Exhibit 10.8
MASTER AGREEMENT
BETWEEN
TERAYON CORPORATION
AND
NET BRASIL S.A.
[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
MASTER AGREEMENT BETWEEN TERAYON CORPORATION AND NET BRASIL S.A.
The parties to this Agreement, dated as of June 30, 1997 for reference only,
are:
TERAYON CORPORATION, hereinafter "TERAYON", a company organized under the laws
of California, USA, with its principal offices located at 0000, Xxxxxx Xxxx
Xxxx, Xxxxx Xxxxx XX 00000, hereafter duly represented by the undersigned;
and
NET BRASIL S.A., hereinafter "NET BR", a company organized under the laws of
Brazil, with its principal offices located at Xxxxxxx Xxxxxx 000, Xxx Xxxxx-XX,
Xxxxxx, hereafter duly represented by the undersigned;
RECITALS
WHEREAS TERAYON has developed and desires to avail to NET BR a Proprietary
Technology which has oriented and has also been incorporated to TERAYON's
TeraPro(TM) Cable Modem and the TeraLink 1000 Master Controller projects;
WHEREAS TERAYON has developed and desires to avail to NET BR the complementary
headend equipment and is hereby desiring to sell and license to NET BR for its
marketing, use and sale all Product deriving from such Proprietary Technology
and softwares so related;
WHEREAS TERAYON has elected and hereby desires to appoint NET BR as its
Distributor for Product and softwares as mentioned hereinabove in the territory
of Mercosul more specifically Argentina, Paraguay, Uruguay , Bolivia and other
countries to be agreed upon in writing by the parties;
WHEREAS TERAYON has elected and hereby desires to appoint NET BR as its Most
Preferred Distributor for Product and softwares as mentioned hereinabove in the
territory of Brazil.
WHEREAS NET BR under the conditions stated hereinunder is willing to accept the
appointment to act as a Distributor in the territory of Mercosul and, to act as
Most Preferred Distributor of TERAYON in the Territory of Brazil;
WHEREAS NET BR, upon mutual agreement with its NACS has performed tests and
completed a thorough evaluation of the platforms designed by TERAYON in
accordance to its Proprietary Technology;
WHEREAS NET BR as requested by the NACS will coordinate the purchase from
TERAYON; of TeraPro, TeraLink and the correspondent headend equipment as
resulting from the Technology herein;
2
WHEREAS TERAYON as hereinunder set forth is to provide warranty and supporting
services related to maintenance, installation assistance and training to allow
the achievement of the Product's capabilities, performance and duration as
expected by NET BR.
WHEREAS TERAYON, NET BR and its NACS shall use their best efforts in the
performance of their obligations under this Agreement;
NOW, THEREFORE, TERAYON and NET BR agree to enter into this Master Agreement,
subject to the following covenants and conditions:
1. DEFINITIONS
As used in the Agreement, the expressions hereunder shall have the following
---------
meanings:
1.1. The term Agreement shall apply to this Master Agreement and to all
---------
statements, attachments, exhibits and amendments attached hereto made in
strict accordance with the business reflected hereto.
1.2. The following expressions shall mean:
a) NACS (NET Affiliate Cable System) - any operating company so
----
designated by NET BR in writing which is or becomes under agreement
with NET BR and which will be jointly responsible with NET BR under
the terms of the Agreement herein;
---------
b) Related Company - a company in any way related to TERAYON and/or NET
---------------
BR with regard to the Agreement herein;
c) Receiving Party - the party receiving Confidential Information;
---------------
d) Disclosing Party - the party disclosing Confidential Information;
----------------
e) Receiver - NET BR or its NACS personnel or TERAYON personnel receiving
--------
Confidential Information
1.3. Product (collectively) - the Products listed in Attachment A and described
-------
by their respective technical and functional characteristics also listed
in Attachment A, as amended by mutual agreement of the parties from time
to time.
1.4. Optional (s) - the addition to the Product by TERAYON upon NET BR's
-------- -------
written request of certain features as either a different release
hereinafter "DR" of the Product or an additional module hereinafter "AM"
to such Product as described in Attachment A, and as amended by mutual
-------
Agreement from time to time.
---------
3
1.5. Improvements - modifications made or acquired by TERAYON in accordance to
------------
the technical changes either requested by NET BR or as a result of
TERAYON's engineering and development
1.6. Spare Parts - any part related to Product hereinabove which are defined in
----------- -------
accordance with the Attachment A to be used by TERAYON either in Product
-------
repair or maintenance.
1.7. Technology - the knowledge possessed and known by TERAYON as necessary to
----------
meet specifications and applications for the Product.
-------
1.8. Acceptance Test Plan hereinafter ATP - the defined criteria and process
--------------------
mutually agreed upon by the parties in writing in Attachment B which are
necessary to evaluate and demonstrate that Product listed in Attachment A
-------
provides the features and conforms to specifications required by NET BR,
as listed in Attachment A, in all material respects.
1.9. Technology Verification hereinafter TCVN - the test, as set forth in
-----------------------
Attachment B, performed on prototype and Product as provided by TERAYON
-------
for installation on a target hybrid fiber coax plant, for verification by
NET BR and the NACS of the basic technological capability of TERAYON to
provide the functions and features as defined in Attachment A.
1.10. Effective Date - the date of the last signature to this Agreement in
-------------- ---------
strict accordance of the terms of Section 21.1.
1.11. Initial Date - the date of the written approval by NET BR of the final
------------
results of the first TCVN as conducted in accordance to Attachment B.
4
CONFIDENTIAL TREATMENT REQUESTED
2. OBJECT
2.1. TERAYON hereby agrees to sell Product to NET BR or to NET BR's NACS as
-------
duly assigned in writing by NET BR through the correspondent purchase
order. The minimum purchase requirements of Product shall be set forth
-------
in Attachment C.
2.2. TERAYON hereby grants NET BR, [*****************************************
****************************************], as set forth in Attachment C.
------------
2.3. TERAYON hereby grants NET BR, [****************************************
*********************************************************************].
------------
2.4. TERAYON is hereby committed to NET BR and its NACS not to sell Product
-------
or Spare Parts to any other like customer in the Territory of Brazil on
----- -----
terms that, when compared to conditions expressed in the Agreement
---------
hereinunder, are more favorable.
3. PURCHASE PRICE
3.1. The purchase price for the volume of Product is listed in Attachment C.
-------
3.1.1. Nevertheless Product price shall [**********************] between the
-------
parties aiming [************], previously to any [*****************
******] either within the original term of the Agreement or any eventual
---------
term therefrom.
3.1.2. Product price will be [*****] according to [**************], related
-------
to Product [**************************] and [*********************]:
-------
3.2. Product unit pricing, as stated in Attachment C, is assignable to NET
-------
BR's NACS and shall be recalculated every [**************] as of the
date of the first shipment. Resulting credits will be due and paid to
NET BR by TERAYON in a mechanism to be agreed upon by and between the
parties.
3.3. All payments under this Agreement shall be made either by the wire
---------
transfer or by irrevocable letter of credit in U.S. Dollars to TERAYON
in Santa Clara CA, for the supply of Product.
-------
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
5
CONFIDENTIAL TREATMENT REQUESTED
3.4. The minimum volume purchase requirements of Product stated in Attachment
-------
C will be [****************************************************
*********************
*******************************.
-------
************************************************************************
-------
********************************************************.]
4. TERMS OF PAYMENT
NET BR shall cause payments to be made to TERAYON in accordance to NET
BR's assignment of the purchase order and shall always be accomplished
within thirty (30) calendar days after receipt of the Proforma invoice
from TERAYON.
5. PURCHASE ORDERS AND ROLLING FORECAST
5.1. All purchase orders will be placed by NET BR or its NACS with TERAYON
ninety (90) days in advance of the requested date of the shipment.
5.2. Simultaneously to a NACS written acceptance of the assignment (an
Assignee) of any purchase order so assigned by NET BR (an Assignor),
NACS will declare in writing on the text of each and all correspondent
purchase order to abide by the entirety of the terms and commercial
conditions of both the purchase order and the Agreement hereinunder.
---------
5.3. Any and all purchase orders assigned by NET BR to its NACS in accordance
to the Section 5.2. hereinabove shall be unconditionally accepted by
TERAYON as per the entirety of its original terms and commercial
conditions like any other valid and binding purchase order solely
submitted to TERAYON by NET BR within the Agreement herein.
---------
5.4. NET BR and its NACS will jointly define, upon TERAYON advise, the type,
volume or percentage of Spare Parts to be informed to TERAYON by
-----------
purchase orders. Spare Parts will be produced, supplied and shipped on a
-----------
firm condition by TERAYON, as specified in the in the purchase orders
and in strict accordance to the Attachment C hereto.
5.5. NET BR shall quarterly provide TERAYON no later than the tenth (10th)
day of each month with a twelve (12) month rolling forecast for the
supply of the Product. The starting date of the rolling forecast will be
-------
adjusted upon mutual Agreement between the parties in writing.
---------
5.5.1. The first three (3) months of the forecast shall be considered to be one
hundred per cent (100%) accurate and shall be a release for the quantity
of the Product stated therein.
-------
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
6
CONFIDENTIAL TREATMENT REQUESTED
5.5.2. The second three (3) months of the forecast shall have at least seventy
five (75%) accuracy and the last six (6) months shall be the best
available estimate.
5.5.3. The initial three (3) months of the forecast will placed by NET BR with
TERAYON. The first forecast will be sent by NET BR to TERAYON on a date
previous to the Initial Date.
------------
5.5.4. Delivery dates as stated in the forecasts shall be deemed to have been
accepted by TERAYON unless no later than ten (10) calendar days after
TERAYON's receipt of a six-month forecast, TERAYON notifies NET BR in
writing of its inability to meet the required shipping schedule and
notifies NET BR of the shipment schedule it can achieve which will be
subjected to NET BR's written approval.
5.5.5. The schedule sent by TERAYON to NET BR as per Section 5.5.4. hereinabove
shall be deemed to have been accepted by NET BR unless NET BR provides
notice to TERAYON within ten (10) calendar days of the receipt of such
amended schedule that the schedule is not acceptable.
5.6. NET BR or its assigned NACS may, at any time, cancel the purchase of the
Product or services hereinunder in whole or in part, but only by paying:
-------
(I) [**********************] of the purchase price if such cancellation
is received by TERAYON more than [****************] before the scheduled
delivery date; (II) [********************] of the purchase price if such
cancellation is received more than [********************], but less than
[****************] before the schedule delivery date; (III) [*******
*******************] of the purchase price if such cancellation is
received more than [*****************], but less than [***************]
before the schedule delivery date; and (IV) [********************] if
such cancellation is received less than [*****************] before the
schedule delivery date.
5.7. NET BR shall allow TERAYON and/or its duly authorized representatives
reasonable access to the premises and personnel of NET BR for the
purpose of acquainting themselves with the quality of sales, licensing
and service to customers carried out by NET BR as a Most Preferred
Distributor in the territory of Brazil.
5.7.1. NET BR shall maintain accurate records of its sales and/or sublicenses
of the Product for a period of two (2) years after the issuance of the
-------
corresponding fiscal documentation for the specific sale.
5.8. NET BR shall at its own expense obtain all required government import
approvals or other permits, customs clearances, or authorizations
required for the shipment and sale of Product into and within the
-------
Territory of Brazil.
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
7
CONFIDENTIAL TREATMENT REQUESTED
6. DISTRIBUTIONSHIP
6.1. At such time as the market opportunities represent the purchase of an
aggregate of [******************************] units of Product NET BR
-------
shall, by writing notice to TERAYON within sixty (60) days, have the
option, directly or indirectly, by an appointment of a third party under
mutual written agreement with TERAYON, to promote, develop a market for,
sell and distribute the Product and Spare Parts for use in the Territory
------- -----------
of Brazil. In furtherance of such undertakings, NET BR shall:
a) maintain a qualified distributor organization employing such
technical sales and service personnel, including without limitation
technical specialists specifically trained to support the Product,
-------
as reasonably necessary to fully develop and support the market
potential for the Product, and ensure that at all times the Product
------- -------
are sold or supported only by such personnel;
b) assign a technically competent sales engineer or product manager to
the marketing and distribution of the Product, and ensure that such
-------
individual attends, at NET BR's expense, the periodic training
sessions sponsored by TERAYON;
c) at its own expense, participate in at least two exhibitions and
trade fair shows within the Territory of Brazil at which the Product
-------
may reasonably be displayed and demonstrated;
d) provide adequate promotion of the Product, including sales promotion
-------
materials in the language or languages necessary for proper
marketing of the Product in the Territory of Brazil, and send copies
-------
of all promotional materials to TERAYON for its written approval
prior to use or distribution of such materials; and
e) provide a written marketing plan to TERAYON which plan shall include
trial locations, market potential for the Product, strategy and
-------
tactics by territory, key or target accounts and a one (1) year
estimate of business by calendar quarter commencing with the quarter
within which this Agreement is signed.
---------
6.2. NET BR shall effect all sales of the Product to customers of NET BR upon
-------
NET BR's standard terms and conditions for sales and/or sublicenses
attached hereto as Exhibit D (if NET BR's standard terms and conditions
is in a language other than English, an English translation thereof
shall also be attached hereto as Exhibit D), with such changes thereto
as may be necessary to conform to the provisions of this Agreement and
---------
other reasonable minimum terms and conditions requested by TERAYON. In
the event that NET BR proposes to sell Product to a customer on terms
-------
materially different from those set forth on Exhibits C, NET BR shall
give written notice to TERAYON of such proposed non-standard terms prior
to completing such sale or sublicense.
6.3. NET BR shall not solicit sales or accept orders for the Product, create
-------
branch establishments, or maintain warehouses for delivery purposes
outside the Territory of Brazil without the prior written approval of
TERAYON.
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
8
CONFIDENTIAL TREATMENT REQUESTED
6.4. NET BR shall keep TERAYON fully informed of all governmental,
commercial, and industrial activities and plans which do or reasonably
could affect the Product in the Territory.
-------
6.5. The parties hereto agree that, due to the close relationship involved in
a distributorship agreement, TERAYON must necessarily rely on NET BR's
business experience and good reputation to ensure the protection of
TERAYON's trademarks and reputation and good will.
7. LOGO
The parties hereby agree that TERAYON labeling shall only be affixed on
the back of the Product. In line with the specifications and design, to
-------
be mutually agreed upon in writing, at the time and in accordance with
the placement of the P.O. by either NET BR or its NACS, TERAYON shall
provide for to allow NET BR's labeling to be exhibited as per
instructions, mutually agreed upon in writing, on whatever surfaces that
may be indicated by NET BR of each TeraPro unit console and consistent
with the requirements of Section 12.
8. CONFORMANCE AND ACCEPTANCE
8.1. TERAYON hereby agrees that only Product which is in conformance with the
-------
specifications set forth in Attachment A and as had been verified
through the ATP will be accepted by NET BR and/or its NACS and shall be
subject to payments.
8.2. In case non-conforming TCVN Product is indicated by NET BR or its NACS
-------
after a laboratory testing agreed upon by and between NET BR and TERAYON
to exceed [****************] of the total volume of a specific shipment,
NET BR or its NACS are hereby entitled, after initial training and
optimization of the said laboratory tests, to refuse acceptance of the
entirety of the lot of that specific shipment, given that the parties on
a good faith basis have mutually conducted unsuccessful reasonable
attempts to overcome and remedy the failure as mentioned above.
8.3. TERAYON will be liable for the cost of the return shipment of the
Product which is not accepted by NET BR and/or its NACS as a result of
-------
the procedures stated in Section 8.2. hereinabove. Upon mutual consent
in writing TERAYON and NET BR may agree on a different solution.
8.4. Upon the occurrence of the event mentioned in Section 8.2, TERAYON shall
provide a new shipment not less than within 45 days effective from the
TCVN.
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
9
CONFIDENTIAL TREATMENT REQUESTED
9. DISCONTINUANCE
9.1. TERAYON is hereby allowed to unilaterally discontinue the Product or
-------
its production line if NET BR or its NACS have not purchased in the
previous calendar year at least [********************] of the units
forecast volume stated in Attachment C or upon giving a twelve (12)
months advance written notice to NET BR.
9.2. TERAYON hereby agrees to supply Spare Parts in sufficient number to
-----------
allow the Product's normal use during [five years] after the last
---------
delivery of the Product. NET BR may only use such parts as replacements
-------
parts for damaged Product previously supplied by TERAYON within the
-------
terms of the Agreement. The confidentiality, ownership, and license
---------
provisions of this Agreement shall remain in effect with respect to
---------
such Spare Parts, including those purchased following termination of
-----------
this Agreement.
---------
10. WARRANTY AND LIMITATION OF LIABILITY
10.1. TERAYON hereby warrants the Product to be free from manufacturing and
-------
material defects for a period of one (1) year effective from the TCVN
after delivery, and also to be conforming to specifications as
contained in Attachment A.
10.1.1. It is explicitly excluded from any warranty, damages to the external
parts of the Product such as cabinets, panels, finishing and buttons
-------
unless originated by a material defect.
10.1.2. Burnt or damaged components in the power supply circuit, input stage of
the tuner shall be assumed to be result of electrical stress.
[*] - Indicates confidential information that has been omitted and
filed separately with the Securities and Exchange Commission.
10
CONFIDENTIAL TREATMENT REQUESTED
10.2. TERAYON is hereby committed to directly or indirectly, by an appointment
of a third party under mutual written agreement with NET BR to repair
without charge or replace without charge, at its option, to NET BR's
NACS, if NACS within one year after delivery of the Product to the NACS,
-------
notifies TERAYON of a claimed defect in workmanship or materials. This
promise does not cover damage caused by misuse, negligence, accident, or
Product that have been tampered with, or subjected to unusual physical or
-------
electrical stress or atmospheric discharges or any other cause of damage
other than defect in material or workmanship. If during such one year
period (I) TERAYON is notified promptly in writing upon discovery of any
defect in the goods, including a detailed description of such defect,
(II) after first having obtained written consent to send them, such goods
are sent to TERAYON, and (III) TERAYON's examination of such goods
discloses to its satisfaction that such goods are defective and such
defect is not the result of any damage caused by misuse, negligence,
accident, improper installation, repair or alteration by someone other
than TERAYON, improper testing, or use contrary to any instructions
issued by TERAYON, or Product that have been tampered with, or subjected
-------
to unusual physical or electrical stress or atmospheric discharges or any
other cause of damage other than defect in material or workmanship then
Product purchased from TERAYON as covered by this warranty, will be
-------
repaired within thirty (30) days from receipt by TERAYON, TeraPro and
TeraLink, covered by this warranty, will be either repaired or
temporarily replaced, while repair takes place within sixty (60) days,
TERAYON shall only charge the cost of freight, package and in-transit
insurance to and from TERAYON.
10.3. NET BR's sole and exclusive remedy and TERAYON's sole and exclusive
obligation for a breach of such warranty will be timely repair or
replacement of the defective Product or refund of the applicable purchase
-------
price, all in accordance with TERAYON's then-standard warranty policy.
EXCEPT AS EXPRESSLY SET FORTH HEREIN, TERAYON EXPRESSLY DISCLAIMS ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE
AND NON-INFRINGEMENT. NET BR shall make no additional warranties on
behalf of TERAYON and agrees to indemnify and hold TERAYON harmless from
any claims based on warranties given in violation of this Agreement.
---------
10.4. IN NO EVENT SHALL TERAYON BE LIABLE TO NET BR FOR ANY INDIRECT, SPECIAL,
OR CONSEQUENTIAL DAMAGES, EVEN IF TERAYON HAS BEEN ADVISED OF THE
POSSIBILITY THEREOF. In addition, in no event shall any direct damages
from TERAYON to NET BR exceed [*****************************************]
the amounts paid by NET BR to TERAYON hereunder. NET BR acknowledges that
these limitations of liability are an essential element of the bargain
between the parties and that in the absence of such limitations of
liability, the economic terms of this Agreement would be substantially
---------
different. This Section shall survive termination or expiration of the
Agreement.
---------
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
11
11. INDEMNITY
11.1. In addition to any other indemnities set forth in this Agreement, NET BR
---------
hereby agrees to indemnify, defend and hold TERAYON harmless from any
claim, lawsuit, legal proceeding, settlement or judgment, including,
without limitation, TERAYON's reasonable attorneys' fees and costs
incurred in the defense of the same, resulting from or arising out of (a)
any acts or omissions of NET BR, its employees or its agents, including
without limitation any representations or warranties and Product
-------
warranties made by NET BR, its employees or agents regarding the Product,
-------
(b) any death of or personal injury to any person or damage to property
due to negligence, recklessness, or willful misconduct of NET BR or NET
BR's officers, employees, agents or customers, or (c) failure of NET BR
to obtain any governmental authorization.
11.2. TERAYON agrees to indemnify and hold NET BR harmless from any and all
damages, loss, demands, fees, expenses, fines, penalties, and costs
(including without limitation reasonable attorney's fees, costs and
disbursements) finally awarded against NET BR and arising from any United
States claims, suits, actions or proceedings brought against NET BR by
any third party that alleges that the Product infringe any United States
-------
patent, copyright, trademark or other intellectual property right of a
third party or misappropriate any third party trade secret; provided that
NET BR provides TERAYON (i) prompt written notice of the existence of
such claim, suit, action or proceeding, (ii) sole control over the
defense or settlement of such claim, and (iii) assistance at TERAYON's
request to the extent reasonably necessary for the defense of such claim
or suit.
11.3. Upon notice of any claim of infringement or upon reasonable belief of the
likelihood of such a claim, TERAYON shall have the right, at its option,
(i) to obtain the rights to continued use of any Product, (ii) substitute
-------
other suitable, functionally equivalent, non-infringing equipment,
hardware and/or software, (iii) replace or modify the Product or its
-------
design so that it is no longer infringing, or (iv) refund to NET BR or
its customers the purchase price of such Product upon its return.
-------
11.4. Notwithstanding the foregoing, TERAYON shall not indemnify NET BR for any
claims based on (a) any non-TERAYON intellectual property incorporated in
or combined with a Product where in the absence of such incorporated
-------
intellectual property, the Product would not have been infringing, (b)
-------
Product that have been altered or modified by NET BR or any third party
-------
where in the absence of such alteration or modification the Product would
-------
not be infringing; (c) any combinations of the Product with any product
-------
or services not supplied or authorized by TERAYON where in the absence of
such combination, the Product would not have been infringing; and (d) any
-------
use of an outmoded version of the Product for which NET BR has been
-------
supplied an updated, revised or repaired Product which is not infringing.
-------
12
12. TRADEMARK AND TRADE NAMES
12.1. It is hereby acknowledged that neither NET BR itself nor NET BR's NACS
have any interest in TERAYON's trademarks or trade names, patents or
copyrights and that cooperation will be extended to TERAYON to secure
TERAYON's registration of such trademarks, trade names, patents or
copyrights in Brazil.
12.2. NET BR recognizes that TERAYON utilizes a combination of acronyms,
trademarks, trade names and other marketing names, a current list of
which is set forth on Exhibit E hereto Trademarks. NET BR acknowledges
the validity of the Trademarks and TERAYON's ownership thereof. NET BR
shall not challenge TERAYON's rights to use the Trademarks which TERAYON
may apply to or use in connection with the Product. TERAYON may from time
-------
to time attach other or additional marks or names to Product, and NET BR
-------
shall be deemed to have waived any challenge of TERAYON's rights thereto,
unless NET BR gives written notice of an objection to such use within
thirty (30) days after the first sale of such Product by NET BR.
-------
12.3. If NET BR in the course of its business in the sale of the Product
-------
acquires any goodwill or reputation in any of the Trademarks of TERAYON
applied thereto, then at the expiration or termination of this Agreement
all such goodwill or reputation automatically shall vest in TERAYON
without any separate payment or other consideration of any kind to NET
BR.
12.4. NET BR shall, at the request and expense of TERAYON, do such acts or
things as TERAYON may reasonably require for the purpose of obtaining,
maintaining, enforcing and preserving any of the Trademarks, or other
property right of TERAYON in the Territory, provided, however, that NET
BR agrees that only TERAYON has the right to enjoin any infringement or
registration by a third party of the Trademarks or similar rights.
12.5. NET BR shall not adopt, use, or register any acronym, trademark,
tradename or other marketing name of TERAYON or any confusingly similar
work or symbol as part of NET BR's own name or the name of any of its
NACS or the name of the Product it markets.
CONFIDENTIAL TREATMENT REQUESTED
13. SOFTWARE LICENSE AND OWNERSHIP
13.1. Certain proprietary TERAYON software or firmware may be incorporated in
the Product. Such software or firmware (collectively, "Software") is
-------
licensed, not sold to NET BR. Subject to the terms and conditions of this
Agreement, TERAYON grants to NET BR during the term of this Agreement a
--------- ---------
nonexclusive, nontransferable, royalty-free license in the Territory to
distribute through NET BR's ordinary sales channels any Software
incorporated in the Product solely as incorporated in executable code or
-------
firmware format therein, and to permit end users of the Product to use
-------
the Software solely as incorporated in the Product. To the extent
-------
permissible by applicable law, NET BR shall not itself, or permit others
to, reverse compile, reverse engineer or otherwise disassemble the
Software. To the extent permissible by applicable law, no rights to copy,
prepare derivative works or to publicly perform or display any Software
are granted to NET BR or end users hereunder.
13.2. By granting licenses to NET BR hereunder, TERAYON does not in any way
grant any ownership interest in any TERAYON intellectual property rights.
All rights not expressly granted herein by TERAYON to NET BR are reserved
by TERAYON.
13.3. NET BR shall not alter, obscure or remove any copyright notices or any
other proprietary rights notices placed on the Product.
-------
13.4. All Product marketed by NET BR shall be sold only in the form shipped by
-------
TERAYON, and NET BR shall not alter, modify, or change any Product or its
-------
package or use in relation to any Product.
-------
13.5. TERAYON represents that the Product were developed by TERAYON and its
-------
licensors and that TERAYON possesses all rights and licenses necessary to
grant the license rights set forth herein.
14. [********************]
At such time as NET BR has purchased an aggregate of [******************]
units of Product from TERAYON, TERAYON shall use diligent and
-------
commercially reasonable efforts to [************************************
**************************************************************
**********]. TERAYON shall give written information to NET BR on the
[*************], within six (6) months. [*****************] to be timely
[*********] by TERAYON to NET BR shall be entitled by TERAYON to be a
[**********************] of TERAYON [********************] hereinunder if
TERAYON: [***************************************************] (other
-------
than as a result of alleged infringement); or (ii) files for or is placed
in bankruptcy or (iii) makes an arrangement for the benefit if creditors
(files for Chapter 11 protection).
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
15. TECHNICAL ASSISTANCE
15.1. Technical assistance will be provided at TERAYON facilities unless
otherwise agreed to in writing by the parties.
15.2. Assistance to designated personnel for the understanding of the
Technical Data and the Product will be supplied by TERAYON's
-------
supervision and responsibility by way of:
15.2.1. Assistance with the solution of problems encountered by designated
personnel for the general understanding of the technical data and
Product hereinunder;
-------
15.2.2. Details on technical standards and interpretation of symbolic
representations used; and
15.2.3. Information on possible sources of supplementary documentation, useful
for the clarification of specific details of the technical data and
Product hereinunder.
-------
15.3. Assistance to designated personnel in understanding the theory of the
operation and the adequacy of the Product including interaction with
-------
the designated personnel on NET BR or NET BR's NACS actual or intended
methods and procedures to be used in the integration of the Product.
-------
15.4. NET BR and/or its NACS will pay and be responsible for all travel and
living expenses of its corresponding personnel, as well as for the
technical personnel appointed by TERAYON, TO PROVIDE FOR THE TECHNICAL
ASSISTANCE GIVEN WITHIN THE TERMS OF THIS SECTION.
15.5. Direct engineering and technical assistance will be rendered by TERAYON
at standard customers assistance fees, subject to availability of
resources. It is understood, however, that there will be no additional
charge for reasonable follow up inquiries not directly involving
meeting or further training through common media regarding the contents
of the Product.
-------
15.6. First training related to TeraPro and TeraLink Installation will be
------- --------
made by TERAYON at no additional cost. Any extra training will be
offered at TERAYON's then-standard rates plus travel and related
expenses.
16. TRAINING AND PRE-REQUESTS FOR TRAINING
16.1. TERAYON will develop a training program either for NET BR or its NACS
personnel as contained in Attachment D. During such training program,
designated personnel will abide by all TERAYON internal rules and
regulations, and the facilities' regulations.
16.2. NET BR's NACS shall bear the entire expense of all salaries, fringe
benefits, travel and living expenses of its personnel in training and
all travel and living expenses of technical staff appointed by TERAYON
TO GIVE SUCH TRAINING TO THE DESIGNATED PERSONNEL IN BRAZIL IN A PLACE
DESIGNATED AND AGREED TO BETWEEN NET BR OR ITS NACS. TERAYON PERSONNEL
REQUIREMENTS TO MEET THE ASSISTANCE REQUIRED SHALL BE ARRIVED AT BY
MUTUAL NEGOTIATION AND IN ALL EVENTS SUBJECT TO REASONABLE USE OF
TERAYON'S PERSONNEL.
16.3. The training by TERAYON OF THE TECHNICIANS INDICATED BY NET BR OR ITS
NACS WILL ENCOMPASS THE ENTIRETY OF THE SUBJECTS LISTED IN ATTACHMENT D
HERETO. TERAYON ACKNOWLEDGES THAT SAID TRAINING IS OF THE NATURE AND
TYPE USED TO TRAIN ITS LIKE CUSTOMERS AND TERAYON ACKNOWLEDGES THAT
SAID TRAINING IS DESIGNED TO ENABLE SUCH CUSTOMERS TO CLEARLY
UNDERSTAND THE PRODUCT. IF ADDITIONAL TRAINING IS REQUIRED, TERAYON
-------
AGREES TO GIVE EXTRA TRAINING ON TERAYON'S NORMAL CUSTOMERS TRAINING
FEES PLUS ALL REQUIRED TRAVEL AND RELATED EXPENSES IF ANY.
17. CONFIDENTIAL INFORMATION
17.1. NET BR shall not, at any time, except as required in connection with
the performance of its duties hereunder, directly or indirectly, use,
disseminate, disclose or publish any confidential information (as
defined in Section 17.2 below) obtained from TERAYON or obtained from
other sources with respect to TERAYON. NET BR further agrees that it
will use its best efforts to obtain agreement from each of its
employees or agents who perform duties in connection with this
Agreement that they will conform to the above, and further that they
will not violate NET BR's duties with respect to the confidential
information in which TERAYON has reserved proprietary rights.
Notwithstanding the foregoing, NET BR shall have no liability for use,
reproduction or disclosure of confidential information obtained from
TERAYON if:
a) TERAYON gives its prior express written consent thereto;
b) NET BR establishes that the confidential information was already
known to NET BR, without obligation to keep it confidential, at the
time of its receipt from TERAYON, as evidenced by documents in the
possession of NET BR prepared or received prior to TERAYON's
disclosure;
c) NET BR establishes that the confidential information was received
d) by NET BR in good faith from a third party lawfully in possession
thereof and having no obligation to keep such information
confidential; or
e) NET BR establishes that the confidential information was publicly
known at the time of its receipt by NET BR from TERAYON or has
become publicly known other than by a breach of this Agreement or
other action by NET BR.
17.2. For purposes of this Section, confidential information shall
include, but not be limited to, any information, data, process,
technique, program, computer software, design, drawing, formula,
test data, work- in-process, future development, engineering,
manufacturing, marketing, financial or personnel matter relating to
the TERAYON, its research, development, present or future Product,
-------
sales, customers, employees, opportunities, markets, or business,
whether in oral, written, graphic or electronic form.
17.3. The obligations of NET BR under this Section 17 shall continue
notwithstanding any termination or expiration of this Agreement.
---------
18. TITLE, RISK OF LOSS AND DELIVERY
18.1. Title to the Product and risk of loss of the Product shall pass to
------- -------
NET BR or to its assigned NACS when TERAYON delivers such Product
-------
to a common carrier or NET BR's agent so designated in writing.
Delivery shall be ex TERAYON's factory.
18.2. The delivery dates agreed to by TERAYON are in accordance to the
shipment schedule, and TERAYON shall be liable and in breach of its
obligations to NET BR due to late deliveries.
18.3. TERAYON may, upon NET BR prior written approval on TERAYON's
written notice, change the shipment schedule previously to a
certain shipment, and such change shall be mutually agreed between
the parties, and shall incorporate the current shipment schedule so
as to become the new shipment schedule, unless NET BR objects to
such schedule change in writing within ten (10) calendar days of
receipt of TERAYON's notice.
19. TRIBUTES OR TAXATION
All Brazilian taxes and/or any other government charges applicable
to the sale of product including those applicable to the sale of
products to distributor due as a consequence of this Agreement
---------
shall be paid by NET BR, and all taxes, assessments and levies
either on the receipt of the remuneration by TERAYON or directly
related government charges in connection with the manufacturing
activities in he US shall to be paid by TERAYON. The parties shall
indemnify and hold each harmless against any tax liability
therefor. The parties shall receive no compensation from each other
in the form of money commissions or the like.
CONFIDENTIAL TREATMENT REQUESTED
20. BREACH
20.1. Any of the following acts by the parties shall constitute a
breach of the parties obligations hereunder:
a) failure to manufacture conforming and quality Product under
the Agreement herein;
b) failure to accept conforming Product as supplied hereunder as
-------
well as to return such conforming Product as previously agreed
-------
in writing.
c) failure to supply warranty, supporting services, maintenance,
installation assistance and training as agreed upon in Sections
hereinabove.
d) failure to make payment for the Product and services related to
-------
the Agreement when due;
---------
e) the filing of a voluntary or involuntary petition in
bankruptcy against the parties, the institution of any
proceeding in insolvency or bankruptcy against the parties,
including reorganization and assignment and/or arrangement for
the benefit of creditors, the appointment of a trustee or
Receiver of the parties.
f) any other act by the parties in violation of any provision
hereof.
21. TERM
21.1. This Agreement shall only be effective upon previous NET BR and
---------
TERAYON mutual and written approval of Attachments A and B terms
what shall occur no later than (30) days as of the last
signature of the Agreement hereinunder.
---------
21.2. This Agreement will terminate on the last day of its term which
---------
shall occur DECEMBER 31, 1999. However, this Agreement will be
---------
extended for additional one (1) year terms upon mutual notice in
writing ninety (90) days prior to either the date of termination
of the first term of the Agreement or to any of the subsequent
---------
terms thereof, (the "Term").
21.3. in the event that NET BR desires to renew this Agreement for
---------
successive periods to be defined by the parties upon mutual
agreement in writing, TERAYON is hereby committed to NET BR and
its NACS to sell the Product or its Spare Parts to them [*****]
------- -----------
when compared to TERAYON's standard pricing policy for the sale
of the same Product [******].
-------
22. TERMINATION
22.1. This Agreement may be terminated by written notice at the option
---------
of a party having such right, as provided hereunder:
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
22.1.1. By NET BR in case of Product lack of performance and/or
-------
governmental act or legislation;
22.1.2. By either party in case of bankruptcy, receivership, concordat,
reorganization and assignment and/or arrangement for the benefit
of creditors, the appointment of a trustee or Receiver, or
liquidation of the other party; or
22.1.3. By both parties mutual written Agreement in case of occurrence
---------
of a specific Act of God or a specific event of Force Majeure
which continues for more than three (3) months; or
22.1.4. By the non-defaulting party if the other party fails to perform
any of its obligations under this Agreement and does not remedy
---------
such default within thirty (30) calendar days following receipt
of a written notice from the non-defaulting party requesting such
remedy, then the non-defaulting party shall have the right by
notice in writing to terminate this Agreement and thereupon all
---------
rights of the defaulting party hereunder shall cease without
prejudice to the remedy of either party against the other in
respect of any previous breach of any of the provisions
hereinunder; or
22.1.5. By either party in the case of disclosure by the other party of
proprietary information or of this Agreement without the explicit
---------
written consent by the Disclosing Party.
22.2. If this Agreement is terminated by TERAYON due to NET BR's
---------
failure to pay or failure to cause an assigned NACS to pay or due
to an effective lack of payment of any amounts due, the
correspondent NACS will:
22.2.1. Not disclose any of the Technical Data or any other information
hereunder received through NET BR or TERAYON;
22.2.2. Pay TERAYON through NET BR all amounts due and unpaid hereunder,
including reasonable expenses.
22.3. If TERAYON terminates the Agreement for reasons other than
---------
resulting from NET BR's breach, then:
22.3.1. NET BR and/or its assigned NACS will be free to use the
Technical Data already provided under the terms of this Agreement
---------
as it relates to the continuous proper functioning and operation
of the TERAYON equipment as supplied by TERAYON or the Second
Source Supply defined in section 14 hereinabove.
22.4. The termination of this Agreement will not prejudice any claim
---------
of TERAYON or NET BR as the same may be accrued or to accrue on
account of any default by NET BR or TERAYON as the case may be.
22.5. Upon termination or expiration of this agreement, TERAYON shall have the
right, but not the obligation , to repurchase from NET BR all products
and spare parts for products then in NET BR's inventory or in transit.
Any products or spare parts not so repurchased may be disposed of by NET
BR without prejudice or charge back to TERAYON.
22.6. Upon expiration or termination of this agreement for reasons other than
those contemplated in this Agreement, NET BR agrees to do the following:
---------
a) Deliver to TERAYON all records related to services, sales and
licenses which pertain to the product.
b) Refrain thereafter from representing itself as a TERAYON distributor
or using any trade names or trademarks of TERAYON.
c) If applicable, change within ninety (90) days, its name to any other
name which do not incorporate the trademarks or trade names of
TERAYON.
d) Return to TERAYON or immediately destroy all stationary, advertising
mater or any other printed material in its possession under its
control containing or bearing any trademark or trade name of TERAYON;
and
e) Take all appropriate steps to remove and cancel its listing in
telephone books, directories, public records or elsewhere which state
or indicate that NET BR is a distributor of TERAYON.
22.7. This Agreement will terminate on the last day of its Term.
---------
22.8. If the parties hereafter agree to conduct future TCVN trials or
Commercial Verification trials, the TCVN for each such trial shall be the
one jointly developed by the parties for that trial, as stated
hereinunder.
23. WAIVER
The waiver of any default by either of the parties of any of the terms and
conditions of this Agreement, will not represent the waiving of any other
---------
default related to any other term or condition, but will apply solely in
cases where such waiver is conceded.
24. ASSIGNMENT OF THE AGREEMENT
24.1. Neither of the parties may cede, transfer or assign the Agreement
---------
hereunder or its rights in whole or in part to any third parties except
for NET BR's purchase orders assignment to its NACS, without prior written
notice of such transaction, which shall be subject to previous approval by
the other party in writing except to NET BR's NACS as above.
20
24.2. This Agreement shall endure to the benefit of and be binding upon the
---------
parties hereto and their respective successors and assigns.
25. FORCE MAJEURE
Force Majeure shall mean any event or condition, not existing as of
date of signature of this Agreement not reasonably foreseeable as of
---------
such date and not reasonably within the control of either party, which
prevents in whole or in material part the performance by one of the
parties of its obligations hereunder. Without limiting the foregoing,
the following shall constitute events or conditions of Force Majeure:
act of State or Governmental action, riots, disturbances, civil war,
war, strikes, lockouts, slowdowns, prolonged shortage of energy
supplies, material shortages, epidemics, fire, flood, earthquake,
lightning and explosion.
26. GOVERNING LAW
26.1. Any dispute in connection with this Agreement shall be finally settled
---------
by arbitration in accordance with the laws of the State of
California - USA.
26.2. The arbitration shall be held in Los Angeles, before three arbitrators.
TERAYON and NET BR shall be entitled to appoint one arbitrator each and
the third arbitrator shall be appointed jointly by the two arbitrators
appointed by TERAYON and NET BR except for any law conflicts.
26.2.1. The arbitration proceedings shall be in English and shall be conducted
on a confidential basis.
26.3. Any award, order or judgment pursuant to such arbitration shall be
deemed final and may be entered and enforced according to the law each
party agrees for the purpose of the enforcement of the arbitration to
be bound either by the award and the corresponding law.
26.4. New York, NY, shall be the appropriate venue for the resolution of
disputes hereunder, given that nothing contained in the Agreement
---------
herein shall neither infringe nor be construed to infringe or adversely
affect the enforcement of any applicable law or regulation of Brazil.
21
26.5. The parties shall not engage in any business practice which is illegal
under the laws of any jurisdiction within the Territory of Brazil.
Without limiting the foregoing, the parties hereby agree to abide by
and comply with the export control laws of the United States of
America, as such laws may be amended from time to time. In addition,
the parties hereby agree that they shall comply with the requirements
of the U.S. Foreign Corrupt Practices Act (the "Act") and shall refrain
from any payments to third parties which would cause the other party to
violate the Act. The parties hereby agree to indemnify and hold the
other party harmless from any breach of this Section .
27. NOTICES AND NOTIFICATIONS
27.1. All notices, notifications, requests and any other form of
communication required under this Agreement, will be sent by Telefax or
---------
registered air mail to the addresses of the Parties mentioned in this
Agreement, or to other addresses specified by notices in writing, and a
---------
copy will be addressed separately to the "attention of the Agreement
---------
Administrator", at the address hereunder defined.
27.2. Within fifteen (15) days from the Effective Date, each of the parties
--------------
will appoint its Agreement Administrator and will notify the other
---------
party with the name and address of the Administrator who will be fully
authorized to take all measures necessary for the implementation of
this Agreement.
---------
27.3. The parties may appoint a different Agreement Administrator at any
---------
time, upon written notice to the other party.
27.4. The Agreement Administrator's responsibilities include the obligation
---------
to analyze and coordinate solutions to problems as soon as they are
brought to the parties' attention and to notify the appropriate
personnel of the party in order to solve any such problems promptly.
27.5. NET BR shall promptly give TERAYON written notice of any transaction
affecting either the control of its capital stock, or any material
change in the respective interest of any partners. In the event that
TERAYON in its reasonable discretion determines that the continuation
of this Agreement subsequent to such a transaction or change would be
detrimental to TERAYON's original interests deriving herefrom, then
TERAYON upon mutual Agreement with NET BR may terminate this Agreement
effective ninety (90) days after written notice thereof.
28. AGREEMENT AND MODIFICATION
28.1. This Agreement and the attachments and exhibits are the sole statement
---------
of the terms and conditions applicable to the subject matter herein.
22
28.2. This Agreement may only be modified by a written amendment signed by
---------
representatives duly authorized to so bind TERAYON and NET BR. This
Agreement shall not be supplemented or modified by a course of
---------
performance or trade usage.
28.3. Independent parties. The parties shall act as independent contractors
under the terms of this agreement. The parties are not and shall not be
deemed to be employees, agents, co-venturers or legal representatives
of each other for any purpose. The parties shall not be entitled to
enter into any contracts in the name of, or on behalf of each other,
nor shall they be entitled to pledge the other party's credit in any
way or hold themselves out as having authority to do so.
30.2. Severability. All provisions of this Agreement shall be considered as
---------
separate terms and conditions; and in the event that anyone shall be
held illegal; invalid; or unenforceable; all other provisions hereof
shall remain in full force and effect as if the illegal; invalid; or
unenforceable provision were not a part thereof. Should any such
provision reasonably be considered by either party as an essential
element of this agreement, the parties hereto shall negotiate a
replacement provision in good faith through an adequate amendment to
the contract. If the parties are unable to agree upon the terms of such
replacement provision within ninety (90) days of the contravening
provisions termination; then this agreement may be terminated at the
option of the party reasonably considering such contravening provision
to be an essential element of this Agreement effective upon the giving
---------
of a thirty (30) days written notice to the other party to such effect.
23
IN WITNESS WHEREOF, the Parties have entered into this Agreement on the basis of
---------
good-will and with the intention to cooperate for the mutual benefit and
consider the Agreement effective as an entire Agreement between themselves in
--------- ---------
respect to its subject matter.
AGREED TO:
TERAYON CORPORATION LTD. NET BRASIL S.A.
BY: BY:
-------------------------- --------------------------
SIGNATURE: SIGNATURE:
------------------- -------------------
TITLE: TITLE:
----------------------- -----------------------
BY: BY:
-------------------------- --------------------------
SIGNATURE: SIGNATURE:
------------------- -------------------
TITLE: TITLE:
----------------------- -----------------------
SANTA XXXXX, JULY 1997. SAO PAULO, 30 JUNE 1997.
WITNESSES
1. 2.
--------------------------- ---------------------------
FOR TERAYON FOR NET BRASIL
24
ATTACHMENT A
PRODUCT LIST
PRODUCT FUNCTIONALITY
PRODUCT TECHNICAL DATA AND SPECIFICATIONS
25
ATTACHMENT B
ACCEPTANCE TEST PLAN
26
CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT C
VOLUME COMMITMENT
NET BR and NACS [******]
---------------------------------
[************] [*************]
---------------------------------
[*******] [****]
---------------------------------
[*******] [****]
---------------------------------
[*******] [*****]
---------------------------------
[*******] [*****]
---------------------------------
[*******] [*****]
---------------------------------
[*******] [*****]
---------------------------------
[**** (********)] [******]
---------------------------------
[*******]
[********] [*****]
-----------------------------------------------------------------------------
[*********] [***************] [******************]
-----------------------------------------------------------------------------
[*******] [********] [********] [********]
-----------------------------------------------------------------------------
[********] [********] [********] [********]
-----------------------------------------------------------------------------
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
27
ATTACHMENT D
TERAYON TRAINING PROGRAM
1. TERACOMM SYSTEM OVERVIEW
. Current System Release Supported Feature Sets
. Provisioning Server - Overview & Demo
2. TERACOMM SYSTEM TRAINING
3. PRE-INSTALLATION CRITERIA
. Network/Plant Characterization & Readiness
. LAN / WAN Network Preparation
. In Home Installation
. Billing & Provisioning Preparation
. Headend Combining & Splitting
4. TERACOMM SYSTEM INSTALL & ACTIVATION
. INITIAL System Turn up and Configuration
. CU Installation
. RU Installation
. RU to CU Connectivity
. Router Connection / ACIP
. Subscriber Activation & Disconnect
5. TERACOMM SYSTEM MANAGEMENT & TROUBLESHOOTING
. Diagnostics & Trouble Shooting
. System Faults & Alarms
. SNMPc / MIBs
Terayon Training Schedule to be updated as required.
28
CONFIDENTIAL TREATMENT REQUESTED
ATTACHMENT E
[***********************************]
===================================================================================================
[*************] [*****] [**********]
---------------------------------------------------------------------------------------------------
[*******] [***************************************** [********]
**********************************************
************]
---------------------------------------------------------------------------------------------------
[*******] [***************************************** [*******]
********************************************
***************************]
---------------------------------------------------------------------------------------------------
[********** [***************************************** [*******]
********] ********************************************
***************************]
---------------------------------------------------------------------------------------------------
TER - 002.2P 4. Apparatus and method for establishing Frame 7/19/96
(CIP #2) Synchronization in Distributed Digital Data
Communications Systems
---------------------------------------------------------------------------------------------------
[*******] [************************************** [*******]
***********************************************
*************]
---------------------------------------------------------------------------------------------------
TER - 004 6. Apparatus and method for Digital Data 3/14/96
Transmission over CATV system using
ATM Transport protocol
---------------------------------------------------------------------------------------------------
[**********] [***************************************** [*******]
***************************************
*******************]
---------------------------------------------------------------------------------------------------
[********** [***************************************** [*******]
*****] ************]
---------------------------------------------------------------------------------------------------
[********** [****************************************] [*******]
*****]
===================================================================================================
[*] - Indicates confidential information that has been omitted and filed
separately with the Securities and Exchange Commission.
