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CERTAIN CONFIDENTIAL TREATMENT CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.
EXHIBIT 10.16
VTEL CORPORATION and FIRST VIRTUAL CORPORATION
EQUIPMENT MANUFACTURING OEM AGREEMENT
-------------------------------------
This Agreement is entered into as of this 20th day of August, 1997, ("Effective
Date") by and between VTEL Corporation, a Delaware corporation having its
principal place of business at 000 Xxxx Xxxxx Xx., Xxxxxx, XX 00000 ("VTEL"),
and First Virtual Corporation ("First Virtual") having its principal place of
business at 0000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxx Xxxxx, XX 00000.
BACKGROUND
VTEL, is engaged in the design, manufacture, service, integration, and sale and
distribution of multi-media video conferencing systems and has a desire to
expand into the ATM attached video applications market.
First Virtual is engaged in the design, manufacture, and sale of multimedia
networking products, including 25 Mb/s, ATM switches, 25 Mb/s ATM network
interface cards, multimedia operating software known as 'MOS', and other
multimedia server products.
The parties wish to provide for the right and option of VTEL to purchase and
license First Virtual products for distribution and resale by VTEL, as described
in this Agreement.
AGREEMENT
Accordingly, in consideration of the mutual promises, rights and obligations
described in this Agreement, the parties agree as follows:
1. SCOPE
First Virtual will design, test, manufacture, sell, and support OEM versions of
the products described in Schedule A to this Agreement ("OEM Products").
2. LICENSE
2.1.First Virtual hereby grants to VTEL a non-exclusive, non-transferable
worldwide right to market and distribute the OEM Products, and in the case of
software, sublicense, under the VTEL trademark, either directly or indirectly
through its distributors.
0.0.Xx the event VTEL purchases the OEM Products for its own internal use, such
use of the software shall be pursuant to the applicable end user license
agreement delivered with the OEM Products.
2.3.First Virtual hereby grants to VTEL non-exclusive rights to use, modify,
translate, and reproduce, the documentation delivered by First Virtual with the
OEM Products for distribution. VTEL shall not modify, remove, or omit any
copyright or other proprietary notice contained in the documentation. The right
to reproduce copies of documentation shall include the right to have such
reproduction performed by another party on VTEL's behalf, subject to the
obligations relating to confidentiality and protection of First Virtual's
proprietary rights pursuant to this Agreement.
2.4.VTEL's distribution of OEM Products to end user customers shall be pursuant
to VTEL's end user license agreement. Such end user license agreement shall
contain, at a minimum and without limitation, those terms and conditions
provided in Schedule E attached hereto.
3. PURCHASE AND SALE OF OEM PRODUCTS.
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3.1.OPTION TO PURCHASE OEM PRODUCTS; OBLIGATION TO SELL OEM PRODUCTS. VTEL may,
at its option, purchase the OEM Products described in Schedule A from First
Virtual for distribution and resale by VTEL, by placing written orders under
this Agreement. VTEL has no obligation to order a minimum amount of any type of
OEM Product. First Virtual agrees to manufacture and deliver to VTEL OEM
Products in response to all orders placed under this Agreement, provided that
such orders comply with the terms of this Agreement
3.2.ORDERS FOR OEM PRODUCTS. Each order placed by VTEL for OEM Products shall be
governed by the terms of this Agreement; conflicting or additional terms
provided in any order by VTEL or acknowledgment by First Virtual shall be of no
effect unless specifically accepted in writing by an authorized representative
of VTEL and First Virtual. Each order shall specify:
o Description of OEM Products (including applicable item numbers and part
numbers)
o Purchase price
o Specified delivery schedule
3.3.CANCELLATION OR POSTPONEMENT OF ORDERS. VTEL may cancel or reduce the
quantity of any order without liability on or before sixty (60) days in advance
of the ship date specified in VTEL's order without cancellation charge. VTEL may
cancel or reduce the quantity of any order on or before [ * ] days in advance of
the ship date specified in VTEL's order by paying First Virtual a cancellation
charge equal to [ * ] of the purchase price of that portion of the order which
is canceled. VTEL may postpone the delivery of any portion of an order one time
for up to one hundred eighty (180) days without any liability by delivering
written notice to First Virtual on or before thirty (30) days in advance of the
ship date specified in VTEL's order.
0.0.XXXXXXXX OF OEM PRODUCTS IN RESPONSE TO ORDERS. VTEL may place orders for
delivery forty-five (45) days from First Virtual's receipt of the order. VTEL
acknowledges that First Virtual may confirm such shipments with delivery dates
which are no more than ninety (90) days from receipt of order. Notwithstanding,
First Virtual will use all commercially reasonable efforts to deliver OEM
Products to VTEL in the quantities ordered by VTEL by the shipment date
specified in VTEL's order or as soon as possible prior to the delivery date
confirmed by First Virtual.
3.5.PRICES; PAYMENT. Prices for the OEM Products shall be those set forth in
Schedule B, less all applicable discounts. Prices exclude all freight-in and
insurance as provided by this Agreement. All prices are exclusive of any tax
levied or based on the equipment, (collectively "Taxes"). VTEL shall pay such
Taxes (other than income and franchise taxes of First Virtual), or provide First
Virtual with a certificate of exemption acceptable to the appropriate taxing
authority. Payment shall be due thirty (30) days from the date of shipment
subject to VTEL's acceptance of the OEM Products pursuant to Section 4.
3.6.SHIPMENT; CHANGES; TITLE; RISK OF LOSS. OEM Products shipped in response to
VTEL's orders will be shipped F.O.B. origin. Title and risk of loss will pass to
VTEL upon shipment. VTEL's orders shall identify VTEL's preferred method of
shipment, designated carrier, and VTEL's account number with the carrier.
3.7.NON-BINDING ROLLING FORECAST. To assist First Virtual in delivering OEM
Products, VTEL agrees to provide First Virtual, on a monthly basis, with a three
(3) month rolling forecast for its projected orders for OEM Products. The
provision of such forecast shall in no way bind VTEL to actually place orders
for any such quantities nor otherwise expose VTEL to liability.
3.8.MINIMUM ORDERS FOR OEM PRODUCTS. Nothing in this Agreement shall be
construed as requiring that VTEL order any specific minimum amount of OEM
Product.
4. ACCEPTANCE.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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The parties acknowledge the requirement that the OEM Products be supplied with
as close to a "zero defect rate" as is practically possible. Each OEM Product is
subject to final inspection and acceptance at VTEL's facility within ten (10)
business days after delivery. First Virtual will follow good manufacturing
practices (equivalent to IPC Class II for electrical assembly and ISO9000
requirements) utilizing materials, techniques, and procedures which conform to
industry standards. First Virtual will make available to VTEL, upon request,
information regarding First Virtual's quality assurance procedures. VTEL may
conduct and observe tests and inspections at First Virtual's manufacturing plant
when VTEL notifies First Virtual one day in advance.
5. WARRANTIES; REMEDIES.
0.0.XXXX FROM DEFECTS. For the hardware components of the OEM Products, First
Virtual warrants that each OEM Product delivered to VTEL shall be free from
defects in material and workmanship for one year after shipment to VTEL's end
user customer, but in no event later than fifteen (15) months from delivery to
VTEL; for the software components of the OEM Products, the media shall be free
from defects in materials and workmanship for ninety (90) days ("Warranty
Period"). First Virtual represents and warrants that the OEM Products, hardware
and software inclusive, shall conform to First Virtual's published designs and
specifications applicable at the time of shipment.
5.2.TESTING. First Virtual warrants that it will test each and every OEM Product
to ensure conformance to the design and specifications before delivery to VTEL.
0.0.XXXX FROM LIENS, POWER TO PERFORM. First Virtual warrants that the OEM
Products delivered under this Agreement shall be free from all liens,
encumbrances, and restrictions. First Virtual warrants that it has all rights
and powers necessary to performs its obligations under this Agreement and to
grant the licenses and other rights provided to VTEL by this Agreement.
0.0.XXXXXXXX. First Virtual warrants that all services performed under this
Agreement will be performed in a professional manner and in accordance with the
terms of this Agreement.
5.5.REMEDIES. If VTEL discovers a defect or non-conformance during the Warranty
Period, VTEL shall promptly notify First Virtual of any non-conforming material
to obtain a Return Materials Authorization number ("RMA"). First Virtual agrees
to accept the return of OEM Products that VTEL determines does not meet the
warranties described in this Section. Upon VTEL receipt of the RMA, VTEL shall
cause the return of the non-conforming OEM Product to First Virtual at VTEL's
cost. Upon its receipt, First Virtual shall promptly either repair or replace
it, at First Virtual's option and cost. Properly repaired or replaced OEM
Product shall promptly be delivered to VTEL and the Warranty Period therefor
shall continue for ninety (90) days following delivery of the returned OEM
Product to VTEL or the balance of the original Warranty Period, whichever is
longer. First Virtual shall bear the cost for shipment of OEM Products for
warranty repair to VTEL's designated facility. If the defect is attributable to
a problem with software, First Virtual shall promptly provide VTEL with a
suitable patch, fix, or work-around sufficient to enable the OEM Product to
operate in accordance with First Virtual's published documentation and
specifications provided with the OEM Product at the time of shipment. These
remedies are in addition to any others which may be provided by this Agreement
or by law.
5.6.LIMITATIONS. This warranty does not include damages due to inadequate
operating environment, accident, disaster, neglect, abuse, misuse, or
alterations made without approval by First Virtual. THE FOREGOING WARRANTIES ARE
IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE.
6. TECHNICAL ASSISTANCE, SUPPORT AND TRAINING.
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6.1.TECHNICAL ASSISTANCE. First Virtual shall provide VTEL with the technical
assistance and maintenance support as is more specifically described in Schedule
C. The parties anticipate that VTEL or its resellers, or service providers will
perform maintenance for OEM Products delivered to end user customers, and that
First Virtual will provide "factory level" support to VTEL to enable it to
perform satisfactory maintenance of the OEM Product for VTEL's customers. Such
technical assistance shall be provided to VTEL free of charge.
VTEL's support responsibilities shall be limited to the OEM Products. VTEL shall
not be responsible for supporting other First Virtual products which the end
user customer may be using in association with the OEM Products, including but
not limited switches and gateway products.
0.0.XXXXXXXX. First Virtual shall provide VTEL with training as is more
specifically described in Schedule D, including a general introduction to the
First Virtual products and detailed training on the OEM Products and updates,
and sales and support training.
7. INDEMNIFICATION; PROPRIETARY RIGHTS.
7.1.INDEMNIFICATION BY FIRST VIRTUAL. First Virtual will, at its own expense,
defend, indemnify, and hold VTEL harmless from any and all claims, costs,
expenses, damages, or other liability, including reasonable attorneys' fees, to
the extent that any such action is based on a claim by a third party (i) that
any OEM Product infringes a patent, trademark, or copyright, or misappropriates
any trade secret, or (ii) which is based upon the use, distribution, operation,
or performance of any OEM Product, anywhere in the world. First Virtual's
obligations under the preceding are subject to the conditions that: (a) VTEL
promptly notifies First Virtual in writing of any such claim, and (b) First
Virtual will have sole control of such defense and all negotiations for any
settlement or compromise.
If First Virtual receives notice of an alleged infringement or if use or
distribution of any OEM Product shall be prevented by an injunction based on
alleged infringement, First Virtual shall have the right, at its option to (i)
obtain the rights for VTEL to continue use and distribution of such OEM Product
or technology, (ii) substitute other suitable OEM Product, software and/or
technology while maintaining the same form and function, or (iii) modify such
OEM Product so that it is no longer infringing while maintaining the same form
and function. In the event (i), (ii), and (iii) are not commercially feasible,
VTEL shall return the infringing OEM Product and First Virtual shall refund to
VTEL the price paid for such OEM Product. First Virtual shall have no liability
to VTEL with respect to any claim of patent, copyright, or any other
intellectual property right infringement which (a) arises solely from the
combination or utilization of the OEM Product with any hardware or software not
furnished or approved by First Virtual, or (b) results from the use of an
infringing OEM Product if such infringement would have been avoided by the use
of a noninfringing version of the OEM Product as provided by First Virtual to
VTEL.
7.2.INDEMNIFICATION BY VTEL. VTEL will defend at its own expense any action
brought against First Virtual by a third party, to the extent (i) that it is
based on any warranties made by VTEL to a third party in excess of the
warranties provided under this Agreement, or (ii) the claim is based on
specifications provided by VTEL to First Virtual. VTEL's obligations under the
preceding are subject to the conditions that: (i) First Virtual promptly
notifies VTEL in writing of any such claim, and (ii) VTEL will have sole control
of such defense and all negotiations for any settlement or compromise.
7.3.PROPRIETARY RIGHTS OF VTEL. VTEL reserves all proprietary rights in all
original works, computer programs, discoveries, inventions, patents, know-how,
techniques, designs, maskworks, engineering details and other data developed by
VTEL, including all information relating to the network management interface
circuitry and technology disclosed to First Virtual by VTEL.
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7.4.PROPRIETARY RIGHTS OF FIRST VIRTUAL. First Virtual reserves all proprietary
rights in all original works, computer programs, discoveries, inventions,
patents, know-how, techniques, designs, maskworks,
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engineering details and other data developed by First Virtual Corporation,
including all information relating to the network management interface circuitry
and technology disclosed to VTEL by First Virtual.
8. ENGINEERING CHANGES.
8.1.REQUIRED CHANGES. First Virtual reserves the right to make engineering
changes at any time to the OEM Products (i) which are necessary to comply with
changed safety or environmental standards and other environmental regulations,
(ii) which are necessary to make the product non-infringing with respect to any
patent, copyright or other proprietary interest, or (iii) which are for the
purpose of improving the quality, reliability or manufacturability of the OEM
Products provided that such improvement shall not affect the form, fit, or
function of the OEM Products.
8.2.OPTIONAL CHANGES. In the event First Virtual modifies its standard product
version of the OEM Product for reasons other than those specified in this
Section, the parties shall mutually agree with respect to when such modification
shall be incorporated in the OEM Products.
8.3.NOTICE OF CHANGES. First Virtual will provide at least thirty (30) days, or
as soon as known by First Virtual, written notice to VTEL's project manager of
all planned permanent or temporary changes to the OEM Products which impact
form, fit or function, as required by safety, environmental or other
governmental compliance of the OEM Products. The notice will include a summary
of the expected impact of any such planned change on the above listed
characteristics of the OEM Products. VTEL shall have the right to cancel
outstanding orders for any OEM Products that are subject to such changes without
incurring any penalty.
9. UPGRADE OF TECHNOLOGY
9.1.NOTICE. First Virtual will notify VTEL of upgrades to First Virtual's
standard products which correspond to the OEM Products. Such notice shall be
provided to VTEL, upon determination of First Virtual's standard product plans
and VTEL shall have the option to have such modifications incorporated in OEM
Products within the same timeframe of such planned upgrades or at a later date
as determined by VTEL.
9.2.CHARGES FOR UPGRADES. If such upgrades or enhancements are provided to other
customers at no additional charge, there will be no increase in the unit price
for OEM Products under this Agreement. Otherwise, such upgrades shall be
provided to VTEL in accordance with the pricing in Schedule B. It should be
noted that the intent of this Agreement is to produce OEM Products that are
similar to First Virtual's standard product.
10. SUPPLY OF PRODUCT AND SPARES
10.1.END-OF-LIFE PURCHASES. In the event of termination of this Agreement, VTEL
will be entitled, at its option, to place a final order for a "life cycle
purchase" of the OEM Products at least ten (10) days prior to the effective date
of such termination, for delivery within one hundred eighty (180) days after the
effective date of termination.
10.2.AVAILABILITY OF PRODUCT AND SPARES. First Virtual will make available to
VTEL spare, replacement, and maintenance parts necessary to enable VTEL to
support the OEM Products for a period of at least five (5) years after the date
of the last shipment to VTEL's end user customers. First Virtual will make these
parts available to VTEL at prices that are at least as low as the prices being
charged to First Virtual's other customers. with similar terms and conditions.
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11. CONFIDENTIAL INFORMATION.
11.1.CONFIDENTIAL AND PROPRIETARY INFORMATION. The parties understand that each
may disclose to the other in connection with this Agreement, certain of its
proprietary or confidential information which is to be protected in accordance
with the terms of this Agreement.
11.2.DEFINITION. The term "Confidential Information" as used herein shall mean
any and all information disclosed by a party in written or other tangible form
which is clearly marked as being confidential or proprietary information of the
party; or oral information designated as confidential by the disclosing party at
the time of disclosure and summarized and identified as being confidential in
writing within thirty (30) days after disclosure.
11.3.OBLIGATIONS. The party receiving Confidential Information shall (i)
maintain it in confidence and shall not disclose it to anyone other than its
employees or others acting under its control who are bound by a written
agreement sufficient to enable the receiving party to comply with this
Agreement, (ii) use at least the same degree of care to maintain its secrecy as
the party uses in maintaining the secrecy of its own proprietary, confidential,
and trade secret information, (iii) always use at least a reasonable degree of
care in maintaining its secrecy, (iv) use it only for the purpose of performing
its obligations under this Agreement, and (v) upon request by the disclosing
party, return or certify the destruction of all Confidential Information
delivered hereunder.
11.4.LIMITATIONS. Neither party shall have any obligation concerning that part
of the other's Confidential Information which (i) was known to it before its
receipt from the other party without an obligation of confidentiality, (ii) is
lawfully obtained from a third party under no obligation of confidentiality,
(iii) becomes publicly available other than as a result of an act or failure to
act of the receiving party, (iv) is independently developed by the receiving
party, (v) is required to be disclosed pursuant to a legal, judicial or
administrative proceeding, or (vi) is disclosed by the receiving party with the
other party's written permission. In the event disclosure is required pursuant
to a legal, judicial, or administrative proceeding, the receiving party shall
use reasonable efforts to provide prior notice to the disclosing party to allow
it to seek protective or other court orders.
Neither party will disclose any part of the other party's Confidential
Information to anyone except those of its employees or contractors having a need
to know the same in order to accomplish the purposes of this Agreement and who
have, before receiving access to the information, acknowledged its confidential
proprietary and/or trade secret nature and have agreed in writing to be bound by
the terms of this Section or similar terms in a written agreement with the
receiving party.
11.5.REMEDIES. If any part of a party's Confidential Information is wrongfully
disclosed or used, then in addition to the remedies provided by this Agreement
or by law, the party which provided the Confidential Information will be
entitled to an injunction preventing further disclosure or use of the
information by the other party or by any third parties to whom the Confidential
Information has been wrongfully disseminated.
12. TERM AND TERMINATION.
12.1.TERM. This Agreement shall commence upon the Effective Date and continue
for a period of two (2) years. Thereafter, unless earlier terminated in
accordance with the terms herein, the Agreement shall automatically renew on an
annual basis upon the anniversary date hereof.
12.2.TERMINATION. At any time during the term of the Agreement, either party may
terminate this Agreement in the event:
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a) the other party ceases to conduct business in the normal course,
becomes insolvent or bankrupt, makes a general assignment for the
benefit of creditors, becomes generally unable to pay its debts as
they become due, suffers or permits the appointment of a receiver for
its business or assets,
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becomes subject to any levy, seizure, attachment or execution against
it, or becomes subject to any proceeding under any statute of any
governing authority relating to insolvency or the protection of rights
of creditors; or
b) the other party fails to perform any obligation required to be
performed under this Agreement, including VTEL's failure to make any
payment due (unless such payment is reasonably disputed), for a period
of thirty (30) days after receipt of notice from the other party of
such failure and such failure cannot be cured within such thirty (30)
day period; then such other party shall have the right to terminate
this Agreement immediately by giving written notice to the other of
its election to do so.
The foregoing rights of termination are in addition to all other rights and
remedies provided in this Agreement or by law.
12.3.TERMINATION ON FAILURE OF PRODUCT OR SYSTEM. If the OEM Products fail to
operate in the manner desired by VTEL, as a stand alone product or part of a
system, then VTEL may terminate this Agreement by providing thirty (30) days
notice.
12.4.EFFECTS OF TERMINATION.
00.0.0.Xx the event First Virtual is the defaulting party, VTEL, without
limiting any other remedies or claims it may have at law or in equity, shall
have (i) the option to place a final order for the OEM Products with delivery
dates not to exceed six (6) months from the date of termination, and (ii) the
right to continue to distribute the OEM Products held in inventory, such
distribution to be pursuant to the terms of this Agreement.
00.0.0.Xx the event this Agreement is terminated by First Virtual for default by
VTEL, First Virtual shall permit VTEL to retain limited rights to use the OEM
Products thereafter for so long as necessary in order to allow VTEL to satisfy
its then existing contractual obligations to support its end user customers. The
licenses granted to end user customers with respect to the software component of
any OEM Product, shall survive any termination or expiration of this Agreement.
12.4.3.Any termination of this Agreement shall not relieve VTEL of its
obligation to pay any sum due hereunder or to provide warranty support to its
end user customers.
12.4.4.The following provisions shall survive any termination of this Agreement:
Sections 2.1, 2.2, 2.4, 3.5, 4, 5, 6, 7, 10, 11, 12.4, 13, and any other
provision which would naturally survive in fulfillment of either party's
obligations hereunder.
13. GENERAL PROVISIONS.
13.1.NOTICES. Any notices required to be given under this Agreement shall be in
writing and sent to the address of the appropriate party indicated on the first
page of this Agreement or to such other address as may have been substituted by
written notice. All such notices sent to VTEL shall be addressed "Attention:
Contracts Administration".
Notices given pursuant to this Agreement shall be deemed to have been received
five (5) business days after mailing if given by mail, and one (1) business day
after sending if delivered by cable, telegram, facsimile, telex, or electronic
mail, and upon delivery if delivered by hand.
13.2.FAILURE AND DELAY. Except as expressly provided in this Agreement, neither
party shall be liable for its failure or delay in performance of its obligations
under this Agreement due to strikes, wars, revolutions, fires, floods,
explosions, earthquakes, government regulations, or other causes beyond its
control.
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13.3.FOREIGN RESHIPMENT. This Agreement is made subject to all laws,
regulations, orders, or other restrictions on the export from the U.S.A. of
products, documentation, or of other information about products, which may be
imposed from time to time. Neither party shall export any such products or
information to any country for which an export license or other governmental
approval is required at the time of export without first obtaining such license
or approval.
13.4.ASSIGNMENT. This Agreement may not be assigned by either party without
prior written permission from the other, which shall not be unreasonably
withheld. Any attempt by a party to assign any right, or delegate any duty or
obligation which arises under this Agreement, without such permission, will be
voidable. This Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns, if any, of the parties hereto.
13.5.WAIVER, AMENDMENT, OR MODIFICATION. Any waiver, amendment or modification
of any right, remedy or other term under this Agreement will not be effective
unless in writing and signed by the party against whom enforcement is sought.
The waiver or failure of either party to exercise in any respect any right
provided for in this Agreement shall not be deemed a waiver of any further right
under this Agreement.
13.6.LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY
SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES OR LOST PROFITS ARISING
OUT OF THE USE OR PROVISION OF OEM PRODUCTS OR SERVICES PROVIDED HEREUNDER. THIS
LIMITATION SHALL APPLY EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES.
13.7.RELATIONSHIP OF THE PARTIES; COSTS. The parties are each independent
contractors. No agency relationship between VTEL and First Virtual is made by
this Agreement. Neither party shall have any right or authority to act on behalf
of the other and neither party will represent that it has such right or
authority. Except as expressly provided in this Agreement, each party shall bear
its own costs in connection with the performance of its obligations.
13.8.PUBLICITY; MUTUAL APPROVAL. The parties acknowledge the importance of
maintaining as confidential the existence and terms of this Agreement, and the
business relationship it reflects. Neither party shall disclose the existence or
terms of this Agreement to any third party without the written consent of the
other party. All publicly distributed materials prepared by either party that
mention the other party, the products of the other party, or this Agreement,
shall be approved by both parties in writing before publication.
13.9.ENTIRE AGREEMENT; GOVERNING LAW. This Agreement, including its schedules,
constitutes the entire agreement between parties with respect to its subject
matter and shall be governed by the laws of the State of California.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
VTEL Corporation FIRST VIRTUAL CORPORATION
By: By: /s/ X.X. Xxxxxxxx
Name: Name: X.X. Xxxxxxxx
Title: Title: COO/CFO
Date: Date: 8/20/97
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SCHEDULE A
OEM PRODUCTS
The following First Virtual products shall be available to VTEL hereunder
subject to the terms of this Agreement. In addition, VTEL shall have the option
to purchase individual components of the OEM Products in stand alone form. Such
OEM Products shall include any updates and upgrades thereto.
VSA-6000 25Mbps ATM Interface System to connect VTEL TC1000 & LC5000 at 512kb/s
or less
VSA-6001 25Mbps ATM Interface System to connect VTEL TC1000 & LC5000 at above
512kb/s
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SCHEDULE B
PRICING
VTEL shall receive the pricing specified herein for the OEM products in Schedule
A.
PRODUCT PRICING
[ * ] from First Virtual domestic list price.
SERVICE PRICING
[ * ] from First Virtual domestic list price.
NON-RECURRING ENGINEERING
Shall be determined based on VTEL's requested customization, subject to
additional terms and conditions as mutually agreed.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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Schedule C
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MAINTENANCE AND SUPPORT SERVICES
GENERAL
During the term of this Agreement and one year thereafter, notwithstanding First
Virtual's obligations to provide spares and warranty services hereunder, First
Virtual shall provide to VTEL maintenance and support services for the OEM
Products. Such support services shall include all bug fixes, error corrections,
and updates, and telephone factory level;support to VTEL's Service Organization.
TECHNICAL SUPPORT
VTEL's Customer Service Organization shall have direct access to factory level
technical support from First Virtual.
ESCALATION PROCESS
First Virtual will provide access to the factory level technical support
resources sufficient to effect their support responsibilities under this
Agreement for a minimum of five days a week eight hours a day (5 X 8). Technical
information requests from VTEL must be acknowledged within two hours.
Escalations shall generally follow this path:
First Event: The end user customer or VTEL's reseller calls VTEL to report a
problem with the OEM Product.
Second Event: VTEL attempts to solve the problem using its internal support
resources.
Third Event: VTEL escalates the problem if unsolved at Second Event to higher
level internal technical support.
Fourth Event: VTEL escalates the problem if unsolved at Third Event to First
Virtual technical support.
In the event of failure of the general escalation process to resolve the
technical problems with the OEM Product, First Virtual shall provide on-site
technical support capable of identifying/isolating any design deficiency of the
OEM Product or interoperability problem of the OEM Product with VTEL products or
other third party products. If requested by VTEL following the failure to
resolve a technical problem, First Virtual shall provide technical support to a
location determined by VTEL (but within the USA) within two business day. VTEL
shall pay First Virtual $1000 per day plus reasonable expenses for this on site
support.
PRIORITY LEVELS and RESOLUTIONS
The parties agree that errors shall be classified as follows:
o FATAL ERRORS prevent all useful work from being done;
o SEVERE IMPACT ERRORS disable major functions and prevents them from being
performed;
o DEGRADED OPERATIONS ERRORS disable only certain nonessential functions; and
o MINIMAL IMPACT ERRORS are all others errors which do no substantially
affect business operations.
All fatal and severe impact errors reported by VTEL shall be acknowledged with
written confirmation on the day reported to First Virtual. Such problems shall
be fixed or workarounds provided within two (2) business days. Such fix or
workaround shall be incorporated in an update within one (1) month thereafter.
All degraded operations errors reported by VTEL shall be acknowledged with
written confirmation no later than the next business day. Such problems shall be
fixed or workarounds provided within five (5) business days. Such fix or
workaround shall be incorporated in an update or major release within two (2)
months thereafter.
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All minimal impact errors reported by VTEL shall be acknowledged with written
confirmation no later than five (5) business days. Such problems shall be
provided with the earlier of the next update or major release, including any
applicable documentation changes.
The parties acknowledge that in the event these obligations cannot be met within
the specified timeframe, the parties shall discuss and mutually agree on the
correct course of action.
TEST EQUIPMENT REQUIREMENTS/AVAILABILITY
First Virtual shall provide to VTEL for a reasonable and agreed price necessary
test equipment to include diagnostic tools, test fixtures, and test devices so
as to ensure that VTEL may adequately provide services to VTEL's customers. VTEL
shall have the right to reproduce and distribute diagnostic tools only for use
internally and by VTEL's third party service providers. Notwithstanding the
foregoing, First Virtual shall provide diagnostic software to VTEL at no charge.
TOOLS REQUIREMENTS/AVAILABILITY
First Virtual shall provide to VTEL for a reasonable and agreed price any
special tools necessary to install and maintain the OEM Products. Tools may
include but are not limited to special physical tools, software debug utilities,
special diagnostics, etc. VTEL shall have the right to reproduce and distribute
diagnostic tools only for use internally and by VTEL's third party service
providers. Notwithstanding the foregoing, First Virtual shall provide diagnostic
software to VTEL at no charge.
DOCUMENTATION
First Virtual shall provide to VTEL any documentation which may be necessary to
provide services to VTEL's customers. Such documentation includes, but is not
limited to: User documentation, Application documentation, performance tests,
test procedures, white papers, notes, technical bulletins, functional
specifications, design specifications, schematics, parts lists, source code,
field service documentation etc.
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SCHEDULE D
TRAINING
TRAINING DOCUMENTATION
First Virtual will provide three sets of its standard training material
including, where appropriate, handouts, overheads, outlines, syllabus, labs,
manuals etc. Additional material shall be available for an agreed price. If the
training course is updated, three copies of updated training materials will be
provided to VTEL ten (10) days prior to product release.
COURSE AVAILABILITY
First Virtual will provide training courses, at VTEL's facility of choice, for
the VTEL's Service Organization, VTEL's third party service providers, and
VTEL's internal training developers within ten (10) days prior to product
availability. Details regarding type of class, content, audience, location and
size will be mutually agreed. Training for future options, functional
enhancements, and upgrades shall be offered by First Virtual and participation
is solely at VTEL's option.
PRICING
Pricing for the courses provided by First Virtual at VTEL's location will be as
follows:
[ * ] per instructor (including travel time), plus all reasonable [ * ]. VTEL
will provide [ * ]. [ * ] training shall be provided at [ * ] to VTEL, which
shall be limited to [ * ] training session.
[*] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
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SCHEDULE E
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END USER LICENSE AGREEMENT
The end user license agreement distributed with the OEM Products by VTEL shall
include terms and conditions substantially similar to the following. First
Virtual shall advise VTEL of any additional third party license requirements as
soon as known by First Virtual.
a) The end user shall be granted only a personal, nontransferable,
non-exclusive right to use the SOFTWARE only on a single CPU at a time
(a single CPU shall include for this purpose systems with redundant
processing units, but only one user);
b) The end user may not copy the software, except for one (1) copy for
backup or archival purposes only and only as necessary to use the
software;
c) The software shall be used solely with the OEM Products as provided
hereunder;
d) The end user shall agree not to reverse-assemble, decompile, or
otherwise attempt to derive source code from the SOFTWARE;
e) First Virtual and its third party licensors shall retain all title to
the software, and all copies thereof, and no title to the software
shall be transferred to the end user;
f) The end user shall agree to comply with all export and re-export
restrictions and regulations of the Department of Commerce or other
United States agency or authority, and not to transfer, or authorize
the transfer, of the SOFTWARE to a prohibited country or otherwise in
violation of any such restrictions or regulations.
