COLLABORATION AGREEMENT
THIS COLLABORATION AGREEMENT (this "Agreement") is made and entered into
effective as of the 25th day of November, 1996 (the "Effective Date") by and
among Hybrid Networks, Inc., a Delaware corporation, having its principal
place of business at 00000 Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx 00000-0000,
U.S.A. ("Hybrid"), Sharp Corporation, a Japanese corporation, having its
principal place of business at 00-00 Xxxxxxx-Xxxx, Xxxxx-xx, Xxxxx, Xxxxx
("Sharp") and ITOCHU Corporation, a Japanese corporation, having its
principal place of business at 0-0, Xxxx-Xxxxxx 0-xxxxx, Xxxxxx-xx, Xxxxx
000-00, Xxxxx ("Itochu"), with reference to the following facts and recitals:
RECITALS:
WHEREAS, Hybrid has developed certain cable modems (Model Numbers
CCM-101/161/201/211) (the "Current Cable Modems") and wishes to develop
certain new cable modems (N-series cable modems), for use in the cable
television environment (the "New Cable Modems"; together with the Current
Cable Modems, collectively, the "Cable Modems"), as more particularly
described in Exhibit A hereto, and is looking for business partners to help
pursue and further the development of the Cable Modems and the business
relating thereto;
WHEREAS, Sharp is a leading manufacturer and supplier of, among other
items, Electronic Components and Systems and is willing to become a business
partner with Hybrid in the field of development in furtherance of the Cable
Modem technology and in pursuit of required commercial productions thereof;
WHEREAS, Itochu is a leading sogoshosha in Japan and is willing to
become a business partner with Hybrid and Sharp in the sales and marketing
aspects of the Cable Modems; and
WHEREAS, Hybrid, Sharp and Itochu (collectively, the "Parties" and each
individually, a "Party") wish to form a business alliance and collaborate
with one another in order to develop and pursue such New Cable Modem business;
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained and for other good and valuable
consideration, adequacy and receipt of which are hereby acknowledged, the
Parties hereby agree as follows:
1. BUSINESS ALLIANCE FOR CABLE MODEM.
Subject to the terms and conditions herein set forth, Hybrid hereby
engages Sharp and Itochu, and Sharp and Itochu shall use their reasonable
efforts, to collaborate with and help Hybrid in order to (i) further develop
and improve the New
Cable Modems and (ii) develop and procure supply sources and marketing
channels for the Cable Modems. This Agreement shall govern the general terms
and framework pursuant to which the Parties shall achieve the aforementioned
purposes.
2. OEM SUPPLY.
Hybrid shall engage Sharp and Itochu, and Sharp and Itochu shall
act, respectively, as an exclusive OEM supplier and as an exporter to Hybrid
for the New Cable Modems developed under this Collaboration Agreement, upon
terms and conditions to be reasonably agreed in writing among Hybrid, Sharp,
and Itochu. The exclusivity provision of this section shall continue in force
for the entire period of this Collaboration Agreement as long as the volume,
delivery schedule, and price to Hybrid of the New Cable Modems manufactured by
Sharp shall meet reasonable targets to be established and agreed upon
periodically among the Parties.
3. COST REDUCTION EFFORT.
Sharp shall study, examine, and on a reasonable efforts basis
determine a method to achieve a reasonable production cost for the New Cable
Modems at a level that is reasonably necessary to achieve market acceptance
for the New Cable Modems while providing reasonable margins, as agreed to by
the Parties, upon sale to end users, and shall submit a cost reduction
proposal to Hybrid; provided that Sharp shall be provided with the disclosure
pursuant to Section 4 below. Subject to Section 2 above, Sharp shall
manufacture and supply the New Cable Modems in accordance with the proposal
to be submitted by Sharp and Itochu to Hybrid and the terms and conditions to
be agreed upon pursuant to Section 2.
4. DISCLOSURE.
As soon as reasonably practicable after the execution of this
Agreement, Hybrid shall provide to Sharp such adequate disclosure of all
design, engineering and other technical information for the Cable Modems as
Sharp may reasonably request.
5. JOINT DEVELOPMENT OF NEW CABLE MODEMS.
Hybrid and Sharp shall perform a joint development of the New Cable
Modems using the respective technologies of Hybrid and Sharp upon the terms
and conditions to be reasonably agreed in writing between Hybrid and Sharp,
so as to ensure that such New Cable Modems will be competitive in the
marketplace; provided that Sharp shall be provided with the disclosure
pursuant to Section 4 above.
6. LICENSED PRODUCTION.
The New Cable Modems and the technology incorporated therein (other
than Sharp technology or a third party's technology whether used by Sharp
with or without license) shall be the property of Hybrid, Hybrid shall have a
license to use any Sharp technology incorporated in the New Cable Modems and
any derivatives thereof
under separately agreed-upon terms and conditions. Hybrid agrees to grant a
license under royalty to Sharp to manufacture the New Cable Modems bearing
Sharp's own brand, and to market and supply such New Cable Modems to any
person or entity other than Hybrid, subject to the terms and conditions to be
reasonably agreed upon in writing between Hybrid and Sharp and subject to the
Parties' once entering into agreements concerning OEM supply, joint
development, and the other matters referred to herein, including, without
limitation, license fees and the scope and duration of such licenses.
Royalties will not be due to Hybrid for any New Cable Modems that Sharp
manufactures and supplies to Hybrid, either directly from Sharp or indirectly
through Itochu, either on a OEM or on a licensed production basis, for Hybrid
to sell through its own channels.
7. COOPERATION WITH HYBRID'S MARKETING EFFORT.
Subject to terms and conditions to be reasonably agreed upon in
writing by the respective Parties, Itochu shall cooperate with Hybrid and
Sharp, each, to market and supply the Cable Modems to such customers or
channels and on such terms as the Parties may agree upon.
8. TECHNICAL SUPPORT.
As soon as reasonably practicable after Sharp is provided with the
disclosure pursuant to Section 4 above, Sharp shall send three technical
staff members at the first stage to Hybrid for the purpose of assisting
Hybrid in terms of a cost reduction and mass production design of the Cable
Modems so that Sharp can make an early start of mass production, and also for
the purpose of learning about the PoP that will be required for the mass
production, test, and evaluation of the Cable Modems.
9. TERM.
The term of this Agreement shall commence on the Effective Date and
shall continue in full force until December 31, 1999.
10. FUTURE ASSURANCE.
The Parties shall cooperate with one another in good faith in order
to achieve the purposes and intent of this Agreement.
11. CONFIDENTIALITY.
No Party shall disclose to any third party or use for its own
benefit or for the benefit of any third party any information disclosed by
the other Party or Parties and explicitly designated confidential at the time
of disclosure during the term of this Agreement and for three years
thereafter.
12. OWNERSHIP OF INTELLECTUAL PROPERTY.
All intellectual property and other proprietary rights developed or
invented by a Party in connection with this Agreement shall belong to the
inventory Party; provided, that such property or right developed or invented
by the joint effort of both Hybrid and Sharp shall belong jointly to Hybrid
and Sharp as co-owners and be separately and independently sub licensable.
13. GENERAL PROVISIONS.
(a) This Agreement sets forth the entire agreement among the
Parties with respect to the subject matter hereof. No amendment to this
Agreement shall be effective unless in writing and signed by duly authorized
representatives of the Parties.
(b) No assignment of rights or delegation of duties under this
Agreement shall be effective unless consented to by the Parties in writing in
advance.
(c) The relationship between and among the Parties under this
Agreement is and remains always that of independent contractors. Nothing
herein contained shall be construed as creating any relationship of agency,
partnership, common enterprise, or fiduciary duty by or among the Parties. No
Party shall have any right, power or authority to incur any liability on
behalf of or in the name of the other Party or Parties.
(d) No Party shall be responsible to the other Party or Parties for
any indirect, special, consequential, incidental or punitive damages of any
nature or kind whatsoever including without limitation loss of profit,
revenue, and business opportunity arising directly or indirectly out of or
connected in any way with this Agreement or any business contemplated herein,
regardless of forms of action, whether by contract, tort, equity or
otherwise, even if it was or should have been aware or advised of the
possibility thereof. No action may be brought against any Party beyond two
(2) years after the cause of action has arisen or should reasonably have been
discovered to have arisen.
(e) This Agreement shall be governed by the laws of California,
U.S.A. Any dispute arising directly or indirectly out of or connected in any
way with this Agreement which shall not be settled among the parties within
30 days after such dispute has been notified by any party shall be submitted
to binding arbitration in San Francisco, California in accordance with the
Rules then in effect of the Arbitration and Condition of International
Chamber of Commerce, whose award or decision shall be final, non-appealable
and binding on the parties and their respective successors and permitted
assigns.
(f) All headings of this Agreement and each Section thereof are for
the purpose of convenience only.
(g) This Agreement shall be binding upon and inure to the benefit
of the parties and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the Parties shall cause this Agreement to be
executed by their duly authorized officers as of the Effective Date.
Hybrid Networks, Inc.
By: /s/ Xxxx Xxxxxxxxx
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Its: CEO
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Sharp Corporation
/s/ Xxxxxxxxx Xxxxx
By: Xxxxxxxxx Xxxxx
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Its: Division General Manager
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Electronic Components Division
ITOCHU Corporation
By: /s/ Xxxxxx Xxxxxx
-----------------------------------
Its: Xxxxxx Xxxxxx
-----------------------------------
General Manager
Telecommunication Systems Dept.
EXHIBIT A
MODEL NUMBER DESCRIPTION
CCM-161 4VSB, phone return, 1000 system software compatible/2000
upgradable
All the following are 2000 system software compatible
CCM-101 4VSB, phone return
CCM-101-S 4VSB, phone return, secure
CCM-201 64QAM, phone return
CCM-201-S 64QAM, phone return, secure
CCM-202 64QAM, phone return internal modem
CCM-202-S 64QAM, phone return internal modem, secure
CCM-211 64QAM, 4VSB cable return
CCM-211-S 64QAM, 4VSB cable return, secure
N-101 4VSB, phone return
N-101-S 4VSB, phone return, secure
N-201 64QAM, phone return
N-201-S 64QAM, phone return, secure
N-202 64QAM, phone return internal modem
N-202-S 64QAM, phone return internal modem, secure
Note all modems listed as cable return, such as CCM-211/211S and N-211/211s,
also support an external phone modem connection
