1
Exhibit 10.25
SIEMENS / CASTLE OEM CONTRACT
SIEMENS-CASTLE
OEM AGREEMENT FOR PURCHASE OF PRODUCTS
Page 1 of 82
2
SIEMENS / CASTLE OEM CONTRACT
OEM AGREEMENT FOR PURCHASE OF PRODUCTS
--------------------------------------
CONTENTS
PARTIES AND SIGNATURES....................................................... 5
ARTICLE I DEFINITIONS....................................................... 6
Terms Defined
ARTICLE II CONFIDENTIALITY PROVISIONS....................................... 7
Confidential Information
Disclosure between the Parties
ARTICLE III PRODUCT......................................................... 9
Product Description
Problem Determination
Incompatibilities
Special Products
Product Changes
Marketing
ARTICLE IV PRICES.......................................................... 11
Product Availability for Purchase
Price Warranty
Price List
Forecast
Discounts
ARTICLE V PURCHASING TERMS AND CONDITIONS.................................. 15
Order Servicing
Change Orders
Schedule Commitments
Packing
Shipping
Receiving and Inspection
Shipping Damage
Page 2 of 82
3
SIEMENS / CASTLE OEM CONTRACT
ARTICLE VI PAYMENT......................................................... 19
Payment Terms
Invoicing
ARTICLE VII WARRANTY....................................................... 20
Warranty Liability
Year 2000 Compliance Warranty
Warranty Limitation
ARTICLE VIII REPAIR SERVICE................................................ 22
Repairs not covered under Warranty
Repair Procedures
Emergency Replacement Service
Refurbishment
ARTICLE IX AVAILABILITY AND SUPPORT........................................ 24
Product Availability
Technical Support
Installation assistance
Extraordinary Support
Engineering Complaints
Training
ARTICLE X DOCUMENTATION.................................................... 26
Specifications or Drawings
Documentation
Use of Information
Reproduction of Documentation
ARTICLE XI COMPLIANCE...................................................... 27
Radio Frequency Energy Standards
Registration
Toxic Substances and Hazardous Materials
Compliance with Laws
ARTICLE XII TERM AND TERMINATION........................................... 29
Term of Agreement
Termination of Agreement
Page 3 of 82
4
SIEMENS / CASTLE OEM CONTRACT
ARTICLE XIII SOFTWARE....................................................... 30
Rights In Software
Software Documentation
Repair To Software
Software Certification
Availability of Source Programs and Documentation
Custom Software
ARTICLE XIV GENERAL PROVISIONS............................................. 33
Transferability
Disclaimer of Agency
Publicity
Notices
Governing Law
Arbitration
Non-Waiver
Execution of Further Documents
Other Remedies
Effects of Headings
Patent and other Proprietary Rights Infringement Indemnification
Markings
Contingency
Developments by Siemens
Validity
Amendments
Integration
ARTICLE XV LIMITATION OF LIABILITY......................................... 36
Limitation of Liability
ATTACHMENTS
Attachment A Product and Price List........................... 37
Attachment B Related Materials................................ 48
Attachment C Product Specifications........................... 49
Attachment D Non-Disclosure Agreements........................ 50
Attachment E Service Agreement................................ 53
Attachment F Forecast......................................... 70
Attachment G OEM Agreement Quality Assurance Provisions....... 71
Attachment H Release Escrow Agreement (Example)............... 73
Attachment I Licensee Escrow Agreement........................ 77
Attachment J Description of Escrow Materials.................. 81
Page 4 of 82
5
SIEMENS / CASTLE OEM CONTRACT
OEM AGREEMENT FOR PURCHASE OF PRODUCTS
THIS AGREEMENT, having an Effective Date of December 23, 1998, is hereby entered
into between Castle Networks, Inc., a Delaware corporation, having a principal
place of business at 68 Tadmuck Road, Westford, Massachusetts (hereinafter
referred to as Company), and SIEMENS INFORMATION AND COMMUNICATION NETWORKS,
INC. a Delaware Corporation, having a principal place of business at 900 Broken
Sound Parkway, Boca Raton, Florida 33487, (hereinafter referred to as Siemens).
WHEREAS, Siemens desires to purchase Products (hereinafter described) and
thereafter desires to have Product delivered for Siemens' use with Siemens'
products that may be offered for resale to third parties, and
WHEREAS, Company is interested in selling Product to Siemens.
NOW THEREFORE, in consideration of the mutual covenants contained herein, it is
agreed as follows:
(a) The Articles, Attachments, and Amendments contained in this Agreement
constitute the entire agreement between the Parties;
(b) No modifications or waiver of any of the provisions, or any future
representation, promise, or addition shall be binding upon the Parties
unless agreed to in writing;
(c) This Agreement supersedes and cancels any prior agreements in their
entirety.
IN WITNESS WHEREOF, the Parties hereto have as of the Effective Date duly
executed this Agreement, including Attachments A through J which are
incorporated herein and made a part hereof, by the respective officers thereunto
duly authorized.
Castle Networks, Inc. SIEMENS INFORMATION AND COMMUNICATION
NETWORKS, INC.
By: /s/ Thomas M. Burkardt By: /s/ Illegible
-------------------------- -------------------------
Title: President Title: President and CEO
----------------------- ----------------------
Date: 12/23/98 Date: 12/23/98
------------------------ -----------------------
Page 5 of 82
6
SIEMENS / CASTLE OEM CONTRACT
ARTICLE I
---------
DEFINITIONS
-----------
1.0 TERMS DEFINED
As used in this Agreement, the following terms shall have the following
respective meanings (in singular or plural usage, as indicated by the context).
1.1. "CATALOG" means any document that describes Company Products that are
generally available for sale through normal distribution channels.
1.2. "CUSTOMER" means an end-user of Product who, at the time of acquisition of
the Product, has taken possession of the Product for its end use and does not
intend to further distribute the Product to yet another party.
1.3. "EFFECTIVE DATE" of this Agreement means the date first written above.
1.4. "MAINTENANCE PERIOD" means a period during which the Company shall make
available to Siemens, maintenance service and repair parts for the Product.
1.5. "PARTIES" means Company and Siemens.
1.6. "PRICE LIST" means Company's published listing of its standard prices for
which Company will sell its Product.
1.7. "PRODUCT" means the Product(s) specified in Attachment A including all
generally sold, (i) standard spare parts, (ii) improvements, upgrades,
corrections, modifications, alterations, revisions, or updates, to the specified
Products made by Company during the purchase term of this Agreement.
1.8. "PRODUCT SPECIFICATIONS" means the technical specifications for the design,
performance, operations, test and maintenance of the Product as more
specifically set forth in Attachment C.
1.9. "RELATED MATERIALS" means the information, whether or not in documentary
form, relating to, the use, maintenance or marketing of Product as set forth in
Attachment B.
1.10. "SOFTWARE" means the software contained in any hardware Product and any
Products which are comprised solely of software.
1.11. "SOURCE CODE" means human-readable source statements for the software
including, without limitation, program listings, data definition models,
indices, structure tables, system flow charts, program flow charts, defined
terms, file layouts, program narratives and global documentation.
Page 6 of 82
7
SIEMENS / CASTLE OEM CONTRACT
1.12. "SPARES" means any sub-assembly generally provided by Company for field
replacement for Products including, but not limited to, components, boards,
fasteners, power supplies, cables, wiring, casings and other associated
materials as more specifically specified in Attachment A.
1.13. "SPECIAL PRODUCT" means any special feature or capability that is not a
part of the Company's generally offered Product, not contained in the general
Product Catalog and Price List, and generally built-to-order. Special Products
affected by this Agreement shall be specified in Attachment A.
1.14. "TERM OF THIS AGREEMENT" means the period of time in months beginning with
the Effective Date and ending on the last day of the month, thirty-six (36)
months thereafter.
ARTICLE II
----------
CONFIDENTIALITY PROVISIONS
--------------------------
2.0 CONFIDENTIAL INFORMATION
For the purpose of this Agreement, "Confidential Information" shall mean any
information and data of a confidential nature (i) if in writing, marked as
"Confidential" or with other words of like import or effect, and (ii) if
provided orally, then denominated as confidential prior to the oral disclosure
and followed by a written abstract notated as "Confidential" or other words of
like import or effect, both (i) and (ii) including, but not limited to,
proprietary, developmental, technical, 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.
2.1 DISCLOSURE BETWEEN THE PARTIES
2.1.1 All Confidential Information exchanged between the Parties pursuant
to this Agreement:
2.1.1.1 shall not be distributed, disclosed, or disseminated in any
way or form by the receiving Party to anyone except its own employees
who have a reasonable need to know such Confidential Information;
2.1.1.2 shall be treated by the receiving Party with the same degree
of care to avoid disclosure to any third party as is used with respect
to the receiving Party's own information of like importance which is
to be kept secret. The receiving Party shall be liable for disclosure
of Confidential Information of the disclosing Party only if such care
is not used. The burden shall be upon the receiving Party to show that
such care was used; and
2.1.1.3 shall not be used by the receiving Party for its own purpose,
except as otherwise expressly stated herein, without the express
written permission of the disclosing Party; and
Page 7 of 82
8
SIEMENS / CASTLE OEM CONTRACT
2.1.1.4 shall remain the property of and be returned to the disclosing
Party (along with all copies thereof) within thirty (30) days of
receipt by the receiving Party of a written request from the
disclosing Party setting forth the Confidential Information to be
returned.
2.1.2 The obligations of the above paragraph shall not apply, however, to
any information which:
2.1.2.1 is already in the public domain or becomes available to the
public through no breach of this Agreement by the receiving Party;
2.1.2.2 was in the receiving Party's possession prior to receipt from
the disclosing Party as proven by the receiving Party's written
records;
2.1.2.3 is received independently on a non-confidential basis from a
third party free to disclose such information to the receiving Party;
or
2.1.2.4 is independently developed by the receiving Party as proven by
its written records prior to receipt from the disclosing Party.
2.1.2.5 is the subject of subpoena or court order.
2.1.3 Either Party shall have the right to refuse to accept any
Confidential Information under this Agreement.
2.1.4 Siemens shall be free to disclose and distribute Company's
Confidential Information to the extent that such Confidential Information
is inherently disclosed in the ordinary sale and licensing of the Product
and Related Materials.
2.1.5 No license to the receiving Party, other than with respect to trade
secrets and know-how, under any trademark, patent or copyright, or
applications which are now or may thereafter be owned by the disclosing
Party, is either granted or implied by the conveying of Confidential
Information to the receiving Party.
2.1.6 Each Party shall advise its employees, personnel, agents, staff and
representatives of the terms hereof and require them to observe the terms
and conditions hereof.
2.1.7 Upon termination of this Agreement, for any reason, each Party shall
promptly return to the other Party all Confidential Information provided by
the other Party, not required for support of such parties current customers
or as otherwise provided. In the event, however, that this Agreement is
terminated by one party due to the other party's breach of the
confidentiality or license terms of this agreement, the non-breaching party
may demand all confidential information in the possession of the breaching
party be returned.
Page 8 of 82
9
SIEMENS / CASTLE OEM CONTRACT
ARTICLE III
-----------
PRODUCT
-------
3.0 PRODUCT DESCRIPTION
Company agrees to sell and or license to Siemens the Product in accordance with
the Product Specifications appended hereto as Attachment C and made a part of
this Agreement. The quality of such Product shall be comparable to similar
Products provided by Company to its other OEM Customers.
In addition, Company shall make available for Siemens' purchase and or license,
all improvements, upgrades, enhancements, corrections, modifications,
alterations, revisions, updates, made to Product during the Term of this
Agreement on terms substantially as provided herein.
Company agrees to make available, during the Term of this Agreement, assistance
to Siemens as set forth in this Agreement, with respect to any questions
relating to the operation, marketing, maintenance or interpretation of the
Product.
3.1 PROBLEM DETERMINATION
Company will provide Siemens, under the Confidentiality terms hereof, access to
the bug lists and error data base which Company generally makes available to its
OEM customers. Each party will be responsible for their own expenses for any
software or data communications facilities required. Castle shall thereby
disclose to Siemens errors, defects or problems in the Product, Product
Specifications or Special Products during or after the Term of this Agreement.
Company agrees, pursuant to the terms hereof, to assist Siemens in the
correction of same.
3.2 INCOMPATIBILITIES
Company agrees to notify Siemens in writing of technical changes, enhancements,
alterations, improvements or other modifications that could render such altered
Product incompatible with previously provided Products or which would materially
alter the manner in which such modified Products interface with Siemens
equipment which is discovered in Company's normal testing. Company shall be
responsible to test Products for conformity to industry standards and protocols
as set forth in the Specification and compatibility with other devices meeting
those standards. Any special compatibility testing between Siemens' products and
those of Company shall be the responsibility of Siemens, except as otherwise
provided herein. Such notice must be provided in a reasonable time to allow
Siemens, in the exercise of prompt due diligence, to test and determine any
necessary modifications to its equipment or to Product to ensure the continued
marketability of the modified Products by Siemens, prior to delivery of Product
with such changes, enhancements, alterations, improvements or other
modifications. Company shall advise Siemens, with reasonable detail and
specificity, as soon as reasonably possible with regard to any interoperability
issues disclosed in its normal testing. In the event of interoperability
failures between Company's Products and Siemens products the parties shall
cooperate to resolve the failures in an appropriate manner.
Page 9 of 82
10
SIEMENS / CASTLE OEM CONTRACT
3.3 SPECIAL PRODUCTS
Special Products may be requested, quoted and developed from time to time and
added to this Agreement by mutual agreement. Such Special Products, Related
Materials and associated prices shall only become part of this Agreement on
written approval of both Parties.
3.4 PRODUCT CHANGES
3.4.1 Company shall advise Siemens of all changes to Product in accordance
with the procedures specified herein.
3.4.2 Company may at any time make changes in Product, or modify the
drawings and specifications relating thereto, or substitute Product of
later design to fill an order, provided the changes, modifications or
substitutions under normal and proper use do not impact upon the Product's
(a) reliability, (b) the Specifications, or (c) form, fit or function. For
such changes, Company shall notify Siemens not later than thirty (30) days
after such change has been implemented.
3.4.3 Except in the case of "Mandatory Changes", Company shall send copies
of a written change modification to Siemens ninety (90) days prior to the
effective date of each change to Product which impacts on form, fit,
function, reliability, or Product Specifications. Mandatory Changes are
those changes required to correct an extremely unsatisfactory condition
requiring immediate action, such as changes for safety or to meet existing
Product Specifications. In such cases Company shall promptly send Siemens a
change notification. Company shall provide with each change notification
the following information if it is not already included: (a) Product change
number; (b) a detailed description of the change; (c) reason for the
change; (d) description of the impact of the change; (e) price impact, if
any; (f) proposed date for changes. In appropriate cases Company shall
provide Siemens' with a no cost sample of the changed Product for testing.
3.4.4 In the event that Siemens reasonably rejects such change to a
Product, Siemens shall advise Company of such determination as soon as
reasonably possible, but in no event more than thirty (30) days from the
date of notice. Siemens' failure to so notify Company shall be deemed an
acceptance of the change. Company shall not furnish any such changed
Products on any of Siemens orders if the change has been rejected. In such
event, Products, with regard to the proposed change and any failure,
problem or incompatibility which arises with regard to such change not
having been made, shall be provided on an "as is", "where-is" unsupported
basis without warranty.
3.4.5 When Related Materials are updated, the Company will provide examples
of same, however where updates are necessary or required for operation,
installation or maintenance, updates will be provided concurrent with the
release of the update.
Page 10 of 82
11
SIEMENS / CASTLE OEM CONTRACT
3.5 MARKETING
3.5.1 PRIVATE LABEL: Siemens shall private label and market all Products
purchased hereunder under Siemens own trade names and trade dress. Costs
incurred by Company for changes to Products and for altered materials
mandated by such private labeling shall be reimbursed to Company by
Siemens. Company may, in good faith, order private label special materials
in quantities in excess of Siemens' orders, based upon Siemens' forecasts,
and Siemens shall reimburse Company for all such materials and reasonable
inventory costs associated, if such materials are not utilized in Products
for Siemens. On an exception basis, subject to Company's sole approval, and
with mutual agreement required in each case, Company will supply and
Siemens may market non-private label Products.
3.5.2 ADDED VALUE: Purchase and License prices charged and terms granted to
Siemens hereunder are based upon Siemens' agreement that it shall market
the Products with substantial added value. Added value, for this purpose
means that Products, as provided to Siemens customers in the customer's
end-use installation, shall have material software and/or hardware
modifications that invoke Siemens proprietary features, such as, but not
limited to, network management, interoperability or management protocols.
Such added value, while not necessarily a separately priced Siemens'
product, shall constitute a material and significant portion of the
Products value in the end-use customer's application.
3.5.3 MARKETING EFFORTS: Siemens agrees to use its commercially reasonable
best efforts to market the Products provided by Company hereunder.
ARTICLE IV
----------
PRICES
------
4.0 PRODUCT AVAILABILITY FOR PURCHASE
Company agrees to have the Product available for purchase by Siemens during the
Term of this Agreement at prices as set forth herein and with delivery lead
times, for forecast quantities of sixty (60) days ARO, reasonable with respect
to similar Products of Company.
Company agrees that during the Term of this Agreement it shall, if requested by
Siemens and at Siemens expense as mutually agreed, maintain in inventory units
of Product available for delivery to Siemens above and beyond that being
manufactured in response to Siemens' purchase orders and scheduled for delivery
hereunder. Siemens may take delivery of such inventory in the event Siemens
requires additional quantities for sale or shipment. In the event of anticipated
labor disturbances, shortages of materials, or other conditions or events which
could adversely interrupt deliveries by Company hereunder, Company agrees to
advise Siemens as soon as reasonably possible and at Siemens' request,
manufacture, sell, and deliver to Siemens, in advance, quantities originally
scheduled for delivery during such period when such interruptions are
anticipated.
Page 11 of 82
12
SIEMENS / CASTLE OEM CONTRACT
The site and facilities where Company shall manufacture the Product is Company's
facility in Westford, MA or at other sites of which Company shall advise
Siemens.
Upon advance notice and subject to the Confidentiality provisions contained
herein, Siemens employees, agents or representatives may visit Company's
manufacturing premises at reasonable times to observe Company's performance of
its obligations under this Agreement.
4.1 PRICE WARRANTY
During the Term of this Agreement, the terms, conditions and prices for Products
taken as a whole, under which Siemens may purchase the Product shall be no less
favorable to Siemens than those which Company provides to any other OEM
purchasing the same or similar Product in like quantities over like time periods
under like terms.
4.2 PRICE LIST
The Price List for Product, Spares, and Special Products, during the purchase
term of this Agreement are specified in Attachment A. The prices contained in
Attachment A shall not normally be increased during the first two years of the
Agreement except by mutually signed approvals by both Parties, subject to the
provisions herein. Prices for the third year shall not be increased by
percentage greater than the increase in the US Dept. of Labor's published
Producer Price Index (all items) during the first two years of the Agreement.
Products added to the Agreement for purchase or license shall be at prices as
mutually agreed at the time of adding to the price list.
Prices under this Agreement are based upon Siemens' forecasts as set forth
below. Separately priced software and certain hardware items are
non-discountable.
On a case by case basis Siemens may request an incremental discount to preserve
its margins in competitive situations and Company will negotiate, in good faith,
such increments.
Castle reserves the right to revise prices upward in the event that it
experiences cost variances in the areas of components, labor or manufacturing
overhead that exceed 30% of its estimated costs for any of the foregoing cost
items.
4.3 FORECAST
4.3.1 Siemens shall use its commercially reasonable best efforts to
accurately forecast its anticipated requirements for Product. An initial
first year's forecast will be part of this Agreement, as shown in
Attachment F. Siemens shall, on a rolling monthly basis, update the one
year forecast. Such forecasts are for information and planning purposes
only. Forecasted quantities and delivery dates are subject to change and do
not constitute a binding commitment to buy on the part of Siemens.
Page 12 of 82
13
SIEMENS / CASTLE OEM CONTRACT
4.3.2 Siemens forecasts shall be used for the following purposes:
(a) Company shall utilize Siemens forecast for placing orders for
custom components and sub-assemblies, unique to Siemens products.
Prior to placing such orders, Company shall advise Siemens of the
parts and components being ordered. Siemens shall, within 3 business
days of such notice, advise Company of any items being ordered which
Siemens believes, in good faith, are not appropriate, in the light of
its order level. For those custom items ordered, Company shall bill
Siemens in advance at the actual invoice price plus 15%. Such custom
items, when received, shall be segregated and identified to Siemens
and shall be made available to Siemens for its reasonable inspection
and verification. (consignment option available)
(b) Company shall grant to Siemens a credit, against the purchase
price of Products, of the actual invoice price for the Custom items
utilized in such Products which are purchased.
(c) At the termination of this Agreement, Company shall ship to
Siemens as directed by Siemens, FOB shipping point, all unused items
under a or b, above.
(d) Siemens orders shall be in line with its forecasts. In the event
that Siemens' orders vary from Forecast, Company shall have the right
to reduce or increase forecast quantities, as applicable, and, while
Company shall use its commercially reasonable best efforts to accept
all orders and meet lead times, it shall not be obligated to accept
orders for quantities in excess of those forecast.
4.4 DISCOUNTS
4.4.1 DISCOUNTING GENERALLY: Discounts are granted on the basis of Castle's
OEM customer including significant added value, as defined in the
agreement, and purchasing a quantity level of product.
4.4.2 QUANTITY LEVEL: Siemens has represented to Castle, as inducement to
grant the Base Discount provided for herein, that Siemens intends to use
its reasonable commercial efforts to purchase and take delivery from Castle
for resale, Castle Product having an accumulated invoice price to Siemens,
excluding shipping and insurance, of approximately $51M (USD) over the 30
month period from first availability, in accordance with the Revenue
Schedule, below.
4.4.3 BASE DISCOUNT: The base discount for Siemens' purchases will be
fifty percent of the US Price list price (50%) for discountable items as
shown in the Castle Price List.
Page 13 of 82
14
SIEMENS / CASTLE OEM CONTRACT
Exception items marked "non-discountable" or "limited discount" will be
discounted as shown in the price list.
Page 14 of 82
15
SIEMENS / CASTLE OEM CONTRACT
4.4.4 PERIODIC REVENUE SCHEDULE:
Cumulative net purchases Percentage
Month (inclusive) by Siemens to end of Period Increment during Period
----------------- --------------------------- -----------------------
0-6 $ 3M 6%
7-12 $11M 16%
13-18 $23M 24%
19-24 $37M 27%
25-30 $51M 27%
FAILURE TO MEET PERIODIC REVENUE REQUIREMENT: In the event that Siemens
fails to meet the revenue requirement, as shown in the Revenue Schedule
above, during any period, the parties shall, at Castle's request, negotiate
in good faith, an appropriate reduction in Siemens base discount on a going
forward basis.
4.4.5 CONFIGURATION DISCOUNT: The base discount will be increased for OEM
purchases of systems having large configurations, in the following manner:
# of chassis slots filled Incremental Discount
------------------------- --------------------
0 - 9 0%
10 - 14 3%
15 - 19 6%
Configuration discounts are computed on single orders for single delivery.
Cards without chassis and add-on cards are not eligible for configuration
discounts. For single order/single deliveries which are not factory
configured, configuration discounts will be based upon even population of
chassis ordered. Questions and disputes regarding configuration discounts
will be resolved by solely by Castle in the exercise of its reasonable sole
judgement.
4.4.6 INTERNAL USE DISCOUNT: Products purchased for Siemens internal use
will be discounted at 65% for discountable product. Siemens will track
and maintain an inventory record and will report, if Castle so requests,
the chassis serial number and configuration of internal systems. Internal
systems which are sold, placed at customer locations or made available for
customer use will be subject to a bill back equal to 2 times the difference
between the internal discount and the discount that would have been
applicable to the price of the system had it been purchased at the OEM
discount.
4.4.7 Orders placed for delivery with quoted lead times and forecasts, but
not delivered due to Castle's failure, shall be considered as having
contributed to the revenue requirement. Training, Support, NRE and special
development fees will not be computed
Page 15 of 82
16
SIEMENS / CASTLE OEM CONTRACT
as part of the Revenue Requirement. Invoice prices, for the purpose of
computing revenue, are net of shipping and insurance charges.
Spare part prices and discounts are specified in Attachment A.
Special Products prices will be individually quoted. Special Products may
be added to the Price List in Attachment A, if mutually agreed to in
writing by both Parties.
All prices are quoted in U.S. dollars and are F.O.B. Company point of
shipment and do not include, sales or other taxes, import duties, special
packaging, shipping or insurance charges. Such additional charges shall be
separately stated on the applicable invoice and paid by Siemens. Siemens
shall not be responsible for taxes on Company's net income.
ARTICLE V
---------
PURCHASING TERMS AND CONDITIONS
-------------------------------
5.0 ORDER SERVICING
A Siemens purchase order constitutes the exclusive statement of Siemens offer to
Company to purchase Product, Special Products, and Spares. Acceptance by Company
of a Siemens purchase order under the terms and conditions of this Agreement
shall be indicated by written acceptance. Any additional or different terms or
conditions expressed by Siemens or Company in a purchase order or acknowledgment
shall be void unless expressly agreed to in writing by the other party.
5.1 CHANGE ORDER
Siemens shall have the right, by written change order, to make changes in any
one or more of the following: (a) quantity of goods to be delivered; (b) method
of shipping or packing; (c) place of delivery; and (d) delivery schedules, as
limited herein. Change orders are subject to Company's acceptance in writing.
Purchase orders may not be cancelled.
Purchase orders may be rescheduled, one time, for up to ninety (90) days, so
long as the request to reschedule is received by Company no less than 30 days
prior to the scheduled ship date.
Once accepted, Company shall not change a purchase order without written
approval by Siemens. If such change is made by Company without written approval
by Siemens, the order may be subject to cancellation.
Siemens agrees to place an initial purchase order upon first Product
availability, targeted for July 1, 1999 in quantities appropriate to the
forecast, but for no less than $885,000.00, which may be neither canceled nor
rescheduled. Company will ship initial order quantities to Siemens' stock at
Company's facility, without additional charge, if requested by Siemens. Siemens
will pay for such goods as if they were shipped to Siemens in the ordinary
course.
Page 16 of 82
17
SIEMENS / CASTLE OEM CONTRACT
5.2 SCHEDULE COMMITMENTS
5.2.1 The requested delivery dates applicable to each purchase order will
be set forth in such purchase order. Delivery dates will be confirmed by
Company's acknowledgement. Company agrees not to ship Product prior to the
agreed upon delivery date without Siemens' prior written authorization.
5.2.2 Subject to the provisions contained in the Section 14.11 CONTINGENCY,
in the event Company exceeds the agreed upon delivery date by more than
three (3) business days, through no fault of Siemens, then in addition to
all other rights and remedies provided for in this Agreement or otherwise
and without any liability or obligation to Siemens, Siemens shall have the
right to: (a) cancel such purchase order, or (b) extend such delivery date
to a later date, subject, however, to the right to cancel as in (a) above
if delivery is not made or performance is not completed by such extended
date.
5.2.3 In the event Company fails to meet the agreed upon delivery date and
such failure is not due to reasons covered by the Section 14.11
CONTINGENCY, then Company shall be liable for purchase order cancellation
and actual out-of-pocket logistical costs incurred by Siemens as a direct
result of such failure.
5.2.4 If a purchase order is canceled pursuant to the above, Siemens and
Company shall agree to cancellation by Siemens, to the extent that Siemens'
customer cancels its order as a direct result of Company's failure to
comply with the terms hereof, addressing only that release of Product under
the single order affected by Company's failure, and Company shall issue
appropriate credits to be applied to future purchases for Products
delivered .
5.2.5 If Siemens requests, for reasons other than covered by the Section
14.11 CONTINGENCY, that shipment be postponed beyond the date shown on a
purchase order, Company may invoice Siemens as of the original scheduled
delivery date for Product manufactured hereunder. Title for such delayed
Product shall pass to Siemens on date of invoice.
5.2.6 All Product invoiced to Siemens in accordance with the foregoing
paragraph shall be marked conspicuously as Siemens property, and safely
stored by Company separated from any other material stocks. Such Product
shall be shipped out as ordered by Siemens. Company assumes responsibility
for any loss or damage to such Product while stored by Company. Siemens
shall reimburse Company for storage and insurance costs for such Product.
Company shall advise Siemens in writing of the specific location where
Product is stored and of any subsequent movement of the Product. Company
agrees, upon request by Siemens, to execute and deliver to Siemens a bill
of sale evidencing conveyance/license of such Product, free from liens and
encumbrances, together with any other document such as a bailment
agreement, warehouse receipt, lease (on storage space), mortgage, deed of
trust, or surety bond as Siemens may deem necessary to secure title in such
Page 17 of 82
18
SIEMENS / CASTLE OEM CONTRACT
product against third parties, all of which documents shall be in a form
reasonably acceptable to Siemens.
5.3 PACKING
5.3.1 Company shall, at no charge, package and pack Product in appropriate
boxes, reels, bundles, pieces, coils, etc. which will provide protection
against damage (including static) during shipment, handling and storage in
reasonably dry unheated quarters with temperatures and humidity levels
within -30 to +65 degrees Celsius, and up to 95% relative humidity,
respectively. Corrugated shipping containers shall comply with requirements
of Rule 41 of the Uniform Freight Classification. Containers of any type
that are too heavy or too large to be palletized shall be skidded to
facilitate fork truck and/or mechanical handling.
5.3.2 Company shall mark all such packaging for identification purposes in
accordance with ARTICLE XI, COMPLIANCE.
5.4 SHIPPING
5.4.1 Unless specifically agreed to by Siemens and Company, all shipment
will be made F.O.B. point of shipment "collect" utilizing one of the
approved and preferred carriers listed below. If questions arise concerning
shipments, Company is directed to contact the Siemens ICN Transportation
Department at telephone (407) 942-5499 or 942-5347.
Ground Parcel Shipments:
UPS Ground - Consignee Billing
RPS Ground
LTL Motor Freight - Southeast Regional:
Southeastern Freight Lines
Averitt Express
LTL Motor Freight - Longhaul:
Consolidated Freightways
Overnite Transportation
Air Freight - Envelopes and packages up to 20 lbs.:
FEDEX
Air Freight - Packages 21 lbs. and over:
Emery Air Freight
Burlington Air Express
Deferred Air Freight:
LEP/Profit Air Freight
Page 18 of 82
19
SIEMENS / CASTLE OEM CONTRACT
International Envelope/Non-dutiable Parcels:
FEDEX
International Package/Commercial Orders:
Kuehne & Nagel, Inc.
(must consign to Orlando International Airport (MCO)
Van Line and TL Shipments:
Contact Siemens Traffic Department
5.4.2 Additional Instructions:
- Consolidate each day's shipments into a single shipment whenever
possible.
- Route all motor freight and air shipments "Freight Collect".
- Unless otherwise requested by exception, do not declare an
"insured value" with the carrier as Siemens is self-insured.
- Air or other premium shipments must be authorized by a Siemens
ICN Purchasing Agent and will be routed via second day service
unless instructed otherwise.
- Excess transportation charges resulting from non-compliance may
be billed to the supplier or deducted from the supplier's
invoice.
- Absolutely no "COD" or "FCCOD" deliveries can be accepted.
- Contact the Traffic Department in the event of carrier service
failure(s) or if a deviation from these instructions is desired.
5.4.3 Unless prior approval has been provided in writing, all shipments NOT
in compliance with these freight terms or carrier routing instructions will
be refused at the destination.
5.4.4 Unless otherwise agreed to, all Product shipments under this
Agreement will be in new, unused condition.
5.4.5. Siemens shall not be charged for cartons, wrapping, boxing, crating,
drayage or other such costs, unless agreed to in writing.
5.4.6 Company shall ship Product from Company's nearest facility capable of
supplying Siemens' needs.
5.4.7 Product, Special Products, and Spares will be shipped with a packing
list enclosed with each shipment.
5.4.8 Title and risk of loss shall pass to Siemens upon proper tender of
delivery to the common carrier.
Page 19 of 82
20
SIEMENS / CASTLE OEM CONTRACT
5.4.9 Shipping damage claims shall be reported to the carrier and Company
shall replace such damaged goods on a first priority basis in Company's
manufacturing queue (P1 basis), subject to the placing of the claim with
the carrier by Siemens. Product, Special Products, and Spares will be
shipped with a packing list enclosed with each shipment.
5.5 RECEIVING AND INSPECTION
5.5.1 There shall be no partial shipments unless authorized by Siemens.
Company shall be responsible for Siemens' reasonable direct out of pocket
costs actually incurred as a result of unauthorized partial shipments.
Siemens reserves the right to make final inspection of Product, Spares, and
Special Products up to ten business (10) days after receipt at the ship to
location.
5.5.2 Siemens may, upon inspection, notify Company of any defect,
deficiency, or default and reject such goods. Goods so rejected may be
returned to Company under warranty and unless promptly replaced may subject
the Company to cancellation of the purchase order.
5.5.3 Goods shipped in advance of delivery schedule or unauthorized partial
shipments, other than as provided for herein, may be rejected or returned
to Company at Company's expense.
5.6 SHIPPING DAMAGE
Upon request, Company will insure, at Siemens expense, all Product orders
hereunder until delivery to and acceptance of delivery by Siemens of such
Product at the location designated on the purchase order. Company shall
cooperate with Siemens in every reasonable way to facilitate the settlement of
any such claim.
ARTICLE VI
----------
PAYMENT
-------
6.0 PAYMENT TERMS
Unless otherwise agreed to in writing by the Parties, the terms for payment of
all purchase orders shall be receipt of payment by check or wire transfer, in
full, no later than sixty (60) days after the issuance of invoice, provided,
however, that payment shall not impair Siemens right of inspection. Sums not
paid when due shall bear interest at the lesser of 1.5% for each month or part
thereof or the maximum allowed by law.
Page 20 of 82
21
SIEMENS / CASTLE OEM CONTRACT
6.1 INVOICING
6.1.1 All applicable Federal, State, and local taxes shall be stated
separately on Company invoice.
6.1.2 Company shall issue its invoice within two business days of shipment.
ARTICLE VII
-----------
WARRANTY
--------
7.0 WARRANTY
7.0.1 Company warrants that, for a period of twelve (12) months for hardware and
four (4) months for software from the date ten (10) business days after
shipment, the Product sold or licensed hereunder shall be free from defects in
material and workmanship and shall in all respects conform to the
specifications, including any modification thereof mutually agreed upon in
writing and specified in Attachment C. Software is not warranted to be error
free.
7.0.2 This warranty may only be utilized by Siemens and not Siemens' end-user
customers; however, the sale or sublicense by Siemens to its end-user customer
shall not terminate the warranty. Siemens shall provide first and second level
warranty support and out-of-warranty sub-assembly replacement and software
support directly to its end-user customers. To this end, Siemens will maintain
an appropriate level of spares inventory.
7.0.3 If any Product supplied by Company hereunder fails to conform to this
warranty during the warranty period and subject to the exceptions set forth
herein, Company shall, at its sole cost and expense, either repair or replace
the same. This warranty is made upon the express condition that:
a) Company is given prompt written notice upon discovery of any
non-conformity with explanation of the alleged deficiencies;
b) Siemens first secures a return material authorization (RMA) and such
Product is returned to Company's manufacturing facilities shipping prepaid,
except as otherwise agreed;
c) The Product has not been altered, modified or changed in any other
manner than has been previously authorized by Company, nor has product been
subject to misuse or damage due to improper handling and/or operation by
Siemens or any Siemens customer;
d) Repairs to the Product have not been made by anyone other than Company
or at Company's authorized service facility; and
e) The Software warranty does not extend to Software defects or failures
resulting from misuse, neglect, accident or abuse not caused by Company or
Company's representatives
Page 21 of 82
22
SIEMENS / CASTLE OEM CONTRACT
or which has been improperly installed, repaired, modified, or altered by
someone other than Company or Company's representative.
f) Neither the software nor hardware warranty extends to any defects or
failures resulting from improper handling, failure to follow Company's
operating and maintenance instructions or failure to maintain environmental
conditions as recommended by Company.
7.0.4 Company will repair or replace the hardware within a reasonable time and
will return repaired Product or will supply replacement Products to Siemens at
Company's expense. For Software, Company will issue a patch or work around
within a time frame as specified in the Service Level Agreement negotiated
separately between the Parties and in accordance with the designated severity
level of the problem, and will correct the non-conformance in the next
commercial release of the Software.
7.0.5 No term, condition, understanding or agreement purporting to modify the
terms of this warranty shall have any legal effect unless made in writing and
signed by authorized officers of Parties.
7.0.6 All Products which have been repaired or replaced by Company shall have
the same warranty as above for Product originally shipped, except the term of
the warranty shall be the balance of the period of time ascertained by deducting
from the original warranty term the number of days from shipment of the original
unit by Company, and the time of receipt by Company of the defective Product, or
ninety (90) days for hardware, thirty (30) days for the same defect for Software
from date of repair or replacement, whichever is greater.
7.1 YEAR 2000 COMPLIANCE WARRANTY
7.1.1 Company warrants and represents that the Products covered by this
agreement, including all custom Products, individually and in combination,
have been assessed and do achieve Year 2000 compliance. In order to be Year
2000 compliant, the Products must function accurately and without
interruption before, during and after January 1, 2000, without any manual
intervention in operations, and all date data information must be correct
before, during and after that date. The Products, individually and in
combination, shall provide correct results when moving forward or backward
in time through and beyond January 1, 2000, and shall provide fault-free
performance in processing dates and date-related data (including, but not
limited to, calculating, comparing and sequencing). The warranties set
forth above shall not be subject to any disclaimer or exclusion of
warranties or to any limitation of Seller's/Licensor's liability under this
agreement.
7.1.2 Company also warrants and represents that it has assessed or is
currently assessing Year 2000 compliance issues as it relates to its
business operations; that it is actively resolving any Year 2000
non-compliance relating to its operations, and that it will achieve Year
2000 compliance prior to January 1, 2000, in order that it will be able to
Page 22 of 82
23
SIEMENS / CASTLE OEM CONTRACT
successfully conduct normal business operations during and after the
transition into the year 2000. Such compliance includes, but is not limited
to, systems critical to the procurement of raw materials and components
and/or the manufacture and shipment of Products to Buyer/Licensee.
7.2 THIS WARRANTY EXCLUDES ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED,
ORAL OR WRITTEN, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY
AND/OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE VIII
------------
REPAIR SERVICE
--------------
8.0 REPAIRS NOT COVERED UNDER WARRANTY
8.0.1 In addition to repairs and replacements provided for in the Article VII
WARRANTY, Company agrees to provide at Company's then current prices, repair and
replacement service on all Product at the latest revision level for a period of
five (5) years after the expiration of this Agreement or any subsequent renewal
agreement. Siemens will return, shipping pre-paid, Product to be repaired under
this section to a location designated by Company and, unless otherwise agreed,
Company shall ship the repaired or replacement Product which, at Company's
option, meets the specifications at the time of original sale or as established
in Attachment C, as amended from time to time, within thirty (30) calendar days
of receipt of the defective Product.
8.0.2 In the event Company is unable or unwilling to provide repair or
replacement service beyond the committed period in 8.01, except in the events
covered in the Section 14.11 CONTINGENCY, and is unable to obtain another source
or repair for Siemens, then Siemens may require Company, for a reasonable fee,
to provide Siemens with the technical information solely for Siemens' use in the
repair of the Product.
The technical information includes, by example and not by way of limitation: (a)
manufacturing drawings and specifications including circuit pack schematics; (b)
manufacturing drawings and specifications covering special tooling and the
operation thereof; (c) a detailed list of all commercially available parts and
components purchased by Company on the open market disclosing the part number,
name and location of the supplier; and (d) repair specifications and test
procedures, as available.
8.0.3 If Product is returned to Company for repair as provided for in this
section, and is determined to be beyond repair, or repair costs are expected to
exceed fifty percent (50%) of the cost of a replacement, Company shall so notify
Siemens. If requested by Siemens, Company will sell to Siemens a replacement at
the current agreement price or, if no such agreement exists, at a price agreed
upon by Company and Siemens. Further, if requested by Siemens, Company shall
take the necessary steps to dispose of the un-repairable Product consistent with
sound commercial practices, and pay to Siemens the net salvage value, if any.
Page 23 of 82
24
SIEMENS / CASTLE OEM CONTRACT
8.0.4 Replacement and repaired Products shall be warranted as outlined in the
Article VII WARRANTY.
8.0.5 It is expressly understood and agreed that this Agreement does not grant
Company any exclusive privilege to repair any or all of the Product purchased
hereunder for which Siemens may require repairs; and Company and Siemens may
contract with others for these services.
8.0.6 All transportation charges for, and risk of in-transit loss or damage to
Product returned to Company for repair under this Section will be born by
Siemens. All transportation charges associated with the return of such repaired
and replacement Product to Siemens will be borne by Company. Company shall bear
the risk of in-transit loss and damage for shipments to Siemens on repaired or
replaced Product.
8.1 REPAIR PROCEDURES
To facilitate the repair of Product, Siemens may contact Company with any
questions that may arise concerning Repair Services and, if required, specify
any special packing of Product which might be necessary to provide adequate
in-transit protection from transportation damage.
Company may require that Siemens furnish the following information with Product
returned to Company for repair: (a) an RMA number secured from Company; (b) name
and telephone number of Siemens employee to contact in case of questions about
the Product to be repaired; (c) ship to address for return of repaired Product;
(d) a complete list of Product returned; (e) the nature of the defect or
failure, if known; (f) whether or not returned Product is in warranty, if known;
and (g) whether or not Company should return replaced component parts.
Product repaired by Company shall have the repair completion date stenciled or
otherwise identified in a permanent manner at a readily visible location on the
Product and the repaired Product shall be returned with a tag or other papers
describing the repairs which have been made with sufficient detail to identify
replaced components.
All invoices originated by Company for repair services must be clearly
identified as such, and must contain: (a) a reference to Siemens' Purchase Order
or requisition for these repair services, (b) a detailed description of repairs
made by Company and the need therefore, and (c) an itemized listing of parts and
labor charges, if any.
8.2 EMERGENCY REPLACEMENT SERVICE
In addition to the Product replacement provisions set forth in the Article VII
WARRANTY and Section 8.0 REPAIRS NOT COVERED UNDER WARRANTY, Company agrees, to
make available to Siemens Emergency Replacement Service at mutually agreed to
terms conditions and prices. In the event of an emergency condition and to the
extent Company can reasonably do so, to ship replacement Product and Spares
within twenty four (24) hours of notification by Siemens, on an exception basis
only and so long as Siemens maintains an appropriate spares stock, for the
duration of this Agreement and for a period of five (5) years thereafter.
Page 24 of 82
25
SIEMENS / CASTLE OEM CONTRACT
In order to schedule shipment of emergency replacements, Siemens may telephone
Company by 3:00PM EST (or EDT), as applicable, on a business day for delivery on
the next business day.
For Product under warranty, there will be no charge for replacement Product, and
outgoing transportation costs will be borne by Company. For Product not covered
under warranty, charges for replacement Product will be the current FOB
applicable price list price.
8.3 REFURBISHMENT
At the request of Siemens, and at a mutually agreed to price, Company shall
refurbish Product at current revision level provided by Siemens for reuse.
Refurbishment includes maintenance necessary to return the Product to a
"like-new" operational and appearance condition that is suitable for its reuse
by Siemens.
ARTICLE IX
----------
AVAILABILITY AND SUPPORT
------------------------
9.0 PRODUCT AVAILABILITY
Company agrees to offer for sale to Siemens, for a period of five (5) years
after the expiration date of this agreement, or any subsequent renewal
agreement, functionally equivalent maintenance, replacement, and repair parts.
Such parts shall be priced at the then current agreement price, or if no such
agreement exists, at a price agreed upon by Parties.
Company shall add products that are successors to the Products listed hereunder
so that Siemens may purchase such successor products under the terms of this
Agreement. Successor products are those offering like functionality, scale and
scalability as the listed Products, and are marketed by Castle as substitutes
when the listed Products are discontinued.
In addition, should Company decide, during the life of this Agreement, to
discontinue manufacturing Product, Company shall give at least twelve (12)
months prior notice to Siemens of such manufacture discontinuance to permit
Siemens a last time buy opportunity.
In the event Company becomes insolvent, ceases to carry on business on a regular
basis, or if the Company is no longer willing or able to fulfill its obligations
to maintain or support Product in accordance with this agreement and Company is
unable to obtain another source of supply for Siemens, then such inability shall
be considered noncompliance with this section. In such event Siemens may require
Company, on reasonable terms and conditions and at reasonable prices, subject to
recovery of Siemens reasonable out-of-pocket costs, to provide Siemens with a
license to such technical information or any other rights required so that
Siemens can have manufactured or obtain such Product or parts from other sources
for the sole purpose of supporting and providing incremental product to Siemens
then installed customer base.
The technical information includes, by example and not by way of limitation: (a)
manufacturing drawings and specifications of raw materials and components
comprising such parts; (b) manufacturing drawings and specifications covering
special tooling and the operation thereof;
Page 25 of 82
26
SIEMENS / CASTLE OEM CONTRACT
and (c) a detailed list of all commercially available parts and components
purchased by Company on the open market disclosing the part number, name and
location of the supplier, and Price List for the purchase thereof.
9.1 TECHNICAL SUPPORT (SEE ATTACHMENT E, SERVICE AGREEMENT)
9.2 INSTALLATION ASSISTANCE
If requested by Siemens, on an exception basis only, Company agrees to make
available at the installation site, a field engineer to render installation and
cutover assistance. Prices for such services shall be at prices mutually agreed
to by Siemens and Company.
9.3 EXTRAORDINARY SUPPORT
Company agrees, on an exception basis, to provide extraordinary support
(material and/or services) at prices shown in Attachment E, or, where such
prices do not exist, at Company's prevailing prices to assist Siemens in helping
Customer in restoring service which has been disrupted due to catastrophic
conditions (fire, flood, etc.). This support shall consist of that level of
effort required to provide support in a time frame deemed necessary by Customer
and agreed to by Company consistent with resource and manpower limitations of
Company.
This clause shall not be construed to require Company to maintain any
inventories whatsoever nor to maintain any position or status of readiness to
perform in the future.
9.4 ENGINEERING COMPLAINTS
9.4.1 Siemens may issue, in writing, engineering complaints to notify
Company of unsatisfactory conditions or performances of Product that
Siemens believes requires a change in the design, manufacturing process or
installation instructions. Company shall provide a written response to each
engineering complaint within thirty (30) days of receipt of such complaint
and shall provide a corrective action plan thereafter if the parties agree
that corrective action is required.
9.4.2 If epidemic failures occur (defined as the same failure or
specification non-conformities of the Product occurring due to the same
specifically identified cause to more than five percent of installed
Product within a period of three (3) months, in or out of warranty during
the Term of this Agreement, then Company agrees to study and review, at no
additional cost to Siemens, such failures and non-conformities as submitted
in writing by Siemens. If it is mutually agreed between Siemens and Company
that the Product is not in conformity with the applicable specifications,
Company shall act with its commercially reasonable best efforts to correct
the non-conformity by developing an engineering change to the Product or
other mutually agreeable solution.
9.5 TRAINING
Company shall provide to Siemens ten (10) days of training on the Products at no
charge at Company's site in a maximum of two (2) training classes for not more
than ten (10) persons, or as otherwise mutually agreed.
Page 26 of 82
27
SIEMENS / CASTLE OEM CONTRACT
Training, additional to that provided above, shall be offered to Siemens, at the
prices listed in Attachment E. Such training shall, at Siemens' option, be held
at Company's location or at Siemens' location. When such training is held at
Siemens' location, Siemens shall provide adequate training facilities. Specifics
of training are as set forth in the Training section of the Service Agreement,
Attachment E.
Siemens shall be provided with updated training materials to reflect any
changes, modifications, and enhancements to the Product. Training materials,
courses, or bulletins will be provided by Company, anytime significant changes
to Product are made. Siemens' rights to use training materials at no cost are
limited to non-revenue and internal training use.
ARTICLE X
---------
DOCUMENTATION
-------------
10.0 SPECIFICATIONS OR DRAWINGS
Company's Commercial and/or Technical Specifications shall cover the Products
provided hereunder. Such Specifications are attached hereto and are hereby made
a part of this Agreement as Attachment C, Product Specifications.
10.1 DOCUMENTATION
10.1.1 Company agrees to furnish and convey to Siemens, in English, at no
charge, two (2) complete sets of Product documentation in hard copy and a
single electronic copy, as is normally provided with the Product listed in
Attachment C, and any succeeding changes hereto, as described in the
Section 3.4 PRODUCT CHANGES. Such Product documentation shall include, the
right to reproduce such Product documentation for internal use at no charge
hereunder.
10.1.2 In addition, Company shall make available to Siemens on an as
ordered basis, all Product documentation, and shop level repair
documentation sufficient to allow Customer to perform component level
trouble shooting and repair activities to Product. Prices for such
documentation are shown in Attachment E. Such materials shall not include
Source Code.
Company further agrees to furnish documentation in Frame Maker format or
conforming to one of the following specifications:
(a) Master Documentation Set on diskette or CD-ROM saved in HTML (Hyper
Text Markup Language), or
(b) Master Documentation Set on diskette or CD-ROM saved in SGML (Standard
Generalized Markup Language), along with Document Type Definitions (DTDs).
Page 27 of 82
28
SIEMENS / CASTLE OEM CONTRACT
Company will be charged a fee by Siemens for converting the documentation
to a format compatible with our customer's browsers (HTML), or
(c) Company may provide Siemens with Uniform Resource Locator (URL) to
their electronic documentation on the World Wide Web, or
(d) Master Documentation Set on diskette or CD-ROM saved in a current
version of a commonly used word processing package or in American Standard
Code for Information Interchange (ASCII).
Company will advise Siemens in writing of all updates to documentation. This
notification will be directed to Siemens' Product Line Management or its
Designee and will include the new issue number, date of change, and reason for
change. Siemens is responsible for notifying its end-user customers.
10.2 USE OF INFORMATION
All specifications, drawings, sketches, models, samples, tools, computer
programs, technical information, confidential business information or data,
written, oral or otherwise (all herein designated "Information") obtained by
either Party hereunder or in contemplation hereof shall remain the property of
the disclosing Party. All copies of such Information in written, graphic or
other tangible form shall be returned to its owner upon request. Unless such
Information was previously known to be free of any obligation to keep it
confidential or has been or is subsequently made public by its owner or a third
party pursuant to Article II CONFIDENTIALITY PROVISIONS, it shall be kept
confidential, shall be used only in the filling of orders, or in performing
otherwise hereunder, and may be used for other purposes only upon such terms as
may be agreed upon in writing by both Parties.
10.3 REPRODUCTION OF DOCUMENTATION
Siemens may; in either electronic or paper media do the following: reproduce,
prepare derivatives and distribute copies of documentation supplied by Company
under this Agreement for internal use by Siemens, on a no charge basis to
market, use and maintain the products supplied by Company under this Agreement.
Documentation for Siemens' customers which constitute separately priced items in
Company's price lists and which is provided to Customer by Siemens for or in
respect of a fee may be reproduced at a mutually agreed to royalty fee. All
copies, so produced shall contain all copyright and/or other proprietary notice
contained in the original Company supplied documentation.
ARTICLE XI
----------
COMPLIANCE
----------
11.0 RADIO FREQUENCY ENERGY STANDARDS
Materials furnished hereunder shall comply, to the extent applicable, with the
requirements of Subpart J of Part 15 of the Federal Communications Commission's
Rules and Regulations, as may be amended from time to time, including those
sections concerning the labeling of such
Page 28 of 82
29
SIEMENS / CASTLE OEM CONTRACT
material and the suppression of radio frequency and electromagnetic radiation to
specific levels. Should the material during use generate harmful interference to
radio communications, Company shall provide to Siemens information relating to
methods of suppressing such interference. In the event such interference cannot
reasonably be suppressed, Company shall, at the option of Siemens, accept return
of Product and refund to Siemens the price paid for Product. Nothing herein
shall be deemed to diminish or otherwise limit Company's obligations under
Article VII WARRANTY of this Agreement.
11.1 REGISTRATION
When material furnished under this Agreement is subject to Part 68 of the
Federal Communications Commission's Rules and Regulations, as may be amended
from time to time, Company warrants that such Product when delivered is
registered under and complies with Part 68 of the Federal Communications
Commission's Rules and Regulations, including, but not limited to, all labeling
and Customer instruction requirements. Company agrees to indemnify and save
Siemens harmless from any liability, claims or demands (including the costs,
expenses and reasonable attorney's fees on account thereof) that may be made
because of Company's noncompliance with Part 68 of the Federal Communication
Commission's Rules and Regulations. Company agrees to defend Siemens, at
Siemens' request, against such liability, claim or demand. In such cases,
Company shall have the right to control and direct the defense of and settlement
of each claim or demand. Siemens shall promptly notify Company of all such
claims.
11.2 TOXIC SUBSTANCES AND HAZARDOUS MATERIAL
All material that is a "hazardous chemical substance or mixture" or a "hazardous
material" as these terms are defined in the Toxic Substance Control Act and the
Hazardous Material Transportation Act are hereinafter referred to as Hazardous
Material.
Company agrees to ship all such Hazardous Material on an F.O.B. destination
basis, freight prepaid by Company and added as a separate item on Company's
invoice. Company agrees to comply with all labeling, packaging, shipping and all
requirements as required by the afore-referenced acts, the Code of Federal
Regulation, Title 49 and all applicable state and local regulations. The
Hazardous Material itself and its packaging shall be clearly and visibly marked
so as to be readily identified.
Company agrees to provide the assistance to Siemens of an advisory nature in the
use and disposal of all hazardous material purchased hereunder.
11.3 COMPLIANCE WITH LAWS
11.3.1 Each party shall comply with all applicable federal, state, county
and all local laws, ordinances, regulation and codes (including procurement
of required permits or certificates) in its performance hereunder,
irrespective of whether a specification is furnished. This may include, but
is not limited to, compliance with the Occupational and Safety Health Act
of 1970 as amended, the Small Business Investment Act of 1958 as amended,
Vietnam Era Veterans Readjustment Assistance Act of 1972 as amended, the
Page 29 of 82
30
SIEMENS / CASTLE OEM CONTRACT
Rehabilitation Act of 1973 as amended, and Executive Orders Number 11246
(Equal Employment Opportunity), 11625 (National Program for Minority
Business Enterprises), 11701 (Employment of Veterans by Federal Agencies
and Government Contractors and Subcontractors), 11758 (Authority Under
Rehabilitation Act of 1973), 12138 (Creating a Woman's Business Enterprise
Policy and Prescribing Arrangements for Developing, Coordinating, and
Implementing a National Program for Women's Business Enterprise), and any
applicable state or local law, rule or regulation affecting safety and
health. If material, services or containers furnished are required to be
constructed, packaged, labeled or registered in a prescribed manner,
Company shall comply with federal law and, in addition, with applicable
state or local law.
11.3.2 The export laws and regulations of the United States prohibit,
except under license, the export from the U.S.A. of certain commodities and
technical data unless the exporter has received written assurance from the
foreign importer that the commodities and technical data will not be
further exported to certain countries. Both Parties agree to fully comply
with all relevant export laws and regulations of the U.S.A. to assure that
no violation of such U.S. export laws or regulations occurs and the Parties
will cooperate fully in obtaining any such required licenses or approvals.
The particular order shall be terminated if the Parties are unable to
obtain any required export license or approval in a period of time that is
reasonable with respect to the overall schedules.
11.3.3 Company agrees to comply with any and all laws, rules and
regulations governing design, manufacture, and testing of Product.
11.3.4 Company will provide Product which is NEBS compliant.
ARTICLE XII
-----------
TERM AND TERMINATION
--------------------
12.0 TERM OF AGREEMENT
Unless otherwise amended in writing by the Parties, the Term of this Agreement
shall commence on the Effective Date and continue for thirty-six (36) months. In
the event of a renewal of this Agreement, for a maximum of 24 additional months,
all terms shall be subject to mutual agreement.
12.1 TERMINATION OF AGREEMENT
Notwithstanding the provisions of Term of Agreement, if either Party hereto
shall fail adequately to perform or observe any of the terms and conditions to
be performed or observed by it under this Agreement, the other Party shall give
written notice to the defaulting Party specifying the respects in which the
defaulting Party has so failed to perform or observe the terms and conditions of
this Agreement, and in the event that any defaults so indicated shall not be
remedied by the defaulting Party within ninety (90) days after such notice, the
Party not in default may, by written notice to the defaulting Party within
thirty (30) days thereafter of its election to do so, terminate this Agreement
for cause, and, except as provided herein, this Agreement and all
Page 30 of 82
31
SIEMENS / CASTLE OEM CONTRACT
the rights herein granted to the defaulting Party shall terminate five (5) days
after the defaulting Party's receipt of such notice of termination. Failure of
either Party to so terminate this Agreement due to a breach on the part of the
other Party shall not prejudice its rights to terminate for a subsequent breach
on the part of the defaulting Party.
In the event that Company shall (i) cease conducting business in the normal
course, (ii) become insolvent, (iii) make a general assignment for the benefit
of creditors, (iv) suffer or permit the appointment of a receiver for its
business or substantially all of its assets, or (v) avail itself or becomes
subject to any proceeding under the Federal Bankruptcy Act or any other statue
of any state relating to insolvency or the protection of rights of creditors,
and such event materially and substantially prevents Company from carrying out
its obligations hereunder, then Siemens may, at its sole option and subject to
the provisions of this Agreement, terminate this Agreement for cause.
In the event of a termination due to Company's material breech of its
obligations hereunder, Siemens shall have the right to utilize the escrowed
materials to support its installed customer base. Siemens shall pay the cost of
escrow and updates.
Upon termination of this Agreement for any reason, Company shall promptly return
to Siemens any Siemens' supplied materials.
ARTICLE XIII
------------
SOFTWARE
--------
13.0 RIGHTS IN SOFTWARE
13.0.1 Title to software furnished to Siemens or Customer shall remain in
Company except as otherwise provided herein. For such term as Siemens shall
continue to use and operate Product, Company grants Siemens a non-exclusive
license to use the binary version of the software on the hardware with
which the software was first supplied and the right to sub-license such
like limited use to Siemens' end-user customers under the end-user license
terms as set forth in 13.0.3, below. Such license is perpetual so long as
Siemens remains in compliance with the license terms hereof.
13.0.2 Siemens or Customer may copy the software for back-up or maintenance
purposes for use with the hardware with which it was originally delivered,
but shall not knowingly reproduce the software for any other purpose. Any
such reproduction or copies shall include any copyright, similar
proprietary notice or other notices contained in the items being
reproduced.
13.0.3 Siemens' or end-users rights to use the software are limited as
follows:
(a) The software may only be used on the hardware on which it is first
supplied or supplied replacement hardware.
(b) Copies may be made for back up purposes only.
Page 31 of 82
32
SIEMENS / CASTLE OEM CONTRACT
(c) Software may not be modified, decompiled, disassembled or reverse
engineered.
(d) Siemens may, at no additional charge, sublicense software as a part of
the sale, rental, lease, transfer, or assignment of Product. Such
sublicensee shall succeed to all of Siemens' or Customer's rights and
obligations under this license with respect to such software.
13.0.4 Siemens or Customer may, at no charge, relocate software to another
location within the United States for reuse with the product with which it
was originally delivered when such Product has been relocated. Such
relocation or reuse shall not alter Siemens' or Customer's license to use
the software. Siemens or Customer shall notify Company in writing prior to
each software relocation or reuse.
13.0.5 The license fees and discounts applicable, if any, for software are
as set forth in Attachment E, Price Lists.
13.1 SOFTWARE DOCUMENTATION
Company shall provide to Siemens, its standard software documentation in
electronic form as listed in Attachment B.
13.2 REPAIR TO SOFTWARE (SEE SERVICE AGREEMENT, ATTACHMENT E)
13.3 SOFTWARE CERTIFICATION
Prior to providing major releases of software to Siemens hereunder, Company
shall certify to Siemens, that such new releases have been tested to conform and
perform in accordance with Company's specifications.
13.4 AVAILABILITY OF SOURCE PROGRAMS AND DOCUMENTATION
Siemens has, pursuant to this Agreement, licensed from COMPANY those computer
software products listed in Attachment A hereto (the "Products"). Siemens
desires to have the Source code for the Products placed in an escrow account
("Escrow") substantially pursuant to the terms and conditions of an Escrow
Agreement, attached hereto as Attachment H, with respect to the Products as
defined in the Agreement. COMPANY agrees to place a copy of the Source Code into
Escrow with a mutually agreed Escrow Holder. If there is more than one Product
listed in Attachment A for which Source Code is required, COMPANY may, at its
option, establish separate escrow accounts for each Product's Source Code.
COMPANY shall ensure that the copy of the Source Code that is deposited in the
Escrow at any given time is the latest version. COMPANY will cause Siemens to be
designated as a "Registered Licensee" of the Escrow by executing a document
substantially as shown in Attachment J in Siemens' name for each Product and
submitting such Exhibits to the Escrow Holder. A Licensee Escrow Agreement
between Siemens, Company and the Escrow Holder, substantially as shown at
Attachment I, shall govern the term of the Escrow. Upon receipt by the Escrow
Holder of the executed Attachment J from COMPANY, the Escrow Holder will send to
Siemens a copy of the Licensee Escrow Agreement.
Page 32 of 82
33
SIEMENS / CASTLE OEM CONTRACT
As a condition to Siemens' status as a Registered Licensee becoming effective,
Siemens agrees to promptly execute and return to the Escrow Holder the Licensee
Escrow Agreement.
Siemens shall follow the procedures set forth in Attachment I for notifying the
Escrow Holder in the event that Siemens believes that a Release Condition has
occurred that entitles Siemens to receive a copy of the Source Code for one or
more of the Products from Escrow. Siemens shall have a non-exclusive limited
license to use the Source Code strictly in accordance with the conditions
outlined in Attachment H.
In the event of a termination under 12.1.2 Company agrees to make available to
Siemens all source programs, technical documentation and other information
(Software source materials) not previously provided to Siemens hereunder, for
the sole purpose of maintenance, modification, or correction of the most current
version of the Software provided to Siemens. Should Siemens' use of the Software
source materials involve the practice of any invention covered by a patent,
Company shall grant a non-exclusive license to Siemens to use such technology as
is necessary for maintenance, modification or correction of Product for the term
thereof. Such license shall be non-transferable and shall not be sublicensed by
Siemens or Customer except for the purpose of having a third party perform these
services.
13.5 CUSTOM SOFTWARE
13.5.1 Custom software as used herein shall mean software requested by
Siemens and developed exclusively by Company for Siemens.
13.5.2 Siemens shall provide specifications to Company as part of a request
for Company to develop custom software. Company shall notify Siemens, in
writing, within the time frame specified in the request for acceptance or
rejection of such request. Should Company accept such request, Company
shall submit, within a mutually agreed upon time and at no cost or
obligation to Siemens, a Firm Price Quote (FPQ) including, but not limited
to: (a) a final summary of such customer software specification; (b) output
formats; (c) description of documentation to be furnished; (d) fixed fee or
other fees and charges, if any, for development of such custom software;
(e) scheduled installation dates; and (f) a listing and goals of each task
to be performed by Company, when each shall be performed and the order of
performance (herein "Schedule").
Siemens and Company shall mutually agree to payment terms and the rights of
the Parties to such custom software prior to the commencing of development
work by Company on a request by request basis.
13.5.3 Siemens may, at its option, either withdraw its request, counter
with another request for Company's consideration, or accept the FPQ and if
accepted, thereafter issue an order to Company for the custom software.
Prior to issuance of the order, Siemens shall incur no obligation to
Company because of any withdrawal of Siemens' request.
Page 33 of 82
34
SIEMENS / CASTLE OEM CONTRACT
13.5.4 After the completion of the development, Company shall deliver to
Siemens on or before the applicable scheduled date all written custom
software, source code, records of test data related thereto and all
associated documentation.
13.5.5 After such delivery and installation, Siemens and Company shall
jointly test the custom software to determine if it conforms to
specifications. Upon successful completion of said acceptance testing,
Siemens shall notify Company in writing of Siemens' acceptance or rejection
of the custom software, after such determination relative to conformance to
the specification is made. If correctly rejected for non-conformance,
Company shall, at no additional charge, promptly take such action as may be
required to correct the deficiency.
ARTICLE XIV
-----------
GENERAL PROVISIONS
------------------
14.0 TRANSFERABILITY
This Agreement shall be binding upon and shall inure to the benefit of any
corporation, or other legal entity with which Company or Siemens may be merged
or consolidated, or the successors to or assignee of the total assets of either
of them which relate to this Agreement.
Neither party may sell, assign, transfer, delegate, or subcontract this contract
or any rights or obligations hereunder, in whole or in part, without the prior
written consent of the other party, which consent shall not be unreasonably
withheld.
14.1 DISCLAIMER OF AGENCY
This Agreement shall not constitute either Party the employee, legal
representation or agent of the other Party, nor shall either Party have the
right or authority to assume, create, or incur any liability or any obligation
of any kind, expressed or implied against, or in the name of or on behalf of the
other Party.
With respect to third parties, any and all matters regarding Company's Products,
warranties, or terms and conditions of sale shall be referred to Company by
Siemens.
With respect to third parties, any and all matters regarding Siemens' Products,
warranties, or terms and conditions of sale shall be referred to Siemens by
Company.
14.2 PUBLICITY
Neither party shall disclose or publicize the existence of this Agreement or its
terms, nor refer to the other party in connection with any Product, promotion or
publication without the prior written approval of the other party. The parties
will, upon completion of the Agreement and at appropriate stages during its term
agree upon joint press releases to be made to the industry and general press.
Page 34 of 82
35
SIEMENS / CASTLE OEM CONTRACT
Each Party shall use its commercially reasonable best efforts not to disclose to
any third party during the Term of this Agreement, the terms and conditions of
this Agreement, except as may be required by law, or by governmental regulation,
requirements or orders or as may be necessary to establish or assert its right
hereunder.
14.3 NOTICES
Any and all written notices, communications and deliveries between Company and
Siemens with respect to this Agreement shall be sufficiently made on the date of
mailing if sent registered or certified mail to the respective address, subject
to change upon written notice, of the other Party as follows:
In the case of Siemens:
Siemens Telecom Networks
400 Rinehart Road
Lake Mary, Florida 32746
Attention: Director of Purchasing
In the case of Company:
Castle Networks, Inc.
68 Tadmuck Road
Westford, MA
Attention: Thomas Burkardt
14.4 GOVERNING LAW
This Agreement shall be governed by the laws of the State of New York.
14.5 ARBITRATION
Any dispute hereunder shall be settled by binding arbitration in New York City
under the rules of the American Arbitration Association for commercial disputes
by a panel of three arbitrators. The arbitrators ruling may be enforced by any
court having jurisdiction. Notwithstanding the foregoing, in the event of a
threat of immediate, irreparable harm, either party may seek equitable relief in
any court having jurisdiction.
14.6 NON-WAIVER
No delay or failure to exercise any right or remedy or enforce any provision of
this Agreement shall operate as a waiver thereof. The waiver of one breach or
default hereunder shall not constitute the waiver of any other or subsequent
breach or default.
14.7 EXECUTION OF FURTHER DOCUMENTS
The Parties agree to execute, acknowledge, and deliver all such further
instruments, and do all such other acts, as may be necessary or appropriate in
order to carry out the intents and purposes of this Agreement or perfect or
protect any right or license granted under this Agreement.
Page 35 of 82
36
SIEMENS / CASTLE OEM CONTRACT
14.8 OTHER REMEDIES
Any and all provisions for remedies agreed to in any specific provisions or
instances in this Agreement are not intended as exclusive remedies, and each
Party may pursue, in addition thereto, any remedies it may have at law, or
otherwise, or take such other action as it may determine.
14.9 EFFECT OF HEADINGS
The Article, Section, Paragraph, and Attachment headings appearing in this
Agreement are inserted only as a matter of convenience and in no way define,
limit, construe or describe the scope or intent of such Article, Section,
Paragraph, or Attachment nor in any way affect this Agreement.
14.10 PATENT AND OTHER PROPRIETARY RIGHTS INFRINGEMENT INDEMNIFICATION
Company shall defend Siemens, at Company's cost and expense, against any claim
or suit alleging infringement of a US, Canadian, or European Community patent,
copyright or other proprietary right brought against Siemens or Siemens'
Customer, to the extent that such claim pertains to the Product and Company
shall pay all damages awarded or settlements, incurred in such claim or suit,
provided that Siemens and/or Siemens' customer, as applicable, gives Company
prompt written notice of such claim, sole control over its defense and
settlement and cooperates with Company in the defense or settlement of such
claim or suit. If an injunction is obtained against use of the Product as a
result of infringement of a patent, copyright or other proprietary right,
Company shall, at its option, and at Company's expense, either procure the right
to continue using the Product, replace or modify them so they become
non-infringing, but remain functionally equivalent or accept return of the
Product and refund the depreciated purchase/license price therefor in the event
the preceding two remedies are not commercially practicable.
14.11 MARKINGS
Company shall mark all Products furnished hereunder for identification purposes
as follows:
(a) Model/part number and serial number, if applicable
(b) Month and year of manufacture
(c) Other identification which may be mutually agreed to by Parties
Upon Siemens' written request, certain of Siemens trademarks, names, symbols,
decorative designs or evidence of Siemens inspection (herein "Insignia") may be
properly affixed by Company to the Product. The design, location and manner in
which such Insignia will be affixed must be approved in writing by Siemens.
Charges, if any, for such Insignia shall be billed and payable by Siemens.
14.12 CONTINGENCY
Neither of the Parties shall be held responsible for any delay or failure in
performance hereunder caused by fires, strikes, embargoes, requirements imposed
by Government regulations, civil or military authorities, act of God or by the
public enemy or other similar causes beyond such
Page 36 of 82
37
SIEMENS / CASTLE OEM CONTRACT
Party's control. However, Company's delay or failure to perform shall not be
excused by a default of any of its subcontractors or suppliers unless such
default arises out of causes completely beyond the control of the Company. If
such contingency occurs, the party injured by the other's inability to perform
may elect to: (a) terminate a particular order or part thereof if the
contingency continues for a period of more than sixty (60) days as to Product
not already received; (b) suspend a particular order for the duration of the
delaying cause, buy or sell elsewhere Product to be bought or sold hereunder,
and deduct from any commitments the quantity bought or sold or for which
commitments have been made elsewhere; or (c) resume performance under a
particular order once the delaying cause ceases with an option in the injured
party to extend the period hereunder up to the length of time the contingency
endured. Unless written notice is given within thirty (30) days after such
injured party is apprised of the contingency, (b) shall be deemed selected.
14.13 DEVELOPMENTS BY SIEMENS
Nothing contained in this Agreement shall prevent Siemens from independently
developing, either through the use of its own personnel or through third
parties, or acquiring from third parties, Product similar to Product or other
types of Product. Nothing herein shall be construed to grant Company any rights
in any such similar Product so developed or acquired or to the revenues or any
portion thereof derived by Siemens from the use, sale, lease, license or other
disposal of any such Product.
14.14 VALIDITY
In the event any provisions of this Agreement shall be deemed invalid by any
court of law, the invalidity of that provision shall not affect the remaining
portions of this Agreement and any ambiguity which arises by reason of such
invalidity shall be construed in accordance with the overall intent of the
Parties as exhibited by the remaining provisions of this Agreement.
14.15 AMENDMENTS
This Agreement may not be modified or amended, except in writing executed by the
authorized representative of the Parties hereto.
14.16 INTEGRATION
This Agreement with Attachments A through G sets forth the entire Agreement and
understanding of the Parties relating to the subject matter contained herein and
merges all prior discussions between them and neither Party shall be bound by
any definition, condition, warranty or representation other than as expressly
set forth in this Agreement.
ARTICLE XV
----------
LIMITATION OF LIABILITY
-----------------------
15.0 LIMITATION OF LIABILITY
With the exception of indemnification obligations for third party claims
pursuant to paragraph 14.10, in no event will either party be liable to the
other for special, incidental or consequential damages, including lost profits
or lost data of any kind or type however arising.
Page 37 of 82
38
SIEMENS / CASTLE OEM CONTRACT
ATTACHMENT A
PRODUCT AND PRICE LIST
MARKETING DESCRIPTION OF CASTLE NETWORKS C2100:
CASTLE NETWORKS C2100 SERVICES MEDIATION PLATFORM: A 21st CENTURY VOICE & DATA
SERVICES PLATFORM FOR EMPOWERING NEXT-GENERATION SERVICE PROVIDERS
The C2100 Services Mediation Platform is a next-generation voice and data
switching solution that allows you to cost-effectively deploy new
revenue-generating services.
PROVIDER CONCERN SWITCHING REQUIREMENT CARRIER BENEFIT
- --------------------------------------------------------------------------------------------------------
Need for a cost-effective A digital switch built The C2100 supports new voice
central office with integrated DACS and data services over a
voice/data model single connection
- --------------------------------------------------------------------------------------------------------
Stringent central office NEBS Level 3, The carrier class C2100 switch supports
requirements Bellcore certified SS7 colocation and enhanced interconnection
features, including Feature Group D services
- --------------------------------------------------------------------------------------------------------
Facilities require 1:1 redundancy at all The C2100 supports un-manned central
"lights-out" operation levels; remote control office operation, resulting in lower
operational costs and increased profitability
- --------------------------------------------------------------------------------------------------------
High "cost of being wrong" Apply new technologies The C2100 is a small footprint solution
discourages aggressive to reduce cost and size enabling low-cost entry to new markets
expansion
- --------------------------------------------------------------------------------------------------------
Distinct skill sets currently Multiple management Either data or voice skill
required for managing techniques on sets can manage the C2100
both data and voice a digital switch voice/data solution
[logo CASTLE NETWORKS] Castle Networks Company Confidential 4
SEIZING OPPORTUNITIES TO EFFICIENTLY DELIVER NEW SERVICES
As a player in the competitive 21st Century telecommunications services market,
you have an extraordinary opportunity to lead the wave of next-generation
service providers by empowering your customers with a choice of affordable and
creative services, applications, and integrated voice and data business
solutions. Castle Networks helps turn your struggle to determine how to deliver
simultaneous communications over packetized voice and data networks into a
focused opportunity to outperform your competitors by delivering innovative
services over transparent network infrastructure. The market landscape is
changing rapidly, creating tremendous opportunities for aggressive service
providers that embrace emerging technologies and prepare innovative and
differentiated service offerings. The time to seize the opportunity is
now--before your competition strikes first.
Page 38 of 82
39
SIEMENS / CASTLE OEM CONTRACT
As you compete with established carriers and service providers, you can gain a
sustainable business advantage by selecting a high-density, high-performance
switching architecture that alters the cost model for delivering new services.
Instead of following the lead of incumbent carriers and trying to deploy new
offerings based on legacy Class 5 switching equipment, you can leapfrog over
them by selecting a highly dense, space saving switching platform designed to
efficiently deliver 21st Century voice and data services. Analysts expect voice
traffic on converged networks to grow into a $12 billion market in just two
years, allowing carriers with the infrastructure plans in place to capitalize on
these exciting revenue opportunities.
Castle Networks has developed a state-of-the-art switching platform that
performs "Services Mediation" between the diverse technologies installed in
legacy networks. You can protect your investment in legacy infrastructure while
delivering robust services that enable you--for the first time--to truly take
advantage of the combined benefits of existing voice and data networks.
INTRODUCING THE C2100 SERVICES MEDIATION PLATFORM
Founded by executives and engineers from leading vendors in both the voice and
data worlds, Castle Networks has set out to change the traditional economic
model for carriers while empowering a new breed of service providers. Castle
Networks is introducing a cost-effective switching platform optimized for
voice/data integration and full compatibility with existing infrastructure. The
Castle Networks C2100 Services Mediation Platform mediates disparate signaling,
transport, and management functions to span multiple networks. You can now
transparently deliver voice, data, and even multimedia applications that
leverage existing investments in Class 5 switches and installed network
infrastructure. These applications add up to new market opportunity and cost of
ownership savings for you, the service provider of the 21st Century.
The C2100 reduces the complexity of applications by enabling easy access to
telecommunications and data communications database information by letting you
deploy and manage services across multiple networks through a single,
easy-to-use management interface. This new switching platform unites the
multiple technologies of the public voice and data networks and provides the
capacity required to support voice traffic at a price point that reflects a
distributed product architecture and the business realities of a deregulated
market. In doing so, the Castle Networks solution offers a cost-effective
migration path and economic motivation for you to invest in next-generation
C2100 switches that augment existing infrastructure while enabling new services.
Page 39 of 82
40
SIEMENS / CASTLE OEM CONTRACT
PSTN MUST EVOLVE TO SUPPORT THE EXPLOSIVE GROWTH OF DATA
- - There are an estimated 14 million U.S. households with access to the
Internet, and Internet usage is rising at a rate of over 40 percent per
year.
- - According to SBC, Internet calls average 20.8 minutes, while the average
voice call is 3.8 minutes. This creates problems for LECs that have
engineered their networks for voice services.
- - During peak hours, Internet calls consume 20-36 percent of telephone switch
capacity, according to SBC.
- - SBC research found that during peak hours, 15 percent of all
calls--including emergency 911 calls--fail to be completed due to
congestion.
- - Demand for second and third residential telephone lines--which are used
primarily for Internet access and telecommuting--is growing at 150 percent.
- - Public utility commissions in many states are creating new area codes to
accommodate the increase in demand due to Internet and remote access
requirements. Even a relatively small state like Massachusetts has had to
approve the creation of two new area codes within the past 3 years.
- - According to Treillage Network Strategies, there will be more than $300
billion in U.S. carrier voice and data service revenues at stake by the
year 2002.
By providing Services Mediation between the public voice and data networks, the
C2100 connects your customers to voice, data and emerging services from any
network at anytime. This central office platform allows you to increase your
flexibility in defining and provisioning services in order to gain advantages in
both time-to-market and cost. Additionally, you can accelerate the introduction
of new services while allowing your data infrastructure to co-exist with your
mature voice infrastructure.
You can systematically evolve to a distributed, low-cost communication
infrastructure that delivers the reliability, availability, and scalability you
require. The C2100 allows you to capitalize on innovation enabled by converged
technologies to deliver differentiated, innovative voice and data services to
your customers in a way that offers new levels of profitability never before
possible.
Page 40 of 82
41
SIEMENS / CASTLE OEM CONTRACT
- -----------------------------------------------------------
YOUR CHECKLIST FOR A NEXT GENERATION CONVERGENCE SWITCH
- -----------------------------------------------------------
- - DELIVERS THE RELIABILITY OF VOICE AT THE DENSITY/POWER/PRICE OF DATA
- - OPERATES NATIVELY IN CIRCUIT AND PACKET WORLDS
- Legacy PSTN and Multiple new Transports
- Existing OSS Integration
- - DELIVERS SEAMLESS SERVICES THROUGH MEDIATION
- - ARCHITECTED TO SCALE FROM TENS TO MILLIONS OF CONNECTIONS
- Right-sized for a new audience
- Pay-as-you-grow
- - DISTRIBUTES INTELLIGENCE AND CORE SWITCHING
- - LEVERAGES A VARIETY OF TRANSPORTS
[logo CASTLE NETWORKS] Castle Networks Company Confidential 4
RAPIDLY DEPLOY INNOVATIVE SERVICES
The Castle Networks Services Mediation Architecture(TM) (SMA) allows you to
quickly deliver new services that give you an edge in a very competitive
marketplace. Through the SMA's Mediation Policy Engine, Castle Networks offers a
server-side Java management interface that streamlines development and
management of new services--while masking the complexity of the underlying
network. The C2100 actually virtualizes the network for the application,
allowing you to simplify the increasing complexity of service exchanges with
other carriers. This approach to co-mingling voice and data traffic in the
public network--combined with the powerful concept of integrating
telecommunications and data communications databases--allows you to capitalize
on market shifts and introduce services that provide timely and responsive
competitive advantages. For the first time, you'll be able to differentiate your
service program offerings by adding enhanced voice/data services such as
Web-based end-user provisioning of telephone call management.
And, you'll be able to exploit unprecedented abilities to develop new services,
since the C2100 transparently links the end user to the transport network
regardless of access or transport technology. The C2100 allows you to quickly
deploy next-generation applications that require access to both voice and data
signaling and database services. You'll be able to generate detailed end-to-end
call records for consolidated accounting and billing, and you can add data and
multimedia services while ensuring carrier-class reliability.
Page 41 of 82
42
SIEMENS / CASTLE OEM CONTRACT
The C2100 is optimized for bundled voice and data business services and
leverages the feature-rich, mainframe-class switches already deployed in the
Public Switched Telephone Network (PSTN) infrastructure. Your mission to quickly
and cost-effectively build out new cities and offer bundled voice and data
services in the competitive local exchange marketplace can be accomplished by
leveraging this lower-cost, scalable, space-saving platform. Carriers with
existing investments in Class 5 switches can cost-effectively augment
mainframe-class switching equipment to expand capacity and offer new services,
while the new breed of Competitive Local Exchange Carriers (CLECs) and service
providers can choose to resell Class 5 switch services from the incumbent voice
carrier while offering new data services.
Your customers will enjoy bandwidth guarantees, while you'll be able to enter
into profitable Service Level Agreements (SLAs) for both voice and data. Your
customers will be able to reap maximum benefits from your services by tuning
their own bandwidth allocations to guarantee Quality of Service (QoS) levels.
And you can define port availability levels and even offer premium service
levels for one hundred percent port coverage.
The C2100 opens up a new world of possibilities for creating services. For
example, you can offer bundled voice and data services through a single Primary
Rate ISDN interface to business through a single leased line interface.
Integrated Access Devices (IADs) or Integrated Communications Platforms (ICPs)
on the customer premises can feed into the C2100 and provide value added voice
and data services, such as web hosting, email, computer telephony integration,
video services, and unified messaging. Data traffic from routers and switches on
the enterprise LAN and voice traffic from PBXs can feed into dedicated ports on
the C2100.
You'll be able to guarantee the number of ports available for long-distance
voice calls, and you can even allow customers to reprovision their available
bandwidth to manage periodic and predictable increases in voice or data traffic.
By providing managed services you'll empower your customers to self-manage
bandwidth according to their business policies and demands. Whether your
customers need to add toll-free numbers in real-time or create Hunt Groups of
varying size or complexity, these services can be dynamically provisioned
through an easy-to-use web browser interface.
With the C2100, Castle Networks gives you the ability to easily create very
large Hunt Groups so you can route voice and data traffic to optimize bandwidth
and switching capacity. This allows you to create flexible Internet offload
services. For example, you can offer ISPs increased control over equipment
utilization because of the flexibility to route calls based on sophisticated
Hunt capabilities that include:
ROTARY: Linear calling with each successive call returning to the first
port available allows you to route traffic to an ISPs best equipment before
routing traffic to older or less functional equipment.
CYCLIC: Enables you to route calls to the next available port to ensure
that all ports throughout the group are used equally.
Page 42 of 82
43
SIEMENS / CASTLE OEM CONTRACT
ROUND ROBIN: Allows you to direct traffic by "DS-1 Hopping" to make sure
that load is distributed by routing each successive to the next T1.
UNIFORM: You can ensure that there is an even number of calls on each T1 so
that calls can be offloaded to remote access servers equally to balance
load across ISP concentrators.
LEAST/MOST RECENTLY USED: You can manage traffic by routing calls to the
port that has either received the most recent or least recent call.
CUSTOM ORDERING: This unique service lets your ISP customers define the
Hunt order to meet their specific requirements.
By having so many options for delivering data to your ISP customers, you can
develop closer business relationships, offer higher-margin services, and
increase account control.
You can minimize the investment--and risk--of expanding to new service areas by
deploying a C2100 in a remote service area instead of a Class 5 switch. Voice
calls are switched locally on the TDM network or backhauled to the Class 5
switch for treatment, while data traffic is sent to an IP, ATM or frame relay
switch for call completion on the data network. You can then create bundled and
enhanced voice and data services that are switched from a common, lower-cost
platform in a remote central office. Castle Networks therefore allows you to
minimize the costs and risks of introducing new services or expanding your
service area by combining the functionality of both a digital cross-connect and
a voice switch.
Castle Networks empowers you to create linkages between the PSTN and the Public
Switched Data Network (PSDN) network to provide for a parity of services that
enables the seamless delivery of applications and services over multiple
networks. By introducing ATM and IP signaling to the Signaling System 7 voice
infrastructure, the Castle Networks platform enables voice to be carried over
data--and vice versa.
FLEXIBLE SERVICES MEDIATION ARCHITECTURE
The C2100 leverages both legacy and new communications technologies from both
the voice and data worlds to enable a new, lower-cost call model. The innovative
Services Mediation Architecture allows you to flexibly deliver 21st Century
telecommunications services from a software-based switching architecture.
There are four major subsets to the software architecture that enable the
delivery of new services:
ACCESS PROCESSOR
Your end users are serviced by the Access Processor, which is designed to
support a variety of line side connectivity, including Primary Rate ISDN,
private line switches, Plain Old Telephone Services (POTS), wireless
infrastructure, and even cable connectivity. The Access Processor captures the
traffic coming into the switch and feeds it into the Universal Signaling Matrix.
Page 43 of 82
44
SIEMENS / CASTLE OEM CONTRACT
TRANSPORT SERVER
The Transport Server is similarly designed to deal with a variety of
transmission networks types, including Time Division Multiplexing (TDM), IP,
ATM, Dense Wave Division Multiplexing (DWDM), and Synchronous Optical Network
(SONET). You can therefore have maximum flexibility in deploying new services
over diverse networks.
UNIVERSAL SIGNALING MATRIX
The Universal Signaling Matrix is central to the C2100 because it creates an
abstraction between the Access and Transport signaling call models and the
service itself to transparently bind the service to the end user. You can
leverage legacy networks to enable voice and data services across diverse
networks. The Universal Signaling Matrix allows you to create differentiated
services while maintaining the flexibility to take advantage of new technologies
and applications.
MEDIATION POLICY ENGINE
The Mediation Policy Engine can then look at the call connection requests from
the Universal Signaling Matrix. No matter which technologies originates the call
connection, the call can now access both telecommunications databases (such as
Hunt Groups, local number portability services, call detail services, etc) and
data communications databases (including browser access and integration with
Directory Services such as LDAP and RADIUS). The results are then processed
through a variety of Hunt algorithms and directories and across transports. The
server-side Java management interface allows you to easily create and deploy
innovative new voice and data services.
SMALL-FOOTPRINT, HIGH-DENSITY PLATFORM
The software architecture is tightly integrated with a hardware platform to
offer new price/performance levels for voice and data convergence. The C2100 is
a NEBS-3 compliant platform that makes extremely efficient use of valuable and
high-cost central office real estate. The C2100 is a low-power, space-saving
chassis measuring 30-inches high by 15 inches deep by 23 inches wide. It
supports up to 120 T3s in a non-blocking configuration using a mix of TDM, IP,
and ATM to achieve a maximum bandwidth potential of 80,000 DS-0 channels. Two
chassis--the equivalent of 160,000 DS-0 channels--can be mounted in a standard,
seven-foot central office rack.
Central office "real estate" is a precious commodity; it is not only expensive,
it is often difficult to acquire. The highly dense C2100 fits in a small
fraction of the central office space required by a Class 5 switch. Castle
Networks architected this solution using the latest advancements in
semiconductor and communications processing technologies to reduce physical
size, while offering dramatic performance enhancements over existing Class 5
architectures. The C2100's product design, size, and dramatic increase in
density provides a distributed server design for the PSTN, just as distributed
client/server computing revolutionized the architecture of enterprise networks.
This architecture ultimately adds up to lower cost, higher density, and more
rapidly deployable solutions for remote central office locations.
The C2100 houses 19 slots, and in its initial release can be configured with one
to fifteen DS-3s to provide a maximum capacity of 3,360 non-blocking Inter
Machine Trunks (IMTs), T1, or
Page 44 of 82
45
SIEMENS / CASTLE OEM CONTRACT
Primary Rate ISDN (PRI) connections in a single chassis. It supports eight SS7 A
and/or F Link Sets. The A Links allow you to connect to peering networks, and
the F Links are used to interconnect intra-carrier traffic. Up to six chassis
can be configured as a Virtual Switch to support over 20,000 T1s and make
efficient use of expensive SS7 A links.
This allows you to scale the Castle Networks solution across multiple platforms.
It also allows you to best utilize scarce SS7 Point Codes, since a single Point
Code can service multiple C2100 switches. The C2100 provides a great deal of
capacity in a small footprint design. For a fraction of the cost of a Class 5
switch, you can increase switching capacity and deploy new services. The C2100
is installed in the central office and can complement existing Class 5 switches
to expand capacity and enable new services, or it can be installed in a remote
central office to allow you to minimize the investment risk of expanding to new
service areas.
DISTRIBUTED MIDPLANE DESIGN
Adding cards into available slots allows you to cost-effectively purchase the
platform components necessary to handle your current application demands while
providing the flexibility to cost-effectively scale to maximum capacity. Each
blade adds incremental performance by adding switching capacity, and each blade
includes signal processing. The C2100 leverages dense merchant digital switching
devices and programmable logic from Castle Networks to achieve a high-capacity
and non-blocking distributed Digital Switching Bus with a midplane capacity in
excess of 80,000 DS-0s. All input/output (I/O) modules are separated from the
core logic modules in a non-blocking, midplane design to provide
high-reliability and support modular scalability.
HIGH-AVAILABILITY SERVICES PLATFORM
High-levels of redundancy are designed into the C2100 to deliver carrier-class
reliability. Castle Networks expects a maximum of three-minutes of system
downtime per year. Each card is hot-swappable in the field, and the switch will
continue to process traffic even during degraded operations. The distributed,
non-blocking design allows traffic to be re-routed throughout the system in the
event of a card failure. The system features independent external central office
power supply connections and independent DC converters on each card.
The C2100 is designed for carrier-class services and features a variety of
redundant system design features, including:
- - Distributed processing of signaling information
- - Redundant Management Bus Design
- - Mirrored storage of configuration and billing data
- - Physical Line Level redundancy for all trunk and access interfaces
- - Individual thermal sensors on each card
- - Distributed -48 Volt DC power with per card DC converters
- - Physically redundant asynchronous Craft ports
- - Physically redundant 10/100 Ethernet connections
- - Redundant, hot-swappable Shelf Controller Engine (SCE) Modules
- - Redundant hot-swappable Call Processing Engine (CPE) Modules
Page 45 of 82
46
SIEMENS / CASTLE OEM CONTRACT
- - Redundant hot-swappable DXM Channelized T3 Modules
- - Configurable and redundant holdover clocks
- - Redundant timing sources
- - Shelf Alarm Contacts
- - Rolling live firmware upgrades
- - Redundant fans
SHELF CONTROLLER ENGINE PROVIDES SYSTEM AND REDUNDANCY MANAGEMENT
The Shelf Controller Engine (SCE) synchronizes timing and provides management
features for the C2100. Castle Networks recommends that SCEs be paired for
redundancy. Each SCE stores all chassis data--including configuration, Call
Detail Records (CDRs), and firmware. The SCE also contains interfaces for the
Building Integrated Timing Supply (BITS) to synchronize clocking, two
asynchronous Craft Ports, a 10/100 Ethernet interface for connection to a local
terminal or a legacy management system, and Alarm Contacts for connecting to the
fabric of the central office and triggering alarms. All data collection features
and management interfaces are duplicated when using two SCE cards for
redundancy.
CALL PROCESSING ENGINE (CPE) MODULE RUNS SERVICES MEDIATION
Castle's Services Mediation allows carrier offerings across multiple
technologies and networks, and the Call Processing Engine (CPE) Module runs
these services. The CPE Module manages the system's extensive Directory Services
and Hunt Group capabilities, and creates the Call Detail Records, which are then
stored in the SCE. Each CPE Module has a 200 MHz PowerPC processor, 128 MB of
SDRAM, and 2 RJ-48X T1 interfaces. The module can therefore provide the
flexibility to pull A or F Links from either external T1s or from the TDM bus.
Each CPE Module supports eight SS7 A or F Links and has dual 50 MHz PowerPC
processor to provide dedicated processing for the SS7 links. This design avoids
contention for processing resources when critical call routing decisions need to
be made.
DXM CHANNELIZED T3 MODULE
The Distributed eXchange Module (DXM) provides the physical interface for
channelized T3 and ISDN interfaces for the C2100. A DXM is required for each T3
connection, and it allows any T1 circuit within a T3 connection to be signaled
by any of the signaling protocols supported by the C2100. Each T1 can be
configured to support common channel signaling, such as ISDN, or to support
out-of-band signaling, such as SS7 and the Media Gateway Control Protocol (MGCP)
and Internet Protocol Device Control (IPDC) standards. Each DXM Channelized T3
Module has a 50 MHz PowerPC and 32 MB SDRAM, and contains both an integrated
DSU/CSU for channelizing traffic and an integrated Digital Access and
Cross-connect System (DACS) for connecting any ports without using the system
midplane. The DXM Channelized T3 Module supports DS-3 Bit Error Rate Tests
(BERT) to measure the quality of data transmission, and it can initiate and
recognize Loop-Back tests to allow you to test and troubleshoot wiring or board
issues. An optional Redundancy I/O Adapter is available for further improving
system reliability.
Page 46 of 82
47
SIEMENS / CASTLE OEM CONTRACT
SIMPLIFIED OPEN SYSTEMS MANAGEMENT
The C2100 was designed to support simplified network management--including Java
application-based management from the desktop that lets you deploy value-added
services that allow your customers increased control over their services. The
C2100 can be managed from any Java-enabled browser, or management can be
integrated into existing management systems--such as HP OpenView--via SNMP and
the MIB-II Agent. A powerful Command Line Interface allows you to manage the
C2100 through a local console, remote modem, or Telnet session. Management can
also be integrated into legacy management systems via a Q/TL1 Gateway.
FULL-FEATURED MOTOROLA RISC PROCESSORS
The C2100 is standardized around the PowerPC family of high-performance Reduced
Instruction Set Computing (RISC) processors from Motorola. The platform uses
combinations of Motorola PPC603 and MPC860 chipsets.
COMING SOON TO A CENTRAL OFFICE NEAR YOU
In early 1999, Castle Networks introduced the C2100, a hardware/software central
office platform designed from the ground-up to switch both voice and data calls
while enabling emerging service applications. Castle Networks will help you to
link your voice and data networks while protecting investments in legacy
switching infrastructure. You can now seamlessly deliver applications and
services across multiple networks. By introducing ATM and IP signaling to the
Signaling System 7 world, Castle Networks will allow you to carry voice over
data infrastructure--and data over voice infrastructure. The C2100 will continue
to enable next-generation services for the PSTN and PSDN through Services
Mediation that will ultimately unite the diverse technologies of the voice and
data worlds.
The C2100 facilitates the co-existence and long-term transition of the PSTN to a
packet infrastructure, allowing you to build out capacity, gradually integrate
existing services, and rapidly introduce the new services that will empower you
to increase revenue, market share, account control, and profits as you deliver
21st Century telecommunications services.
Page 47 of 82
48
SIEMENS / CASTLE OEM CONTRACT
CASTLE NETWORKS PARTS AND PRICE LIST (AS OF 12/20/98):
- --------------------------------------------------------------------------------
CASTLE NETWORKS, INC
- --------------------------------------------------------------------------------
CONFIDENTIAL - DO NOT COPY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MODEL LIST
- --------------------------------------------------------------------------------
NUMBER DESCRIPTION PRICE
- --------------------------------------------------------------------------------
C2100 - CHASSIS AND MODULES WITH I/O ADAPTERS
- --------------------------------------------------------------------------------
CHS1-01-SYS C2100 Chassis w/Fan, Filter, Slot Blanks $17,500
- --------------------------------------------------------------------------------
CPE1-01-SYS 1 Slot Call Processor Engine with SS7/PRI Support $21,000
- --------------------------------------------------------------------------------
SCE1-01-SYS 1 Slot Shelf Controller Engine $21,000
- --------------------------------------------------------------------------------
DXM1-01-SYS 1 Slot 1 Port DS3 - Digital eXchange $42,000
- --------------------------------------------------------------------------------
DXM1-R1-SYS 1 Slot 1 Port DS3 - Redundant Digital eXchange $45,000
- --------------------------------------------------------------------------------
NMS1-01-SYS Network Management for NT $10,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
C2100 - INDIVIDUAL MODULES AND IO ADAPTERS
- --------------------------------------------------------------------------------
CPE1-01-MOD Call Processor Module with SS7/PRI $19,000
- --------------------------------------------------------------------------------
CPE1-01-IOA Call Processor-IO Adapter $ 3,000
- --------------------------------------------------------------------------------
SCE1-01-MOD Shelf Controller Module $19,000
- --------------------------------------------------------------------------------
SCE1-01-IOA Shelf Controller-IO Adapter $ 3,000
- --------------------------------------------------------------------------------
DXM1-01-MOD 1 Port DS3 - Digital eXchange Module $40,000
- --------------------------------------------------------------------------------
DXM1-01-IOA 1 Port DS3 - IO Adapter $ 3,000
- --------------------------------------------------------------------------------
DXM1-RI-IOA 1 Port DS3 - Redundant IO Adapter $ 6,000
- --------------------------------------------------------------------------------
The above information will be updated and amended as needed.
Page 48 of 82
49
SIEMENS / CASTLE OEM CONTRACT
ATTACHMENT B
RELATED MATERIALS
Related Materials to be provided at no charge shall be specifically identified
by stock number and listed in the categories below. This list is not all
inclusive and will be updated as needed.
MARKETING MATERIAL
Sales Brochures
Special Product Information
Product Presentations
White Papers
Application Notes
TECHNICAL MATERIAL
System Manuals
Operations Manuals and/or Procedures
Program Manuals
Maintenance Manuals
Test and Diagnostic Information
User Manuals
INSTALLATION MATERIAL
Installation Manuals
TRAINING MATERIAL
Training Manual and Training Aids
Examples of the actual documents listed above have been received by Siemens. It
is known that many are in draft format and will be updated on a regular basis.
Page 49 of 82
50
SIEMENS / CASTLE OEM CONTRACT
ATTACHMENT C
PRODUCT SPECIFICATIONS
Technical specification of Product, including information on design,
performance, operations, test and maintenance, standards, and any parts of
components to be used in Product.
Include here, also, any special requirements to incorporate Product into the
Siemens Products.
All information in this Attachment is Confidential.
The above information will be provided by Castle as soon as it is available.
Page 50 of 82
51
SIEMENS / CASTLE OEM CONTRACT
ATTACHMENT D
NON-DISCLOSURE AGREEMENTS
NON-DISCLOSURE AND LIMITED USE AGREEMENT
By and between Siemens Telecom Networks, having a place of business at 400
Rinehart Road, Lake Mary, FL 32746 (hereinafter "Recipient"), and Castle
Networks, having offices in Westford, MA. (hereinafter "Discloser").
WHEREAS, Discloser desires to disclose certain of its information for the
following limited purpose(s) and uses:
Technical discussions concerning Broadband products.
and
WHEREAS, said information is mainly comprised of the following: Proprietary
information including: product plans, presentation slides, brochures, and system
documentation as related to, but not limited to, product development, pricing,
business, or marketing plans. (hereinafter "Confidential Information").
NOW THEREFORE, the parties agree as follows:
1. That disclosure and receipt of Confidential Information is for the purposes
set forth above and for no other purpose.
2. All Confidential Information provided to Recipient pursuant to this
Agreement:
(a) shall, if in physical form, be marked "Confidential" or similarly
legended by the Discloser before being turned over to the Recipient;
(b) shall, if disclosed orally, be reduced to writing and marked as in (a)
above within thirty (30) days of disclosure;
(c) shall not be copied or distributed, disclosed or disseminated in any
way or form by the Recipient to anyone except its own employees, or
the employees of the partners comprising it, or the parents or
affiliates of the partners or their parents, who have a reasonable
need to know said Confidential Information;
(d) shall be treated by the Recipient with the same degree of care to
avoid disclosure to any third party as is used with respect to the
Recipient's own information of like importance which is to be kept
confidential;
(e) shall not be used by the Recipient for its own purposes or any other
purpose except the purpose set forth above and in business
arrangements with the Discloser except as otherwise expressly stated
herein without the express written permission of the Discloser; and
Page 51 of 82
52
SIEMENS / CASTLE OEM CONTRACT
(f) shall remain the property of and be returned to the Discloser (along
with all copies and derivatives thereof) within thirty (30) days of
receipt by the Recipient of a written request from the Discloser
setting forth the Confidential Information to be returned.
3. The obligations of paragraph 2 shall not apply, however, to any information
which:
(a) is already in the public domain at the time of disclosure or becomes
available to the public through no breach of this agreement by the
Recipient; or
(b) was, as between Discloser and Recipient, lawfully in the Recipient's
possession prior to receipt from the Discloser without obligation of
confidentiality; or
(c) is received independently from a third party free to lawfully disclose
such information to the Recipient; or
(d) is subsequently independently developed by the Recipient; or
(e) is not marked as provided in 2 (a) and (b) above; or
(f) is disclosed in response to a valid order of a court or other
governmental body in the United States, Germany, or European
Commission Authority, or any political subdivision thereof, but only
to the extent of and for the purposes of such order; provided however,
that the Recipient shall first notify the Discloser in writing of the
order and permit the Discloser to seek an appropriate protective
order.
4. Unless otherwise mutually agreed in writing, the Recipient's obligations
hereunder with respect to each item of Confidential Information shall
terminate three (3) years from the date of receipt thereof by Recipient.
5. Recipient shall have the right to refuse to accept any information under
this Agreement and nothing herein shall obligate either party to disclose
to the other party any particular information.
6. The parties hereto shall not be obligated to compensate each other for
exchanging any information under this Agreement.
7. Neither party shall have any obligation to enter into any further agreement
with the other except as it, in its sole judgment, may deem advisable. It
is understood that no patent, copyright, trademark or other proprietary
right or license is granted by this Agreement. The disclosure of
Confidential Information and materials which may accompany the disclosure
shall not result in any obligation to grant the recipient rights therein.
8. This Agreement shall be effective as of the date of the last signature as
written below. It may be terminated with respect to further disclosures
upon thirty (30) days prior notice in writing. This Agreement shall
automatically terminate one (1) year from its effective date. The rights
and obligations accruing prior to termination as set forth herein shall,
however, survive the termination as specified in this Agreement.
9. Discloser warrants and represents that it possesses all necessary powers,
right and authority to lawfully make the disclosures subject to this
Agreement.
Page 52 of 82
53
SIEMENS / CASTLE OEM CONTRACT
10. This Agreement represents the entire understanding and agreement of the
parties and supersedes all prior communications, agreements and
understandings relating to subject matter thereof. The provisions of this
Agreement may not be modified, amended, nor waived, except by a written
instrument duly executed by both parties. This Agreement may not be
assigned by either party without the prior written consent of the other.
This Agreement is made subject to and shall be construed under the laws of
the State of Florida as if both parties were residents of the State of
Florida.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by its duly authorized representative on the date specified below.
SIEMENS TELECOM NETWORKS CASTLE NETWORKS
By: _________________________ By: ___________________________
John D. McGoun
Title: Manager of Subcontracts Title: ________________________
Date: _______________________ Date: _________________________
ORIGINAL WITH SIGNATURES ON FILE WITH BOTH PARTIES.
Page 53 of 82
54
SIEMENS / CASTLE OEM CONTRACT
ATTACHMENT E
SERVICE AGREEMENT
WHEREAS SIEMENS and Castle have entered into a OEM Agreement relating to
collaborative promotion, sale and distribution of Standard Products: and
WHEREAS the Parties wish to set out the terms and conditions under which the
parties will provide services for the products:
NOW THEREFORE IN CONSIDERATION of the mutual covenants and agreements, and other
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the Parties hereto agree as follows:
1.0 DEFINITIONS: For the purposes of this Addendum the definitions set forth in
the OEM Agreement shall have the meanings specified in the OEM Agreement, and
the following additional terms shall have the meanings set forth below:
1.1. "ADDITIONAL SERVICES" shall mean all commercially available OEM level
services offered by a Party other than those Services described in SECTION 4.1.
1.2. "ADDENDUM" shall mean this Service Addendum and all Schedules and
Appendices attached hereto as such are amended from time to time in accordance
with the provisions hereof.
1.3. "AUTHORIZED SIEMENS SUPPORT PERSONNEL" or ("SSP")shall mean an individual
1.3.1. who has been properly trained to repair the Product;
1.3.2. who, in the opinion of the responsible Castle or SIEMENS manager,
exhibits sufficient Product expertise; or
1.3.3. who is working under the direction of either Castle or SIEMENS TAC.
1.4. "BUSINESS DAY" shall mean the local time of 8:00 AM to 5:00 PM, Monday
through Friday, excluding holidays, from which Castle performs Third Line
Support.
1.5. "COVERED SYSTEMS" are those Products (a) used by Siemens for their internal
support and testing purposes and (b) those systems of Siemens' customers which
are covered by the original warranty or for which Siemens has secured a service
agreement, and for which Siemens has paid the Basic Fee, in accordance with the
payment terms herein, to Castle.
1.6. "CUSTOMER" shall mean the end user or distributor who purchases the Product
from SIEMENS.
Page 54 of 82
55
SIEMENS / CASTLE OEM CONTRACT
1.7. "FIRST LINE SUPPORT" shall mean the initial fault diagnosis procedures
undertaken by SIEMENS to identify and correct a hardware or software problem as
such functions and procedures are further defined in SCHEDULE A and in the
Operational Procedures.
1.8. "MAINTENANCE RELEASE" shall mean a software release or revision which
provides fixes to problems, but which does not provide new functionality or
material performance enhancement.
1.9. "MINIMUM FIELD REVISION LEVEL" shall mean the earliest level of hardware or
software currently supported in the field by Castle.
1.10. "OPERATING PROCEDURES" shall mean the operating procedures to be followed
by the Parties in connection with the provision of the Services pursuant to this
Agreement, which operating procedures shall be developed by the Parties in
accordance with SCHEDULE C hereto.
1.11. "PARTY" OR "PARTIES" shall mean SIEMENS and Castle.
1.12. "OEM AGREEMENT" shall mean the Agreement entered into between SIEMENS and
Castle dated November 30, 1998 of which this Addendum is a part, and the terms
of which, if they do not conflict with the terms hereof, shall apply to all
services, payments, duties and obligations arising under this Service Addendum.
1.13. "PRODUCTS" shall mean the products listed in ATTACHMENT A of the OEM
Agreement as such Attachment is amended from time to time.
1.14. "PURCHASER" shall mean the Party who is purchasing the Services from the
other Party.
1.15. "SECOND LINE SUPPORT" shall mean those Services to be provided by SIEMENS
as described in SCHEDULE A and in the Operational Procedures.
1.16. "COVERED SERVICES" shall mean the services to be provided by Castle for
the "BASIC FEE" set forth in Attachment E pursuant to this Agreement.
1.17. "SOFTWARE" shall mean those Products which are software, irrespective of
the medium in which they are contained, and shall include Maintenance Releases.
1.18. "SUPPLIER" shall mean the Party who is providing the Services.
1.19. "TAC" shall mean either the Castle level 3 Technical Assistance Center, or
the SIEMENS Technical Assistance Center as appropriate .
1.20. "THIRD LINE SUPPORT" shall mean the Services to be provided by Castle in
accordance with the functions and procedures specified in SCHEDULE A and in the
Operational Procedures.
1.21. "SERVICE PRICE" shall mean those prices set forth in the Basic Fee and
Service Addendum Price List attached hereto and made a part hereof.
Page 55 of 82
56
SIEMENS / CASTLE OEM CONTRACT
1.22. "VERSION" shall mean a new release of Software which adds or materially
enhances functionality or performance, and which is produced and licensed by
Castle as a separate feature release of a version of the Product.
2.0 GENERAL SERVICES AND ADDITIONAL SERVICES
2.1 Subject to the terms and conditions of this Agreement, Castle shall provide
to SIEMENS the Third Level Support Services set out in SECTION 4.1 hereof, and
such of the Additional Services as SIEMENS may purchase from time to time.
2.2 Siemens shall offer to its Customers and those end-users purchasing from its
Customers, during the term of this Agreement and for a period of five years
thereafter, level 1 and 2 support for the Products for warranty and out-of
warranty repairs and support for both hardware and software.
2.3 SERVICES NOT INCLUDED
Castle is not obligated to provide Services pursuant to the Basic fee for the
following circumstances:
(i) maintenance or repairs necessitated by an attempt by an individual
who is not an Authorized Person to repair or maintain the Products;
(ii) maintenance or repairs resulting from casualty, catastrophe, or
natural disaster, accident, misuse, neglect or negligence of SIEMENS
or a Customer, or causes external to the Products such as, but not
limited to, failed or faulty electrical power or air conditioning, or
any causes other than ordinary use;
(iii) maintenance or repairs resulting from accessories, attachments or any
other devices which do not adhere to Castle's specifications;
(iv) repairs resulting from unauthorized changes, modifications or
alterations of or to the Product; and
(v) the furnishing of optional accessories or consumable supplies.
(vi) Future releases, including dot releases, upgrades and new versions,
which are not maintenance releases.
2.4 EXCLUDED SERVICES, SEPARATE AGREEMENT
The excluded services set out in SECTION 2.2, above, may be performed by
separate agreement between Castle and SIEMENS. The price for the performance of
any excluded service shall be the Service Price.
Page 56 of 82
57
SIEMENS / CASTLE OEM CONTRACT
3.0 COMMERCIAL TERMS
3.1 PRICE FOR ADDITIONAL SERVICES
The price for any Additional Services provided under this Agreement shall be the
Service Price.
3.2 COST OF OUT OF WARRANTY REPAIR/ADVANCED REPLACEMENT SERVICES
The price for Out-of-Warranty Repair and Advanced Replacement Services shall be
the Service Price.
3.3 TECHNICAL ASSISTANCE
Level 3 Technical Assistance (as described in SECTION 4.1.1) shall be provided.
3.4 TECHNICAL SUPPORT FOR SOFTWARE
Except as specifically provided herein, technical support for Software shall be
provided at no cost for the then-current Version and one previous Version. Any
research and development efforts required for problem resolution for older
Versions, shall be at a price mutually agreed to, on a case by case basis.
4.0 CASTLE'S LEVEL 3 SUPPORT OBLIGATIONS
4.1 SERVICES TO BE PROVIDED BY CASTLE
Castle shall provide the following Services to Siemens in respect of covered
systems for the Basic Fee:
4.1.1 Technical Assistance
Castle shall provide basic level 3 help desk functions to assist SIEMENS in
the provision of those functions described in the Castle/SIEMENS Operating
Procedures as being First and Second Line Support functions. Technical
Assistance will be provided by Castle's TAC during its normal hours of
operations as set out in SCHEDULE C.
4.1.2 Technical Support
4.1.2.1 Third Line Support and Problem Escalation
Castle shall provide Third Line Support as described in SCHEDULE A,
and provide problem escalation as described in SCHEDULE B.
4.1.2.2 Software Maintenance
a) Master object code copies of corrections releases for
Software and associated documentation will be provided,
subject to the license terms of the OEM Agreement, free of
charge when available. SIEMENS shall have the right to copy
and distribute Maintenance Releases to its Customers as
necessary to correct Software problems. Castle may also
provide SIEMENS with patches for distribution to specific
Customers.
Page 57 of 82
58
SIEMENS / CASTLE OEM CONTRACT
b) Castle shall provide SIEMENS's support organizations with any new
software versions for their internal use on support and lab
systems only. Hardware enhancements required shall be Siemens
responsibility to purchase. In the event that at correction to a
Critical or Major Software problem is made only in a new Version,
SIEMENS shall have the right to distribute the Version to its
Customers at no charge.
c) Castle shall seek to have new Versions compatible with one
previous version with regard to the functions and features
present in the previous version.
d) Upgrades, new versions and dot releases must be separately
purchased by Siemens for license on Siemens' customers systems.
4.1.2.3 Compatibility and Correction Matrix
Castle shall develop a compatibility matrix which will illustrate the
effects of a hardware or Software update on other Products in a system.
Castle shall document the effect of a correction to a specific release of
Software on other releases of the same Software. Compatibility and
correction matrices shall be updated on a regular basis. This provision
shall not require Castle or to test for or maintain interoperability with
non-Castle products.
4.1.2.4 Hardware Upgrades
a) During the warranty period set out in the OEM Agreement, Castle
shall provide, free of charge, any hardware upgrades required to
remedy a non-conformance of the hardware to specifications.
Upgrades will be provided on a return to factory basis, except as
otherwise agreed. Field upgrades are the responsibility of the
first/second line support provider. These upgrades shall be
performed in accordance with the Repair and Return process set
out in SCHEDULE C.
b) Hardware upgrades outside of the warranty period, including those
required solely as a result of the installation of a new Software
Version, are not covered by the Basic Fee and must be purchased
in accordance with the OEM Agreement.
c) In the event of a network-wide hardware upgrade which is required
as a result of a non-conformance to specifications, the Parties
agree to work together to devise appropriate plans to minimize
the disruption to customers, time required, and costs to both
parties, including, if appropriate the use of buffer stock as
temporary replacements during the upgrade.
Page 58 of 82
59
SIEMENS / CASTLE OEM CONTRACT
d) Castle shall provide, on a return to factory exchange basis,
hardware for "Class A" changes as defined in Bellcore TR209 or
equivalent.
4.1.2.5 Support of Older Releases
Castle shall provide Problem Resolution as described in SCHEDULE A for the
then-current Version of a Product, and for one preceding Version. Support
for Versions of a Product which precede a current Version by two Versions,
shall be agreed to on a Product by Product basis. Castle may agree to
provide support for older Versions not covered under the preceding
sentence, on a case by case basis.
4.1.2.6 Sporadic Malfunction
In the case of sporadic non-conformance to specification of the Products,
unable to be successfully isolated or analysed at the level 1/2, Castle
agrees to apply the appropriate resources to investigate the malfunction.
Subject to SECTION 2.2, Castle shall use commercially reasonable efforts,
which may include Product upgrades, replacements or "work-arounds", to
correct any problem with the Products which is identified as the cause of
the sporadic non-conformance to specification. For the purposes of this
SECTION 4.1.2.6, "sporadic malfunction" shall mean any non-reproducible,
intermittent non-conformance to specification which results in a temporary
cessation in Product functionality. Sporadic Malfunctions will be escalated
in accordance with the Management Escalation Process set out in SCHEDULE B.
4.1.2.7 Undetermined Problems
If, during the term of this Agreement, network malfunctions arise which
cannot be attributed to a specific Product, and the level 1 and 2 provider
is unable, after reasonable efforts, to resolve the problem, Castle shall
promptly work with the level one and two provider to investigate the
problem. If the problem is found to result from the integration or
inter-networking of the network, the parties shall work together in
accordance with the Management Escalation Process set out in SCHEDULE B to
achieve a mutually acceptable solution.
4.1.2.8 Design Requirements
Castle shall use reasonable efforts to provide Maintenance Releases and
patches that may be incorporated into a Customer's network in a manner to
minimize the disruption of network operations. Wherever possible, updates
and upgrades will be suitable for remote installation.
4.1.3 Documentation
Castle will provide to SIEMENS all available user and TAC level 1 and 2 Product
documentation required to service and support the Products, including those
documents set out in SCHEDULE C hereto. SIEMENS shall have the right to use the
documentation solely for the purpose of providing service and support to its
Customers as provided under this Agreement. SIEMENS shall make the documentation
available only to those of
Page 59 of 82
60
SIEMENS / CASTLE OEM CONTRACT
its employees, agents and contractors having a "need to know", and only after
they have been advised of its confidential and proprietary nature, and have
agreed to protect same.
4.1.3.1 Commercially Available Documentation (covered in OEM Agreement)
4.1.3.2 Electronic Bulletin Board Access
SIEMENS shall have full access to Castle's then current OEM level
electronic bulletin boards and World Wide Web pages which contain Castle
technical information and Product documentation. Such materials shall
include information describing features contained within a new Product
feature release, engineering changes made to the Products, configuration
assistance, application documentation, procedures for performing firmware
and Software upgrades.
All of SIEMENS's engineers who perform the second line support function may
have access to the electronic bulletin board and information contained in
the World Wide Web pages on a "need to know" basis for support and training
purposes only, including downloads of any such information as Castle may
make available on compact disk from time to time.
4.1.4 Hardware Repair
a) Access to Castle's repair service will be provided pursuant to the Basic
Fee through the appropriate Castle service location, during its normal
business hours. Repair Services will be provided in accordance with the
Repair Procedures described in SCHEDULE D attached hereto.
b) No Products may be returned without prior authorization from Castle,
which authorization shall not be unreasonably delayed or withheld.
c) Castle will provide three types of Repair Services during a seven (7)
day by twenty-four (24) hour availability:
4.1.4.1 Advanced Replacement - Dead-On-Arrival
This is a replacement service for "Dead On Arrival" or "'infant Mortality",
which refers to those Products which fail immediately upon delivery and/or
initial installation. Castle will use commercially reasonable efforts to
ship an equivalent new replacement Product, via overnight carrier, within
five days of request received by 3:00 PM local time at the Castle TAC on a
business day.
4.1.4.2 Repair and Return
This is the standard repair service for both in-warranty and
out-of-warranty Products which fail in service. SIEMENS shall return the
faulty unit to Castle for repair in accordance with the Return and Repair
procedures set out in this Agreement and SCHEDULE D attached hereto. Castle
shall also ensure that all
Page 60 of 82
61
SIEMENS / CASTLE OEM CONTRACT
returned Products are brought up to the Minimum Field Revision Level at no
additional charge.
A) Castle will either repair or, at its option, replace defective
Products covered under warranty within fifteen (15) Business Days of
its receipt. The new warranty period for repaired or replaced Products
shall be the remainder of the original warranty period or ninety (90)
days on hardware and thirty (30) days on software, whichever is
greater. SIEMENS will ship Products to Castle at SIEMENS's expense.
Castle will ship the repaired or replacement Products surface freight
to SIEMENS at Castle's expense. Expedited freight shall be at
SIEMENS's expense.
B) Castle will either repair or replace, at SIEMENS's option and cost,
defective Products not covered under warranty, within fifteen (15)
Business Days of receipt. The new warranty period for repaired or
replaced Products shall be one year (365 days) for hardware and one
hundred and twenty (120) days for software. SIEMENS will ship Products
to Castle at SIEMENS's expense. Castle will ship the repaired or
replacement Products surface freight to SIEMENS at Castle's expense.
Expedited freight shall be at SIEMENS's expense.
C) If a Hardware Product is returned for repair three (3) times within
the warranty period, other than for reasons set out in SECTION 2.2,
Castle shall replace the Product with a new Product or new equivalent
Product at no charge to SIEMENS. The new Product shall be warranted as
provided in the OEM Agreement.
4.1.5 Extended Warranty Contract
Extended Warranty is a contracted extension of Castle's original equipment
warranty, which lengthens the original warranty for a period of one (1)
year. Under the Extended Warranty program, the Customer continues to be
eligible to return products to Castle for repair with no additional charge
per part. Castle will make available such Extended Warranties to SIEMENS's
customers, on request by SIEMENS, at SIEMENS's expense.
4.1.6 Reports
Castle will provide reports to SIEMENS as specified in the Operating
Procedures. These shall include, but shall not be limited to, reports
detailing repair turnaround times, fault measurements, problem resolution
status, and quantitative data on problem reporting.
4.2 Problem Resolution time frames
Notwithstanding any other provision of this Agreement, the Problem Resolution
time frames set out in SCHEDULE A shall apply only to commercially available
versions of the Products.
4.3 ADDITIONAL SERVICES
Page 61 of 82
62
SIEMENS / CASTLE OEM CONTRACT
4.3.1 Request for Additional Services
Subject to the terms and conditions of this Agreement, SIEMENS shall be
entitled to request that Castle provide any of the Additional Services.
Additional Services may be provided to SIEMENS or directly to the Customers
as subcontractors of SIEMENS. Castle may not otherwise provide Services
directly to SIEMENS's Customer without the express written consent of
SIEMENS. Not all of the Additional Services are available in all areas of
the world.
5.0 SIEMENS'S OBLIGATIONS
5.1 TEST EQUIPMENT AVAILABILITY
Unless otherwise expressly agreed, SIEMENS shall ensure that it has test
equipment available for testing the Products at each of its Second Line Support
locations which is equivalent to that used by Castle to test the Products. In
addition, SIEMENS's Second Line Support personnel shall have access to such
laboratory equipment as necessary to provide their Customers with assistance,
and to be able to reproduce problems with the Products.
5.2 ADEQUATE TRAINING FOR FIRST AND SECOND LINE SUPPORT INDIVIDUALS
SIEMENS shall ensure that each of the individuals within its organization and
its distribution channel who are responsible for providing either First Line
Support or Second Line Support have been adequately trained in the Products and
technology which they are required to support.
5.3 SPARES
SIEMENS shall maintain an appropriate number of spares for each of the Products,
or shall acquire spares through the Advanced Replacement Loan Service described
in SECTION 4.1.4(c)(II), in order to effectively support its installed Customer
base.
Page 62 of 82
63
SIEMENS / CASTLE OEM CONTRACT
SCHEDULE A
----------
PROBLEM RESOLUTION SERVICES
---------------------------
A.1 PROBLEM RESOLUTION
A.1.1
In connection with the resolution of problems, SIEMENS shall provide First and
Second Line Support of the Products to its Customers in accordance
Castle/SIEMENS Operating Procedures. Before escalating a problem to Castle Third
Line Support, SIEMENS shall have completed all of the functions and procedures
described herein and in SCHEDULE B for both First and Second Line Support.
A.1.2
In providing Second Line Support, SIEMENS shall provide detailed in-depth
problem analysis, problem duplication as well as those functions described in
the Castle/SIEMENS Operating Procedures as being Second Line Support functions.
Problems that cannot be resolved by SIEMENS's Second Line Support
Organization(s) shall be referred to Castle in accordance with SECTION A.1.4 for
Third Line Support. Only those individuals identified to Castle as Primary
Technical Contacts in accordance with SECTION A.1.4 hereof shall be entitled to
escalate a Problem to Castle for Third Line Support.
A.1.3
Third Line Support shall mean the provision of a correction or a work around to
a problem which SIEMENS is unable to provide through the provision of First and
Second Line Support. Castle shall perform those functions described in the
Castle/SIEMENS Operating Procedures as Third Line Support functions. Third Line
Support shall normally not include the provision of any hardware that may be
required to support a new software release, nor the labor to install a new
software load. Hardware, if required, shall be purchased separately subject to
the Problem being escalated in accordance with SCHEDULE B - Management
Escalation Procedure. Similarly, the labor to perform the upgrades may be
contracted for separately.
A.1.4
Upon execution of a non-disclosure agreement, Castle shall provide SIEMENS with
access to a designated individual or individuals within the TAC, which
individual or individuals shall be Castle's Primary Technical Contact(s).
SIEMENS shall also have access to the call tracking database systems to
electronically report problems and requests for information, and no less than
"read" access to Castle's research and development problem tracking system.
Castle's Primary Technical Contact(s) shall be SIEMENS's point of contact to
Castle's support organization. Castle's Primary Technical Contact(s) shall make
the final confirmation of the problem analysis and formally escalate the problem
to Castle's R&D for resolution. The problem will be assigned a priority in
accordance with the provisions of SECTION A.2 hereof. The Parties shall advise
each other of the names of the Primary Technical Contacts in their respective
support organizations. The Parties may from time to time change the Primary
Technical Contact individuals by giving notice to the other Party, provided
however, any replacement Primary Technical Contact shall be sufficiently
trained, as described herein, to fulfill the functions of such position.
Page 63 of 82
64
SIEMENS / CASTLE OEM CONTRACT
A.2 PROBLEM PRIORITY CLASSIFICATION
A.2.1
SIEMENS may request a specific priority classification of a problem or Request
for Information, although Castle may reclassify the Problem or Request for
Information if Castle deems it appropriate. If the Parties disagree on the
classification of a particular Problem or Request for Information, Castle's and
SIEMENS's Primary Technical Contacts shall endeavor to agree on the
classification of a problem. If Castle's and SIEMENS's Primary Technical
Contacts are unable to agree, the matter will be escalated in accordance with
SCHEDULE B - Management Escalation Process to ensure resolution. Problem shall
be classified into one of the three (3) following categories for issues related
to trouble reports: Emergency, Major, and Minor. A fourth category, Query or
Question, is a request for information which is not directly related to a
service outage or problem. In the event that SIEMENS reports a problem that is
determined by Castle's R&D staff to be either outside of the documented
functional specification of the Product, or in respect of a Product that is
functioning in accordance with the documented functional specification, Castle
reserves the right to request that the problem status be changed to a 'Design
Change Request', in which case Castle will treat it as a change in feature
content rather than a problem. The Parties will work together to come to a
reasonable resolution and escalate the issue in accordance with SCHEDULE B -
Management Escalation Procedure.
A.2.2
Priority Definitions for reporting Problems and Requests for Information to
Castle are as follows:
CRITICAL: Emergency Problems are those that result in:
- A total system failure that results in the loss of all transaction
processing capability (e g connection setup, data transmission)
- Significant reduction in capacity or traffic handling capability
- Any loss of safety or emergency capabilities
- Loss of systems ability to perform automatic system reconfiguration
- Inability to restart a processor or the system
- System related loss or severe degradation of one or more primary
rate/aggregate spans or connections
- Loss of access for maintenance or recovery operations
- Loss of the system's ability to provide any required Emergency or
Major trouble notification
- Total loss of a material feature or functionality that impacts the
operation of the Product
MAJOR: Major problems are those that result in:
- Emergency problems in which there is an acceptable work around in
place
- Degradation in capacity or traffic handling capability
- Degradation of system's ability to perform automatic system
reconfiguration
- Difficulty restarting a processor or the system
- Any loss of functional visibility and/or diagnostic capability
Page 64 of 82
65
SIEMENS / CASTLE OEM CONTRACT
- Short system or subsystem outages, whose duration accumulates to
greater than 2 minutes in any 24 hour period, or that continue to
repeat during longer periods
- Prevention of access for routine administrative activity
- Significant degradation of the system's ability to provide any
required Emergency or Major Trouble notification
- Significant degradation of a material feature or functionality that
impacts the operation of the Product
MINOR: Minor problems are those that result in:
- Degradation of access for routine administrative capability
- User interface problems for network management that are not service
affecting.
- Any problems that are not safety related on non commissioned
equipment.
- Any other problems that do not result in the loss or degradation of a
material feature or functionality
QUERY OR QUESTION: A fourth class, Query or Question, is a request for
information which is not directly related to a service outage or problem. This
may include:
- Requests for assistance in the installation or configuration or a
system or subsystem
- Requests for documentation pertaining to a system or subsystem
Page 65 of 82
66
SIEMENS / CASTLE OEM CONTRACT
A.3 CASTLE RESPONSE TIME COMMITMENTS
A.3.1 Call Response Time:
Call Response Time is defined as the elapsed time between the reporting of a
Problem by SIEMENS and the time a Castle Third Line technical support specialist
contacts SIEMENS. Call Response Time is monitored and is used to trigger
escalation. Castle will use reasonable efforts to meet the Call Response Times
specified below for each Priority Level.
Priority Level Response Time Commitment
- -----------------------------------------
Critical Fifteen (15) minutes at all times (times outside of the
Business Day may be subject to personnel on call via pager)
Major Within one (1) hour at all times (times outside of the Business
Day May be subject to personnel on call via pager)
Minor By the next Business Day for calls received during a
Business Day
Query By the next Business Day for calls received during a
Business Day
A.3.2 Restore Time
Restore Time is defined as the elapsed time between the reporting of a Service
Affecting problem by SIEMENS and the time Castle provides an acceptable work
around or returns the Product to a level of operation that is acceptable to the
Customer. Castle will use reasonable efforts to meet the Restore Times specified
below for each Priority Level.
Priority Level Restore Time Commitment
- ----------------------------------------------
Critical Less than or equal to 24 hours.
Castle will use all commercially reasonable efforts to restore
the affected Product as soon as possible.
Major Less than or equal to Three (3) Business Days.
Minor Not Applicable
Query Not Applicable
Page 66 of 82
67
SIEMENS / CASTLE OEM CONTRACT
SCHEDULE B
----------
MANAGEMENT ESCALATION PROCEDURE
-------------------------------
The purpose of any escalation procedure is to ensure that unresolved problems
are brought to the appropriate levels of expertise and management for attention
and action. This includes, but is not limited to, problems not resolved in the
time frames as indicated in SCHEDULE A (Problem Resolution Process), problems
whose priorities can not be agreed to, problems that turn into design change
requests, undetermined problems, and sporadic problems.
For the purposes of this process, escalation time frames to the various levels
of management are determined by the requested prioritization of the problem.
This escalation process is for post sales support of hardened product at a
Customer site and is not intended for use during lab evaluation of beta or in
field trial loads of Product, nor is it intended for use where there is an
acceptable proposal for service restoration.
After the Customer reports the problem, it is the responsibility of the Second
Line support organization to begin the escalation process and to escalate
unresolved problems in a timely and accurate manner.
The Management Escalation process should involve parallel escalation within both
SIEMENS and Castle to insure that both companies are escalating unresolved
issues simultaneously.
It is also the intent of this escalation procedure to properly report escalated
issues to non-service groups within the Castle and SIEMENS companies.
A list of the names of the "Manager(s)", along with their associated phone
numbers, will be kept up to date and shared between SIEMENS and Castle on a
regular basis.
Page 67 of 82
68
SIEMENS / CASTLE OEM CONTRACT
SCHEDULE C
----------
OPERATING PROCEDURES
--------------------
Castle and SIEMENS will participate in the development of ISO 9000 procedures to
define the processes and procedures for the two companies to interact. Writing
procedures required by SIEMENS to interface to existing processes of Castle will
be the responsibility of SIEMENS with assistance of assigned 'content experts'
from Castle. Writing procedures that cause change in both company's present
practices will be done jointly, utilizing prime contacts within each
organization as appropriate.
Documents will be written to include, but not be limited to, the following
processes and procedures:
- - Ordering and scheduling services
- - Training and course development
- - Problem notification between the two organizations
- - First, second, and third line support
- - Installation and commissioning
- - Network integration
- - Site and network engineering
- - Repair and return, including hardware modification, hardware/software
upgrade
- - Service logistics, including hardware inventory and management
- - System and network upgrade
- - Advance Replacement
- - Software Release and software patch distribution
- - New Product Introduction
- - Problem Escalation
Page 68 of 82
69
SIEMENS / CASTLE OEM CONTRACT
SCHEDULE D
----------
REPAIR AND REPLACEMENT
----------------------
D.1 REQUESTS FOR RETURN
All requests for return of Products or for Advance Replacement of Products
should be made to Castle. Castle's Service Representatives will obtain all
necessary information from SIEMENS for processing the return and issuing a
Return Authorization (RA) number.
D.2 SHIPPING OF DEFECTIVE PRODUCTS
Defective Products must be returned by SIEMENS in static protective material,
securely packaged to prevent damage in transit, and shipped prepaid with the RA
Number written on the outside of the package.
If to Castle, shipment should be made to:
Castle Networks
68 Tadmuck Road
Westford, MA 01886
If to SIEMENS:
Siemens ICN
400 Rinehart Road
Lake Mary, FL 32746
Att: Traffic Department
D.3 REPAIR AND RETURN
Castle will either repair or replace, at its option, defective Products and
return them to SIEMENS's point of origination.
D.4 RETURN DIRECTLY TO CASTLE
Upon written request by SIEMENS, Castle may permit SIEMENS's Customers to return
defective Products directly to Castle for repair or replacement. Permission
shall be granted on a case by case basis, at Castle's discretion.
Castle shall have the right to charge Siemens a no trouble found fee, (NTF Fee),
in the event that the number of non-defective FRU's shipped are excessive.
Page 69 of 82
70
SIEMENS / CASTLE OEM CONTRACT
SCHEDULE E
----------
BASIC FEE SCHEDULE
------------------
E.1 BASIC FEE: The basic fee is a yearly amount to be paid by Siemens for Castle
provided Covered Services.
The basic fee is a percentage of the Castle Product list price applicable to all
Products, systems, hardware and software, purchased by Siemens and used by
Siemens internally or sold to customers and covered by warranty or a Siemens
service agreement.
The basic yearly fee is computed as follows:
PERCENT OF HARDWARE AND SOFTWARE
COVERAGE OF PRODUCTS TOTAL CASTLE LIST PRICE AS OF PURCHASE DATE
- --------------------------------------------------------------------------------
First year warranty only or Blue (hardware and system) 1.125%
First year warranty only or Blue (additional software product) 1.00%
Any subsequent year - Siemens Blue coverage 2.00%
Any year - Siemens Silver coverage 3.00%
Any year - Siemens Gold coverage 4.00%
The fee will be computed quarterly on all applicable hardware and software by
Siemens each quarterly payment will be invoiced and paid in accordance with the
payment terms of the OEM Agreement.
The Basic Fee will not be applicable to Product that has been returned,
destroyed or scrapped, upon reasonable evidence thereof presented to Castle
within 60 days of the date of such return, scrap or destruction.
Siemens shall provide reports on its Customer's Products covered by service
agreements on a quarterly basis and Company shall have the right to audit
Siemens records to determine the accuracy of the reports.
Page 70 of 82
71
SIEMENS / CASTLE OEM CONTRACT
ATTACHMENT F
FORECAST
Siemens will forecast its demand for Product and Spares during the Term of this
Agreement.
The forecast will show quantity of Product required by time period (generally
per month). Significant requirements for Spares will likewise be shown as
requested by Company.
All information shown on this Forecast is tentative and should be used for
planning purposes only. It is not a commitment to buy.
All information in this Attachment is Confidential.
SIEMENS ICN
C2100 FORECAST
1999 2000 2001
January 0 6 15
February 0 6 15
March 0 10 15
April 0 10 15
May 0 10 15
June 0 10 15
July 1 12 15
August 2 12 15
September 3 12 15
October 4 15 15
November 4 15 15
December 6 15 15
-- --- ---
Annual Total 20 133 180
Contract Total 333
===
Assumes July 1,1999 Availability.
The above forecast is in units and assumes an average list price of $295,000 per
unit. This may vary based on actual configurations and is for PLANNING PURPOSES
ONLY.
Page 71 of 82
72
SIEMENS / CASTLE OEM CONTRACT
ATTACHMENT G
OEM AGREEMENT QUALITY ASSURANCE PROVISIONS
SCOPE
This Quality Assurance Provision addresses Off-The-Shelf OEM equipment procured
by Siemens to be included in their products.
PERFORMANCE, FORM, FIT AND FUNCTION
All products supplied under the provisions of this Agreement shall perform
within the criteria defined in the Company's published literature for the
relevant part number.
The products covered in this Agreement have been qualified and approved for
inclusion into Siemens products based upon their conformance to specifications,
form, fit and function defined in the Company's published documentation at the
time of execution of this Agreement, relative to the particular Supplier's part
number referenced in this Agreement. If Company elects to implement changes in
products covered by this Agreement, which result in deviation from these
specifications, form, fit or function, Siemens must be immediately notified so
that qualification and approval status can be re-evaluated. Company shall not
ship such changed units to Siemens, in fulfillment of this Agreement, without
prior written notification.
Company shall provide Siemens Quality Assurance Department with copies of all
relevant Engineering or Product Changes (ECO, ECN, PCN) which might affect
performance, reliability , safety or interface criteria.
COMPANY QUALITY SYSTEM
Company shall provide Siemens Quality Assurance Department with copies of the
Quality and/or Workmanship Standards which are currently in-place and used in
the manufacture of the products covered in this Agreement. Siemens Quality
Assurance Department retains the right to perform announced, coordinated audits
of the Company's manufacturing activity and relevant Quality/Test records,
throughout the term of this Agreement.
RELIABILITY
Company's products are qualified and incorporated into this Agreement, in part,
based upon their published reliability predictions. In the event these
predictions change materially by reason of design, manufacturing process,
component change or calculation method, Company shall notify Siemens, in
writing, of the details of said change.
Page 72 of 82
73
SIEMENS / CASTLE OEM CONTRACT
REGULATORY COMPLIANCE
Products covered under the terms of this Agreement shall, as a minimum, conform
to the requirements of UL 94, Class V-0 or V-1, for plastic card file covers.
Compliance with any other regulatory agency statutes should be identified and
applicable identification numbers forwarded to Siemens Quality Assurance
Department for record.
INCOMING INSPECTION AND TEST
Siemens reserves the right to perform detailed inspection and testing of all
Company's product, shipped under the terms of this Agreement, for conformance
with the Company's published mechanical, marking and electrical performance
specifications. If unique equipment or processes are required to perform
appropriate inspection and test, Company shall identify this requirement to
Siemens Quality Assurance Department.
MARKING
Company shall mark products in conformance with published documentation. Items
which are intended to be field replaceable by Siemens shall be serialized for
tracking and control purposes. Serial numbers shall be located to allow easy
capture by craftpersons, without the necessity of disassembly of the field
replaceable item and/or interruption of service to Siemens Customers.
PACKING AND SHIPPING
Company shall insure that packing and shipping procedures are adequate for the
methods of transportation identified as a part of this Agreement. In the event
repeated damage, attributable to shipping, is reported, Company will take all
corrective measures necessary to correct this deficiency at no cost to Siemens.
REPAIR DATA
Company shall make available, upon request by Siemens Quality Assurance
Department, repair data on defective product returned by Siemens for repair.
Company shall maintain this data as a repair history for a minimum of one (1)
year. See Service Agreement, Attachment E.
Page 73 of 82
74
SIEMENS / CASTLE OEM CONTRACT
ATTACHMENT H
EXAMPLE
RELEASE ESCROW AGREEMENT
This Escrow Agreement (Agreement) is entered into and made effective as of this
___ day of ___________ , 199_ , by and between Siemens Information &
Communication Networks, Inc. ("Siemens") a Delaware Corporation having a
principal place of business at 900 Broken Sound Parkway, Boca Raton, Florida
33487. and _________ a ______ Corporation having a principal place of business
at _____________ (hereinafter referred to as Company) who are parties to a OEM
Agreement dated ___________ __, 199_. Unless otherwise defined herein, the
capitalized terms of this Agreement will have the same meanings ascribed to them
in the OEM Agreement.
RECITALS
Siemens has, pursuant to the OEM Agreement, licensed from Company those
communications software products listed in Attachment A of the Agreement (the
"Products"). Siemens desires to have the source code for the Products placed in
an escrow account ("Escrow") pursuant to the terms and conditions of this Escrow
Agreement to secure Company's performance of its warranty, maintenance and/or
support obligations with respect to the Products as defined in the OEM
Agreement. Company is willing to establish such escrow account on the terms and
conditions set forth below:
1. DEFINITIONS
1.1 "ABC" means the Escrow Holder, which will act as the escrow agent for
the source code escrow established pursuant to the terms and
conditions of this Agreement.
1.2 "Licensee Escrow Agreement" means an agreement with ABC in
substantially the form attached hereto as Attachment I, which Siemens
and Company will execute with the Escrow Holder in connection with the
source code escrow to be established hereunder.
1.3 "Release Conditions" means conditions under which Siemens will be
entitled to receive a copy of the Source Code from escrow, as defined
in para 2 of the Licensee Escrow Agreement attached hereto as
Attachment I.
2. ESTABLISHMENT OF THE ESCROW ACCOUNT
Company agrees to place a copy of the Source Code into an escrow account
(the "Escrow") with ABC. If there is more than one Product listed in
Attachment A, Company may, at its option, establish separate escrow
accounts for each Product's Source Code. Company shall ensure that the copy
of the Source Code that is deposited in the Escrow at any given time is the
latest version. Company will cause Siemens to be designated as a
"Registered Licensee"
Page 74 of 82
75
SIEMENS / CASTLE OEM CONTRACT
(a beneficiary) of the Escrow by executing a Licensee Escrow Agreement in
Siemens' name for each Product and submitting such Exhibits to ABC. The
terms of the Escrow shall be governed by the Licensee Escrow Agreement.
Upon receipt by ABC of the executed Attachment H from Company, ABC will
send to Siemens a copy of the Licensee Escrow Agreement. As a condition to
Siemens' status as a "Registered Licensee" becoming effective, Siemens
agrees to promptly execute and return to ABC the Licensee Escrow Agreement.
3. RESTRICTIONS ON USE OF SOURCE CODE
Siemens shall follow the procedures set forth in the Licensee Escrow
Agreement for notifying ABC in the event that Siemens believes that a
Release Condition has occurred that entitles Siemens to receive a copy of
the Source Code for one or more of the Products from Escrow. In the event
that a copy of the Source Code for one or more of the Products is released
from Escrow to Siemens by ABC in accordance with the terms and conditions
of the Licensee Escrow Agreement, Siemens shall have a non-exclusive
limited license to use the Source Code strictly in accordance with the
following conditions:
3.1 DURATION OF LICENSE AND RETURN OF SOURCE CODE. Siemens shall have the
right to retain and use the Source Code only for the period of the
continuation of the condition upon which the Source Code was released.
Should Company fully resume active support and maintenance of the
Software in the ordinary course of its business, Siemens shall within
ninety (90) days of such resumption and activity by Company, return
all copies of the Source Code and modifications thereto in Siemens'
possession or under its control to Company.
3.2 SCOPE OF USE RIGHTS. Siemens may use the Source Code solely (i) to
make modifications to the Source Code that are necessary to support
and maintain purchasers or licensees of the Products as defined in the
Agreement that contain the Software and (ii) to produce, through
compilation or assembly, copies of the Software in object code form
for distribution to purchasers or licensees of Products in accordance
with the terms and conditions of the OEM Agreement. Siemens will not
make copies of the Source Code or modifications thereto except as
necessary to sell, license, or distribute to, or support and maintain,
purchasers or licensees of Siemens' products that contain the Software
as provided in the preceding sentence. Siemens will not authorize
anyone else to make copies of the Source Code.
3.3 LOCATION OF USE. Siemens will use the Source Code or associated object
code only within the premises of its own facilities or Affiliates
located within North America and will not allow the exportation
thereof.
3.4 NONDISCLOSURE OBLIGATIONS. Siemens will keep the Source Code
confidential within its own organization or its Affiliates, if Source Code
or associated object code is disclosed to its Affiliates. Siemens will not
disclose any part of the Source Code or associated object code to any
person or employee connected with Siemens or to any entity,
Page 75 of 82
76
SIEMENS / CASTLE OEM CONTRACT
subdivision, subsidiary, department, or office of Siemens, or to any other
person or entity, whether or not connected with Siemens, in any fashion
whatever other than those employees of Siemens or Affiliates who have a
need to know. Siemens will instruct all such employees, before having
access to the Source Code, that the Source Code and associated object code
is proprietary to and contains the trade secrets of Company and that
Siemens's use of such Source Code and associated object code are subject to
the terms and limitations contained herein. Additionally, Siemens agrees to
obtain a written acknowledgement of the foregoing from each employee to
whom the Source Code is disclosed and to provide the same to Company upon
its request.
3.5 SECURITY. Siemens will maintain the Source Code in a secure fashion,
exercise the same degree of care to avoid publication and unauthorized
dissemination as Siemens employs with respect to its own proprietary
information which is does not desire to have published or
disseminated, and take all reasonable measure to protect the Source
Code from theft, or unauthorized disclosure, reproduction or copying.
3.6 COPYRIGHT NOTICES. As a condition to the license granted under this
section, Siemens agrees to place a copyright notice satisfying the
requirements of Section 401 of Title 17 of the United States Code on
each copy of the Source Code.
4. ESCROW FEES
Siemens shall pay to Company, ABC's standard annual source code escrow fee,
and Company will deliver the same to ABC for each year. Should Siemens fail
or elect not to pay the annual escrow charges within thirty (30) days of
the invoice date, then the Escrow will lapse with respect to Siemens, and
Company will notify ABC that Siemens is no longer a "Registered Licensee"
for the Escrow.
5. OWNERSHIP
Company shall be the sole and exclusive owner of the Source Code and of any
modifications made thereto by Company, and all patent rights, copyrights,
trade secret rights, mask work rights, rights of priority and other
proprietary rights associated therewith (collectively "Proprietary
Rights").
6. DISCLAIMER OF WARRANTY AND LIMITATION OF LIABILITY
THE SOURCE CODE IS SUPPLIED "AS IS" WITHOUT WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. REGARDLESS WHETHER ANY REMEDY SET FORTH
HEREIN OR IN THE SLA FAILS TO ACHIEVE ITS ESSENTIAL PURPOSE, IN NO EVENT
WILL Company, SIEMENS, AFFILIATE OR ANYONE ELSE WHO HAS BEEN INVOLVED IN
THE DEVELOPMENT OF THE SOURCE CODE OR THE SOFTWARE BE LIABLE FOR
Page 76 of 82
77
SIEMENS / CASTLE OEM CONTRACT
INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES RESULTING FROM USE
OF THE SOURCE CODE OR THE SOFTWARE.
Except as expressly provided in this Agreement, all of the provisions,
terms and conditions of the OEM Agreement shall remain in full force and
effect.
The parties acknowledge that damages for breach hereof may not be an
adequate remedy and therefore the parties agree that in the event of any
breach hereof by Company, Siemens or Affiliates, the other party may seek
specific performance, injunctive relief or equitable relief in addition to
any other rights or remedies by law.
7. NO ASSIGNMENTS
The parties agree that the rights to the release of the Source Code to
Siemens may not be assigned to any third party including but not limited to
any party properly acquiring rights of Siemens under the OEM Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
written below.
(COMPANY,INC.) Siemens ICN, Inc.
Signature: Signature:
Name: Name:
Title: Title:
Date: Date:
Page 77 of 82
78
SIEMENS / CASTLE OEM CONTRACT
ATTACHMENT I
LICENSEE ESCROW AGREEMENT
This Escrow Agreement made as of this __ day of _________ , 199_, among
[_________], having an office at _______________________________ , (hereinafter
"Escrow Agent") and ______________________________, _______Inc. (hereinafter
"COMPANY ____ __"), _____ having ____ an ____ office ____ for ____ the _____
transaction ____ of ____ business ____ at ____________________________________ ,
and Siemens Information & Communication Networks, Inc. (hereinafter "Siemens"
having an office for the transaction of business at 900 Broken Sound Parkway,
Boca Raton, FL 33487.
WHEREAS, COMPANY and SIEMENS have entered into a OEM Agreement (hereinafter
"Agreement") dated _____________ , 199_, pursuant to which COMPANY has agreed to
grant to SIEMENS a license to use certain communications software referred to in
Attachment A to said OEM Agreement as the same may be amended from time to time,
(hereinafter referred to as "SW") upon terms and conditions specified therein;
and
WHEREAS, to ensure the continued functionality and availability of SW to
SIEMENS, COMPANY has agreed to establish and maintain the source code for said
SW in escrow;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and in said AGREEMENT, the parties agree as follows:
1. DEPOSIT IN ESCROW
A. Within ten (10) days after the execution of this Escrow Agreement in
accordance with Section 13.5 of said AGREEMENT, COMPANY shall deliver
to Escrow Agent a sealed package containing: (i) a copy of a
completely documented, then current version of the source code for SW
in human readable form, as amended, the same being referred to
hereinafter as the "Source Code". COMPANY shall identify each item in
said package and certify the completeness and accuracy of the Source
Code in a letter forwarding the same to Escrow Agent, with a copy of
said letter to SIEMENS. Immediately upon receipt of the Source Code,
Escrow Agent shall notify SIEMENS of such receipt.
B. Escrow Agent shall hold the Source Code in a secure facility and shall
release the same to SIEMENS upon the terms and conditions hereinafter
provided.
C. Unless otherwise provided by the AGREEMENT or this Escrow Agreement,
or Addenda, Exhibits or Riders thereto, COMPANY has the obligation to
keep the Source Code deposit updated with replacement Source Code in
accordance with the following:
Page 78 of 82
79
SIEMENS / CASTLE OEM CONTRACT
a. Replacement Source Code shall replace the existing Source Code as
SW is updated or modified or revised. COMPANY will deliver the
Replacement Source Code to the Escrow Agent, identifying each
item of said Replacement Source Code delivered to said Escrow
Agent and certifying the completeness and accuracy of the
Replacement Source Code in a letter forwarding the same to Escrow
Agent, with a copy of said letter to SIEMENS. Immediately upon
receipt of the Replacement Source Code, Escrow Agent shall notify
SIEMENS of such receipt. Escrow Agent will then destroy or return
to COMPANY the previously deposited Source Code which has now
been replaced, and the Replacement Source Code shall thereafter
be referred to as Source Code.
2. RELEASE FROM ESCROW
A. Upon the occurrence of one or more of the Liquidation Events listed
below, SIEMENS shall provide to Escrow Agent and to COMPANY, via
certified mail, return receipt requested, an affidavit of an officer
of SIEMENS reciting the occurrence of such event.
a. COMPANY has made an assignment for the benefit of creditors; or
b. COMPANY is insolvent, is the subject of proceedings in bankruptcy
or has ceased to conduct business in the normal course; or
c. A receiver, trustee, referee or similar officer has been
appointed to take charge of the Source Code; or
d. COMPANY is no longer providing support for Product and features
in Attachment A to the Agreement.
B. Within ten (10) business days subsequent to Escrow Agent's receipt of
an affidavit in accordance with Section 2. A. hereof from SIEMENS (the
"Response Period"), COMPANY must, if it has any objection to the
release of said Source Code, file with Escrow Agent an affidavit
executed by an officer of COMPANY stating that the event described in
SIEMENS's notice has not occurred or has been cured. If COMPANY'S
objection is not provided to the Escrow Agent within the Response
Period, then, on the day after the end of the Response Period, Escrow
Agent is authorized to, and shall immediately, deliver said Source
Code to SIEMENS subject to the terms of the Release Escrow Agreement.
C. If COMPANY timely files an affidavit disputing SIEMENS's claim that a
specific event has occurred, the Escrow Agent shall not deliver said
Source Code to SIEMENS until directed to do so by COMPANY and SIEMENS
jointly, or until Escrow Agent is instructed to do so by an
arbitration panel in accordance with the following:
Page 79 of 82
80
SIEMENS / CASTLE OEM CONTRACT
a. All disputes or disagreements between SIEMENS and COMPANY
involving the interpretation or enforcement of this Escrow
Agreement, or arising from or relating to this Escrow Agreement,
shall be determined in the same manner as set forth in the
AGREEMENT, excepting that COMPANY and SIEMENS agree that they
will jointly petition the arbitrator(s) to commence the
appropriate proceedings within ten (10) days of initiation of
such dispute or disagreement and to conduct such proceedings in
an expedited manner.
3. TERM OF ESCROW AGREEMENT
This Escrow Agreement shall remain in full force and effect in perpetuity
or until terminated by SIEMENS or until the Escrow Agent receives notice
from either party that the Agreement has expired or terminated. Upon
termination, any and all documentation and programs showing the Source Code
shall be promptly returned to COMPANY. Any disputes arising from a claim of
termination of the Agreement will be negotiated by the Parties in good
faith.
4. GENERAL
A. Escrow Agent shall be entitled to a set up fee of $__________ and an
annual storage charge of $__________ as compensation for performance
of its duties hereunder, which fee and charge are to be borne by
______________.
B. Escrow Agent shall have no responsibility with respect to the accuracy
or completeness of the Source Code.
C. Except as provided herein, Escrow Agent agrees that it shall not
divulge or disclose or otherwise make available to any third party
whatsoever, or make any use whatsoever of the Source Code without the
express prior written consent of COMPANY and that it shall take any
and all steps necessary to prevent disclosure of the Source Code while
in its provision.
D. Escrow Agent shall not, by reason of its execution of this Agreement,
assume any responsibility or liability for any transactions between
COMPANY and SIEMENS other than for the performance of its obligations
with respect to the Source Code held by it in accordance with this
Escrow Agreement. The party pursuant to whose directions Escrow Agent
acts shall indemnify and hold harmless Escrow Agent from any and all
liability, damage, costs or expenses, including reasonable attorney's
fees, which may be sustained or incurred by Escrow Agent as a result
of the taking of such directed action.
5. CONFLICTS
In the event of any conflicts between this Escrow Agreement and the
Agreement, this Escrow Agreement shall control.
Page 80 of 82
81
SIEMENS / CASTLE OEM CONTRACT
6. NOTICES
Any notice required or permitted by this Escrow Agreement shall be in
writing and accomplished by personal delivery, registered or certified
mail. Such notice shall be deemed to have been given at the time of
personal delivery or, in the case of mail, five (5) days after it has been
mailed by such certified or registered mail to the address of SIEMENS (as
set forth on the first page of this Escrow Agreement) Attention: Legal
Department, and/or the address of COMPANY (as set forth on the first page
of this Escrow Agreement) and/or the address of Escrow Agent (as set forth
on the first page of this Escrow Agreement) or to such other address as may
be specified by similar notice.
IN WITNESS WHEREOF, Escrow Agent, COMPANY Corporation, and SIEMENS have each
caused this Escrow Agreement to be signed and delivered by their duly authorized
representatives.
(Escrow Agent)
By: Date:
(COMPANY INCORPORATED)
By: Date:
Siemens Information & Communication Networks, Inc.
By: Date:
Page 81 of 82
82
SIEMENS / CASTLE OEM CONTRACT
ATTACHMEMT J
DESCRIPTION OF ESCROW MATERIALS DEPOSIT
Ref: Deposit Account Number:_________________ Account
Name:___________________________
COMPANY, INC., pursuant to an Escrow Agreement dated, between Siemens
Information and Communications Networks, Inc., the Registered Licensee and
Beneficiary, and COMPANY, INC., hereby deposits the below described materials
into the above referenced Deposit Account by transferring them to Escrow Holder:
The Deposit type is: (Check space that applies)
Initial Deposit _____Supplemental Deposit____
DESCRIPTION
Name:________________________________ Version:________________________________
Date:________________CPU/OS:_________ Revision:_______________________________
Application:__________________________________________________________________
Utilities Needed:_____________________________________________________________
Special Operating Instructions:_______________________________________________
Item Description:_____________ Media:______________ Quantity:_________________
Signatures below certify that the above described materials were delivered/sent
to Escrow Holder, and that materials were received.
SENDER RECEIVER__________________________
Signature:__________________________________ Signature:________________________
Name:_______________________________________ Name:_____________________________
Title:______________________________________ Title:____________________________
For:________________________________________ For:______________________________
Date Sent:__________________________________ Date Received:____________________
Page 82 of 82