CERTAIN PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
Exhibit 10.13
STRATEGIC PARTNERING AGREEMENT
BY AND BETWEEN
CABLETRON SYSTEMS, INC.
AND
PREDICTIVE SYSTEMS, INC.
EFFECTIVE DATE: JULY 30,1999
TABLE OF CONTENTS
SECTION 1. PAGE 1
SECTION 2. PAGE 2
SECTION 3. PAGE 3
SECTION 4. PAGE 7
SECTION 4A. PAGE 8
SECTION 5. PAGE 8
SECTION 6. PAGE 11
SECTION 7. PAGE 11
SECTION 8. PAGE 11
SECTION 9. PAGE 11
SECTION 10. PAGE 11
SECTION 11. PAGE 12
SECTION 12. PAGE 12
SECTION 13. PAGE 13
SECTION 14. PAGE 14
SECTION 15. PAGE 15
SECTION 16. PAGE 15
SECTION 17. PAGE 15
SECTION 18. PAGE 16
SECTION 19. PAGE 17
SECTION 20. PAGE 17
SECTION 21. PAGE 18
SCHEDULES PAGE 20
STRATEGIC PARTNERING AGREEMENT
BETWEEN
CABLETRON SYSTEMS, INC.
AND
PREDICTIVE SYSTEMS, INC.
THIS AGREEMENT (the "Agreement") made and entered into this
30th day of July, 1999, by and between Cabletron Systems, Inc., a Delaware
corporation with offices located at 35 Industrial Way, Rochester, New Hampshire
03867 (hereinafter "Cabletron"), and Predictive Systems, Inc., a Delaware
corporation with offices located at 145 Hudson Street, New York, New York, 10013
(hereinafter "Predictive").
RECITALS
WHEREAS, Cabletrom is a provider of network technology and consulting services
worlwide; and
WHEREAS, Predictive is a provider of services which, among
other things, assess the effectiveness of customers' security systems with
respect to specified applications, networks, network servers, and other
information assets; and
WHEREAS, Cabletron desires to enter into an agreement with
Predictive, and Predictive desires to do the same with Cabletron, to enable
Cabletron to offer such security assessment and other services to its customers,
on the terms and conditions set forth below.
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants set forth in this Agreement, and other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to as follows:
1. DEFINITIONS
1.1 "Customer" is a customer to whom services are provided in a Project
pursuant to this Agreement
1.2 "Project" is a work project for a Customer that is subject to this
Agreement. A Project may be an Assessment Project, a Follow-On Project or a
Teaming Project.
A. An "Assessment Project" is a Project involving only
delivery of the services contemplated by the relevant Assessment Product.
B. A "Follow-On Project" is a Project for a Customer that
addresses a particular issue or issues identified by Predictive or Cabletron in
connection with, or that otherwise arises out of, and Assessment Project, a
Teaming Project, or a Follow-On Project arising out of an Assessment Project or
a Teaming Project.
C. A "Teaming Project" is a Project mutually determined by the
parties to be undertaken as a team with respect to customers of Cabletron, in
accordance with Section 4A hereof.
1.3 "Assessment Product" means a packaged service development by
Predictive and marketed by Cabletron's sales force pursuant to this Agreement,
including without limitation, the ISRA product referred to in Section 3.
3
1.4 "Assessment Project Agreement" means the statement of work and
associated purchase order between Cabletron and Predictive or Cabletron and the
Customer, as the case may be, with respect to an Assessment Product. The form of
Assessment Project Agreement relating to the ISRA product is attached hereto
Schedule 1.4, and the Assessment Project Agreements for other Assessment
Projects shall be substantially similar thereto, with such changes as may be
mutually agreed to by Predictive and Cabletron. Assessment Project Agreements
may be modified only by mutual agreement of Cabletron, and Predictive, and shall
be subject to the terms of this Agreement.
1.5 "Pricing Algorithm" means Predictive's proprietary pricing
algorithm for each Assessment Product.
1.6 "Term" means the two (2) year period beginning on the date of
hereof, which shall be automatically extended for successive one(1) year
periods, unless sooner terminated in accordance with Section 17.
2. STRATEGIC PARTNERSHIP
Cabletron and Predictive are entering into a strategic partnership
during the Term hereof pursuant to the terms and conditions of this Agreement.
2.1 Cabletron and Predictive will cooperate as to Assessment Projects
and Follow-On Projects in accordance with Sections 3 and 4, respectively.
2.2 Cabletron and Predictive will actively cooperate to identify and
carry out Teaming Projects in accordance with Section 4A. The parties shall
cooperate to produce a standard agreement for Teaming Projects, but recognize
that the Customer may require changes thereto. Each of the parties agrees not
unreasonably withhold consent to such changes, consistent with its generally
applicable operational and risk management policies.
2.3 Except as otherwise mutually agreed to by the parties in writing,
[****]. If so agreed by the parties in writing with respect to a particular
Project, Predictive and Cabletron personnel carrying out such Project will
identify themselves as members of their respective organizations acting
pursuant to the "Cabletron/Predictive Strategic Partnership" (or such other
name as may be jointly determined by the parties).
2.4 The form of any announcements relating to the relationship
contemplated hereby, marketing materials relating thereto and other
communications regarding the parties' common activities hereunder, shall be
subject to the approval of both parties (subject to disclosure obligations, if
any, under applicable securities laws).
2.5 A. The parties hereby establish an Oversight Committee to monitor
and oversee the strategic relationship contemplated hereby. The Oversight
Committee shall act as a facilitator of this Agreement and shall have authority
to act on behalf of the parties, except as otherwise provided in this Agreement,
and except to the extent that any act or decision of the oversight Committee is
subject to the internal review or approval of either party (in which event such
party shall so inform the other members of the Committee). Each party shall
appoint two (2) members of the Oversight Committee, who shall serve at the
pleasure of their employers or until they resign or are unwilling or unable to
serve. Subsequent appointments to fill vacancies or otherwise to replace a
member shall be made by the respective parties. The initial members appointed by
Predictive shall be [****] and the initial members appointed by Cabletron shall
be [****].
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
4
The Oversight Committee shall meet at least quarterly, preferably in person,
alternating between the respective facilities of Cabletron and Predictive.
B. The parties may also form such implementation and other
teams and committees as they may deem necessary or desirable from time to time.
Any such teams or committees shall report to the Oversight Committee, and shall
have the authority granted them by such Committee (subject to Section 2.5A).
Each of the parties hereto shall also appoint contact persons to handle
operating issues arising under this Agreement from time to time, whose functions
and authority may be determined by the Oversight Committee. The Oversight
Committee (or its subcommittees or the contact persons referred to in the
preceding sentence, as determined by the Oversight Committee) shall be
responsible for, among other things, preparing and/or coordinating approval and
execution of any modifications to this Agreement or any schedules or other
documents to be created pursuant hereto, and resolving any disagreements or
disputes (in accordance with Section 21.8 hereof).
2.6 Predictive shall provide Cabletron with all necessary information
and training to enable Cabletron to promote and market the services contemplated
hereby, Cabletron shall afford representatives of Predictive reasonable access
to Cabletron's sales force (including, without limitation, permitting such
representatives to attend appropriate national and/or regional sales training
conferences) to enable Predictive to assist such sales force in the marketing of
Assessment Products, Follow-On Projects and other services provided by the
parties pursuant to this Agreement. Such access may be coordinated through the
Oversight Committee or its designees.
3. ASSESSMENT PROJECTS.
3.1 Concurrently with the date of this Agreement, Predictive is
delivering to Cabletron, for marketing in accordance with this Agreement, all
relevant materials relating Predictive's Information Security Requirements
Analysis ("ISRA") product, including related marketing materials and customer
service software containing the Pricing Algorithm. A list of all materials
relating to the ISRA product delivered to Cabletron by Predictive is attached
hereto as Schedule 3.1. Cabletron has introduced the ISRA product to is sales
force and is commencing the active marketing and sale of the ISRA product as of
the date hereof.
3.2 The parties anticipate that additional Assessment Products will be
marketed under this Agreement. At approximately [****] intervals beginning in
July 1999, Predictive will present to the Oversight Committee in general terms
[****] ideas for Assessment Products for possible inclusion under this
Agreement. The Oversight Committee will discuss and evaluate the product ideas
so presented, conduct such market or other evaluations as it deems appropriate,
and select a product idea for further development in accordance with this
Section. In the course of such selection, the Oversight Committee may consider
and propose minimum commitments and other financial details similar to those
contemplated by Section 3.7 with respect to the ISRA product. Predictive will
then deliver to Cabletron a more detailed description of the product so
selected, including a related service description and statement of work,
together with sales training marketing materials and Pricing Algorithm, within a
reasonable period of time after such selection, not to exceed [****]. Upon such
delivery, Cabletron shall have the option, exercisable within [****] after such
delivery, to include such product as an Assessment Product hereunder. During
the period between delivery of each proposed Assessment Product and the
option exercise deadline relating thereto, Cabletron and Predictive will
continue to consult regarding such product. If Cabletron does not exercise
its option with respect to the product offered by Predictive on or before the
expiration of the foregoing [****] option period, such option shall lapse as
to such product and such product shall not be deemed to be an Assessment
Product for any purposes under this agreement (except that the provisions of
Section 5.3 shall apply to Cabletron as though such product were an
Assessment Product). A list of all materials relating to each
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
5
such Assessment Product and so delivered to Cabletron shall e attached hereto as
Schedule 3.2. Notwithstanding the foregoing, the parties may at any time, by
mutual written agreement, add additional Assessment Products under this
Agreement, including products previously presented to Cabletron under this
Section but as to which Cabletron did not exercise its opinion during the option
period
3.3 With respect to the ISRA Assessment Product and each other
Assessment Product added under this Agreement in accordance with Section 3.2,
Cabletron will use commercially reasonable efforts to promptly commence
marketing and thereafter actively market such product through its sales force
and sales representatives, including but not limited to its telemarketing sales
force. Each proposal developed by Cabletron with respect to an Assessment
Project shall be subject to review and approval by Predictive, such approval not
to be unreasonably withheld. Predictive shall complete such review promptly upon
receipt of such plans, but in no event later than [****] from the time of
such receipt. The parties shall endeavor in god faith to promptly resolve any
issues arising with respect to a particular proposal for an Assessment
Project. Cabletron will be responsible for (i) responding to any customer
inquiries or RFP's for assessment products and services, or bids for
Assessment Projects; (ii) generating and issuing to the Customer a statement
of work with regard to an Assessment Project; (iii) procuring and retaining
Assessment Project Agreements from Customers (as applicable); and (iv)
billing charges to Customers and collecting receivables for all Assessment
Projects.
3.4 A. With respect to each Assessment Product marketed by the parties
under this Agreement, Predictive will provide (i) initial sales force training
and periodic re-training, (ii) dedicated marketing support consistent with the
activity levels and sales volumes hereunder, and (iii) all goods and services
needed to carry out each Assessment Project, all in accordance with and as set
forth in the relevant Assessment Project Agreement and Implementation Schedule
(as defined in Section 3.5).
B. Predictive shall maintain sufficient staff and infrastructure
to deliver the volume of services contemplated by this Agreement. Upon
delivery of each Assessment Product, Predictive will have sufficient
personnel and resources to undertake a limited number of simultaneous
Assessment Projects is two (2) in the case of the ISRA product and shall be
determined by the Oversight Committee in connection with the inclusion of
other products under Section 3.2, on the basis generally of the anticipated
volume levels as reflected in Cabletron's initial commitment. Predictive will
add additional capacity over the Term of this Agreement consistent with
Cabletron's revenue commitments, or as otherwise mutually determined by the
parties to be appropriate in light of then-current service volumes.
3.5 Attached hereto as Schedule 3.5 is a detailed product intake and
implementation schedule relating to the ISRA product described above. The
parties shall in good faith mutually agree upon and attach to this Agreement,
as an addendum to Schedule 3.5, a detailed product intake and implementation
procedure ("Implementation Schedule") for each Assessment Product to be
included under this Agreement after the date hereof. Predictive will use its
reasonable best efforts to commence work on a committed Assessment Project
within [****] after being advised by Cabletron of the Customer's execution
and delivery of the commitment; PROVIDED, HOWEVER, that predictive shall have
up to [****] to commence such work, due to unanticipated staffing shortages
or other reasonably unforeseen circumstances, it is not practicable to do so
within the first fifteen-day period. Unless otherwise agreed by the parties
in writing, in the event that Predictive fails to commence work on a
committed Assessment Project by the end of the second fifteen-day period, the
Minimum Committed Amount (as defined in Section 3.1) for the Assessment
Product to which the Assessment Project relates shall be reduced by the
amount of Predictive's price to Cabletron for such Assessment Project, as
determined under Section 3.6 hereof.
3.6 Subject to Section 3.7, Predictive's price to Cabletron for
performing the services deliverable pursuant to each Assessment Project shall
be determined in accordance with the Pricing Algorithm for the relevant
Assessment Product. [****]. In addition, Predictive shall be entitled to
reimbursement for travel and lodging expenses and other expenses in
accordance with Cabletron's standard expense reimbursement policy; PROVIDED,
HOWEVER, that reasonable travel and lodging reimbursement will be applicable
for travel beyond a [****] of all Predictive offices and such further
locations designated by Cabletron, all as listed on Schedule 3.6 hereto, and
PROVIDED, FURTHER that Predictive personnel may continue to use Predictive's
reimbursement form to submit their expense reports. Predictive's fees for
each Assessment Product shall be subject to review [****] by the Oversight
Committee and shall be modified upon written agreement of a majority of the
members thereof, subject to the parties' respective operational and risk
management policies.
3.7 The parties recognize that in order to carry out its duties
under this Agreement, Predictive will be required to put substantial effort
into the development of the various Assessment Products and build and
maintain a sizable additional marketing and service-delivery capability.
Accordingly, Cabletron hereby commits to and agrees to pay certain
non-refundable amounts to Predictive in accordance with this Section 3.7, in
consideration of Predictive's entering into this Agreement and making the
Assessment Products available hereunder.
With respect to each Assessment Product, Cabletron shall issue a
[****] purchase order (each, a "Purchase Order") having an aggregate face
amount for the [****] (the "Face Amount"), as determined by the parties.
[****] of the Face Amount, or such other portion as the parties shall agree,
(the "Minimum Committed Amount") will constitute Cabletron's minimum
commitment payable in accordance with this Section 3.7. A portion of the
Minimum Committed Amount, as agreed to by the parties, (the "Up-Front
Payment") will be paid upon delivery by Predictive of the applicable
Assessment Product for marketing under this Agreement, and the remainder
shall be payable as further provided in this Section. That portion of the
Face Amount in excess of the Minimum Committed Amount shall be payable in
accordance with Section 3.8 against work performed by Predictive with respect
to Assessment Projects relating to the applicable Assessment Product. With
respect to each additional Assessment Product added to this Agreement under
Section 3.2, the Face Amount, Minimum Committed Amount and Up-Front Payment
shall be determined as contemplated by this Section 3.7.
Subject to the above, the parties shall negotiate payment schedules
and amounts for all Assessment Products (other than the ISRA product) upon
delivery of the product for marketing under this Agreement. Notwithstanding
any other provision in this Agreement to the contrary, unless the parties
otherwise agree, in no event shall Predictive be obligated hereunder with
respect to any Assessment Product as to which Cabletron does not agree to a
Minimum Committed Amount of at least [****].
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
6
In the case of the ISRA product, the Face Amount of the Purchase Order
is [****] the Minimum Committed Amount is [****] and the Up-Front Payment is
[****] and Cabletron is issuing such Purchase Order and paying such Up-Front
Payment concurrently with the execution and delivery of the Agreement.
Other payments with regard to ISRA Product and other Assessment
Products, as applicable, shall be made as follows:
A. Subject to the terms of this Section 3.7, [****] of the
Minimum Committed Amount will be payable to Predictive on or before the end
of each succeeding [****] period following delivery of the Assessment Product
(crediting at the time of each payment the amount of the Up-Front Payment, to
the extent not previously credited pursuant hereto). Payment of the Minimum
Committed Amount with respect to the ISRA product shall be made according to
the following schedule:
----------------------------- ------------------------
PAYMENT DATE AMOUNT DUE
----------------------------- ------------------------
[****] [****]
----------------------------- ------------------------
[****] [****]
----------------------------- ------------------------
[****] [****]
----------------------------- ------------------------
[****] [****]
----------------------------- ------------------------
For purposes hereof, each of the above dates (and any similar dates signifying
the end of a [****] payment period with respect to any other Assessment
Product) shall hereinafter be referred to as a "Calculation Date." Calculation
Dates for Assessment Products other than the ISRA product shall be each June 30
and December 31 following delivery of such products, unless otherwise agreed by
the parties.
B. On each Calculation Date, the aggregate of all revenues
accrued by Predictive from all Projects (based on work performed, and any
amounts against which credits are allowed pursuant to Section 3.7 C.), together
with the amount of any Up-Front Payments and Minimum Payments (as such term is
defined below) made prior to such date (collectively, "Aggregate Revenues")
shall be compared with the aggregate Minimum Committed Amounts for all Projects
payable through such Calculation Date. To the extent that such aggregate Minimum
Committed Amounts exceed the amount of the Aggregate Revenues, Cabletron shall
pay Predictive the difference (a "Minimum Payment") in accordance with Section
3.8.
C. All Up-Front Payments and Minimum Payments shall be fully
earned when paid and shall be non-refundable; however, Cabletron shall be
entitled to a credit against any consideration payable to Predictive based on
work performed by Predictive with respect to any Project, but shall not be
credited against any reimbursable expenses. To the extent that any such
non-refundable amounts exceed the amounts credited pursuant to the preceding
sentence, Cabletron shall be entitled to commission new work from Predictive
within Predictive's core competencies, either directly for Cabletron or for a
Cabletron customer, and to take a credit against such work. Any amounts due to
Predictive in excess of any such credit (including any amounts payable from that
portion of any Purchase Order in excess of the Minimum Committed Amount thereof)
shall be paid by Cabletron in accordance with Section 3.8 hereof.
D. Attached hereto as Schedule 3.7, for illustrative purposes
only, is an example of the computation of payments pursuant to this Section 3.7.
3.8 Predictive shall furnish Cabletron monthly invoices for its
services in connection with all Projects hereunder and any additional amounts
and reimbursable expenses payable under this Agreement. All such invoices shall
be payable net [****] days (together with any applicable Minimum Payments
payable as of any Calculation Date, accompanied by a schedule showing the
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
7
calculation thereof). All payments hereunder shall be made by check, except
that upon mutual agreement of the parties such payments may be made by wire
transfer to an account designated by Predictive. [****].
3.9 [****] Cabletron may within sixty (60) days after receiving such
notice elect to substitute the Pricing Algorithm (or its equivalent) for such
product under such agreement for the then-applicable Pricing Algorithm
hereunder, provided, in such event, that Cabletron shall be required to
assume in writing and to perform all materials terms governing consideration
and material other obligations, and satisfy any material conditions, to which
such third party is subject under its agreement with Predictive. Nothing in
this Section 3.9 shall be construed to modify the restrictions on the parties
contained in Section 5 of this Agreement.
4. FOLLOW-ON PROJECTS
4.1 It is anticipated that Follow-On Projects will either consist of
work as to which only one of the parties has the relevant service capability
("Non-Overlap Work") or work as to which both parties have the relevant service
capability ("Overlap Work"). Listed in Schedule 4.1 are the categories
constituting Overlap Work and Non-Overlap Work between the parties (the "Overlap
Schedule"). The Overlap Schedule shall be periodically updated by the parties to
reflect changes in their respective capabilities. In the event that a dispute
arises as to which party has the relevant capability (or as to whether a
particular Project constitutes Overlap Work or Non-Overlap Work), such issue
shall be resolved in accordance with Section 21.8.
4.2 Non-Overlap work in connection with any Follow-On Project shall
be performed by the party having the relevant capability. [****] All
Non-Overlap Work, whether performed by Predictive or Cabletron [****] with
respect to Non-Overlap Work performed by Cabletron.
4.3 The parties agree that Overlap Work in connection with any
Follow-On Project shall be [****] them. On a quarterly basis or at such other
intervals as may be determined by the parties, the Oversight Committee shall
review all such Projects on a case-by-case basis, with a view towards
allocating such Projects so that their benefits, and the nature and character
of business so conducted, [****].
4.4 Prior to undertaking any Follow-On Projects, the parties shall
mutually agree to, and attach hereto as Schedule 4.4, an Implementation Schedule
for Follow-On Projects generally.
4.5 The parties shall cooperate to produce a standard agreement for
Follow-On Projects, but recognize that the Customer may require changes thereto.
Each of the parties agrees not to unreasonably withhold consent to such changes,
consistent with its generally applicable operational and risk management
policies.
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
8
4.6 Cabletron shall use commercially reasonable efforts to market
Follow-On Projects to its Customers that have ordered Assessment Projects,
consistent with reasonable business practices and the Customers' interests.
Predictive shall conduct each Assessment Project, and each party shall conduct
each Follow-On Project performed by it, with a view to developing and/or
maintaining good business relations between the Customer and the
Cabletron/Predictive Strategic Partnership.
4A. TEAMING PROJECTS
The parties may mutually agree as t specific Cabletron customers as to
which it may be more advantageous to service through a Teaming Project than for
either party to service independently. Such potential customers shall be listed
on (or added to ) Schedule 4A hereto, to be mutually executed by the parties,
which Schedule shall also indicate the date each such potential customer was
added to the Schedule. Except to the extent otherwise provided in this
Agreement, Teaming Projects shall be treated as Follow-On Projects for all
purposes hereof, including but not limited to pricing and implementation.
5. CERTAIN OPERATING RESTRICTIONS.
5.1 A. Predictive acknowledges that Cabletron enjoys an advantageous
relationship with its customers. Predictive further acknowledges that, by
performing services for Cabletron under this Agreement, Predictive, and its
employees and agents, may become privy to certain confidential information of
Cabletron which if disclosed to or used by third parties, including Predictive
and its employees and agents, would prejudice Cabletron's competitive advantage
in the marketplace. Therefore, Predictive agrees that:
(1) Except as permitted under Section 5.6, and subject to the
remaining provisions of this Section 5.1, following a
commitment by a Customer for a Project that results in fees to
Predictive of at least [****], Predictive will not
independently, directly or indirectly, solicit such Customer
to perform services covered by this Agreement of substantially
similar thereto from the time of such commitment until the
expiration of [****] following the delivery of services
hereunder (including any Follow-On or Teaming Projects
subsequently performed for such Customer). Such period shall
be increased to [****] following delivery for any Project
which generates fees to Predictive of [****] or more. For
purposes of the foregoing provisions of this Section 5.1A, the
"Customer" shall be deemed to be the business unit as to which
the relevant Customer decision-maker exercises purchasing
authority (regardless of whether such business unit
comprises one or more locations), and shall not be construed
to preclude Predictive from offerings its services to other
business units within the same organization; PROVIDED,
HOWEVER, that Predictive shall promptly notify Cabletron of
any other business units of a Cabletron Customer with which it
has entered an agreement to sell such services. Nothing in
this Section 5.1A (1) shall be construed to prohibit
Predictive from participation in the efforts of a third party
to market a potential project for services which Predictive
from participating in the efforts of a third party to market a
potential project for services which Predictive is not
otherwise obligated by this Agreement to perform with or for
Cabletron, or is not otherwise prohibited from performing by
this Agreement, and as to which Cabletron does not have a
reasonable chance of performing, as reasonably determined by
the Oversight Committee; provided, HOWEVER, that Predictive
shall not engage in such marketing efforts without the prior
written consent of the Oversight Committee, such consent not
to be unreasonably withheld or delayed. Predictive shall, in
any such instance, provide to the Oversight Committee for its
consideration any information the Oversight Committee may
reasonably require,
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
9
including but not limited to the name(s) of the Customer(s)
to whom such services are to be furnished; PROVIDED, HOWEVER,
that Predictive shall not be required to provide the name
of the third party with whom it may intend to offer such
services.
(2) [****] either on a subcontract basis or otherwise. [****]
may be added to Schedule 5.12 from time to time by Cabletron
with the written consent of Predictive, not to be unreasonably
withheld. Notwithstanding the foregoing, nothing in this
Section 5.1.A(2) shall be construed to [****], as reasonably
determined by the Oversight Committee. PROVIDED, HOWEVER, that
Predictive shall not offer or provide such services in such
manner without the prior written consent of the Oversight
Committee, such consent not to be unreasonably withheld or
delayed. Predictive shall, in any such instance, provide to
the Oversight Committee for its consideration any information
the Oversight Committee may reasonably require, including but
not limited to the name(s) of the customer(s) to whom such
services are to be furnished; PROVIDED, HOWEVER, [****].
B. Predictive agrees to notify its employees and agents in
writing of the restrictions contained in this Section 5.1, to obtain signed
agreements of all personnel providing services for or on behalf of Predictive
under this Agreement to the effect that they acknowledge such restrictions and
agree to adhere to them, to provide copies of said agreements Cabletron upon
request, and otherwise to use its best efforts to insure that such restrictions
are fully observed.
5.2 Each of Cabletron and Predictive agrees not to approach potential
Teaming Project customers independently for a period of [****] following their
addition to Schedule 4A, or such other period as may be expressly agreed to
by the parties and set forth on such schedule (provided that, in the case of
Cabletron, such agreement shall be limited to services constituting
Non-Overlap Projects to be performed by Predictive, or Overlap Projects). The
parties may mutually agree to such other restrictions relating to such
potential customers as they deem appropriate. If Projects are generated from
such customers, the provisions of Section 5.1 shall apply.
5.3 With respect to any Assessment Product marketed by Cabletron under
this Agreement, unless this Agreement is sooner terminated either in its
entirety or with specific respect to such Assessment Product in accordance with
Section 17, Cabletron shall not directly or indirectly (including through a
"branding" arrangement) offer or sell such Assessment Product (or combination of
goods and services substantially similar thereto) except pursuant to this
Agreement. With respect to any Assessment Product as to which detailed
information is furnished to Cabletron under Section 3.2 and as to which
Cabletron does not exercise its option thereunder, unless this Agreement is
sooner terminates in accordance with Section 17, Cabletron shall not directly or
indirectly (including through a "branding" arrangement) offer or sell such
Assessment Product (or combination of goods and services substantially similar
thereto) for a period of [****] after the expiration of the deadline for
the exercise of Cabletron's option with respect thereto under Section 3.2 unless
the parties subsequently agree during the Term hereof to offer the Assessment
Product hereunder (in which event the first sentence of this Section 5.3 shall
apply).
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
10
5.4 During the Term of this Agreement and for a period of [****]
neither Cabletron nor Predictive shall, without the prior written consent of
the other, directly or indirectly solicit the employment or consulting or
other services of any employee or consultant of the other party, or otherwise
induce any such employee or consultant to leave the other party's employment
or cease providing services thereto, as the case may be, whether or not such
employee's or consultant's actions in doing so would constitute a breach of
any agreement with such other party.
5.5 The parties each acknowledge and agree that monetary damages shall
not be an adequate remedy for breach by the other party of the provisions of
Sections 5.1 through 5.4 above, and that irreparable injury shall result to the
nonbreaching party and its subsidiaries and affiliates (if any) in the event of
such breach. Accordingly, the parties agree that in addition to any other remedy
available to the nonbreaching party at law or in equity in such instance, such
party may seek the entry of an order restraining and enjoining the breaching
party , or any employee or agent thereof, from further violations of such
provisions. The period of time applicable to any such breached provisions shall
be extended by one day for each day such violation continues subsequent to the
entry of such order.
5.6 Attached hereto as Schedule 5.6 is a list of existing Predictive
customers. Notwithstanding any provision to the contrary in this Agreement,
such customers (and services provided by Predictive therefor, but only to the
extent provided to such customers) shall not be subject to this Agreement.
Additional customers of Predictive may be added to Schedule 5.6 with the
written consent of Cabletron, not to be unreasonably withheld, provided that
such customers are obtained through Predictive's own independent sales
efforts and not in violation of this Agreement.
5.7 During the Term of this Agreement, Predictive shall have the right
of first refusal to perform all network security services that Cabletron intends
to subcontract, so long as Predictive has an office from which to perform such
services within [****] of the potential customer's site or can otherwise
practicably perform such services at reasonable cost. Predictive shall have
[****] after receipt of the offer from Cabletron to perform such network
security services, to inform Cabletron in writing of its desire to perform
the services. If Cabletron does not receive written acceptance of such offer
from Predictive within the aforesaid [****]. Cabletron may subcontract such
security service to a third party on substantially the same basis as was
offered to Predictive.
6. COMPENSATION OF PREDICTIVE'S PERSONNEL: EXPENSES.
6.1 Predictive shall bear sole responsibility for payment of
compensation to its personnel and contractors. Predictive shall pay and report,
for all personnel assigned to Cabletron or a Customer site, any applicable
federal and state income tax withholding, social security taxes, and
unemployment insurance applicable to such personnel. Predictive shall bear sole
responsibility for any health or disability insurance, retirement benefits, or
other welfare or pension benefits, if any, to which such personnel may be
entitled. Predictive agrees to defend, indemnify, and hold harmless Cabletron,
Cabletron's officers, directors, employees and agents, and the administrators of
Cabletron's benefit plans, from and against any claims, liabilities, or expenses
relating to such compensation, tax, insurance, or benefit matters.
6.2 Except as otherwise agreed to in writing, Predictive shall be
responsible for all costs and expenses incident to the performance of Projects
hereunder, including all costs of doing business incurred by Predictive.
7. WORKERS' COMPENSATION
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
11
Notwithstanding any other workers' compensation or insurance policies
maintained by Cabletron, Predictive shall procure and maintain workers'
compensation coverage sufficient to meet the statutory requirements of every
state in which Predictive's personnel are engaged at Cabletron's or a Customer's
site. Predictive agrees to defend, indemnify, and hold harmless Cabletron, and
Cabletron's officers, directors, employees, and agents, from and against any
claims, liabilities or expenses arising from Predictive's failure to maintain
workers' compensation coverage in accordance herewith.
8. PREDICTIVE'S AGREEMENTS WITH PERSONNEL
Predictive shall obtain and maintain in effect written agreements with
each of its personnel and subcontractors who participate in any work under a
Project. Such agreements shall contain terms sufficient for Predictive to comply
with all provisions of this Agreement, including but not limited to Sections 5
(Certain Operating Restrictions), 12 (Confidential and Proprietary Data) and 13
(Ownership of Work Product), and shall provide that such personnel shall have no
status as employees of Cabletron and no claim under any Cable
9. TAXES
Any taxes incurred in performing Projects hereunder shall be borne by
the Customers, other than taxes in respect of the net income of Cabletron or
Predictive (which taxes shall be borne by the party incurring the same), and the
Assessment Project Agreement or other relevant Customer agreement for each
Project shall so provide.
10. RECORDS.
10.1 Each of Predictive and Cabletron shall maintain accounting
records, in accordance with sound accounting practices, to substantiate all
invoices to Projects, and shall keep such records for [****] from the date of
final payment.
10.2 A. Either party hereto (for purposes hereof, the "Auditing Party")
shall have the right to audit the appropriate records of the other party (the
"Audited Party") for the sole purpose of determining the Audited Party's
compliance with the terms and conditions of this Agreement. Any such audit shall
be at the expense of the Auditing Party. All such audits shall be conducted by
an independent certified public accountant, and shall take place during regular
business hours at the Audited Party's offices, and shall not interfere
unreasonably with the Audited Party's business activities. Audits shall be
conducted no more frequently than annually, and the Audited Party shall be given
[****] prior written notice of the date of each audit and the name of the
accountant who will be conducting the same. Each audit shall cover a period
of time beginning no earlier than [****] immediately preceding the date of
audit.
B. Adjustments shall be made by the proper party within [****]
following the audits completion to compensate for any errors or omissions
disclosed by the audit. If the parties do not agree to the amount of the
adjustment hereunder, the Audited Party may perform its own audit within a
reasonable period of time following completion of the initial audit by the
Auditing Party. If following the second audit the parties still do not agree
as to the amount of such adjustment, such disagreement shall be settled in
accordance with Section 21.8 hereof.
C. Any information received by the accountant during the audit
shall be retained in confidence. Any auditor's report presented to the Auditing
Party shall be copied to the Audited Party, shall only address compliance with
this Agreement, and shall contain no other information pertaining to the Audited
Party or its business.
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
12
11. SAFETY
Predictive shall comply with all Cabletron and Customer safety
regulations.
12. CONFIDENTIAL AND PROPRIETARY DATA.
12.1 In the performance of this Agreement or in contemplation thereof,
each party or its employees and agents (for purposes hereof, a "Receiving
Party") may have access to private or confidential information owned or
controlled by the other (or, in the case of Cabletron, its Customers) (for
purposes hereof, a "Disclosing Party") relating to the Disclosing Party's
business, equipment, apparatus, programs, software, specifications, drawings and
other data, and such information may contain proprietary details and
disclosures. Without limiting the foregoing, all work products, software
(including without limitation Predictive's Pricing Algorithm) and tangible
materials (including without Predictive's product descriptions and marketing
materials) produced by a Disclosing Party in developing any products marketed
hereunder, and all materials produced by the Disclosing Party in providing
services in connection with any Project, are and shall be deemed to be the
confidential information of the Disclosing Party, except and only to the extent
otherwise set forth in the applicable Assessment Project Agreement or other
relevant Customer contract. With respect to an confidential information
consisting of or embedded in software (including the Pricing Algorithm), the
Receiving Party shall not disassemble, decompile, "scope", or reverse engineer
such software without the express written consent of the Disclosing Party. All
information and data so acquired by the Receiving Party under this Agreement or
in contemplation thereof shall be and shall remain the Disclosing Party's
exclusive property, and the Receiving Party shall keep and shall use its best
efforts to have its employees and agents keep, any and all such information and
data confidential, and shall not copy or publish or disclose it to others, or
authorize its employees, agents or anyone else to copy publish or disclose it to
others, without the Disclosing Party's prior written approval. The Receiving
Party shall return all tangible confidential information to the Disclosing Party
(i) upon the termination of this Agreement, (ii) in the case of confidential
information that relates only to a particular product type or Project, promptly
following the option deadline relating thereto if Cabletron fails to exercise
its option under Section 3.2, and otherwise upon the termination of this
Agreement with respect to such product type or Project pursuant to Section 17,
or (iii) in any case at the request of the Disclosing Party. Each Assessment
Project Agreement or other Project agreement to which a Customer is a party
shall contain a mutually acceptable provision relating to confidential
information.
12.2 The foregoing obligations of confidentiality shall not apply to
information which lawfully comes into the possession of the Receiving Party and
which (i) is received from a third party who is not subject confidentiality
obligations with respect to such information, (ii) can be demonstrated to have
been previously known to the Receiving Party without any obligation of
confidentiality, (iii) is or becomes part of public industry knowledge through
no action or omission of the Receiving Party, or (iv) can be demonstrated to
have been independently developed by or to be the subject of independent
development efforts of the Receiving Party from making disclosure of
confidential information to the extent required by law, rule or regulation,
provided that the Receiving Party shall give the Disclosing Party prior notice
as to the nature of the required disclosure so a to afford the Disclosing Party
the opportunity to the challenge the need for such disclosure.
12.3 The parties each acknowledge and agree that monetary damages shall
not be an adequate remedy for breach of the provisions of this Section 12, and
that irreparable injury shall result to the nonbreaching party and its
subsidiaries and affiliates (if any) in the event of such breach. Accordingly,
the parties agree that in addition to any other remedy available at law or
inequity, the nonbreaching party may seek the entry of an order restraining and
enjoining the breaching party, or any employee or agent thereof, from further
violations of such provisions. The period of time applicable to any such
breached
13
provisions shall be extended by one day for each day such violation
continues subsequent to the entry of such order.
14
OWNERSHIP OF WORK PRODUCT
13.1 All copyrights, patents, trade secrets, or other intellectual
property rights ("IP Rights") associated with any ideas, concepts, techniques,
inventions, processes, or works of authorship developed or created exclusively
by either party or its personnel during the course of performing its obligations
hereunder shall belong exclusively to such party. All IP Rights associated with
any ideas, concepts, techniques, inventions, processes or works of authorship
that are jointly developed by Cabletron and Predictive shall be jointly owned b
them and may be used by each of them upon written notice to the other; PROVIDED,
HOWEVER, that neither party hereto shall assign, license or otherwise transfer
any such joint IP Rights to any person entity engaged in the same business as,
or in a business similar to, the other party's.
13.2 Predictive hereby grants to Cabletron a limited, non-exclusive
license to use the products, materials, software and intellectual property
delivered to Cabletron by Predictive during the Term solely for the purpose of
marketing Predictive's products and services to its Customers in accordance with
this Agreement. Such license shall be royalty-free during the Term. IN the case
of any proprietary rights obtained by Predictive by license or assignment from
third parties, the foregoing grant shall be subject to any limitations imposed
by the licensor or assignor of such rights. Except as expressly set forth in
this Agreement, neither party has any right, title or interest in or to the
intellectual property of the other.
14. WARRANTIES
14.1 Each party warrants that all services required of it hereunder
will be performed in a workmanlike manner and within the time schedule provided,
and that such services shall conform in all material respects with relevant
Implementation Schedule and Assessment Project Agreement (or other agreement to
which the Customer is party). In the event of a warranty breach, the breaching
party agrees to reperform the services without charge and without delay. The
warranties hereunder shall expire [****] after the time such services
are rendered.
14.2 Each party certifies that it owns or has the valid right to use
all intellectual property to be used by it in performance of its obligations
hereunder, and that such rights do not violate any intellectual property rights
of any third party.
14.3 Each party warrants that neither it nor it agents or employees
shall make any representation or warranty to Customers or otherwise regarding
Project or product, or the quality of any work to be done b Predictive, except
to the extent set forth in the agreed-upon form of Assessment Project Agreement
or other Customer contract, without the prior written consent of the other
party.
14.4 A. Predictive warrants that all services provided by it and any
deliverables produced or created by it under this Agreement (including but not
limited to products, software, and other deliverables) are Year 2000 compliant.
Subject to the further provisions of this Section 14.4, commercial hardware or
software produced or created by third parties shall be subject to the
manufacturer's warranty and not the provisions of the preceding sentence;
PROVIDED, HOWEVER, that nothing in this Section shall be construed to lessen,
diminish, or otherwise affect the service warranty set forth in the preceding
sentence. Year 200 compliance, for the purposes hereof, shall mean that such
goods and material, where applicable, accurately process, provide and/or receive
date/time data (including but not limited to calculating, comparing and
sequencing) from, into, and between the twentieth and twenty-first centuries,
and he years 1999 and 2000, and leap year calculations, to the extent that other
information technology not provided by Predictive to Cabletron and/or Customers
under this Agreement, which issued in combination with foregoing goods and
materials and has received warranties therefor from said third parties.
Predictive shall indemnify, defend and hold Cabletron harmless from and against
all claims, losses, damages or costs
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
15
arising from any action, suit proceeding by any third party to the extent, and
only to the extent, that such action, suit or proceeding is based upon claims or
allegations that any services provided by Predictive and any deliverables
produced or created by it under this Agreement are not Year 2000 compliant.
Predictive agrees that the warranty and representations set forth herein shall
be extended to all Customers.
B. Cabletron does not warrant to Predictive that any services
provided by it or nay deliverables produced or created by it under this
Agreement are Year 2000 compliant; however, Cabletron shall indemnify, defend
and hold Predictive harmless from and against all claims, losses, damages or
cost arising from any action, suit or proceeding by any third party to the
extent, and only to the extent, that such action, suit or proceeding is based
upon claims or allegations that any services provided by Cabletron and any
deliverables produced or created by it under this Agreement (i.e., exclusive of
any services provided by Predictive and any deliverables produced or created by
Predictive) are not Year 2000 compliant.
14.5 EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY
HERETO MAKES ANY WARRANTY, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING
WITHOUT LIMITATION ANY WARRANTY OF MERCHANT ABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, WITH RESPECT TO THE PERFORMANCE OF ITS DUTIES OR ANY DELIVERABLES
DELIVERED BY IT PURSUANT TO THIS AGREEMENT.
15. PERSONNEL
15.1 Personnel provided by Predictive will not for any purpose be
considered employees of Cabletron. Except as specifically authorized in writing
by Cabletron, Predictive's personnel shall make no commitments on behalf of
Cabletron for any purpose. Predictive assumes full responsibility for its
employees' actions while performing hereunder and shall be responsible for their
supervision, daily direction and control.
15.2 [****]. Cabletron reserves the right to disapprove such
assignment if reasonable grounds exist for such disapproval.
15.3 Except as expressly limited by Section 15.2, and subject to
applicable Customer requirements, Predictive shall obtain qualified personnel to
staff Projects performed by it hereunder in such manner as it may determine.
Without limiting the forgoing, Predictive may engage contractors or
subcontractors to perform any such work, provided such persons execute a written
agreement binding them to the applicable obligations of Predictive under this
Agreement.
16. LIMITS OF LIABILITY
16.1 EXCEPT IN THE CASE OF A VIOLATION OF SECTION 5 (CERTAIN OPERATING
RESTRICTIONS) SECTION 12 (CONFIDENTIAL AND PROPRIETARY DATA), OR SECTION 13
(OWNERSHIP OF WORK PRODUCT), NEITHER PARTY HERETO NOR THEIR SUBSIDIARIES OR
OTHER AFFILIATES SHALL BE LIABLE FOR ANY CONSEQUENTIAL DAMAGES (INCLUDING BUT
NOT LIMITED TO LOST PROFITS AND LOSS OF DATA) OR INCIDENTAL DAMAGES, EVEN IF
INFORMED OF THE POSSIBILITY THEREOF. Any reprocurement costs associated with
Predictive's breach of this Agreement or any statement of work or purchase order
shall be deemed direct damages for purposes hereof.
16.2 IN ANY ACTION, SUIT OR PROCEEDING RELATING TO THE PERFORMANCE BY
EITHER PARTY OF ITS OBLIGATIONS WITH RESPECT TO ANY PROJECT OR PROJECTS,
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
16
SUCH PARTY SHALL NOT BE LIABLE TO THE OTHER OR TO ANY CUSTOMER FOR ANY AMOUNTS
IN EXCESS OF THE AGGREGATE AMOUNT OF REVENUES RECEIVED BY SUCH PARTY RELATING TO
SUCH PROJECT(S).
17. TERM AND TERMINATION.
17.1 Either party may terminate this Agreement effective at the end
of the original two-year term of this Agreement or at the end of any
applicable renewal period by giving not less than one hundred eighty (180)
days' notice of such termination. In the event of termination under this
Section 17.1, this Agreement shall remain in effect regarding any Project
already in progress until such Project is terminated or performance is
completed.
17.2 Without prejudice to any other remedies available hereunder,
either party shall have the right to terminate this Agreement either as a whole
or with respect to any product or Project as to which a default described under
this Section 17.2 has occurred (if applicable) in the event that (i) the other
party fails to make any payment due hereunder following ten (10) days' written
notice thereof from the party to be paid; (ii) the other party commits a
material default under this Agreement, which remains uncured after written
notice thereof to such party followed by a reasonable period of time (not to
exceed thirty (30) days) in which to cure such violation or default; (iii) a
court of competent jurisdiction enters a decree or order of relief (1) in
respect of the other party in any voluntary or involuntary case or proceeding
under any bankruptcy, insolvency or similar law, s now or hereafter in effect or
(2) appointing a receive, liquidator, assignee, trustee or similar official of
the other party or any substantial part of its assets, and such decree or order
is consented to by the other party or continues unstayed an in effect for a
period of sixty (60) consecutive days; or (iv) the other party makes a general
assignment for the benefit or creditors. Notice given hereunder shall specify
whether this Agreement is being terminates as a whole or only with respect to a
particular product or Project (if applicable), and if the latter, which product
or Project is being terminated. The existence of a material default (and the
related period for cure hereunder) shall be determined in accordance with
Section 21.8.
17.3 Each of the parties hereto acknowledges that a change of control
of either party hereto or a material acquisition by such party could materially
alter the business relationship contemplated hereby. In the event that either
party is subject to a change of control or is a party to a material acquisition,
and either such party or the other party reasonably determines that such change
of control or acquisition would materially alter the business relationship
contemplated by this Agreement or the mutual expectations on which it is based,
then either party may terminate this Agreement upon ninety (90) days' prior
written notice to the other. Any dispute as to whether this Section is
applicable shall be resolved in accordance with Section 21.8.
17.4 In the event of any termination of this agreement (either in its
entirety or with respect to a particular product or Project), all parties shall
promptly discontinue work as of the date of such termination (except otherwise
specifically provided in Section 17.1), and each party shall be entitled to any
compensation payable by the other for goods and services rendered up to the date
of such termination upon receipt and acceptance thereof by the other party. In
the event of termination by Cabletron under Section 17.2, Predictive shall
forfeit and shall no longer be entitled to any portion of the Minimum Committed
Amount not yet payable by Cabletron pursuant to the payment schedule established
under Section 3.7 hereof.
17.5 The rights and obligations of the parties under Sections 3.7, 3.8,
5,6,7,9,10,12,13,14,15,16,17,18,20 and 21 shall continue after expiration or
termination of this Agreement and shall bind the parties and their legal
representatives, successors, heirs, and assigns.
17
18. INDEMNIFICATION
18.1 Predictive shall be liable for expenses or damages incurred by
Cabletron which result from the wrongful or negligent acts or omissions of
Predictive's employees and other personnel providing services for or on behalf
of Predictive hereunder.
18.2 Predictive shall indemnify, defend, and hold Cabletron harmless
from and against any and all actual or threatened claims for bodily injury or
death or for damage to real property or to personal property, tangible or
intangible, which result from the wrongful or negligent acts or omissions of
Predictive's employees and other personnel providing services for or on behalf
of Predictive hereunder.
18.3 Predictive shall defend, at its own expense, any actual or
threatened suit or other proceeding against Cabletron based on a claim that the
products or services (or any portion thereof) to be provided by Predictive under
this Agreement infringes any patent, trademark, copyright, trade secret, or any
intellectual property right of any third party. Predictive shall also pay all
damages and costs that are assessed against Cabletron as a result of such
infringement. If the products or services (or any portion thereof) at issue in
such suit or proceeding are deemed in violation of any patent, trademark,
copyright, trade secret, or other intellectual property right, and the use,
provision or delivery thereof is enjoined or is likely to be enjoined as a
result, Predictive shall at its own expense and option either (1) procure for
Cabletron the right to continue using, providing or delivering said products or
services; (2) modify the same so as to make them non-infringing; or (3) replace
said products or services with substantially equivalent and non-infringing
services or deliverables. If Predictive fails to meet its obligations hereunder
to defend such suit, Cabletron may take control of its own defense at
Predictive's sole expense.
19. NOTICES.
All notices required or desired to be given hereunder shall be in
writing and, if not personally delivered, shall be sent by facsimile
transmission (with a copy by first class mail) or by registered or certified
mail. If sent via facsimile transmission or personally delivered, notices shall
be deemed to have been given on the day when personally delivered or facsimile
addressed to the other party at the address shown below, provided that either
party may from time to time change the address to which notices to it are to be
sent giving notice of such change to the other party. If mailed by registered or
certified main, notices shall be deemed to have been given when received.
IF TO CABLETRON: IF TO PREDICTIVE:
35 Industrial Way 145 Hudson Street
Rochester, New Hampshire 03867 New York, New York 10013
Attention: Manager - Legal Contracts Attention: [****]
Facsimile: (603)337-3295 Facsimile: (212) 219-4499
20. GOVERNMENT LAWS.
20.1 Predictive shall, at Predictive's own expense, comply with all
laws and regulations of federal, state, and local governmental authorities
relating to Predictive's obligations under this Agreement.
20.2 To the extent that any Project is to be ultimately provided under
a United States Government contract, additional Federal Acquisition Regulations
(FAR) and Department of Defense
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
18
FAR Supplement (DFARs) clauses may be incorporated by reference in the
Assessment Project Agreement or other relevant customer contract.
20.3 The clauses listed below are applicable to all work performed
hereunder;
A. 52.222-26, Equal Opportunity (E.O. 11246);
B. 52.222-35, Affirmative Action for Special Disabled and
Vietnam Era Veterans (38 U.S.C. 4212(a)); and
C. 52.222-36, Affirmative Action for Handicapped Workers (29.
U.S.C. 793).
21. GENERAL
21.1 Neither party shall use the other's trademarks, trade names,
logos, or other designations for any reason without the other's prior written
consent.
21.2 This Agreement, and all statements of work and purchase orders
associated herewith, shall be contingent upon Cabletron's receipt from
Predictive of insurance certificates evidencing insurance coverage satisfactory
to Cabletron before work is commenced. Cabletron Systems, Inc. and all
subsidiaries shall be named as additional insureds on the general and automobile
liability insurance policies. Such certificates shall provide that the insurance
company shall give Cabletron thirty (30) days advance written notice prior to
any cancellation or change in the stated coverage. Such coverages shall include
the following:
A. General Liability Insurance - Personal Injury and Property
Damage, Combined Single Limit: $2,000,000
B. Automobile Insurance - Bodily Injury and Property Damage,
Combined Single Limit: $2,000,000
C. Workers' Compensation Insurances - In accordance with the
provisions of applicable law.
D. Contractual Liability Insurance - Covering Predictive's
contractual undertakings generally.
Predictive agrees to add any additional coverages as Customers may reasonably
request, so long as such additional coverages may be obtained at reasonable
expense.
21.3 Neither Predictive nor Cabletron shall sell, transfer, or assign
any right or obligation hereunder without the prior written consent of the
other, which may be withheld for any reason.
21.4 Subject to its obligations under Section 5 hereof, Cabletron
reserves the right, at its sole option, to enter into negotiations with,
and/or contract with, any other party to perform the same or similar
functions or services as those contemplated under this Agreement.
21.5 Each party represents to the other that such party is under no
obligation or restriction nor will such party assume any, which would interfere
or present a conflict of interest with the work that each is to perform under
this Agreement.
**** Represents material which has been redacted and filed separately with
the Commission pursuant to a request for confidential treatment pursuant to
Rule 406 under the Securities Act of 1933, as amended.
19
21.6 Predictive acknowledges that Predictive is incorporated or
organized as a corporation under the laws of a state in the United States.
21.7 The price to be charged Customers for the products and services
provided herunder shall be solely at Cabletron's discretion.
21.8 In event of any dispute concerning the implementation of this
Agreement or relating to an alleged immaterial breach hereof, the relevant
operating personnel of each party, together with their managers, shall use
reasonable efforts, acting in good faith, to resolve such dispute. If either
party determines in good faith that such efforts have not yielded a satisfactory
result, then such party may request that the dispute be addressed by the
Oversight Committee. The Oversight Committee shall also be responsible for
initially attempting to resolve any commercially material dispute or any dispute
relating to an alleged material breach hereof. The Oversight Committee shall
meet promptly and use commercially reasonable efforts to arrive at a mutually
acceptable resolution. Any such dispute not so resolved within thirty (30) days
after initially being reported to the Oversight Committee (or such longer period
as to which the parties shall have agreed in writing) shall be finally
determined by binding arbitration in Manchester, New Hampshire, before a single
arbitrator chosen in accordance with the rules of the American Arbitration
Association then and there obtaining. The arbitration shall be conducted in
accordance with such rules, and the arbitrator shall have the authority to order
such injunctive relieve as he may determine, to determine how the parties shall
bear the costs of such arbitration, and to award such damages (but not any
punitive or exemplary damages) as are appropriate. Each of the parties hereby
waives any and all objections he or it may have with respect to the jurisdiction
of such arbitral forum or the inconvenience of its venue.
21.9 No waiver by either party hereto of a breach by the other of any
terms or conditions of this Agreement, or any statement of work or purchase
order related hereto, shall be deemed a waiver of any other breach of the same
or other terms or conditions, and no delay or failure by any party to enforce or
exercise any right under this Agreement, or any such statement of work or
purchase order shall constitute a waiver of such right or any other right
hereunder.
21.10 The laws of the State of New Hampshire shall govern this
Agreement, without regard to its conflicts of law principles.
21.11 Except as otherwise noted herein, references in this Agreement to
Sections and Schedules are to the sections and schedules of this Agreement.
21.12 This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective successors and permitted assigns.
21.13 This Agreement may be amended only by an instrument in writing
signed by all parties hereto.
21.14 Both parties acknowledge that they have read this Agreement and
understand and agree to be bound by its terms. This Agreement, its Schedules,
and any relevant contracts to which the Customers and one or both of the parties
hereto are party to, constitute the complete agreement regarding these
transactions, and replace any prior oral or written communication between the
parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
20
- --------------------------------- ---------------------------------------
CABLETRON SYSTEMS, INC. PREDICTIVE SYSTEMS, INC.
- --------------------------------- ---------------------------------------
By: /s/ David Kirkpatrick By: /s/ Ronald Pettengill
------------------------ -------------------------------
David Kirkpatrick Name: Ronald Pettengill
Chief Financial Officer
Date: August 05, 1999 Title: Chairman and CEO
Date: August 9, 1999
- ---------------------------------- --------------------------------------
21