Direct to Home), DBS (Direct Broadcast Satellite), SMATV (Single Master Antennae Television), MDS (Microwave Distribution System), MMDS (Multipoint Microwave Distribution System), CATV (Cable Television) and TVRO (Television Receiving Only). The telephony industry includes, without limitation, local telephone, personal communication networks, cellular, paging and land lines. Such products include those that are designed to operate on the Tandem Non-Stop Kernel operating system and the IBM RS6000 AIX operating system and other UNIX systems. One of these CableData products is CableData's Intelecable, which CableData owns all rights, title and interest in and to, and which currently operates only on IBM's RS6000 AIX ("CableData's Intelecable"). B. In accordance with this Agreement, CableData now wishes to develop a separate version of CableData's Intelecable to operate on Tandem's Non-Stop Kernel and Integrity NR computer platforms and to enhance it for the domestic convergence market (the "Product"), and to market, support and maintain the Product in the above referenced market segments within selected countries once it is developed. C. Tandem wishes to assist CableData in its development of the Product by providing certain [*] support specified in this Agreement. D. Tandem and CableData intend to enter into a separate Tandem Alliance Agreement (the "Alliance Agreement") on or about the Effective Date to (a) further govern CableData's marketing, sale, maintenance and support of the Product on Tandem platforms once it has been developed and (b) to govern CableData's value added reselling or system integration of certain Tandem NonStop Kernel and Integrity NR hardware and software products in the designated market segments and countries. NOW, THEREFORE, in consideration of these premises and of the mutual promises and conditions contained in this Agreement, Tandem and CableData hereby agree as follows: 1. DEFINITIONS. *PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. CableData Port of Intelecable-1 1.1 "Acceptance Criteria" are the mutually agreed upon written technical and operational performance and functional criteria and Documentation standards set forth in the Development Plan attached as Exhibit A. The Acceptance Criteria will be reviewed from time to time and mutually agreed upon changes made as appropriate. 1.2 "Acceptance Date" means the date Tandem accepts the completed Product in accordance with the Development Plan and this Agreement. 1.3 "Deliverable" is a deliverable under the Development Plan, including, but not limited to, object code, Specifications or Documentation. 1.4 "Development Plan" is the written development plan for the Product mutually agreed to by the parties to be set forth in Exhibit A, which includes, but is not limited to, the Acceptance Criteria, Deliverables, Documentation, Milestones and Specifications. 1.5 "Documentation" is the documents, manuals, product descriptions and other written materials for the Product, referred to, indicated or described in the Development Plan, including, but not limited to, any user manuals, operating materials or Specifications. 1.6 "Eligible Products" means Tandem's Non-Stop Kernel and Integrity NR hardware and software products described in Exhibit B attached hereto. 1.7 "Milestone" is the completion of all of the Deliverables included in a phase as described in the Development Plan. 1.8 "Specifications" are the functional specifications, external and internal design specifications, product descriptions and other Documentation prepared by CableData and approved by Tandem, which define the purpose, functions, features and performance of the Product set forth in the Development Plan. 1.9 "Subscriber" means, for purposes of this Agreement, each active subscriber on CableData's Product during any month. A month, for purposes of this definition, is the period between successive final month-end cutoffs for CableData's or its subsidiaries' distributors' or agents' invoicing purposes. An "active" subscriber, for purposes of this definition, is a residential, business, educational or governmental entity subscribing to one or more services in the Target Market. 1.10 "System Libraries" means the code libraries described in the Development Plan that interface CableData's Intelecable with the Tandem Platforms. 1.11 "The Tandem Platforms" are Tandem's NonStop Kernel and Integrity NR computer systems and their successor systems, however designated, so long as the successor platforms are binary compatible with the NonStop Kernel and Integrity NR operating systems, whichever the case may be. 1.12 "Target Market" means the CATV, DTH, DBS, MDS, MMDS, SMATV, TVRO, telephony or convergence market segments in the countries set forth in attached Exhibit C. The parties may agree from time-to-time to add certain market segments or countries to, or delete them from, the Target Market. CableData Port of Intelecable-2 2. DEVELOPMENT OF PRODUCT. 2.1 GENERALLY CableData will complete the development of the Product in accordance with the Development Plan, including, but not limited to, porting the System Libraries to be capable of operating on the Tandem Platforms. All personnel assigned by CableData to the development of the Product shall possess suitable technical skills and expertise consistent with the requirements of their respective assignments under the Development Plan. Except for the "Tandem Payment" described in Section 3.1 and the Tandem support described in Section 2.2, CableData will be responsible for all costs, facilities, equipment and support related to the development of the Product and its other obligations under this Agreement. 2.2 TANDEM SUPPORT. In addition to the Tandem Payment, Tandem will assist CableData in developing the Product by providing CableData with a combined credit for up to [*] to be applied solely towards (a) Eligible Products purchased or licensed from Tandem and (b) Tandem technical and professional services referred to in the Development Plan ("Professional Services"). Tandem may use subcontractors to provide Professional Services under this Agreement. Each time CableData acquires such Eligible Products and Professional Services, Tandem will debit the [*] credit based on the discounted price Tandem then customarily charges its Alliance Partners for the applicable Eligible Product or Professional Service (the "Discount Price"). If CableData has not exhausted the entire credit by the Acceptance Date, it will expire and unused credit amounts will be retained by Tandem. The credit will apply only to Eligible Products developed, owned and manufactured by Tandem and not to Eligible Products acquired by Tandem from third parties. CableData may purchase or license a reasonable quantity of such third party Eligible Products from Tandem at its then-current cost. If CableData exhausts the entire credit, it must pay for any additional Eligible Products and Tandem Professional Services it acquires at the Discount Price. Eligible Products acquired by CableData under this Section 2.2 will be used solely by CableData to satisfy its obligations under this Agreement and will be subject to Tandem's then-current Development System Policies and Guidelines and its then-current local standard agreement(s) for the purchase and the license of Tandem Eligible Products and the acquisition of Professional Services. The Eligible Product purchase agreement(s) and the Professional Services agreement will be mutually agreed to and entered into by the parties during the course of the development of the Product (the "Product Purchase Agreement" or the "Professional Services Agreement"). 2.3 DEVELOPMENT DEPENDENCIES. Tandem recognizes that the Product will utilize the Tuxedo transaction processing system. Tandem will use reasonable efforts to make a version of Tuxedo which is suitable for Product acceptance testing hereunder available on its Non-Stop Kernel platform no later than the third calendar quarter of 1995. Tandem also recognizes that the Product must utilize Sun Microsystems' ONC RPC protocol in order for it to be ported to the Integrity NR platform. Therefore, Tandem will use reasonable best efforts to make a version of such protocol available on the Integrity NR platform for Product acceptance testing hereunder. Tandem further agrees to use reasonable best efforts to make its D30 version of its NonStop Kernel operating system (a) POSIX 1003.1 (v. 1990) compliant in accordance with release 1 under Tandem's NonStop Kernel Open System Services (OSS) Product API implementation document dated May 13, 1994, (b) POSIX 1003.2 compliant in accordance with release 1 under Tandem's NonStop Kernel Open System Services (OSS) Product Utilities implementation document *PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. CableData Port of Intelecable-3 dated September 15, 1994 and (c) National Language Support ("NLS") XPG4-I18.N compliant, in each case for Product acceptance testing hereunder. If Tandem does not (i) make Tuxedo available, (ii) achieve POSIX 1003.1 and POSIX 1003.2 compliance, or (iii) achieve NLS XPG4-I18.N compliance, in each case as and when set forth above, then CableData's obligation to deliver the completed NonStop Kernel or Integrity NR version of the Product, whichever the case may be, on the date set forth in the Development Plan will be extended for a period of time equal to the period of time that such availability or compliance is delayed, or for such other period of time as the parties may otherwise agree upon in writing, and the parties will revise relevant Milestone due dates accordingly. 2.4 ACCEPTANCE TESTING. 2.4.1 Each Deliverable will be created by CableData in accordance with the Specifications and Development Plan to meet the Acceptance Criteria and will be subject to Tandem's approval, also in accordance with the Acceptance Criteria. Acceptance tests shall be run in the presence of representatives designated by Tandem and CableData, respectively, using mutually agreed to test data and cases corresponding to mutually agreed upon test procedures. The acceptance tests shall establish whether each Milestone satisfies the Acceptance Criteria and conforms to the Specifications applicable to such Milestone. 2.4.2 Tandem shall notify CableData in writing within five (5) business days of any failure(s) or deviation(s) of a Deliverable discovered in acceptance testing. CableData shall submit to Tandem, as soon as possible, but in any event within five (5) business days after receipt of notification of a failure, a proposed plan of action to correct such failure which shall have a reasonable opportunity for success. CableData will amend its proposed plan of action as reasonably required by Tandem, and will promptly and diligently implement the same upon Tandem's approval thereof. 2.5 PROJECT CHANGE ORDERS AND SCHEDULE CHANGES. From time to time during the development phase of this Agreement, either party may submit requests which alter, amend, enhance, add to, or reduce the other party's obligations under the Development Plan. Each party shall evaluate such requests and promptly respond to the other party, within fourteen (14) days, or such other period of time as the Project Managers may mutually agree to, with a description of the technical, price, schedule, and Deliverable impacts of the requested change for current and subsequent phases of the development. Any additions, deletions, modifications, or changes which affect any obligation of either party shall be documented in project change orders issued hereunder ("Change Orders"). Such Change Orders will include, but not be limited to, the agreed upon changes in Specifications, the impact on the development schedule and the impact, if any, on the cost of the development of the Product. Change Orders will be incorporated herein upon acceptance in writing by both parties as if attached hereto. 2.6 PROJECT MANAGEMENT. 2.6.1 TANDEM PROJECT MANAGER. Tandem shall designate a Project Manager (the "Tandem Project Manager") who shall have overall responsibility for the: (i) coordination of the development of the Product; (ii) acceptance of Deliverables; and (iii) approval of Change Orders. The CableData Port of Intelecable-4 Tandem Project Manager shall be CableData's point of contact within Tandem for the resolution of any problems that may arise in connection herewith. 2.6.2 CABLEDATA PROJECT MANAGER. CableData shall designate a Project Manager (the "CableData Project Manager"), who shall have overall responsibility for the: (i) direction and coordination of the development of the Product; and (ii) approval of Change Orders. The CableData Project Manager shall be Tandem's point of contact within CableData for the resolution of problems which may arise in connection herewith. 2.6.3 MANAGEMENT PROCEDURES. The CableData Project Manager and Tandem Project Manager shall establish and implement reasonable project management procedures. Such project management procedures shall include, without limitation, the following: (a) regularly scheduled project status meetings occurring at least once a quarter during the development of the Product and thereafter during the term of this Agreement to discuss the overall status of the development of the Product and each party's ongoing obligations and efforts under this Agreement (the "Quarterly Meetings"); (b) product design review meetings in the development of the Specifications; (c) Change Order procedures; (d) payment certification procedures; (e) acceptance testing; and (f) all other management procedures reasonably deemed necessary by the CableData Project Manager and Tandem Project Manager. The CableData Project Manager will provide a project status report which will be generated upon CableData's completion of each Milestone. In addition to the Quarterly Meetings, each Manager will meet with the other Manager at his or her reasonable request to coordinate with respect to any dispute which may arise relating to the scope, direction or performance of the development of the Product. 2.6.4 MEETINGS AND SCHEDULES. In addition to the Project Manager, each party will designate one (1) person to attend each Quarterly Meeting to be a technical specialist to speak for that party with respect to technical matters. The parties' Project Managers and technical representatives may be replaced at any time, by written notice of the designating party to the other party. Each party will cause its Project Manager and representative to attend the Quarterly Meetings in locations and at times reasonably acceptable to both parties. Each party shall be responsible for its own costs and expenses in attending and participating in such meetings. The CableData Project Manager shall also develop internal time and responsibility schedules as are necessary to accomplish the development of the Product in accordance with this Agreement and shall take appropriate action to maintain such schedules and to promptly resolve development problems and Specification issues as they arise. The CableData Project Manager shall supply copies of all such schedules to the Tandem Project Manager, upon its reasonable request. 2.7 PRODUCT MARKETING, MAINTENANCE AND SUPPORT. 2.7.1 MARKETING. CableData will actively, diligently and competitively market the Product on the Tandem Platforms in all countries within the Target Market in accordance with the Marketing Plan referred to below in Section 2.7.2. On a case-by-case basis, the parties may agree to expand the Target Market to other market segments or non-English speaking countries on mutually agreeable terms. CableData may market the Product directly, through subsidiaries, through local distributors selected by CableData, or through other means or mechanisms selected by CableData, and CableData Port of Intelecable-5 CableData shall retain complete discretion in the appointment and use of such distributors, means or mechanism, subject to its marketing obligations set forth in Section 2.7 and the Alliance Agreement. CableData's use of distributors, subsidiaries or agents to market the Product will not release it from any of its obligations under this Agreement. 2.7.2 MARKETING PLAN. The Alliance Agreement will include a mutually agreed to Marketing Plan for the Product. The Marketing Plan may provide for joint participation in business and trade shows, exhibitions, and similar events, cooperative marketing and communications with distributors and customers and appointment of a marketing representative for each party. In accordance with the Alliance Agreement, each party will cause its employees to cooperate with the other party's employees in such joint or cooperative marketing efforts agreed to under the Marketing Plan. If marketing representatives are provided for, each party may change its representative upon notice to the other party. 2.7.3 MAINTENANCE OF FUNCTIONALITY AND FEATURES. During the term of this Agreement, CableData will ensure that the Product's functionality and features are available on each Tandem Platform and are equivalent to the highest level of functionality and features CableData provides for other versions of CableData's Intelecable, or its similar software products, which operate on non-Tandem computer platforms. This will include, without limitation, assuring that the System Libraries, and the Product as a whole, comply with (a) POSIX 1003.1 (v. 1990) in accordance with release 1 under Tandem's NonStop Kernel Open System Services (OSS) Product API implementation document dated May 13, 1994, (b) POSIX 1003.2 in accordance with release 1 under Tandem's NonStop Kernel Open System Services (OSS) Product Utilities implementation document dated September 15, 1994 and (c) those portions of National Language Support XPG4-I18.N which are material to the full and proper operation of the Product in the language of any non-English speaking country that the parties may agree to add to the Target Market from time-to-time so that CableData is able to market such version of the Product in such country promptly after the parties have agreed to such addition. CableData will announce that such functionality and features will be available on the applicable Tandem Platform at the same time and to the same extent as it announces that the functionality and features are or will be available on any non-Tandem platform. CableData will provide such functionality and features on the applicable Tandem Platform no later than ninety (90) days after the date it first provides such functionality on any non-Tandem platform. Notwithstanding the foregoing, if an end-user customer dictates that the Product include third party software functionality or features that are not then available on either Tandem Platform, and CableData reasonably determines that it is not technically feasible to make such functionality or features available on either Tandem Platform under this Section 2.7.3, then before or promptly after making the functionality or features available on the non-Tandem platform CableData will give Tandem notice of that fact and the parties will thereafter promptly meet to review CableData's determination. If Tandem reasonably agrees that making such functionality or features available is technically unfeasible, then CableData need not make such functionality or features available on either Tandem Platform or the parties may agree to attempt to make the functionality or features available on mutually acceptable terms, which may include further Tandem monetary and/or technical support. On the other hand, if the parties do not agree on the technical feasibility of making such third party functionality or features available, then the dispute will be resolved in CableData Port of Intelecable-6 accordance with the dispute resolution provisions of Section 12.9 below and CableData's obligation to make the functionality or features available on the Tandem Platforms will be deferred until the dispute is resolved. If the maintenance of the functionality and features of the Product under this Section 2.7.3 results in any modifications or enhancements to or derivative works of the Product, such modifications, enhancements or derivative works will be considered part of the Product. 2.7.4 ALLIANCE AGREEMENT. Tandem and CableData will enter into the Alliance Agreement. When entered into, the Alliance Agreement will govern the marketing, sale, maintenance and support of the Product to and for Tandem customers for use with Eligible Products, as modified or supplemented by any additional or different terms in this Section 2.7, if any. The Alliance Agreement will also govern any mutually agreed to discounts or fees provided to CableData in connection with CableData acting as a value added reseller or system integrator of Eligible Products or a Tandem Alliance software house. 3. FUNDING OF THE DEVELOPMENT. [*] *PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. CableData Port of Intelecable-7 [*] 4. COOPERATION. Each party shall cooperate with the other party during the term of the Agreement as follows: 4.1 TECHNICAL DIRECTION AND INFORMATION. Each party will use good faith efforts to provide the other party with advance notices of new product developments and releases that its technical representative under this Agreement has determined have applicability and appropriateness to the Product and Eligible Products as soon as practical, but in no event later than such information is publicly disclosed by the party providing such information. The receiving party shall treat such advance notices as confidential and proprietary information of the other party in accordance with Section 7.4. 4.2 NEW PRODUCTS. As and when Tandem releases or makes available in a country within the Target Market any new software products for use with Eligible Products, Tandem and CableData may jointly evaluate such products for applicability to the Product, and in the event that they reasonably agree that such products are applicable to the Product, then Tandem may provide CableData with a machine-executable copy of the product free of charge solely for evaluation purposes in accordance with the terms of the Product Purchase or Loan Agreement. 4.3 EXISTENCE OF AGREEMENT. Neither party shall disclose the existence of this Agreement until such time as the parties shall mutually agree upon and implement a public announcement, except to its employees, contractors or agents who have a strict need to know about it in order for such party to meet its obligations under this Agreement; thereafter, either party may disclose the existence of this Agreement, but neither party shall disclose the specifics of the Agreement to third parties without the prior written consent of the other party, except to its employees, contractors or agents as set forth above, as may be required by law or to its auditors in the internal operations of its business. *PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. CableData Port of Intelecable-8 5.1 RETAINED DISCOUNTS AND INFLUENCE FEES. Beginning on the first day of the first calendar quarter following the Effective Date and for the remaining portion of a (5) year period commencing as of the Effective Date, Tandem will retain [*] during the first year of such period, [*] during the second year of such period and [*] during the third, fourth and fifth years of such period, of (a) any and all "Discounts" (defined in the Alliance Agreement) CableData receives under the Alliance Agreement for purchases, licenses or leases of any Tandem products, including, but not limited to, Eligible Products, for value added resale, system integration, internal use, service bureau or any other purpose, except for use as a Tandem development system ("Retained Discounts"), and (b) any and all software house "Revenue Influence Fees" (defined in the Alliance Agreement), or any other fees CableData receives under the Alliance Agreement on revenue Tandem obtains from a customer's purchase or lease of Tandem hardware, which result from any and all CableData application or other software packages covered by the Agreement, including, but not limited to, the Product ("Retained Fees"). For example, if CableData is acting as a Tandem value added reseller in the second year of the retention period and is receiving a [*] Discount, then Tandem will retain [*] points of the Discount leaving CableData with a [*] percent [*] net Discount; and if in the third year of the retention period CableData then becomes a software house instead of a value added reseller and is receiving a [*] percent [*] Revenue Influence Fee, then Tandem will retain [*] percentage points of the Fee leaving CableData with a net Fee of [*] percent [*]. Cumulative Retained Discounts and Retained Fees during the retention period will be capped at [*]. 5.2 SUBSCRIBER FEE. Beginning on the Effective Date and for a period of five (5) years thereafter, CableData will accrue for Tandem's benefit a Subscriber count fee as follows: For each customer of CableData providing Subscriber services in the Target Market (other than non-paying Beta site customers) who uses the Product on or with any Eligible Product in any manner (including, without limitation, via licensing or in a service bureau arrangement), no matter who owns, leases, possesses, operates or controls the Eligible Product itself, Tandem shall earn a fee of [*] per month per subscriber (the "Subscriber Fee"). Cumulative Subscriber Fees during the five (5) year Subscriber Fee period will be capped at [*]. 5.3 FEE OFFSETS. Within thirty (30) days after Tandem receives each monthly Subscriber Fee report from CableData described in Section 5.5 below, it will, for CableData's benefit, (a) offset accrued and previously unoffset Retained Discounts and Retained Fees against all accrued Subscriber Fees which have not been previously offset against and (b) provide CableData with a written report of the offset. For example, if at the end of the first month there are [*] in Retained Discounts and Retained Fees and CableData's Subscriber Fee report shows [*] in Subscriber Fees, the offset will leave no remaining unoffset Retained Discounts and Retained Fees to carry forward for the next month and [*] in remaining accrued Subscriber Fees. If in the next month there are [*] in new Retained Discounts and Retained Fees and [*] in new Subscriber Fees, then the [*] in newly accrued Retained Discounts and Retained Fees will be offset against a total of $100,000 in new and previously accrued and unoffset Subscriber Fees leaving a zero balance in both the accrued Retained Discount and Retained Fees account and the accrued Subscriber Fee account to carry forward for the next month. *PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. CableData Port of Intelecable-9 5.4 FINAL RECONCILIATION OF FEES. At the end of the five (5) year period described in Sections 5.1 and 5.2 above, if there are any remaining unoffset Subscriber Fees CableData will pay this amount to Tandem by check at Tandem's office at 19333 Vallco Parkway, Cupertino, CA 95014 within thirty (30) days after the end of the (5) year period. If at the end of the five (5) year period the cumulative amount of all accrued Subscriber Fees, including those which have received an offset, does not equal [*] CableData does not have to pay Tandem the difference between such cumulative amount and [*]. If at the end of the five (5) year period, all remaining Retained Discounts and Retained Fees exceed all remaining Subscriber Fees, CableData will not be entitled to the excess which will be retained by Tandem. 5.5 RECORDS AND REPORTS. CableData shall keep complete and accurate written records of Subscriber Fees and Tandem will keep complete and accurate written records of Retained Discounts and Retained Fees. Beginning with the second month following the Effective Date, for each calendar month during the five (5) year period referred to in Section 5.1 and 5.2 above, CableData will provide, within fifteen (15) days after the end of each month, a written report so that Tandem can determine the Fees offset for that month. Not more than once per calendar quarter, within thirty (30) days after written request to the other party, Tandem or CableData shall, through an independent third party, be entitled to conduct an audit and review of the financial records and reports of the other party relating to Subscriber Fees and counts or Retained Discounts and Retained Fees in order to verify the proper amounts of accrued Subscriber Fees and offsets. The audit shall occur within normal business hours, at the corporate headquarters in California of the party being audited. The auditing party shall be entitled to retain an independent certified public accounting firm to assist it with the audit. The parties shall be responsible for their own costs and expenses in connection with the audit, unless the independent auditor determines that the audited party's financial records were materially incomplete or inaccurate by at least [*] percent [*], in which case it will bear the other party's costs and expenses of that audit. 5.6 TAXES. All taxes, duties, fees and other governmental charges of any kind, including withholding taxes (except based on Tandem's net income), which are levied, assessed, or otherwise imposed by or under the authority of any government or any political subdivision thereof, on revenues derived by CableData, its subsidiaries, distributors or agents in connection with licenses of the Product or Retained Discounts and Retained Fees and Subscriber Fees, will not be considered a part of, deducted from, or offset against any Subscriber Fees payable to or Discounts and Fees retained by Tandem under this Section 5. 6. NON-EXCLUSIVITY. The parties agree that the relationship between them set forth in this Agreement is non-exclusive and each party is free to enter into similar or other agreements with third parties. 7. PROPRIETARY RIGHTS. 7.1 OWNERSHIP OF THE PRODUCT. CableData shall retain exclusive ownership of all right, title and interest in and to the Product, and all portions thereof (including, but not limited to System Libraries), now existing or to be developed or adapted pursuant to this Agreement by *PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. CableData Port of Intelecable-10 CableData, Tandem, any third party or parties, or their respective employees, representatives, agents, consultants, independent contractors, successors and assigns, in any and all forms (including but not limited to source code and machine-executable code), all derivative works thereof and enhancements thereto, all Product documentation, work papers or written development materials relating to any of the foregoing developed pursuant to this Agreement, and all Intellectual Property Rights in any of the foregoing; and Tandem hereby assigns to CableData all right, title, and interest in and to any of the foregoing (including but not limited to, assignment of any copyrights it may have to the System Libraries), which it may otherwise have or be deemed to acquire in the Product. Upon CableData's request, Tandem agrees to assist CableData at CableData's sole expense as may be reasonably required to perfect CableData's rights as described in this Section 7.1, which assistance shall include the execution of any and all instruments or documents that may be necessary or convenient to establish, evidence, maintain, defend or enforce CableData's rights as described in this Section 7.1. "Intellectual Property Rights" means all right, title and interest in and to patents, patent applications, copyrights, mask work rights, trademarks, trade names and trade secrets. 7.2 OWNERSHIP OF ORIGINAL WORKS OF TANDEM. CableData does not claim any rights to original works created or owned by Tandem which are not part of the Product, including but not limited to any Eligible Products. All Intellectual Property produced by Tandem created prior to the effective date of this Agreement or which is not part of the Product will be owned by Tandem, except to the extent such work contains any portion of the Product or any other original work of CableData. CableData recognizes and agrees that Tandem has and retains any and all know-how, ideas, design concepts or techniques employed by Tandem in rendering Professional Services to CableData under this Agreement which are not covered by Section 8.1, including all Intellectual Property rights therein, and may provide similar services to third parties. 7.3 NO IMPLIED LICENSES. This Agreement shall not be construed or interpreted to grant to either party any right or license, by implication, estoppel or otherwise, to sell, transfer, assign, develop, or make any use of this Product or any of the Eligible Products, except as expressly provided in this Agreement or in the Alliance Agreement. Without limiting the generality of the foregoing sentence, except as set forth in the Alliance Agreement, neither party shall have any rights to adapt, alter, localize, license or sublicense to third parties any of the foregoing items, without the prior written consent of the other party, which may be granted or withheld in the other party's sole discretion. Except as expressly set forth in this Agreement or the Alliance Agreement, neither party shall employ, retain, or subcontract with any third party or parties to perform any obligations or exercise any rights it may have under this Agreement, unless such party has first obtained the prior written consent of the other party to such action, which consent will not be unreasonably denied. 7.4 CONFIDENTIALITY. 7.4.1 PROTECTION OF CONFIDENTIAL INFORMATION. Should either party disclose any of its confidential information for any purpose in connection with this Agreement, the party receiving the information shall maintain the information in confidence, shall use at least the same degree of CableData Port of Intelecable-11 care to maintain the secrecy of the information as it uses in maintaining the secrecy of its own proprietary, confidential and trade secret information, shall always use at least a reasonable degree of care in maintaining the secrecy of the information, shall use the information only for the purpose of performing its obligations under this Agreement unless hereafter agreed in writing by the other party. Neither party shall disclose any such information to any person except those of its employees, agents and contractors having a need to know in order to accomplish the sole purpose stated above, and shall require each employee, agent and contractor before he or she receives direct or indirect access to the information, to acknowledge the confidential, proprietary and trade secret nature of the information and to agree to be bound by this Section 7.4. Each party shall deliver to the other party, in accordance with any request from the other party, all copies, notes, packages, diagrams, computer memory media and all other materials containing any portion of the other party's confidential information. 7.4.2 LIMITATION ON OBLIGATIONS. Neither party shall have an obligation with respect to any portion of such information which (i) was known to it prior to receipt from the other party, (ii) is lawfully obtained by either party from a third party under no obligation of confidentiality or (iii) is or becomes publicly available other than as a result of any act or failure to act of either party. Confidential Information must be marked or otherwise clearly designated as such in writing by the disclosing party prior to disclosure or within five (5) days of disclosure if provided orally. 7.4.3 INCLUDED WITHIN CONFIDENTIAL INFORMATION. For purposes of this Section 7.4, confidential information made available to Tandem by CableData may include, without limitation, the Product and other CableData software application products made available to Tandem in the course of performance of this Agreement, and all documentation and code relating thereto, and confidential information made available to CableData by Tandem may include without limitation all information relating to the Eligible Products and any other hardware or software Products Tandem provides CableData in the course of performance of this Agreement, and all documentation and code related thereto. Confidential information shall also include, but is not limited to, either party's proprietary, technical, developmental, marketing, sales, operating performance, cost, know-how, business and process information, computer programming techniques, and all record-bearing media containing or disclosing such information and techniques, as well as any samples, models or prototypes, or parts thereof. 7.5 USE OF TRADEMARK, NAME. Except as set forth in the Alliance Agreement, each party agrees not to use the other's name, trade name, trademark, service mark, or other designation without such other party's prior written consent. 8. WARRANTY. CableData represents and warrants that (a) it owns all right, title and interest in and to CableData's Intelecable and in and to all of the Intellectual Property it will use to develop the Product and perform its obligations under this Agreement or (b) it has the authority to do so without infringing the rights of any third party or creating any financial obligation to any third party. 9. INDEMNIFICATION. CableData will defend or settle any claim against Tandem (a) resulting from the performance or use of the Product and any information CableData supplies about the same, or (b) that the Product CableData Port of Intelecable-12 infringes any patent, utility model, industrial design, copyright, trade secret, mask work, trademark or servicemark, provided Tandem promptly notifies CableData in writing of the claim and cooperates with CableData in and grants it sole authority to control the defense and any related settlement. CableData will pay the costs of such defense and settlement and any costs and damages finally awarded against Tandem. THE ABOVE STATES TANDEM'S EXCLUSIVE REMEDY AND CABLEDATA'S ENTIRE LIABILITY FOR CLAIMS OF INFRINGEMENT BY THE PRODUCT. 10. NO CONSEQUENTIALS. NEITHER PARTY WILL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, PUNITIVE, MORAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER OR NOT FORESEEABLE AND WHETHER OR NOT THE OTHER PARTY IS INFORMED OF THEIR POSSIBILITY, INCLUDING, BUT NOT LIMITED TO, LOSS OF RECORDS OR DATA, GOODWILL, PROFITS, USE OF MONEY OR PRODUCTS, STOPPAGE OF WORK OR IMPAIRMENT OF OTHER ASSETS, ARISING OUT OF CONTRACT OR TORT. 11. TERM AND TERMINATION. 11.1 TERM. This Agreement shall become effective on the date first written above and shall continue in effect thereafter for a period of five (5) years unless sooner terminated pursuant to this Section 11. 11.2 TERMINATION. 11.2.1 TERMINATION FOR BREACH OR INSOLVENCY. A party may terminate this Agreement, effective upon dispatch of written notice of termination to the other party, without judicial notice or resolution, if: (a) the other party breaches any of its material obligations under this Agreement and fails to cure such breach within thirty (30) days after receipt of notice specifying the breach; or (b) the other party ceases to conduct business in the normal course; becomes insolvent; enters into suspension of payments, moratorium, reorganization or bankruptcy; makes a general assignment for the benefit of creditors; admits in writing its inability to pay debts as they mature; suffers or permits the appointment of a receiver for its business or assets; or avails itself of or becomes subject to any other judicial or administrative proceeding that relates to insolvency or protection of creditors' rights. [*] *PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. CableData Port of Intelecable-13 [*] 11.2.2 TERMINATION OTHER THAN FOR BREACH. 11.2.2.1 ELECTION TO TERMINATE. Notwithstanding anything to the contrary in this Agreement, prior to Tandem's acceptance of both the final Development Plan and the final Marketing Plan referred to in Section 3.1(b) above, if for any reason whatsoever, Tandem or CableData decides in its sole and absolute discretion not to agree (a) to the preliminary Development Plan, or any part thereof, (b) to the final Development Plan, or any part thereof, (c) to the final Marketing Plan, or any part thereof or (d) to enter into the Alliance Agreement, then either party (the "Terminating Party") may provide the other party (the "Non-Terminating Party") with notice that it elects to end its participation in the development of the Product and terminate the Agreement. However, within five (5) business days of the date of the Non-Terminating Party's receipt of such notice, the Non-Terminating Party may provide the Terminating Party with notice requesting that a Vice President designated by each party jointly meet with all Project Managers and technical representatives at an agreed upon date and time within five (5) business days of the Terminating Party's receipt of such notice to confer regarding the Terminating Party's election to terminate. If the meeting is requested, each party will cause such persons to attend the meeting. If the parties have not agreed in writing within five (5) days from the date of the meeting to continue the Agreement it will be considered terminated at the end of such (five) 5 day period. Each party may change its designated Vice President with notice to the other party and the decisions of the Vice Presidents will bind the respective party. If the Non- Terminating Party does not request the above described meeting in the time provided for above, then the Agreement will be deemed terminated as of the date of the Terminating Party's notice of election to terminate. [*] 11.2.2.2 REMEDY FOR ELECTION TO TERMINATE. If the Agreement is terminated by either party in the manner set forth in Section 11.2.2.1 above, a party's election to terminate will not be considered a breach of this Agreement by such party. In addition, no matter which party elects to terminate the Agreement, within thirty (30) days of the date of termination, [*] and notwithstanding anything to the contrary in this Agreement, neither party will have any further liability of any kind to the other party in connection with this Agreement and the development of the Product, except for liability for any breach of the Agreement which occurred prior to such termination and *PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. CableData Port of Intelecable-14 any liability in connection with rights and obligations under this Agreement which survive its termination under Section 12.18 or survive under the relevant provisions of a Product Purchase Agreement or a Professional Services Agreement. 11.3 EFFECT OF TERMINATION. Except as otherwise expressly stated in this Section 11.2 or in Section 12.18 below (Survival), upon any termination of this Agreement all rights and obligations of each party to this Agreement shall expire and be of no further force or effect. Upon the termination of this Agreement for any reason, each party will promptly deliver to the other party all of the other party's Confidential Information in its possession or control. 11.4 EXCLUSIVE REMEDY. THE REMEDIES PROVIDED FOR IN SECTIONS 11.2.1.1, 11.2.1.2 AND 11.2.2.2, AND ANY REMEDIES EXPRESSLY PROVIDED FOR ELSEWHERE IN THIS AGREEMENT, STATE THE ENTIRE LIABILITY OF A PARTY, AND THE SOLE AND EXCLUSIVE REMEDY OF THE OTHER PARTY, FOR THE ACTS OR OMISSIONS OF A PARTY WHICH GIVE RISE TO SUCH REMEDIES, EXCEPT FOR ANY REMEDIES PROVIDED FOR BREACH OF THE CONFIDENTIALITY PROVISIONS OF THIS AGREEMENT. [*] 12. MISCELLANEOUS PROVISIONS. 12.1 INDEPENDENT CONTRACTORS. 12.1.1 No provision of this Agreement shall be construed to constitute either party as the agent, servant, employee, partner, or joint venturer of the other party. The parties to this Agreement are and shall remain independent contractors. Each party shall retain exclusive management, direction, and control of its employees and the work to be performed by it hereunder. 12.1.2 All personnel assigned by one party to work with the other party pursuant to this Agreement shall remain employees of the assigning party, and shall possess suitable technical skills and expertise consistent with the requirements of their respective assignments. Each party shall cause any of its employees assigned to provide services at the other party's facilities to comply with all reasonable regulations and instructions while at such facilities, which were previously provided to the other party or the employee. Each party shall have the right to exclude from its premises any persons who refuse to individually sign a nondisclosure and confidentiality agreement substantially in the form of and no more restrictive than the provision of Section 7.4 herein. The assigning party shall indemnify and hold the other party harmless from any and all damages and losses finally awarded for any claims, suits or liability for bodily injury, death, or damage to real property or tangible personal property, which results from any failure by such personnel to comply with such regulations and instructions (other than the negligence of the party to whom the personnel were assigned). The indemnifying party shall have sole control of any litigation and/or settlement and the indemnified party will promptly *PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. CableData Port of Intelecable-15 notify the indemnifying party when it first learns of such suit, claim or action. The indemnified party will provide the indemnifying party with reasonably requested assistance in the defense or settlement of the suit, claim or action. 12.2 NO ENDORSEMENT. TANDEM DOES NOT APPROVE, ENDORSE, WARRANT OR GUARANTEE THE PRODUCT. CABLEDATA WILL NOT REPRESENT TO ANY THIRD PARTY THAT TANDEM HAS APPROVED, ENDORSED, WARRANTED OR GUARANTEED THE PRODUCT WITHOUT THE SPECIFIC PRIOR WRITTEN CONSENT OF TANDEM. 12.3 COUNTERPARTS. This Agreement may be executed in counterparts, each of which shall be deemed an original instrument, but both of which together shall constitute only one and the same instrument. 12.4 ASSIGNMENT. Neither this Agreement nor any right or obligation hereunder is assignable or delegatable in whole or in part, whether by operation of law or otherwise, except (a) as otherwise expressly set forth in this Agreement or (b) upon prior written consent of the other party, which consent will not be unreasonably withheld. Any assignment or delegation which violates this Section is void. Notwithstanding the foregoing, this Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. The successor or assign of a party hereto shall execute and deliver all documents and instruments reasonably requested by the other party to evidence and confirm its obligations under this Agreement. 12.5 NOTICES AND OTHER COMMUNICATION. Every notice or other communication required or contemplated by this Agreement to be given by any party shall be delivered either by (i) personal delivery, (ii) postage prepaid, return receipt requested, registered or certified mail (airmail if available), or the equivalent of registered or certified mail under the laws of the country where mailed, (iii) nationally recognized overnight courier, such as Federal Express or UPS, or (iv) facsimile with a confirmation copy sent simultaneously by postage prepaid, return receipt requested, registered or certified mail, in each case addressed to the party for whom intended at the following address: To CableData: U.S. Computer Services 2969 Prospect Park Drive Rancho Cordova, CA 95670 Attn: Bob Crowley, VP Marketing Division Facsimile: (916) 636-5750 With a copy to: General Counsel Facsimile: (916) 636-4561 To Tandem: Tandem Computers Incorporated 19191 Vallco Parkway Cupertino, CA 95014 Attn: Vice President & General Manager Communications Division Facsimile: (408) 285-5458 or at such other address as a party previously shall have designated by written notice to the other party. Notice by registered or certified mail CableData Port of Intelecable-16 shall be effective on the date it is officially recorded as delivered to the intended recipient by return receipt or equivalent, and in the absence of such record of delivery, the effective date shall be presumed to have been the 5th business day after it was deposited in the mail. All notices and other communications required or contemplated by this Agreement to be delivered in person or sent by courier shall be deemed to have been delivered to and received by the addressee and shall be effective on the date of personal delivery; notices delivered by "tested" telex or by facsimile with simultaneous confirmation copy by registered or certified mail shall be deemed delivered to and received by the addressee and effective on the first business day in the location where the facsimile was received after the date sent. Notice not given in writing shall be effective only if acknowledged in writing by a duly authorized representative of the party to whom it was given. 12.6 LAW TO GOVERN. The validity, construction and enforceability of this Agreement shall be governed in all respects by the laws of California, except its choice of law provisions, whether or not one or more of the parties shall now be or hereafter become a resident of another state or country. 12.7 SUBJECT HEADINGS. The subject headings of the Articles and Sections of this Agreement are included for the purpose of convenience only, and shall not affect the construction or interpretation of any of its provisions. 12.8 NO WAIVER OF RIGHTS. All waivers hereunder must be made in writing, and failure at any time to require any other party's performance of any obligation under this Agreement shall not affect the right subsequently to require performance of that obligation or any other obligation under this Agreement. Any waiver of any breach of any provision of this Agreement shall not be construed as a waiver of any continuing or succeeding breach of such provision or a waiver of modification of the provision or any other provision of this Agreement. 12.9 SETTLEMENT OF DISPUTES. Any controversy or claim between the parties arising out of or in connection with this Agreement shall first be submitted for resolution as follows. Within thirty (30) days of the time that such dispute or controversy arises, a Vice President of each party shall confer in good faith in an attempt to resolve the controversy or claim. The decisions of the Vice Presidents will be final and binding on the parties. Either party may change its representative at any time with prior notice to the other party. A party's election to terminate this Agreement under Section 11.2.1.1 or 11.2.1.2 is not subject to the foregoing. A party's election to terminate this Agreement under Sections 11.2.2 and 12.19 will be resolved solely in the manner described in those Sections. 12.10 STATUTE OF LIMITATIONS. Neither party will bring a legal action related to this Agreement more than four (4) years after the cause of action arose. Nothing in this Agreement will affect the limitation period applicable to any action or proceeding for (i) unauthorized use or disclosure of confidential information provided under this Agreement or (ii) infringement of proprietary rights. 12.11 ENTIRE AGREEMENT. This Agreement represents the entire understanding and agreement between the parties concerning the subject matter CableData Port of Intelecable-17 hereof and supersedes any and all prior negotiations, understandings or agreements in regard thereto, oral or written. 12.12 EXPENSES. Except as expressly provided herein to the contrary, each party to this Agreement shall be solely responsible for its expenses incurred in connection with the negotiation, preparation, execution, delivery and performance of this Agreement. 12.13 AMENDMENTS. This Agreement or the Exhibits hereto may not be modified except by an instrument or instruments in writing signed by the party or parties against whom enforcement of such modification is sought. 12.14 INCORPORATION BY REFERENCE. Exhibits A through F attached to this Agreement and referred to herein are hereby incorporated by reference into this Agreement. 12.15 SEVERABILITY. Whenever possible, this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement should be prohibited or invalid under applicable law, such provision shall be construed as ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. 12.16 EXPORT CONTROLS. CableData acknowledges that the Eligible Products, and all related confidential and technical information, documents and materials, are subject to export controls under the U.S. Export Administration Regulations. CableData will, cause its subsidiaries, affiliates, agents, distributors, and customers to: (i) comply strictly with all legal requirements established under these controls; (ii) cooperate fully with Tandem in any official or unofficial audit or inspection that relates to these controls and (iii) not export, re- export, divert, transfer or disclose, directly or indirectly, any Eligible Products, or related confidential or technical information, document or material, or any direct product thereof, to any of the countries currently or subsequently listed in the U.S. Export Administration Regulations, or to any national or resident thereof, without obtaining the prior written authorization of Tandem and the U.S. Commerce Department. 12.17 UNLAWFUL PAYMENTS. Neither CableData nor Tandem will use any payment or other benefit derived from the other to offer, promise or pay any money, gift or any other thing of value to any person for the purpose of influencing official actions or decisions affecting this Agreement, while knowing or having reason to know that any portion of this money, gift or thing will, directly or indirectly, be given, offered or promised to (i) any person acting in an official capacity for any government or its instrumentalities (including government-owned or controlled corporations) or any non-governmental client or prospective client or (ii) any political party, party official or candidate for political office. 12.18 SURVIVAL. Each party's rights and obligations under Sections 5 (Recoupment of Tandem Payment) and Section 12.19 (Export Controls) are expressly intended to survive the expiration or termination of this Agreement. However, if the Agreement is terminated in accordance with Sections 11.2.1.1 or 11.2.1.2 of Section 11.2.1, then each party's rights and obligations under Section 5 will not survive, except with respect to the Integrity NR version of the Product if it is completed before termination and CableData Port of Intelecable-18 [*] In addition, no expiration or earlier termination of this Agreement shall relieve either party of its rights or obligations under Section 7 of this Agreement (Proprietary Rights), which rights and obligations are expressly intended to survive any such expiration or termination. 12.19 FORCE MAJEURE. Neither party will be liable for any failure or delay in performing an obligation that is due to causes beyond its reasonable control, such as natural catastrophes, governmental acts or omissions, laws or regulations or labor strikes. If any such cause continuously prevents or delays performance of this Agreement for more than sixty (60) days, the party awaiting performance may elect to terminate this Agreement by providing notice to the other party in the manner set forth in Section 11.2.2.1, and the other party may invoke the request for meeting procedures set forth in such Section. In the event a force majeure event occurs prior to Tandem's acceptance of the completed Product and Tandem is the party awaiting performance, if Tandem thereafter terminates this Agreement as provided for above, [*]. IN WITNESS WHEREOF, the parties have caused their authorized representatives to execute this Agreement in each party's name as of the Effective Date. "CableData" "Tandem" U.S. COMPUTER SERVICES, TANDEM COMPUTERS INCORPORATED a California corporation By: /s/ Robert D. Crowey By: /s/ John Sims --------------------------- -------------------------- Name: Robert D. Crowey Name: John Sims ------------------------- ------------------------ Title: Senior Vice President Title: Vice President _____________________________ ___________________________ *PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST. CableData Port of Intelecable-19 EXHIBIT A Development Plan CableData Port of Intelecable-20 EXHIBIT B Eligible Tandem Products The following Tandem hardware and software products described in Tandem's published Price List as of the Effective Date: 1. All servers running the Guardian operating system and all associated attached peripheral devices. 2. Himalaya series servers (currently K100, K1000 and K10000) running the NonStop Kernel operating system and all associated attached peripheral devices, including systems designated by Tandem as their successors. 3. Integrity NR servers (NR4401, NR4412, NR4436 designations) running UNIX operating system 5.4 (IRIX or Tandem based UNIX operating systems) and all associated attached peripheral devices, including systems designated by Tandem as their successors. CableData Port of Intelecable-21 EXHIBIT C Target Market Countries United States of America; Guam; Puerto Rico; Canada; United Kingdom of Great Britain and Northern Ireland; Australia CableData Port of Intelecable-22