RESELLER AGREEMENT
THIS AGREEMENT is by and between Com21, Inc. a Delaware corporation with
principal offices at 750 Tasman Drive, Milpitas, California 95035 ("Company"),
and 3Com Corporation, a Delaware corporation located at 5400 Bayfront Plaza,
Santa Clara, CA 95052-8145 ("3Com"). The effective date of this Agreement shall
be the date last executed below ("Effective Date").
A. Company and 3Com have entered into a Technology License and Reseller
Agreement dated as of March 22, 1996.
B. Company and 3Com mutually desire 3Com to market and sell certain cable
headend products and cable modem products developed by Company.
C. Company and 3Com mutually desire for Company to deposit into escrow
the designs and other materials relating to such headend products, and to permit
the release of said designs and other materials relating to such headend
products to 3Com upon the occurrence of certain conditions, as more specifically
set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties agree as follows:
1. DEFINITIONS.
1.1 "Affiliate" means with respect to any person, any other person
controlling, controlled by or under direct or indirect common control with such
person (for the purposes of this definition "control," when used with respect to
any specified person, shall mean the power to control the vote of fifty percent
(50%) or more of the voting securities of such person).
1.2 "Authorized Reseller" means a reseller or distributor
authorized by 3Com to distribute any of Company's Products within the Territory.
1.3 "Compatibility" or "Compatible" for the Com21 Headend initially
means material compliance with the Ethernet standard interface and,
approximately six (6) months from the effective date of the Technology License
and Reseller Agreement, material compliance with the Fast Ethernet standard
interface. "Compatibility" or "Compatible" for the Com21 Modem initially means
material compliance with the Ethernet standard interface. "Material compliance"
with the Ethernet or Fast Ethernet standard interface means that the Com21
Headend or Com21 Modem, as the case may be, can properly pass data with
equipment that complies with such standard interface. In all instances
"Compatibility" will also include compliance with the specifications entitled
"The Com21 Community Protocol for HFC Networks version 1.04.05 dated January 28,
1997", as well as any other specifications mutually agreed to by the parties
from time to time. Furthermore, with respect to the interoperability of the
Com21 Headend Product with the 3Com Product, Compatibility shall mean the
criteria used by Company (in Company's sole discretion) to determine whether the
initial generation of the Com21 Modem Product properly interoperates with the
initial generation of the Com21 Headend Product (including but not limited
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to functionality and performance criteria).
1.4 "Com21 Headend" means the headend controller unit to be
developed by Company and all enhancements, upgrades and new versions thereof
that are compliant with the Com21 Community Protocol specification referenced in
Section 1.3 above.
1.5 "Com21 Headend Product" shall mean the Com21 Headend and the
Com21 Headend Software.
1.6 "Com21 Headend Software" means the Company network management
applications programs and other Com21 Headend software in object code form
described in the Design Specifications, and related documentation provided by
Company and all enhancements, Upgrades, Updates and new versions thereof made
available by the Company.
1.7 "Com21 Modem" means the cable modem unit to be developed by
Company and all enhancements, upgrades and new versions thereof.
1.8 "Com21 Modem Product" means the Com21 Modem and the Com21 Modem
Software.
1.9 "Com21 Modem Software" means the Com21 Modem image software and
other Com21 Modem software in object code form described in the Design
Specifications, and related documentation provided by Company and all
enhancements, Upgrades, Updates and new versions thereof made available by the
Company.
1.10 "Com21 Software" shall mean the Com21 Headend Software and the
Com21 Modem Software.
1.11 "Confidential Information" means that information of either
party ("Disclosing Party") which is disclosed to the other party ("Receiving
Party") pursuant to this Agreement, in written form and marked "Confidential" or
if disclosed orally, the Disclosing Party shall indicate that such information
is confidential at the time of disclosure and send a written summary of such
information to the Receiving Party within thirty (30) days of disclosure and
mark such summary "Confidential." Confidential Information shall include, but
not be limited to, trade secrets, know-how, inventions, techniques, processes,
algorithms, software programs, schematics, designs, contracts, customer lists,
financial information, sales and marketing plans and business information.
References to 3Com as a Receiving Party or a Disclosing Party shall also include
all present and future subsidiary and parent companies of 3Com.
1.12 "Design Specifications" means the final design specifications
for the Products that, prior to the date of first shipment of the Products by
Company to 3Com, will be incorporated into Exhibit A (Design Specifications).
The Design Specifications will specify that the Com21 Headend will have the
capability to recognize, load, configure and associate the appropriate modem
image with the most current Version of the initial Generation and each future
Generation of the 3Com Product and at least the two most recent prior Versions
of each Generation of the 3Com Product, provided that the 3Com Product is
compliant with the
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specifications entitled "The Com21 Community Protocol for HFC Networks version
1.04.05 dated January 28, 1997", as well as any other specifications mutually
agreed to by the parties from time to time. The Design Specifications will also
specify that 3Com will have the ability to distribute patches, updates, upgrades
and new versions of the Com21 Software and the software for the 3Com Products by
making such patches, updates, upgrades and new versions available for
downloading into units of the Products and the 3Com Products, as applicable.
1.13 "3Com" means 3Com Corporation and all its present and future
subsidiaries and Affiliates.
1.14 "End User" means an end user who acquires a Product from 3Com
or an Authorized Reseller.
1.15 "End User License Agreement" has the meaning given it in
Section 3.3.
1.16 "Generation" means a substantial change in the form, fit or
function of the 3Com Product, as determined by 3Com in its sole discretion.
1.17 "Inventory" means all Products which are: (a) in 3Com's
custody, whether or not consigned to, or paid for by, any customer; (b) ordered
by 3Com but not yet shipped by Company; (c) in transit to 3Com or from 3Com to
3Com's buyer; or (d) returned to 3Com from any customer of 3Com.
1.18 "Large Multiple System Operators" means customers or potential
customers which purchase the Products and/or the 3Com Product and for which the
number of homes passed exceeds one million (1,000,000) homes.
1.19 "Multiple System Operators" means customers or potential
customers which purchase the Products and/or the 3Com Products and for which the
number of homes passed is below one million (1,000,000) homes.
1.20 "MLOP Cost" means the materials, labor, overhead and period
costs associated with supplying units of the Product.
1.21 "NFR" means "not for resale" copies of the Product, that is,
the Product is used for purposes which do not directly produce revenue for 3Com
(e.g., testing, evaluation, sales, marketing, engineering and demonstration
purposes).
1.22 "Products" means the Com21 Headend Products and the Com21
Modem Products set forth in Exhibit B hereto, and any additional amendments
thereto that may be signed by the parties and attached to this Agreement, and
shall include all enhancements, fixes, Updates, Upgrades, modifications to and
with respect to the Com21 Headend Products only, future versions of the Com21
Headend Products made by or for Company.
1.23 "Technology Documentation" means all designs, drawings,
specifications, test information, vendor lists, source and object code versions
of the software incorporated into or
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used by Company to design, manufacture or maintain the Com21 Headend Products
and all other data and information owned by Company or to which Company has the
right to grant sublicenses with respect to the design, manufacture and use of
the Com21 Headend Products. The Technology Documentation will include a list of
third party technology, if any, in the Com21 Headend Products to which Company
cannot sublicense the rights envisioned by the manufacturing license below, and
persons at such third parties to contact regarding obtaining licenses. The
Technology Documentation will further include a list of consultants, if any,
whom Company reasonably believes could provide technical support to 3Com in
connection with 3Com's exercising of the fights under the manufacturing license
below. Attached as Exhibit F to this Agreement is a complete list of the
Technology Documentation that exists as of such date. Company shall update such
Technology Documentation if it updates its own archival copy of the Technology
Documentation.
1.24 "Technology License and Reseller Agreement" means the
Technology License and Reseller Agreement between the parties dated March 22,
1996.
1.25 "Territory" means the United States and the rest of the world.
1.26 "Update" shall mean a replacement of all or a portion of a
Product that is primarily intended to fix an error or deficiency in the Product.
1.27 "Upgrade" means a replacement of all or a portion of a Product
that is primarily intended to add functionality or performance to the Product
and for which a separate or additional charge can be made to the End User.
1.28 "Version" means a basic change in the form, fit or function of
the 3Com Product, as determined by 3Com in its sole discretion.
1.29 "3Com Product" means the initial Generation and each future
Generation of the cable modem products developed by 3Com under the terms of the
Technology License and Reseller Agreement and all updates, up-grades and new
versions thereto.
2. APPOINTMENT.
2.1 Subject to the terms and conditions of this Agreement, Company
hereby appoints 3Com as a non-exclusive reseller and distributor of Products in
the Territory, and grants 3Com a non-exclusive license to use, demonstrate,
sell, market, publicly perform and publicly display for marketing purposes, and
distribute the Products directly or through Authorized Resellers. Said license
shall include a license under all presently existing and future copyrights,
patents, trade secrets and other rights necessary for 3Com and its Authorized
Resellers to perform all acts contemplated herein. 3Com accepts such appointment
and license and agrees to acquire the Products from Company under the terms and
conditions of this Agreement.
2.2 Subject to the terms of this Agreement, 3Com shall have
complete freedom to determine the manner by which it wishes to market and sell
the Products.
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2.3 3Com may sell the Products in the Territory directly to End
Users or through Authorized Resellers. 3Com shall have sole authority to
authorize Authorized Resellers in accordance with criteria determined by 3Com.
2.4 No ownership of any intellectual property rights to the
Products is transferred to 3Com hereunder, all of which rights shall remain with
Company or the applicable third party owner. As between the parties, Company
retains all title to, and except as expressly and unambiguously licensed herein,
all rights and interest in the Com21 Software and all intellectual property and
proprietary rights throughout the world protecting the Products.
2.5 This Agreement shall not be construed as restricting in any way
3Com's freedom to make, use or distribute any other products, including any
products which may compete with the Products. Nothing in this Agreement shall be
construed as limiting in any manner Company's marketing or distribution
activities or its appointment of other dealers, distributors, licensees or
agents.
2.6 Subject to Section 8.12 below, Company reserves the right to
change, modify or discontinue any Product at any time.
3. DUTIES AND OBLIGATIONS OF 3COM.
3.1 3Com agrees to use reasonable commercial efforts to encourage
and develop the sales potential for the Products, to employ competent sales
personnel to meet the demands and needs for marketing of the Products, and to
encourage the purchase of the Products by Authorized Resellers and End Users.
3.2 Except as otherwise contemplated in this Agreement or the
Technology License and Reseller Agreement, and except to the extent expressly
prohibited by applicable law, 3Com shall not modify or reverse engineer any
Product without the prior written consent of Company.
3.3 This Section 3.3 shall apply only if Company has provided an
end user license agreement to be distributed with the Com21 Software. No
distribution or license of the Com21 Software by 3Com shall be made except
pursuant to a written agreement, whether distributed in printed or electronic
form (an "End User License Agreement") that is at least as protective of Company
and its rights as Company's end user software license agreement, set forth in
Exhibit E (Com21 End User Software License Agreement) attached hereto. Company
agrees that if it licenses Com21 Software on terms more favorable to the end
user than the terms set forth in Exhibit E (Com21 End User Software License
Agreement), then such more favorable terms shall automatically apply.
3.4 3Com agrees to use commercially reasonable efforts to keep
Company informed as to any problems encountered with the Products and any
resolutions arrived at for those problems, and to communicate promptly to
Company any and all modifications, design changes or improvements of the
Products suggested by any customer.
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4. DUTIES AND OBLIGATIONS OF COMPANY.
4.1 With respect to each Product, Company shall provide 3Com within
a mutually agreeable time, at no cost, an electronic copy of the Company's
Product specifications and Product sales literature for use in 3Com's sales
efforts. 3Com will be permitted to incorporate such materials into its own
materials. 3Com may purchase from Company hard copies of such Company
specifications and sales literature at the prices set forth in Exhibit B
(Product and Price List). In its distribution efforts, 3Com will use the then
current names (the "Marks") used by Company for the Products. However, all
advertisements, promotional materials, packaging and anything else bearing a
Mark shall identify Company as the Mark owner and unless used in substantially a
form previously approved by Company, shall be subject to prior approval of
Company, which approval shall not be unreasonably withheld or delayed. 3Com also
agrees not to contest during or after the term of this Agreement any Mark used
by Company anywhere in the world (or any name, mark or designation similar
thereto) and to reasonably cooperate with Company (at Company's expense) in
Company's efforts to register the Marks. 3Com shall not apply to register any of
the Marks without Company's prior written consent, which consent shall not be
unreasonably withheld or delayed. If Company so consents, 3Com may promptly
register at its expense such Marks in the name of and for the sole benefit and
ownership of Company. Company shall provide 3Com one copy of each maintenance
manual, operator's manual, any other manuals for the Products and field change
orders and technical bulletins incorporating engineering changes for Products.
3Com may copy and distribute such materials internally and to its Authorized
Resellers.
4.2 Company shall provide 3Com within a mutually agreeable time, at
Company's MLOP Cost, (a) [*] Com21 Modem Product, for use by 3Com and its
Authorized Resellers.
4.3 Company shall use commercially reasonable efforts to make
available, at no cost to 3Com, a reasonable number of man hours of appropriate
members of Company's technical personnel to assist 3Com to keep current with the
latest technological developments in the Products. Each party shall designate an
appropriately trained employee as a technical liaison and apprise the other
party of the liaison's name.
4.4 Company represents and warrants to 3Com that upon and after the
Effective Date of this Agreement, Company will not provide any Product to 3Com
which has come into physical contact with: (i) a Class I substance, as defined
in Section 611 of the Federal Clean Air Act (the "Act"), during any portion of
the manufacturing process; or (ii) a Class II substance, as defined in the Act
and Title 40, Code of Federal Regulations, Section 82 (the "Code"), during any
portion of the manufacturing process, where there has been a determination by
the U.S. Environmental Protection Agency that there is a substitute product or
manufacturing process for such Product which does not rely on the use of such
Class II substance, that reduces overall risk to human health and the
environment, and that is currently or potentially available, in accordance with
the Code.
*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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Company further represents and warrants that 3Com shall not be subjected
to any warning or labeling requirements regarding a Class I substance or a Class
II substance pursuant to the Act or any regulation promulgated under the Act, as
a result of any Product provided by Company to 3Com under this Agreement.
Without limitation to the foregoing, Company represents and warrants that
in all respects, the manufacture and sale of the Products comply and will
throughout the term of this Agreement comply with all applicable environmental
laws, regulations and other regulatory requirements.
If Company discovers a breach of any of the representations and
warranties in this Section 4.4. it shall immediately notify 3Com of such breach
in writing, explaining the circumstances constituting the breach and identifying
the Product(s) involved. Further, Company shall defend, indemnify and hold
harmless 3Com and its officers, directors, employees, agents, representatives,
successors and assigns from any liabilities, losses, demands, claims or
judgments arising from the breach of any of Company's representations and
warranties set forth in this Section 4.4.
4.5 Company shall give 3Com written notice of Product Updates,
Upgrades and new versions as soon as reasonably possible, but in any event at
least sixty (60) days prior to their availability to Company's customers. Such
notices shall contain detail of the changes to the form, fit or function of the
Product. Company shall use reasonable efforts to provide 3Com with six (6)
months notice of new Products that Company elects to make available for
distribution by 3Com under this Agreement. Company shall also provide 3Com at
Company's MLOP Cost with NFR units of the affected Product modules so that 3Com
has [*] new versions of Com21 Headend Products and future Com21 Headend Product
Upgrades, one [*] Com21 Modem Products and future Com21 Modem Product Upgrades,
concurrent with the providing of such notice or at the earliest possible date
thereafter (but always prior to their general availability) for purposes of
evaluation and testing of Compatibility with 3Com Products.
4.6 Company agrees to give sixty (60) days prior written notice to
3Com of any product being considered by Company for distribution to customers
through channels other than this Agreement, which is functionally similar to any
of the Products or which is designed or will be marketed as compatible with any
version of the Product ("Similar Product").
4.7 For a period of twelve (12) months after delivery of each unit
of the Com21 Headend or Com21 Modem, as the case may be, to the End User,
Company warrants to 3Com that such Com21 Headend or Com21 Modem, as the case may
be, will substantially conform to the Design Specifications and to any
performance or other specifications for the Com21 Headend or Com21 Modem, as the
case may be, published or made generally available by Company. For a period of
ninety (90) days after installation of the Com21 Software by the End User,
Company warrants that the media on which the Com21 Software is supplied will be
free from defects in materials or workmanship. 3Com shall notify Company of any
nonconformance during the applicable warranty period. The parties shall follow
the RMA procedures set forth in Section 3.5
*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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(Return Material Authorization) of Exhibit C (Support Services). Company's
exclusive obligation with respect to nonconforming Product shall be, at
Company's option, to repair or replace such Product within the turnaround time
described in Section 3.5(ii) (Turn-Around Time) of Exhibit C (Support Services),
or to refund to 3Com the purchase price paid for said Product. In the event a
Product completely fails to function within the first forty-eight (48) hours of
installation (dead- on-arrival or DOA) and is verified as such by Company,
Company shall waive any charges to 3Com in order to effect the earliest
reasonable repair or replacement of such defective Product. Replacement and
repaired Products shall be warranted for the remainder of the warranty period or
ninety (90) days, whichever is longer. Company will upgrade repaired Product to
the most recent revision level of such Product at no cost to 3Com. THE FOREGOING
WARRANTIES ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, STATUTORY OR OTHERWISE,
INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
The above warranty does not extend to any Product that is modified or altered by
any party other than Company or other than pursuant to Company's
recommendations, is not maintained to Company's maintenance recommendations, is
operated in a manner other than that specified by Company or is treated with
abuse, negligence or other improper treatment (including, without limitation,
use outside the recommended environment). 3Com's sole remedy with respect to any
warranty or defect is as stated in this Section 4.7.
4.8 Company shall provide statistics on Product no problem found
(NPF) returns on a quarterly basis. During the Warranty Period, Company shall
waive any NPF charges on in- warranty Products returned for repair. In the event
that (a) NPF returns of a Com21 Headend Product exceeds twenty-five percent
(25%) of the calendar quarter in-warranty returns of such Com21 Headend Product
or (b) NPF returns of a Com21 Modem Product exceeds ten percent (10%) of the
calendar quarter in-warranty returns of such Com21 Modem Product, both parties
agree to work together to reduce the frequency of NPF returns of such Product.
4.9 "Epidemic Failure" shall mean substantial deviations in a
Product not modified by the Company or with the Company's authorization from the
Design Specifications which significantly impair the use of such Product
existing at the time of delivery but which are not reasonably discernible at
that time and which are evidenced by an identical. repetitive defect due to the
same cause and occurring in the same series of the Products.
In the case of an Epidemic Failure, Company's obligations shall be, as
soon as practical, to propose an action plan to fix the failure of any affected
Products and to implement this action plan upon 3Com's acceptance thereof. If
the action plan is not acceptable to 3Com, 3Com can require Company to repair or
replace, at Company's option, the affected Products. The repair or replacement
shall be done at mutually agreed-upon location(s); provided, however, that costs
of repair or replacement together with the shipping, transportation and other
costs of gathering and redisseminating the Products shall be borne by Company.
The parties agree to make commercially reasonable efforts to complete the repair
or replacement of all of the affected Products within four (4) weeks after
written notice of Epidemic Failure by 3Com to Company.
4.10 Company shall provide Authorized Resellers and End Users of
the Products with warranty, maintenance and support services as provided herein.
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5. SOFTWARE LICENSE
5.1 Subject to the terms and conditions of this Agreement, Company
grants to 3Com a nonexclusive, nontransferable, worldwide, royalty-free license
to reproduce and distribute to 3Com's customers object code versions of the
Com21 Software for the Products and any patches, Updates, Upgrades and new
versions thereto.
5.2 Company will deliver each patch, Update, Upgrade or new version
of the Com21 Software for the Product to 3Com in a mutually agreed upon format
no later than the date that Company first makes such patch, Update, Upgrade or
new version available to Company's own customers, subject to the terms and
conditions of Section 4.5.
6. TESTING AND MODIFICATION OF THE PRODUCTS.
6.1 As soon as reasonably possible after receipt of 3Com's written
request, Company shall submit [*] to 3Com at Company's MLOP Cost for
Compatibility testing as provided in Section 6.2 below. At 3Com's request,
Company shall provide 3Com with up to [*] NFR receive modules for each sample at
Company's MLOP Cost.
6.2 3Com shall test such samples and notify Company in writing
within sixty (60) days after receipt of the samples if the samples fail to
materially comply with the Design Specifications or fail to be Compatible (each,
a "Nonconformity"). Failure to so notify Company within said sixty (60) days
shall be deemed to be acceptance of such samples. Such notice shall describe the
Nonconformity in enough detail for the Company to reproduce such Nonconformity.
Within thirty (30) days after receipt of such notice of Nonconformity, Company
shall modify the Products to correct such Nonconformity and shall promptly
resubmit four (4) samples of the redesigned Product (if such modified Product is
a Com21 Headend Product, one (1) unit will have a fully-loaded configuration
(i.e., all optional slots are filled with a combination of receive modules or
10Base-T modules, as determined by 3Com) and three (3) units will have a
configuration containing at least one (1) receive module) to 3Com at no cost for
re-testing. If 3Com rejects such redesigned Products due to a Nonconformity, the
parties shall repeat the procedures set forth up to two more times, if
necessary.
If after the third delivery of samples to 3Com as set forth above,
the samples contain a Nonconformity, then within ten (10) days of 3Com's written
request, the parties will choose in -good faith an independent consulting firm
acceptable to both parties (which acceptance will not be unreasonably withheld)
to determine whether it is feasible to correct such Nonconformity. If the
parties are unable to agree upon such independent consulting firm within such
ten (10) day period, Company shall choose an independent consulting firm
reasonably acceptable to it within ten (10) days after the expiration of such
ten (10) day period. The parties agree that time is of the essence in the
selection of such independent consulting firm. Unless otherwise agreed by the
*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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parties, the consultant shall be certified as a professional engineer in
electrical engineering. Such consulting firm shall agree in writing to keep
confidential the information disclosed to it by Company and 3Com. For purposes
of this Section 6.2, a consulting firm will be deemed to be "Independent" if it
does not have a material interest (financial or otherwise) in either party, it
does not have any ongoing work with either party and its fees are not contingent
on the results of such feasibility determination.
Such firm will be instructed to make its decision in writing within
thirty (30) days of being retained. Each party will fully cooperate with the
consulting firm, will equally bear such firm's fees and expenses and will not
take any action against such firm relating to its review or decision. If the
consulting firm decides that the correction of the Nonconformity is feasible,
then 3Com may immediately terminate this Agreement for Company's default and
declare that an Event of Escrow Release (as defined in Section 16.1 (Technology
Escrow and Manufacturing License)) has occurred. If the consulting firm decides
that the correction of the Nonconformity is commercially not reasonably
feasible, then 3Com may terminate this Agreement but such termination shall not
constitute an Event of Escrow Release.
6.3 The parties agree to meet quarterly to discuss the states and
direction of Company's design and development of the Products and to assess how
3Com could assist to accelerate and enhance such design and development. During
such status meetings, 3Com shall report to Company regarding changes to the
design and functionality of the Products requested or suggested by Large
Multiple System Operators and Multiple System Operators. For any given change so
requested or suggested, if such change is requested or suggested by (i) one (1)
Large Multiple System Operator, or (ii) by a combined total of any five (5)
Large Multiple System Operators and/or Multiple System Operators, Company and
3Com will meet to discuss in good faith whether such change is reasonably
feasible to implement and when such change could be implemented. Each Product
developed as a result of such discussion shall be subject to Compatibility
testing as provided in Section 6.2 above.
6.4 Company at its expense shall implement any modifications
necessary to maintain the Compatibility of the Products. The design and manner
of implementation of such modifications shall be in Company's sole discretion.
Company shall implement such modifications and [*] case may be, to 3Com at
Company's MLOP Cost for testing within sixty (60) days after making any mutually
agreeable changes to the Design Specifications, or such other time frame as may
be mutually agreed in writing. Section 6.2 above shall apply to such modified
Products, or the applicable module of such modified Products.
6.5 Subject to Company's agreements with its subcontract
manufacturers, 3Com shall have the right to perform vendor audits of
manufacturing processes at Company's manufacturing and subcontract manufacturing
facilities upon reasonable advance written notice, and Company shall reasonably
cooperate with 3Com in that regard. If an inspection or test is
*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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made on Company's premises, Company shall provide 3Com's inspectors with
reasonable facilities and assistance. Each party will bear its own expenses with
respect to such audits.
7. PRICE AND PAYMENT.
7.1 The price to 3Com for the Products are set forth in Exhibit B
(Product and Price List). The prices for additional Products to be covered by
the Agreement shall be set forth in amendments to Exhibit B (Product and Price
List). Company represents and warrants that, at the date of this Agreement, the
prices set forth herein will not exceed those charged to any other customer of
the Company purchasing the Products or products similar or equivalent thereto in
similar channels and in similar quantities. If at any time, Company offers lower
prices to any other customer for such similar or equivalent products on similar
terms or on terms less favorable to Company, taken as a whole, Company shall
immediately notify 3Com and offer such more favorable terms to 3Com effective as
of the date such prices were offered to such other customer (provided 3Com
adopts any and all minimum purchase commitments imposed upon such other
customer). Any consideration provided to Company hereunder for Products
delivered to 3Com prior to such date shall be non-refundable and non-creditable.
Any other changes to the price paid by 3Com for the Products and prices for
Upgrades shall be mutually agreed upon in writing.
7.2 Payment for Products ordered pursuant to this Agreement shall
be net thirty (30) days after the last to occur of (a) receipt of the Product by
3Com at the point of delivery, or (b) receipt by 3Com of Company's correct
invoice.
7.3 Company shall provide 3Com with thirty (30) days prior written
notice of any price increases. In the event of a price decrease, all 3Com orders
not yet shipped or in transit will be invoiced at the decreased price. Orders
issued by 3Com after the date of the price decrease will be invoiced at the
decreased price. Company shall also provide price protection on Products in
3Com's inventory purchased within the then current leadtime for such Products.
In the event of a price increase, the new prices will apply to all orders
accepted by Company after the notice period. In the event of a price increase,
upon 3Com's request, Company shall furnish 3Com with Company's written
cost-based justification for the Products documenting the reason for such price
increase.
7.4 The prices for the Products are exclusive of all federal, state
or local sales, use, excise, ad valorem, export, import or value-added taxes.
3Com agrees to pay such taxes unless 3Com has provided Company with a valid
exemption resale certificate, or unless 3Com is otherwise exempt. In addition,
3Com shall pay all duties, import licenses, fees, tariffs and other similar
expenses incurred by Company in making international shipments hereunder.
7.5 Notwithstanding any provision of this Agreement, 3Com is free,
in 3Com's sole discretion, to distribute the Products at any price.
8. ORDERS AND RETURNS.
8.1 3Com shall provide Company with a twelve (12) month nonbinding,
forward looking, rolling unit order forecast and update such forecast on a
monthly basis. Company shall
*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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use such forecast for internal planning requirements only. Such forecast does
not represent any commitment by 3Com to purchase Products. Further, Company
shall treat all such forecasts as Confidential Information in accordance with
Section 13 (Confidential Information) below.
8.2 Orders for Products must be in the form of written or
electronically transmitted purchase orders. Neither party shall have any
obligation to the other based on an orally transmitted order. In the event of a
conflict between the terms of this Agreement and the terms of a purchase order
or purchase acknowledgment, the terms of this Agreement shall govern. No minimum
order quantities shall be required. Invoices by Company shall be in duplicate
and shall include purchase order number, line item number, part number,
description of items, quantities, unit price, and extended totals. Payment shall
not be deemed to constitute acceptance.
8.3 3Com shall submit binding purchase orders to Company at least
ninety (90) days prior to the requested delivery date. ne parties agree to meet
quarterly to discuss Company's efforts to reduce leadtimes for Products. 3Com's
order shall automatically be deemed accepted upon receipt by Company. Company
shall notify 3Com within two (2) business days after receipt of an order if
Company anticipates any problem in shipping the quantity of Product ordered on
the time schedule set forth below or in the order. Company shall ship all Com21
Modem Products ordered by 3Com within ninety (90) days of receipt of the order
or as otherwise specified in the order. Company shall ship all Com21 Headend
Products ordered by 3Com within ninety (90) days of receipt of the order or as
otherwise specified in the order; provided however that if (a) the number of
units of Com21 Headend Products ordered for delivery in the month for which
delivery has been requested is greater than [*] the number of units of such
Products forecasted by 3Com for the month in which delivery has been requested
and (b) such number of units ordered over the forecasted number is greater than
[*], then Company shall be obligated only to use commercially reasonable efforts
to ship such Com21 Headend Products ordered by 3Com within ninety (90) days of
receipt of order or as otherwise specified in the order.
8.4 The quantity of goods on the face of the purchase order must
not be exceeded without written approval from 3Com. 3Com will pay for maximum
quantities ordered. Overshipments will be held at Company's risk and expense for
a reasonable time awaiting shipping instructions. Return shipping charges for
excess quantities will be at Company's expense.
8.5 3Com shall have right to defer the shipment of all or part of
any order prior to the estimated shipping date by giving Company written notice
of the revised planned shipment date, subject to the following conditions:
(a) 3Com may delay delivery of any order, provided that the
rescheduled delivery date occurs during the term of this Agreement. At 3Com's
election, 3Com may reschedule such order (i) at no charge to 3Com, in which case
such rescheduled order may not be further rescheduled or canceled, or (ii) pay a
rescheduling fee equal to the percentage of the purchase price of the
rescheduled Products corresponding with the notice given before the scheduled
delivery date in accordance with the table set forth below, in which case such
rescheduled order may be further rescheduled or canceled in accordance with this
Section 8.5:
*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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Notice Before Scheduled Delivery Date Rescheduling Charge
------------------------------------- -------------------
0 to 30 days 12%
31 to 60 days 6%
61 to 90 days 2%
(b) 3Com may cancel the delivery of any order. 3Com shall pay
a cancellation charge equal to the percentage of the net purchase price of the
canceled Product(s) corresponding with the notice given before the scheduled
delivery date in accordance with the table set forth below.
Notice Before Scheduled Delivery Date Cancellation Charge
------------------------------------- -------------------
0 to 30 days 20%
31 to 60 days 10%
61 to 90 days 2%
8.6 3Com shall have the right to request Company to expedite the
shipping date of any order. Company shall use reasonable efforts to meet 3Com's
new expected shipping dates.
8.7 Company shall ship Products Ex Works [OPEN ISSUE - AWAITING
COM21 INPUT] Company's manufacturing facility and shall invoice upon shipment
(provided however that 3Com shall not be required to bear any additional costs
or fees associated with shipment from a non-domestic location). Payment shall be
in U.S. Dollars. Any invoiced amount not paid when due shall be subject to a
service charge of one and one-half per-cent (1.5)% per month or if lower,the
maximum amount permitted by law, provided however, that Company shall allow 3Com
twenty (20) days after giving written notice of nonpayment to pay such amount
before imposing a service charge.
8.8 All Products delivered shall be suitably packed, depending on
the method of shipment, in Company's standard shipping cartons, marked for
shipment as specified in 3Com's purchase order, and delivered to 3Com or its
carrier agent Ex Works [OPEN ISSUE] Company's manufacturing plant, at which time
title to such Products and risk of loss shall pass to 3Com (provided however
that 3Com shall not be required to bear any additional costs or fees associated
with shipment from a non-domestic location). All Product units shall be marked
with the Product's rev/version and a 3Com-supplied label of 3Com part numbers on
the exterior in a visible location. 3Com shall select the carrier, unless
otherwise agreed to in writing by 3Com. All freight, insurance and other
shipping expenses, including special packing expenses shall be paid by 3Com from
the Ex Works point (provided however that 3Com shall not be required to bear any
additional costs or fees associated with shipment from a nondomestic location).
8.9 3Com shall inspect all Products promptly upon the receipt
thereof and may reject any Product that fails to conform to the specifications
set forth in the Company's current brochure and specifications for the Product.
Any Product not rejected within thirty (30) days after receipt of that Product
by 3Com ("Rejection Period") shall be deemed accepted. To reject a Product, 3Com
shall notify the Company within the Rejection Period in writing or fax of its
*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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rejection and request a RMA number. The parties shall follow the RMA procedures
set forth in Section 3.5 (Return Material Authorization) of Exhibit C (Support
Services). 3Com shall pay the shipping charges for return of any Products found
not to be defective, otherwise Company shall be responsible for all shipping
charges associated with the return of defective Products.
8.10 Unless a Product is returned in accordance with the provisions
of Company's warranty for the Product as set forth in Section 4.7, after the
Rejection Period 3Com may not return a Product to the Company for any reason
without the Company's prior written consent. For any Product for which Company
gives such consent, Company shall charge 3Com a restocking fee not to exceed
fifteen percent (15%) of 3Com's purchase price for that Product and shall credit
the balance of the purchase price to 3Com's account. 3Com shall be responsible
for all shipping charges associated with the return of any Product pursuant to
this Section 8.10.
8.11 In the event of expiration or termination of this Agreement
for any reason except for cause by Company based on the material breach of this
Agreement by 3Com, Company shall repurchase from 3Com within thirty (30) days
all unsold Products in 3Com's Inventory purchased by 3Com within four (4) months
prior to said expiration or termination for the price paid by 3Com for each
unit. Except when this Agreement is terminated for cause by Company based on
material breach of this Agreement by 3Com, 3Com may at its election sell all or
a portion of the remaining Inventory in lieu of returning same to Company.
8.12 Company shall provide 3Com with at least six (6) months prior
notice prior to ceasing production of the Products. Within ninety (90) days
after the receipt of such notice, 3Com may place last time purchase orders with
Company for the Products, which orders may be scheduled for delivery in
accordance with the terms of this Agreement for up to six (6) months following
the date production of the Products actually ceases. The foregoing shall not
effect the ability of 3Com to continue to place regular orders in accordance
with the terms of this Agreement until the production of the Products has
ceased.
9. TRADEMARKS.
9.1 Company hereby grants to 3Com a worldwide, nonexclusive,
limited license to use the Company trademarks, and the respective stylistic
marks listed on Exhibit F (Com21 Trademarks) to the Technology License and
Reseller Agreement and such other mutually agreeable Company marks
(collectively, the "Company Trademarks) in conjunction with the distribution of
the Products and in 3Com's advertising promotional and printed materials for the
Products. 3Com has provided to Company a copy of 3Com's Trademark Guidelines.
3Com shall use the Company Trademarks in the manner specified in 3Com's
Trademark Guidelines for proper usage of 3Com trademarks. 3Com's Trademark
Guidelines may be modified from time to time by 3Com, in its sole discretion,
with written notice of such modification to Company. In the event Company
implements its own trademark Guidelines or policies, 3Com agrees to comply with
such guidelines or policies. If compliance with a Company policy or guideline is
not reasonably feasible, 3Com shall notify Company in writing and propose an
alternative procedure for Company's approval, which will not be unreasonably
denied. Upon Company's request, 3Com shall provide Company with free samples of
3Com advertising, promotional and packaging materials for the Products for which
such trademarks are used to ensure that
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Company's quality standards are maintained.
10. REPRESENTATIONS AND WARRANTIES.
10.1 Noninfringement. Company represents and warrants that it has
full power and authority to grant the fights granted hereunder. Company further
represents and warrants to the best of its knowledge that at the time of initial
shipment of the Products to 3Com neither the Products nor their content,
promotion, advertisement, sale, distribution or other disposition will infringe
or violate any copyright, patent, trade secret, trademark, right of publicity or
privacy or other personal or proprietary right of any third party. Company
represents that, during the term of this Agreement, it will do all things
necessary to maintain its copyright protection in the Products. 3Com's sole
remedy for a breach of the foregoing representations and warranties shall be the
indemnity set forth in Section 12.1 below.
10.2 End User Warranty. Company shall include with each Product
Company's standard license agreement for such Product ("End User License").
Company warrants that each Product conforms to the End User License. Company
shall provide 3Com with complete, packaged Products with documentation
containing the Company End User License and all warranties, disclosures and
representations concerning the Products and their use. Company agrees that such
warranties, disclosures and representations of Company are extended to 3Com and
3Com's Authorized Resellers and End Users.
11. TECHNICAL SUPPORT.
11.1 Training and support services for the Products shall be
provided as set forth in Exhibit C (Support Services).
12. INDEMNITY.
12.1 Company shall indemnify and hold harmless 3Com and its
directors, officers, employees and agents against any and all claims, actions or
demands, alleging that the Products infringe any U.S., Canadian, European
Community (EC) or Japanese copyrights, U.S., Canadian, EC or Japanese patents,
trade secrets or other proprietary rights of any third parties.
(a) This obligation is contingent upon (i) 3Com giving prompt
written notice to Company of any such claim, action or demand, (ii) 3Com
allowing Company to control the defense and related settlement negotiations, and
(iii) 3Com fully assisting, at Company's expense, in the defense and/or
settlement.
(b) Company shall have no obligation hereunder for any such
claims, actions or demands to the extent such claims, actions or demands result
from:
(i) the use of the Product combined with processes,
materials, or products not supplied, created, developed or licensed by Company;
or
(ii) the modification or attempted modification of the
Product by parties
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other than Company or the use or distribution of such modified Product; or
(iii) 3Com's continued alleged infringing activity after
being notified thereof or after being informed of modifications that would have
avoided the infringement (but only if Company completely ceases the manufacture,
use and sales of the applicable Product(s), and the costs of implementing such
modifications shall be borne by Company);
3Com will indemnify and hold Company and its directors, officers, employees and
agents harmless against any claim, action or demand excluded from Company's
indemnity obligation under this Section 12.1 (b). This obligation is contingent
upon (i) Company giving prompt written notice to 3Com of any such claim, action
or demand, (ii) Company allowing 3Com to control the defense and related
settlement negotiations, and (iii) Company fully assisting, at 3Com's expense,
in the defense and/or settlement.
Each party's obligation of indemnification under this Section 12.1 with
respect to each claim, action or demand of infringement of any third party EC or
Japanese copyright, patent, trade secret or other proprietary right ("Foreign
Indemnity") shall not exceed the greater of (a) [*] or (b) the amount in
aggregate paid to Com21 by 3Com hereunder during the twelve (12) month period
prior to the date the notice of the claim, action or demand subject to such
Foreign Indemnity was tendered to the indemnifying party. If it reasonably
appears that the total liability of the indemnifying party under the Foreign
Indemnity may exceed or has exceeded the limit specified above or if the
indemnifying party fails to honor its obligations hereunder for such Foreign
Indemnity, then the indemnifying party shall relinquish the sole control of the
defense and/or settlement with respect to the claims, actions or demands covered
by such Foreign Indemnity and the other party shall have the right to obtain
sole control, except that the indemnifying party may retain some partial control
as reasonably agreed by the parties, to the extent the indemnifying party has
honored its obligations and still has liability under the Foreign Indemnity.
Subject always to the limit set forth in the first sentence of this paragraph,
the indemnifying party shall continue to have the obligation to promptly pay the
costs and expenses of the defense of such a claim, including but not limited to
reasonable attorneys' fees and all other related costs and expenses reasonably
incurred by the other party in assuming and maintaining the defense. In such
event the other party shall not have the right to effect a settlement involving
a liability of the indemnifying party in excess of the liability limit described
above or involving a non-monetary settlement on the part of the indemnifying
party, without the prior written consent of the indemnifying party.
Relinquishment of control shall in no event release the indemnifying party from
any liability hereunder, subject always to the limit set forth in the first
sentence of this paragraph. If the indemnifying party fails to so relinquish
control then the parties agree that the limits on the indemnifying party's
liability under the Foreign Indemnity to the other party under this paragraph
shall cease.
EXCEPT AS SET FORTH IN SECTION 10.1, THE FOREGOING IS IN LIEU OF ANY
WARRANTIES OF NON-INFRINGEMENT, WHICH ARE HEREBY DISCLAIMED, AND STATES 3COM'S
SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO CLAIMS DESCRIBED IN THIS SECTION 12.1.
THE FOREGOING IS IN LIEU OF ANY WARRANTIES OF NON-INFRINGEMENT, WHICH ARE HEREBY
DISCLAIMED AND STATES COMPANY'S SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO THE
*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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CLAIMS DESCRIBED IN THIS SECTION 12.1(B).
12.2 3Com shall indemnify and hold Company and its directors,
officers, employees and agents harmless against any and all claims, actions and
demands to the extent arising under this Agreement on account of 3Com's
activities. or those of its employees and agents (including, without limitation,
Authorized Resellers and systems integrators) including, without limitation,
liabilities arising from acts (or omissions to act) of negligence or willful
misconduct or providing unauthorized representations or warranties (or failing
to disclose all limitations on warranties and liabilities as set forth in
Company's End User Software License Agreement) to its customers. 3Com's
obligation under this Section 12.2 is contingent upon (i) Company giving prompt
written notice to 3Com of any such claim, action or demand, (ii) Company
allowing 3Com to control the defense and related settlement negotiations and
(iii) Company fully assisting, at 3Com's expense, in the defense and/or
settlement.
Company shall indemnify and hold 3Com and its directors, officers,
employees and agents harmless against any and all claims, actions and demands to
the extent arising under this Agreement on account of Company's activities, or
those of its employees and agents (including, without limitation, Company's
suppliers) including, without limitation, liabilities arising from acts (or
omissions to act) of negligence or willful misconduct. Company's obligation
under this Section 12.2 is contingent upon (i) 3Com giving prompt written notice
to Company of any such claim, action or demand, (ii) 3Com allowing- Company to
control the defense and related settlement negotiations and (iii) 3Com fully
assisting, at Company's expense, in the defense and/or settlement.
13. CONFIDENTIAL INFORMATION.
13.1 Confidential Information. Each party acknowledges that in the
course of the performance of this Agreement, it may obtain the Confidential
Information of the other party. The Receiving Party (as defined in Section 1.11
(Confidential Information)) shall, at all times, both during the term of this
Agreement and thereafter for a period of [*], keep in confidence and trust all
of the Disclosing Party's (as defined in Section 1.11 (Confidential
Information)) Confidential Information received by it. The Receiving Party shall
not use the Confidential Information of the Disclosing Party other than as
expressly permitted under the terms of this Agreement or by a separate written
agreement. The Receiving Party shall take all reasonable steps to prevent
unauthorized disclosure or use of the Disclosing Party's Confidential
Information and to prevent it from failing into the public domain or into the
possession of unauthorized persons. The Receiving Party shall not disclose
Confidential Information of the Disclosing Party to any person or entity other
than its officers, employees, consultants and subsidiaries who need access to
such Confidential Information in order to effect the intent of this Agreement
and who have entered into written confidentiality agreements which protect the
Confidential Information of the Disclosing Party. The Receiving Party shall
immediately give notice to the Disclosing Party of any unauthorized use or
disclosure of Disclosing Party's Confidential Information. The Receiving Party
agrees to assist the Disclosing Party to remedy such unauthorized use or
disclosure of its Confidential Information.
13.2 Exceptions to Confidential Information. The obligations set
forth in Section
*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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13.1 (Confidential Information) shall not apply to the extent that Confidential
Information includes information which (a) is already known to the Receiving
Party at the time of disclosure, which knowledge the Receiving Party shall have
the burden of proving; (b) is, or, through no act or failure to act of the
Receiving Party, becomes publicly known; (c) is received by the Receiving Party
from a third party without restriction on disclosure; (d) is independently
developed by the Receiving Party without reference to the Confidential
Information of the Disclosing Party, which independent development the Receiving
Party will have the burden of proving; (e) is approved for release by written
authorization of the Disclosing Party; or (f) is required to be disclosed by a
government agency to further the objectives of this Agreement or by a proper
order of a court of competent jurisdiction; provided, however, that the
Receiving Party will use its reasonable efforts to minimize such disclosure and
will consult with and assist the Disclosing Party in obtaining a protective
order prior to such disclosure.
13.3 Remedies. Each party acknowledges and agrees that any breach
of this Section 13 (Confidential Information) by a party's unauthorized use or
disclosure of the Disclosing Party's Confidential Information would cause
irreparable injury to the other party for which monetary damages are not an
adequate remedy. Accordingly, in addition to other available remedies, the
non-breaching party will be entitled to obtain appropriate injunctive relief and
other equitable remedies in the event of such breach.
14. PUBLICITY. Neither party shall disclose the terms of this Agreement
without the prior approval of the other party, except that a party may disclose
the terms of this Agreement where required by law, provided that such party
makes every reasonable effort to obtain confidential treatment or similar
protection to the fullest extent available to avoid public disclosure of the
terms of this Agreement. A party required by law to make disclosure of the terms
of this Agreement will promptly notify the other party and permit the other
party to review and participate in the application process seeking confidential
treatment.
15. TERM AND TERMINATION.
15.1 Term. The Agreement shall commence on the Effective Date and
shall continue for five (5) years thereafter unless terminated sooner under the
provisions set forth herein. Thereafter, this Agreement shall automatically be
renewed for successive one (1) year terms, unless 3Com requests in writing at
least thirty (30) days prior to the end of the then current term that this
Agreement not be so renewed; provided, however, that upon the occurrence of an
event of Escrow Release (as defined in Section 16 (Technology Escrow and
Manufacturing License), Company may not object to the renewal of this Agreement
as provided above.
15.2 Termination for Cause. This Agreement may be terminated by
either party for cause immediately by written notice to the other upon the
occurrence of any of the following events:
(a) if the other party ceases to do business or otherwise
terminates its business operations for more than thirty (30) consecutive days;
or
(b) if the other party materially breaches any material
provision of this
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Agreement and fails to substantially cure such breach within thirty (30) days of
written notice describing the breach (twenty (20) days in the case of a breach
of a payment obligation); provided however that a breach of the obligations set
forth in Section 13 (Confidentiality) or Section 3.2 shall be grounds for
immediate termination by the non-breaching party; or
(c) if the other becomes insolvent or seeks protection under
any bankruptcy, receivership, creditors arrangement or comparable proceeding, or
if such proceeding is instituted against the other and is not dismissed within
ninety (90) days; or
(d) if Company ceases the manufacture and distribution of the
Products.
15.3 Survival. The parties' obligations under Section 2.4, Section
4.7, Section 7 (Price and Payment), Section 8.9, Section 8.11, Section 10
(Representations and Warranties), Section 11 (Support Services), Section 12
(Indemnity), Section 13 (Confidential Information), Section 15.5, Section 18
(Limitation of Liability), Section 19 (Miscellaneous) and obligations accrued
during the term of this Agreement to make payments shall survive the termination
of the Agreement.
15.4 Upon expiration or termination of this Agreement by Company
pursuant to Section 15.2 (Termination for Cause) above, all licenses granted to
3Com hereunder shall immediately terminate and 3Com shall discontinue all
distribution of the Products and use of the Marks; provided, 3Com may retain a
reasonable number of copies of the Com21 Software in object code form to be used
solely for support of its installed base of Products as of the date of
termination and 3Com shall have a limited license only to the extent necessary
for 3Com to support the installed base of Products.
15.5 Each party shall, within fifteen (15) days of the effective
date of any termination of this Agreement, return to the other or destroy all
full or partial copies, in whatever media, of all the other party's Confidential
Information and any and all other materials in such party's possession which had
been furnished to it by the other party pursuant to this Agreement, and such
party shall warrant in writing to the other within thirty (30) days after
termination or expiration that all such materials have been returned or
destroyed pursuant to this Section 15.5.
15.6 Upon an End User acquiring a copy of the Com21 Software
pursuant to an End User License Agreement, the End User shall be entitled to use
that copy of the Com21 Software. subject to the terms and conditions of the End
User License Agreement. The rights of End Users are independent of this
Agreement and will survive any termination of this Agreement for any reason
whatsoever.
16. TECHNOLOGY ESCROW AND MANUFACTURING LICENSE.
16.1 Technology Escrow and Manufacturing License. Within ten (10)
days after the first shipment of Products from Company to 3Com, Company shall
place the Technology Documentation for all versions of the Com21 Headend
Products initially listed on Exhibit B (Product and Price List) in a mutually
agreed upon escrow account pursuant to the Escrow Agreement attached hereto as
Exhibit D (Escrow Agreement). Thereafter, within ten (10) days
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after the execution of any amendments to Exhibit B (Product and Price List) to
add additional updates or versions of the Com21 Headend Products or to add new
Com21 Headend Products. Company shall place the Technology Documentation for
such Com21 Headend Products into such escrow account. 3Com shall pay any and all
annual fees, deposit fees, reporting fees and costs associated with such escrow,
however, Company will bear its own cost of creating the deposit and all updates
thereto. Company hereby grants to 3Com a worldwide, non-exclusive,
non-transferable, non-sublicensable, perpetual, irrevocable license to
manufacture, have manufactured, import. sell, repair, use, modify (but only to
make error corrections or make Compatible) reproduce and, with respect to Com21
Headend Software, distribute error corrections and modifications made by 3Com in
object code form only, of the Com21 Headend Products under all registered and
unregistered copyrights, patents, trade secrets, mask works, designs, drawings,
specifications, vendor lists and all other data and other information owned by
Company or to which Company has the right to grant sublicenses with respect to
the design, manufacture, maintenance and use of the Com21 Headend Products and
any other intellectual property rights associated therewith, and to prepare and
have prepared derivative works based thereon (but only to make error corrections
or make Compatible), and to use source code for the software contained in or
associated with the Com21 Headend Products to make and have made, use. sell,
modify (but only to make error corrections or make Compatible), reproduce, and
with respect to Com21 Headend Software, distribute error corrections and
modifications made by 3Com in object code form only and prepare and have
prepared derivative works based on the Com21 Headend Products (but only to make
error corrections or make Compatible), and to grant sublicenses to third parties
as to any or all of the rights granted to 3Com under this license and to have
immediate and complete access to all embodiments of the Seller Technology
otherwise held by Company, only in the event (i) Company becomes insolvent,
generally fails to pay or admits in writing its inability to pay its debts as
they become due, (ii) Company applies for or consents to the appointment of a
trustee, receiver or other custodian or makes a general assignment for the
benefit of its creditors, (iii) this Agreement is not assumed in its entirety
pursuant to Section 365 of Title 11 of the United States Bankruptcy Code and not
dismissed within ninety (90) days of the date of the filing of any bankruptcy
proceeding or if the bankruptcy trustee rejects this Agreement prior to the
expiration of said ninety (90) day period, (iv) Company takes any corporate or
other action to authorize, or in furtherance of, any of the foregoing, (v) any
event occurs which would permit 3Com to terminate this Agreement pursuant to
Section 15.2 (Termination for Cause) except as described in Section 2.4
(Sustaining Engineering/Error Correction) of Exhibit C (Support Services) of
this Agreement or to terminate the Technology License and Reseller Agreement
(except as described in Section 5.3 of such agreement (Acceptance) or if 3Com
elects not to renew such agreement in accordance with Section 17.1 (Term) of the
Technology License and Reseller Agreement), (vi) Company ceases, or gives notice
that it intends to cease manufacturing and distributing the Com21 Headend
Products or (vii) the Company is unable to meet the reasonable supply
requirements of Com21 Headend Products of 3Com's customers. For purposes of this
Section 16.1 (Technology Escrow and Manufacturing License), Company shall be
deemed to be unable to meet the reasonable supply requirements of 3Com's
customers if [*]; provided that such delays in shipment are not the
result of the occurrence of a force majeure condition as specified in Section 17
(Force Majeure) that has lasted for less than one hundred thirty-five (135) days
or is not due to any delay, failure to perform or interference by 3Com. In
*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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order for Company not to be deemed unable to meet such reasonable supply
requirements, Company must fulfill orders on a "first-in first-out" (FIFO) basis
(e.g., orders from Company's customers are fulfilled in the order they are
received) The occurrence of any of the foregoing shall constitute an "Event of
Escrow Release" for purposes of this Agreement.
16.2 Royalties. In the event that, pursuant to an Event of Escrow
Release, the manufacturing license granted by Com21 to 3Com pursuant to Section
16.1 (Technology Escrow and Manufacturing License) (the "Manufacturing License")
becomes effective 3Com shall pay Com21 a royalty of [*] of 3Com's MLOP Cost of
the units of the Com21 Headend Products manufactured by or for 3Com pursuant to
the Manufacturing License, provided, however, that 3Com shall not owe any
royalties on (a) demonstration units (up to eight (8) units), beta units,
internal use test units, returned units or for Updates to units for which a
royalty has already been paid or (b) the first seventy-five (75) units of the
Com21 Headend Products manufactured by or for 3Com not included within the units
described in clause (a).
Royalties shall be paid on a quarterly basis and shall be payable within
forty-five (45) days from the end of each 3Com fiscal quarter, Such payments
shall be accompanied by quarterly reports listing the quantity of Com21 Headend
Product units manufactured by or for 3Com and 3Com's MLOP cost of such units
during the applicable fiscal quarter.
17. FORCE MAJEURE.
17.1 Except of the payment of money and the obligation of
confidentiality described in Section 13 (Confidential Information), neither
party will be liable for any failure or delay beyond its control in performance
under this Agreement due to fire, explosion, earthquake, storm, flood or other
weather, unavailability of necessary utilities or raw materials, war,
insurrection, riot, act of God or the public enemy, law, act, order, export
control regulation, proclamation, decree, regulation, ordinance, or instructions
of Government or other public authorities, strikes, lockouts or other labor
disputes or shortages or inability to obtain material or equipment, compliance
with laws or regulation (including, without limitation, those related to
infringement) or judgment or decree of a court of competent jurisdiction (not
arising out of breach by such party of this Agreement). In the event of the
happening of such a cause, the party whose performance is so affected will give
prompt, written notice to the other party, stating the period of time the same
is expected to continue. The affected party will use its reasonable efforts to
mitigate the effect of the event giving rise to the failure or delay in
performance.
18. LIMITATION OF LIABILITY,
18.1 EXCEPT FOR A BREACH OF SECTION 13 (CONFIDENTIALITY) AND EXCEPT
AS OTHERWISE PROVIDED IN SECTION 12.1 ABOVE, NEITHER PARTY SHALL HAVE ANY
LIABILITY OF ANY KIND OR FOR LOSS OF REVENUE OR LOSS OF BUSINESS OR OTHER
FINANCIAL LOSS OR FOR ANY COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR
TECHNOLOGY ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, INCLUDING
WITHOUT LIMITATION IN CONNECTION WITH THE MANUFACTURE, SALE, INSTALLATION, USE,
PERFORMANCE, FAILURE OR CORRUPTION OF THE COM21 PRODUCT(S) LICENSED
*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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HEREUNDER, REGARDLESS OF THE FORM OF THE ACTION, WHETHER IN CONTRACT, TORT
(INCLUDING NEGLIGENCE) STRICT PRODUCT LIABILITY OR OTHERWISE, EVEN IF ANY
REPRESENTATIVE OF A PARTY HERETO HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
18.2 Notwithstanding Section 18.1, in the event Company breaches
its obligations to sell Products to 3Com under this Agreement, Company agrees
that it shall use its best efforts to have its other authorized resellers of
such Products sell to 3Com such number of units of the Products that Company
failed to sell to 3Com. Company agrees that the limitation of cover remedy
described in Section 18.1 shall not apply in the event 3Com procures substitute
Products from such other resellers.
19. MISCELLANEOUS.
19.1 Notices. Any notice provided for or permitted under this
Agreement will be treated as having been given when (a) delivered personally,
(b) sent by confirmed telex or telecopy, (c) sent by commercial overnight
courier with written verification of receipt, or (d) mailed postage prepaid by
certified or registered mail, return receipt requested, to the party to be
notified, at the address set forth below, or at such other place of which the
other party has been notified in accordance with the provisions of this Section
19.1 (Notices).
If to 3Com:3Com Corporation
5400 Bayfront Plaza
Santa Clara, CA 95052
Telecopy: (408) 764-8955
Attention: Interface Products Group Purchasing Manager
with a copy to the attention of 3Com's General Counsel at the address
above, and a telecopy number of (408) 764-6434.
If to Company: Com21, Inc.
750 Tasman Drive
Milpitas, CA 95035
Telecopy: (408) 953-9299
Attention: President
with a copy to: Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, CA 94303
Telecopy: (415) 496-2885
Attention: Edward M. Leonard, Esq.
Such notice will be treated as having been received upon the earlier of actual
receipt or five (5) days after posting.
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19.2 Assignment. Neither party may assign, voluntarily, by
operation of law or otherwise, any rights or delegate any duties under this
Agreement (other than the right to receive payments) without the other party's
prior written consent, and any attempt to do so without such consent will be
void, except that an assignment to an acquiror of all or substantially all of a
party's stock, assets or business shall not require the prior written consent of
the other party. This Agreement will bind and inure to the benefit of the
parties and their respective successors and permitted assigns.
19.3 Modification. This Agreement cannot be amended or modified,
except by written instrument executed by the duly authorized representatives of
both parties.
19.4 Independent Contractors. The parties are independent
contractors of each other and neither has nor shall have any power, right or
authority to bind the other, or to assume or to create any obligation or
responsibility, express or implied, on behalf of the other. Nothing contained in
this Agreement shall be construed as establishing 3Com and Company as partners
or joint venturers, or as creating the relationship of employer and employee,
master and servant, or principal and agent between them.
19.5 Headings. The printed titles given to the clauses of this
Agreement are inserted for convenience only and do not form part of this
Agreement and shall not affect its interpretation.
19.6 Waiver. A waiver of any default hereunder or of any of the
terms and conditions of this Agreement shall not be deemed to be a continuing
waiver or a waiver of any other default or of any other term or condition, but
shall apply solely to the instance to which such waiver is directed. The
exercise of any right or remedy provided in this Agreement shall be without
prejudice to the right to exercise any other fight or remedy provided by law or
equity, except as expressly limited by this Agreement.
19.7 Severability. If any provision of this Agreement shall be held
to be invalid, illegal or unenforceable, then. to the extent permitted by law,
the validity, legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
19.8 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND ALL DISPUTES HEREUNDER SHALL BE GOVERNED BY, THE LAWS OF THE STATE OF
CALIFORNIA, EXCEPT ITS CONFLICT OF LAW RULES. THE PARTIES EXCLUDE IN ITS
ENTIRETY THE APPLICATION TO THIS AGREEMENT OF THE UNITED NATIONS CONVENTION ON
CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS.
19.9 Choice of Forum. The sole jurisdiction and venue for actions
related to the subject matter of this Agreement shall be the United States
District Court and the Courts for the State of California, Santa Clara County
and the parties hereby submit to the jurisdiction of such courts and waive any
and all venue objections.
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19.10 Export Controls. 3Com shall comply with afl applicable
export laws, restrictions, national security controls and regulations of the
United States and all other applicable foreign agencies and authorities, and
shall not export or re-export, or allow the export or re-export of any Com21
Product or any copy, portion or direct Product thereof (i) in violation of any
such restrictions, laws or regulations, or (ii) without all required
authorizations to Cuba. Libya, North Korea, Iran, Iraq or Rwanda or to any Group
D:1 or E:2 country (or any national of such country) specified in the then
current Supplement No. I to part 740 of the U.S. Export Administration
Regulations (or any successor supplement or regulations); 3Com shall obtain any
necessary licenses and/or exemptions with respect from the U.S. of all materials
or items deliverable by Company and upon request by Company shall demonstrate to
Company compliance with all such applicable laws and regulations prior to
delivery thereof by Company.
19.11 Attorneys' Fees. Any action to enforce this Agreement, the
prevailing party shall be awarded all court costs and reasonable attorneys' fees
incurred, including such costs and attorneys' fees incurred in enforcing and
collecting the judgment.
19.12 Entire Agreement. This Agreement, the Technology License and
Reseller Agreement and the Exhibits attached hereto and thereto (except for
Exhibit G (Technology Escrow and Manufacturing License) of the Technology
License and Reseller Agreement) constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all previous or
simultaneous proposals, negotiations, representations, commitments, writings and
all other communications between the parties, both oral and written. This
Agreement may not be released, discharged, changed or modified except by an
instrument in writing signed by a duly authorized representative of each of the
parties. The terms of this Agreement shall prevail in the event that there shall
be any variance with the terms and conditions of any invoice, acknowledgment or
other such document submitted by Company or any purchase order, acknowledgment
or any other such document submitted by 3Com.
19.13 Allocation of Risk. The sections on limitation of liability,
warranty and warranty disclaimer allocate the risks in the Agreement between the
parties. This allocation is an essential element of the basis of bargain between
the parties.
19.14 Construction of Agreement. This Agreement has been negotiated
by the respective parties hereto and their attorneys and the language hereof
shall not be construed for or against any party.
19.15 Counterparts. This Agreement may be signed in two
counterparts which together shall form a single agreement as if both parties had
executed the same document.
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IN WITNESS WHEREOF, the parties have caused their duly authorized
officers to execute this Agreement.
COMPANY: 3COM:
COM21, INC. 3COM CORPORATION
------------------------------- -------------------------------
Name Name
------------------------------- -------------------------------
Title Title
July 30, 1997 July 30, 1997
------------------------------- -------------------------------
Date Date
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EXHIBIT A
DESIGN SPECIFICATIONS
[to be attached prior to date of first shipment of Products by Company to
3Com; Specs for Products shipped already to be provided by Com21 prior
to execution]
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EXHIBIT B
PRODUCT AND PRICE LIST
CHANNEL PARTNER DISCOUNTS
SECTION FOUR
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Confidential
3COM ADDITIONS TO EXHIBIT B
COM21 PRODUCTS EXTENDED WARRANTY
Service Agreement Packages:
Annual (Standalone) Software Maintenance Agreement
Software Maintenance
The annual service agreement can also be bundled with a software
maintenance agreement which provides upgrades to major and maintenance
software releases: Price:First Year SW maintenance at time of NMAPS
purchase: [*]
If purchased within 12 months of time of NMAPS purchase:
[*]
If purchased after 12 months of NMAPS purchase and the release
of the Com21 Software held by the End User is the then current
release or the immediately preceding release: [*]
If, however after 12 months, the End User has an older version
of the Com21 Software that is two or greater versions behind
the then current release, the End User must also purchase the
then current release at full price.
PRODUCTS COVERED:
NMAPS
System Software
TYPICAL SCENARIOS:SCENARIOS:
Maintenance Release (3.X to 3.X+1)
Software Maintenance contract customers automatically receive upgrade at
no additional charge. New customers pay list price of software and
receive current rev (3.X + 1)
Major Release (3.X to 4.0)
New customers pay full list price for and are offered the choice of
purchasing a software maintenance contract.
*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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Confidential
NOTE: Customer Service will always be able to upgrade a customer for free
if they deem necessary.
Duration of Contract
Maintenance contracts last for 12 months from the time of purchase. These
will not be dependent on the calendar year. Renewal notification shall be
generated by order administration sixty (60) days notice and sent to
sales for their follow-up.
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EXHIBIT C
SUPPORT SERVICES
1. Definitions
Authorized Caller. "Authorized Caller" means a person or persons
designated by 3Com as the technical support interface for the Products.
Designated Support Engineer. "Designated Support Engineer" means a person
or persons designated by Company as the technical support interface for
after-hour assistance, if different from "Primary and Secondary Contacts."
Error. "Error" means a defect in the Product which is reproducible and
which causes such Product not to function substantially in conformance with the
Company's Design Specifications, End User documentation, or other related
documentation, including without limitation any functional specifications or
other engineering documentation for the Product, or commonly accepted operating
principles as defined by industry standards. Errors are classified as follows:
Severity 1: Major Service Interruption. The problem causes
significant loss of user data or work time. Performance degradation is such that
Major Functions cannot be completed. The customer cannot accomplish meaningful
work and there is no customer acceptable Workaround available.
Severity 2: Significant Service Interruption. The problem causes
difficulty in the execution of a Minor Function. Perceptible performance
degradation may occur but the function completes after a period of time
acceptable to the customer. Customer acceptable Workaround available.
Severity 3: Other Non-Conformance to Specification. No loss of
function, but impairs some operations. Problem causes a minor inconveniences
such as cosmetic problem, awkward interface, or minor syntax discrepancy. This
includes documentation errors.
Major Function. "Major Function" means a function that is
frequently used or represents the essential functions for which Product is
purchased or used by a customer or is necessary for approval or sale by
Government agencies or applicable standards.
Minor Function. "Minor Function" means a function that is not
frequently used or does not represent the essential functions for which the
Product is purchased or used by a customer or is not necessary for approval or
sale by government agencies or applicable standards.
Primary and Secondary Contacts. "Primary and Secondary Contacts"
means the persons assigned by Company as the technical support interface for the
Products.
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Problem Priorities. "Problem Priorities" classify the criticality
of a problem at a customer site. Problem Priorities are assigned at the time of
3Com's initial contact with Company. Problem Priorities may be changed based
upon new information or customer situation. Problem Priorities are defined the
same as Errors, but refer the classification of the incident, not any resulting
Error which may be identified during the resolution of the incident.
Severity 1: Major Service Interruption. The problem causes
significant loss of user data or work time. Performance degradation is such that
major functions cannot be completed. The customer cannot accomplish meaningful
work and there is no customer acceptable workaround available.
Severity 2: Significant Service Interruption. The problem causes
difficulty in the execution of a minor function. Perceptible performance
degradation may occur but the function completes after a period of time
acceptable to the customer. Customer acceptable workaround available.
Severity 3: Other Non-Conformance to Specification. No loss of
function, but impairs some operations. Problem causes a minor inconveniences
such as cosmetic problem, awkward interface, or minor syntax discrepancy.
Documentation errors are classified as Severity 3 incidents.
Technical Support Levels. "Level" means a certain class of service
provided to Authorized Resellers and End Users. Definitions are as follows:
Level One: Technical support staff is competent to answer technical
inquiries regarding Products, perform remedial hardware determination, and
Product installation and configuration support.
Level Two: Technical support staff is competent to identify the
cause of a problem, replicate the problem at either the end-user site or 3Com
test facility, and implement a solution for a problem which is not the result of
a Product Error. In the case of a Product Error, the technical staff is
competent to identify the source of the Error, create a reproducible test case,
and document the details of the Error for escalation to Company.
Level Three: Staff is competent to identify a Product Error and
implement a solution through a Product change in either hardware or software.
Workaround. A "Workaround" is a feasible change in operating
procedures whereby an End User can avoid any deleterious effects of an Error.
2. Technical Support
2.1 Support Issues. 3Com is responsible for providing Level One and
Level Two pre-sales and post-sales support services to its Authorized Resellers
and End Users. Company shall provide Level Three back-up technical support to
3Com, and shall make available to 3Com support via telephone, FAX or E-Mail to
3Com's Authorized Caller(s).
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Company's support will provide telephone acknowledgment of 3Com's support calls
within (1) hour on a twenty-four (24) hour per day, seven (7) days per week,
three hundred and sixty-five (365) days per year basis provided that 3Com calls
the Primary or Secondary Contact or Designated Support Engineer. 3Com will
receive most favored class of priority from Company, and will be assigned
Primary and Secondary Contacts. This support shall be provided at 3Com's
FCS/First Customer Ship for one (1) year at no cost to 3Com. Thereafter, 3Com
has the option to renew such support services on a quarterly basis during the
term of this Agreement and for each of the next four (4) years thereafter, at a
quarterly cost to be set forth in Exhibit B (Product and Price List), which cost
shall not exceed Company's price to other customers for such maintenance and
support, less Company's most favored discount therefor. 3Com is under no
obligation to renew all or any portion of such support and may cancel all or any
portion of such support at any time and receive a prorated refund of any prepaid
fees. Such support shall be automatically renewed unless 3Com gives written
notice of termination of support at least thirty (30) days prior to the end of
the current quarter.
The Authorized Callers will be the primary contacts between 3Com's
and Company's technical support centers. 3Com will be permitted to register up
to six Authorized Callers. 3Com will provide a list of Authorized Callers
including names, address, phone numbers, and internet e-mail address. This list
will be reviewed quarterly and updated as required. All Authorized Callers shall
receive training as set forth in section 4.
Company will provide a list of Designated Support Engineers; this
list will be reviewed quarterly and updated as required.
The Primary and Secondary Contacts will be the contacts between Company's
and 3Com's Authorized Callers. Company will provide a list of Primary and
Secondary Contacts; this list will be reviewed quarterly and updated as
required.
2.2 Resolution of Support Issues. 3Com shall reasonably attempt to
resolve Level One and Level Two customer support requirements for the Products
prior to contacting Company. Company will provide Level Three support to 3Com.
In the event that 3Com cannot successfully resolve customer issues within a
reasonable period of time, upon request from 3Com Company shall use commercially
reasonable efforts to provide Level Two technical support to ensure that 3Com
provides prompt resolution of issues regarding Products. Company will not,
regarding the Products, contact or provide direct support to 3Com's customers
pursuant to this Agreement without 3Com's prior approval. Company will use
commercially reasonable efforts to provide an initial response acknowledging
receipt of the support request to all 3Com support requires within one (1) hour
and 3Com and Company will agree, in good faith, what additional information
and/or documentation will be required for resolution. If a particular problem is
not resolved or identified as an "Error" within two (2) business days following
the initial call to Company, technical support managers and engineers for each
party will work in good faith to devise and carry out a plan that will provide a
timely and satisfactory resolution. Company shall work with 3Com in attempting
to reproduce any such problem.
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2.3 Emergency Technical Support. For End User or Authorized
Reseller problems deemed by 3Com to be a Severity I emergency, Company will use
its commercially reasonable efforts to address and resolve the problems as
quickly as possible.
Except as set forth in this Exhibit C (Support Services), Company shall
have no responsibility pursuant to this Agreement for providing technical
support directly to 3Com's Authorized Resellers and End Users. Such technical
support shall be provided by 3Com and/or its Authorized Resellers in accordance
with 3Com's usual customer support procedures. However, in the event that an End
User requires emergency, on-site support that would be significantly facilitated
by Company's assistance and such support is requested by 3Com, Company agrees to
use its commercially reasonable efforts to provide such emergency support. 3Com
will attempt to manage the situation, such that Company's assistance will be
transparent to the customer and shall reimburse Company for its time at the
price set forth in Exhibit B (Product List and Prices), plus other reasonable
expenses. In situations where the site visit was precipitated by a known (but
unresolved) or acknowledged Company problem, 3Com will not reimburse for labor
or expenses. Problems regarded as emergencies include, but shall not be limited
to, problems resulting from Errors. Problem resolution shall be governed by the
Sustaining Engineering/ Error Correction section below.
2.4 Sustaining Engineering/Error Correction. 3Com and Company shall
promptly agree in good faith to provide any information and/or documentation
which may be required to permit Company to identify and resolve Product Errors.
The Error correction period begins after Company (a) has enough information to
profile the Error and (b) can recreate the Error or has access to a facility
where the Error can be recreated. Company agrees to respond to identified Errors
based on the following time-table:
Severity 1 Errors. Company shall use its commercially reasonable efforts
to resolve or reduce the severity via workaround and/or patch within
forty-eight (48) hours of receipt of notice of such Error. Company shall
provide its action plan within twenty-four (24) hours, and regular status
updates. Final resolution shall be identified per action plan. 3Com and
Company problem managers shall review Error status after forty-eight (48)
hours.
Severity 2 Errors. Company shall use its commercially reasonable efforts
to resolve or reduce the severity via workaround and/or patch within five
(5) working days of receipt of notice of such Error. Company shall
provide an action plan within seventy-two (72) hours, and regular status
updates. 3Com and Company problem managers shall review after five (5)
working days. When required, a final engineering solution shall be
identified per action plan.
Severity 3 Errors. Company shall use its commercially reasonable efforts
to acknowledge the Error within fifteen (15) working days of receipt of
notice. Acknowledgment will convey entry into Company's Error or Product
Requirements Database. Final engineering resolution will be determined
and scheduled through mutual agreement between 3Com and Company's
Engineering and Marketing management.
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The prescribed Error correction periods above may be extended as mutually
agreed, e.g., if resolution of problem requires timely hardware certification or
test, or if resolution represents significant risk to the Major Functions.
Provided that Company is using its commercially reasonable efforts to
resolve any such Error, 3Com agrees that a breach of this provision by Company
is insufficient to allow 3Com to terminate the Agreement and shall not be an
Event of Escrow Release; provided, however, 3Com shall be entitled to pursue any
other remedy available to 3Com, including, but not limited to seeking damages
for Company's breach.
Company shall provide 3Com, as a common business practice, a mechanism by
which 3Com may receive a monthly detail list of the status of all Errors
reported and/or resolved. This list shall contain known problems, Workarounds
list and open Error/Bug report.
2.5 Support Tools. At no charge to 3Com, Company shall provide
diagnostic tools which Company has the right to provide to 3Com and procedures
and a list/description of test equipment reasonably necessary and used by
Company to troubleshoot problems and assist in problem identification, isolation
and resolution.
Company shall also provide the following additional support tools, if
available: (i) compatibility/inter-operability matrix and (ii) supported and not
supported configurations statement. Company shall further promptly provide to
3Com when available, all modifications or other revisions to such support tools.
2.6 Support Evaluation. From time to time following acceptance by
3Com of the Products, but no less frequently than once each calendar quarter,
management-level support representatives from each party will meet to review the
performance of, and recommend improvements regarding, the technical support and
warranty assistance offered to End Users and Authorized Resellers under this
Agreement.
3. Hardware Support
3.1 Repair Services. 3Com shall have the right to purchase Product
repair services, spare parts and upgrade kits as applicable for a period of
seven (7) years after the last shipment of the affected Product hereunder,
notwithstanding the expiration of the Agreement. Such purchases shall be
governed by the applicable terms and conditions set forth herein. The prices
charged for such Product repair services, spare parts and upgrade kits shall be
at the lowest prices then charged by Company to any other Customer for similar
quantities of the same or comparable items. Should Company fail to provide
exchange or repair obligations, then Company will provide suitable and form,
fit, and function compatible replacement products at no additional charge to
3Com.
3.2 Inventory Requirements. Company will provide failure analysis
reports for the Product. The reports shall include predicted, demonstrated and
field data for the whole unit assembly and individual subassemblies (FRUs/Field
Replaceable Units), including MTBF/Mean Time Between Failure data, and how MTBF
is computed. The reports will also
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include the sparing/inventory rationale used by the Company. Company will
provide to 3Com product and spares inventory recommendations, based on the
failure analysis data.
3.3 Test and Repair Procedures. At no charge to 3Com, Company shall
provide test specifications, test equipment specifications, and written test
procedures necessary to enable 3Com personnel to verify functional failures,
perform adjustments and alignments, as required, and verify functional
performance.
3.4 Out-of-Warranty Repairs. Company will repair or replace a
defective Product and forward the same back to 3Com. Company will repair
defective Product to 3Com standards, including cosmetic standards (i.e., proper
labeling, no scratches or dents, all feet). Company will upgrade repaired
Product to the most recent revision level for such Product at no additional
cost. Company shall charge its standard repair rates less the largest discount
offered to Company's other customers. Any out-of-warranty repaired Products
carry a ninety (90) day warranty from shipment by Company. 3Com reserves the
option to perform out-of-warranty repairs at the 3Com repair facilities. In the
event 3Com exercises the option to perform repairs at the 3Com facilities,
Company shall provide all required product specifications, engineering
documentation, test and repair procedures. Out-of-warranty repair charges for a
Product shall not exceed twenty percent (20%) of the discounted price paid by
3Com for such Product.
3.5 Return Material Authorization (RMA). Company shall provide 3Com
with RMA procedures. The following procedure shall apply to Company's repair of
both in- warranty and out-of-warranty Products, except as otherwise noted.
(i) Management. Company will use its commercially reasonable
efforts to provide 3Com with RMA number within twenty-four (24) hours after
receipt of request. 3Com Repair RMA returns of Products will be managed through
a 3Com Repair center. 3Com shall notify Company if it opens more than five such
repair centers. Company will provide domestic and international interfaces to
manage 3Com returns. 3Com shall return Product to Company's closest geographic
repair center.
(ii) Turn-Around Time. Company will use commercially
reasonable efforts to repair or replace the defective Product and forward the
same back to 3Com within ten (10) business days after receipt, but in all
instances Company shall repair or replace the defective Product and forward the
same back to 3Com within fifteen (15) business days. Company will provide
expedited repair service to accommodate 3Com emergency requirements with an
expedite cost equal to ten percent (10%) of the repair charge described in the
last sentence of section 3.4 above; provided however that if the Product for
which expedited repair service has been requested is not repaired or replaced
and forwarded back to 3Com within ten (10) business days, such expedite cost
shall be waived.
(iii) Reporting. 3Com Repair RMA returns of Products will be
returned with an itemized repair report for each unit. Company will provide a
monthly report of: (i) RMAs processed, including failure analysis and (ii)
physical inventory of 3Com owned material. Upon special request, Company will
provide inventory status within two (2)
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business days.
(iv) Shipping charges. 3Com will pay shipping charges on
out-of-warranty Products shipped to Company for repair. Company will pay
shipping charges on Products returned to 3Com.
(v) Packaging requirements. Company and 3Com will jointly
develop a repair shipping process prior to FCS/First Customer Ship of a Product
by 3Com that satisfies packaging requirements for both parties.
3.6 No Problem Found (NPF). Company shall provide statistics on
Product NPF returns on a quarterly basis. Company shall waive any NPF charges on
Com21 Headend Products returned for repair to the extent such Com21 Headend
Products represent less than twenty-five percent (25%) of the out-of-warranty
Com21 Headend Products returned for repair during that calendar quarter. 3Com
may be subject to charges associated with Company's handling and shipping of NPF
returns in excess of twenty-five percent (25%) of the out-of-warranty Com21
Headend Product returns, not to exceed twenty-five percent (25%) of the repair
charge. Company shall waive any NPF charges on Com21 Modem Products returned for
repair to the extent such Com21 Modem Products represent less than ten percent
(10%) of the out-of-warranty Com21 Modem Products returned for repair during
that calendar quarter. 3Com may be subject to charges associated with Company's
handling and shipping of NPF returns in excess of ten percent (10%) of the
out-of-warranty Com21 Modem Product returns, not to exceed twenty-five percent
(25%) of the repair charge. Further, both parties agree to work together to
reduce the frequency of NPF returns.
4. Training
4.1 Technical Training. During the term of this Agreement, Company
shall, at its expense, provide 3Com with one (1) course per Product of basic and
advanced training for up to six (6) 3Com employees (including the Authorized
Callers) engaged in the technical support of the Product. Company shall further
provide to 3Com, at Company's expense, similar training for modifications or
other revisions to the Product(s). Training will be conducted at Com21's
facilities in Milpitas, California or such other mutually agreeable facility.
Each training course shall commence on a mutually agreed upon date. Such
training shall cover in detail, the installation, configuration, operation,
trouble shooting, adjustment, test and maintenance of the Product. When training
is held at Company's training facilities, Company shall provide a reasonable
quantity of appropriate Product units as training aids. When such classes are
conducted at 3Com's facilities, 3Com shall provide a reasonable quantity of
Products, and other required equipment as training aides. Company shall provide
copies of the student training guides, and all other necessary materials to each
trainee and to 3Com. 3Com may record any or all training courses on video tape
and may reproduce and distribute such recordings, for internal use only, under
3Com's name.
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Company also shall provide at no cost to 3Com, continuing training to
3Com employees and independent contractors, as follows:
(a) After the first year of the Agreement, Company shall
provide annually to 3Com, without cost, complete technical training relating to
its Products for up to six (6) qualified individuals;
(b) Upon the release of each new Product or new version of
existing Product with substantial functional changes, Company shall provide to
3Com, without cost, complete technical training relating to such new Product or
version for six (6) qualified individuals.
Company shall offer additional training throughout the term of this
Agreement at Company's standard rates that are listed in Exhibit B (Product and
Price List). If conducted at other than 3Com's Santa Clara or San Jose facility
or Company's facility, 3Com shall pay all reasonable costs incurred by Company's
instructor(s) for travel and living expenses during the period of such training.
Company shall pay for the salary of its instructor(s) and all other costs and
expenses related to such training. Company shall submit invoices to 3Com after
the conclusion of such training classes which itemize all expenses incurred and
shall include copies of all receipts therefor. Payment terms shall be net thirty
(30) days from receipt of invoice.
4.2 Training Courses and Materials. During the term of this
Agreement, Company shall provide 3Com with all materials utilized to provide
training in connection with the Products. Training shall include, but is not
limited to, customer reseller and end-user courses. Training materials shall
also include, but are not limited to, instructor guides, overheads, student
workbooks, and manual/guides. Company shall provide masters of such training
materials in both hard copy and electronic media. Company shall further provide
copies of all modifications or other revisions to such training materials as
they become available. 3Com is permitted to use such material for its internal
use only in training 3Com's sales and support staff on the Products.
Company hereby grants to 3Com a royalty-free non-exclusive, worldwide
license to use, modify, create derivative works based upon, reproduce and
distribute the training materials (whether modified or unmodified but excepting
proprietary technical information relating to the products) for use by its
Authorized Resellers and End Users and its/their employees and consultants in
connection with the Products distributed under the terms of the Agreement.
3Com hereby grants to Company a royalty-free non-exclusive, worldwide
license to use, modify, create derivative works based upon, reproduce and
distribute the 3Com training materials (whether modified or unmodified but
excepting proprietary technical information relating to 3Com products) based
upon the Company training materials and created in accordance with the license
granted in the immediately preceding paragraph, for use by Company's authorized
resellers and End Users and its/their employees and consultants in connection
with the Products distributed under the terms of the Agreement.
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Escrow # 1267-7
EXHIBIT D
ESCROW AGREEMENT
This Escrow Agreement ("Escrow Agreement") is executed this 18th day of
September 1997 by and among Com21, Inc., a Delaware corporation ("Company"),
with an office at 750 Tasman Drive, Milpitas, California 95053, 3Com
Corporation, a Delaware corporation ("3Com "), with an office at 5400 Bayfront
Plaza, Santa Clara, CA 95052-8145, and Brambles NSD, Inc., a Delaware
corporation ("Escrow Agent"), as Escrow Agent.
RECITALS
A. Company and 3Com have entered into a Reseller Agreement ("Reseller
Agreement") pursuant to which Company shall distribute the Products, as defined
in the Reseller Agreement, to 3Com.
B. The Reseller Agreement requires Company and 3Com to enter into an
Escrow Agreement with Escrow Agent in the form hereof.
C. The purpose of this Escrow Agreement is to provide for Company's
periodic deposit of the Technology Documentation, as defined below, with Escrow
Agent and, under certain circumstances specified below, to permit 3Com to obtain
the Technology Documentation from the Escrow Agent solely for the purposes set
forth herein.
D. Escrow Agent is in the business of providing third party technical
escrow protection by storing, retaining and allowing limited access to
proprietary technology, including computer software, related media,
documentation, and materials.
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein, the parties agree as follows:
1. DEPOSIT OF DOCUMENTATION.
a. The term "Technology Documentation" as used in this Escrow
Agreement has the same meaning as set forth in Section 1.23 of the Reseller
Agreement.
b. The term "Deposit" as used in this Escrow Agreement means the
Technology Documentation, including updates, deposited with Escrow Agent by
Company pursuant to this Escrow Agreement.
c. Company agrees to deposit with Escrow Agent, a complete copy of
the Technology Documentation, within ten (10) days after the date of first
shipment by Company of the Products to 3Com. Any deposit with the Escrow Agent
shall consist of a sealed package certified by an authorized officer of Company
to contain a complete set of the
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Technology Documentation as defined in Paragraph 1(a) above.
2. REVISIONS AND MAINTENANCE.
a. Company agrees to deposit with Escrow Agent a copy of all
revisions of and additions to the Technology Documentation ("Updates") if
Company updates its own archival copy of the Technology Documentation. Such
revisions and additions shall be deposited in a sealed package certified by an
authorized officer of Company to contain a complete Update.
b. Escrow Agent shall acknowledge receipt of all Deposits by
sending written acknowledgment thereof to both Company and 3Com within ten (10)
days of acceptance of a Deposit by Escrow Agent.
3. VERIFICATION.
a. At 3Com's option and expense, 3Com may select an independent,
disinterested consultant, reasonably acceptable to Company, to verify that any
Deposit delivered to the Escrow Agent contains a complete version of the
Technology Documentation. For purposes of this Agreement, the consultant may,
among other things, compile any source code into object code and test and
compare such object code version against Company's version. As a condition to
permitting the consultant to perform verification under this Escrow Agreement,
the consultant will be required to execute an appropriate confidentiality
agreement in a form reasonably acceptable to Company for the protection of
Company's proprietary rights in the Technology Documentation.
b. The consultant has permission to remove the Deposit or any
portion thereof from the Escrow Agent's site location to verify that the Deposit
contains the Technology Documentation and as part of such verification, to test
the Deposit accordingly to determine if the Deposit is sufficient to permit 3Com
to exercise its fights under Section 10 (Manufacturing License Grant Including
the Use of Source Code) hereof, when and if such rights become exercisable. The
consultant will not be permitted to communicate to 3Com any information
concerning the documentation, including design, structure, sequence or other
internal aspects of the source code contained in the Deposit, but will merely
verify for 3Com that the source code contained in the Deposit is complete,
accessible, and contains the materials it should contain in accordance with this
Escrow Agreement.
4. STORAGE AND SECURITY.
a. Escrow Agent shall act as custodian of the Deposit until the
escrow is terminated pursuant to Section 12 (Termination) of this Escrow
Agreement. Escrow Agent shall establish, under its control, a secure receptacle
for the purpose of storing the Deposit and shall put the receptacle under the
control of one or more of its officers, selected by Escrow Agent, whose identity
shall be available to Company and 3Com at all times. Escrow Agent shall exercise
a professional level of care in carrying out the terms of this Escrow Agreement.
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b. The Deposit shall remain the exclusive property of the Company,
subject only to the licenses provided in this Escrow Agreement.
c. Escrow Agent shall not divulge, disclose or otherwise make
available the Deposit to any parties other than those persons duly authorized in
writing by an officer of Company or make any use whatsoever of the Deposit or of
any information provided to it by Company in connection with this Escrow
Agreement, except as provided in this Escrow Agreement.
d. Escrow Agent shall not permit any person access to the Deposit
except in accordance with Section 3 (Verification) and as may be necessary for
Escrow Agent's authorized representatives to perform under this Escrow
Agreement. This obligation will continue indefinitely notwithstanding
termination of this Escrow Agreement.
e. Access to the Deposit shall not be granted without compliance
with all security and identification procedures instituted by Escrow Agent.
f. Escrow Agent shall have no obligation or responsibility to
verify or determine that the Deposit does, in fact, consist of those items which
Company is obligated to deliver, under any agreement, and Escrow Agent shall
bear no responsibility whatsoever to determine the existence, relevance,
completeness, currency, or accuracy of the Deposit.
g. Escrow Agent's sole responsibility shall be to accept, store and
deliver the Deposit, in accordance with the terms and conditions of this Escrow
Agreement.
h. If any of the Deposit shall be attached, garnished or levied
upon pursuant to an order of court, or the delivery thereof shall be stayed or
enjoyed by an order of court, or any other order, judgment or decree shall be
made or entered by any court affecting the Deposit or any part thereof, Escrow
Agent is hereby expressly authorized in its sole discretion to obey and comply
with all orders, judgments or decrees so entered or issued by any court, without
the necessity of inquiring whether such court had jurisdiction, and in case
Escrow Agent obeys or complies with any such order, judgment or decree, Escrow
Agent shall not be liable to any 3Com of Record, Company or any third party by
reason of such compliance, notwithstanding that such order, judgment or decree
may subsequently be reversed, modified or vacated.
5. RELEASE OF DEPOSIT.
a. Upon the occurrence of any Event of Default (as defined in
Section 8 (Events of Default), 3Com may deliver to Escrow Agent a written notice
of such Event of Default ("Notice"), and Escrow Agent shall provide a copy of
such Notice to Company by certified mail. Unless Company shall have provided
Contrary Instructions (as defined below) to Escrow Agent within ten (10) days
after receipt of 3Com's Notice, the Deposit shall be delivered to 3Com by Escrow
Agent within the next five (5) business days following the end of such ten (10)
day period.
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b. "Contrary Instructions" for the purpose of this Escrow Agreement
means a notarized affidavit executed by an official of Company stating that the
Event or Events of Default specified in 3Com's Notice have not occurred, or have
been cured.
c. Upon timely receipt of such Contrary Instructions, Escrow Agent
shall not release the Deposit, but shall continue to store the Deposit until
otherwise directed by 3Com and Company jointly, or until resolution of the
dispute pursuant to Section 6 (Dispute Resolution) of this Escrow Agreement, or
by a court of competent jurisdiction.
d. Notwithstanding any Deposit release hereunder, the obligations
of Company to continue making Deposits and the obligations of Escrow Agent to
receive and maintain such Deposits shall continue throughout the term of this
Escrow Agreement.
6. DISPUTE RESOLUTION. Company and 3Com agree that if Contrary
Instructions are timely given by Company pursuant to Section 5 (Release of
Deposit) hereof, then Company and 3Com shall submit their dispute regarding
3Com's Notice to arbitration by a single arbitrator who is a member of the
American Arbitration Association, according to its rules and regulations then in
effect. Said arbitration shall take place in the city and state where the
Deposit is stored by Escrow Agent. The decision of the arbitrator shall be final
and binding upon the parties and enforceable in any court of competent
jurisdiction, and a copy of such decision shall be delivered immediately to
Company, 3Com and Escrow Agent. The parties shall use their reasonable efforts
to commence the arbitration proceeding within ten (10) business days following
delivery of the Contrary Instructions. 'Me sole questions to be determined by
the arbitrator shall be whether or not 3Com has the right to receive the Deposit
under the terms of this Escrow Agreement. If the arbitrator finds that 3Com has
the right to receive the Deposit, Escrow Agent shall promptly deliver the
Deposit to 3Com . Depositions may be taken and discovery obtained in any such
arbitration proceedings in accordance with California Code of Civil Procedure
("CCP") Section 1283.05 and 1283.1. All fees and charges by the American
Arbitration Association and the reasonable attorneys' fees and costs incurred by
the prevailing party in the arbitration shall be paid by the non-prevailing
party. Judgment upon the award rendered by the arbitrator may be entered into
any court having jurisdiction thereof. Notwithstanding the foregoing, either
party shall have the right to obtain a preliminary judgment on any equitable
claim in any court of competent jurisdiction, where such judgment is necessary
to preserve property or proprietary rights under this Escrow Agreement. Such
judgment shall remain effective as long as the terms of the judgment so provide
or until specifically superseded by the action of the arbitrator as provided
above.
7. BANKRUPTCY. Company and 3Com acknowledge that this Escrow Agreement is
an "agreement supplemental to" the Reseller Agreement as provided in Section
365(n) of Title 11, United States Code ("Bankruptcy Code"). Company acknowledges
that if Company (as a debtor in possession) or a trustee in bankruptcy rejects
the Reseller Agreement or this Escrow Agreement in a case under the Bankruptcy
Code, 3Com may elect to retain its rights under the Reseller Agreement and this
Escrow Agreement as provided in Section 365(n) of the Bankruptcy Code. Upon
written request of 3Com to Company or the Bankruptcy Trustee, Company or such
Bankruptcy Trustee shall not interfere with the rights of 3Com as provided
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in the Reseller Agreement and this Escrow Agreement. including the right to
obtain the Deposit from Escrow Agent.
8. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an "Event of Default" for purposes of this Escrow Agreement.
a. Company becomes insolvent, generally fails to pay or admits in
writing its inability to pay its debts as they become due;
b. Company applies for or consents to the appointment of a trustee,
receiver or other custodian or makes a general assignment for the benefit of its
creditors;
c. The Reseller Agreement is not assumed in its entirety pursuant
to Section 365 of Title 11 of the United States Bankruptcy Code and not
dismissed within ninety (90) days of the date of the filing of any bankruptcy
proceeding or if the bankruptcy trustee rejects the Reseller Agreement prior to
the expiration of said ninety (90) day period;
d. Company takes any corporate or other action to authorize, or in
furtherance of, any of the foregoing;
e. Any event occurs which would permit 3Com to terminate the
Reseller Agreement pursuant to Section 15.2 (Termination for Cause) thereof
except as described in Section 2.4 (Sustaining Engineering/Error Correction) of
Exhibit C (Support Services) of the Reseller Agreement or to terminate the
Technology License and Reseller Agreement dated March 22, 1996 (except as
described in Section 5.3 of such agreement (Acceptance) or if 3Com elects not to
renew such agreement in accordance with Section 17.1 (Term) of the Technology
License and Reseller Agreement);
f. Company ceases, or gives notice that it intends to cease
manufacturing and distributing the Com21 Headend Products (as such term is
defined in the Reseller Agreement); or
g. Company is unable to meet the reasonable supply requirements of
Com21 Headend Products of 3Com's customers. For purposes of this Section 8(d),
Company shall be deemed to be unable to meet the reasonable supply requirements
of 3Com's customers if Company is more than thirty (30) days late in shipping
fifty percent (50%) or more of scheduled orders of Com21 Headend Products for
any three (3) consecutive months; provided that such delays in shipment are not
the result of the occurrence of a force majeure condition as specified in
Section 17 (Force Majeure) of the Reseller Agreement that has lasted for less
than one hundred thirty-five (135) days or is not due to any delay, failure to
perform or interference by 3Com. In order for Company not to be deemed unable to
meet such reasonable supply requirements, Company must fulfill orders on a
"first-in first-out" (FIFO) basis (e.g., orders from Company's customers are
fulfilled in the order they are received).
9. INDEMNIFICATION. Company and 3Com jointly and severally agree to
indemnify, defend and hold Escrow Agent harmless from and against any and all
claims,
*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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actions and suits, whether groundless or otherwise, and from and against any and
all liabilities, losses, damages, costs, charges, penalties, counsel fees, and
any other expense of any other nature, including, without limitations,
settlement costs incurred by Escrow Agent on account of any act or omission of
Escrow Agent, in respect of or with regard to this Escrow Agreement, except
insofar as such liabilities arise by reason of Escrow Agent's gross negligence
or willful misconduct.
10. MANUFACTURING LICENSE GRANT INCLUDING THE USE OF SOURCE CODE. If any
or all of the Technology Documentation is released to 3Com pursuant to Section 5
(Release of Deposit), Company hereby grants 3Com the rights in and to the
Technology Documentation as provided in Section 16 (Technology Escrow and
Manufacturing License) of the Reseller Agreement.
11. RECORDS. Escrow Agent agrees to keep complete written records of the
activities undertaken and materials prepared and delivered to Escrow Agent
pursuant to this Escrow Agreement. Company and 3Com shall be entitled at
reasonable times during normal business hours and upon reasonable notice to
Escrow Agent during the term of this Escrow Agreement to inspect the records of
Escrow Agent with respect to the Technology Documentation. Company shall be
entitled upon reasonable notice to Escrow Agent and during normal business hours
to inspect the facilities of Escrow Agent with respect to the physical status
and condition of the Technology Documentation.
12. TERMINATION.
a. This Escrow Agreement shall terminate ninety (90) days after
termination of the Reseller Agreement. Upon such termination, except for
termination as a result of rejection of the Reseller Agreement in a bankruptcy
case of Company, Escrow Agent shall return the Deposit to Company.
b. 3Com may unilaterally terminate this Escrow Agreement upon sixty
(60) days written notice to Escrow Agent. Upon such termination, Escrow Agent
shall return the Deposit to Company.
c. Escrow Agent reserves the fight to resign as Escrow Agent upon
sixty (60) days prior written notice to Company and 3Com. Escrow Agent shall,
upon such termination, transfer the Deposit to such substitute Escrow Agent as
is specified in Company's and 3Com's joint notice to Escrow Agent after having
received payment of its fees and costs pursuant to Section 14 (Fees) of this
Escrow Agreement.
d. In the event that the sixty (60) day notice period in Section
12.b elapses without Escrow Agent having received payment from either Company or
3Com of the remaining fees due, Escrow Agent shall then have the option, without
further notice of either party, to terminate this Escrow Agreement and to
destroy the Deposit.
13. GOOD FAITH RELIANCE. Escrow Agent may rely and act upon any
instruction, instrument, or signature believed in good faith to be genuine, and
may assume that
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any person purporting to give any writing, notice, respect, advise or
instruction in connection with or relating to this Escrow Agreement has been
duly authorized to do so.
14. FEES.
a. In consideration of performing its functions as Escrow Agent,
Escrow Agent shall be compensated by 3Com as set forth in Schedule I hereto (Fee
Schedule). The fees set forth in Fee Schedule will be billed periodically by
Escrow Agent to 3Com.
b. The fees set forth in Fee Schedule are for Escrow Agent's
ordinary services as Escrow Agent. In the event Escrow Agent is required to
perform any additional or extraordinary services as a result of being Escrow
Agent, including intervention in any litigation or proceeding, Escrow Agent
shall receive reasonable compensation for such services and be reimbursed for
such costs incurred, including reasonable attorney's fees.
c. Escrow Agent shall be entitled to receive payment of all costs,
fees and expenses due it, prior to any release or return of the Deposit.
15. ENTIRE AGREEMENT. This Escrow Agreement and the Reseller Agreement,
including the Exhibits hereto and thereto, constitute the entire agreement among
the parties regarding the subject matter hereof, and shall supersede all
previous and contemporaneous communications, representations, understandings and
agreement, either oral or written between the parties.
16. NOTICE. All notices required or permitted by this Escrow Agreement
shall be in writing and shall be deemed to have been received upon the earlier
of receipt or one (1) day after dispatch, if sent by (i) personal same or next
day delivery, (ii) facsimile with confirmation of transmission or (iii)
commercial overnight carrier with written verification of receipt, to the other
parties at the address or facsimile number set forth below. The parties may
change their address or facsimile number by written notice to the other parties.
a. Escrow Agent:
Brambles NSD, Inc.
2109 Bering Drive
San Jose, CA 95117-2014
Attn: Escrow Officer
Fax: (408) 441-6826
b. Company:
Com21, Inc.
750 Tasman Drive
Milpitas, CA 95035
Telecopy: (408) 953-9299
Attn: President
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with copies to:
Brobeck, Phleger & Harrison LLP
Two Embarcadero Place
2200 Geng Road
Palo Alto, CA 94303
Telecopy: (415) 496-2885
Attention: Edward M. Leonard, Esq.
c. 3Com:
3Com Corporation
5400 Bayfront Plaza
Santa Clara, CA 95052
Telecopy: (408) 764-8955
Attention: Interface Products Group Purchasing Manager
With a copy to the attention of 3Com's General Counsel at the address above, and
a telecopy number of (408) 764-6434.
17. COUNTERPARTS. This Escrow Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument.
18. GOVERNING LAW. This Escrow Agreement shall be governed by and
construed according to the internal laws of the State of California without
application of the principles of choice of law or conflict of laws.
19. SEVERABILITY. In the event any of the provisions of this Escrow
Agreement shall be held by a court of competent jurisdiction to be contrary to
any state or federal law, the remaining provisions of this Escrow Agreement will
remain in full force and effect.
20. HEADINGS. The section headings in this Escrow Agreement do not form a
part of it, but are for convenience only and shall not limit or affect the
meaning of the provisions.
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IN WITNESS WHEREOF, the parties have executed this Escrow Agreement on
the date first above written.
COM21 3COM
By: By:
------------------------------- -------------------------------
Printed Name: Printed Name:
--------------------- ---------------------
Title: Title:
---------------------------- ----------------------------
Date: Date:
----------------------------- -----------------------------
ESCROW AGENT: Brambles NSD, Inc.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
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SCHEDULE 1
FEE SCHEDULE
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SCHEDULE 1
FEE SCHEDULE
Escrow Agent: BRAMBLES NSD, INC.
2109 Bering Drive
San Jose, CA 95131-2014
Re: Escrow Agreement # 1267-7, dated September 18, 1997
1. Initial Acceptance Fee (One Time Only) $1,125.00
2. Custom Escrow Agreements
Priced by Proposal
3. Annual Storage Fee
Standard Storage Unit 10" X 10" X 24" $ 425.00
(Larger Units Available)
(Total start-up and first year's fees = $1,550.00)
4. Account Administration/Maintenance
Clerical (One hour minimum per year) $ 30.00/Hr.
Officer Level (As required) $ 70.00/Hr.
Termination Fee (Minimum) $150.00
Shipping additional
5. Registration of Additional Licensees To
Multiple Licensee Escrow
First Licensee No Charge
Additional Licensees - Initial Registration $110.00 ea.
Annual Fee Per Licensee Thereafter $ 25.00 ea.
6. Outside Costs
Cost Plus 10%, as Incurred
Prices subject to change without notice.
Effective 12/15/92
*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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EXHIBIT E
COM21 END USER SOFTWARE LICENSE AGREEMENT
IMPORTANT: Read Before Opening or Using This Product
COM21 END USER SOFTWARE LICENSE AGREEMENT
YOU SHOULD CAREFULLY READ THE FOLLOWING TERMS AND CONDITIONS BEFORE OPENING OR
USING THIS PRODUCT. IT CONTAINS SOFTWARE, THE USE OF WHICH IS LICENSED BY COM21,
INC. ("COM21") TO ITS CUSTOMERS FOR THEIR USE ONLY AS SET FORTH BELOW. IF YOU DO
NOT AGREE TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, RETURN THIS ENTIRE
PACKAGE UNOPENED OR WITH THE SOFTWARE UNUSED TO COM21 OR THE LOCATION WHERE YOU
OBTAINED IT.
LICENSE: Com21 grants you a nonexclusive license to use the accompanying
software program(s) (the "Software") subject to the terms and restrictions set
forth in this License Agreement. Except as provided below, this License
Agreement does not grant you any rights to patents, copyrights, trade secrets,
trademarks, or any other rights in respect to the Software.
The Software is licensed to be installed and used on any appropriate Com21
products owned by or leased to you. You may reproduce and provide one (1) copy
of the Software and supporting documentation for each such product on which the
Software is used as permitted hereunder. Otherwise, the Software and supporting
documentation may be copied only as essential for backup or archive purposes in
support of your use of the Software as permitted hereunder. You must reproduce
and include all copyright notice(s) and any other proprietary rights notices
appearing on the Software and the supporting documentation on any copies that
you make.
ASSIGNMENT; NO REVERSE ENGINEERING: You may transfer the Software and
license to another party in the same country in which you obtained the Software
if the other party agrees in writing to accept the terms and conditions of this
License Agreement. If you transfer the Software, you must at the same time
either transfer any copies of the Software as well as the supporting
documentation to the same party or destroy any such materials not transferred.
Except as set forth above, you may not assign your rights under this License
Agreement.
Modification, reverse engineering, reverse compiling, or disassembly of the
Software is expressly prohibited. However, if you are a European Community
("EC") resident, information necessary to achieve interoperability of the
Software with other programs within the meaning of the U.K. Copyright [Computer
Program] Regulations 1992 implementing the EC Directive on the Legal Protection
of Computer Programs is available to you from Com21 upon written request.
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EXPORT RESTRICTIONS: You agree that you will not export or re-export the
Software or accompanying documentation (or any copies thereof) or any products
utilizing the Software or such documentation in violation of any applicable laws
or regulations of the United States or the country in which you obtained them.
TRADE SECRETS; TITLE: You acknowledge and agree that the structure, sequence and
organization of the Software are the valuable trade secrets of Com21 and its
suppliers. You agree to hold such trade secrets in confidence. You further
acknowledge and agree that ownership of, and title to, the Software and all
subsequent copies thereof regardless of the form or media are held by Com21 and
its suppliers.
UNITED STATES GOVERNMENT LEGENDS:
For units of the Department of Defense:
The Software is commercial computer software as defined in 48 C.F.R. 21 1 and
therefore is provided to units of the Department of Defense under the terms of
this License Agreement, which is Com21's standard commercial agreement for the
Software. In the alternative, if 48 C.F.R. 211 is not invoked, the Software is
licensed as follows:
Restricted Rights Legend: Use, duplication or disclosure by the United States
Government is subject to restrictions as set forth in subparagraph (c)(1)(ii) of
the Rights in Technical Data and Computer Software Clause at 48 C.F.R.
52.227-7013. Com21, Inc., 750 Tasman Drive, Milpitas, California 95035.
For civilian agencies:
Restricted Rights Legend: Use, reproduction or disclosure is subject to
restrictions set forth in subparagraph (a) through (d) of the Commercial
Computer Software - Restricted Rights clause at 48 C.F.R. 52.227-19 and the
limitations set forth in Com21's standard commercial agreement for the Software.
Unpublished rights reserved under the copyright laws of the United States.
TERM AND TERMINATION: This license will expire fifty (50) years from the date
that you first use the Software, if it is not earlier terminated. You may
terminate it at any time by destroying the Software and documentation together
with all copies and merged portions in any form. It will also terminate
immediately if you fail to comply with any term or condition of this License
Agreement. Upon such termination you agree to destroy the Software and
documentation, together with all copies and merged portions in any form.
GOVERNING LAW: This License Agreement shall be governed by the laws of the State
of California as such laws are applied to agreements entered into and to be
performed entirely within California between California residents and by the
laws of the United States. You agree that the United Nations Convention on
Contracts for the International Sale of Goods (1980) is hereby excluded.
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LIMITED WARRANTY; LIMITATION OF LIABILITY: All warranties and limitations of
liability applicable to the Software are as stated on the Limited Warranty Card
or in the product manual accompanying the Software. Such warranties and
limitations of liability are incorporated herein in their entirety by this
reference.
SEVERABILITY: In the event any provision of this License Agreement is found to
be invalid, illegal or unenforceable, the validity, legality and enforceability
of any of the remaining provisions shall not in any way be affected or impaired
and a valid, legal and enforceable provision of similar intent and economic
impact shall be substituted therefor.
ENTIRE AGREEMENT: This License Agreement sets forth the entire understanding and
agreement between you and Com21 and may be amended only in a writing signed by
both parties.
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COM21, INC.
LIMITED WARRANTY
HARDWARE: Com21 warrants its hardware products to be free from defects in
workmanship and materials, under normal use and service, for the following
lengths of time from the date of purchase from Com21 or its Authorized Reseller:
Hardware products One year
Spare parts and spares kits 90 days
If a product does not operate as warranted above during the applicable warranty
period, Com21 shall, at its option and expense, repair the defective product or
part, deliver to Customer an equivalent product or part to replace the defective
item, or refund to Customer the purchase price paid for the defective product.
All products that are replaced will become the property of Com21. Replacement
products may be new or reconditioned. Any replaced or repaired product or part
has a ninety (90) day warranty or the remainder of the initial warranty period,
whichever is longer.
Com21 shall not be responsible for any software, firmware, information, or
memory data of Customer contained in, stored on, or integrated with any products
returned to Com21 for repair, whether under warranty or not.
SOFTWARE: Com21 warrants that the software programs licensed from it will
perform in substantial conformance to the program specifications therefor for a
period of ninety (90) days from the date of purchase from Com21 or its
Authorized Reseller. Com21 warrants the media containing software against
failure during the warranty period. No updates are provided. Com21's sole
obligation with respect to this express warranty shall be (at Com21's
discretion) to refund the purchase price paid by Customer for any defective
software products, or to replace any defective media with software which
substantially conforms to Com21's applicable published specifications. Customer
assumes responsibility for the selection of the appropriate applications program
and associated reference materials. Com21 makes no warranty or representation
that its software products will work in combination with any hardware or
applications software products provided by third parties. that the operation of
the software products will be uninterrupted or error free, or that all defects
in the software products will be corrected. For any third party products listed
in the Com21 software product documentation or specifications as being
compatible, Com21 will make reasonable efforts to provide compatibility, except
where the non- compatibility is caused by a "bug" or defect in the third party's
product.
STANDARD WARRANTY SERVICE: Standard warranty service for hardware products may
be obtained by delivering the defective product, accompanied by a copy of the
dated proof of purchase, to Com21's Corporate Service Center or to an Authorized
Com21 Service Center during the applicable warranty period. Standard warranty
service for software products may be obtained by telephoning Com21's Corporate
Service Center or an Authorized Com21 Service Center, within the warranty
period. Products returned to Com21's Corporate Service Center must be
pre-authorized by Com21 with a Return Material Authorization (RMA) number marked
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on the outside of the package, and sent prepaid, insured, and packaged
appropriately for safe shipment. The repaired or replaced item will be shipped
to Customer, at Com21's expense, not later than thirty (30) days after receipt
of the defective product by Com21.
WARRANTIES EXCLUSIVE: IF A COM21 PRODUCT DOES NOT OPERATE AS WARRANTED ABOVE,
CUSTOMER'S SOLE REMEDY FOR BREACH OF THAT WARRANTY SHALL BE REPAIR, REPLACEMENT.
OR REFUND OF THE PURCHASE PRICE PAID, AT COM21'S OPTION. TO THE FULL EXTENT
ALLOWED BY LAW, THE FOREGOING WARRANTIES AND REMEDIES ARE EXCLUSIVE AND ARE IN
LIEU OF ALL OTHER WARRANTIES, TERMS, OR CONDITIONS, EXPRESS OR IMPLIED, EITHER
IN FACT OR BY OPERATION OF LAW, STATUTORY OR OTHERWISE. INCLUDING WARRANTIES,
TERMS, OR CONDITIONS OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND
SATISFACTORY QUALITY. COM21 NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO
ASSUME FOR IT ANY OTHER LIABILITY IN CONNECTION WITH THE SALE, INSTALLATION,
MAINTENANCE OR USE OF ITS PRODUCTS.
COM21 SHALL NOT BE LIABLE UNDER THIS WARRANTY IF ITS TESTING AND EXAMINATION
DISCLOSE THAT THE ALLEGED DEFECT IN THE PRODUCT DOES NOT EXIST OR WAS CAUSED BY
CUSTOMER'S OR ANY THIRD PERSON'S MISUSE, NEGLECT, IMPROPER INSTALLATION OR
TESTING, UNAUTHORIZED ATTEMPTS TO REPAIR OR MODIFY, OR ANY OTHER CAUSE BEYOND
THE RANGE OF THE INTENDED USE, OR BY ACCIDENT, FIRE, LIGHTNING, OR OTHER HAZARD.
LIMITATION OF LIABILITY. TO THE FULL EXTENT ALLOWED BY LAW COM21 ALSO EXCLUDES
FOR ITSELF AND ITS SUPPLIERS ANY LIABILITY, WHETHER BASED IN CONTRACT OR TORT
(INCLUDING NEGLIGENCE), FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL, OR
PUNITIVE DAMAGES OF ANY KIND, OR FOR LOSS OF REVENUE OR PROFITS, LOSS OF
BUSINESS, LOSS OF INFORMATION OR DATA, OR OTHER FINANCIAL LOSS ARISING OUT OF OR
IN CONNECTION WITH THE SALE, INSTALLATION, MAINTENANCE, USE, PERFORMANCE,
FAILURE, OR CORRUPTION OF ITS PRODUCTS, EVEN IF COM21 OR ITS AUTHORIZED RESELLER
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND LIMITS ITS LIABILITY TO
REPAIR, REPLACEMENT, OR REFUND OF THE PURCHASE PRICE PAID, AT COM21'S OPTION.
THIS DISCLAIMER OF LIABILITY FOR DAMAGES WILL NOT BE AFFECTED IF ANY REMEDY
PROVIDED HEREIN SHALL FAIL OF ITS ESSENTIAL PURPOSE.
Some countries, states, or provinces do not allow the exclusion or limitation of
implied warranties or the limitation of incidental or consequential damages for
certain products supplied to consumers or the limitation of liability for
personal injury, so the above limitations and exclusions may be limited in their
application to you. This warranty gives you specific legal rights which may vary
depending on local law.
GOVERNING LAW: This Limited Warranty shall be governed by the laws of the state
of California.
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EXHIBIT F
TECHNOLOGY DOCUMENTATION
[to be prepared and attached by Com21 prior to execution]
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SUPPLEMENT TO COM21/3COM TECHNOLOGY LICENSE
AND RESELLER AGREEMENT DATED MARCH 26, 1996
3Com shall pay Com21 the $500,000 extended license fee related to the Mongoose
ASIC. This fee is described in the Technology License And Reseller Agreement
between 3Com and Com21 dated March 22, 1996.
As part of the 3Com's acceptance of the Mongoose ASIC and upon payment of the
$500,000 fee, 3Com will receive the right to buy the next generation ASIC,
currently known as Jasmine, being developed to replace the Mongoose ASIC. The
Jasmine ASIC must be 100% backwards compatible with the Mongoose ASIC. 3Com
agrees not to implement the new Jasmine features in 3Com products. No hardware
changes will be required to implement Jasmine and if any firmware changes are
required, they will be provided by Com21 to 3Com pursuant to Sec. 6.1 of the
original Technology License And Reseller Agreement.
The Jasmine ASIC will be made available to 3Com under the same pricing, terms,
and conditions contained in the March 22, 1996 Technology License And Reseller
Agreement that applied to the Mongoose ASIC.
In the event Com21 is no longer able to support the Jasmine ASIC if a
significant defect is discovered for which no workaround is available which
complies with the last sentence of paragraph two above, or if Atmel is no longer
willing to do business with 3Com on mutually agreeable terms, Com21 will provide
a complete Jasmine Design Package to 3Com, similar to the design package
described in the March 22, 1996 agreement, to enable 3Com to correct the defect
or find an alternate source for the device.
3COM CORPORATION COM21, INC.
Signed: Signed:
--------------------------------- ---------------------------------
Name: Jef T. Graham Name: Peter D. Fenner
----------------------------------- -----------------------------------
Title: Vice President & General Manager Title: President and CEO
---------------------------------- ----------------------------------
Date: Date:
----------------------------------- -----------------------------------
*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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June 11, 1996
Com21, Inc.
1991 Landings Drive
Mountain View, CA 94043
Re: Com21 Mongoose Product Acceptance Criteria
Ladies and Gentlemen:
This letter will confirm that the attached Com21 Mongoose Product Acceptance
Criteria (rev. 1.0, 6/07/96) is mutually agreeable to the parties and shall be
deemed to be Exhibit D for purposes of the Technology License and Reseller
Agreement dated March 22, 1996 between the parties.
To confirm your agreement with the foregoing, please execute both copies of this
letter and return one to the undersigned.
Very truly yours,
3Com Corporation
By:
-------------------------------
Printed:
--------------------------
Title:
----------------------------
AGREED
Com21, Inc.
By:
-------------------------------
Printed:
--------------------------
Title:
----------------------------
Date:
-----------------------------
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COM21 Mongoose Product Acceptance Criteria
Contract Exhibit D
Revision 1.0, 6/07/96
Ed Boyd
John Griesing
The following will be used to determine the acceptance of the Mongoose product.
All of the items listed in the document will be required to accept the Mongoose
product at meeting the Acceptance Criteria.
1. Design Package
The following is the design package that 3Com expects to receive relative
to the Mongoose product. It is expected that this package will be
available in it's entirety at the time of fabrication of the final
Mongoose product.
- RTL Verilog Code that compiles without errors and with all warnings
messages investigated.
- Verilog simulation environment with self checking test cases. A self
checking test case will report an error when the feature to be tested
fails.
- Behavioral, minimum delay netlist, typical delay netlist, and maximum
delay netlist simulations passing in Verilog simulation environment.
- Set of test vectors with 90% or greater test coverage.
- Simulate vectors using minimum, typical, and maximum delays.
- Simulate vectors using dynamic timing analyzer (i.e. Epilog) (optional).
- Synopsys scripts for synthesis and complete set of timing constraints for
synopsys.
- Synopsys static timing analysis completed without violations.
2. Environmental Conditions
The following conditions will be tested on the device.
- Temperature testing over operating range (0C-70C)
- Voltage margining (4.75 - 5.25 V)
- Timing Verification (per specification)
- 29K Bus
- Modulator/Demodulator
- SRAM
- MACE
- Mongoose BER (Bit Error Rate) 58
- Ethernet Packet Bridging.
- Send packets to learn source addresses. Verify bridging based on
learned addresses. Verify aging of old addresses and replacement
of oldest entries.
- Send broadcast packets. Verify bridging based on ethertype table
and broadcast rate count.
- Send packets directed to processor. Verify bridging based on local
MAC enable switch, MAC address table, and multicast address table.
- Send multicast packets. Verify bridging based on multicast address
table.
- MACE Interface.
- Transmit packets with MACE underruns, max collisions, and late
collisions. Verify detection and recovery.
- Receive packets that had late collisions, CRC errors, alignment
errors, and overruns. Verify detection and recovery.
- Determine cell and frame boundaries.
- Verify Cell delination detection.
- Verify Frame delination detection.
- Generate T7EI errors. Verify detection and recovery.
- Corrupt/change both frame and cell boundaries. Verify detection of
loss, reestablishment or connection, and graceful termination to
upstream transmission.
- Decryption of packet.
- Decrypt OAM, AAL5 and raw ATM cells using all 10 keys based on the
VPI. Verify cell contents.
- Downstream packet routing.
- Send OAM's packet and verify reception into queue 0.
- Send good and bad CRC-10 in OAM packets. Verify mongoose
detection.
- Send Raw ATM cells to queues I and 2. Verify cell contents.
- Send AAL5 cells to queues 3, 4, & 5. Verify cells contents.
- Send good and bad CRC-32's with AAL5 packets. Verify mongoose
detection.
- Downstream grant queuing.
- Send Acquisition grants. Verify detection, queuing, and random
backoff.
- Send Contention grants. Verify detection, queuing and random
backoff. Verify transition for Acquisition to Active state.
- Verify transition from Active to Idle state.
- Send Directed grants. Verify state changes and proper queuing.
- Overflow grant queue. Verify recovery.
- Send grants with bad CRC-10's. Verify removal from queue.
- Encryption of packet.
- Encrypt OAM, AAL5 and raw ATM cells using all 4 keys. Verify cell
contents.
- Encrypt packet with decryption occurring on downstream channel.
- FEC Generation.
- Verify FEC on upstream data. Generate bit errors and verify
reception at head end.
- Upstream Queues.
- Upload multiple packets into all queues. Verify priority ordering
and packet boundaries.
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- Upstream Cell Generation.
- Send AAL5 Packets upstream. Verify header information, HEC,
CRC-32, and reassembled packet at head end.
- Send OAM packets. Verify header information, HEC, CRC-10, and
payload data.
- Send raw ATM cells. Verify data.
- Upstream traffic.
- Verify IDLE cell Generation.
- Verify start of frame delay.
- Ability to gracefully reset queues, MACE, and cable modem interface.
- Generate and acknowledge all interrupts.
- Read and write all processor accessible registers.
4. Test Equipment
The above testing requires the following equipment from Com21
- Latest version HCX and associated SW
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