CONFIDENTIAL TREATMENT REQUESTED
PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT
By and between
PATH 1 NETWORK TECHNOLOGIES INC.
And
INTERNET PHOTONICS, INC.
SEPTEMBER 9, 2002
1 DEFINITIONS..............................................................1
1.1 ACCEPTANCE TEST.......................................................1
1.2 ACCEPTANCE TEST PLAN OR ATP...........................................1
1.3 ACCEPTANCE TEST PROCEDURES............................................2
1.4 CUSTOMER READINESS....................................................2
1.5 DEFECT................................................................2
1.6 FIELD TRIAL UNIT......................................................2
1.7 INTELLECTUAL PROPERTY RIGHTS..........................................2
1.8 INTERNET PHOTONICS DELIVERABLES.......................................3
1.9 PATH 1 DELIVERABLES...................................................3
1.10 PATH 1 KNOW-HOW.......................................................3
1.11 PATH 1 PATENTS........................................................3
1.12 PATH 1 TECHNOLOGY.....................................................3
1.13 PRODUCT MANAGEMENT INFORMATION BASE (MIB).............................4
1.14 PRODUCT(S)............................................................4
1.15 PRODUCTION UNIT.......................................................4
1.16 SERVICES..............................................................4
1.17 SEVERITY 1 DEFECT.....................................................4
1.18 SEVERITY 2 DEFECT.....................................................4
1.19 SEVERITY 3 DEFECT.....................................................5
1.20 SEVERITY 4 DEFECT.....................................................5
1.21 SPECIFICATIONS........................................................5
1.22 TERM..................................................................5
1.23 WORKAROUND SOLUTION...................................................5
2 SCOPE OF WORK............................................................5
2.1 SERVICES..............................................................5
2.2 AGENCY APPROVALS......................................................6
3 COMPENSATION; INTELLECTUAL PROPERTY RIGHTS...............................6
3.1 COMPENSATION..........................................................6
3.1.1 Initial Payment.................................................6
3.1.2 Field Trial Delivery Payment....................................7
3.1.3 Extension of Exclusion Payment..................................7
3.2 INTELLECTUAL PROPERTY RIGHTS; ROYALTIES...............................7
3.3 EXCLUSIVE LICENSE.....................................................7
3.3.1 Exclusive License Grant.........................................7
3.3.2 Product Modifications and Derivatives...........................8
3.3.3 Exclusive Market and Exclusive Period...........................8
3.4 MOST FAVORED NATIONS PRICING..........................................8
3.5 TRADEMARK RIGHTS......................................................9
3.6 INDEMNIFICATION.......................................................9
4 PRICE PER UNIT..........................................................10
5 PRODUCT FORECAST........................................................10
6 MARKETING...............................................................10
7 MILESTONES..............................................................11
7.1 DELIVERY OF THE ACCEPTANCE TEST PLAN (ATP)...........................11
7.2 DELIVERY OF THE INTERNET PHOTONICS PRODUCT MANAGEMENT INFORMATION
BASE (MIB)...........................................................11
7.3 ACCEPTANCE TEST PROCEDURES...........................................11
7.4 ACCEPTANCE TEST......................................................12
7.5 AMENDMENT OF ACCEPTANCE TEST PLAN....................................12
7.6 FIELD TRIAL UNITS SHIPMENT...........................................12
7.7 PRODUCT RELEASE FOR FCC, CE AND UL CERTIFICATION.....................12
7.8 COMPLETION OF UL APPROVAL............................................12
7.9 PRODUCT REVIEWS AND MEETINGS.........................................12
7.10 PERFORMANCE ASSURANCE................................................13
8 SPECIFICATIONS..........................................................14
9 ENHANCEMENTS TO PRODUCTS................................................15
10 DELIVERABLES AND DELIVERY; ACCEPTANCE; AND REJECTION....................15
10.1 PROGRAM MANAGERS.....................................................15
10.2 DELIVERABLES.........................................................15
10.3 ACCEPTANCE...........................................................15
10.3.1 Inspection and Testing.........................................15
10.3.2 Material Errors and Correction.................................16
10.3.3 Product Acceptance.............................................16
10.3.4 Disputed Deliverables..........................................16
10.3.5 Rejection......................................................17
11 CONTINUITY OF SUPPLY....................................................17
12 REPRESENTATIONS AND WARRANTIES..........................................18
13 CONFIDENTIALITY.........................................................18
13.1 CONFIDENTIAL INFORMATION.............................................18
13.2 PERMITTED USE........................................................18
13.3 EQUITABLE RELIEF.....................................................19
13.4 RETURN AND USE OF CONFIDENTIAL INFORMATION...........................19
14 TERMINATION.............................................................20
14.1 ACCEPTANCE TEST FAILURE..............................................20
14.2 ASSIGNMENT OR TRANSFER OF ASSETS.....................................20
14.3 MATERIAL BREACH......................................................20
14.4 COMPLETION OF RESELLER AGREEMENT.....................................20
14.5 FULFILMENT OF OBLIGATIONS............................................21
14.6 SURVIVAL.............................................................21
15 WARRANTY ON PATH 1 TECHNOLOGY...........................................21
16 MAINTENANCE AND SUPPORT.................................................21
17 WARRANTIES/LIMITED LIABILITY............................................22
18 GENERAL.................................................................22
18.1 FORCE MAJEURE........................................................22
18.2 NOTICES..............................................................22
18.3 RELATIONSHIP OF PARTIES..............................................23
18.4 USE OF NAME..........................................................23
18.5 PERSONNEL............................................................23
18.6 EMPLOYMENT TAXES AND BENEFITS........................................24
18.7 OTHER TAX IMPLICATIONS...............................................24
18.8 EXPORT CONTROLS......................................................24
18.9 ASSIGNMENT...........................................................24
18.10 NO WAIVER.........................................................24
18.11 NO RIGHTS IN THIRD PARTIES........................................25
18.12 COUNTERPARTS......................................................25
18.13 HEADINGS AND REFERENCES...........................................25
18.14 CONSTRUCTION......................................................25
18.15 APPLICABLE LAW....................................................25
18.16 SEVERABILITY......................................................25
18.17 COMPLETE AGREEMENT................................................25
18.18 ATTORNEY'S FEES...................................................26
19 SIGNATURES..............................................................26
CONFIDENTIAL TREATMENT REQUESTED
PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT
This Product Development and Supply Agreement (the "Agreement") is
entered into effective September 6, 2002 (the "Effective Date") between Path 1
Network Technologies Inc. (hereinafter "Path 1"), a Delaware corporation located
at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and Internet Photonics,
Inc. (hereinafter "Internet Photonics"), a Delaware corporation located at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (individually a "Party" and
collectively "the Parties").
RECITALS
WHEREAS, Path 1 desires to develop a co-branded set of products using
certain of Path 1's proprietary technology and to deliver such products to
Internet Photonics in exchange for the compensation set forth herein;
WHEREAS, Internet Photonics desires Path 1 to perform certain
engineering services in connection with the development, testing and delivery of
certain co-branded products for and to Internet Photonics; and
WHEREAS, Internet Photonics desires to sell the products developed and
delivered by Path 1 pursuant to this agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein the Parties agree as follows:
TERMS AND CONDITIONS
1 DEFINITIONS
1.1 ACCEPTANCE TEST
Acceptance Test means the test of the Products to be performed by
Path 1 and witnessed by Internet Photonics pursuant to the
Acceptance Test Plan.
1.2 ACCEPTANCE TEST PLAN OR ATP
Acceptance Test Plan or "ATP" means the test criteria and test
scenarios to be mutually agreed upon by the Parties to ensure the
Products' compliance with the Product and Interoperability
Specifications. The Parties shall use reasonable efforts to ensure
that the ATP will be submitted to Internet Photonics by Path 1 by
*** and be mutually agreed upon by the Parties on or before ***.
1.3 ACCEPTANCE TEST PROCEDURES
Acceptance Test Procedure means the test procedure to be used to
measure the criteria spelled out by the ATP. It will include the
test sequences to be performed at Path 1's facility in San Diego
following a *** approach.
1.4 CUSTOMER READINESS
Customer Readiness shall mean a Product that can be
installed at an IPI customer site.
1.5 DEFECT
A Defect shall mean any variance, documented in writing by Path1
or IPI, in performance and functionally from the Product
performance and functionality described in the ASI Over IP Gateway
Product Specification called out in Appendix A.
1.6 FIELD TRIAL UNIT
Field Trial Unit or "Unit" means the Product as delivered after
Acceptance Test but before Certification Release. A field trial
unit ***, but *** as mutually agreed to by the parties, however,
Field Trial Units shall ***.
1.7 INTELLECTUAL PROPERTY RIGHTS
Intellectual Property Rights means any information, inventions,
copyrights, trademarks, service marks, maskwork rights, logos,
trade names, innovations, discoveries, improvements, ideas,
know-how, show-how, developments, methods, designs, reports,
charts, drawings, diagrams, designs, analyses, concepts,
technology, records, brochures, instructions, manuals, software
(both in source code and object code format), documentation
relating to all software, manufacturing techniques, expertise,
inventions (whether or not reduced to practice or the subject of a
patent application), test protocols, test results, descriptions,
parts lists, bills of materials, documentation whether in written
or electronic format, prototypes, molds, models, assemblies,
processes and any similar intellectual property and information,
whether or not protected or protectable by patent or copyright
together with all United States and foreign patents and pending
applications.
1.8 INTERNET PHOTONICS DELIVERABLES
Internet Photonics Deliverables means, collectively or
individually, revisions and approval of the Specifications
(Appendix A), preliminary operations manual, acceptance test plan
and Product MIB.
1.9 PATH 1 DELIVERABLES
Path 1 Deliverables means, collectively or individually, the
Specifications, preliminary operations manual, an initial draft of
the Acceptance Test Plan, ***Field Trial units.
1.10 PATH 1 KNOW-HOW
Path 1 Know-How means all of Path 1's proprietary information
techniques, inventions, data, practices, methods, knowledge,
designs, skill and experience including, without any limitation,
any trade secret or other Intellectual Property Right, whether or
not patentable or copyrightable, relating to the Path 1 Technology
or useful for the development, production, assembly, manufacture,
or transport of the Products.
1.11 PATH 1 PATENTS
Path 1 Patents means and includes all patents and patent
applications related to the design, manufacture, or use of the
Products, issued or filed as of the date hereof, or during the
Term, including without limitation all foreign counterparts, all
substitutions, extensions, reissues, renewals, divisions,
continuations and continuations in part relating to such patents
and their foreign counterparts, and which are owned or controlled
by Path 1 (where "controlled" means licensed-in by Path 1 with a
royalty-free right to grant sublicenses).
1.12 PATH 1 TECHNOLOGY
Path 1 Technology means (i) the inventions, designs, discoveries
and processes claimed in the Path 1 Patents and (ii) the Path 1
Know-How.
1.13 PRODUCT MANAGEMENT INFORMATION BASE (MIB)
Product Management Information Base (MIB) means the collection of
definitions, which identify the properties of the managed objects
within the device to be managed. Every managed device keeps a
database of values for each of the definitions written in the MIB.
1.14 PRODUCT(S)
Product(s) means and includes the co-branded Asynchronous Serial
Interface ("ASI") to Internet Protocol ("IP") gateway products to
be developed and supplied by Path 1 using the Path 1 Technology
pursuant to this Agreement as more particularly described in
Appendix A attached hereto. Product(s) also means and includes the
Non - Exclusive co-branded Internet Protocol ("IP") to
Asynchronous Serial Interface ("ASI") to gateway products already
developed, or will be developed by Path 1
1.15 PRODUCTION UNIT
Production Unit means the Product as delivered after full
Acceptance Test compliance but before Certification Release. A
production unit will fully satisfy the ATP.
1.16 SERVICES
Services means the work and labor of each Party necessary for the
performance of such Party's respective obligations pursuant to
this Agreement.
1.17 SEVERITY 1 DEFECT
Severity 1 defect shall mean any product defect that materially
affects the functionality and performance of the product to the
extent that it does not meet the Product Requirement in Appendix
A.
1.18 SEVERITY 2 DEFECT
Severity 2 defect shall mean any product defect that severely
degrades the functionality and performance of the product and for
which there is no workaround solution.
1.19 SEVERITY 3 DEFECT
Severity 3 defect shall mean any product defect that degrades the
functionality and performance of the product and for which there
is a workaround solution to restore functionality and performance.
1.20 SEVERITY 4 DEFECT
Severity 4 defect shall mean any product defect that does not
affect operational functionality or performance of the product.
1.21 SPECIFICATIONS
Specifications means the mechanical, engineering, operational
and/or functional descriptions, details and requirements for the
Products as set forth in Appendix A attached hereto as the same
may be modified as provided herein. Included are any standards for
performance or operation of the item to which such Specifications
pertain.
1.22 TERM
Term means the period from the Effective Date until this Agreement
is terminated pursuant to Section 14 hereof.
1.23 WORKAROUND SOLUTION
Workaround solution shall mean any configuration and/or
instructions that do not conform to the intended use of the
Product but, when used, allows the Product to operate as intended.
2 SCOPE OF WORK
2.1 SERVICES
Subject to the terms and conditions set forth in this Agreement,
each Party will be responsible for obtaining all of the
technology, labor, material, tooling and facilities (and all
related costs) necessary for the completion of its portion of its
respective portion of the Services, except as otherwise set forth
in this Agreement.
2.2 AGENCY APPROVALS
Path 1 shall be responsible for (a) supporting all board level and
power supply changes required to meet Conformite Europeene ("CE")
and Underwriters Laboratories ("UL") approval and (b) obtaining
all necessary CE, UL and FCC approvals required to distribute the
Products. Path 1 and Internet Photonics agree to form a joint
certification team to obtain any other governmental or necessary
private agency approvals or certifications necessary for the
Products to be distributed in North America and to use their
respective reasonable efforts to obtain such approvals or
certifications.
The Parties shall *** pay the actual costs and filing fees for the
submission for any such additional approvals in the United States
and any other jurisdictions as the Parties mutually agree in
writing. In order for Path 1 to perform its obligations under this
Section 2.2, Internet Photonics shall provide Path 1 with
customary English language summaries of the specifications of each
individual jurisdiction's requirements where agency approval is
being sought. Each Party shall provide all reasonable assistance
to the other for obtaining approvals and certifications for the
Products, including use of any relevant testing, test results,
documents, applications and approvals and certificates with regard
to the Products.
In the event other governmental or private agency approvals or
certifications are necessary (other than CE, UL and FCC
approvals), all costs for agency approvals for other jurisdictions
shall be mutually agreed upon.
3 COMPENSATION; INTELLECTUAL PROPERTY RIGHTS
3.1 COMPENSATION.
Internet Photonics agrees to pay Path 1 aggregate fees of up to
*** as follows:
3.1.1 Initial Payment
Two Hundred Fifty Thousand Dollars (US$250,000) shall be
paid by Internet Photonics to Path 1 upon the signing of
this Agreement for completion of the Milestones in
accordance with Section 7, Exclusive License in accordance
with Section 3 and all other obligations of Path 1 and
rights to be received by Internet Photonics in accordance
with the terms and conditions of this Agreement.
3.1.2 Field Trial Delivery Payment
***shall be paid by Internet Photonics to Path 1 upon
Internet Photonics' receipt and acceptance of *** Field
Trial units, in accordance with Section 1.7 of this
agreement, or upon delivery of one or more units to a
customer site, on or before ***. Field Trial Units may be
for *** and any *** Path 1 products desired by Internet
Photonics to support customer trial configurations.
3.1.3 Extension of Exclusion Payment
*** shall be due and payable only by Internet Photonics to
Path 1 at such time that Internet Photonics elects to
increase the Exclusivity Period as set forth in Section
3.3 of this Agreement. At the time of exercise of this
option to increase the exclusivity period, Internet
Photonics will place an order for a minimum of ***
production units. This order may be for *** products
desired by Internet Photonics, but must be for no less
than *** units per month during the exclusive period.
Internet Photonics will have the option to reduce this
order by ***% for every *** weeks delay in the delivery of
the first *** Field Trial Units from the delivery date
stated in Section 7.6 hereof.
3.2 INTELLECTUAL PROPERTY RIGHTS; ROYALTIES
Path 1 shall own all Intellectual Property Rights related to the
Products, the application program interface and the Path 1
Technology and retains all rights to manufacture the Products and
the application program interface.
3.3 EXCLUSIVE LICENSE
3.3.1 Exclusive License Grant
Subject to the terms and conditions of this Agreement, Path
1 hereby grants to Internet Photonics for the Term, a
fully-paid, limited, exclusive (as set forth below),
nontransferable license to use, support, demonstrate, resell
and distribute the Products and all end user documentation
delivered as part of, or related to, the Products. This
license becomes a perpetual, non-exclusive license for all
products purchased under this agreement after the expiration
of the exclusivity period.
3.3.2 Product Modifications and Derivatives
The foregoing license grant does not extend to derivative
works based on the Products. The license does apply to any
performance improvements and/or maintenance updates of the
Products made by Path 1. Within the period referenced in
Section 15 of this agreement, modifications to Products,
for performance, interoperability or other improvements,
which are necessary for use of products on *** networks to
support service offerings, due to Internet Photonics'
customer requirements or to meet agency Certifications,
shall be implemented by Path 1 in good faith with
commercially reasonable efforts.
3.3.3 Exclusive Market and Exclusive Period
The foregoing license grant shall be restricted to other
channel partners of Path 1 in the *** market, selling into
*** environments only (the "Exclusive Market"), and will
only be exclusive for a period of *** months from the date
that Path 1 delivers, and IPI accepts, in accordance with
Section 10.3.3, Production Units of Products and announces
the immediate availability of its formal product release
(the "Exclusivity Period"). The Exclusivity Period may be
extended by Internet Photonics for an additional
consecutive *** month period upon payment of the
exclusivity payment prior to the end of year 2002. As a
further condition of this exclusivity, Internet Photonics
agrees that it will exclusively distribute the Products as
Internet Photonics' ASI to IP and IP to ASI products (no
third party competitive products) during the Exclusivity
Period.
For purposes of clarification, not withstanding the
foregoing, during the Exclusivity Period, Path 1 is free to
sell its products and derivatives thereof directly to ***
customers in such markets as it chooses to sell into,
including, but not limited to, ***, or any other such
market. During the exclusivity period, Path 1 agrees to
only propose and inform Internet Photonics products, when
any *** customer opportunities requiring *** are identified
by Path 1 for *** transport that are within the *** market
selling into *** environments.
3.4 MOST FAVORED NATIONS PRICING
Throughout the Term, in the event Path 1 sells a product that is
commercially equivalent to a Product covered under this Agreement
to any other buyer in the metro cable/MSO market at a price point
less than the price paid by Internet Photonics (as adjusted to
include applicable discounts), when taken together with the
economic terms of such arrangement, Path 1 shall promptly notify
Internet Photonics and either (a) offer such price and terms to
Internet Photonics or (b) where such lower prices are due to other
terms and conditions in Path 1's agreement with such other party,
offer such prices to Internet Photonics with such terms and
conditions.
3.5 TRADEMARK RIGHTS
The Products shall contain certain markings and identifications,
which include the trademark(s) and/or trade names of Path 1 and
Internet Photonics, on the Products sold by Internet Photonics.
Such markings and identification shall be strictly in accordance
with the requirements of Path 1 and Internet Photonics as set
forth in each Party's Trademark Guidelines, as may be updated from
time to time. Neither Party is authorized to use the trademark(s)
and trade names of the other Party on any products, other than the
Products, or for any other purpose. Subject to compliance Path 1's
Trademark Guidelines, Internet Photonics is hereby granted a
limited trademark license with respect to the Path 1 trademarks
solely for use on, and in connection with, the Products. All other
use is prohibited. This license shall terminate on the earlier of
termination of this Agreement or failure of Internet Photonics to
maintain the quality requirements set out in this Agreement or in
any subsequent written communication received from Path 1.
Internet Photonics shall obtain no rights to or interest of any
kind in any Path 1 trademarks or trade names other than the
limited right to use set out above.
3.6 INDEMNIFICATION
Path 1 shall indemnify and hold Internet Photonics harmless from
and against any and all damages, costs and expenses (including
without limitation reasonable attorneys' and expert witness fees)
incurred by Internet Photonics in connection with any action,
suit, proceeding, demand, assessment or judgment arising out of or
related to any claims by third parties based on any infringement
by the Path 1 Intellectual Property Rights, the Path 1 Know-how,
the Path 1 Patents, the Path 1 Technology, any trademark, service
▇▇▇▇, logo, trade name, trade secret, copyright, patent or other
intellectual property right of any other person or entity or
breaches of obligations under this Agreement; provided that (i)
Internet Photonics promptly notifies Path 1 of such action, claim
or proceeding; (ii) Path 1 shall have the sole right to
compromise, settle or defend any such action, claim or proceeding;
provided, however, that Path 1 shall not compromise or settle any
such action, claim, or proceeding in a manner that does not
unconditionally release Internet Photonics without Internet
Photonics' prior written consent; and (iii) Internet Photonics
provides Path 1 reasonable assistance at Path 1's request and
expense in the defense of such action, claim or proceeding.
Internet Photonics shall indemnify and hold Path 1 harmless from
and against any and all damages, costs and expenses (including
without limitation reasonable attorneys' and expert witness fees)
incurred by Path 1 in connection with any action, suit,
proceeding, demand, assessment or judgment arising out of or
related to any claims by third parties based on any infringement
by the Internet Photonics trademarks, logos or trade names of any
trademark, logo or trade name of any other person or entity or
breaches of Internet Photonics' obligations under this Agreement;
provided that (i) Path 1 promptly notifies Internet Photonics of
such action, claim or proceeding; (ii) Internet Photonics shall
have the sole right to compromise, settle or defend any such
action, claim or proceeding; provided, however, that Internet
Photonics shall not compromise or settle any such action, claim,
or proceeding in a manner that does not unconditionally release
Path 1 without Path 1's prior written consent; and (iii) Path 1
provides Internet Photonics reasonable assistance at Internet
Photonics' request and expense in the defense of such action,
claim or proceeding.
4 PRICE PER UNIT
Path 1 and Internet Photonics will agree upon an initial purchase
price(s) for both the ASI to IP and IP to ASI gateway Products, which
purchase price(s) will be reflected in the initial purchase order from
Internet Photonics (in accordance with Section 3.1.2). The Parties
shall meet at least every *** to establish a mutually agreeable
purchase price going forward that approximates a ***. Path 1 will
share its *** information and Internet Photonics will share its *** in
order to adjust the purchase price for the next ***.
5 PRODUCT FORECAST
Internet Photonics agrees to provide Path 1 with a rolling 90-day
product forecast for the purposes of manufacturing planning, not as a
hard commitment or obligation on the part of IPI.
6 MARKETING
Path 1 may disclose its relationship with Internet Photonics in its
advertising, press, promotion and/or direct sales materials.
Notwithstanding anything in this Agreement to the contrary, the
Parties agree that each Party may make such disclosure of this
Agreement, exclusive of proprietary information such as pricing as
required by either party pursuant to applicable securities regulations
or other laws.
Upon execution of this Agreement, the Parties shall mutually prepare a
press release regarding the formation of a strategic alliance between
Path 1 and Internet Photonics, which release will be mutually
agreeable to the Parties. Except as allowed above, neither Party shall
disclose the content of this Agreement, including but not limited to,
the terms of funding and the product development efforts to any third
parties. During the Term each party must review and approve the
content of any press release of products before it is issued. Internet
Photonics hereby agrees and covenants that it will exercise its best
efforts to launch its end-to-end transport initiative (including and
integrating the Products with Internet Photonics LightStack family
related to this Agreement or the relationships of the Parties)
solution no later than the availability of Field Trial Units.
Path 1 shall designate an expert to assist Internet Photonics'
marketing team with response to customer requests for network designs,
performance of acceptance tests, network integration and. and
analyzing all problems occurring during such tests. Upon Internet
Photonics' request, Path 1 shall provide up to two days of training
for Internet Photonics Systems Engineers on the installation, testing,
operation and maintenance of Products. Path 1 shall provide to
Internet Photonics a set of reproducible training materials, including
such materials as usually utilized by Path 1 when instructing its own
customers. All reasonable travel and lodging expenses incurred by Path
1 in connection with mutually agreed Marketing and Technical
assistance provided above shall be paid or reimbursed by Internet
Photonics.
7 MILESTONES
The Parties agree to the following milestones for development and
testing of the Products:
7.1 DELIVERY OF THE ACCEPTANCE TEST PLAN (ATP)
Delivery of the ATP to Internet Photonics by Path 1 and mutual
agreement of the content thereto by ***. Revisions and approval by
Internet Photonics by *** .
7.2 DELIVERY OF THE INTERNET PHOTONICS PRODUCT MANAGEMENT INFORMATION BASE
(MIB)
Delivery of the Internet Photonics Product MIB by Path 1 to
Internet Photonics and mutual agreement there to by *** with
revisions and approval by Internet Photonics by ***.
7.3 ACCEPTANCE TEST PROCEDURES
Acceptance test plan procedures are subject to change up to the
point of ATP execution. A copy of the procedures and test results
will be provided upon delivery of Field Trial units.
7.4 ACCEPTANCE TEST
Path 1's completion of an Acceptance Test with Internet Photonics
present to witness and accept results by delivery of Field Trial
Units.
7.5 AMENDMENT OF ACCEPTANCE TEST PLAN
The Acceptance Test Plan may be amended after it is initially
agreed to by the Parties pursuant to Section 7.1 only by a written
amendment signed by both parties.
7.6 FIELD TRIAL UNITS SHIPMENT
Path 1's shipment of *** Field Trial Units to Internet Photonics
by *** . in accordance with Section 3.1.2.
7.7 PRODUCT RELEASE FOR FCC, CE AND UL CERTIFICATION
Product release for FCC, CE and preliminary UL testing with
provisional clearance through an authorized testing center will be
no later than *** unless otherwise mutually agreed by Path 1 and
Internet Photonics.
7.8 COMPLETION OF UL APPROVAL
The submission of application for final UL approval with respect
to the Products will occur when the authorized testing center
completes preliminary UL testing. The final application review
process through the UL center may take up to 6 months.
The Parties agree to use their best reasonable commercial efforts
to adhere to the schedule set forth in this Section 7. However,
each of the above milestones may be extended by mutual agreement
of the Parties on a day-by-day slip basis until completed.
7.9 PRODUCT REVIEWS AND MEETINGS
The Parties agree to meet from time to time at mutually agreeable
times and locations to review and discuss the status of the
development of the Products. The Parties further agree to promptly
meet at the request of either Party with respect to any material
issues a Party may have with the performance of the other Party of
its obligations under this Agreement.
7.10 PERFORMANCE ASSURANCE
Should the Product fail to meet the conditions of Section 10 by
***, IPI shall return all Products and Field Trial units
previously delivered under this Agreement and Path 1 will release
from escrow the shares as defined below, unless otherwise agreed
to by Path 1 and Internet Photonics.
Upon receipt of the Section 3.1.1 payment, Path1 shall issue ***
shares of its *** (the "Shares"), valued at $*** based on a per
share price of $*** at close of business on ***, in the name of
Internet Photonics into escrow as collateral. Such Escrow shall be
deposited with Chicago Title in Irvine, California. Path 1 will
prepare the collateral agreement on behalf of the Parties to this
Agreement; such agreement shall be reasonably acceptable to
Internet Photonics and Chicago Title. Internet Photonics will
receive shares valued at up to $***, but in no event more than ***
shares, based on the per share price at close of market on ***
from escrow if a successful Acceptance Test has not occurred by
*** (or such later date as mutually agreed by Internet Photonics
and Path 1). Internet Photonics shall thereafter be entitled to
transfer or otherwise dispose of the Shares in its discretion in
accordance with applicable securities law restrictions.
In the event that (1) a successful Acceptance Test has not
occurred by *** (or such later date as mutually agreed by Internet
Photonics and Path 1) and (2) Internet Photonics shall have
determined in good faith that it is unlikely that a successful
Acceptance Test shall have occurred by ***, then Internet
Photonics shall be entitled to demand that Path 1 register the
Shares for resale on a Form S-3 registration statement. Upon such
demand, Path 1 shall promptly file a registration statement with
the SEC on Form S-3 and shall use its best efforts to cause such
registration statement to be declared effective no later than ***,
or the first practicable date based on Internet Photonics date of
such demand. Commencing 30 days after ***, or 30 days after the
first practicable date above, or the first practicable date based
on Internet Photonics date of such demand, whichever is later.
Commencing 30 days after ***, or 30 days after the first
practicable date above, Path 1 shall use commercially reasonable
efforts to assist Internet Photonics in locating one or more
buyers for the Shares.
If the registration statement referred to above has not become
effective at the time of such release of the Shares, the Shares
will be issued with the following restrictive legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
SATISFACTION OF CERTAIN TERMS SET FORTH IN A PRODUCT DEVELOPMENT
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR SUCH
HOLDER'S PREDECESSOR IN INTEREST, A COPY OF WHICH IS ON FILE AT
THE PRINCIPAL OFFICE OF THIS COMPANY. ANY TRANSFER OR ATTEMPTED
TRANSFER OF ANY SHARES IN CONTRAVENTION OF THE TERMS OF THE
PRODUCT DEVELOPMENT AGREEMENT IS VOID WITHOUT THE PRIOR EXPRESS
WRITTEN CONSENT OF THE COMPANY OR THE DECISION OF THE
ATTORNEY-ARBITRATOR REFERRED TO IN SECTION 3.1.3 HEREIN.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 ("THE ACT") AND ARE
"RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN RULE 144 UNDER
THE ACT. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
If Internet Photonics is unable to sell the Shares (either in the
open market or through one or more private sales) for gross
proceeds of at least $ *** by ***, then Internet Photonics shall
have the right to transfer the Shares to Path 1 in exchange for a
fully-paid up, non-exclusive, perpetual license for Internet
Photonics (and its successors in interest) to use, modify,
develop, sell and sublicense to end-users, resellers and
distributors the products as described in Appendix A.
Notwithstanding any other provisions of this agreement, the
remedies under this Section shall be the sole and exclusive
remedies of IPI in the event of such failure of Acceptance.
8 SPECIFICATIONS
Each Product is to be designed and manufactured in accordance with the
Specifications. Each Party may request modifications to the
Specifications at any time during the Term. Such requests shall be
submitted to the other Party in writing, and shall not be deemed or
considered binding unless accepted by the other Party in writing. If
any such modification of the Specifications is agreed to, the Parties
will negotiate an equitable adjustment to the Agreement, including the
apportionment between the Parties of any additional development,
testing or tooling costs. Upon mutual agreement of any modification to
the Specifications, both Parties will proceed with the implementation
of the prescribed modifications, and the Specifications and other
Appendices and Exhibits to the Agreement shall be modified accordingly
to reflect such agreed upon modifications and the term
"Specifications" as used herein shall refer in all cases to the
Specifications as so modified.
9 ENHANCEMENTS TO PRODUCTS
During the Term, Path 1 will make available for sale to Internet
Photonics future enhancements to the Products. Internet Photonics will
provide Path 1 with customer feedback and Path 1 agrees to address
reasonable requests for future enhancements.
10 DELIVERABLES AND DELIVERY; ACCEPTANCE; AND REJECTION
10.1 PROGRAM MANAGERS
Each Party shall within ten (10) days after the Effective Date,
designate a Program Manager in writing to the other Party, who
shall have the authority on behalf of its Party to make and
communicate all decisions respecting such Party's rights and
obligations under this Agreement.
10.2 DELIVERABLES
Path 1 and Internet Photonics agree to use their best commercially
reasonable efforts to perform their respective Services and
deliver their respective Deliverables, if any, in accordance with
the schedule set forth in Section 8 hereof. Each Party's
obligations shall be contingent upon the other Party successfully
providing any prerequisite Deliverable or Service in a timely
fashion in accordance with the Specifications and this Agreement.
All stated dates are date of delivery unless otherwise specified.
Internet Photonics shall use the Path 1 Deliverables only for
testing, acceptance and marketing purposes and, excluding Field
Trial Units, shall not sell, lease or transfer any Path 1
Deliverables to any third party.
10.3 ACCEPTANCE
10.3.1 Inspection and Testing
Internet Photonics, with the reasonable assistance of Path
1 as necessary, will examine and test each respective Path
1 Deliverable (and/or item thereof as specified in Section
7) upon delivery. Internet Photonics shall, as soon as
reasonably practicable following the delivery of any Path
1 Deliverable, but in no event later than fifteen (15)
business days after receipt of the notice of delivery of
any Path 1 Deliverable (i) accept the Path 1 Deliverable
by providing Path 1 with written notice of such acceptance
or (ii) if the Path 1 Deliverable materially fails to
conform to the Specifications ("Material Error"), reject
the Deliverable and provide Path 1 with a written
statement of such Error(s) (the "Rejection Notice"). If
Internet Photonics' responds by rejecting the Deliverable
after the fifteen (15) business day period, Path 1 may, at
its discretion, extend the milestone schedule for all
subsequent Path 1 Product Deliverables to IPI on a day for
day basis equal to the time of the IPI's rejection less
fifteen (15) business days.
10.3.2 Material Errors and Correction
Path 1 will promptly correct the Material Errors set forth
in the Rejection Notice with respect to any Path 1
Deliverable and redeliver the Path 1 Deliverable to
Internet Photonics within such reasonable period of time
as may be mutually agreed upon by the Parties with regard
to all circumstances affecting such Path 1 Deliverable.
Internet Photonics shall, as soon as reasonably
practicable after such redelivery but in no event later
than fifteen (15) business days thereafter, accept or
reject the redelivery in accordance with the procedure set
forth in Section 10.3.1, which procedure shall be repeated
until all of the Path 1 Deliverables are accepted or
Internet Photonics invokes the provisions of subsection
10.3.4 hereof.
10.3.3 Product Acceptance
"Product Acceptance" shall be deemed to occur upon the
earlier of (i) acceptance by Internet Photonics, pursuant
to this Section 10.3, of all Path 1 Deliverables and
successful completion of the Acceptance Test with regard
to the Products as set forth in the Acceptance Test Plan
or (ii) the first sale, lease or license of a unit of
Product by Internet Photonics to a customer or other third
party. The date upon which such Product Acceptance occurs
shall be deemed the "Date of Product Acceptance."
Notwithstanding anything to the contrary contained herein,
Product Acceptance shall not be conditioned upon any
design or development of the Path 1 Deliverables meeting
any agency's criteria for approval other than those of the
United States.
10.3.4 Disputed Deliverables
The Parties further agree that in the event a dispute
arises as to whether any Deliverable (or item thereof) is
acceptable under the procedure set forth in Sections
10.3.1 and 10.3.2 or as to whether the Acceptance Test has
been successfully completed pursuant to Section 7.4, and
the Parties are unable after good faith negotiation
(between their respective Program Managers, and if needed,
between their respective CEO's assisted by their legal
counsels) to resolve such dispute, the dispute shall be
settled under the Rules of Conciliation and Arbitration of
the International Chamber of Commerce by a United States
attorney-engineer of a Chicago law firm, former
attorney-engineer of a Chicago law firm or a retired judge
with relevant engineering experience acceptable to both
parties but not related to either party, whose decision
shall be final and binding. Such attorney-engineer shall
be appointed upon first request of either Party and shall
render his decision within thirty (30) days after having
accepted such appointment.
10.3.5 Rejection
Should any Path 1 Deliverable fail to be accepted after
the third delivery of that Path 1 Deliverable pursuant to
Section 10.3.2 above, then the Parties shall promptly meet
to resolve the problem. Any subsequent rejection of the
same Path 1 Deliverable (unless otherwise resolved
pursuant to Section 10.3.3), shall be deemed grounds for
Internet Photonics to terminate this Agreement pursuant to
Section 14 hereof; provided that, in the alternative,
Internet Photonics may elect to accept further
resubmission of the applicable Path 1 Deliverable in
accordance with this Section 10.3.
11 CONTINUITY OF SUPPLY
During the term of this Agreement, in the event that Path 1 is unable
to provide a supply of Products to satisfy Internet Photonics' actual
demand for the Products for reasons attributable to Path 1, such as
acquisition, bankruptcy, or other reasons, Path 1 will make timely
arrangements and provide all necessary information, drawings,
software, etc. for Internet Photonics to source the manufacture of the
Products from a contract manufacturer of its choice until Path 1
either: (i) resolves the supply issues or (ii) determines it cannot
resolve the issue(s).
Should Path 1 determine it cannot resolve the issue(s) relating to
supply of Products, Internet Photonics will be authorized to continue
to source the Product from their selected contract manufacturer until
it no longer wishes to sell the Product, or until the expiration of
this agreement, whichever is sooner. Path 1 and its successor(s) will
retain all Intellectual Property Rights associated with the
Product(s).
12 REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants that it has full right and
authority to enter into this Agreement and to perform its obligations
hereunder. Each Party further represents and warrants that it has full
right and authority to grant the rights granted to the other Party
herein.
13 CONFIDENTIALITY
13.1 CONFIDENTIAL INFORMATION
"Confidential Information" means (i) any and all technical and
non-technical information of a Party including inventions, works of
authorship, technology, know-how, patent, copyright, trade secret,
mask works and other Intellectual Property Rights, techniques,
algorithms, libraries, data, software, including without limitation
the Path 1 Technology, the Products and associated documentation,
in source code, physical or any other form, and any financial
information, personnel information, business or marketing plans,
(ii) any information received in written form designated by the
Disclosing Party as confidential prominently thereon or, if
disclosed orally, designated as confidential at the time of
disclosure and reduced to writing and delivered to the other Party
("Receiving Party") within thirty (30) days after such disclosure;
and (iii) the term and conditions of this Agreement; provided,
however that "Confidential Information" shall not include
information that the Receiving Party can demonstrate through
documentary evidence that (A) was public knowledge at the time of
such disclosure to the Receiving Party, or thereafter became public
knowledge, other than as a result of actions of the Receiving Party
in violation hereof; (B) was rightfully known by the Receiving
Party (as shown by its written records) prior to the date of
disclosure to the Receiving Party by Disclosing Party; (C) was
disclosed to the Receiving Party on an unrestricted basis from a
source unrelated to any Party and not under a duty of
confidentiality to the Disclosing Party; or (D) was independently
developed by the Receiving Party without use of the Confidential
Information disclosed by the Disclosing Party (as shown by its
written records).
13.2 PERMITTED USE
The Receiving party shall maintain in confidence all Confidential
Information of the Disclosing Party, and shall not use, disclose
or grant the use of the Confidential Information except on a
need-to-know basis to those directors, officers, employees,
permitted sub licensees, permitted assignees and agents,
consultants, or foundries, to the extent such disclosure is
reasonably necessary in connection with the Receiving Party's
activities as expressly authorized by this Agreement or to comply
with an order of a court or other governmental authority, or
otherwise required to be disclosed under applicable law, provided
that the Receiving Party provides written notice thereof to the
Disclosing Party and sufficient opportunity to object to any such
disclosure or to request confidential treatment thereof.
Such disclosure shall not deprive the information so disclosed of
its character as Confidential Information. To the extent that
disclosure is authorized by this Agreement, prior to disclosure,
the Receiving Party shall obtain agreement of any such person to
hold in confidence and not make use of the Confidential
Information for any purpose other than those permitted by this
Agreement. The Receiving Party shall notify the Disclosing Party
promptly upon discovery of any unauthorized use or disclosure of
the Disclosing Party's Confidential Information. The Receiving
Party shall take all reasonable steps, both during and after the
Term, to insure that no person(s) (other than those authorized
under this Agreement) shall have access to the Confidential
Information of the Disclosing Party. Any permitted reproduction of
Confidential Information shall contain any and all confidential or
proprietary notices or legends, which appear on the original
unless otherwise authorized in writing by the Disclosing Party.
Each party's obligation under this section shall survive any
termination of this Agreement for a period of five years.
13.3 EQUITABLE RELIEF
Each Party agrees that the provisions of this Section 14 are
reasonable and necessary for the protection of the other party and
that such provisions may not be adequately enforced by an action
for damages. Therefore, in the event of a breach or threatened
breach of this Section 14 by the Receiving Party or any person
controlled by the Receiving Party, the Disclosing Party shall be
entitled, in addition to all other remedies, to an injunction
and/or restraining order enjoining the breach or threatened breach
of the provisions of Section 14 or otherwise to enforce
specifically such provisions against violation, without the
necessity of posting any bond or other security by the Disclosing
Party. The Receiving Party further agrees that if it shall violate
any of the covenants and agreements under this Section 14, the
Disclosing Party shall be entitled to an accounting and repayment
of all profits, commissions or other benefits realized and/or
which may be realize as a result of or arising out of any such
violation. Such remedies shall be cumulative and are not exclusive
and in addition to any injunctive relief or other legal or
equitable remedy to which the Disclosing Party is or may be
entitled. In addition, the prevailing party shall also be entitled
to its reasonable attorneys' fees and costs incurred in any action
in which it is successful in establishing or defending against an
alleged violation of Section 14.
13.4 RETURN AND USE OF CONFIDENTIAL INFORMATION
Upon termination of this Agreement, the Receiving Party shall
return to the Disclosing Party all Confidential Information of the
Disclosing Party and shall make no other or further use of such
Confidential Information.
14 TERMINATION
This Agreement may be terminated as follows:
14.1 ACCEPTANCE TEST FAILURE
In the event a Product is unable to pass the Acceptance Test to
Internet Photonics' reasonable satisfaction by *** (the
"Acceptance Test Deadline"); provided however, if Internet
Photonics fails to timely perform the Acceptance Test pursuant to
the ATP or unreasonably does not accept the Path 1 Deliverables
and/or the Acceptance Test, the Deadline shall be extended on a
day by day slip for each day said Internet Photonics fails to
adhere to the ATP or unreasonably does not accept the Path 1
Deliverables.
The results of termination under this paragraph shall be in
accordance with paragraph 7.10
14.2 ASSIGNMENT OR TRANSFER OF ASSETS
By either Party, immediately upon written notice to the other
Party, if (a) all or a substantial portion of the assets of the
other Party are transferred to an assignee for the benefit of
creditors, or to a receiver or a trustee in bankruptcy, (b) a
proceeding is commenced by or against the other Party for relief
under bankruptcy or similar laws and such proceeding is not
dismissed within sixty (60) days, or (c) the other Party is
adjudged bankrupt.
14.3 MATERIAL BREACH
By either Party, in the event the other Party materially breaches
any of its obligations hereunder and fails to cure same within
sixty (60) days after receipt of the written notice of such
breach.
14.4 COMPLETION OF RESELLER AGREEMENT
If the Product Supply and Reseller Agreement has not been executed
on or before ***, which date may be extended upon mutual
agreement, the provisions of Section 7.10 herein would apply.
14.5 FULFILMENT OF OBLIGATIONS
Upon Path 1's fulfilment of its obligations under this agreement,
or upon incorporation of any remaining obligations in a subsequent
agreement between Path 1 and Internet Photonics
14.6 SURVIVAL
The provisions of Sections 1 (Definitions), 3.1 (Compensation) (to
the extent that any fees have been earned as of the termination),
3.2 (Intellectual Property Rights), 3.6 (Indemnification), 7.10
(Performance Assurance), 13 (Confidentiality), 17
(Warranties/Limited Liability) and 18 (General) shall survive the
expiration or termination of this Agreement.
15 WARRANTY ON PATH 1 TECHNOLOGY
Path 1 agrees to provide a warranty against any Internet Photonics
reported hardware design firmware/software defects for a period of ***
after the delivery of the first Production Unit by Path 1 to IPI. Path
1 will resolve all defects reported, in writing, by IPI within this
warranty period within *** after this warranty period has completed.
16 MAINTENANCE AND SUPPORT
Path 1 agrees to provide maintenance and support for Products
described in Appendix A attached hereto for a period of *** after
acceptance of a Product by Internet Photonics. Any additional
maintenance and support of the Products required after the expiration
of this *** period will be provided at Path 1's discretion on a time
and materials basis. PATH 1'S SOLE LIABILITY AND INTERNET PHOTONICS'
EXCLUSIVE REMEDY WITH RESPECT TO BREACH OF THE FOREGOING OBLIGATION
WILL BE LIMITED TO ERROR CORRECTION OR PRODUCT REPLACEMENT.
17 WARRANTIES/LIMITED LIABILITY
EXCEPT AS SPECIFICALLY PROVIDED HEREIN, PATH 1 MAKES NO WARRANTY,
EXPRESS OR IMPLIED, AND DISCLAIMS ANY WARRANTIES WITH RESPECT TO THE
TECHNOLOGY, PRODUCTS OR DOCUMENTATION, INCLUDING, WITHOUT LIMITATION,
ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, MERCHANTABILITY, OR
NON-INFRINGEMENT.
NEITHER PARTY SHALL BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL,
INDIRECT, EXEMPLARY, SPECIAL OR PUNITIVE DAMAGES, REGARDLESS OF
WHETHER THE CLAIM GIVING RISE TO SUCH DAMAGES IS BASED UPON BREACH OF
WARRANTY, BREACH OF CONTRACT, STRICT LIABILITY, NEGLIGENCE OR OTHER
THEORY, EVEN IF A PARTY HAS BEEN ADVISED OF SUCH POSSIBILITY THEREOF.
EXCEPT IN RESPECT TO PATH 1 OBLIGATIONS IN ACCORDANCE WITH SECTION
3.6, IN NO EVENT SHALL PATH 1 BE LIABLE TO INTERNET PHOTONICS FOR
DAMAGES UNDER THIS AGREEMENT IN EXCESS OF THE FEES AND OTHER PAYMENTS
ACTUALLY PAID TO PATH 1 FROM INTERNET PHOTONICS DURING THE PRECEDING
TWELVE (12) MONTH PERIOD FROM THE DATE OF THE EVENT GIVING RISE TO THE
CLAIM OCCURRED.
18 GENERAL
18.1 FORCE MAJEURE
Neither Party shall be liable for any failure or delay in its
performance under this Agreement due to causes which are beyond
its reasonable control, including, but not limited to, acts of
God, acts of civil or military authority, fires, epidemics,
floods, earthquakes, riots, wars, sabotage, labor shortages or
disputes, and governmental actions; provided that (a) the delayed
Party: (i) gives the other Party written notice of such cause
promptly, and in any event within fifteen (15) days of discovery
thereof; and (ii) uses its reasonable efforts to correct such
failure or delay in its performance, and (b) the delayed Party's
time for performance or cure under this Agreement shall be
extended for a period equal to the duration of the cause or sixty
(60) days, whichever is less.
18.2 NOTICES
Any consent, notice or report required or permitted to be given or
made under this Agreement by one Party hereto to the other Party shall
be in writing, delivered by Federal Express or comparable express
service, addressed to such other Party at its address indicated below,
or to such other address as the addressee shall have last furnished in
writing to the addressor and (except as otherwise provided in this
Agreement) shall be effective upon receipt by the addressee.
If to Path 1:
Path 1 Network Technologies, Inc.
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Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
If to Internet Photonics:
Internet Photonics, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
18.3 RELATIONSHIP OF PARTIES
The Parties are independent contractors. Neither company nor its
respective employees, consultants, contractors or agents are
agents, employees or joint venturers of the other, nor do they
have any authority to bind the other by contract or otherwise to
any obligation. Each Party will not represent to the contrary,
either expressly, implicitly, by appearance or otherwise. Each
Party will determine, in its sole discretion, the manner and means
by which it performs its obligations hereunder, subject to the
express condition that each Party will at all times comply with
applicable law.
18.4 USE OF NAME
Except as provided in Sections 3.5 and 7, neither Party will,
without first obtaining the other Party's prior written consent,
be entitled to use the name of the other Party in promotional,
advertising and other materials.
18.5 PERSONNEL
The respective employees, consultants, contractors and agents of
each Party will observe the working hours, working rules and
holiday schedule of the other while working on the other Party's
premises. Notwithstanding the foregoing, employees of a Party
shall be and remain employees of that Party and shall not be
deemed or claim to be employees of the other Party even when
working on such other Party's premises. Additionally, each Party
warrants that it will not seek to employ, hire, retain, or
otherwise seek the services of any of the employees of the other
Party during the Term and for a period of one year thereafter
unless agreed in writing by both Parties.
18.6 EMPLOYMENT TAXES AND BENEFITS
Each Party shall be responsible for any and all employment taxes
and benefits payable to its employees, representatives,
contractors, subcontractors and other engaged by it to perform its
obligations hereunder and in no event shall either Party look to
the other Party for such payments.
18.7 OTHER TAX IMPLICATIONS
The purpose of development of the Path 1 Deliverables under this
Agreement is to demonstrate that the Products developed hereunder
will conform to the Specifications. The Path 1 Deliverables have
no intrinsic value as an item. As such, no value added, sales, or
use taxes have been assessed or are anticipated to be required as
a result of the Services to be performed by Path 1 under this
Agreement.
18.8 EXPORT CONTROLS
Each Party shall comply with all applicable United States laws and
regulations respecting the export or re-export, directly or
indirectly, of any technical data acquired from the other Party
under this Agreement or any Product or Path 1 Deliverables
utilizing any such data.
18.9 ASSIGNMENT
Except as expressly provided herein, neither Party may assign or
delegate this Agreement, or any of its respective rights or
obligations hereunder without the prior written consent of the
other Party hereto. Notwithstanding the foregoing, both Parties
shall have the right to transfer their respective rights hereunder
to any purchaser of all or substantially all of assets of the
business of such Party to which this Agreement relates (whether by
sale, merger or otherwise) subject to confirmation that all rights
and obligations of this Agreement remain in force.
18.10 NO WAIVER
Failure by either party to enforce any provision of this Agreement
shall not be deemed a waiver of future enforcement of that or any
other provision.
18.11 NO RIGHTS IN THIRD PARTIES
This Agreement is made for the benefit of Internet Photonics and
Path 1 and not for the benefit of any third parties.
18.12 COUNTERPARTS
This Agreement may be executed in one or more counterpart, each of
which shall be deemed an original, but collectively shall
constitute but one and the same instrument.
18.13 HEADINGS AND REFERENCES
The headings and captions used in this Agreement are used for
convenience only and are not to be considered in construing or
interpreting this Agreement.
18.14 CONSTRUCTION
The Parties and their respective counsel have negotiated this
Agreement. This Agreement will be fairly interpreted in accordance
with its terms and without any strict construction in favor of or
against either party.
18.15 APPLICABLE LAW
This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, U.S.A. without giving
effect to any conflict of laws principles thereunder.
18.16 SEVERABILITY
If for any reason an arbitration forum or a court of competent
jurisdiction finds any provision of this Agreement, or portion
thereof, to be unenforceable, that provision of the Agreement
shall be enforced to the maximum extent permissible so as to
effect the intent of the Parties, and the remainder of this
Agreement shall continue in full force and effect.
18.17 COMPLETE AGREEMENT
This Agreement, including all Appendices and Exhibits, constitutes
the entire agreement between the Parties with respect to the
subject matter hereof, and supersedes and replaces all prior or
contemporaneous understandings or agreements, written or oral,
regarding such subject matter. No amendment to or modification of
this Agreement shall be binding unless in writing and signed by
duly authorized representatives of both Parties. To the extent any
terms and conditions of this Agreement conflict with the terms and
conditions of any invoice, purchase order or purchase order
acknowledgement placed hereunder, the terms and conditions of this
Agreement shall govern and control.
18.18 ATTORNEY'S FEES
The prevailing Party in any dispute under this Agreement shall be
entitled to all of its reasonable attorneys' fees.
19 SIGNATURES
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized representatives.
PATH 1 NETWORK TECHNOLOGIES INC: INTERNET PHOTONICS, INC. :
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------- -------------------------------
NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ NAME: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
TITLE: Vice President, Marketing TITLE: Chief Financial Officer
and Sales
DATE: September 9, 2002 DATE: September 9, ▇▇▇▇
▇▇▇▇▇▇▇▇ A
PRODUCT REQUIREMENTS SPECIFICATIONS
By
PATH 1 NETWORK TECHNOLOGIES INC.
For
INTERNET PHOTONICS, INC.
Version 6.0
September 9, 2002
1 PRODUCTS SUMMARY
Path 1's goal is to develop and sell products that address the ASI to IP
and IP to ASI gateway needs of the cable marketplace. Four (4) products
have been identified for development.
Internet Photonics Inc. (IPI) has specified a product, (Path 1 code name
IPIP-101) Product 1) the ASI DE-MUX TO IP GATEWAY, which is identified in
the PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT.
In Addition, Path 1 plans to develop the following products, which will be
offered to IPI under a non-exclusive agreement:
2) An ASI over IP bridging Product, called here the IP TO ASI RX
GATEWAY
3) An IP to ASI Product including IP SPTS multiplexing, called here
the IP TO ASI MUX GATEWAY 4) An ASI to IP bridging Product without ASI MPTS
de-multiplexing Product into component SPTSs, called here
the ASI TO IP TX GATEWAY
The four product names identified above and used in this document are
understood to be for the purpose of contract and product specifications
only, and not to be the final product name. IPI and Path 1 will mutually
agree product naming as soon as possible.
The exclusive agreement covers only the ASI DE-MUX TO IP GATEWAY. This
product inputs up to 8 ASI MPTSs and outputs SPTSs over IP on the GigE
network interface.
The IP TO ASI MUX GATEWAY inputs SPTSs over IP on the GigE network
interface, and outputs multiplexed MPTSs on up to 8 ASI output ports.
The ASI DE-MUX TO IP GATEWAY inputs ASI video while the IP TO ASI MUX
GATEWAY outputs ASI video. The two products serve different directions.
Note that the exact definition for ASI DE-MUX TO IP GATEWAY and THE IP TO
ASI MUX GATEWAY is spelled out in detail within the body of the
requirements section.
IPI's target market will be the *** as defined in the Product Supply and
Development Agreement contract. This Marketing Requirements Specification
document must be accepted by IPI and used as the basis for the Acceptance
Test Plan and private Simple Network Management Protocol (SNMP) Management
Information Base (MIB), documents that Path 1 will create.
Four products will be specified, as noted above. These products offer
unique capabilities within a common architecture. It is informative to
compare these requirements so that a clear understanding of the unique
capabilities of each product can be gained.
This specification will identify requirements unique to each in addition
to identifying requirements that are common to each.
1.1 REVISION HISTORY
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Date By Whom Comments
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*** ▇▇▇▇ ▇▇▇▇▇▇ Proper definition of Unicast and Multicast processing for
the IP to ASI Product. Added default *** and ***.
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*** Yendo Hu Update and correct Product description
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*** ▇▇▇▇ ▇▇▇▇▇▇ Chassis and Product Description
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2 HARDWARE REQUIREMENTS
The products all use common hardware interfaces, which are described in
this section. In addition, requirements for the front panel, rear panel
and chassis are described.
2.1 ASI VIDEO PORTS
Factory order hardware with 4 or 8 ASI ports configured all for either
input or output.
Licensed operation of ASI ports, up to the number of factory ordered
hardware ports. Port base licensing allows for the capability of using
fewer ASI ports than the hardware supports which may result in a lower
cost per port, with built in upgrade for more ports.
For example, if the product is ordered with 8 ASI ports and licenses
for only 6 ASI ports, then later purchasing the license can enable the
additional 2 ASI ports. In general, the license is issued to the user
as a key, which enables from 1 to 8 ports.
One Activity LED per factory ordered hardware ASI port will blink at a
rate proportional to the detected Transport Stream bitrate.
For each port a maximum bit rate of 5Mbps, if SPTS, is supported.
For each port a maximum bit rate of 156Mbps, if MPTS, is supported.
The total input Transport Stream (TS) packet bitrate cannot exceed
936Mbps.
2.2 GIGABIT ETHERNET IP PORT
The GigE port is the exclusive interface for transmission of video over
IP data. In addition, management protocols will run on this interface.
The product can be ordered with either SFP connectors (Optical Gigabit
Ethernet) and/or Copper Gigabit Ethernet connectors. If ordered with
SFP, then the choice for:
|X| MT-RJ Gigabit Ethernet
|X| SFP LC Gigabit Ethernet
When ordered with both connectors, configuration settings allow
prioritizing one connector over the other.
Activity and link LEDs will operate as is normal for network
interfaces.
When product is hardware factory configured for ASI to IP then the
maximum IP output Transport Stream bitrate will be *** measured over
*** milliseconds and the maximum IP input bitrate of *** measured over
*** milliseconds.
When product is hardware factory configured for IP to ASI then the
maximum IP input Transport Stream bitrate will be *** measured over ***
milliseconds and the maximum IP output bitrate of *** measured over ***
milliseconds.
2.3 10/100 FAST ETHERNET PORT
This IP network interface port is used only for *** and never used as a
*** interface. The *** interface will be enabled at all times, however
if not connected then *** protocols will still be enabled on the ***
interface.
Activity and link LEDs will operate as is normal for PCs with network
interfaces adapters.
2.4 RS-232 SERIAL PORT
The RS-232 port is used for initial configuration of the networks
settings and for Path 1 support and diagnostics.
Port settings are: ***.
Initial setup parameters are ***.
2.5 FRONT PANEL
The front panel will have 4 LEDs; power, activity (video input on ASI
or IP), event log, and error.
2.6 REAR PANEL
All labeled inputs and outputs will be accessible on the rear
panel.
2.7 CHASSIS
Requirements of the chassis are as follows:
|X| Front panel LEDs
|X| Front to rear airflow
|X| Rugged rack mount capable 1 RU
|X| Top sides bottom and rear are either brushed aluminum or painted
exterior
|X| Provide rear panel 120/240VAC to the internal PSU (option alternative
supply voltages for example; for single or dual-48VDC supply)
|X| Protect against EMI sufficient for FCC and CE certifications.
|X| Safe for operating sufficient for UL certification.
|X| ***
|X| Rear Panel labeled Inputs, Outputs, and LEDs
|X| Top side warning, certifications, and MAC address labeling
|X| External fans
|X| Removable ears
2.8 INPUT AND OUTPUT PROTOCOLS REQUIREMENTS
Each interface port will run protocols specific to enabling the
application. This section discusses these protocols.
2.9 ASI MPEG-2 PROTOCOL
Only *** byte fixed size *** Transport Stream packets will be
recognized.
ASI input *** streams must be *** compliant with a measured maximum PCR
jitter not to exceed ***. This insures that end-to-end accumulated PCR
errors in the transport system from Encoder source to the Set Top Box
remains within *** PCR jitter tolerance of ***.
All ASI outputs will uniformly distribute data signals across the full
ASI signal bandwidth of ***, measured over *** milliseconds (commonly
called ***).
2.10 GIGABIT ETHERNET PROTOCOLS
The Video over IP encapsulation, transmit or receive, will interoperate
with raw ***. This de-facto protocol is specified as: *** with 1 to 7
*** packets per Ethernet frame, where *** packets are never fragmented
across Ethernet packet boundaries.
This interface is also used for in-band management protocols.
Specifically this interface will support:
|X| ***
|X| ***
|X| ***
|X| *** (***)
2.11 10/100 FAST ETHERNET PROTOCOLS
This interface is used exclusively for *** protocols. Specifically
this interface will support:
|X| ***
|X| ***
|X| ***
|X| *** (***)
2.12 RS-232 SERIAL PROTOCOLS
This interface will be configured to run the *** program. This ***
program has be enabled with special commands, which make it possible
for the user to configure both the *** and *** network settings. In
addition, the *** is used for authorized factory troubleshooting.
3 PROCESSING REQUIREMENTS
The processing requirements are not identical across all four products.
This section clearly identifies the unique characteristics of each
product.
3.1 ASI DE-MUX TO IP GATEWAY PROCESSING
The ASI De-Mux to IP Gateway is enabled with processing defined in this
is section, in addition to the processing defined in the ASI to IP Tx
Gateway processing above.
*** Transport Streams (***) can be de-multiplexed into the component
*** (***) before encapsulation. Each *** can contain no more than ***
component ***. Specifically *** de-mux processing will:
1) ***
2) ***
3) ***
3.2 IP TO ASI RX GATEWAY PROCESSING
***Transport Streams, either *** or ***, are received
encapsulated within *** for processing. *** packets are
de-encapsulated from the *** and output directly to the ***
according to the ***. The *** assigns to each *** the proper
*** and includes either the *** or the *** number.
The *** is defined in Provisioning Management and Monitoring
Requirements.
3.3 IP TO ASI MUX RX GATEWAY PROCESSING
The IP to ASI Mux Rx Gateway is enabled with processing defined in this
is section, in addition to the processing defined in the IP to ASI Rx
Gateway processing above.
Received *** can be multiplexed before output to the ***. Each output
*** contains no more than *** component ***. The *** is used to control
the *** multiplexing process and contains the *** output *** Program
Number and *** number.
4.4 ASI TO IP TX GATEWAY PROCESSING
ASI to IP Tx Gateway will be enabled with the ASI to IP
processing. This processing allows up to 8 ASI ports to be
continuously monitored for valid ***, individual *** packets
collected into groups of ***, encapsulated in *** and
immediately transmitted as multiplexed *** over *** on the ***
interface according to the mapping assignment in the ***.
The *** is defined in Provisioning Management and Monitoring
Requirements.
.
4 PROVISIONING, MANAGEMENT, AND MONITORING REQUIREMENTS
The processing requirements are not identical across all four products.
This section clearly identifies the unique characteristics of each
product.
4.1 COMMON IP NETWORK INTERFACES PROVISIONING
Network configuration settings for both the *** and the ***
interfaces. This includes assignment of ***.
*** maximum bitrate assignment, which limits the maximum input or
output bitrate. This will have a default value of ***.
*** minimum bitrate assignment, which limits the maximum input or
output bitrate. This will have a default value of ***.
Optionally, network provisioning is available from the front panel
using the LCD and keypads.
4.2 COMMON ASI INTERFACE AND IP INTERFACE MONITORING
The product will raise events, set conditions and increment counters;
which are captured for presentation to the user in various formats. The
presentation formats are:
|X| Front Panel LED; power, activity, log, and fault
|X| SNMP using MIB browser
|X| Option for Front Panel using LCD
|X| Option for Web User Interface
The front panel power LED will be illuminated when connected to a VAC
supply.
The front panel activity LED will be blink bitrate relative when:
|X| For the ASI to IP configuration, ASI traffic is detected
|X| For the IP to ASI configuration, IP traffic is detected.
The front panel log LED will be illuminated as long as the Event Log
Not Empty condition is set. This must be manually unset.
The front panel fault LED will be illuminated as long as any event has
been raised within the last *** or any or condition is set. The fault
LED will be illuminated for no less than *** at a time.
Optionally, monitoring of event log, counters, and faults is available
from the front panel LCD or a Web User Interface.
4.3 SPECIFIC ASI TO IP TX GATEWAY MONITORING
Monitoring includes events, conditions, counters, gauges, event logs,
and ***.
4.3.1 Events
Events include:
|X| Event Log Not Empty Condition - indicates that events are archived
in the event log. Event Log must be cleared to unset this condition.
|X| GigE Link Down Condition - auto unset
|X| 10/100 FE Link Down Condition - auto unset
|X| Gateway Not Detected Condition - auto unset
|X| ***
|X| ***.
|X| ***.
|X| Over Temperature Condition
Events will raise *** at intervals of no greater that *** for each
type of event, and then only at transition between the states of the
event. Events that may occur at high frequency will be bound to event
counters. These event counters re: ASI sync loss *** that are raised
for these events will be bound to the associated counter.
4.3.2 Conditions
Conditions are either *** or ***. *** conditions must be manually
unset and *** conditions are automatically unset. Unless specified all
conditions are ***.
Conditions include:
|X| Event Log Not Empty Latched Condition - *** by clearing the event
log
|X| GigE Link Down Condition
|X| 10/100 FE Link Down Condition
|X| Gateway Not Detected Condition
|X| ***
|X| ***
|X| ***
|X| Over Temperature Condition
4.3.3 Counters
Events are counted by event type and the event counters are
available for monitoring. Event counters may be reset. When
event counters increment (during a *** sampler time) then the
associated condition will be set for at least ***. When event
counters doe not increment (over a *** sample time) then the
associated condition is automatically unset.
Events Counters include:
|X| ***.
|X| ***.
|X| ***.
4.3.4 Gauges
Gauges report the status of internal variables, which rise and
fall under operation the product; for example internal
temperature, IP bitrate, and ASI bitrate. Some gauges are used
to set Conditions when parametric bounds are exceeded. Gauge
conditions remain set until the bonds are no longer exceeded.
Some gauges do not correspond to Conditions and are only
monitored variables.
Gauges include:
|X| Over Temperature
|X| Input IP bitrate
|X| Output IP bitrate
|X| Input ASI port bitrate
|X| Output ASI port bitrate
|X| Input Program count
|X| Output Program count
4.3.5 Event Logs
Event logs are archived in non-volatile memory for review by
the user. In other words event logs persist across system
reset. Event logs are manually cleared. Event logs are updated
for every condition that is set or unset including the bound
counters if appropriate. At least *** date and time stamped
entries will be archived.
4.3.6 Traps
*** will be raised for every condition that is *** or ***. If
appropriate the *** will include the bound counter. All ***
can be filtered by type.
4.4 SPECIFIC IP TO ASI RX GATEWAY MONITORING
These features are very similar to the ASI to IP Tx Gateway monitoring
requirements. The following is a list of differences:
|X| ***
|X| ***
4.5 SPECIFIC ASI DE-MUX TO IP GATEWAY PROVISIONING
The ASI De-Mux to IP Gateway is enabled with provisioning defined in
this is section, in addition to the provisioning defined in the ASI to
IP Gateway processing above.
Provisioning includes *** assignment of de-mux enable, which further
requires assignment of component *** address assignment.
De-mux enable is part of the *** and *** address is stored in the ***.
This table data is referenced during ASI De-Mux to IP Gateway
processing for proper assignment of *** address generation.
The ASI De-Mux to IP Program Map Table is loaded initially using the
***. The default *** is ***.
4.6 SPECIFIC ASI TO IP TX GATEWAY PROVISIONING
Provisioning includes *** assignment of destination being either ***
or *** address.
For *** assigned as ***, there are the additional requirements for ***
and ***.
For *** assigned as ***, there is the additional requirement for
assignment of ***.
This information is stored in the ASI to IP ***, which is referenced
during ASI to IP processing for generation of the proper destination
address assignment.
The ASI to IP *** is loaded initially using a ***. The default Port
*** identifies the *** destination *** incrementing by one for each
*** and starting at: ***.
4.7 SPECIFIC IP TO ASI MUX GATEWAY PROVISIONING
In addition to what is defined here is included the IP to ASI Rx
Gateway provisioning described above.
Provisioning includes *** assignment of mux enable, which further
requires assignments to entries in the ***. Mux enable is part of the
*** and the *** is configured to assign input IP encapsulated *** to
output programs in the *** multiplex. This table data is referenced
during IP to ASI Mux Gateway processing for proper assignment of ***
source address assignment.
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*** Portions of this document have been omitted pursuant to a request for
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filed separately with the Commission.