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EXHIBIT 10.6
CONTRACT NO.
MASTER RESELLER AGREEMENT
BETWEEN
SPRINT/UNITED MANAGEMENT COMPANY
AND
VISUAL NETWORKS
This MASTER RESELLER AGREEMENT ("Agreement") effective August 23, 1996
("Effective Date"), between Sprint/United Management Company, a Kansas
corporation, ("Sprint"), with offices located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and Visual Networks, a Delaware corporation ("Supplier"),
with offices located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
BACKGROUND
Supplier designs, develops, manufactures, and sells electronic equipment
("Equipment") and firmware and software as further defined in Section 13, below
("Software"), (collectively, "Products"), including auxiliary installation,
training, and technical and marketing support services ("Services"); and
Sprint desires to purchase or license various Products and Services from
Supplier that Sprint expects to use itself, or resell or sublicense to others
solely in association with Sprint network Services provided to Sprint or
Sprint's customers ("Customers"), and Supplier is willing to sell and license
the Products to Sprint and provide Services subject to the terms of this
Agreement.
The parties agree as follows:
1.0 SCOPE
(a) This Agreement contains the terms that will apply to any
contract or purchase order("Order") that Sprint may place with
Supplier during the term of this Agreement for Products and
Services offered by Supplier more fully described in Exhibit
A, attached to and incorporated in this Agreement.
In addition, Sprint may issue a non-binding yearly Order
("Blanket Order") which will apply to Products ordered during
that year. During a given year, Sprint may amend from time to
time the Blanket Order. The parties agree that the Blanket
Order does not obligate Sprint to any dollar amount or volume
of purchases of Product and is only intended to facilitate in
order administration.
Under a Blanket Order, Sprint will issue a document for the
purchase of Product under it ("Release"). A Release commits
Sprint to the purchase of the specific dollar amount or
quantity set forth in that Release. In addition, a Release
commits Supplier to ship the Product identified in the Release
and invoice Sprint in accordance with this Agreement.
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(b) The terms of this Agreement control over any additional or
inconsistent terms found in any Order under this Agreement or
in any acknowledgment or other form used by Supplier, or any
exhibits attached to this Agreement.
(c) The Order becomes a binding obligation of the parties when
Supplier signs and returns to Sprint an acceptance copy of the
Order or begins performance of the Order, whichever occurs
first.
(d) This Agreement is entered into by Sprint on its own behalf and
for the benefit of all Sprint Corporation affiliated entities
("Sprint Affiliates") as set forth in Exhibit C. The term
Sprint Affiliate includes: a) controlled Sprint Affiliates,
meaning any entity in which Sprint Corporation or its
wholly-owned affiliates has practical management control over
the entity by virtue of majority stock ownership or an
equivalent ownership interest, b) uncontrolled Sprint
Affiliates, meaning any entity in which Sprint Corporation
directly or indirectly holds an equity or similar interest,
but the interest does not give practical management control,
or c) remote Sprint Affiliates, meaning parent entities of
joint ventures of which Sprint or Sprint Affiliates are a
part, telecommunications entities which have an affiliation
with those joint ventures, and business customers of Sprint of
Sprint Affiliates.
Any controlled Sprint Affiliate may automatically execute a
Contract Order under this Agreement. Subject to negotiation
and upon approval by Sprint's Material & Services Management
Department ("M&SM"), Supplier will accept any uncontrolled or
remote Sprint Affiliate Contract Order. All references to
Sprint refer equally to Sprint Affiliates executing Contract
Orders with terms in accordance with this Agreement. No
commitment is made by Sprint or any Sprint Affiliate, nor any
liabilities accepted, except that set forth in a properly
signed Contract Order. All communications and invoices must
be directed to the Affiliate issuing the Contract Order under
the instructions issued in the Contract Order. Services
performed on behalf of any Sprint Affiliate will be billed to
or collected from only that Affiliate. Only the Sprint
Affiliate issuing a specific Contract Order under this
Agreement will incur any obligation or liability to Supplier
for any claim which may arise from or relate to that Contract
Order.
(e) Sprint is not committed to purchasing any minimum Order or
aggregate dollar volume of Products or Services during the
term of this Agreement, however, Sprint may provide monthly
and yearly estimates of Product purchases ("Forecast") for
planning purposes. Any Forecast provided to Supplier by
Sprint is not a commitment on Sprint's part to purchase
certain dollar amounts or quantities.
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Pricing for Year One of this Agreement is as indicated in
Exhibit A, Pricing, Schedule I. If Sprint does not purchase
80% of the amount for the specific period as detailed below,
the pricing for the subsequent year will be as indicated in
Exhibit A, Pricing, Schedule II. If Sprint purchases 80% or
greater than the amount for the specific period, as detailed
below, then the pricing will be as indicated in Exhibit A,
Pricing, Schedule I, for the subsequent period.
Year One of Agreement: $ *** (net of applied discounts)
Year Two of Agreement: $ *** (net of applied discounts)
Year Three of Agreement: $ *** (net of applied discounts)
NOTE: Any purchases made, prior to this Agreement, against the
CUSTOMER-SPECIFIC INTEGRATOR PARTNER AGREEMENT between the
parties, # CSIP-SP-001, will be included toward Year One's
volume.
2.0 TERM & TERMINATION
(a) This Agreement begins on the Effective Date and will remain in
force for a period of 3 years unless terminated as provided in
this Agreement.
(b) Either party may terminate this Agreement upon 30 days' prior
written notice to the other party if the other party
materially breaches the Agreement and fails to cure the breach
within 30 days of written notice of the breach.
(c) Either party may terminate this Agreement upon written notice
to the other party, if the other party is placed in
liquidation or receivership, if a petition of voluntary or
involuntary bankruptcy is filed against it and if the petition
is not dismissed within 30 days, or if it fails to satisfy a
final and valid court judgment for payment of money.
(d) This Agreement, including any Order, may be terminated
immediately at any time by Sprint without penalty if there is
any change in control or ownership of Supplier to a direct
competitor of Sprint (as reasonably determined by Sprint). If
permitted under applicable securities law, Supplier must give
Sprint no less than 30 days written notice of any change in
control or ownership of Supplier. This subsection does not
apply in the event of Supplier's acquisition as a
publicly-traded company.
3.0 PRICE AND TERMS OF SALE
(a) Prices for the Products and Services for the Term of this
Agreement are set forth in Exhibit A.
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*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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(b) Supplier warrants that the terms of this Agreement and the
prices on Exhibit A are no less favorable than the terms given
to any third party that purchases or licenses similar Products
or Services from Supplier under similar terms and conditions.
If Supplier offers more favorable prices and terms to any
Customer during the term of this Agreement, the prices and
terms will be applicable to Sprint Orders. Supplier warrants
that the prices on Exhibit A are complete and include, but are
not limited to, purchase price, maintenance fees, taxes,
packaging, labeling, custom duties, storage and insurance. In
determining whether an agreement is of similar scope and the
consideration is less, all the terms of this Agreement and
that agreement will be analyzed as a whole.
(c) Post Term Maintenance. At Sprint's option at the end of the
Term, Supplier will offer maintenance Services under the terms
of this Agreement at an annual cost not to exceed ***% of the
cumulative sales of ASEs, PAMs, PACSs, & MICs, as defined in
Exhibit A.
4.0 INVOICING AND PAYMENT
(a) Invoices must show:
(i) the Contract number, Order number, and Release
number,
(ii) the date shipment was made and the shipping point for
Products;
(iii) that the line item on the Order matches the line item
on the invoice, including the price and description,
unless there has been a price decrease.
(b) Sprint may specify additional invoicing instructions on the
Order. Supplier may not invoice Sprint until Products are
shipped, or Services have been accepted by Sprint.
(c) Payment *** days after receipt of valid invoice for the first
12 months of this Agreement. Thereafter, payment is *** days
from receipt of valid invoice . A legible FAX invoice is
acceptable provided no other copy is provided.
(d) Sprint and Supplier may desire to facilitate certain commercial
transactions between them electronically in Electronic Data Interchange ("EDI")
format in substitution for conventional paper-based documents. EDI
transactions under this Agreement, may include transmitting and receiving EDI
data for ordering, invoicing and payment. Prior to initiating an EDI
transaction, Sprint and Supplier will separately execute Sprint's Trading
Agreement which will set forth the terms and conditions of the EDI transaction.
5.0 DELIVERY, TITLE, RISK OF LOSS
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*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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(a) Delivery of Products will be F.O.B. Origination Freight
collect, and title and risk of loss will pass to Sprint, upon
delivery to Sprint carrier. Supplier agrees to follow
Sprint's shipping instructions, as detailed in Exhibit B,
Sprint Transportation Routing Guide.
(b) If Supplier fails to meet the delivery date, Sprint may direct
expedited routing and excess costs will be debited to
Supplier's account, or, in accordance with Paragraph 7,
Cancellation for Cause, cancel all or part of the Order. If
Products are delivered ahead of the delivery date, Sprint may:
(i) return the Products at Supplier's expense for early
delivery; or
(ii) withhold payment for the Products until after the
specified delivery date; or
(iii) place Products in storage for Supplier's account
until the specified delivery date.
(c) *** days before each quarter, Sprint will provide to Supplier
a quarterly Forecast by Product, and upon Sprint's request,
Supplier agrees to deliver any amount of Product included
within that Forecast within ***days. On amounts exceeding
the prorated volumes, delivery will occur consistently within
*** days.
***
(d) The name, addresses and contact person of Supplier's
Affiliates and distributors, through which any Services may be
ordered by Sprint, are set forth in Exhibit C. Supplier will
notify Sprint, in writing, of any changes in the Affiliates
and distributors on Exhibit C.
6.0 INSPECTION, ACCEPTANCE AND QUALITY CONTROL
(a) Sprint may inspect Products according to an agreed upon
incoming inspection procedure and rejection rate. Products
that fail to meet inspection criteria will be returned to
Supplier, at Supplier's expense. Supplier will pay for
reshipping conforming Products to Sprint. Sprint may place a
hold on all pending Orders until Supplier has demonstrated
that the cause for rejection has been corrected. If the cause
for rejection is not corrected within 30 days after rejection,
Sprint may cancel outstanding Orders without further
obligation or liability. Sprint may conduct a site inspection
at Supplier's facility during business hours by providing 7
days notice to Supplier.
(b) If Supplier becomes aware of any problem with a Product that
is of a safety, regulatory compliance, environmental
compliance, or serious performance nature, and changes the
design or documentation related to the Product, Supplier must
implement the change in accordance with Exhibit D.
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*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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(c) In order for the Products to be connected to the Sprint public
communications network, the Products must pass Sprint's
certification tests. This includes any material modifications
made to any Products to ensure operability and backward
compatibility with Sprint's network. Such materiality shall
be determined by Sprint. Accordingly, Supplier will provide
Sprint units of Product at no charge, along with cables, and
Documentation, to enable Sprint to perform its certification
process.
7.0 CANCELLATION
(a) Cancellation for Cause. Sprint may cancel an Order, in whole
or in part, if Supplier fails or refuses to deliver Products
or Services as ordered on the delivery date, or if Supplier is
not performing in accordance with Supplier-published
specifications. Sprint's acceptance of all or any part of the
Products or Services will not waive claims which Sprint may
have for delays.
If Sprint cancels an Order in whole or in part for cause,
Sprint may procure similar Products or Services from a third
party, and Supplier must pay Sprint for the excess cost for
the replacement Products or Services to be capped at 200% of
Sprint's purchase price for that Order. If cancellation is
partial, Supplier must continue the performance of the
remaining portion of the Order
(b) Cancellation for Convenience:
(i) Prior to delivery, for Releases and orders under ***,
Sprint may, without penalty or other liability
reschedule or cancel a delivery. For Releases or
Orders over ***, Sprint may cancel a Release or Order
within *** days of the shipment date, or pay
reasonable inventory carrying costs until such
inventory is sold to Sprint.
(ii) After partial delivery, Sprint may cancel any or all
of the remaining portion of the Release or Order upon
written notice. Upon receipt of notice, Supplier
must discontinue work, preserve and protect
materials, work in progress and completed work and
conclude performance in accordance with Sprint's
instructions. Sprint will pay Supplier's costs
properly incurred (substantiated by documentation
satisfactory to Sprint) Supplier will not be entitled
to any additional damages on account of cancellation.
8.0 TERRITORY
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*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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The territory will be defined by the address of Sprint's network services
client. Supplier will ship Products only to United States locations at
Sprint's expense. Sprint will be responsible for shipment of Supplier's
Products outside of the United States, at Sprint's expense. Supplier's
Products shall be leased, resold or integrated only into Sprint network
services offerings for clients that are United States based, United States
based multinationals or United States based divisions of international
corporations.
9.0 WARRANTY
(a) Supplier warrants all Equipment against material defects in
material and workmanship and warrants that Equipment will
strictly conform with Supplier's written specification for 5
years from either the date of shipment (or installation if
applicable). Equipment that is repaired or replaced is
warranted by Supplier for the remaining period of the original
warranty, or for 90 days from date of shipment by Supplier,
whichever is longer. All Equipment must be new.
(b) If the Equipment is defective in material or workmanship or
fails to comply with the applicable Equipment specification
during the warranty period, Supplier will repair or replace
the Equipment at Supplier's facility or modify the Equipment
to comply with the Equipment specification. Sprint will
notify Supplier if Sprint requires the original Equipment to
be repaired and returned to Sprint. Sprint will pay the cost
of shipping the defective Equipment to Supplier. The repair
or replacement of the Equipment will be made within 10
business days of receipt by Supplier, at no charge to Sprint.
Shipment of the repaired Equipment to Sprint will be at
Supplier's expense. If Supplier is unable to repair or
replace the Equipment or to modify the Equipment within the 10
business days, Sprint may reject the Equipment and Supplier
will refund to Sprint all monies paid in connection with that
Equipment including but not limited to shipping..
(c) Supplier warrants that all Products, when delivered, conform
to all applicable laws and regulations.
(d) i) Supplier warrants all Software will be in
accordance with Supplier's specifications for a
period of 45 days, from Sprint's acceptance.
Supplier will, at its option, correct or replace any
defective Software version or update at Supplier's
expense, if the Software was installed properly and
used in accordance with Supplier's specification.
ii) Supplier has the full power and authority to grant
the license granted Sprint under this Agreement with
respect to the Software, and neither the license to
nor use by Sprint of the Software, as permitted under
this Agreement, will in any way constitute an
infringement or other violation of any copyright,
patent, trade secret, trademark, nondisclosure, or
any other intellectual property right, moral right,
or right of publicity. The
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Software licensed under this Agreement will be free
and clear of all liens and encumbrances.
iii) To the best of Supplier's knowledge, after
investigation, neither Supplier nor its personnel
performing Services under this Agreement has any
existing obligation that would violate or infringe
upon the rights of third parties, including property,
contractual, employment, trademark, trade secrets,
copyright, patent, proprietary information and non
disclosure rights, that might affect Vendor's ability
to fulfill its obligations under this Agreement.
iv) During Term or when Maintenance is provided after the
Term, Supplier guarantees that its maintenance and
technical support Services described in this
Agreement and the Schedule hereto will be available
for the then-current and immediately preceding
versions of the Software licensed under this
Agreement.
(e) Supplier warrants all Services provided will be performed in a
workmanship like and timely manner, in conformance with the
highest professional standards of the industry and to Sprint's
reasonable satisfaction. Defective or deficient Services will
be corrected, or, at Sprint's option, monies paid to Supplier
in connection with the Services will be refunded.
(f) Additional Supplier warranties and maintenance Services which
must be provided by Supplier are included in Exhibit D.
(g) The warranties are made solely to and for the benefit of
Sprint and its Customer. Supplier makes no other warranties
with respect to the products or any services and disclaims all
other warranties, . Sprint's sole remedy with respect to any
warranty or defect is as stated above.
10.0 SUPPLIER SUPPORT OBLIGATIONS
Supplier agrees to provide to Sprint the support Services detailed in
Exhibit E.
11.0 OWNERSHIP
(a) All Equipment, materials, drawings, Software or data of every
description that Supplier receives directly or indirectly from
Sprint or from a third party on behalf of Sprint, or that is
paid for in whole or in part by Sprint, is the property of
Sprint ("Sprint-owned"). Supplier must ▇▇▇▇ all such property
as Sprint-owned, and must return all Sprint-owned property to
Sprint upon Sprint's request, or upon the termination or
expiration of this Agreement, whichever is earlier. Supplier
is responsible and must account for all Sprint-owned property,
and bears the risk of loss while the property is in Supplier's
possession. Sprint-owned property may only be used in
Supplier's performance of this Agreement. Sprint may inspect
any
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agreements and associated records, including invoices, by
which Supplier acquires Sprint-owned property.
(b) Supplier retains all ownership and unrestricted rights to the
Products. In the future, Sprint and Visual may conduct good
faith negotiations on future product enhancements to the
Products as part of a new and separate executed agreement.
The purpose of such agreement will be to define possible
specific developments unique to Sprint (for which Sprint would
pay for development) and possible specific, defined
restrictions on Supplier's distribution rights for those
developments.
12.0 PROPRIETARY INFORMATION
(a) Supplier and Sprint acknowledge that while performing this
Agreement they may have access to Supplier-owned or
Sprint-owned trade secrets including, but not limited to,
products, planned products, service or planned service,
suppliers, customers, prospective customers, data, financial
information, computer software, processes, methods, knowledge,
inventions, ideas, marketing promotions, discoveries, current
or planned activities, research, development or other
information relating to Sprint's or Supplier's business
activities or operations or those of either's customers or
suppliers ("Proprietary Information").
(b) This Agreement creates a confidential relationship between
Sprint and Supplier. Sprint and Supplier will keep
Proprietary Information confidential and, except as authorized
by Sprint or Supplier in writing, Supplier and Sprint may only
use Proprietary Information to perform the Services or provide
the Products as required under this Agreement, and may only
make copies necessary for performing or reselling the Services
or providing the Products. Supplier or Sprint will label all
Proprietary Information as proprietary or if disclosed in an
intangible format, confirm in writing within 30 days of
disclosure. Upon cessation of work, or upon Sprint's or
Supplier's request, Sprint or Supplier will return all
documents and other materials in their control that contain
or relate to Proprietary Information.
(c) Sprint may require signed non-disclosure agreements from
Supplier's employees, agents or subcontractors.
(d) Proprietary Information does not include information that
Supplier or Sprint can demonstrate by written documentation:
(i) is rightfully known to Supplier or Sprint prior to
negotiations leading to this Agreement;
(ii) is independently developed by Supplier or Sprint
without any reliance on Proprietary Information; or
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(iii) is or later becomes part of the public domain or is
lawfully obtained by Supplier or Sprint from a third
party.
(e) Supplier and Sprint acknowledge that disclosure of Proprietary
Information by Supplier or Sprint will cause irreparable
injury to Sprint or Supplier, Sprint's Customers and other
suppliers, that is inadequately compensable in monetary
damages. Accordingly, Sprint or Supplier may seek injunctive
relief in any court of competent jurisdiction for the breach
or threatened breach of this Section 12, in addition to any
other remedies in law or equity.
13.0 LICENSE OF SOFTWARE
(a) "Software" means any program stored on any media, including
but not limited to, magnetic tape, semiconductor device, disk,
or other memory device, or computer memory and including
related items. Supplier grants to Sprint a non-exclusive,
fully paid-up, perpetual license to use the object code of the
Software with the right to sublicense the object code to its
Customers, provided that the object code will only be used in
connection with the Products for which it was acquired and by
Sprint's consultants and agents on a need-to-know basis. This
right to use and sublicense the object code is subject to
payment of applicable license fees.
(b) Sprint acknowledges that Supplier claims that the Software is
proprietary to Supplier and third parties from whom Supplier
has acquired license rights. Title to the Software will
remain with Supplier or the third-party owners. Sprint will
enter into a software license agreement with its Customers,
prior to providing the object code of the Software. The
software license will be either a separate agreement or a
master sublicense agreement under which various products are
sublicensed by Sprint and will contain provisions that are no
less restrictive than those of this Section 13.
(c) Sprint may copy the object code of the Software for the
purpose of distributing it to its Customers. Additionally,
Sprint, its distributors, Customers and prime contractors may
copy the object code of the Software for back-up or archival
purposes. Each copy of the Software made by Sprint, its
distributors, Customers, and prime contractors will include
the proprietary notice contained in the Software as delivered
by Supplier.
(d) During the Term of this Agreement or when maintenance is
provided following the Term, Sprint may distribute copies of
any Software correction, modification, or update provided to
Sprint or its Customers at no additional cost.
(e) Sprint will not, and will not assist any third party to,
modify, reverse assemble, reverse compile or reverse engineer
the Software.
(f) The expiration or termination of this Agreement will not
terminate the right of Sprint or its Customers to use the
Software.
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(g) Supplier warrants, that it is not necessary for Sprint, or its
Customers to obtain a license from any third party in order to
use the Products, other than the license granted by Supplier
under Sections 13 and 15.
(h) Failure to comply with Section 13 is a material breach of this
Agreement.
14.0 ESCROW AGREEMENT
(a) Within 30 days after the Effective Date, Supplier and Sprint
will enter into an escrow agreement ("Escrow Agreement") with
an escrow agent. The Escrow Agreement will provide for the
delivery of items necessary to recreate, modify, maintain and
use the Software, including without limitation, flow chart and
diagrams, compilers, operating Software, and relevant
documentation, such as design documentation and the document
environment ("Source Code") to the escrow agent, and require
the Supplier to deposit in escrow any modifications or
enhancements to the Source Code of the Software within 45 days
after provision of such modifications and/or enhancements to
Sprint or its Customers. In addition, Sprint will be
permitted to inspect the Source Code, which has been deposited
in escrow, through an independent third-party, to verify that
the Source Code has been deposited and that it contains
everything needed to use and maintain the Software. The fees
of the escrow agent will be paid by Sprint.
(b) Sprint will have the right to obtain a copy of the Source Code
from the escrow agent to maintain, modify and enhance the
Software for itself and sublicensees, subject to the
confidentiality provisions of this Agreement, and only if one
or more of the following events occurs:
(i) Supplier willfully refuses for more than 30 days to
deliver the Software to Sprint, or to support the
Software licensed by Sprint to a Customer, in breach
of Supplier's obligations under this Agreement, or
(ii) Supplier is unable to deliver the Software to Sprint
due to Supplier's voluntary or involuntary
bankruptcy, insolvency, dissolution or cessation of
active business operations for a period of more than
30 days.
If one or more of the above listed events occurs, Supplier
automatically, by the terms of this Agreement, grants to
Sprint a personal (except for third parties permitted to work
with the source code pursuant to Subsection (c) below,
non-exclusive, royalty free, worldwide license to use the
Source Code for the purpose of meeting its support obligations
to itself and its Customers. The 30-day period referred to
in subsections (i) and (ii) commences when Supplier receives
written notice from Sprint that the event has occurred.
(c) In the event of an Escrow withdraw as set forth in this
Section, Sprint may not sublicense the Source Code to any
third party not a Customer. Sprint may permit
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third parties to work with the Source Code on Sprint's behalf,
provided the third-parties are subject to a non-disclosure
agreement.
15.0 USE OF PRODUCTS
(a) The Products purchased under this Agreement may either be used
by Sprint or Sprint may sell, lease, sublicense or distribute
in any manner the Equipment or Software directly to its
Customers. Supplier licenses to Sprint and authorizes Sprint
to sublicense to Customers the right to use any intellectual
property, if any, contained in the Products for use by Sprint
and its customers under this Agreement.
(b) Sprint may make copies of Product documentation if Sprint
reproduces Supplier's proprietary notice on each copy.
16.0 LIABILITY AND INDEMNIFICATION
(a) Supplier and Sprint agree to release, irrevocably and forever
each other, and will defend, pay all judgments, expenses, and
costs (including attorney fees) and generally indemnify,
defend and hold each other harmless from all liability, suit,
claim or proceeding ("claims") resulting from the performance
or non-performance of this Agreement brought against either
party by any person for any damage, loss or destruction of
any kind, including, without limitation, loss to any property
or for any personal injury, including, without limitation,
death, defamation and invasion of privacy, to any person,
including without limitation any personnel of Sprint or
Supplier if the loss, destruction, injury or death results or
allegedly results, in whole or in part, from the act,
negligence, error, omission or willful misconduct or breach of
this Agreement by Supplier or Sprint.
(b) Supplier agrees to handle and defend all claims brought
against Sprint or its Customers, including without limitation,
Sprint's lessees, bailees, transferees and assigns, so far as
based on any claim that the work or Services performed, or the
Products furnished or manufactured by Supplier in the course
of this Agreement or any resulting use or sale of any work,
Services or Products constitutes an infringement of any patent
or copyright of any country, or misappropriation of any trade
secret, or constitutes a breach of any moral right, right of
publicity, or intellectual property right.
(c) If the sale or use of the Products or Services is enjoined,
Supplier must, at Supplier's option and Supplier's expense,
either:
(i) procure for Sprint and its Customers the right to use
the Products or Services; or
(ii) replace the Products or Services with equivalent
non-infringing Products or Services; or
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(iii) modify the Products and Services so they become
non-infringing; or
(iv) remove the Products or Services and refund the
purchase price, including transportation,
installation, removal and other incidental charges.
(d Sprint will notify Supplier in writing of any claims, and will
provide information, assistance and authority for Supplier's
handling and defense of the claim, all at Supplier's expense.
(e) Other than the parties's indemnification obligations under
section 16 of this agreement, neither party will be
responsible to the other for: i) except for indemnifications
made under Section 16b, special, indirect or consequential
loss or damage (including lost data) whether or not such loss
or damage is caused by the fault or negligence of that party,
its employees, agents or subcontractors, ii) for procurement
of substitute goods, technology of services, iii) except for
indemnification obligations under Section 16b, any amounts in
excess, in the aggregate, *** This section does not limit
liability for bodily injury to a person.
17.0 INSURANCE
(a) Supplier will obtain and maintain during the term of this
Agreement, with financially reputable insurers licensed to do
business in all jurisdictions where Product or Services are
delivered or performed and that are reasonably acceptable to
Sprint, not less than the following insurance:
(i) Workers' Compensation as required under any Workers'
Compensation or similar law in the jurisdiction where
the Product is manufactured or work is performed with
an employer's liability limit of not less than
$500,000 per accident; and
(ii) Commercial General Liability, including Product
Liability Insurance and Contractual Liability and
Products/Completed Operations Liability, with a limit
of not less than $1,000,000 combined single limit per
occurrence for bodily injury, personal injury, and
property damage liability, naming Sprint as an
additional insured;
(iii) Business Auto liability insurance covering the
ownership, maintenance or use of any owned, non-owned
or hired automobile with minimum limits of one
million dollars ($1,000,000) combined single limit
per accident for each bodily injury, including death,
and property damage liability, naming Sprint as an
additional insured; and
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*** Confidential Information has been omitted and filed separately with the
Securities and Exchange Commission.
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CONTRACT NO.
(iv) "All Risk" Property Insurance covering not less than
the full replacement cost of Supplier's personal
property while installing, training, or servicing on
Sprint or Customer premises.
(b) Certificates of Insurance. Supplier must, as a material
condition of this Agreement, prior to commencement of any work
and prior to any renewal of insurance, deliver to Sprint a
certificate of insurance, satisfactory in form and content to
Sprint, evidencing that the above insurance, is in force and
will not be canceled or materially altered without first
giving Sprint 30 days' prior written notice.
(c) Nothing contained in this Section 17 limits Supplier's
liability to Sprint to the limits of insurance certified or
carried.
18.0 RIGHT OF AUDIT
Supplier will maintain all records pertaining to this Agreement for at
least 3 years after final payment. Sprint may audit, copy and inspect
the records at reasonable times during the term of this Agreement and
for the 3-year period to verify costs incurred. The audit will be
performed by an independent third party mutually agreed upon and paid
for by Sprint, unless issues related to costs charged Sprint or
Supplier's performance are discovered, in which case the Supplier will
incur the cost of the audit.
19.0 NOTICE
Any communication relating to this Agreement must be in writing and
reference the Contract Number and Order number, if applicable and sent
by certified mail, return receipt requested, telex, facsimile or
overnight mail to the following addresses or as may be later
designated by written notice of a party:
Sprint: ▇▇▇ ▇▇▇▇▇▇▇▇▇
SPRINT
Switched Data Services
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Copy: ▇▇▇ ▇▇▇▇▇▇
Lead Negotiator, Materials & Services Management
SPRINT
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
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CONTRACT NO.
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy of Default Notice to:
SPRINT LAW DEPARTMENT
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Supplier: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, VP Finance
VISUAL NETWORKS
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
20.0 ARBITRATION
(a) Any dispute arising out of or relating to this Agreement,
including any issues relating to arbitrability or the scope of
this arbitration clause, will be finally settled by
arbitration in accordance with the rules of the American
Arbitration Association applying the substantive law of Kansas
without regard to any conflict of laws provision. The
arbitration will be governed by the United States Arbitration
Act, 9 U.S.C. Section 1 et seq., and judgment upon the award
rendered by the arbitrator(s) may be entered by any court with
jurisdiction. The arbitration will be held in the Kansas
City, Missouri metropolitan area. The arbitrators are not
empowered to award damages in excess of compensatory damages
and each party waives any damages in excess of compensatory
damages. Notwithstanding the foregoing, Sprint or Supplier
may bring a claim for injunctive relief as provided in Section
12(e) in a court of competent jurisdiction without first
submitting the matter to Arbitration.
(b) Claims made by Supplier may only be brought against the Sprint
Affiliate which issued the Order giving rise to the claim.
21.0 FEDERAL REQUIREMENTS
(a) Sprint's Status as a Government Contractor. If Sprint or the
federal government determines that this Agreement supports
specific requirements included in a Sprint contract or
subcontract with the federal government, Supplier will be
subject to certain federal acquisition regulations ("FAR's")
contained in Sprint's contract or subcontract. Supplier will
be subject only to FAR's that must be included in all
subcontracts as a matter of law. The applicable FAR will be
attached to the affected Order.
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CONTRACT NO.
(b) Small Business/Small Disadvantaged Business Reporting. If
this Agreement has subcontracting opportunities, Supplier will
make an accounting of dollars applicable to the Products and
Services purchased by Sprint that are subcontracted to firms
that are Small Businesses, Small Disadvantaged Businesses, or
Women-Owned Businesses under Small Business Administration
Regulations. These dollars will be reported annually in
writing to the following address:
Small Business Coordinator
SPRINT
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
22.0 GENERAL
(a) Ethics Code. Supplier agrees to comply with Sprint's Code of
Ethics, where applicable, a copy of which is attached to this
Agreement and is incorporated in this Agreement.
(b) Supplier Performance. Time is of the essence in Supplier's
performance under this Agreement. Sprint is not obligated to
pay for Products delivered or Services performed which do not
conform to Sprint's Order.
(c) Independence of Parties. Neither party is in a joint venture
with or partner or agent of the other. Neither party has the
authority to bind the other in any way. Both parties agree
not to make any commitment in the name of or which purports to
be binding on the other.
(d) Independent Contractor
(i) Supplier must comply with laws, regulations and
orders relating to equal employment opportunity,
workers' compensation, unemployment compensation and
FICA. Upon request, Supplier will furnish Sprint
with
its EEO policies and procedures, verification of
workers' compensation, unemployment compensation,
FICA and the number of hours any individual performs
Services for Sprint within any 12 consecutive month
period.
(ii) Supplier, its subcontractors, employees or agents are
independent contractors for all purposes and at all
times. Supplier has the responsibility for, and
control over, the means and details of performing the
Services, subject to Sprint's inspection. Supplier
will provide all training, hiring, supervising, hours
of work, work policies and procedures, work rules,
compensation, payment for expenses and discipline and
termination of its employees.
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17
CONTRACT NO.
(iii) Sprint will incur no responsibility or obligation to
employees, agents, subcontractors or other parties
utilized by Supplier to perform the Services set
forth in this Agreement. Such person or parties
will, at all times, remain employees, agents or
subcontractors (whichever is applicable) of Supplier.
(iv) Supplier is solely responsible for payment of wages,
salaries, fringe benefits and other compensation of,
or claimed by, Supplier's employees including,
without limitations, contributions to any employee
benefit, medical or savings plan and is responsible
for all payroll taxes including, without limitation,
the withholding and payment of all federal, state and
local income taxes, FICA, unemployment taxes and all
other payroll taxes. Supplier is also solely
responsible for compliance with applicable Workers'
Compensation laws with respect to maintenance of
workers' compensation coverages on Supplier's
employees. Supplier will indemnify and defend Sprint
from all claims by any person, government or agency
relating to payment of taxes and benefits, including
without limitation, any penalties and interest which
may be assessed against Sprint. Supplier will
similarly indemnify and defend Sprint from all claims
by any person or governmental agency which arise
directly or indirectly from any failure by Supplier
to comply with applicable Workers' Compensation laws
with respect to maintenance of workers' compensation
coverage on Supplier's employees.
(v) If Sprint determines that a Supplier-provided
employee, agent or subcontractor is not providing
satisfactory service, Sprint will advise Supplier and
may require Supplier to remove that individual or
subcontractor. Sprint will only pay for work
actually performed by the removed individual or
subcontractor prior to Sprint's notice for removal
and not for transportation or per diem costs
associated with replacing the individual. Supplier
will submit additional resumes to Sprint for purposes
of filling a vacancy at no additional charge.
(vi) Supplier and Sprint will require its employees,
agents and subcontractors to comply with the terms
and conditions of this Agreement.
(f) Survival. Numbered provisions 9, 10 ,11, 12, 13, 14, 15, 16,
17, 18, 20, 22(j) and (k) will survive the expiration or
termination of this Agreement, as well as provisions in this
Agreement that by their content are intended to survive the
performance, termination or cancellation of this Agreement.
(g) Severability. If a provision of this Agreement is
unenforceable, the remaining provisions will remain in effect,
to be construed as if the unenforceable provision were
originally deleted.
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CONTRACT NO.
(h) Waiver. The waiver of a breach of any term of this Agreement
will not constitute the waiver of any other breach of the same
or any other term.
(i) Assignment. Neither party may assign all or any part of this
Agreement without the prior written notice of the other, which
may not be unreasonably withheld, except Sprint may assign
this Agreement to any Sprint controlled Affiliate without
Supplier's consent.
(j) Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of Kansas,
without regard to any conflict of laws provision therein.
(k) Publicity. Except as required by law or this Agreement,
neither party will, without the other party's prior written
consent, which shall not be unreasonably withheld:
(i) make any news release, public announcement, denial or
confirmation of this Agreement or its subject matter;
or
(ii) in any manner advertise or publish the fact of this
Agreement
(l) Remedies. Remedies available to either party under this
Agreement are cumulative and may be exercised concurrently or
separately. The exercise of any one remedy is not an election
of that remedy to the exclusion of other remedies. The rights
and remedies of the parties in this Agreement are not
exclusive and are in addition to any other rights and remedies
available in law or in equity.
(m) Security. Supplier warrants and agrees its employees, agents
and subcontractors will abide by Sprint's security
requirements provided by Sprint to Supplier for the designated
premises where services are performed under this Agreement.
Any security breach will be referred to Sprint's Corporate
Security department.
Supplier will be liable for any security breach resulting from
its failure to comply with Sprint Security requirements, and
will indemnify, defend and hold Sprint harmless for any loss
or damage arising out of or relating to any security breach.
(n) Weapons. Supplier is prohibited from carrying weapons or
ammunition onto Sprint's premises or using or carrying weapons
while performing work on Sprint's behalf or attending
Sprint-sponsored activities. Supplier further agrees to
comply with any postings or notices located at Sprint's
premises regarding safety, security or weapons.
23.0 ENTIRE AGREEMENT
This Agreement, including all Exhibits listed below, contains the
entire agreement between the parties with respect to the subject
matter contained. In the event of an
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19
CONTRACT NO.
inconsistency between the terms of this Agreement and those of an
Order, the terms of this Agreement control. In the event of an
inconsistency between the body of this Agreement and the exhibits, the
body of this Agreement controls:
Exhibit A including any related Schedules:
Product and Cable prices to Sprint
Post Term Maintenance Support Fees
Post Warranty Equipment Warranty Fees
Installation Fees
Post Term Spare Parts Prices
Exhibit B: Sprint Transportation Routing Guide
Exhibit C: Supplier Affiliates and Distributors
Exhibit D: Warranty and Maintenance Services
Exhibit E: Supplier Support Obligations
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CONTRACT NO.
SIGNED:
SPRINT/UNITED MANAGEMENT VISUAL NETWORKS COMPANY
/s/ ▇▇▇▇ ▇▇▇▇ /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------- ----------------------------------
(SIGNATURE) (SIGNATURE)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------- ----------------------------------
(PRINT NAME) (PRINT NAME)
VP - ENTERPRISE SERVICES CHIEF FINANCIAL OFFICER
-------------------------------- ----------------------------------
(TITLE) (TITLE)
8/22/96 8/20/96
-------------------------------- ----------------------------------
(DATE) (DATE)
/S/ ▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
(SIGNATURE
▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
(PRINT NAME)
AVP - MATERIALS & SERVICES MGMT.
--------------------------------
(TITLE)
AUGUST 23, 1996
--------------------------------
(DATE)
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