EXHIBIT 10.2
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AMENDMENT NUMBER ONE TO RESELLER AND SERVICES AGREEMENT
BETWEEN CABLETRON SYSTEMS, INC.
AND DIGITAL EQUIPMENT CORPORATION
This Agreement, dated February 7, 1998, constitutes Amendment number one
(1) to the Reseller and Services Agreement by and between Cabletron Systems,
Inc. ("Seller") and Digital Equipment Corporation ("Digital") dated November 24,
1997 ("Reseller Agreement"). Capitalized terms not otherwise defined herein
shall have the respective meanings ascribed to them in the Reseller Agreement.
WHEREAS, Seller and Digital desire to amend certain provisions of the
Reseller Agreement,
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller and Digital hereby agree as
follows:
The Reseller Agreement is hereby amended by either substituting the following
sections and appendices for the corresponding sections and appendices contained
in the Reseller Agreement or, in cases where a particular section set forth
below is not currently contained in the Reseller Agreement (as indicated by the
words "(Insert as new section)" immediately preceding the new section), by
inserting such section into the appropriate place in the Reseller Agreement. To
the extent that the insertion of a new section would alter the section numbering
of the Reseller Agreement, the Reseller Agreement should be renumbered
accordingly. For the purposes of this Amendment, however, preexisting sections
will be numbered as they were in the Reseller Agreement prior to this Amendment.
1.40 "PRODUCT INFORMATION" shall mean descriptions, documentation, technical
tips, Software support tools, publications, technical newsletters, training
materials and all other information in any media which Digital may
reasonably require in order to sell, support and maintain the Products
and/or deliver Services to Customers.
4.4 The price of Spare Parts used for the provision of Contract Services of NPB
Products shall be [ * ] from the pricing set forth in Sections 4.1 and 4.2.
Unless otherwise agreed between the parties, no MDF or incentive programs
shall apply to such purchases. The price for repair services for NPB
Product Spare Parts
* Confidential Treatment has been requested as to certain portions of this
agreement. The term "Confidential Treatment and the xxxx (*) is used
throughout this agreement in order to indicate that material has been omitted
and separately filed with the Securities and Exchange Commission.
provided in connection with Digital's provision of Contract Services for NPB
Products shall be [ * ].
4.7 Seller's prices, when sold and/or shipped to Digital, shall include all
charges such as packaging, packing, customs duties imposed before passage
of title, and all taxes except sales, use and other such taxes imposed
upon the sale or transfer of Product for which Digital is solely
responsible under applicable law and for which Digital is properly in
voiced by Seller. If Product or Spare Parts are supplied without normal
packaging or packing, Seller will pass on to Digital its resultant cost
savings in connection therewith.
6.1 Prior to delivery, Seller shall insure that all Products conform in all
material respects to the guidelines set forth on Schedules 6.1 and 6.1.1
as applicable.
6.2 Digital may perform source inspection and quality assurance reviews in
accordance with the Quality Assurance Guidelines contained in Schedules
6.1 and 6.1.1 as applicable, but this shall in no way relieve Seller of
its obligation to materially conform to the guidelines set forth in
Schedules 6.1 and 6.1.1 respectively, nor does said right of inspection
waive (i) any of Seller's obligations hereunder; (ii) the rights of
Digital to inspect the Products upon delivery; or (iii) the specific
Product Warranty provisions. Seller shall assist Digital, at Digital's
request, in performing such inspection and reviews.
6.3 Seller shall have fourteen (14) days from the date of notification by
Digital of a deviation from the Quality Assurance Guidelines or, for
Seller Products, the quality guidelines established by the parties
pursuant to the Service Implementation Plan described in Section 8.2.3, to
cure such deviation. In the event such a deviation is not cured within
fourteen (14) days, Digital, at its option, may:
6.3.2 immediately terminate Seller's right to continue to use the Digital
Marks on any Digital-Branded Products.
* Confidential Treatment
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7.4 Seller shall pay Digital [ * ]. The foregoing takes into account the fact
that Digital will provide as part of the Warranty Services (i) call
handling, (ii) pur chasing, stocking and storage of Spare Parts and
replacement whole units, and (iii) logistics and revision management, and
will not be providing repair services.
8.2.3 Digital shall not commence its obligations under Sections 8.2.1 and 8.2.2
until ninety (90) days following the Closing Date. During such ninety (90)
day period, Seller and Digital shall enter into a mutually agreeable
service implementation plan (the "Service Implementation Plan") which
provides sufficient additional details beyond the contractual provisions
necessary to ensure a quality service delivery and an efficient working
relationship between Seller and Digital for the servicing of Seller
Products. Such Service Implementation Plan shall include, but not be
limited to, sufficient detail on: (i) quality; (ii) Product Information
and documentation in any medium and from any Seller source, system, or
database; and (iii) branding. The agreement by the parties with respect to
such plan shall be subject to the Escalation Process contained in Schedule
3.1 of the Reseller Agreement, and the scheduling of the agreement process
shall be given sufficient priority to ensure its successful completion.
8.8 Seller acknowledges that Digital's worldwide implementation of the
Services contemplated by this Agreement will likely be accomplished in a
phased approach. Seller also acknowledges that Digital's ability and
commitment to perform such Services is greatly dependent on Seller's
delivery to Digital of all necessary training, tools, diagnostics,
information and support ("Readiness Requirements") in a timely and
efficient manner. As such, Seller will work with Digital to establish a
Service Readiness Plan, (the "Plan"). The Plan shall be incorporated by
reference into this Agreement, and shall establish detailed operational
instructions concerning how to invoke the service relationship created by
this Agreement. The parties
* Confidential Treatment
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agree to assign the necessary resources to begin the development of the
Plan immediately upon execution of this Agreement. Specifics to be
included in the Plan shall be: (i) Seller's deliverables respecting
Digital's implementation of Warranty Services and Contract Services; (ii)
logistics planning and disposition requirements; (iii) training and
information/documentation deliverables for all NPB Products, Digital-
Branded Products and Seller Products; (iv) Digital staffing and training
requirements to satisfy mutually acceptable certification levels; (v)
field deployment (persons/equipment); (vi) communications and
infrastructure requirements; (vii) problem tracking and reporting
requirements; (viii) sales forecasting details (types/frequency) by
region/territory; and (ix) service quality metrics. Readiness
Requirements for New Products shall be added to the Plan by amendment.
8.13 Seller will package Spare Parts consistent in all material respects with
MCS' current packaging requirements, a copy of which is attached hereto
as Schedule 6.1.
8.15 Seller's exclusive remedies for Digital's failure to perform Services in
accordance with the applicable descriptions of such Services agreed to by
the parties are i) to request that Digital perform conforming Services;
or ii) to receive a refund of the amount(s) paid to Digital for such
Services. Digital shall not be liable for any costs or other expenses
incurred by Seller in connection with such failure.
9.1.1. Digital may terminate this license with respect to an individual Digital-
Branded Product if Seller neglects or fails to perform or observe any of
the obligations set forth on Schedule 9.1.1 with respect to such
individual Digital-Branded Product if Digital determines, in its sole
discretion, that such neglect or failure causes a material adverse effect
on Digital's trademark rights, and such condition is not remedied within
thirty (30) days after written notice of such neglect or failure; or if
Seller enters bankruptcy proceedings, becomes insolvent, makes an
assignment for the benefit of its creditors, discontinues its business or
is placed in receivership. Notwithstanding the foregoing, if Seller is
using reasonable and prompt efforts to cure such neglect or failure,
Digital shall not exercise its right of termination hereunder until the
earlier of (i) ten (10) days after the end such thirty (30) day cure
period, and (ii) Seller ceases using reasonable efforts to cure such
neglect or failure, as determined in Digital's sole discretion.
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9.3 Seller shall submit all uses of the Digital Marks and the Digital Brand
to Digital for its prior approval, which shall not be unreasonably
withheld. Digital shall use reasonable efforts to grant or deny such
approval promptly. As of the Closing Date, the Digital contact person for
such approval shall be Xxxx Bouchenoire. All current uses of the Digital
Marks and the Digital Brand on NPB Products and NPB Product packaging
shall be deemed to have been approved. Digital's approval of any standard
layouts and designs shall be limited to ensuring that such layouts and
designs comply with the standards set forth in Schedule 9.1.1, as the
same may be amended from time to time. After a layout or design has been
approved. Seller may use the approved layouts or designs and
substantially identical layouts and designs upon products, packaging and
marketing collateral without further approval of Digital, except in the
event that the standards set forth on Schedule 9.1.1 have been modified
by Digital, in which case all such layouts and designs must be
resubmitted to Digital for reapproval. The parties shall meet once per
year for Digital to review all uses of the Digital Marks, the Seller
Trade name, and the Digital Brand and confirm that such uses are in
accordance with this Agreement.
9.6 After the Closing Date, the Seller Products listed on Schedule 9.6 shall
be sold under the Digital Marks in accordance with the Product Road Map.
Before the First Revenue Ship of such Products under the Digital Marks,
Seller must have met all of Digital's requirements with respect to the
items listed in Section 8.8 to ensure that Digital is prepared to be the
exclusive provider of Warranty Services and the Strategic Network
Services Partner for Contract Services for all such Products. Digital
shall use reasonable efforts to expedite the approval of the branding of
all such Seller Products with the Digital Marks, it being understood that
the average time required is expected to be no less than eight (8) weeks
but in no event shall exceed twelve (12) weeks after the Closing Date.
9.9 Seller shall be entitled to refer to an organization within Seller that
predominantly sells Digital-Branded Products as the "DIGITAL Network
Products Group, a Cabletron Systems, Inc. Company" (the "Seller Trade
name").
9.9.2 Seller may not use the word xxxx "DIGITAL" other than i) as part of
the Seller Trade name, ii) in all capital letters, and (iii) as set forth
in this Agreement.
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9.9.4 The Seller Trade name and the Relationship Logo may only be used to
identify the group or division within Seller which is manufacturing,
selling, marketing, and servicing Digital-Branded Products and doing
business under the Seller Trade name and the Relationship Logo. They may
not be used for product branding.
9.9.7 The example set forth on Schedule 9.9.5 illustrates permitted uses of
Seller Trade name and Relationship Logo, subject to Digital's approval
with respect to color, size and appearance of the Digital Brand.
9.10 Seller shall abide by the Digital Trademark License and Quality
Requirements terms set forth on Schedule 9.1.1.
11.2 Seller hereby grants to Digital and its Authorized Warranty Service
Providers a royalty-free, non-exclusive, worldwide license to reproduce
and distribute, in whole or in part, (i) all Product Information
excluding documentation and training materials which the Seller markets
for profit; and (ii) any other service-related materials or documentation
provided by Seller to Digital or Digital Partners hereunder.
12.1 Digital owns all right, title and interest, including all Intellectual
Property Rights in all materials (including diagnostic software, hardware
and software tools and associated documentation) developed by Digital for
its own use or the use of its Authorized Warranty Service Providers in
the performance of Services.
12.2 Seller hereby grants to Digital and its Digital Partners a non-exclusive,
worldwide license, until the expiration of the last Digital Services
Agreement, to duplicate, use, and distribute, directly and indirectly,
all Software, including revisions and updates. All Software, including
revisions and updates, shall be available for duplication and
distribution internally by Digital, and to Customers and/or third parties
via down-loading from Seller's on-line database(s). Digital will pay
Seller a royalty on any Software that is duplicated and distributed by
Digital, at rates to be negotiated by the parties. Royalty payments shall
be reduced by the amount of any tax required to be withheld against
Seller income from royalties by a government or governmental agency;
provided that the parties shall cooperate in good faith to reduce such
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withholding to the extent legally possible. Where reduced or nil rates of
withholding tax apply under the provisions of double
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taxation treaties, Seller shall provide Digital with the authorizations
necessary to apply for such rates, and Digital shall make such filings as
may be necessary to claim the benefit of the reduced or nil rate. Digital
shall provide Seller any certification of the amounts withheld and copies
of any certificates furnished by a withholding jurisdiction. In the event
that Digital makes any payment without deduction of withholding tax,
Seller shall indemnify Digital against any subsequent liability arising
from the failure to make such a deduction. Prior to First Revenue Ship of
a Software Product or revision or upgrade thereto, Seller will provide
Digital with a distribution master for such Product, revision or upgrade.
12.2.1 Notwithstanding the foregoing, Digital may issue no charge Purchase
Orders for all Software that is provided by Seller generally to Customers
at no cost. Such Software shall be provided to Digital in such quantities
as requested by Digital, on a royalty-free basis. Seller may, at Seller's
option, provide Digital with an electronic master copy to make copies for
Digital's internal use.
12.3 Seller hereby grants to Digital and its Authorized Warranty Service
Providers a royalty free, non-exclusive, worldwide license, until the
expiration of the last Digital Services Agreement, to use and distribute,
and to provide Customers, both directly and indirectly, electronic access
to all data and information contained in Seller's Product Information
database (excluding company confidential information and documents and
training materials which Seller markets for profit) for the purpose of
providing support to Customers.
13.3 Seller shall make available for use by Digital and Digital's Authorized
Warranty Service Providers service tools (including diagnostic software
and hardware, hardware tools and associated documentation) to assist
Digital and Digital's Authorized Warranty Service Providers in performing
Services hereunder. The types, quantities and deployment of such service
tools will be mutually determined by the parties. The proprietary service
tools shall remain the exclusive property of Seller, and shall be
returned to Seller upon expiration or termination of this Agreement.
21.1 The manufacturer of a Digital-Branded Product shall bear all costs
associated with the one year manufacturer's warranty. The manufacturer of
a
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Seller Product shall bear all costs associated with the standard
manufacturer's warranty for such Seller Product.
21.3 Seller warrants that all Digital-Branded Products sold by Seller to
Digital under the terms of this Agreement will be free from defects in
workmanship and materials under normal use and service for (i) one year
for hardware and Software and (ii) ninety (90) days for floppy discs and
magnetic media. All Warranty claims for Digital-Branded Products must
comply with the terms of the Warranty set forth on Schedule 8.10. The
manufacturer of a Digital-Branded Product, whether Digital or Seller, as
the case may be, shall be responsible for all Digital-Branded Product
repairs during the warranty period. Seller shall be responsible for all
Seller Product repairs during the applicable standard manufacturer's
warranty period.
21.4 Seller warrants that (i) Software contained in Digital-Branded Products
provided hereunder will perform in substantial conformance to the program
specifications therefor during its one-year warranty period; (ii)
Software contained in Seller Products provided hereunder will perform in
substantial conformance to the program specifications therefor during its
applicable standard manufacturer's warranty period; (iii) that all
defects in Software, whether contained in Digital-Branded or Seller
Products, identified during the applicable warranty period will be
corrected; (iv) that all Software is Year 2000 Compliant; and (v) that
the magnetic media containing Software will not fail during the first
ninety (90) days.
21.5 The Warranty for Digital-Branded Products shall be as set forth on the
Warranty Schedule attached hereto, Schedule 8.10. The parties shall
mutually agree on all additions to, deletions from or changes to the
Schedule. Prior to shipment of any Digital-Branded Products, Seller shall
incorporate the Warranty set forth on Schedule 8.10 into its Digital-
Branded Products literature, documentation and corresponding Warranty
registration cards or forms.
21.7.1 In the event that Seller evaluates and determines that there is NPF in
greater than ten percent (10%) of the Products or parts returned in a six
(6) month period, Seller reserves the right to charge Digital for each
returned unit determined to be NPF thereafter, the lesser of (i) $150 or
(ii) twenty-five percent (25%) of the purchase price.
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21.7.2 [Section renumbered as 21.7.1]
(Insert as new section)
21.8 [Text of former 21.7.1]
(Insert as new section)
21.11 Digital's exclusive remedies for breach of any warranties set forth in
this Section 21 are (at Seller's option) (i) repair or replacement of the
applicable Product or a refund of the purchase price; or (ii) the
provision of conforming services. Seller shall not be liable for any
costs or other expenses incurred by Digital in connection with such
breach.
22.1.1 [ * ]
* Confidential Treatment
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Except as amended hereby, the Reseller Agreement remains in full force and
effect.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives.
DIGITAL EQUIPMENT CORPORATION SELLER
/s/ Xxxxx Xxxxxxxx /s/ Xxxxx X. Xxxxxxxxxxx
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Authorized Signature Authorized Signature
Xxxxx X. Xxxxxxxxxxx
Xxxxx Xxxxxxxx Senior Vice President and
Vice President, Finance Chief Financial Officer
-------------------------------- --------------------------------------
Name and Title Name and Title
February 7, 1998 February 7, 1998
-------------------------------- --------------------------------------
Date Date
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CABLETRON SYSTEMS, INC.
SCHEDULES AND EXHIBITS
INDEX
Schedule 3.1 -- Appendix 1 - Product Road Map
Schedule 6.1.1 -- Quality Assurance Guidelines for Software
Schedule 9.1.1 -- Trademark License and Quality Requirements
Appendix 1 -- The Digital Brand
Appendix 2 -- DEC Formative Marks
Appendix 3 -- Digital Logo Reproduction Requirements
Appendix 5 -- Digital Brand Usage Requirements
Appendix 6 -- Usage Criteria for DEC Formative Marks
Appendix 7 -- Relationship Logo Usage Requirements
Schedule 9.6 -- Seller Products to be Digital-Branded
Schedule 9.8 -- Standards for Use of the Digital Marks
Schedule 9.9.5 -- Sample Business Card
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