Exhibit 10.10
AT&T/YURIE AGREEMENT
No. SA-001
between
AT&T Corp.
Government Markets/Defense Markets
and
Yurie Systems, Inc.
(formerly Integrated Systems Technology, Incorporated or "IST")
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This Agreement (hereinafter "Agreement") originally made and entered into
on 18 August 1995 and restated and amended on the 4th day of December, 1996 by
and between AT&T Corp., a New York corporation, through and on behalf of its
Government Markets/ Defense Markets organization, having an office at ▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter "AT&T"), and Yurie Systems, Inc.
(hereinafter "Yurie"), a Delaware corporation, having an office at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Yurie has designed and developed certain Asynchronous Transfer
Mode (ATM) switches in two generations--Limitless Data Rate Series 100
(LDR100) and Limitless Data Rate Series 200 (LDR200);
WHEREAS, AT&T has expressed its interest previously and continues to be
interested in evaluating such designs for the purpose of obtaining exclusive
marketing rights to the Government Markets; and,
WHEREAS, Yurie is desirous of granting to AT&T such rights under the terms
agreed to herein.
NOW, THEREFORE, in consideration of the mutual promises made herein and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the Parties agree as follows:
ARTICLE I - DEFINITIONS
ATM means Asynchronous Transfer Mode.
Confidential Information means information disclosed by a Party in tangible
form marked "Proprietary" or "Confidential" or disclosed orally and subsequently
reduced to a summary writing so marked which the disclosing Party does not wish
disclosed to others.
Government Markets means the U.S. Federal, State and Local governments;
contractors performing Government missions; NATO Governments and foreign
governments acting in concert with the U. S. Federal Government (including
Foreign Military Sales as administered by the U. S. Government). The term
"Government Markets" shall not include schools and educational institutions.
Intellectual Property means all intellectual property rights throughout the
world including all copyrights (including, without limitation, the right to
reproduce, prepare derivative works, distribute copies of, display and perform
the copyrighted work), rights in inventions (whether or not patentable),
patents, patent applications, mask work rights, trade secrets, know-how and
other intellectual property.
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Yurie Intellectual Property means intellectual property created by or for
Yurie which is embodied in the LDR100 and/or LDR200 ATM switches or the
manufacture thereof.
Joint Invention means an invention made by one or more of each Party's
employees or agents jointly with one or more of the other Party's employees or
agents, which invention was first conceived or actually reduced to practice
during the term of this Agreement or during one (1) year after termination or
expiration of this Agreement.
LDR100 means an ATM switch having the functionality described in Exhibit A
attached hereto.
LDR200 means an ATM switch, of the current and future designs, upgrades,
features and functionalities, having a high capacity ATM access platform
designed for large-scale deployment in end-user and central office applications
with at least those features and functions made available by Yurie to their
commercial customers. The functionality to be contained in the LDR200 is
described in Exhibit B attached hereto. Such switch shall include, at a
minimum, chassis, power supply, CPU card, timing card, I/O boards, firmware for
all cards, appropriate system software and a User Manual.
Subsidiary of a company means a corporation or other legal entity ( i ) the
majority of whose shares or other securities entitled to vote for election of
directors (or other managing authority) is now or hereafter controlled by such
company either directly or indirectly; or ( ii ) which does not have outstanding
shares or securities but the majority of whose ownership interest representing
the right to manage such corporation or other legal entity is now or hereafter
owned and controlled by such company either directly or indirectly; but any such
corporation or other legal entity shall be deemed to be a SUBSIDIARY of such
company only as long as such control or ownership and control exists.
Technical Information means all software and other works of authorship
including but not limited to schematics, drawings, manufacturing information,
know-how, trade secrets and technical data operations manuals, maintenance and
testing procedures of Yurie directed to or otherwise specifically related to the
LDR100 and/or the LDR200 ATM switches.
ARTICLE II - FURNISHING OF PRODUCTS AND INFORMATION
2.01 Furnishing Products
As consideration for (AT&T PROPRIETARY - INFORMATION WITHDRAWN), Yurie has
delivered ten (10) LDR100 ATM switches to AT&T. AT&T now owns the entire right,
title and interest to such ATM switches and has an unrestricted right to use
such switches and to pass on to its customers and their successors in title a
similar right to use.
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2.02 Furnishing Information
a. In accordance with a mutually agreed upon schedule, Yurie shall deliver
all Technical Information to AT&T at AT&T's facility at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇. With the delivery of Technical Information,
AT&T shall also be furnished a list which identifies the Technical Information
delivered. AT&T shall promptly notify Yurie of any inaccuracies believed
present in the list. All information specified on said list shall be deemed to
be a part of the Technical Information with the following qualification:
Within thirty (30) days after receipt of the list, AT&T shall give Yurie written
notice specifying particular information identified therein which was not
actually received, such specified information shall be deemed deleted from the
list until such information is actually received by AT&T. The requirements of
this paragraph have been complied with accordingly.
b. Yurie shall also furnish AT&T with copies of all issued patents and
pending patent applications owned by Yurie which disclose inventions embodied in
(or to be embodied in) the LDR100 and/or LDR200 ATM switches or Yurie's
Technical Information. AT&T agrees to treat such pending patent applications as
Confidential Information in accordance with Article I.
c. Section 2.02a. does not apply to any Technical Information previously
furnished for limited use to AT&T. Any and all such previously furnished
information shall be deemed to be subject to this Agreement as of 18 August
1995.
2.03 U.S. Export Control
Each Party hereby assures the other that it does not intend to and will not
knowingly, without the prior written consent, if required, of the Bureau of
Export Administration of the U.S. Department of Commerce, ▇▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, transmit directly or indirectly:
(i) the Technical Information; or
(ii) any immediate product (including processes and services) produced
directly by the use of the Technical Information; or
(iii) any commodity produced by such immediate product if the immediate
product of the Technical Information is a plant capable of producing a commodity
or is a major component of such plant;
to (1) Haiti, Iran, Iraq, the People's Republic of China, Syria, Yugoslavia, or
to any Group Q, S, Y or Z country specified in Supplement No. 1 to Part 770 of
the Export Administration Regulations issued by the U.S. Department of Commerce
or (2) any national or resident of the foregoing countries. As of June 1, 1994,
those country groups consist of the following: Albania, Armenia, Azerbaijan,
Belarus, Bulgaria, Cambodia, Cuba, Estonia, Georgia, Kazakhstan,
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Kyrgystan, Laos, Latvia, Libya, Lithuania, Mongolia, North Korea, Romania,
Russia, Tajkistan, Turkmenistan, Ukraine, Uzbekistan, and Vietnam. In addition,
if the immediate product of the Technical Information is a plant or a major
component of a plant, each Party hereby assures the other than any and all
requirements of the Export Administration Regulations (including obtaining
necessary assurances or licenses) will be satisfied with respect to any
controlled commodity produced by such plant.
2.04 Grant to AT&T
a. Yurie grants to AT&T, for itself and its Subsidiaries, a right to use
Yurie Intellectual Property and Technical Information furnished for the purpose
of product evaluation, along with sales and marketing effort for the LDR100
and/or the LDR200 ATM switch design as mutually agreed. AT&T is, as an
attribute of such right, hereby authorized to furnish such information to its
Subsidiaries.
b. As of the effective date and for the duration of Phase I or such other
time as mutually agreed to elsewhere in this Agreement, Yurie grants to AT&T an
exclusive license to sell or lease the LDR100 switches and provide services
based on this product in the Government Markets.
2.05 Sales Support Obligations of AT&T
a. AT&T Government Markets will refer all orders for, or requests for
information about, the LDR100/200 from customers or potential customers, other
than customers in the Government Markets, to Yurie. AT&T Government Markets
will, at Yurie's request, continue to provide support to Yurie sales personnel
for any such referred customer or potential customer.
b. AT&T Government Markets will advise AT&T commercial account managers
about Yurie and the availability and capabilities of the LDR100/200 on a regular
basis, including distributing information and updates supplied by Yurie to such
account managers. At Yurie's reasonable request AT&T Government Markets will
distribute internal marketing messages to, or support product demonstrations
for, AT&T non-Government Markets staff.
c. AT&T Government Markets will support Yurie's commercial sales efforts
by arranging site visits to AT&T Government Markets customers for Yurie
customers, where approved by the AT&T Government Markets customer.
ARTICLE III - THE PROJECT
3.01 General
It is contemplated that the project will be undertaken in two phases,
namely Phase I and Phase II, AT&T having exercised its option to proceed with
Phase II accordingly herein.
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3.02 Phase I
a. During Phase I, AT&T will evaluate the Technical Information and LDR100
to verify the LDR100's ability to perform the functionality set forth in
Exhibit A.
b. AT&T expects that the technical evaluation will be completed by the
latter of:
(i) the end of October, 1995; or
(ii) two months after delivery to AT&T of operational versions of the "up
grade" cards that will support voice compression and a frame relay interface for
the LDR100.
c. During Phase I, Yurie agrees not to seek, participate in, or enter into
licensing activities for LDR100 and/or LDR200 Yurie Intellectual Property and/or
Technical Information with any other party and will maintain the details of this
Agreement in confidence unless otherwise agreed to in writing by AT&T.
d. Phase I will end upon the latter of six (6) months from 18 August 1995
or two (2) months after delivery of "upgrade" cards per Section 3.02(b)(ii).
e. AT&T will purchase fifty (50) LDR100 ATM switches and 125 circuit cards
from Yurie at an average cost of (AT&T PROPRIETARY - INFORMATION WITHDRAWN), for
a total cost of (AT&T PROPRIETARY - INFORMATION WITHDRAWN). Such switches will
be purchased under a separate purchase order from AT&T.
f. Yurie agrees to sell to AT&T additional LDR100 ATM switches of similar
configuration to those acquired in Section 3.02e above at approximately (AT&T
PROPRIETARY - INFORMATION WITHDRAWN).
g. The Parties acknowledge and agree that Phase I was completed on or
before March 16, 1996.
3.03 Phase II
a. AT&T will evaluate the placement of the LDR200 in the network and the
functionality of the LDR200 with respect to the U.S. Department of Defense's
deployable requirements.
b. Yurie will continue the development and initial production of the
LDR200 to meet the technical functionality set forth in Exhibit B and
interoperate with InterSpan.
c. First Article Testing (AT&T) - Thirty (30) days prior to the
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scheduled initial release of new products not described on Exhibit B, first
article testing will commence upon receipt by AT&T from Yurie of three (3) fully
conforming units configured in accordance with all features
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scheduled for initial release. AT&T will have thirty (30) days in which to test
the features in order to determine whether or not all functional and performance
parameters, as mutually agreed to by Yurie and AT&T, have been met. Testing by
AT&T will be considered successfully completed when the first article LDR200
units furnished exhibit all agreed-upon functionalities. Upon successful
completion of the testing, AT&T shall provide Yurie a written notice of
successful completion. In the event that AT&T, in good faith, determines that
the units furnished fail to exhibit all the agreed-upon functionalities, AT&T
shall provide Yurie a written notice to that effect, specifying, with
particularity, the respects in which AT&T deems the units deficient, and Yurie
shall use its best efforts in which to cure such deficiencies. In the event that
Yurie is unable to, or fails to, cure identified deficiencies within ninety (90)
days from receipt of AT&T's written notice, AT&T shall be entitled to cancel any
outstanding purchase orders for such items without penalty. In the event that
AT&T does not provide Yurie with either a notice of successful completion or a
notice of deficiency within 30 days of delivery of the units for evaluation, the
evaluation will be deemed successfully completed.
d. Acceptance Testing - AT&T reserves the right to perform acceptance
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testing on any hardware, firmware and software for the LDR200 switch that are
the subject of purchase orders by AT&T to determine conformance to
specifications and requirements under this Agreement. Acceptance testing will
begin with delivery to AT&T of product pursuant to issued purchase orders. AT&T
will have thirty (30) days from receipt of such product to perform acceptance
testing. In the event that items fail to pass acceptance testing, AT&T shall
have the option to return such items to Yurie for replacement or refund of any
monies paid. In the event AT&T returns items for replacement and Yurie fails to
replace such nonconforming items within forty-five (45) days, then in addition
to any credited or refunded amounts to which AT&T shall be entitled, the
guaranteed purchase obligations of AT&T in subsection h. below shall be reduced
by said amounts. In the event that AT&T does not provide Yurie with a notice of
non-conformance of product within 30 days of delivery, the product will be
deemed to have successfully completed acceptance testing.
e. AT&T will perform after-sale support functions (including network
management) as customary in the industry for the LDR200 throughout the world, on
terms and at rates agreed by AT&T and Yurie.
f. Yurie hereby grants to AT&T an exclusive right to market and sell the
LDR100 and LDR200 in Government Markets during the term of this Agreement.
Yurie will refer all orders for, or requests for information about, the
LDR100/200 from customers or potential customers in the Government Markets to
AT&T.
g. Upon receipt of duly authorized purchase orders from AT&T Corp.,
Government Markets/Defense Markets organization and acceptance by Yurie, Yurie
will sell LDR200 switches to AT&T at (AT&T PROPRIETARY - INFORMATION WITHDRAWN).
h. AT&T shall guarantee LDR200 purchases of $6,500,000 (U.S.) for CY1996,
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$10,000,000 (U.S.) for CY1997 and $10,000,000 (U.S.) for CY1998.
3.04 Intellectual Property-Prior and Sole Inventions
a. All right, title and interest in and to inventions conceived or first
reduced to practice and patents existing prior to 18 August 1995 shall remain
vested in the Party which conceived, created, developed or patented it or first
reduced it to practice.
b. All right, title and interest in and to inventions conceived, created
or developed or first reduced to practice as a result of work performed under
this Agreement clearly and independently by one Party only, and not jointly by
the Parties, shall be owned by the Party which conceived it or first reduced it
to practice. Either Party may file patent applications for inventions conceived
or made by its employees or agents as a result of work performed under this
Agreement, if those inventions are made clearly and independently, as determined
by any reasonable person, by employees or agents of one Party only and not made
jointly with employees or agents of the other Party, but neither Party shall be
required to file such patent applications, secure any patent or maintain any
patent.
3.05 Patent Applications and Patents on Joint Inventions
The provisions of this Section 3.05, shall apply with respect to any Joint
Invention.
(i) The Parties shall mutually agree (a) on the proper method of
protection (e.g., patent, trade secret, etc.) for Joint Inventions, (b) the
country(ies) where patent applications are to be filed and (c) the Party who
is to file such application(s) in such country(ies), subject to Sections
3.05(ii) and (iii) hereof.
(ii) The expenses for preparing, filing and prosecuting each application,
and for issue of the respective patents, shall be borne by the Party which
prepares and files the application, except that expenses associated with
official patent office fees, taxes, annuities and translation costs, if
applicable, shall be equally divided between AT&T and Yurie, and paid as
specified in Section 3.05(iii) hereof. The non-filing Party shall have the
right to review and comment on each such application prior to its filing, and
shall furnish the filing Party with all documents, information, or other
assistance that may be necessary for the preparation, filing and prosecution of
each such application.
(iii) In the case of an application for patent which is filed in a
country which requires the translation of the application and/or the payment of
fees, taxes or annuities on pending applications or on issued patents, the Party
which files the application shall pay such translation costs, fees, taxes or
annuities and shall invoice the non-filing Party for one-half (1/2) of all such
expenses, which shall be payable to the filing Party within thirty (30) days of
receipt of the invoice.
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(iv) In the event that one Party does not wish to pay its share of expenses
associated with a patent application or an issued patent in any country as
specified in Section 3.06(iii) hereof, such one Party shall notify the other
Party in writing of its refusal to share in such expenses, and shall assign all
its right, title and interest in such patent application or issued patent in
such country to the other Party, subject to existing licenses and rights granted
by such one Party to third parties. Concurrent with the execution by such one
Party of all necessary documents associated with such an assignment, the other
Party shall grant to the one Party and its Subsidiaries personal,
nontransferable, nonexclusive, royalty-free, perpetual, irrevocable and fully
paid-up licenses (with no sublicensing rights), under such patent application or
issued patent to make, have made, use, lease, sell and import. Such nonexclusive
licenses shall be for any and all products and services of the kinds furnished
or used in the operation of the one Party's and its Subsidiaries' businesses.
(v) Unless the provisions of Section 3.05(iv) apply, the Parties shall
each have an equal title interest in each application and patent for such Joint
Inventions, with Yurie holding an undivided one-half (1/2) interest and AT&T
holding an undivided one-half (1/2) interest.
(vi) Unless the provisions of Section 3.05(iv) apply, each Party shall
have the right to grant nonexclusive licenses under patents covering such joint
inventions. Each Party for itself and on behalf of its employees, its
Subsidiaries and employees of its Subsidiaries, agrees and consents to the grant
of such licenses by the other Party and the other Party retaining all royalties
that it receives for such licenses, without accounting therefor.
3.06 Other Intellectual Property
a. All right, title and interest in and to works of authorship, trade
secrets, know-how or any other intellectual property, existing prior to 18
August 1995 or conceived, created or developed solely by a Party in connection
with work performed under this Agreement, shall remain vested in the Party which
conceived, created or developed it.
b. For the purpose of this Agreement, the ownership of Yurie Intellectual
Property shall be determined by (i) with respect to Inventions, Title 35 of
the United States Code, and (ii) with respect to copyrighted works of
authorship, Title 17 of the United States Code.
c. Either Party may pursue, independently or jointly with any other third
party, opportunities that are similar to the subject matter of this Agreement
but not pursued under this Agreement, provided the Party pursuing such
opportunity does not utilize Confidential Information in a manner not permitted
herein without the prior written consent of the other Party. Any Yurie
Intellectual Property created under such other opportunity shall not be subject
to this Agreement.
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3.07 Yurie Intellectual Property and Source Code Escrow
In consideration of AT&T agreeing to evaluate, purchase, sell, use and
provide Advance Payments on Yurie equipment and Intellectual Property and
connect customers to AT&T network services using the Yurie products, Yurie
agrees to provide under obligations of non-disclosure one copy of the Yurie
Intellectual Property and Source Code of the Software to an AT&T designee to be
mutually agreed-upon under the terms of a mutually agreed-upon Escrow Agreement.
AT&T shall make no use of said Yurie Intellectual Property including Source Code
unless and until Yurie ceases to meet its obligations to AT&T and its customers
as specified in the Escrow Agreement which should include one or more of the
following acts:
a. a decision by Yurie to cease doing business;
b. the filing of a voluntary or involuntary Petition in Bankruptcy
of Yurie;
c. an act of Force Majeure preventing Yurie from continuing to meet
its customer obligations for 180 days; or
In the event of any of the preceding, Yurie agrees that AT&T shall have the
right to use the Yurie Intellectual Property and Source Code, if AT&T so chooses
as specified in the Escrow Agreement to fulfill its business plan and customer
obligations. The provisions of this Section shall not survive the expiration or
termination of this Agreement.
ARTICLE IV - FEES
4.01 Phase I Fees
a. For the exclusive right to use the Technical Information and patent
applications for evaluation of the LDR100 and/or LDR200 ATM switches and AT&T's
exclusive option, as exercised by AT&T and accepted by Yurie, to acquire all
rights, title and interest in Yurie's Intellectual Property and Technical
Information during Phase I, AT&T has paid to Yurie an exclusive "option price"
amount of One Million Five Hundred Thousand Dollars ($1,500,000 U.S.)
b. Payment of the amount specified in Section 4.01a. was made in monthly
installments of Two Hundred Fifty Thousand Dollars ($250,000 U.S.) with the
final payment having been made at the conclusion of Phase I.
4.02 Phase II Fees
a. AT&T has paid to Yurie an Advance Payment of Six Million Seven Hundred
Ten Thousand Eight Hundred Thirty-Eight Dollars and 75/100 ($6,710,838.75 U.S.)
towards the purchase of 200 each LDR200 ATM switches, including the sales taxes
believed due thereon, to be delivered in accordance with the fit, form
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and function requirements as set forth in Exhibit B and in accordance with the
delivery schedule set forth therein.
b. In the event that during acceptance testing of the first 200 LDR200
ATM switches, the switches fail to comply with the requirements of Sections
3.03b and 3.03d and Yurie does not remedy any material nonconformance within
ninety (90) days of notice from AT&T of such nonconformance, then AT&T may elect
to terminate this Agreement for breach under Section 6.03 and all monies
advanced by AT&T under the provisions of Section 4.02a shall be returned by
Yurie to AT&T and AT&T shall return all LDR200 product delivered to AT&T by
Yurie.
4.03 How Paid
AT&T has paid Yurie the Advance Payment amount stated in Section 4.02a
on September 27, 1996. Payments for any future purchases under Sections 3.03g
and 3.03h will be paid in accordance with individual purchase orders issued by
AT&T. Yurie will tender invoices to AT&T for all payments due and AT&T will pay
Yurie within thirty (30) days of the receipt of a properly certified invoice
(Exhibit C) provided that if a product has been determined to be nonconforming
as a result of AT&T acceptance testing, AT&T shall notify Yurie's Customer
Service organization and shall be entitled to withhold payment for such
nonconforming product. AT&T shall have the right to accelerate payments made
pursuant to this Article.
4.04 Taxes
Yurie shall be responsible for proper payment of all taxes due and
payable, and invoicing AT&T for such charges. AT&T shall reimburse Yurie for all
such charges invoiced.
ARTICLE V - TECHNICAL SUPPORT
5.01 Phase I
Yurie shall render engineering support and technical assistance to AT&T
during the Phase I evaluation. The rates and personnel for these services will
be the same as those specified in Contract Number LGC-A70E dated June 6, 1995.
This support and technical assistance was accomplished as required.
5.02 Phase II
Yurie will provide technical marketing and sales engineering support to
AT&T in the continued development of the LDR200 in accordance with the rates and
personnel referenced in Section 5.01. This effort is ongoing and, to date, this
support assistance has been accomplished.
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5.03 Compliance with Rules and Regulations
a. Each Party's personnel (such Party being referred to as the
"Visitor") shall, while on any location of the other Party ("Host") in
connection with the joint development work under this Agreement shall comply
with the Host's rules and regulations with regard to safety and security. The
Host shall inform such visiting personnel of such rules and regulations. The
Visitor shall maintain full control over such personnel and shall be entirely
responsible for their complying with the Host's rules and regulations. The
Visitor agrees to indemnify and save the Host harmless from any claims or
demands, including the costs, expenses and reasonable attorneys' fees incurred
on account thereof, that may be made by anyone for injuries to persons or damage
to property to the extent they result from the willful misconduct or negligence
of the Visitor or its personnel. The Visitor agrees to defend the Host, at the
Host's request, against any such claim or demand, and the Host agrees to provide
reasonable cooperation for the defense on request of the Visitor.
b. AT&T and Yurie shall, at all times, retain the administrative
supervision of their respective personnel.
5.04 Independent Contractors
AT&T and Yurie are, and shall remain, independent contractors and the
employees of one shall not be considered to be employees of the other. This
Agreement is not intended by the Parties to constitute or create a joint
venture, partnership, or other form of business organization or combination of
any kind, and the rights and obligations of the Parties shall be only those
expressly set forth herein. Neither Party shall have the authority to bind the
other, except to the extent agreed upon herein. Further, each Party shall
continue to be free to engage in activities of a similar nature independently or
with third parties and to furnish information, other than the Confidential
Information or the deliverables of the other Party, and receive information to
and from such third parties regarding the same areas as this Agreement.
ARTICLE VI - TERM/TERMINATION
6.01 Term/Option to Extend Term
This Agreement is valid for the Phase I and Phase II periods as set
forth previously through 31 December 1998 unless terminated by the Parties as
provided herein. AT&T reserves the right to exercise an option under this clause
to extend the term of this Agreement, in one year periods, for up to three (3)
additional years (through 31 December 2001) so long as written notice is
provided to Yurie no later than ninety (90) days prior to the expiration of the
previous term in effect at the time of exercise. Any such option exercised shall
be based upon minimum guaranteed LDR200 purchases of $10,000,000 (U.S.) per year
for each option year exercised and each option year exercised will be based on
the same
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terms and conditions contained in this Agreement. Unless otherwise indicated
herein the license rights are granted in perpetuity.
6.02 Termination for Cause
a. This Agreement may be terminated at any time by either Party
serving a written notice to the other Party:
(i) if the Parties have agreed to terminate the Agreement in
writing signed by their respective duly authorized persons, or
(ii) by AT&T, if any of the "Released to AT&T" dates
identified in Exhibit B were delayed by more than three (3) months based upon
the latest agreed-to schedule of releases as set forth therein, and such delay
was not the result of actions or breaches by AT&T or the result of Force Majeure
or Excusable Delay,
b. Termination pursuant to this Section shall not relieve AT&T of any
obligation to make any payments required to be made by this Agreement while
still in force. However, AT&T shall be entitled to a refund of the balance of
any monies advanced for products not delivered as of the date of termination.
6.03 Termination for Breach
a. If Yurie fails to fulfill one or more of its material obligations
under this Agreement or purchase order, AT&T may, upon its election and in
addition to any other remedies that it may have, at any time terminate this
Agreement by not less that thirty (30) days written notice to Yurie specifying
any such breach, unless within the period of such notice all breaches specified
therein shall have been remedied. In the event that Yurie fails to make any
deliveries as set forth in Section 6.02a(ii), the provisions of that section
shall govern.
b. If AT&T fails to fulfill one or more of its material obligations
under this Agreement, Yurie may, upon its election and in addition to any other
remedies that it may have, at any time terminate this Agreement by not less than
thirty (30) days written notice to AT&T specifying any such breach, unless
within the period of such notice all breaches specified therein shall have been
remedied.
6.04 Effects of Termination
Any termination pursuant to Section 6.02 and/or 6.03 shall not
constitute any reason for claiming damages against the other Party based on any
losses, expenses, cost, loss of profit or loss of business opportunity, or any
liability to third parties arising from any termination or incompleteness of the
Project.
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6.05 Survival
The obligations of the Parties under this Agreement which by their very
nature would survive, shall continue and survive after any termination or
expiration of this Agreement.
ARTICLE VII - MISCELLANEOUS PROVISIONS
7.01 Agreement Prevails
This Agreement shall prevail in the event of any conflicting terms or
legends which may appear on AT&T's or Yurie's Confidential Information.
7.02 Nothing Construed
Neither the execution of this Agreement nor anything in it or in either
Party's Confidential Information or in Yurie's deliverables shall be construed
as an obligation upon either Party or their Subsidiaries to furnish, except as
specifically provided in this Agreement, any person, any assistance of any kind
whatsoever, or any products or information other than Yurie's or AT&T's
Confidential Information or Yurie's deliverables or to revise, supplement or
elaborate upon such information.
7.03 Infringement Indemnity
a. Yurie shall indemnify, defend and hold harmless AT&T, its
affiliates, directors, officers, employees and agents, from and against any
claim that the products delivered hereunder or products made or services offered
using any portion of the Technical Information delivered hereunder, infringes
any copyright or patent or is the subject of any claim of misappropriation of a
trade secret. Yurie shall pay any damages, including reasonable attorney's fees,
finally awarded as a result of any suit based on such claim. The aforesaid
obligations of Yurie are contingent upon the following: (i) AT&T promptly
notifying Yurie in writing of any such claim; (ii) Yurie shall have sole
control of the defense or settlement of the suit or claim; (iii) AT&T shall
cooperate with Yurie in a reasonable way to facilitate the settlement or defense
of the suit or claim; and (iv) the action does not arise directly from
adherence to design, modifications, specifications or written instructions from
AT&T or directly from AT&T's modifications of deliverables or Technical
Information following delivery thereof or AT&T's development of thereof. If such
claim or action does arise directly from adherence to AT&T's design,
modifications, specifications or written instructions, or directly from AT&T's
development, AT&T shall indemnify, defend and hold harmless Yurie, its
affiliates, directors, officers, employees and agents to the same extent, and
subject to the same terms and conditions as Yurie's indemnification obligation
set forth in this Section 7.05. In either event, the indemnified party shall
have the right, at its sole option and expense, to participate in the defense
Page 14
thereof through counsel of its choice.
b. If the use of the Technical Information or products to be delivered
under this Agreement is enjoined as a result of a suit based on any claim of
infringement of a copyright or patent or any claim of misappropriation or a
trade secret, Yurie shall, at its option: (i) negotiate a license or other
agreement with the claimant so that the product or service is no longer subject
to such injunction, (ii) modify the product or service so that it becomes non-
infringing, provided such modification can be accomplished without materially
affecting the performance of the product, or (iii) refund the relevant portion
of the fees paid by AT&T. The entire liability of Yurie with respect to
infringement and/or misappropriation resulting from the use of Technical
Information or products delivered hereunder shall not exceed the monies paid
under Article IV for all costs, damages, attorney's fees and other expenses and
Yurie shall not be liable for any amount in excess of such monies.
7.04 Duties of the Parties
Yurie and AT&T, for itself and its subsidiaries, agree:
(i) that Yurie will not use any of AT&T's Confidential
Information and that AT&T will not use any of Yurie's Confidential Information
or Yurie's deliverables except as authorized herein;
(ii) that, with respect to information furnished hereunder,
Yurie shall hold all of AT&T's Confidential Information and AT&T shall hold all
of Yurie's Confidential Information in confidence for five (5) years from the
termination or expiration of this Agreement (except for software for which there
will be no time limit) and neither Party shall make any disclosure of any or all
of such other Party's Confidential Information to anyone, except to its
employees who have a need to know and to any others to whom such disclosure may
be expressly authorized hereunder and is necessary to implement the use
authorized hereunder, and that each Party shall appropriately notify each person
to whom any such disclosure is made that such disclosure is made in confidence
and shall be kept in confidence by such person; provided that neither Party
shall be required so to do in respect of portions of the other Party's
Confidential Information, if any, (a) which were previously known to the
receiving Party free of any obligations to keep confidential; or (b) which
have become generally known to the public, provided that such public knowledge
was not the result of any act of breach of confidentiality obligation hereof of
the receiving Party; or (c) which the disclosing Party otherwise explicitly
agrees in writing need not be kept confidential; or (d) which is independently
developed by the receiving Party outside the Agreement; or (e) which is
inherently disclosed in the manufacture, use, lease, sale or other distribution
of, or supporting documentation for, any present or future product by or for
either Party; or (f) which is received without restriction from a third party
who is under no obligation of confidentiality;
(iii) that the receiving Party will not, without the
disclosing Party's express
Page 15
written permission, make or have made, or permit to be made, more copies of any
of the Confidential Information furnished by the other Party, than are necessary
for its use hereunder, and that each such copy shall contain the same
proprietary notices or legends which appear on the furnished Confidential
Information;
(iv) that no right is granted herein to use by either Party
any identification (such as, but not limited to, trade names, trademarks, trade
devices, service marks or symbols, and abbreviations, contractions or
simulations thereof) owned by or used to identify the other Party or any of its
Subsidiaries or any of its or their products, services or organizations, and
that, with respect to the subject matter of this Agreement, each Party agrees it
will not without the prior written permission of the other Party (i) use any
such identification in advertising, publicity, packaging, labeling or in any
other manner to identify itself or any of its products, services or
organizations or (ii) represent directly or indirectly that any product,
service or organization of the other Party is a product, service or organization
of the one Party or any of its Subsidiaries, or that of any of its products or
services are made in accordance with or utilizes any information of the other
Party or any of its Subsidiaries;
(v) that upon termination of this Agreement, a receiving Party
may retain, in its legal counsel's files solely for archival purposes, one (1)
copy of the Confidential Information furnished to it by the disclosing Party
pursuant to this Agreement.
7.05 Addresses
Any notice, or other communication, shall be sufficiently given when
sent by certified mail addressed as follows:
To Yurie: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Vice President, Federal Division
Yurie Systems, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
To AT&T: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇. Contract Specialist
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Page 16
7.06 Entire Agreement
This Agreement sets forth the entire agreement and understanding
between the Parties, and this Agreement supersedes all prior proposals,
communications and discussions between the Parties, representations and
understandings related to the subject matter herein, whether written or oral,
which includes, but is not limited to: the Technology Evaluation and License
Agreement dated 18 August 1995 (as amended by letters dated 15 March, 21 April
and 24 May 1996); an Agreement between the Parties dated 18 September 1996 as
amended (with initials, penned changes, and date) on 27 September 1996.
7.07 Non-Assignability
The Parties hereto have entered into this Agreement in contemplation of
personal performance, each by the other, and intend that the rights granted and
obligations hereunder to a Party not be extended to entities other than such
Party's Subsidiaries without the other Party's express prior written consent.
Each Party's rights, obligations and interest in this Agreement and any rights
granted to each Party hereunder may be assigned to any direct or indirect
successor to the business of such Party as the result of any internal
reorganization, merger, consolidation, or acquisition of substantially all of
the business and assets of Yurie, which successor shall thereafter be deemed
substituted for such Party as the Party hereof, mutatis mutandis, effective upon
such assignment; but neither this Agreement nor any rights hereunder shall be
otherwise assignable or transferable (in solvency proceedings or otherwise) by
either Party without the express prior written consent of the other Party.
7.08 No Patent Licenses
Except as explicitly set forth herein, nothing contained herein shall
be construed as conferring by implication, estoppel or otherwise any license or
right under any AT&T or Yurie patent, whether or not the exercise of any right
herein granted necessarily employs an invention of any existing or later issued
AT&T or Yurie patent.
7.09 Waiver
No failure, delay, relaxation or indulgence on the part of either Party
in exercising any power or right conferred upon such Party under the terms of
this Agreement will operate as a waiver of such power or right nor will any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right under this
Agreement.
7.10 Warranty
Yurie warrants to AT&T and its customers that material furnished will
be new, free from defects in design, material and workmanship and will conform
to and perform in accordance with
Page 17
the specifications, drawings and samples. These warranties extend to the future
performance of the material and shall continue for the longer of (a) one year
after the material is accepted and installed by AT&T but not to exceed eighteen
(18) months from receipt of material by AT&T or (b) such greater period as may
be specified elsewhere in this Agreement or a purchase order. Yurie also
warrants to AT&T and its customers that services will be performed in a first
class, workmanlike manner. In addition, if material furnished contains one or
more manufacturers' warranties, Yurie hereby assigns such warranties to AT&T and
its customers. All warranties shall survive inspection, acceptance and payment.
Material or services not meeting the warranties will be, at AT&T's option,
returned for or subject to refund, repaired, replaced or reperformed by Yurie at
no cost to AT&T or its customers and with transportation costs and risk of loss
and damage in transit borne by Yurie. Repaired and replacement material shall be
warranted as set forth above in this clause.
7.11 Disclaimer/Warranty
a. NEITHER PARTY, ITS AFFILIATES OR ITS SUBSIDIARIES MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESSLY OR IMPLIEDLY, BY WAY OF EXAMPLE BUT NOT
OF LIMITATION. NEITHER PARTY, ITS AFFILIATES OR ITS SUBSIDIARIES MAKES ANY
REPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
b. NOTWITHSTANDING THE FOREGOING AND SUBJECT TO SECTION 7.03, YURIE
WARRANTS THAT TO THE BEST OF ITS KNOWLEDGE AND BELIEF, THE USE OF YURIE'S
DELIVERABLES OR CONFIDENTIAL INFORMATION WILL NOT INFRINGE ANY PATENT OR OTHER
INTELLECTUAL PROPERTY RIGHT OF A THIRD PARTY.
c. NEITHER PARTY SHALL BE LIABLE FOR ANY INCIDENTAL, SPECIAL OR
CONSEQUENTIAL LOSS OR DAMAGE, INCLUDING LOST PROFIT OR LOST REVENUE ARISING OUT
OF THIS AGREEMENT, WHETHER ARISING OUT OF BREACH OF WARRANTY, BREACH OF
CONTRACT, NEGLIGENCE, STRICT TORT LIABILITY OR OTHERWISE.
7.12 Amendments to this Agreement
Any supplement, modification or waiver of any provision of this
Agreement must be in writing and executed by an authorized representative of
both Parties.
7.13 Dispute Resolution
(a) If a dispute arises out of or relates to this Agreement, or the
breach, termination or validity thereof, the parties agree to submit the dispute
to a sole mediator selected by the parties or, at any time at the option of a
party, to mediation by the American Arbitration Association
Page 18
("AAA"). If not thus resolved, it shall be referred to a sole arbitrator
selected by the parties within thirty (30) days of the mediation, or in the
absence of such selection, to AAA arbitration which shall be governed by the
United States Arbitration Act.
(b) Any award made (i) shall be a bare award limited to a holding for
or against a party and affording such remedy as is deemed equitable, just and
within the scope of the Agreement; (ii) shall be without findings as to issues
(including but not limited to patent validity and/or infringement) or a
statement of the reasoning on which the award rests; (iii) may in appropriate
circumstances (other than patent disputes) include injunctive relief; (iv)
shall be made within four (4) months of the appointment of the arbitrator; and
(v) may be entered in any court.
(c) The requirement for mediation and arbitration shall not be deemed a
waiver of any right of termination under this Agreement and the arbitrator is
not empowered to act or make any award other than based solely on the rights and
obligations of the parties prior to any such termination.
(d) The arbitrator shall determine issues of arbitrability but may not
limit, expand or otherwise modify the terms of the Agreement.
(e) This Agreement shall be interpreted in accordance with the laws of
the State of New Jersey exclusive of its conflict of laws provisions and the
place of mediation and arbitration shall be in Washington, DC.
(f) Each party shall bear its own expenses but those related to the
compensation and expenses of the mediator and arbitrator shall be borne equally.
(g) A request by a party to a court for interim measures shall not be
deemed a waiver of the obligation to mediate and arbitrate.
(h) The arbitrator shall not have authority to award punitive or other
damages in excess of compensatory damages and each party irrevocably waives any
claim thereto.
(i) The parties, their representatives, other participants and the
mediator and arbitrator shall hold the existence, content and result of
mediation and arbitration in confidence.
7.14 Public Disclosure
(a) The Parties agree that the disclosure to third parties of the
existence and/or terms and conditions of this Agreement, including exhibits, and
the details of the relationship between the Parties shall not be made without
prior written agreement of both Parties, except as required to comply with
applicable law or regulation, provided that the disclosing party shall provide
reasonable prior notice of any such required disclosure. Disclosing party shall
make best efforts to have proprietary information withheld from disclosure.
Page 19
(b) Each Party agrees not to publish or use in advertising, sales
promotions, press releases or publicity matters, the existence or details of the
relationship under this Agreement without prior written approval of the other
Party. The contents of any announcement or press release shall be mutually
agreed to.
7.15 Software Program License and Warranty
Subject to the conditions set forth in Exhibit E, Yurie grants to AT&T
Corp. and its customers and AT&T accepts on behalf of itself and its customers
the Software Program License and Warranty as provided for therein.
-------------------------------------
7.16 Purchase Order Ordering Terms and Conditions
In addition to those clauses and provisions as contained herein, the
Parties agree that the Terms and Conditions set forth within the Purchase Order
Ordering Terms and Conditions (Exhibit D) will be incorporated into any
resultant purchase order(s) issued by AT&T. In the event of any conflict
between provisions contained in this Agreement and the clauses contained in
Exhibit D, the provisions contained in the Agreement shall govern.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed in duplicate originals by its duly authorized representative on the
respective dates entered below.
For: AT&T Corp. For: Yurie Systems, Inc.
By: By:
------------------------ --------------------------
Name: Name:
------------------------ --------------------------
Title: Title:
------------------------ --------------------------
Date: Date:
------------------------ --------------------------
THIS AGREEMENT DOES NOT BIND OR OBLIGATE EITHER PARTY
IN ANY MANNER UNLESS DULY EXECUTED BY AUTHORIZED
REPRESENTATIVES OF BOTH PARTIES.
Page 20
EXHIBIT A
---------
PHASE I TECHNICAL CRITERIA
--------------------------
The LDR100 should be shown to exhibit its claimed functionalities.
Specifically, AT&T testing of the LDR100 must be able to verify:
- The ability to support the customer-side interfaces (e.g., TAXI,
▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇-▇▇▇, ▇▇▇-▇▇▇, two-wire analog, and frame-relay
interfaces).
- The ability to interconnect with the AT&T network (both for the ATM-
based InterSpan service and non-ATM network).
- The ability to operate with a FORE Systems ATM Switch.
- The ability to perform voice compression and modem demodulation and
remodulation.
- The ability to "fail gracefully" in the presence of traffic overload
(e.g., existing high-priority traffic should still be transmitted in the
presence of high-volume lower-priority traffic presented to the switch; and one
should be able to initiate new high-priority traffic when the switch is already
loaded with existing high- and low-priority traffic).
- The ability to support a "bandwidth-on-demand" capability.
Page 21
EXHIBIT B
---------
PHASE II TECHNICAL CRITERIA AND DELIVERY SCHEDULE
Page 22
EXHIBIT B
---------
PHASE II TECHNICAL CRITERIA AND DELIVERY SCHEDULE
(Continued)
Page 23
EXHIBIT B
---------
PHASE II TECHNICAL CRITERIA AND DELIVERY SCHEDULE
(Continued)
Documentation
-------------
Yurie shall furnish to AT&T, along with the equipment delivered, one copy
of the related documentation for each unit delivered by Yurie. Such related
documentation shall be that customarily provided by Yurie to its customers for
such equipment, consistent with the vintage, options and features of the
equipment on which it operates. Such related documentation shall be provided at
no additional charge to AT&T.
Software
--------
Yurie shall promptly furnish to AT&T, for a period of one year from date of
acceptance of equipment, all Software enhancements (one copy), revisions
published by Yurie (one copy) and telephone assistance offered by Yurie to its
commercial customers for any equipment ordered under this Agreement; said
enhancements, revisions published and telephone assistance offered shall be
furnished at no additional charge to AT&T or its customers. Yurie will be
reimbursed for labor costs incurred at mutually agreeable rates if AT&T requests
Yurie's assistance in loading software provided in LDR200 units placed at
customer locations. Any Intellectual Property enhancements included in software
updates provided will be handled in accordance with the Changes to Equipment
--------------------
clause contained in Exhibit D.
Page 24
EXHIBIT B-1
-----------
SCHEDULE OF DELIVERY
--------------------
For the initial production units identified in Section 4.02, and as
specified in AT&T purchase orders YS96-006A and YS96-006B issued on 27 August
1996, the following schedule re-defines specific dates for the delivery of those
features specified:
Item Description Qty Deliver o/b Qty Deliver o/b
---- ----------- --- ----------- --- -----------
0001 19" Chassis 184 ea 30 Sep 96 16 ea 30 Dec 96
0002 16MB CPU 184 ea 30 Sep 96 26 ea 30 Dec 96
0003 STRATUM 4 184 ea 30 Sep 96 16 ea 30 Dec 96
0004 DC Power 110 ea 30 Dec 96
0005 AC Power 110 ea 30 Dec 96
0006 Multi Serial 150 ea 30 Dec 96
0007 DS-1 Board 22 ea 30 Sep 96 128 ea 30 Dec 96
0008 DS-3 Board 30 ea 30 Sep 96 10 ea 30 Dec 96
0009 OC-3 Board 50 ea 30 Dec 96
0010 TAXI Board 155 ea 30 Dec 96
0011 2-Wire Sink 40 ea 20 Apr 97
0012 2-Wire Source 150 ea 30 Dec 96
0013 High Speed Serial 50 ea 30 Dec 96
0014 Voice Compression Software 40 ea 30 Dec 96
0015 DSP I (@ N/C) 40 ea 30 Dec 96
0016 System Software 184 ea 30 Sep 96 16 ea 30 Dec 96
Page 25
EXHIBIT C
---------
CERTIFICATION
-------------
Yurie will, upon request for payment for delivered equipment, include on
all invoices submitted to AT&T the following certification:
"This is to certify that materials and equipment delivered to AT&T as
represented by this invoice, descriptions and quantities as herein noted,
conform to the applicable Specifications, have been tested to parameters set
forth in the most current Yurie Test Plan identified to AT&T, and have
successfully passed all tests performed and therein identified.
[signature and title of responsible official]"
Page 26
EXHIBIT D
---------
PURCHASE ORDER ORDERING TERMS AND CONDITIONS
--------------------------------------------
CAPTIONS - The captions in the purchase order and this Exhibit are included for
convenience only and shall not be construed to define or limit any of the
provisions contained herein.
CFC PACKAGING - Yurie warrants that all packaging materials furnished under the
purchase order and all packaging associated with material furnished therein were
not manufactured using and do not contain chlorofluorocarbons. "Packaging"
means all bags, wrappings, boxes, cartons and any other packing materials used
for packaging. Yurie shall indemnify and hold AT&T harmless for any liability,
fine or penalty incurred by AT&T to any third party or governmental agency
arising out of AT&T's good faith reliance upon said warranty.
COMPLIANCE WITH LAWS - Yurie and all persons furnished by Yurie shall comply at
their own expense with all applicable federal, state, local and foreign laws,
ordinances, regulations and codes, including those relating to the use of
chlorofluorocarbons, and including the identification and procurement of
required permits, certificates, licenses, insurance, approvals and inspections
in performance under the purchase order. Yurie agrees to indemnify, defend (at
AT&T's request) and save harmless AT&T, its affiliates, its and their customers
and each of their officers, directors and employees from and against any losses,
damages, claims, demands, suits, liabilities, fines, penalties and expenses
(including reasonable attorney's fees) that arise out of or result from any
failure to do so.
Yurie and all persons furnished by Yurie shall comply with the same standards of
conduct required of employees of AT&T. By way of illustration only and not
limitation, such standards include those set forth in Section 27 or the Office
of Federal Procurement Policy Act (P.L. 100-679) as amended, and in Section 319
of the ▇▇▇▇ Amendment (P.L. 101-121), both as implemented in the Federal
Acquisition Regulation, and in the booklet Corporate/Personal Integrity Program,
a copy of which will be provided to Yurie by AT&T's Representative. Each of
Yurie's officers, agents, representatives or consultants performing under the
purchase order shall execute and promptly furnish the Pledge in the booklet to
AT&T. To the extent applicable to Yurie, Yurie shall promptly provide to AT&T a
Disclosure of Lobbying activities (OMB Std. Form LLL) as required by the ▇▇▇▇
Amendment and executed by Yurie.
CHANGES TO EQUIPMENT - Any change that Yurie proposes to the equipment furnished
hereunder and the documentation related thereto that would impact upon (a)
reliability, (b) the equipment's specifications, or (c) form, fit, or function
requires the approval of AT&T. Yurie shall forward such proposed change to ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. Contract Administrator, at least sixty (60) days prior to
the proposed effective date except for those cases where an extremely
unsatisfactory condition requires immediate action, in which case Yurie shall
promptly advise AT&T. Yurie shall at the time of notification, provide AT&T with
(a) a product change number, (b) a description of such change, (c) the reason
for such change, (d) a classification of
Page 27
such change in accordance with the change classifications below, (e) a
description of the impact of such change upon (1) reliability, (2) the
equipment's specifications, and (3) form, fit, or function; (f) proposed price
impact, if any, for B, and (g) proposed effective date for such change and
recommended implementation schedule therefor.
Any change in equipment shall be classified into one of the following two
classes:
"A" Changes which are needed to correct inoperative electrical or mechanical
conditions, or extremely unsatisfactory operating or maintenance conditions, or
conditions which result in safety hazards, and which are judged severe enough to
have to be made to all equipment in process, stock, or installed. (Any
conditional application criteria to be specified in the change notification
document.)
"B" Changes which are sufficiently important to justify their application to
equipment being manufactured (as soon as reasonably possible), and which are
recommended for application to existing installations in the field. Examples of
this class of change may include, but are not limited to:
(a) Providing new features that directly affect subscriber service.
(b) Providing design improvements which result in better service
capabilities, longer life or improved transmission margins.
(c) Providing changes in design which result in important cost savings to
AT&T.
(d) Conditions of a mandatory nature, for example, the fulfillment of federal
registration or future compatibility requirements, or for conditions of
sufficient importance to be intended for universal application (change to
be shown as "recommended").
The final classification of any product change proposed by Yurie will be by
mutual agreement between Yurie and AT&T.
For Class A changes, Yurie shall, to the extent required by the Warranty
provisions of the purchase order governing repair or replacement of equipment
under warranty, replace or modify, at no charge, all affected equipment
furnished hereunder and documentation related thereto. Yurie shall supply
relevant documentation to AT&T for all Class A changes. Yurie shall propose a
schedule for the application of these changes at all equipment locations which
shall not exceed one (l) year from date of change notice. This schedule shall be
mutually agreed upon by AT&T and Yurie.
For Class B changes, Yurie shall first notify AT&T of the exact nature of the
change. Details on the proposed implementation procedure for equipment which is
being or will be manufactured shall be discussed with AT&T. AT&T shall, at its
option, determine if equipment previously
Page 28
shipped will be replaced or modified. Should such replacements or modifications
be deemed necessary, Yurie shall, pursuant to the provisions of the purchase
order governing repair of equipment not covered under warranty, make
arrangements for the necessary equipment replacement or modification at prices
and schedules to be mutually agreed upon by AT&T and Yurie prior to
implementation. Documentation related thereto shall be provided by Yurie as
specified for Class A above.
In the event that Yurie and AT&T shall fail to reach agreement on any such
change in equipment to be made by Yurie, then in addition to all other rights
and remedies of law or equity or otherwise, AT&T shall, without any charge,
obligation or liability whatsoever, have the right to terminate the purchase
order and any or all purchase orders for equipment affected by such change.
CONTRACT PRICE - Yurie agrees to sell all equipment ordered by AT&T under the
purchase order based on discounts established in Section 3.03g. This equipment
shall be discounted based on the discount schedule set forth therein. AT&T
purchase orders will be for configured units configured to each Customer's
requirements and include staging to meet delivery schedules. Purchases for the
type of equipment under the purchase order which were acquired by a purchase
order for demonstration or trial prior to the execution of same shall be counted
in the cumulative total and the terms and conditions of the purchase order shall
govern these purchases. There shall be no increases in the discounts established
in Section 3.03g during the term of the purchase order. Should Yurie's
published commercial price for equipment be reduced before the delivery date,
the price to AT&T for such equipment shall be reduced accordingly. In such
event, the adjusted equipment price shall be discounted based on the discount
schedule set forth herein.
DELIVERY - Equipment shall be delivered by Yurie f.o.b. origin, unless otherwise
specified in AT&T's purchase order, within forty-five (45) days after receipt of
a written authorization on the purchase order by AT&T's Supplier Management
Division Representative or a mutually agreeable delivery date set prior to the
placement of a purchase order for this equipment. AT&T will make reasonable
effort to provide Yurie with periodic sales forecasts throughout the term of the
AT&T/Yurie Agreement in order to allow Yurie an opportunity to plan for product
needs, however any forecasts provided shall be provided by AT&T to Yurie for
information purposes only and shall not be considered firm offers by AT&T to
procure forecasted products at the times so indicated.
Yurie agrees not to deliver equipment prior to the agreed upon delivery date
without AT&T's prior written authorization.
DISPOSITION OF RECURRING NO-TROUBLE-FOUND RETURNS - The same production
equipment element/component shall not be returned by Yurie to AT&T with the
notation no-trouble-found (NTF) on more than one (1) occasion. On the second
occasion that a production equipment element/component has been classified by
Yurie as NTF, the production equipment element/component shall be scrapped by
Yurie and Yurie shall ship a new rather than
Page 29
reconditioned replacement to AT&T for the scrapped production equipment
element/component at no charge for that production equipment under warranty.
For out of warranty production equipment, Yurie shall invoice AT&T for the new
production equipment element/component at the discounts applicable under Section
3.03g of Yurie's current selling price for the production equipment
element/component.
DOCUMENTATION - Yurie agrees to furnish all documentation set forth in the basic
Agreement and/or purchase order applicable to equipment furnished hereunder, to
timely update documentation to reflect changes to equipment, and to furnish all
succeeding changes to such documentation. AT&T may reproduce such documentation
for use with equipment furnished hereunder. At a minimum, Yurie shall furnish
the type and quantity of documentation described herein at the times therein
required.
Whether or not specifically required by the purchase order, Yurie shall, with
each shipment by Yurie to AT&T, include all manuals covering the installation,
operation and maintenance of the equipment shipped.
All documentation and any subsequent changes or updates shall reference Yurie's
model numbers, issue numbers and date of issue.
Yurie agrees to maintain a mailing list of AT&T's recipients of such
documentation without charge.
ENVIRONMENTAL/RELIABILITY TESTING - Yurie shall perform environmental testing of
the production equipment in accordance with the AT&T Technical Reference-PUB
51001 entitled NETWORK EQUIPMENT - BUILDING SYSTEM (NEBS) GENERAL EQUIPMENT
REQUIREMENTS, Sections 3, 4, and 5. Yurie agrees to report the test results to
AT&T or its agents.
An initial sample of production equipment shall be subjected by AT&T to Product
Qualification Tests. These tests shall be more comprehensive than the normal
production tests and shall include checks of all functions, protocols and
interfaces and shall be repeated periodically at intervals not to exceed three
(3) months. Variables data (actual readings rather than go/no go data) shall be
recorded for these tests to ascertain any changes/drifts in the measured
parameters. Product Qualification Tests shall also be performed upon the
implementation of any major design changes requested by AT&T.
It is the responsibility of Yurie to demonstrate during the term of the purchase
order that the actual reliability of the delivered production equipment equals
or exceeds the reliability predictions. Yurie shall conduct studies to measure
the replacement/failure of supplied production equipment under actual operating
conditions or simulated operating conditions in a controlled laboratory
environment. These studies may be 1) factory based (where returns are compared
with shipment figures), 2) conducted at an operational site with a sufficient
population
Page 30
of production equipment in service to provide reasonable confidence in observed
replacement estimates, 3) an ongoing factory based (controlled) reliability test
of a sufficient sample of production equipment to provide a timely assessment of
production equipment reliability or 4) all of the above. At AT&T's request, the
results and the analysis of the collected data shall be provided by Yurie to
AT&T.
EQUIPMENT TESTING - In addition to any other tests to be requested by AT&T as
set forth in the purchase order, Yurie is responsible for the performance of
standard factory production tests which, in the absence of any other testing
requested by AT&T as set forth elsewhere in the purchase order, shall be deemed
to be the final tests under the order. Such tests shall be performed in
accordance with Yurie's normal testing and quality control procedures for
equipment of the type purchased here under in order to insure that the equipment
provided hereunder meets all applicable specifications. At the option of AT&T,
Yurie shall furnish a copy of its test plans and quality control procedures to
AT&T prior to initiating any such testing and AT&T, at its expense, may witness
any of the testing by giving prior notice to Yurie. Yurie also agrees to
maintain detailed records of all such tests and to provide AT&T, if requested,
with written results of these tests.
In the event that the equipment fails to meet the applicable specifications and
test requirements, Yurie shall make the necessary adjustments or repairs and
repeat the applicable tests. If, in the opinion of AT&T, the failure rates
experienced during these tests become unsatisfactory, all shipments of like
equipment to AT&T shall be suspended unless otherwise authorized by AT&T.
If Yurie is unable or unwilling to correct, at Yurie's expense, any deficiencies
found during testing provided hereunder within thirty (30) days of such
discovery or such longer period as may be mutually agreed upon, AT&T, at its
option, shall be relieved of all responsibilities under the purchase order
except for payment, as specified in the AT&T/Yurie Agreement and/or the purchase
order, for any equipment that has been received by AT&T and has satisfactorily
passed all applicable tests.
EXCUSABLE DELAYS - If Yurie or AT&T is delayed at any time in the performance of
their responsibilities hereunder by acts of God, Government action, regulatory
approval, fire, unavoidable casualties, unusually severe weather or any other
causes beyond the control and without the fault or negligence of the delayed
party or its subcontractors hereunder, then the other party may (a) extend the
time fixed for the completion of such responsibilities for a period equivalent
to the time lost by reason of any or all of the aforesaid causes, (b) secure
substitute performance at its own expense during the duration of the excusable
delay and reduce performance under the purchase order accordingly, or (c)
terminate all or a portion of the purchase order when the delay totally
precludes the delayed party's performance or materially affects it and the delay
continues for a period of forty-five (45) days. Absent notice to the delayed
party, (a) shall be deemed elected by the other party.
Page 31
FAILURE MODE ANALYSIS OF FAILED COMPONENTS - Yurie shall perform Failure Mode
Analysis on components with a persistent history of failure to determine the
specific cause of the component failure. The results of this analysis and
planned corrective action shall be provided to AT&T within fourteen (14)
calendar days of the completion of the analysis.
FCC REGISTRATION - When equipment furnished under the purchase order is subject
to Part 68 of the Federal Communications Commission's Rules and Regulations, as
amended from time to time, Yurie warrants that such equipment furnished
hereunder shall be registered under and comply with Part 68 of the Federal
Communications Commission's Rules and Regulations, including, but not limited
to, all labeling and customer instruction requirements.
FUTURE IMPROVEMENTS AND BENEFITS - As Yurie announces improvements, upgrades,
field modifications and the like, ("Enhancements"), Yurie shall advise AT&T of
their features and advantages. Yurie assures AT&T that the overall price
granted to AT&T is at least as favorable as those now granted by Yurie to any of
its similarly situated commercial customers for like, quantities, unless said
customer has provided a firm commitment for a specific level of incremental
business, or has specific discounts in certain areas as part of an overall
higher price than AT&T is then being charged, or has entered into an agreement
providing for a commitment for a longer term than AT&T.
GOVERNMENT CONTRACT PROVISIONS - The following provisions regarding equal
opportunity, and all applicable laws, rules, regulations and executive orders
specifically related thereto, including applicable provisions and clauses from
the Federal Acquisition Regulation and all supplements thereto are incorporated
in this Agreement as they apply to work performed under specific U.S.
Government contracts: 41 CFR 60-1.4, Equal Opportunity; 41 CFR 60-1.7, Reports
and Other Required Information; 41 CFR 60-1.8, Segregated Facilities; 41 CFR 60-
250.4, Affirmative Action For Disabled Veterans and Veterans of the Vietnam Era
(if in excess of $10,000); and 41 CFR 60-741.4, Affirmative Action for Disabled
Workers (if in excess of $2,500), wherein the terms "contractor" and
"subcontractor" shall mean "Yurie". In addition, orders placed under the
purchase order containing a notation that the material or services are intended
for use under Government contracts shall be subject to such other Government
provisions printed, typed or written thereon, or on the reverse side thereof, or
in attachments thereto.
HAZARDOUS MATERIAL - Yurie hereby warrants that, except as may be otherwise
expressly provided herein, all equipment furnished by Yurie is safe for its
normal use, is nontoxic, presents no abnormal hazards to persons or the
environment, and may be disposed of as normal refuse without special
precautions.
Yurie agrees to reimburse AT&T for any expense that AT&T may incur by reason of
the recall or prohibition against continued use or disposal of equipment
furnished by Yurie, whether such recall or prohibition against use or disposal
is directed by Yurie or under compulsion of law.
Page 32
HEAVY METALS IN PACKAGING - Yurie warrants to AT&T that no lead, cadmium,
mercury or hexavalent chromium have been intentionally added to any packaging or
packaging component (as defined under applicable laws) to be provided to AT&T
under the purchase order. Yurie further warrants to AT&T that the sum of the
concentration levels of lead, cadmium, mercury and hexavalent chromium in the
package or packaging component provided to AT&T under the purchase order does
not exceed 100 parts per million. Upon request, Yurie shall provide to AT&T
Certificates of Compliance certifying that the packaging and/or packaging
components provided under the purchase order are in compliance with the
requirements set forth above in this clause. Yurie shall indemnify and hold
AT&T harmless for any liability, fine or penalty incurred by AT&T to any third
party or governmental agency arising out of AT&T's good faith reliance upon said
warranties or any Certificates of Compliance.
IDENTIFICATION - Yurie shall not, without AT&T's prior written consent, engage
in advertising, promotion or publicity related to the purchase order, or make
public use of any Identification in any circumstances related to the purchase
order. "Identification" means any copy or semblance of any trade name,
trademark, service ▇▇▇▇, insignia, symbol, logo, or any other product, service
or organization designation, or any specification or drawing of AT&T or its
affiliates, or evidence of inspection by or for any of them. Yurie shall remove
or obliterate any Identification prior to any use or disposition of any material
rejected or not purchased by AT&T, and, shall indemnify, defend (at AT&T's
request) and save harmless AT&T and its affiliates and each of their officers,
directors and employees from and against any losses, damages, claims, demands,
suits, liabilities, fines, penalties and expenses (including reasonable
attorneys' fees) arising out of Yurie's failure to so remove or obliterate.
IMPLEADER - Yurie shall not implead or bring an action against AT&T or its
customers or the employees of either based on any claim by any person for
personal injury or death to an employee of AT&T or its customers occurring in
the course or scope of employment and that arises out of material or services
furnished under the purchase order.
INDEMNITY - All persons furnished by Yurie shall be considered solely Supplier's
employees or agents, and Yurie shall be responsible for payment of all
unemployment, social security and other payroll taxes, including contributions
when required by law. Yurie agrees to indemnify and save harmless AT&T, its
affiliates, its and their customers and each of their officers, directors,
employees, successors and assigns (all hereinafter referred to in this clause as
"AT&T") from and against any losses, damages, claims, demands, suits,
liabilities, fines, penalties and expenses (including reasonable attorney's
fees) that arise out of or result from: (1) injuries or death to persons or
damage to property, including theft, in any way arising out of or occasioned by,
caused or alleged to have been caused by or on account of the performance of the
Work or services performed by Yurie or persons furnished by Yurie; (2)
assertions under Workers' Compensation or similar acts made by persons furnished
by Subcontractor or by any subcontractor or by reason of any injuries to such
persons for which AT&T would be responsible under Workers' Compensation or
similar acts if the persons were employed by AT&T; (3) any failure on the part
of Yurie to satisfy all claims for labor, equipment, materials and other
Page 33
obligations relating directly or indirectly to the performance of the Work; or
(4) any failure by Yurie to perform Yurie's obligations under this clause or the
INSURANCE clause. Yurie agrees to defend AT&T, at AT&T's request, against any
such claim, demand or suit. AT&T agrees to notify Yurie within thirty (30) days
of written claims or demands against AT&T for which Yurie is responsible under
this clause.
INFRINGEMENT - Yurie shall indemnify and save harmless AT&T, its affiliates, its
and their customers, and each of their officers, directors, employees,
successors and assigns from and against any losses, damages, liabilities,
fines, penalties, and expenses (including reasonable attorneys' fees) that arise
out of or result from any proved or unproved claim (1) of infringement of any
patent, copyright, trademark or trade secret right, or other intellectual
property right, private right, or any other proprietary or personal interest,
and (2) related by circumstances to the existence of the purchase order or
performance under or in contemplation of it (an Infringement Claim). If the
Infringement Claim arises solely from Yurie's adherence to AT&T's written
instructions regarding services or tangible or intangible goods provided by
Yurie (Items) and if the Items are not (1) commercial items available on the
open market or the same as such items, or (2) items of Yurie's designated
origin, design or selection, AT&T shall indemnify Yurie. AT&T or Yurie (at
AT&T's request) shall defend or settle, at its own expense, any demand, action
or suit on any Infringement Claim for which it is indemnitor under the preceding
provisions and each shall timely notify the other of any assertion against it of
any Infringement Claim and shall cooperate in good faith with the other to
facilitate the defense of any such Claim.
INSPECTION - AT&T's Representatives shall at all times have access to the Work
for the purpose of inspection or a Quality Review and Yurie shall provide safe
and proper facilities for such purpose.
INSTALLATION AND CUTOVER ASSISTANCE - If requested by AT&T, Yurie agrees to make
available at the installation site, at Yurie's customary charge, a field
engineer to render installation and cutover assistance as required by AT&T for
the first installation and cutover in each of AT&T's regions or at the location
were AT&T's equipment is located.
INSURANCE - Yurie shall maintain and cause Yurie's suppliers to maintain during
the term of the purchase order: (1) Workers' Compensation insurance as
prescribed by the law of the state or nation in which the Work is performed; (2)
employer's liability insurance with limits of at least $200,000 for each
occurrence; (3) comprehensive automobile liability insurance if the use of motor
vehicles is required, with limits of at least $1,000,000 combined single limit
for bodily injury and property damage for each occurrence; (4) Commercial
General Liability ("CGL") insurance, including Blanket Contractual Liability and
Broad Form Property Damage, with limits of at least $1,000,000 combined single
limit for bodily injury and property damage for each occurrence; and (5) if the
furnishing to Company (by sale or otherwise) of products or material is
involved, CGL insurance endorsed to include products liability and completed
operations coverage in the amount of $1,000,000 for each occurrence. All CGL
and automobile liability insurance shall designate AT&T Corp., its affiliates,
and each of their officers, directors and
Page 34
employees as an additional insured. All such insurance must be primary and
required to respond and pay prior to any other available coverage. Yurie agrees
that Yurie, Yurie's insurer(s) and anyone claiming by, through, under or in
Yurie's behalf shall have no claim, right of action or right of subrogation
against Yurie and its customers based on any loss or liability insured against
under the foregoing insurance. Yurie and Yurie's suppliers shall furnish prior
to the start of Work certificates or adequate proof of the foregoing insurance
including, if specifically requested by AT&T, copies of the endorsements and
insurance policies. AT&T shall be notified in writing at least thirty (30)
days prior to cancellation of or any change in the policy.
(NOTE: It was determined during discussion between the Parties that the levels
of insurance set forth above, specifically sub-items (2) and (5) were below what
AT&T considers to be minimum levels of insurance for these areas of liability
identified. The Parties agreed that these levels of liability would be reviewed
by Yurie to determine the economic feasibility of increasing these levels to
$300,000 and $5,000,000, respectively. This review will be completed within
forty-five (45) days following the ratification of this Agreement and AT&T will
be advised as to the course of action Yurie will take regarding the recommended
increases.)
INVOICING - Yurie shall: (1) render original invoice, or as otherwise specified
in the purchase order, showing the purchase order number, through routing and
weight; (2) render separate invoices for each shipment within twenty-four (24)
hours after shipment; and (3) mail invoices with copies of bills of lading and
shipping notices to the address shown on the purchase order. If prepayment of
transportation charges is authorized, Yurie shall include the transportation
charges from the FOB point to the destination as a separate item on the invoice
stating the name of the carrier used.
ISO 9000 - Yurie will actively pursue ISO Certification for the duration of the
purchase order.
LICENSES - No licenses, express or implied, under any patents, copyrights,
trademarks or other intellectual property rights are granted by AT&T to Yurie
hereunder.
MARKING - All equipment furnished hereunder shall be marked for identification
purposes with (a) Yurie's model/serial number; (b) month and year of
manufacture; and (c) other marking in accordance with the requirements outlined
in Technical Reference 52001 dated October, 1985 or ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ # ▇▇-▇▇▇-
▇▇▇▇▇▇ and Bellcore Document # TR795-25540-84-02, as amended from time to time.
OZONE DEPLETING SUBSTANCE LABELING - Yurie hereby warrants and certifies that
all products, including packaging and packaging components, provided to AT&T
under the purchase order have been accurately labeled in accordance with the
requirements of 40 CFR Part 82 entitled "Protection of Stratospheric Ozone,
Subpart E - The Labeling of Products Using Ozone Depleting Substances." Yurie
agrees to indemnify, defend and save harmless AT&T, its officers, directors and
employees from and against any losses, damages, claims, demands, suits,
liabilities, fines, penalties, and expenses (including reasonable attorneys'
fees) that may be
Page 35
sustained by reason of Yurie's non-compliance with such applicable law or the
terms of this warranty and certification.
PACKAGING AND SHIPPING - Equipment furnished hereunder shall be packaged by
Yurie at no additional charge in containers adequate to prevent damage during
shipping, handling and storage. Unless instructed otherwise by AT&T, Yurie
shall (a) ship orders complete, (b) ship to the destination designated in the
purchase order, (c) ▇▇▇▇ all subordinate documents with the AT&T/Yurie Agreement
number and the purchase order number, (d) enclose a packing memorandum with each
shipment and when more than one package is shipped, identify the one containing
the memorandum, (e) ▇▇▇▇ AT&T's purchase order number on all packages and
shipping papers and (f) ship according to routing instructions given by AT&T.
Unless otherwise directed by AT&T, Yurie shall (a) ship equipment from its
nearest facility capable of filling the purchase order, (b) use the lowest
published common carrier rates (rail, truck or freight forwarder) (c) prepay
transportation charges, and (d) add transportation charges at cost as a separate
item on Yurie's invoice when the cost of transportation is to be borne by AT&T .
If requested by AT&T, Yurie agrees to substantiate such charges by providing
AT&T with the original freight ▇▇▇▇ or a copy thereof. Shipping and routing
instructions may be altered, orally or in writing, as mutually agreed upon by
Yurie and AT&T.
Yurie warrants that all packaging associated with materials or products
furnished under the purchase order were not manufactured using, and do not
contain chlorofluorocarbons. "Packaging" means all bags, wrappings, boxes,
cartons and any other packing materials used for packaging.
PAYMENT TERMS - Unless payment terms more favorable to AT&T appear on Yurie's
invoice and AT&T elects to pay on such terms, invoices shall be paid in
accordance with the terms stated in the purchase order, and due dates for
payment of invoices shall be computed from the date of receipt of invoices by
AT&T.
RADIO FREQUENCY ENERGY STANDARDS - Equipment furnished hereunder shall comply,
to the extent applicable, with the requirements of Subpart J of Part 15 of the
Federal Communication Commission's Rules and Regulations, as amended from time
to time, including those Sections concerning the labeling of such equipment and
the suppression of radio frequency and electro magnetic radiation to specified
levels. Should the equipment during use generate harmful interference to radio
communications, Yurie shall provide to AT&T information relating to methods of
suppressing such interference. In the event such interference cannot reasonably
be suppressed, Yurie shall, at the option of AT&T, accept return of the
equipment and refund to AT&T the price paid for the equipment. Nothing herein
shall be deemed to diminish or otherwise limit Yurie's other warranty
obligations under the purchase order.
RELEASES VOID - Neither party shall require (i) waivers or releases of any
personal rights or (ii) execution of documents which conflict with the terms of
the purchase order, from employees,
Page 36
representatives or customers of the other in connection with visits to its
premises and both parties agree that no such releases, waivers or documents
shall be pleaded by them or third persons in any action or proceeding.
REPAIR UNDER WARRANTY - Defective or nonconforming equipment under warranty
will, at AT&T's option, either be returned to Yurie for repair or replacement,
or be repaired or replaced by Yurie. Unless otherwise agreed upon by Yurie and
AT&T, Yurie shall complete repairs and ship the repaired equipment within thirty
(30) calendar days of receipt of defective or nonconforming equipment, or at the
option of AT&T, ship replacement equipment within thirty (30) calendar days
after verbal notification is given to Yurie by AT&T. Yurie shall bear the cost
of transportation charges for the return of all shipments to AT&T designated
destinations of equipment for repair or replacement under warranty. If
requested by AT&T, Yurie, at Yurie's expense, shall begin on-site repairs within
five (5) calendar days after verbal notification is given to Yurie (written
confirmation provided by facsimile with purchase order number) by AT&T for an
expediting fee of $275.00.
Any replacement, repair, modification, installation or other service performed
by Yurie shall be warranted as herein provided for the unexpired period of the
original warranty or for a period of ninety (90) days from the date performance
of the service is completed and accepted by AT&T, whichever is longer.
REPAIR NOT UNDER WARRANTY - In addition to repair and replacement of equipment
under warranty, Yurie agrees to provide repair service on all equipment ordered
hereunder for a period of ten (10) years for LDR200's and five (5) years for
LDR100's after the conclusion of the period set forth in Article IV, Section
6.01. Equipment to be repaired which is not under warranty will be returned to
a location designated by Yurie, and unless otherwise agreed upon by Yurie and
AT&T, Yurie shall ship the repaired equipment within thirty (30) calendar days
of receipt of the equipment by Yurie. With the concurrence and scheduling of
AT&T, repairs may be made by Yurie on-site.
If equipment is returned to Yurie for repair as provided for in this Article,
and is determined by Yurie to be beyond repair, or repair costs are expected to
exceed (50%) fifty percent of the cost of a replacement, Yurie shall so notify
AT&T prior to proceeding with the repair. If requested by AT&T, Yurie will sell
to AT&T a replacement at the current agreed-to price or, if no such agreed-to
price exists, at a price agreed upon by Yurie and AT&T. Further, if requested
by AT&T, Yurie shall take the necessary steps to dispose of the unrepairable
equipment, consistent with sound commercial practices.
Yurie's warranties against defects in material and workmanship provided in the
purchase order shall apply to all repair of equipment not under warranty for a
period of ninety (90) days after receipt of same by AT&T. All replacement of
equipment not under warranty shall be warranted as provided in the WARRANTY
Article for equipment furnished under the purchase order.
Page 37
The purchase order does not ▇▇▇▇▇ ▇▇▇▇▇ an exclusive privilege to repair any or
all of the equipment purchased hereunder for which AT&T may require repair.
Yurie also agrees to support AT&T in obtaining out-of-warranty repairs by
assuring the availability of the necessary technical documentation, spare parts
and training at charges to be agreed upon by AT&T and Yurie.
AT&T shall bear the cost of transportation charges for all shipments of
equipment for repair or replacement not under warranty.
REPAIR PROCEDURES - AT&T may contact Yurie's Customer Service Representative
with any questions that may arise concerning repair, and if required, specify
any special packaging of equipment which might be necessary to provide adequate
in-transit protection from transportation damage.
AT&T shall furnish the following information with equipment returned to Yurie
for repair: (a) AT&T's name and complete address; (b) name(s) and telephone
number(s) of AT&T's employee(s) to contact in case of questions about the
equipment to be repaired; (c) ship to address for return of repaired equipment
if different than (a); (d) a complete list of equipment returned; (e) the nature
of the defect or failure, if known; and (f) whether or not returned equipment is
under warranty.
Equipment repaired by Yurie shall have the repair completion date stenciled or
otherwise identified in a permanent manner at a readily visible location on the
equipment and the repaired equipment shall be returned with a tag or other
papers describing the repairs which have been made.
All material returned to Yurie must be accompanied by a Return Material
Authorization (RMA) number. An RMA number is necessary to assure proper
tracking and handling of returned material at the factory. Yurie reserves the
right to refuse shipments not accompanied by an RMA number. Refused shipments
will be returned to the shipper via collect freight. To obtain an RMA number,
call Yurie Customer Services group at (▇▇▇) ▇▇▇-▇▇▇▇. Please provide serial
number of part when requesting an RMA.
All invoices originated by Yurie for repair services must be clearly identified
as such, and must contain in addition to the information required by other
provisions of the purchase order (a) a reference to AT&T's purchase order for
the repair services, (b) a detailed description of repairs made by Yurie and the
need therefor, and (c) an itemized listing of parts and labor charges, if any.
Replaced parts will, upon request, be available for inspection by, or returned
to, AT&T.
REPAIR AND REPLACEMENT, EMERGENCY SERVICE - In addition to the warranty and out-
of-warranty equipment repair and replacement provisions of the purchase order,
Yurie agrees to provide emergency repair and replacement service for a period of
ten (10) years for LDR200's and five (5) years for LDR100's after the conclusion
of the period set forth in Article
Page 38
IV, Section 6.01. Whenever an emergency out-of-service condition is caused by
equipment furnished hereunder, Yurie shall ship replacement equipment to be
received at the AT&T location within five (5) calendar days for an expediting
fee of $275.
In order to schedule shipment of replacement equipment, AT&T may call Yurie's
Customer Service Representative. This service will be available during normal
business hours, five days a week. For critical support, a process shall be
negotiated between the Parties.
Equipment under warranty replaced under this Article is to be returned to Yurie
by AT&T within thirty (30) days after AT&T's receipt of replacement equipment
hereunder. If such equipment is not returned, Yurie shall have the right to
invoice AT&T at the current AT&T/Yurie Agreement price, or if no such price
exists, at a price agreed upon by Yurie and AT&T.
REPAIR/REPLACEMENT PARTS-CONTINUING AVAILABILITY - Yurie agrees to offer parts
for maintenance, replacement, and repair of equipment for sale to AT&T, for a
period of ten (10) years for LDR200's and five (5) years for LDR100's after the
conclusion of the period set forth in Article IV, Section 6.01, which parts will
be compatible with and functionally equivalent to those provided under the
purchase order.
In the event Yurie fails to supply such parts (not for re-sale -- repair only)
or Yurie is unable to obtain another source of supply for AT&T, then such
inability shall be considered noncompliance with this Article and, in addition
to whatever other rights and remedies AT&T may have at law or in equity, AT&T
may require Yurie, without obligation or charge to AT&T, to provide AT&T with
the Technical Information and any other rights required so that AT&T can
manufacture, have manufactured or obtain such parts from other sources.
The Technical Information shall include, for example, (a) manufacturing drawings
and specifications of raw materials and components comprising such parts, (b)
manufacturing drawings and specifications covering special tooling and the
operation thereof, (c) a detailed list of all commercially available parts and
components purchased by Yurie on the open market disclosing the part number,
name and location of the supplier and price lists for the purchase thereof, and
(d) one complete copy of the then current source code used in the preparation of
any software licensed or otherwise acquired by from Yurie hereunder.
SUPPLIER'S INFORMATION - Yurie shall not provide under, or have provided in
contemplation of, the purchase order any idea, data, program, technical,
business or other intangible information, however conveyed, or any document,
print, tape, disk, semiconductor memory or other information-conveying tangible
article, unless Yurie has the right to do so, and Yurie shall not view any of
the foregoing as confidential or proprietary.
SURVIVAL OF OBLIGATIONS - The obligations of the parties under the purchase
order, which by their nature would continue beyond the termination, cancellation
or expiration of the purchase order, including, by way of illustration only and
not limitation, those in the clauses
Page 39
COMPLIANCE WITH LAWS, IDENTIFICATION, IMPLEADER, INFRINGEMENT, RELEASES VOID,
USE OF INFORMATION and WARRANTY (and INSURANCE and INDEMNITY if included in the
purchase order), shall survive termination, cancellation or expiration of the
purchase order.
TAXES - AT&T shall reimburse Yurie only for the following tax payments with
respect to transactions under the purchase order unless AT&T advises Yurie that
an exemption applies: state and local sales and use taxes, as applicable. Taxes
payable by AT&T shall be billed as separate items on Yurie's invoices and shall
not be included in Yurie's prices. AT&T shall have the right to have Yurie
contest any such taxes that AT&T deems improperly levied at AT&T's expense and
subject to AT&T's direction and control.
TECHNICAL SUPPORT - Yurie agrees to offer ongoing technical support, including
field service and assistance, to AT&T, for a period of ten (10) years for
LDR200's and five (5) years for LDR100's after the conclusion of the period set
forth in Article IV, Section 6.01. The availability or performance of this
technical support service, however, shall not be construed as altering or
affecting any of Yurie's other obligations set forth in the purchase order.
Ongoing technical support by telephone will be available to AT&T from Yurie at
no charge during normal business hours. During the warranty period set forth in
the purchase order, Yurie's field service technical support shall be provided to
AT&T, including emergency (service affecting) on-site twenty-four (24) hour
technical assistance at mutually agreeable rates. AT&T shall call Yurie's
Customer Service Representative to request such field service technical support.
Beyond the warranty period, charges, if any, for field service technical support
shall be agreed upon by AT&T and Yurie.
TERMINATION OF PURCHASE ORDER - AT&T may, with written notice given no later
than fifteen (15) calendar days prior to scheduled delivery, terminate any
purchase orders placed under the AT&T/Yurie Agreement. Unless otherwise
specified in the Agreement or in this purchase order, AT&T's liability to Yurie
with respect to such terminated purchase order or orders shall be limited to:
(1) Yurie's purchase price of all components for the material (not usable in
Yurie's other operations or salable to Yurie's other customers), plus (2) the
actual costs incurred by Yurie in procuring and manufacturing material (not
usable in Yurie's other operations or salable to Yurie's other customers) in
process at the date of the notice of termination; less (3) any salvage value
thereof. However, no such termination charges shall be payable if within sixty
(60) days after notice of termination material equivalent in kind to that being
terminated is ordered by AT&T from Yurie. If requested, Yurie agrees to
substantiate such costs with proof satisfactory to AT&T.
TITLE AND RISK OF LOSS - Title and risk of loss and damage to material purchased
by AT&T under the purchase order shall vest in AT&T when the material has been
delivered at the point of shipment. If a purchase order issued calls for
additional services including, but not limited to, unloading, installation, or
testing, to be performed after delivery, Yurie shall retain
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title and risk of loss and damage to the material until the additional services
have been performed. Notwithstanding the foregoing sentence, if Yurie is
expressly authorized to invoice AT&T for material upon shipment or prior to the
performance of additional services, title to such material shall vest in AT&T
upon payment of the invoice, but risk of loss and damage shall pass to AT&T as
provided in the foregoing sentence.
TOOLS AND EQUIPMENT - Unless otherwise specifically provided in the purchase
order, Yurie shall provide all labor, tools and equipment (the "tools") for
performance of the purchase order. Should Yurie actually use any tools owned or
rented by AT&T or its customer, Yurie acknowledges that it accepts the tools "as
is, where is," that neither AT&T nor its customer have any responsibility for
the condition or state of repair of the tools and that Yurie shall have risk of
loss and damage to such tools. Yurie agrees not to remove the tools from AT&T's
or its customer's premises and to return the tools to AT&T or its customer upon
completion of use, or at such earlier time as AT&T or its customer may request,
in the same condition as when received by Yurie, reasonable wear and tear
excepted.
USE OF INFORMATION - Yurie shall view as AT&T's property any idea, data,
program, technical, business or other tangible information, however conveyed,
and any document, print, tape, disk, tool, or other tangible information-
conveying or performance-aiding article owned or controlled by AT&T, and
provided to, or acquired by, Yurie under or in contemplation of the purchase
order (Information). Yurie shall, at no charge to AT&T, and as AT&T directs,
destroy or surrender to AT&T promptly at its request any such article or any
copy of such Information. Yurie shall keep Information confidential and use it
only in performing under the purchase order and obligate its employees,
subcontractors and others working for it to do so, provided that the foregoing
shall not apply to information previously known to Yurie free of obligation, or
made public through no fault imputable to Yurie.
WAIVER - The failure of either party at any time to enforce any right or remedy
available to it under the purchase order or otherwise with respect to any breach
or failure by the other party shall not be construed to be a waiver of such
right or remedy with respect to any other breach or failure by the other party.
WORK DONE BY OTHERS - If any of the Work is dependent on work done by others,
Yurie shall inspect and promptly report to AT&T's Representative any defect that
renders such other work unsuitable for Yurie's proper performance. Yurie's
silence shall constitute approval of such work as fit and suitable for Yurie's
performance.
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EXHIBIT E
---------
SOFTWARE PROGRAM LICENSE AND WARRANTY
-------------------------------------
1. LICENSE
1.1 Subject to the following terms and conditions, Yurie grants to AT&T Corp.
and its customers and AT&T accepts an irrevocable, perpetual, world-wide, non-
exclusive license to use the object code software provided by Yurie (the
Licensed Program) only with Yurie equipment with all copyright, patent and
intellectual property rights remaining the sole property of Yurie.
1.2 AT&T shall receive software support and upgrades for the Licensed Program
in accordance with the applicable then current Yurie software support policy in
effect and upon payment of any applicable fees.
2. PROTECTION AND SECURITY OF LICENSED PROGRAMS
2.1 AT&T acknowledges and agrees that the Licensed Program contains proprietary
and confidential information of Yurie and/or its third party supplier. AT&T
agrees to protect the confidential and proprietary nature of the Licensed
Program in the same manner that it protects its own confidential information of
like value, provided that AT&T will in all cases use reasonable care to protect
the Licensed Program.
2.2 AT&T shall not use, print, copy, translate, adapt, create derivative works
from, record, transmit, display, disclose, publish, encumber by way of security
interest or otherwise pledge or transfer, modify, assign, distribute, rent, loan
or make available to any third party the Licenses Program in whole or in part,
except as expressly provided in this Agreement.
2.3 AT&T shall refrain from decompiling or applying any procedure to the
Licensed Program, including reverse engineering or any similar process, in order
to derive and/or appropriate for use, the source code or source listings for the
Licensed Program.
3. TERM
3.1 This Agreement shall become effective for each Licensed Program upon
delivery of the Licensed Program to AT&T.
4. WARRANTY
4.1 The Software and Documentation (collectively referred to in all paragraphs
of this Section WARRANTY as Software) will be free from significant errors, will
conform to and perform in accordance with the Specifications, and will function
properly. The media conveying the Software will be free from defects in
material and workmanship. The Software will be
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compatible with and may be used in conjunction with other software as described
in the Specifications or elsewhere in this Agreement. If this Agreement states
that the Software is to be used in conjunction with certain data processing
equipment, the Software shall be compatible with that equipment. The foregoing
warranties extend to the future performance of the Software and shall continue
for the longer of ( a ) the warranty period applicable to AT&T's sublicense to
its customers of the Software or products which incorporate the Software, ( b )
twelve months after the Software is accepted by AT&T, or ( c ) such greater
period as may be specified elsewhere in this Agreement.
4.2 Services will be performed in a first-class, workmanlike manner.
4.3 There are no copy protection or similar mechanisms within the Software
which will, either now or in the future, interfere with the grants made in this
Agreement.
4.4 AT&T and its customers shall have quiet enjoyment of the Software during
the Software license term.
4.5 As to Software for which Licensor does not solely own all intellectual
property rights (including copyright) and other rights in the Software, Licensor
has full right, power and authority to license the Software to AT&T and its
customers as provided in this Agreement.
4.6 If the Software, or any portion thereof, is or becomes unusable, totally or
in any respect during the applicable warranty period, or if services fail to
meet the warranties, Licensor will reperform services, correct errors, defects
and nonconformities and restore the Software to conforming condition free of
significant errors at no cost to AT&T or its customers. Corrected Software
shall be warranted as set forth in this clause.
4.7 The Software does not contain any malicious code, program, or other
internal component (e.g. computer virus, computer worm, computer time bomb, or
similar component), which could damage, destroy, or alter software, firmware, or
hardware or which could, in any manner, reveal, damage, destroy, or alter any
data or other information accessed through or processed by the Software in any
manner. Licensor shall immediately advise AT&T, in writing, upon reasonable
suspicion or actual knowledge that the Software provided under this Agreement
may result in the harm described above. Licensor shall indemnify and hold AT&T
and its customers harmless from any damage resulting from the harm described
above.
4.8 All warranties shall survive inspection, acceptance and payment.
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