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CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF
THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS AND
ENCLOSED BY BRACKETS. THE CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.16
MASTER SUPPORT AGREEMENT
This Master Support Agreement is made this 28th day of June, 1999, (the
"Effective Date"), by and between MCK Communications, Inc. ("MCK"), located at
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and VITAL NETWORK SERVICES, L.L.C.
("VITAL") ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS, MCK markets certain equipment and services to Customers worldwide, and
in connection therewith offers on-site installation, maintenance and value-add
services to such Customers;
WHEREAS, VITAL provides on-site installation, maintenance and value-add
servicing of communications equipment worldwide;
WHEREAS, VITAL has a worldwide infrastructure to perform on-site installation,
maintenance and value-add services and desires to provide such services for MCK;
and
WHEREAS, MCK desires to engage VITAL as an independent contractor in performing
global on-site installation, maintenance and value-add services;
NOW, THEREFORE, in consideration of the mutual promise and covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, MCK and VITAL hereby agree as
follows:
1. DEFINITIONS.
1.1 "Affiliate" shall mean any entity worldwide, which directly or
indirectly controls, is controlled by or under common control with
VITAL.
1.2 "Advance Replacement" means a process to ship replacement Product
components in advance of receipt of failed/defective Product
components.
1.3 "Authorized Service Area" means an area within one hundred (100)
miles of a VITAL Service City.
1.4 "Customer" means the final end-user, purchaser or licensee who has
acquired Product(s) for their own internal use and not for resale,
remarketing, or redistribution, whether directly from MCK or through
other sources, and of whom MCK has received notification of and who is
entitled to support and maintenance services for such Products.
1.5 "First Level Support" means the ability to provide general Product
information and configuration support; collect relevant technical
problem identification information; perform base problem
determination; provide basic support on the standard protocols and
features; go on-site at Customer location to obtain information if
situation requires.
1.6 "Response" means the time period commencing upon MCK's or a
Customer's request for service hereunder and ending when the VITAL
Field Engineer is on-site.
1.7 "Hardware" means tangible Product made available to VITAL.
1.8 "Maintenance Release" or "Patch" means an incremental release of
MCK Software that provides maintenance fixes.
1.9 "Parts Depot" means MCK Parts Depot which provides support
required for this program.
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1.10 "Product" means both Hardware and/or Software listed in Appendix
A, which VITAL may support under the terms of this Agreement. Products
include Service Parts.
1.11 "RMA" means Return Material Authorization.
1.12 "Second Level Support" means First Level Support plus the ability
to support problem isolation and Product specification defect
determination; provide lab simulation and interoperability testing;
define an action plan; analyze traces; provide support on all
protocols and features; reproduce problems in a lab, diagnose problems
remotely and provide MCK with complete steps to reproduce a problem.
1.13 "Service(s)" means support provided by VITAL that includes but is
not limited to installation, maintenance and value-add programs.
1.14 "Service Part" means a component or sub-assembly of a Product,
excluding cables and/or all software, and is also referred to as Field
Replaceable Unit (FRU).
1.15 "Site" means and includes the premises where the Product is to be
installed or is located.
1.16 "Software" means the machine-readable object code software
programs licensed by MCK.
1.17 "Standard Business Hours" means 8:00 AM to 5:00 PM Local Standard
Time, Monday through Friday, excluding VITAL observed holidays.
1.18 "Third Level Support" means fixing or generating workarounds for
Hardware and Software bugs and troubleshooting bugs that were not
diagnosed during Second Level Support.
1.19 "Unrelated Services" means any other Service, in addition to the
Services authorized by MCK and provided by VITAL to a Customer.
1.20 "Update" means Maintenance Releases, Version Releases and/or
Major Releases which contain the same configuration as originally
acquired.
1.21 "Primary Provider" means MCK will promote VITAL internally and to
its Customers for worldwide service deliveries.
1.22 Valued- Added Services means Help Desk and telephone support
services.
2. SCOPE, SERVICE ORDERS AND TERM.
2.1 Authorization. MCK hereby appoints VITAL as a non-exclusive,
primary provider of on-site services to MCK's Customers located
throughout the world.
2.2 Support Services. MCK support services specified below at Section
4 are provided to VITAL as backup to the support staff of VITAL. VITAL
is primarily responsible for providing on-site support and telephone
support Services to MCK's Customers for whom VITAL receives a purchase
order hereunder.
2.3 MCK shall issue a purchase order to order Services. Such order
requires a Services schedule and/or Statement of Work for the specific
Customer or site location signed by MCK.
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2.4 Obligation to Customers. Other than the Services agreed to in this
document, neither VITAL nor MCK will make any obligation to Customers
on behalf of the other, nor commit the resources of the other to
Customers without the other's consent.
2.5 Implementation. MCK and VITAL will implement the terms of this
Agreement worldwide.
2.6 Term. This Agreement shall be effective as of the Effective Date
and shall remain in full force and effect for an initial term of
twenty-four (24) months, unless sooner terminated pursuant to Section
7. This Agreement shall be automatically renewed for additional
successive twelve (12) month terms unless either party gives the other
party at least ninety (90) days written notice of its intention not to
renew prior to the anniversary date of the Agreement.
2.7 Relationship of Parties. It is understood by the parties hereto
that VITAL is an independent contractor and not an employee or agent
of MCK and MCK is not an agent of VITAL. MCK will not provide fringe
benefits or insurance coverage on behalf of VITAL except for sales tax
payable by MCK as provided in Section 7.2. VITAL shall be responsible
for the withholding and/or payment, as required by law, of all
federal, state and local taxes imposed on VITAL and its employees due
to the performance of Services or any other obligation under this
Agreement.
3. VITAL OBLIGATIONS. VITAL shall provide the following Services to MCK:
3.1 On-site Support.
3.1.1 Services. VITAL shall provide on-site installation,
maintenance and value-add Services to MCK Customers during
contracted local business hours. Available Services, response
times and hours are identified in VITAL supplements provided
under separate cover.
3.1.2 On-site service includes: 1-800 number access,
round-the-clock travel to the Customer site, on-site labor,
problem diagnosis, fault isolation, equipment adjustment,
equipment replacement and on-line testing with VITAL standard
test equipment.
3.1.3 Special test equipment. Special test equipment
requirements identified by MCK will be provided by MCK to VITAL
prior to development of VITAL price calculations.
3.2 Technical Support.
3.2.1 VITAL will provide first and second Level Support.
VITAL shall establish problem priorities with MCK consistent with
problem priority definitions as described below. All problems
reported to VITAL technical support will be prioritized and
escalated to MCK based on such guidelines set forth by MCK.
(Reference Attachment C)
3.2.2 VITAL shall report unresolved cases to MCK within the
following time frames beginning at such time that a problem is
given a priority as defined below:
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Priority 1. No later than four (4) hours from initial
MCK notification to VITAL. Priority 1 calls defined as
responding to MCK / End Users while in a troubleshooting
mode.
Priority 2. No later than eight (8) business hours from
initial MCK notification to VITAL. Priority 2 call defined
as responding to MCK / End User configuration questions
during normal network operation.
Priority 3. No later than three (3) business days from
initial MCK notification to VITAL. Priority 3 calls defined
as responding to MCK / End User general technical questions
during normal network operation.
3.3 Software Distribution Rights. VITAL may distribute, on a
non-exclusive basis, MCK provided Updates and Patches to Customers.
3.4 Service Parts Inventory
3.4.1 MCK will consign local spare parts kits to VITAL
Logistics per VITAL recommendations and/or mutually agreed to
spare ratio. Repair of such consigned Product will be at MCK
expense.
3.4.2 VITAL will use all consigned service parts kits only
for the remedial maintenance of MCK Product. VITAL will not
resell service parts to Customers for upgrades, system expansion
or any other reason outside the scope of remedial maintenance.
3.4.3 A Logistics Management fee will be applied by VITAL to
the Customer only if there is not a contract arrangement in place
that requires VITAL to provide the consigned part. (See
Attachment B).
3.5 Consigned Product Receipt/Return; Notification.
3.5.1 VITAL is responsible for the following when receiving
consigned spare parts and/or Advance Replacements and returning
replaced Product under Section 4.1.3:
3.5.1.1 When receiving consigned spare parts,
Advance Replacements and/or returning replaced product under
Section 4.1.3, VITAL is responsible for the following:
VITAL Logistics will inspect all parts received from MCK to
verify any damage in transit. Damaged and/or mis-shipments
will be reported to MCK immediately but not longer than five
(5) business days of receipt.
3.5.1.2 Returns Coordination.
3.5.1.2.1 VITAL shall return all
defective Product(s) within ten (10) days of the
receipt of the replacement Product.
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3.5.1.2.2 VITAL shall coordinate the
return of all failed Product, freight and insurance
prepaid, to the MCK designated repair center.
3.5.1.2.3 VITAL shall comply with the
following RMA procedure:
i. VITAL will ensure all Products are properly
packaged prior to being shipped, and will include
a description of the failure and written
specification of any changes or alterations made
to the Product. Product returned to MCK will
conform in quantity and to the RMA request.
ii. VITAL shall tag each Product returned with a
transaction number and a brief description of the
problem.
3.5.2 For consigned products utilized during remedial
maintenance service as defined in Section 4.1.3, VITAL will be
responsible for the following:
3.5.2.1 Accountability. VITAL will provide and
retain records for all operational activities for MCK
Customers supported under this Agreement, including the
location(s) and hardware configuration of that
Customer.
3.5.2.2 Technical Assistance. Isolate product
problems to the Service Parts level, including
providing technical assistance to VITAL's field support
engineers which includes, at a minimum, hardware
problem identification and resolution.
3.5.2.3 Repackaging/Return of Service Parts. VITAL
will comply with the following return procedure.
i. VITAL will return defective Service Parts per
MCK's instructions.
ii. VITAL will repackage defective Service parts
and deliver to central pick-up location at the
Customer site.
iii. VITAL will inform MCK of pick-up location and
site contact/focal point for defective Service
Parts retrieval.
3.6 Help Desk Coordination. VITAL will represent MCK in answering and
coordinating a toll free customer service number. (See Attachment E)
3.7 Product Inspection. If required by MCK prior to putting previously
installed product under support, VITAL will visit the Customer to
ensure Product has been maintained in adherence to the maintenance
procedures as detailed in the applicable user information (supplied
with product upon initial sale/resale). Each Site visit will be
charged at current Time and Material rates in effect or pre-agreed to
price schedule.
3.8 Significant New Products. For significant new Products added to
the price list and/or not directly listed in Appendix A of this
Agreement, including Products which become MCK Products as a result of
an acquisition by MCK of another entity, MCK may require certain
certification, installation, or training requirements be completed by
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VITAL, as MCK would for all other MCK service providers, prior to
allowing VITAL to support such Products from MCK.
3.9 Focal Points. VITAL will identify at least one (1) individual to
manage the implementation of this Agreement, serve as focal point for
MCK's monitoring of support services provided under this Agreement,
and act as the focal point for day-to-day service issues.
3.10 Records. VITAL will maintain electronic records of Product under
coverage at all Customer sites.
3.11 Direct Customer Services Option. VITAL may resell its own brand
of services for Products directly to MCK customers under the following
circumstances: 1) In a multi-vendor environment where the MCK
installation base is less than 50% of the network and 2) if there is
not an existing service agreement directly with MCK in the first
twelve months after the initial installation. It is not the intention
of VITAL to directly solicit existing or potential Customers of MCK
for service of Products without prior approval of MCK. Under every
circumstance, VITAL will not solicit any such business unless MCK
gives prior approval. If VITAL is granted permission by MCK to quote
and support a customer as the prime to the extent permitted by law,
VITAL 1) will resell services at a higher rate than the published
prices in MCK's service offering and 2) guarantee MCK at least
comparable service revenue as detailed in the terms of Schedule B.
3.12 Personnel. VITAL shall select, employ, pay, supervise, direct and
discharge all VITAL personnel providing Services hereunder. VITAL
shall be solely responsible for the payment of all fringe benefits and
any other direct and indirect compensation for VITAL personnel
assigned to perform Services under this Agreement, as well as be
responsible for their worker's compensation insurance, employment
taxes, and other employer liabilities relating to such personnel as
required by law to be provided.
3.13 Staffing of Personnel. VITAL shall be solely responsible for
assigning personnel to perform the Services, which personnel will be
instructed by VITAL to perform the Services in a timely, efficient and
workmanlike manner. MCK shall have the right to request that personnel
not performing Services properly and in accordance with reasonable
technical or general work standards who do not promptly correct such
performance be replaced by VITAL with competent and suitable
personnel.
4. MCK OBLIGATIONS. MCK will provide the following services to VITAL:
4.1 Support for VITAL includes technical support, training, and
software support and hardware/spare support as follows:
4.1.1 Technical Support.
4.1.1.1 MCK shall provide 24-hour 7- day a week
access to MCK Engineering Resources. MCK will respond
to VITAL within one half (1/2) hour to all calls
received during Standard Local Business hours and to
Priority 1 and 2 calls received outside Standard Local
Business Hours. For Priority 3 calls received outside
Standard Local Business Hours, MCK will respond no
later than the next business day. (Reference 3.2.2 for
Priority definitions)
4.1.1.2 MCK will provide Third Level Support to
VITAL.
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4.1.1.3 Once a problem is reported by MCK or a
Customer, MCK and VITAL will work closely together to
resolve the Customer problem. It is VITAL's
responsibility to log the incoming fault report
received by VITAL and to provide the necessary local
on-site and headquarters technical resources to resolve
problems reported by MCK within the scope of this
Agreement.
4.1.1.4 If a problem is escalated back to MCK,
VITAL will assign a local technical support person to
work the resolution of the problem with MCK. MCK will
supply the appropriate level of technical resources,
based on problem priority and elapsed time, to assist
VITAL with problem resolution and to ensure adherence
to MCK's Problem Prioritization and Escalation
Guideline as described in Attachment C. During such
problem escalation, if it is mutually agreed that MCK
on-site technical resources are required for final
resolution, MCK will dispatch the necessary level of
technical support to assist VITAL at no charge. VITAL
will ensure a local technical support person is
available to work with MCK on-site. VITAL, with the
assistance of MCK, will be responsible for providing
the Customer with the necessary updates for resolution
of the problem.
4.1.2 Software and Software Support
4.1.2.1 Software Releases. MCK will provide
Updates and one (1) paper copy of supporting
documentation for Product supported under this
Agreement as identified in Attachment A for VITAL lab
use. For Product noted by an asterisk, only Maintenance
Releases are available. MCK shall also provide
supporting documentation on Disk/CD ROM, upon request,
and if available. Additional paper copies of supporting
documentation may be reproduced by VITAL.
4.1.2.2 Release Support. MCK, in meeting support
obligations, may require VITAL to upgrade its Customer
to a supported release which may be charged at VITAL's
current Time and Material rates or agreed to price
schedule to MCK.
4.1.2.3 Software Patches. When required to fix a
fault, MCK will provide new Software to VITAL to
initiate corrective action or provide a
network-bootable Software image, as VITAL and MCK
agree.
4.1.2.4 Software Updates and/or Patches will be
provided to VITAL for distribution only on Product for
which Customer is licensed to use the Software and
pursuant to a current maintenance agreement for such
Product.
4.1.3 Hardware Support. MCK shall provide the following
hardware replacement service at no charge for Product supported
by VITAL and identified in Appendix A.
4.1.3.1 Product used for replacement may be new or
equivalent to new, at MCK's discretion.
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4.1.3.2 Product used for replacement will be
repaired by MCK at no charge to VITAL.
4.1.3.3 Product documentation will be provided to
VITAL at no charge.
4.1.3.4 End of Life. For the duration of this
Agreement, MCK agrees to provide Hardware replacement
support for three (3) years following the date of
announced end of life of the Product.
4.2 Training and Education
4.2.1 As part of the initial training, MCK shall train a
minimum of four (4) VITAL central technical support persons with
MCK recommended training course(s). Up to four training course(s)
will be provided by MCK at no cost to VITAL. Training will be
held at VITAL's headquarters in Naugatuck, Connecticut and/or
regional offices throughout the world; dates and locations to be
determined by mutual agreement. Employee expenses will be borne
by VITAL. VITAL agrees to have at least eight (8) trained
regional technical support employees within two (2) months from
the effective date of this Agreement.
4.2.2 MCK shall train additional employees as mutually
agreed necessary to support Customer contract obligations covered
under contracted VITAL support programs. Additional training for
field staff will be the responsibility of VITAL based on
like/same hardware and software.
4.2.3 If requested by VITAL, MCK will provide a
Train-the-Trainer Program at no charge that allows VITAL
instructors to train internal staff on MCK's Products.
4.2.4 Alternative Training. Videos, CD-ROM's or diskettes,
if available by MCK, will be provided to VITAL at no charge to
train field personnel and will be returned to MCK upon completion
of training.
4.3 Alternative Provisioning Purchase of Product to VITAL
4.3.1 MCK will permit purchase of Service Parts for VITAL to
provide support to VITAL direct Customers. MCK will sell to VITAL
Service Parts at MCK's then current published list price, less a
[***] discount.
4.3.2 To assist VITAL in setting up a working laboratory for
network simulation and integration analysis, MCK agrees to
consign VITAL an appropriate number of laboratory units per year.
VITAL agrees to use such units solely for support purposes under
the terms of this agreement and not for resale purposes.
4.4 Record Keeping. Product Configuration and Location Change Notice.
MCK will provide Notice of or any change in i) the Hardware or
Software component and ii) the location of any Customer Product. If
notification is not provided to VITAL, VITAL will invoice for
additional charges due to changes in product configuration or
location, calculated from the date of installation.
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
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5. INTELLECTUAL PROPERTY
5.0 Ownership of Property. Title to and ownership of any and all
intellectual property utilizing Product information (e.g. patents,
copyrights, trademarks)), including but not limited to Hardware,
Software, Updates, Patches, reports, code and data, developed and/or
created by VITAL in connection with this Agreement shall immediately
vest in MCK and VITAL shall have no rights to such property except a
nonexclusive license to use in connection with service of Products.
6. SERVICE EXCLUSIONS
Services provided by VITAL do not include nor shall VITAL be
responsible for any of the services listed below. VITAL shall provide
MCK with a time and materials quotation to perform such services if
requested by MCK.
6.1 Any customization of Software.
6.2 Support or replacement of Product that is altered, modified,
mishandled, destroyed or damaged by natural causes or damaged during
unauthorized use.
6.3 Services to resolve Software or Hardware problems resulting from
third party product or causes beyond MCK's control.
6.4 Services for non-MCK Software installed on any MCK Product.
6.5 Any Hardware upgrade required to run new or updated Software.
6.6 Non-contract related on-site diagnostics and/or remedial services
unless authorized by MCK.
7. CHARGES AND PAYMENTS
7.1 VITAL shall invoice MCK for the Contract Price for Services, as
defined by Appendix B, performed and for any amounts due for Unrelated
Services performed according to the payment schedule described in
Attachment B. Each invoice shall include supporting documentation and
details of the Services and Unrelated Services performed. MCK shall
pay any amounts due within thirty (30) days of receipt thereof.
7.2 The stated charges, prices, fees or other amounts to be invoiced
and paid pursuant to this Agreement, do not include any applicable
Federal, State, County or local sales, use, property, excise taxes
customs, import and export duties, VAT or other tax however
designated, regardless of how or on whom the tax is levied and whether
such tax is based on any charge, price, fee or other amount, (the
Product, or service or their use) pursuant to this Agreement. Any such
taxes and interest on them (except taxes based on VITAL's or MCK' net
income) required to be paid by VITAL shall be added to the invoices.
Any taxes to be paid by MCK, but in fact paid by VITAL, shall be
reimbursed to VITAL. In the event any taxes to be paid by MCK, but
levied on VITAL, are not paid until audit, VITAL may then invoice
Customer. Customer may submit a certificate of Exemption for each
state in which it is registered to do business and exempted from
payment of any tax, and failure to do so does not imply the
responsibility as that of VITAL.
7.3 Unrelated Service. VITAL shall not perform any Unrelated Service
without the prior written or verbal consent of an authorized MCK
representative. MCK will supply a list of authorized individuals under
separate cover. If MCK agrees that such Unrelated
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Service is necessary for a Customer, VITAL shall supply such Unrelated
Service and invoice MCK therefore at the rates set forth in Attachment
B.
7.4 Invoicing. Invoices for installation and Unrelated Service shall
be rendered monthly. Invoices for maintenance and value-add contract
Services shall be rendered quarterly, in advance subject to the
minimum payments under Section 7.5.
7.5 Minimum Payments. As defined by Appendix B in consideration of
VITAL's entering into this Agreement and commitment to provide
services, MCK owes VITAL minimum quarterly payments that aggregate
[***] for Year 1 of the contract and [***] for Year 2 of the
contract. Any service revenue generated by VITAL from MCK contracts is
automatically applied against these minimum payments. Any service
revenue generated by MCK in Year 1 that is in excess of [***] is
automatically applied against MCK's Year Two minimum payment. If
revenue meets or exceeds the total twenty four (24) month commitment
of [***] anytime during the contract term, MCK has met all its
minimum revenue obligations to VITAL.
7.6 In addition to other remedies available to VITAL, overdue invoices
may bear a late payment charge at the rate of one (1) percent
commencing on the 31st day, but in no event in excess of the lawful
maximum. In the event an invoice is more than sixty (60) days past due
and such invoice has not been paid by MCK within sixty (60) days after
the receipt by MCK of written notice that such invoice is more than
sixty (60) days due, VITAL may withhold performance hereunder until
such invoice is paid.
7.7 Books and Records; Audits. VITAL shall maintain full and accurate
books, records and accounts of all Services rendered pursuant to this
Agreement in such a way as to disclose clearly and accurately the
nature and detail thereof, including without limitation such
accounting information as is necessary to support the reasonableness
of charges under this Agreement and such additional information as MCK
may reasonably request for purposes of its internal bookkeeping and
accounting operations. VITAL shall keep such books, records and
accounts insofar as they pertain to the computation of charges
hereunder available at its principal offices for audit, inspection and
copying by MCK and persons authorized by MCK during reasonable
business hours.
MCK shall have the right, on two (2) occasions per each twelve (12)
month period of this Agreement, to conduct an audit of the relevant
books, records and accounts of VITAL upon giving reasonable notice of
its intent to conduct such an audit. In the event of such audit, VITAL
shall give to the party requesting the audit its cooperation and
access to all books, records and accounts reasonably necessary to
audit. If during the course of any such audit it is determined that
the charges actually invoiced to MCK by VITAL are more than [***]
percent greater than the charges which should have been invoiced
according to such audit, then VITAL shall (1) pay to MCK the sum of
(x) the difference between such audited invoice amount and the amount
actually invoiced and (y) interest calculated from the data of the
invoice and (2) reimburse MCK for all costs associated with such audit
not to exceed the amount of the overcharge. If it is determined that
VITAL was underpaid then MCK shall pay to VITAL the amount of the
underpayment.
8. TERMINATION.
8.1 This Agreement may be terminated immediately by either party
through written Notice under any of the following conditions:
8.1.1 By either party if the other party breaches any of the
material provisions of this Agreement and fails to remedy such breach
within thirty (30) days after written notification by the other party
of such breach.
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
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8.1.2 By VITAL if MCK fails to pay any amount when due and such
failure continues for sixty (60) days after written notification by
VITAL of such past due amount except for quarterly advance payments
under Section 7.4 if such failure continues for sixty (60) days after
the quarterly due date.
8.2 Provisions after Termination of the Agreement.
8.2.1 Upon termination of this Agreement (i) each party shall
immediately return to the other all Confidential Information (as
defined below) of the other party in its possession and (ii) VITAL
shall return to MCK immediately after the effective date of
termination all MCK-owned consigned spare parts
9. SOFTWARE LICENSE AND PROPRIETARY RIGHTS.
VITAL acknowledges that it may receive Software as a result of
services provided under this Agreement. VITAL agrees that it is
licensed to distribute such Software only on Product covered under the
Services. Except as otherwise specified, VITAL shall not: (i) copy, in
whole or in part, Software or documentation; (ii) reverse compile or
reverse assemble all or any portion of the Software; or (iii) rent,
lease, distribute, sell, or create derivative works of the Software.
10. CONFIDENTIAL INFORMATION.
10.1 As used in this Agreement, "Confidential Information" means any
business or technical information disclosed, either written or orally,
by one party to the other under this Agreement provided, that if the
information disclosed is in writing, it must be clearly labeled as
"Confidential", "proprietary" or with a similar legend, and if the
information is disclosed orally, it must be i) identified as
Confidential Information at the time of disclosure by the disclosing
party.
10.2 Confidential Information does not include any information which:
10.2.1 is, or subsequently becomes, legally and publicly
known or readily ascertainable by the public, and through no
wrongful act of the receiving party;
10.2.2 is rightfully obtained and received by receiving
party from a third party without any obligation of
confidentiality;
10.2.3 is independently developed by the receiving party or
for the receiving party without access to or benefit from the
Confidential Information; or
10.2.4 is disclosed to a third party by the disclosing party
without restriction on disclosure.
10.3 Each party agrees to hold the other party's Confidential
Information in strict confidence and not to disclose such Confidential
Information to any third party except as specifically authorized by
this Agreement or by the other party in writing. Each party may
disclose the other's Confidential Information to its employees who are
under confidentiality obligations to it and who have a bona fide need
to know such Confidential Information, but only to the extent
necessary to carry out the purposes of this Agreement.
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10.4 Both parties acknowledge and agree that both parties list of
employees is confidential and shall prevent the unauthorized
disclosure of this Confidential Information. Each party shall use at
least the same degree of care to protect such information as it uses
to protect its own confidential or proprietary information of a
similar nature but in no event less than reasonable care. Each party
shall use such information solely for the purposes contained in this
Agreement, and shall make no other use of such information.
10.5 All Confidential Information disclosed hereunder is and shall
remain the property of the disclosing party. No right or license is
granted other than as expressly set forth in this Agreement. These
Section 10 obligations shall survive the expiration or termination of
this Agreement.
11. MCK LIABILITY AND INDEMNIFICATION.
11.1 MCK agrees to defend and indemnify VITAL, its officers, employees
and Affiliates from and against all claims, damages, liabilities,
awards, judgments and settlements against them of whatever nature for
damage to tangible personal property and bodily injury (including
death) arising out of or resulting from the authorized use of the
Product as provided to the Customer or VITAL by MCK in accordance with
the terms of this Agreement.
11.2 MCK, at its own expense, shall defend and indemnify VITAL and its
Affiliates against claims that the authorized repair, installation and
possession of a Product by VITAL in accordance with the terms of this
Agreement infringes a U.S. patent or copyright or misappropriates
trade secrets of a third party provided VITAL (i) gives MCK prompt
notice of such claim, (ii) gives MCK sole control of any defense and
settlement of such claims and (iii) provides any and all reasonably
required assistance requested by MCK at MCK's expense.
11.3 MCK's obligations under this Section 11 shall not extend to
liabilities of VITAL, VITAL officers, employees, or VITAL Affiliates
which are caused by VITAL's negligence or intentional misconduct in
performance of its obligations under this Agreement.
11.4 VITAL shall give MCK prompt notice of any suit or other
proceeding against VITAL for which VITAL may wish to seek
indemnification hereunder. In addition, the parties agree not to
settle or compromise any claim or cause of action, which may affect an
interest of the other party, without the prior written approval of the
other party, providing such approval shall not be unreasonably
withheld.
11.5 MCK shall have full control of the defense of any claim or cause
of action for which it is obligated to indemnify VITAL, and for all
negotiations for its settlement or compromise. VITAL shall reasonably
cooperate with MCK, at MCK's expense, in the defense of the action.
11.6 [***]
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
12
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11.7 IN NO EVENT SHALL MCK OR ANY MCK AFFILIATE BE LIABLE FOR ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOST PROFITS, OR LOST
DATA, OR ANY OTHER INDIRECT DAMAGES EVEN IF MCK HAS BEEN INFORMED OF
THE POSSIBILITY THEREOF OR WHETHER SUCH EXPENSES OR DAMAGES ARE
SUFFERED INTERNALLY BY VITAL OR ARE PAID BY VITAL TO A THIRD PARTY.
12. VITAL LIABILITY AND INDEMNIFICATION.
12.1 VITAL agrees to defend and indemnify MCK and its directors,
stockholders, officers and employees from and against all claims,
damages, liabilities, awards, judgments, and settlements against them
of whatever nature for damage to tangible property and bodily injury
(including death) arising out of VITAL's negligence, willful
misconduct or breach with respect to the performance of its or its
obligations under this Agreement.
12.2 IN NO EVENT SHALL VITAL OR ANY VITAL AFFILIATE BE LIABLE FOR ANY
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOST PROFITS, OR LOST
DATA, OR ANY OTHER INDIRECT DAMAGES EVEN IF VITAL HAS BEEN INFORMED OF
THE POSSIBILITY THEREOF OR WHETHER SUCH EXPENSES OR DAMAGES ARE
SUFFERED INTERNALLY BY MCK OR ARE PAID BY MCK TO A THIRD PARTY.
12.3 VITAL's obligations under this Section shall not extend to
liabilities of MCK and its officers and employees which arise out of
MCK's negligence or intentional misconduct or breach of third party
intellectual property rights in the design, manufacture, distribution,
installation or servicing of the Product.
12.4 MCK shall give VITAL prompt notice of any suit or other
proceeding instituted against MCK for which MCK may wish to seek
indemnification hereunder. The parties agree to cooperate in the
defense of any such action or proceeding. In addition, the parties
agree not to settle or compromise any claim or cause of action, which
may affect an interest of the other party, without the prior written
approval of the other party.
12.5 THE ENTIRE CUMULATIVE LIABILITY OF EITHER PARTY's EXCLUSIVE
REMEDY FOR DAMAGES FROM ANY CAUSE related to or arising out of this
Agreement, its making, performance or interpretation, including claims
of Customers related to performance of Services by VITAL, regardless
of the form of action, whether in contract or tort and including
negligence, shall not exceed the actual amount paid by MCK for
Services directly related to the specific claim, during the twelve
(12) month period immediately prior to MCK's written notice of a
claim.
12.6 Non-Solicitation. During the term of this Agreement and for one
(1) year thereafter, VITAL shall not, without the prior written
consent of MCK, directly or indirectly solicit, recruit, hire or use
the services of any MCK employee whose identity is learned hereunder
so long as such employee is employed by MCK and for sixty (60) days
thereafter. In the event of breach of this obligation VITAL shall
promptly pay to MCK, as liquidated damages and not as a penalty, an
amount equal to two (2) times such employee's total annual
compensation determined as of the date of the breach.
13. INSURANCE
13.1 VITAL shall maintain during the term of this Agreement at VITAL's
expense, commercial general liability insurance including Property
Damage insurance and
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Personal Injury insurance in such amounts and upon such terms which
are reasonably satisfactory to MCK and with MCK named as an additional
insured for purposes of this Agreement.
13.2. Workers Compensation: VITAL will maintain Workers Compensation
insurance to the statutory amount and Employer's Liability of at least
$1,000,000.
14. GENERAL
14.1 Assignments. Neither this Agreement nor any rights under this
Agreement, other than monies due or to become due, shall be assigned
or otherwise transferred by either party (by operation of law or
otherwise) without the prior written consent of the other party. This
Agreement may be transferred or otherwise assigned to any entity which
owns or acquires all or substantially all of the assets of either
party or to any Affiliate with the prior written approval of the other
party, which approval shall not be unreasonably withheld. This
Agreement shall bind and inure to the benefit of the successors and
permitted assigns of the parties.
14.2 Warranty.
14.2.1 VITAL shall not make any warranty commitment, whether
written or oral, on MCK' behalf.
14.2.2 VITAL warrants that the Services provided shall be
performed in a competent manner by qualified, trained maintenance
personnel and shall be free from defects in workmanship for
thirty (30) days following its provision.
14.3 Modifications. This Agreement may not be changed or modified in
any way subsequent to the first date of execution except by an
instrument in writing cosigned by authorized representatives of both
parties. No contract or agreement entered into after the Effective
Date shall amend by implication any provision of this Agreement.
14.4 Severability. If any provision of this Agreement is or becomes
illegal, invalid or void under any applicable state or federal law
under which performance hereunder is required, such provision shall be
considered severable, and the remaining provisions hereof shall not be
impaired, and this Agreement shall be interpreted as far as possible
so as to give effect to its stated purpose.
14.5 Defined Relationship. Other than the services agreed to in this
document, neither party is hereby designated nor appointed an agent to
the other and neither party shall have any authority, either express
or implied, to create or assume any agency or obligation on behalf of
or in the name of the other. The relationship of VITAL and MCK shall
be that of independent contractors and, except as expressly set forth
herein, neither party shall have any responsibility for or obligations
to the employees of the other.
14.6 Disclosure of Agreement. VITAL acknowledges and agrees that in no
event shall any of the information contained in this Agreement be
disclosed to anyone other than VITAL's employees with a need to know.
Neither party shall disclose, advertise, or publish the terms and
conditions of or transactions under this Agreement without the prior
written consent of the other party, which will not be unreasonably
withheld.
14.7 Trademarks. Neither VITAL or MCK will use each other's trademark
or trade name in any manner except as mutually agreed upon. Neither
VITAL or MCK have any right, title or interest in each other's
trademark or trade name. Both parties agree to allow
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the other party to use their name and logo on the other parties
respective web site upon such terms and conditions as the parties
hereto may agree upon.
14.8 Force Majeure. Neither party shall be deemed to be in default nor
be responsible for delays or failures in performance resulting from
acts beyond the reasonable control of such party. Such acts shall
include, but not be limited to, acts of God, strikes, lockouts, riots,
acts of war, epidemics, governmental action or inaction, trade
embargoes, fire, communication line failures, power failures,
earthquakes, or other disasters.
14.9 Notices. Any Notices required or authorized to be given shall be
deemed to have been given when received via certified or registered
first-class mail, postage prepaid, or via any other public or private
delivery service providing for written acknowledgment of receipt to
the address set forth on the signature page of this Agreement.
14.10 Waiver. No delay, failure or refusal on behalf of either party
to require or demand any performance or obligation hereunder, or to
exercise any right or remedy to which it may be or become entitled,
shall constitute or be deemed a waiver or relinquishment thereof, or
of any other right, demand or obligation, and shall not prejudice
either party's right to demand or insist upon any other prior or
subsequent performance or obligation hereunder.
14.11 Disputes and Governing Law. The rights and obligations of the
parties and all interpretations and performance of this Agreement
shall be governed in all respects by the laws of the Commonwealth of
Massachusetts except for its rules with respect to the conflict of
laws.
14.12 Paragraph Headings. Paragraph headings contained in this
Agreement are for ease of reference only and shall not affect the
interpretation or meaning of this Agreement.
14.13 Integration. This agreement, including the attached Exhibits,
and any amendments as may from time to time be agreed and integrated
is intended to be the sole and complete statement of the obligations
of the parties and supersedes any other negotiation, agreement or
understanding, whether written or oral, that may have been made or
entered into with regard to the subject matter hereof by MCK or VITAL
or by any officer or other representative of either party. This
Agreement and the performance of the parties pursuant to it shall not
affect any other Agreement between them which relates to matters
extraneous hereto.
14.14 Conflicts. In the event that any specific wording of this
Agreement shall conflict with any provision or wording of any printed
terms and conditions contained on Purchase Orders, acceptance forms,
procurement and functional specifications, the wording of this
Agreement shall prevail.
14.15 Survival. Sections 8, 10, 11 and 12, shall survive termination
of this Agreement.
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MCK COMMUNICATIONS, INC. VITAL NETWORK SERVICES, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
------------------------------ -------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
---------------------------- -------------------------------
Title: CEO Title: President
---------------------------- -------------------------------
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Address: ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Date: 6/28/99 Date: 6/29/99
---------------------------- -------------------------------
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APPENDIXES
Appendix A: MCK Product List (Accelerated to provide Hard/Soft version)
Appendix B: VITAL Payment Schedule/Minimum Commitments (provided in prior
e-mail)
Appendix C: MCK Escalation/Priority Schedule- TBD
Appendix D: MCK Support Services - TBD
Appendix F: VITAL Installation & Maintenance Service Descriptions
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APPENDIX A: MCK PRODUCT LIST
SWITCH UNIT REMOTE UNIT
Branch Office EXTender 6000 E-6000-SLM08 E-6000-RLM08
(Definity Compatible)
Branch Office EXTender 6000 E-6000-SNM08 E-6000-RNM08
(Meridian/Norstar Compatible)
Branch Office EXTender 6000 E-6000-SEM08 E-6000-REM08
(Neax Compatible)
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[VITAL NETWORK LOGO]
APPENDIX B - REVENUE SPLITS & PRICING SCHEDULE
NOTE: VITAL NETWORK SERVICES CHARGES MCK THE PERCENTAGE OF END-USER LIST PRICE
OR FLAT RATE AS INDICATED.
--------------------------------------------------------------------------------------------------------------------------
TOLL FREE/ HELP DESK CHARGE TO MCK
--------------------------------------------------------------------------------------------------------------------------
I. 8 X 5 HELP DESK [***] (annual)
24 X 7 HELP DESK [***] (annual)
(OPTIONAL - DOES NOT INCLUDE COST OF LINE)
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
SECTION SERVICE DESCRIPTION CHARGE TO MCK
--------------------------------------------------------------------------------------------------------------------------
I. LOGISTICS MANAGEMENT
NON MAINTENANCE CUSTOMERS
PRICE PER STOCKING LOCATION [***]
--------------------------------------------------------------------------------------------------------------------------
SECTION SERVICE DESCRIPTION END USER PRICE MCK VITAL
(% OF PRODUCT LIST)
--------------------------------------------------------------------------------------------------------------------------
II. HARDWARE INSTALLATION SERVICES
(PRICING REFLECTS ZONE A & B ONLY)
BUSINESS DAY (1ST UNIT) TBD [***] [***]
ADDITIONAL UNITS* ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇ ▇▇▇▇) ▇▇▇
ADDITIONAL UNITS* TBD
SITE SURVEY **(PER REQUEST)
*ADDITIONAL UNIT PRICING APPLIES IF
INSTALLED AT THE SAME SITE. MINIMUM
INSTALLATION CHARGE IN $[***].
**FEE IS WAIVED IF INSTALLATION IS [***]
PURCHASED AT TIME OF SITE SURVEY REQUEST
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
III. SOFTWARE INSTALLATION (ON-SITE) SERVICES
LOAD S/W, CONFIGURE & TEST
BUSINESS DAY [***] [***] [***]
NON BUSINESS DAY [***] [***] [***]
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
IV. REMOTE SERVICES
TS/SOFTWARERELEASE (NO LABOR) /ADVANCED [***] [***] [***]
REPLACEMENT
--------------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------------
V. MAINTENANCE SERVICES
(PRICING REFLECT ZONE A & B ONLY)
BASIC 8 X 5 (M-F) [***] [***] [***]
PREMIUM 7 X 24 (PENDING AVAIL)
ALL MAINTENANCE SERVICES LISTED ABOVE CARRY [***]
FOUR (4) HOUR RESPONSE FROM ZONE A
LOCATIONS TO THE END-USER, LOGISTICS
MANAGEMENT INCLUDED.
MCK IS RESPONSIBLE FOR CONSIGNMENT OF
SPARING.
--------------------------------------------------------------------------------------------------------------------------
SECTION SERVICE DESCRIPTION END USER MCK VITAL
--------------------------------------------------------------------------------------------------------------------------
19
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
20
--------------------------------------------------------------------------------------------------------------------------
VI. DEDICATED FIELD ENGINEER
ONE (1) YEAR (40 HOURS PER WEEK)* [***] [***] [***]
*PRICE BASED ON LEVEL OF ENGINEER REQUIRED
--------------------------------------------------------------------------------------------------------------------------
ZONES TO END USER TO END USER
--------------------------------------------------------------------------------------------------------------------------
VII. TIME AND MATERIAL SERVICES (TO END USER) TRAVEL (FIXED LABOR(PER HOUR)
(CONTRACT CUSTOMERS OUTSIDE SCOPE OF RATE)
CONTRACT)
ZONE A [***]
ZONE B [***]
BUSINESS DAY* ZONE C [***]
[***]
ZONE A [***]
ZONE B [***]
NON BUSINESS DAY ZONE C [***]
[***]
[***]
HOLIDAYS & WEEKENDS
[***]
NON- CONTRACT CUSTOMER RATES
ZONE A [***]
ZONE B [***]
BUSINESS DAY ZONE C [***]
[***]
ZONE A [***]
ZONE B [***]
NON BUSINESS DAY ZONE C [***]
[***]
HOLIDAYS & WEEKENDS [***]
ZONE A = 50 MILE RADIUS OF VITAL SERVICE
CENTER
ZONE B=51-100 MILE RADIUS OF VITAL SERVICE
CENTER
ZONE C=100+ RADIUS OF VITAL SERVICE CENTER
*ALL TYPE CALLS CARRY A [***]
MINIMUM EXCEPT WHERE SPECIFIED
--------------------------------------------------------------------------------------------------------------------------
DISCOUNT TO MCK LIST PRICES NOTE:
--------------------------------------------------------------------------------------------------------------------------
VIII. BLOCK OF HOURS (TO MCK)
- TIME & MATERIAL [***] [***] [***]
- PROJECT MANAGEMENT [***] [***]
- PROFESSIONAL SERVICES [***]
- CUSTOMER SERVICE [***] [***]
- OTHER [***]
--------------------------------------------------------------------------------------------------------------------------
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
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--------------------------------------------------------------------------------------------------------------------------
END USER MCK VITAL
--------------------------------------------------------------------------------------------------------------------------
IX. PROFESSIONAL SERVICES/ PROJECT MANAGEMENT CUSTOM QUOTE REQUIRED [***] [***]
--------------------------------------------------------------------------------------------------------------------------
[***] Confidential treatment has been requested for the bracketed portions.
The confidential redacted portion has been omitted and filed separately
with the Securities and Exchange Commission.
21
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--------------------------------------------------------------------------------------------------------------------------
SECTION SERVICE DESCRIPTION MCK CHARGE TO MCK
--------------------------------------------------------------------------------------------------------------------------
X. TECHNOLOGY TRAINING
TRAIN THE TRAINER (PROVIDED BY MCK) [***] [***]
INITIAL CONSULTATION/COURSE INVESTIGATION -----------------> [***]
COURSE DEVELOPMENT* -----------------> [***]
COURSE OFFERING IN NAUGATUCK#
-----------------> [***]
COURSE OFFERING ON CUSTOMER OR MCK PREMISES* [***]
----------------->
*TRAVEL & EXPENSES, SHIPPING WILL BE CHARGED AT ACTUAL
COSTS. SET UP WILL BE BILLED AT [***]
#DEPENDENT ON SUBJECT- PLAN FOR 3-5 DAY COURSE OFFERINGS.
MINIMUM REQUIREMENT, (4) STUDENTS PER CLASS.
(1) BUDGETARY ONLY-EACH PROJECT TO BE REVIEWED ON MERIT.
--------------------------------------------------------------------------------------------------------------------------
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.
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VITAL NETWORK SERVICES / MCK
START UP FEES, CONDITIONS & PAYMENT SCHEDULES
Contract Commencement is JULY 1, 1999. The initial contract term is TWENTY-FOUR
(24) MONTHS.
PAYMENT SCHEDULE (1999-2001)
--------------------------------------------------------------------------------------------------------------------------
YEAR 1 YEAR 2
(PAYMENT IS QUARTERLY IN ARREARS) (PAYMENT IS QUARTERLY FOR ACTUAL SERVICES RENDERED)
--------------------------------------------------------------------------------------------------------------------------
QTR 1 July, Aug, SEPT 1999 [***] QTR 1
--------------------------------------------------------------------------------------------------------------------------
QTR 2 Oct, Nov, DEC 1999 [***] QTR 2
--------------------------------------------------------------------------------------------------------------------------
QTR 3 Jan, Feb, MAR 2000 [***] QTR 3
--------------------------------------------------------------------------------------------------------------------------
QTR 4 Apr, May, JUN 2000 [***] QTR 4
--------------------------------------------------------------------------------------------------------------------------
July 2000- June 2001
--------------------------------------------------------------------------------------------------------------------------
Total [***] 12 Month Target [***]
--------------------------------------------------------------------------------------------------------------------------
CONDITIONS:
1. MCK MINIMUM COMMITMENT TO VITAL NETWORK SERVICES IS [***] IN YEAR 1 AND
[***] IN YEAR 2.
2. PRICING WILL BE REVIEWED EVERY [***] AND IS SUBJECT TO CHANGE UPON
MUTUAL AGREEMENT.
3. IF ACTUAL REVENUE EXCEEDS QUARTERLY TARGETS IN YEAR 1, THE NEXT QUARTERS
INVOICE WILL BE ADJUSTED ACCORDINGLY. THE GOAL FOR THE FIRST TWELVE (12)
MONTH PERIOD IS TO EQUAL OR EXCEED [***]. IN YEAR 2, PAYMENT WILL BE
QUARTERLY IN ARREARS FOR ACTUAL SERVICES RENDERED. IF THERE IS A SHORTFALL
OF THE TWELVE (12) MONTH TARGET, THE FINAL BILLING WILL INCLUDE THE
SHORTFALL AMOUNT.
4. REVENUE MINIMUM'S ONLY APPLY TOWARDS SERVICES HIGHLIGHTED IN SECTIONS I
(A&B), II, III, IV, VIII AND IX ONLY.
5. IF REVENUE MEETS OR EXCEEDS THE TOTAL TWENTY-FOUR (24) MONTH COMMITMENT OF
[***] ANYTIME DURING THE CONTRACT TERM, MCK HAS MET THEIR REVENUE MINIMUMS
TO VITAL NETWORK SERVICES.
[***] Confidential treatment has been requested for the bracketed portions. The
confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission.
23