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EXHIBIT 10.5
RESELLER/INTEGRATION AGREEMENT
This Agreement is entered into as of August 29,1997 ("Effective
Date") by and between Visual Networks, Inc. with offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Systems Provider") and MCI Telecommunication Corporation
with offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("MCI").
Whereas, Systems Provider is in the business of providing information
technology Products to its customers and MCI is in the business of, among other
things, providing systems integration, network management, technology
deployment, and outsourcing Services to its clients;
Whereas, both parties desire to profitably expand their business;
Whereas, MCI desires to propose, bid and deliver Systems Provider's
information technology Products, when it deems appropriate, as part of its
integrated business solutions or to purchase such Products for its own use.
Now, therefore, in consideration of the premises and mutual agreements
contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 The term "Agreement" includes these Terms and Conditions; all
specifications, drawings, documents and addendum made a part of this Agreement,
or incorporated herein by reference; and any amendments to this Agreement.
1.2 The term "Affiliates" of MCI as hereinafter defined may elect to
purchase Products from Systems Provider under this Agreement by such Affiliate
issuing its own purchase order to Systems Provider. As used herein,
"Affiliate" of a named party or other entity shall mean a corporation,
partnership, joint venture or other entity controlling, controlled by or under
common control with such party or other entity. The dollar value of purchases
by Affiliates shall be included in the aggregate volume of Product purchases.
The Affiliate will have primary responsibility for charges incurred in
connection with such purchase order. A list of participating Affiliates as set
forth in Exhibit "C" will be provided by MCI to Systems Provider upon the
signing of this Agreement, and will be updated whenever a change is made. Any
Affiliate included on the list shall be deemed to have agreed in writing to be
bound by all the terms and conditions of the Agreement before Systems Provider
can accept any order(s) from an approved Affiliate under this Agreement. An
Affiliate shall be separately and legally bound by the terms and conditions of
this Agreement, and shall not in any way bind MCI.
1.3 The term "ASE" means Analysis Service Element.
1.4 The term "CPE" means Customer Premise Equipment.
1.5 The term "Delivery" means the receipt of the Product pursuant to the
terms and conditions of this Agreement by Systems Provider at the MCI
designated site, at the time(s) and place(s) specified in the Article of this
Agreement entitled "Delivery".
1.6 The term "DATANOC" shall mean Data Network Operation Center.
1.7 The term "Integrated Business Solutions" shall mean computing and
telecommunications systems installed by MCI consisting of some or all of
hardware and software Products manufactured by Systems Provider and/or other
suppliers, and associated project management, systems design, application
development, systems integration, network management, data center management,
systems support and/or maintenance Services.
1.8 The term "MSNOC" shall mean the Managed Service Network Operations
Center.
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1.9 "Net Revenues" shall mean revenues accruing to a customer of MCI from
sale or licensing of Products, excluding maintenance, consulting fees, and
rebates, and after any discounts on Products.
1.10 The term "Non-Standard Product" shall mean all Products as referenced
in Exhibit B, except for "Standard Products" as defined in article 1.18.
1.11 The term "▇▇▇" shall mean Performance Archive Manager.
1.12 The term "Patent" means patents for inventions and similar forms of
statutory protection, domestic or foreign, such as utility models and
registered designs.
1.13 The term "Products" are all Products and maintenance Services
described in Exhibits A and B, and the related documentation, including updates
and modifications thereto as may be made generally available by Systems
Provider to its customers during the term hereof.
1.14 The term "Purchase Order" shall mean the standard purchase order form
as utilized from time to time by MCI, or an MCI Affiliate, as applicable, which
has been properly signed by a representative of the procurement function of the
purchasing entity authorized to execute such purchase order on behalf of the
entity and shall include all exhibits and attachments incorporated as part of
the purchase order. The term "Purchase Order" shall further include change
orders thereto and delivery orders.
1.15 The term "SDAR" shall mean the Strategic Data Account Representative.
1.16 The term "Services" shall mean the associate maintenance and warranty
services to be provided in support of any hardware and software Products
purchased under this Agreement
1.17 The term "Software" shall mean the Software Products and related
documentation, and any and all updates, modifications and enhancements thereto
furnished by Systems Provider.
1.18 The term "Standard Product" shall mean a csu/dsu, which includes an
ethernet interface as described in the attached Products, and Services exhibit.
1.19 The term "Territory" means the territories of North America, the
United States, and Canada.
1.20 The term "Work" shall mean the services that will be delivered by
Systems Provider or its sub-contractors.
1.21 The term "VTAC" shall mean Visual Technical Assistance Center.
2. ORGANIZATION
2.1 Each party shall appoint a Relationship Director and Technology
Expert. The Relationship Director and Technology Expert may be changed from
time to time at the appointing party's discretion. As of the Effective Date of
this Agreement, Systems Provider' Relationship Director is ▇▇▇▇▇ Stockton_and
MCI's Relationship Director is ▇▇▇▇▇ ▇▇▇▇▇. As of the Effective Date of this
Agreement, MCI's Technology Expert shall be determined sixty days (60) after
the execution date of this Agreement. Systems Provider's Technology Expert is
▇▇▇▇▇ ▇▇▇▇.
2.2 Subject to appropriate security provisions and restrictions on use for
solicitation, in order to facilitate communication each Relationship Director
and Technology Expert shall provide their Internet address and allow to be
publicized within the other party.
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3. MARKETING AND SALES EFFORTS
3.1 Subject to client confidentiality considerations, each party may
identify prospects for the sale of the other party's Products and Services.
Upon notification by one party to the other of such an opportunity and the
provision of information adequate to assess such opportunity, the other will
use all commercially reasonable efforts to respond within five business days
regarding its intent. Any such opportunities will be considered the disclosing
party's confidential information. A standard teaming agreement to be developed
may be used on such opportunities if the requirements for Systems Provider's
pre-sales support go beyond that normally provided under this Agreement per
Section 7.1.
3.2 Each party shall develop standard descriptions of itself and of its
Products and Services for inclusion in the other party's sales material as
deemed appropriate by the other party, including responses to Request For
Information (RFI's) and Request For Proposal (RFP's).
3.3 MCI and Systems Provider will work to develop a marketing plan within
sixty (60) days from the execution of this Agreement which will include
announcements, press releases, training program efforts for internal MCI
technical consultants and SDAR's, and branch rollouts to include technical
consultant's and SDAR's and sales personnel
3.4 Upon execution of the Agreement, ***cities will be selected and
mutually agreed upon by both parties to serve as the initial Product launch
cities, with a mutually agreed upon press release to be issued thereafter by
both parties. The Product rollout will be predicated on the acceptance of
System Providers products within the CPE catalogue. System's Provider will
establish a fund to support all related expenses incurred by MCI up to ***
related to the initial Product launch and associated roadshow. These will
include, but will not be limited to, expenses incurred for travel and marketing
accommodations while traveling in support of the marketing of System Providers
Products.
3.5 Systems Provider will establish a mutually agreed upon pool of funds
for MCI to support marketing activities in support of System Providers Products
3.6 Systems Provider, at its expense, will provide funding for the testing
of Systems Providers Products within the MCI Labs at a not to exceed amount of
*** per Product.
4. INFORMATION EXCHANGE
4.1 Systems Provider will regularly inform MCI, with the coordination of
MCI's Technology Expert, of Systems Provider's product direction and will
solicit MCI's views on the appropriateness of that direction. Any direction
taken by Systems Provider based upon such direction shall be entirely at
Systems Provider's discretion. Such a preview will be provided not less than
twice each year.
4.2 Systems Provider may provide, at its discretion, MCI's Technology
Expert with Systems Provider's evaluations of products competitive to Products
including benchmarks. Unless express written permission is granted, MCI will
not copy such evaluations nor permit the evaluations to be distributed or
circulated within or external to MCI.
4.3 Subject to client ownership and/or confidentiality requirements, MCI
will use reasonable efforts to keep Systems Provider informed as to problems
encountered and resolutions developed and to communicate to Systems Provider
any and all material modifications, design changes or improvements to the
Products suggested by any customer, or any employee or agent of MCI. Systems
Provider's may use all such information without obligation of
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Securities and Exchange Commission.
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any nature to MCI. Systems Providers use of such information shall be at its
own risk. Not withstanding the foregoing, MCI may from time to time, develop
tools, including software, that are complementary to Products; such tools
shall, as between Systems Provider and MCI, remain the exclusive property of
and in the sole possession of MCI.
4.4 Systems Provider will provide telephone support to counsel and advise
MCI's Technology Expert on the use and maintenance of the Products at no charge
to MCI. MCI's Technology Expert will act as the contact with Systems Provider
for purposes of coordination and provision of support under this Agreement.
All requests for support shall be made through the Technology Expert.
4.5 Systems Provider will give MCI's Technology Expert access at no charge
(except for network charges, which shall be the responsibility of MCI) to
Systems Provider's bulletin board of Products' defects and fixes when this is
available. This access will be at least equivalent to that given to Systems
Provider's field engineering force. MCI may provide such fixes to its clients
where the clients have current maintenance agreements with Systems Provider.
4.6 Systems Provider shall provide MCI with one copy of the then current
generally available technical documentation for the Products. MCI shall have
the right to copy such documentation for internal use only. When requested by
MCI, Systems Provider shall provide *** copy of its documentation in
electronic form for internal use by MCI on MCI's internal electronic bulletin
board at *** to MCI; MCI may make such copies as it requires for such purpose
at no charge.
4.7 The Relationship Director of each party shall broadly distribute
within their company an announcement of the intent and features of this
Agreement. This announcement will be made within two (2) months of the
Effective Date of this Agreement.
5. TRAINING
5.1 MCI's Relationship Director or assignee may receive the same technical
training received by Systems Provider's field sales force at no cost to MCI
other than the transportation and living costs associated with the attendance
of MCI personnel at such training.
5.2 Systems Provider will provide at *** to MCI, *** full days of training
to MCI's DATANOC and MSNOC located in Cary, North Carolina. This will include,
but is not limited to *** days of operations training to MCI's DATANOC and
MSNOC and *** days of training on the PAMS and System Providers Software to
three (3) representatives of the DATANOC and MSNOC. This will also include ***
days of follow-up training at a date to be mutually agreed upon by both
parties. Systems Provider will also include *** days of training that will be
specifically developed for the needs of either the DATANOC or the MSNOC..
5.3 Systems Provider will provide, at ***, *** days of training for
representatives of MCI's SDAR organization. This will consist of pre-sales
training and will be provided at a location specified by MCI. If requested by
MCI, Systems Provider will split the training into a one-(1) day session at
field locations agreed to by both Systems Provider and MCI.
5.4 Systems Provider agrees to provide *** days of training to the Network
Services Organization. This training will consist of an overview of the ASE
units and installation procedures.
5.5 Systems Provider's self-study material on the Products, if any, shall
be made available to MCI personnel within a reasonable period of time. Request
from MCI personnel for use of such material shall be channeled
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through MCI's Relationship Director.
5.6 If Systems Provider certifies personnel in the use of its Products,
Systems Provider shall permit MCI personnel to take tests for such
certification at no charge to MCI, other than travel, to the testing locations.
The opportunity to take such tests shall not be contingent upon the completion
of Systems Provider courses.
6. APPOINTMENT OF RESELLER STATUS
6.1 During the term of the Agreement, MCI shall have a non-exclusive
right to resell the Products and Services in the Territory specified in this
agreement. Systems Provider hereby appoints MCI a non-exclusive reseller of
Systems Provider Products directly to end users within the specified Territory,
and MCI hereby accepts such appointment. MCI understands that it will be
deemed a material breach of this Agreement should Systems Provider discover
that MCI has resold Products outside of the Territory and that Systems Provider
may terminate the Agreement in accordance with Section 18 of this Agreement.
6.2 Systems Provider shall represent that MCI is qualified to use Systems
Provider's Products in the development of Integrated Business Solutions. Such
representation may not be exclusive and shall not constitute a warranty of
MCI's performance.
7. PRE AND POST SALES SUPPORT
7.1 MCI shall provide pre and post-sales support to its customers
regarding all aspects of the Products available through this Agreement.
7.2 MCI's Technology Expert or other MCI qualified personnel for the
Products shall provide pre-sales and technical support to MCI personnel
regarding all aspects of the Products available through this Agreement.
7.3 Systems Provider shall provide support to MCI's post-sales support
team if the post-sales support team, in working with a customer, diagnoses a
problem with the Products.
7.4 Upon receipt of an order for *** sites or more, MCI's Technology
Expert and pre and post-sales support personnel may gain the assistance of the
Systems Provider technical assistance center (VTAC) by telephone for six months
following thereafter. VTAC personnel will participate with MCI in delivering
technical assistance. After six months MCI support personnel will be
self-sufficient in providing pre and post-sales support.
7.5 No more than *** MCI project interface personnel, including MCI's
Technology Expert, may be authorized to request assistance from the VTAC. MCI
will provide Systems Provider with a written list of those persons who are
authorized to contact the VTAC on behalf of MCI. MCI may make substitutions to
the list at any time by communicating this in writing to Systems Provider.
7.6 Systems Provider will provide proposal support to MCI by supplying
appropriate boilerplate material and telephone support to answer technical
questions. MCI shall identify a point of contact that acts as the focal point
for Systems Provider proposal material in support of MCI proposal teams.
7.7 MCI is responsible for delivering software upgrades to its customers.
Systems Provider will provide to MCI at no additional cost, a "master" copy of
the latest Software release. It is MCI's responsibility to replicate this
Software and distribute to its customers. MCI may provide a customer address
list and have Systems Provider perform this service for an agreed upon charge
as referenced in Exhibit B of this Agreement.
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Securities and Exchange Commission.
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7.8 At its discretion, MCI may assist its clients in arranging for Systems
Provider or third parties to provide post-sales technical support services for
Products sold to its customers. Such services may include system
certification, installation, maintenance and training. Nothing herein shall be
construed as precluding MCI from providing services of any nature to its
clients, including, without limitation, services regarding the Products.
7.9 Systems Provider shall provide maintenance Services for the Products
as set forth on Exhibit A, attached hereto and incorporated herein.
8. PRODUCT LOANS
8.1 Systems Provider will provide up to *** demonstration sets, consisting
of *** ASE's and the applicable Software, along with upgrades to those Products
to selected MCI operating locations, including MCI's Technology Competence
Centers, for MCI's use in developing client prototypes of Integrated Business
Solutions, at either MCI or client sites at *** to MCI. As Systems Provider
provides the above demonstration sets to MCI, MCI will provide the necessary pc
hardware in conjunction with these samples. Subject to client-confidentiality
considerations, MCI will discuss with Systems Provider the nature of the
business opportunity and the revenue potential, if any, for Systems Provider.
The parties shall execute a mutually agreeable loan agreement. At Systems
Provider's request, MCI shall be responsible for distributing the loaned
Products to the MCI operating locations and for duplicating any software to be
distributed.
8.2 MCI may use the loaned Products for comparative analyses with other
products, but not in conjunction with or on behalf of a provider of products
competitive to System Providers Products. At Systems Provider's request, MCI
shall allow Systems Provider to review and comment upon any such comparative
analyses that are intended for general publication outside of MCI in either
print or other durable formats.
8.3 MCI will be given the opportunity to act as a beta site for selected
Systems Provider's Products. A mutually agreeable Beta Site agreement will be
separately signed for each such Product.
8.4 Systems Provider may from time to time develop software, videotapes,
presentation scripts, and other materials to demonstrate the features and
functions of the Products. Systems Provider shall provide such materials to
MCI upon request for use by MCI in training or in the sales and marketing of
Integrated Business Solutions.
8.5 Systems Provider may, from time to time, develop application software
to assist its field sales and engineering personnel in the modeling,
configuration and testing of Products. Such software may be operated on
workstations or accessed remotely while running on a mainframe or
mini-computer. Systems Provider shall make such software available for use by
appropriately trained MCI personnel at no charge.
9. PRODUCTS AND PRICE
9.1 MCI may purchase the Products at the prices and discounts set forth on
Exhibit "B", attached hereto and incorporated herein.
9.2 When requested by MCI, Systems Provider shall provide a quote for the
Products to be included in a proposed Integrated Business Solution. Such quote
shall be valid for the mutually agreed period of the proposal and shall only be
withdrawn if the project is awarded to someone other than MCI or the project is
cancelled.
9.3 MCI will supply Products directly to end-users or to MCI's prime
contractor if MCI is a subcontractor. MCI will not sell Products to any
customer for the purpose of further resale by such customer unless such
customer is MCI's prime contractor for the development of an Integrated
Business Solution. The price charged by MCI to any customer for the Products
shall be solely within the discretion of MCI.
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9.4 The prices and discounts referenced in Section 9.1 shall also apply to
purchases for internal use by MCI. Support required from Systems Provider for
internal purchases, including post-sales technical support, shall be provided
at Systems Provider's then prevailing rates.
9.5 The prices and discounts referenced in section 9.1 shall also apply to
purchases by MCI for use under MCI's outsourcing contracts. Characteristically
MCI, and not the end-user, would be the licensees or owners of the Products.
For the purposes of this Agreement the outsourcing transactions will be treated
as similar to sales and delivery of Integrated Business Solutions for
end-users.
9.6 Unless otherwise agreed, all prices quoted are payable in U.S. funds
and shall be exclusive of taxes (including without limitation any added value,
use, sales, or similar tax). Unless MCI has provided an approved tax exemption
certificate proving exception status, MCI shall pay any and all such taxes and
shall hold Systems Provider harmless therefrom, provided that if Systems
Provider at its sole discretion, chooses to make any such payment, MCI shall
reimburse Systems Provider in full. All transactions pursuant to this
Agreement shall be considered taxable unless MCI provides Systems Provider with
appropriate verification of exemption as stated herein in this Article. All
prices quoted shall likewise be exclusive of any import duties imposed by the
country of final destination upon shipments from Systems Provider to MCI.
9.7 Systems Provider represents and warrants that the prices set forth in
Exhibit B shall be no higher than the current Systems Provider price to any
other customer for the same quantity of Products purchased over a similar
period of time and under like conditions. Systems Provider further agrees that
in the event prices for the same quantity for such Products under like
conditions are lowered, Systems Provider shall notify MCI in writing of the new
prices and Exhibit B shall be adjusted by written amendment.
9.8. Systems Provider may sell to MCI at prices lower than those cited
herein on a case-by-case basis, and such sales shall not have the effect of
lowering the prices generally offered under this Agreement. Systems Provider
shall notify MCI in writing and the prices for special cases shall be adjusted
by written amendment to this Agreement.
9.9 Each party shall prepare and maintain, at its expense, complete and
accurate books and records documenting financial transactions. Under this
Agreement such books and records shall be maintained for a period of three (3)
years after the date of termination or expiration of this agreement.
9.10 During the initial term and any subsequent renewal periods, and for a
period of *** years after the termination or expiration of this Agreement, each
party shall have the right, at its expense and upon reasonable notice to the
other party, to examine or have examined by its authorized representatives the
Purchase Orders, Packing Slips, and Invoices on record as related to this
Agreement.
10. PAYMENT TERMS AND CONDITIONS OF SALE
10.1 All orders by MCI require a written Purchase Order or similar
documentation and are subject to acceptance and acknowledgment by Systems
Provider. Systems Provider acknowledges that any Purchase Orders received from
MCI shall be null and void unless issued by an MCI Procurement Department
representative. During the term of this Agreement, except where such
provisions are expressly agreed to, the terms and conditions of this Agreement
shall supersede all different or conflicting terms on MCI's Purchase Orders or
on Systems Provider's order acknowledgment forms. Systems Provider will
provide MCI with notice of acceptance or rejection of purchase order within ***
business days of receipt of the purchase order by Systems Provider. At the time
of acceptance of the order Systems Provider shall also accept MCI's requested
delivery date where the date complies with the delivery schedule commitments
described in section 12.1 of this Agreement, or propose a different delivery
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date to MCI; if Systems Provider proposes a different delivery date, the
parties shall agree on the delivery date before the order is deemed accepted.
If no notice of rejection is received within *** business days then the
Purchase Order will be deemed accepted.
10.2 Each Purchase Order shall specify the Services and/or Products to be
delivered, and/or will include quantity, price, delivery date, destination, and
other pertinent details. All Products shipped by Systems Provider to the site
designated by MCI on the applicable Purchase Order will be F.O.B destination
with shipping pre-paid by Supplier and added to the invoice. Title and risk of
loss will transfer once Products have reached its designated destination
10.3 Systems Provider shall comply with MCI bar coding requirements, which
include the following documents:
MCI Telecommunications Corporation bar code label
specification equipment labels, issue 4, dated November
15, 1991
MCI requirements for bar code labeling of shipping containers
and product packaging, dated November 15, 1991
TCIG shipping and receiving transaction bar code label
specification, issue 2, dated December 5, 1989.
Details of these guidelines will be provided to Systems Provider by MCI at a
later date.
10.4 In the event of any conflict as to the terms and conditions between
the pre-printed terms of the Purchase Order and this Agreement, this Agreement
shall take precedence.
10.5 Terms of payment are *** discount for payment within *** days of the
Product delivery date, otherwise payment in full within *** days after the
Product delivery date. In no event shall MCI be required to submit payment for
any Products prior to delivery and acceptance of the same. On the anniversary
date of the Agreement, both parties will review and evaluate the above
mentioned payment terms, and if necessary shall adjust accordingly and upon
mutual agreement between both parties.
10.6 Delivery will be F.O.B. Destination. Systems Provider shall ship the
ordered Products to such locations as MCI shall indicate on its ordering
documentation. Unless specifically authorized by MCI, Systems Provider shall
not ship partial orders to MCI. MCI will be responsible for the payment of all
shipping charges as referenced on the final invoice unless mutually agreed to
otherwise by both parties. All shipments will be made Federal Express, two-day
air using the MCI corporate Federal Express number, once it is supplied to
Systems Provider for this purpose.
10.7 MCI has a period of thirty (30) days after receipt of the Product
within which to notify Systems Provider in writing of any discrepancies between
the Products shipped and the applicable Purchase Order. No payment will be due
to Systems Provider by MCI until such discrepancies are resolved to the
satisfaction of both parties.
10.8 Shipments of Products scheduled under this Agreement may be deferred
or cancelled by MCI upon written notice to Systems Provider. In the event MCI
requests cancellation of any order for Standard Products within *** days of a
scheduled shipment date and Systems Provider accepts such cancellation, MCI
will pay to Systems Provider a cancellation charge as follows:
No. of Days Written
Notice Received Prior to Percentage of Order
Scheduled Shipment Date Price Due
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*** or more days: ***%
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*** days: ***%
*** days: ***%
11. PRICE CHANGES
11.1 All Products whose price has been "increased or decreased" will be
"price protected" under this paragraph if the following conditions are met:
11.1.1 Products are in MCI's stock or are in transit on the
effective date of the price decrease, are unopened and were
shipped to MCI *** days prior to the effective date of price
decrease.
11.1.2 1 Products are in MCI's stock or are in transit on
the effective date of the price increase, are unopened and
were shipped to MCI *** days prior to the effective date of
price increase
12. DELIVERY AND EXPORT
12.1 If Purchase Orders are received specifying shipment dates of less than
*** days on Standard Product, up to *** units per Purchase Order, and *** days
on Non-Standard Products, up to *** units per Purchase Order, Systems Provider
will use best efforts to meet such dates and may apply an expedite charge to
Purchase Orders requiring fulfillment in less than *** business days. Except as
provided above, if Systems Provider deliveries fail to meet the committed
schedule, MCI, without limiting its other rights or remedies as specified
herein, may reserve the right to reschedule the delivery of the Products,
direct expedited routing with Systems Provider paying for any excess costs
incurred thereby, or cancel the order in its entirety. MCI shall not be liable
for Systems Provider commitments or production arrangements in excess of the
amount, or in advance of the time, necessary to meet MCI's delivery schedule.
Products which Systems Provider delivers more than *** days in advance of
schedule may, at MCI's option, either (a) be returned at Systems Provider
expense for proper delivery, (b) have payment therefore, withheld by MCI until
the date that Products are actually scheduled for delivery or (c) be placed in
storage on Systems Provider account until the delivery date specified herein.
MCI may delay, at no cost to MCI, the delivery and invoicing of Products or
Services for a period of up to *** days; provided, however, that MCI notifies
Systems Provider at least *** days prior to the scheduled delivery date.
Delay(s) beyond *** days shall be deemed a change in accordance with the
Article of this Agreement entitled "Changes".
12.2 Systems Provider shall convey good title, free from any claim or
encumbrance, to MCI for all Products delivered under this Agreement. Title to
all such Products shall pass to MCI at the shipping point. Any loss or damage
to such items prior to passing of title shall be at Systems Provider risk.
12.3 MCI shall not export to or use Products in any country if (a) the
export of any such Product to such country is prohibited by the laws of the
United States; or (b) the import of any such Product into such country is
prohibited by the laws of such country; (c) MCI does not possess the proper
import certificate(s) required by the laws of such country for the lawful
importation of any such Product; or (d) if Systems Provider has previously
notified MCI that export of any such Product to such country is prohibited by
restrictions contained in contracts between Systems Provider and any Systems
Provider authorized reseller located in any such country.
12.4 After receipt of Products at the designated site as referenced on the
MCI Purchase Order, MCI shall promptly inspect the Products received. Within
ten (10) days days after such inspection, MCI shall notify Systems Provider in
writing of those damaged items or the incomplete shipment of the Products,
which could include but is not limited to, cables, power supplies,
documentation, and software. Remedy of damaged items or incomplete shipments
shall be made within twenty (20) days by Systems Provider at its expense, which
shall include all related costs for repair or replacement of the rejected
item(s) in accordance with Article 14, WARRANTIES AND
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INDEMNIFICATIONS, and all applicable shipping charges.
12.5 If Systems Provider fails to remedy any such damaged item(s), MCI may
elect either (i )to have any or all such damaged item(s) remedied through other
means as stated in Article 14.3, in which event Systems Provider shall pay the
reasonable costs of so remedying such damaged item(s).
13. REPORTS & AUDITS
13.1 Each quarter & year MCI shall provide Systems Provider a forecast of
its total dollar purchases from Systems Provider, including purchases for
internal use by MCI and by MCI's customer's. Forecasts shall be submitted to
Systems Provider's Relationship Director. Forecasts are non-binding and are
for planning purposes only.
13.2 Systems Provider shall submit monthly, a detailed report of all
purchases under this Agreement. Report shall include, but will not be limited
to, equipment purchased by Product and the associated stocking number,
cancellations, Purchase Order number, price invoiced, and delivery date.
Report is due to MCI within 15 days of reporting month and shall be in
Microsoft Excel format; version 6.0.
14. WARRANTIES AND INDEMNIFICATIONS
14.1 Systems Provider warrants that MCI end users shall acquire good title
to the hardware Products purchased under the terms of this Agreement free and
clear of all liens and encumbrances and that all hardware Products provided
hereunder with the exception of third party equipment, will be free from
defects in material and workmanship for a period of five (5) years under normal
operating conditions from the date of delivery to the end user. This warranty
will apply to all repaired or replaced Products for the unexpired period of the
original warranty or for ninety (90) days following delivery of the Product to
end user, whichever is longer. Systems Provider understands Products are
intended for standard commercial uses.
14.2 Systems Provider warrants that the diskette(s) on which the software
is provided will be free from defects in materials and workmanship under normal
use for a period of ninety (90) days from delivery to end user. Systems
Provider warrants that the Products will materially conform to the
specifications set forth in the relevant Product documentation then in effect,
when used without modification and in accordance with the then current user
documentation. Systems Provider assumes no responsibility for selection of the
Software to achieve the end user's intended results nor for the installation,
use and results obtained from the Software. Systems Provider does not warrant
a) that the functions contained in the Software will meet the end user's
requirements, b) that the Software will operate in the hardware or software
combinations that the end user may select, c) that the operation of the
Software will be uninterrupted or error free, or d) that all defects in the
operation of the Software will be corrected.
14.3 Should a hardware or Software Product fail within this warranty
period, Systems Provider will replace the defective Product when it is returned
to Systems Provider, shipping prepaid. Replacement Products may be refurbished
or contain refurbished materials. If Systems Provider, by its sole
determination, is unable to replace the defective Product, it will refund the
purchase price of the Product. Proof of date of delivery of the returned
Product is required.
14.4 This warranty does not apply if the Product fails or is damaged after
delivery due to shipment, handling, storage, abuse or misuse, has been used or
maintained in a manner not conforming to applicable Product manual
instructions, or modified in any way, or has any serial number removed or
defaced. Repair by anyone other than Systems Provider or an approved agent
will void this warranty.
14.5 THE WARRANTIES AND REMEDIES STATED ABOVE IN ARTICLE 14.1 THROUGH 14.4,
ARE EXCLUSIVE AND IN LIEU OF ALL OTHERS, ORAL OR WRITTEN, EXPRESS OR IMPLIED.
ANY AND
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ALL OTHER WARRANTIES, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, ARE EXPRESSLY EXCLUDED.
14.6 Systems Provider warrants that the Products do not infringe upon the
patent, trademark, copyright or other proprietary interest of any third party
and that it has the right to make the Products available to MCI as provided
herein:
a.) System Provider shall, at its own expense, defend or settle
any suit or proceeding that is instituted against MCI to the extent such suit
or proceeding alleges that any Product sold by System Provider hereunder
infringes any duly issued patent or copyright of the United States or the
Territory and shall pay all damages awarded therein against MCI or agreed upon
in settlement by System Provider; provided that MCI (i) gives System Provider
immediate notice in writing of any such suit, proceeding or threat thereof,
(ii) permits System Provider sole control, through counsel of System Provider's
choice, to defend and/or settle such suit and (iii) gives System Provider all
the needed information, assistance and authority, at System Provider's expense,
to enable System Provider to defend or settle such suit.
b.) The above provision shall not apply to and System Provider
shall have no liability or obligation for any infringement arising from: (a)
any modification, servicing or addition made to the Product by anyone other
than System Provider, (b) the use of such Product as a part of, or in
combination with, any devices, parts or software not provided by System
Provider, (c) compliance with MCI's design requirements or specifications, (d)
the use of other than the then current unaltered release of the software
Product available from System Provider or (e) the use of such Product to
practice any method or process which does not occur wholly within the Product.
The above exclusions apply to the extent that the infringement would have been
avoided but for such modifications, combinations, compliance with
specifications, use of other than the current release or practice of such
method or process.
c.) In the event the use or sale of any Product purchased from
System Provider is enjoined, or in the event System Provider wishes to minimize
its potential liability hereunder, System Provider may, at its sole option and
expense: (i) procure for MCI the right to use or sell such Product; (ii)
substitute a functionally equivalent, non-infringing unit of the Product; (iii)
modify such Product so that it no longer infringes but is substantially
equivalent in functionality; or (iv) if none of the foregoing are commercially
feasible, take back such Product and refund the purchase price paid by MCI for
such Product depreciated over a three (3) year period using the straight line
method. System Provider shall in no event be obligated to accept new orders
for Products, which are subject to a claim of infringement covered under this
Section.
d.) THIS SECTION STATES SYSTEM PROVIDER'S TOTAL RESPONSIBILITY AND
LIABILITY, AND MCI's SOLE REMEDY, FOR ANY ACTUAL OR ALLEGED INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY RIGHT FOR ANY PRODUCTS DELIVERED HEREUNDER OR ANY PART
THEREOF AND IS IN LIEU OF AND REPLACES ANY AND ALL OTHER EXPRESS, IMPLIED OR
STATUTORY WARRANTIES OR CONDITIONS REGARDING INFRINGEMENT.
14.7 Systems Provider agrees to indemnify MCI, MCI's customers, or any such
party to whom MCI distributes Products hereunder against any claim that the
Products (or any Product) infringe, any patent, copyright, trademark or other
proprietary right, provided that MCI or its customers (1) give Systems Provider
prompt written notice of any claim, (2) grant Systems Provider control of the
defense and settlement of such claim, and (3) assist fully in the defense so
long as Systems Provider pays the out-of-pocket expenses. Systems Provider
shall, at its option and expense, (1) procure the right to continue using the
Product, (2) replace or modify the Product so that it becomes non-infringing or
(3) if neither option (1) nor (2) are reasonably practical, accept return of
the product and refund the amount paid for the Product.
14.8 Systems Provider shall have no liability or obligation for any
infringement claim based upon (1) modifications of the Products by parties
other than Systems Provider or use of such modified Product or (2) use of the
Products in combination with materials or Products not supplied or approved by
Systems Provider.
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14.9 THE ABOVE STATES THE ENTIRE LIABILITY OF SYSTEMS PROVIDER AND IS THE
SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO CLAIMS OF INFRINGEMENT OF PROPRIETARY
RIGHTS OF ANY KIND.
14.10 MCI shall not alter or enlarge the representations or guarantees of
the warranty in any way beyond those expressly set forth above. MCI shall hold
harmless and indemnify Systems Provider for any expenses, claims, damages or
liability arising from or related to any unauthorized guarantees, warranties or
representations made by MCI, including without limitation, attorneys' fees. To
receive the foregoing indemnity, Systems Provider must notify MCI in writing of
a claim or suit promptly after its occurrence and provide MCI with reasonable
cooperation and full authority to defend or settle the claim or suit. MCI
shall not indemnify Systems Provider under settlement made without Systems
Provider's written consent.
14.11 Systems Provider shall hold harmless and indemnify MCI for any
expenses, claims, damages or liability arising from or related to any
unauthorized guarantees, warranties or representations made by Systems Provider
about MCI, including without limitation, attorneys' fees. To receive the
foregoing indemnity, MCI must notify Systems Provider in writing of a claim or
suit promptly after its occurrence and provide Systems Provider with reasonable
cooperation and full authority to defend or settle the claim or suit. Systems
Provider shall not indemnify MCI under settlement made without MCI's written
consent.
14.12 Without limiting MCI's obligations under 14.7, Systems Provider agrees
to indemnify and hold MCI and its customers harmless against any third party
claim based upon Systems Provider breach of this Section 14. To receive the
foregoing indemnity, MCI or its customer must notify Systems Provider in
writing of a claim or suit promptly after its occurrence and provide Systems
Provider with reasonable cooperation and full authority to defend or settle the
claim or suit. Systems Provider shall not indemnify MCI or its customer under
settlement made without Systems Provider's written consent.
14.13 Systems Provider agrees to indemnify MCI against any claim arising out
of or resulting from the Products or this Agreement, provided that any such
claim (1) is attributable to bodily injury or death or to injury to or
destruction of physical property and (2) is caused by a negligent act or
omission of Systems Provider. This obligation on the part of Systems Provider
shall exist only if MCI (1) gives Systems Provider prompt written notice of any
such claim, (2) grants Systems Provider control of the defense so long as
Systems Provider pays the out-of-pocket costs. Systems Provider shall have no
liability for any settlement or compromise made without its prior written
consent.
14.14 Systems Provider, at its expense, will maintain adequate insurance
coverage to protect against its liabilities under this Agreement. This
insurance will include (1) worker's compensation insurance, (2) comprehensive
general liability insurance, including coverage for product liability, bodily
injury and property damage,. Upon request, Systems Provider will furnish the
applicable certificate of insurance.
14.15 MCI may at its discretion extend the warranties and indemnification's
given in Sections 14.1, 14.2, 14.3, 14.5, 14.6, 14.7, 14.11, 14.13, and 14.19
to its customers.
14.16 For Products that fail after the warranty period has expired, MCI may
return parts to Systems Provider for replacement after obtaining a Return
Material Authorization ("RMA") number. MCI must provide a Purchase Order for
the replacement part. MCI will be invoiced for the replacement part upon
shipment by Systems Provider.
14.17 Spare parts will be available for a period of five (5) years after the
last date of this Agreement. Spare parts may consist of one part or a set of
parts. In some cases, where Products have been discontinued, the original part
may not be available but a functional, equivalent part or a set of parts would
be substituted for the failed part or a set of parts which includes the failed
part.
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14.18 Upon MCI's request, Systems Provider shall certify that Products
purchased by MCI are new.
14.19 (a) Systems Provider warrants and represents that the Products,
including without limitation all incorporated or related hardware components as
well as all computer code whether in object code, executable, firmware,
microcode or other form, and whether such computer code is resident on or in
the hardware components within the Products or separately licensed by Systems
Provider for use with the Products, will:
(i) provide accurate processing of date and date
dependent data (including, but not limited to, calculating,
comparing and sequencing operations, as well as the
transmitting and receiving of date and date dependent data to,
from and through the Products) for all dates through the year
2100, including without limitation all leap year instances,
and
(ii) express all date and date dependent data passed to,
from or through the Products through the use of fully
complimented 4 digit years in a single field in the format
"CCYY", where "CC" stands for the century and "YY" stands for
the year.
(b) Systems Provider further agrees both that it will within five
(5) business days after MCI's request provide sufficient evidence through
adequate testing of the Products or otherwise to demonstrate compliance with
this warranty, and that the requirements of this warranty shall be part of the
specifications applicable to the Products.
DOCUMENTATION
Systems Provider shall supply MCI with originals of all documentation
available, solely for MCI's internal use, to support and maintain the Products
provided by Systems Provider to MCI under this Agreement, as well as grant a
limited rights license to MCI, at no charge, to reproduce this documentation in
quantities required for its internal. Other documentation which may be
requested pursuant to this Article at the request of MCI shall include:
(a) Installation, Operation and Maintenance (IOM) Manuals
Installation, operation and maintenance manuals, including
packing and unpacking instructions, general descriptions, tables of
specifications, theory of operation, installation procedures,
maintenance procedures, trouble-shooting procedures and parts list.
(b) Engineering Documentation
Non-proprietary specifications, functional descriptions and
operating descriptions.
(c) Acceptance Test Plan/Procedure
This documentation shall be sufficiently comprehensive to
ensure that Products subject to acceptance testing complies with the
requirements of this Agreement. Systems Provider shall develop such
test plans to include at a minimum:
i. Reference to specification
ii. List of the test equipment to be used
iii. Environmental conditions
iv. Initial condition of item being tested, (e.g.
profile, switch position, etc.)
v. Brief description of each test, in the sequence they
are to be performed including a list of parameters
to be measured
vi. Block diagrams of the testing setups
vii. Failure reporting, correction and analysis
requirements
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(d) Factory Test Plan
This plan shall be sufficiently comprehensive to ensure that
upon shipment to MCI, the Products comply in all material respects
with the product specifications of this Agreement.
(e) Quality Assurance Documentation
This document shall describe the quality assurance program of
Systems Provider.
(f) Product Support Documentation
This documentation shall include all the information necessary to
support the continued operation of Products delivered by Systems Provider.
CHANGES TO PURCHASE ORDERS OR PRODUCT
16.1 MCI may request, by written change order or modification, and without
notice to any surety, changes within the general scope of this Agreement in
drawings, designs, specifications, methods of shipment or packaging/packing,
quantities, or time or place of delivery; require additional Work or direct the
omission of Work. In the event, and to the extent that such change modifies
or otherwise alters the scope of any of Systems Provider's obligations under
this Agreement, the Parties shall make best effort to negotiate an equitable
adjustment to the contract price and/or schedule as necessary. Changes to this
Agreement can only be mutually made by the duly authorized representatives of
the Parties.
16.2 Systems Provider shall submit a proposal for the contract adjustment
within thirty (30) days after receipt of written notice from MCI, which MCI
shall either accept or reject within thirty (30) days of receipt. After the
Parties have arrived at an equitable adjustment to the contract price and
schedule, nothing in this Article shall excuse Systems Provider from promptly
proceeding with this Agreement as changed.
16.3 MCI's personnel may from time to time render technical assistance or
give technical advice to, or effect an exchange of information with Systems
Provider personnel concerning the Work to be furnished under this Agreement.
However, Systems Provider shall not deviate from the requirements of this
Agreement by reason of such assistance or exchange of information, unless the
deviation is incorporated into and authorized by a change Purchase Order
issued. Systems Provider shall not, by reason of such assistance, advice or
exchange of information, delete or in any way modify any of MCI's rights or any
of Systems Provider obligations, express or implied, which are a part of this
Agreement.
16.4 Systems Provider may make or incorporate changes not affecting form,
fit, function, interface or interchangeability of the Product.
16.5 In the event certain changes become mandatory by reason of safety or
failure of the Products to perform in accordance with the requirements of this
Agreement, Systems Provider shall provide written notice to MCI and shall
proceed promptly to make the necessary change(s). Systems Provider shall bear
all costs and expenses relating to such retrofit or replacement of Products,
which are necessary for the Products to conform to the requirements of the
Agreement. Such retrofit or replacement applies only when attempting to
satisfy requirements in existence at the inception of this contract and do not
apply to new requirements, which come into existence at a later date.
16.6 Any mandatory changes to the Products, shall be compatible with all
Products in use (for a minimum of two releases backward) or on order pursuant
to this Agreement unless the Parties otherwise specifically agree. If any
mandatory change is not compatible, upward or downward as described, Systems
Provider, at MCI's option, shall retrofit such change(s) on all affected
installed Products ordered pursuant to this Agreement at no cost to MCI.
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17. SOFTWARE
17.1 Systems Provider grants to MCI a transferable, non-exclusive license
to distribute to end users, or, if MCI is a subcontractor to a prime contractor
for an Integrated Business Solution, to a prime contractor for the purpose of
distributing to an end user, under the terms of this Agreement, the Software.
Notwithstanding any provision hereunder MCI may distribute such Software
electronically. Systems Provider grants directly to the end user a
nonexclusive license as set forth in the End User Software License Agreement,
which accompanies the Software. The license granted by Systems Provider is not
a sale. Systems Provider retains all title and ownership of the Software and
documentation. Systems Provider acknowledges that it is solely responsible for
performing any of its obligations as may be described in the End User License
Agreement and that MCI shall have no obligation to Systems Provider or the end
user under such agreement.
17.2 The Software and documentation are protected under copyright laws.
All copyright notices must be reproduced and included with any copy of any
portion of the Software. MCI shall not translate any portion of the Software
or associated documentation into any other format or language without the prior
written consent of Systems Provider. Except as specifically provided elsewhere
in this Agreement, MCI may not transfer the Software or the licenses granted
herein to any third party. MCI shall not, nor authorize any third party, to
reverse engineer, disassemble, decompile, or otherwise attempt to obtain the
source code for the Software.
17.3 In connection with any proposals to and agreements with government
entities, MCI shall work with Systems Provider to ensure that Systems
Provider's proprietary rights receive the maximum protection available from
such government entity for commercial computer Software developed at private
expense. All software and documentation acquired directly or indirectly by or
on behalf of the United States Government shall be identified and marked by
Systems Provider as being licensed only with restricted rights, subject to the
restrictions set forth in subparagraph (c) (1) of the Commercial Computer
Software-Restricted Rights clause of FAR 52.227-19 or subparagraph (c)(1)(ii)
of the Rights in Technical Data and Computer software clause of DFARS
252.227-7013, whichever applicable.
17.4 In all jurisdictions where an enforceable copyright covering the
computer programs of the Software does not exist, the Software must be
accompanied by a written license agreement, signed by the end user, that is no
less restrictive than the terms of Systems Provider's End User software License
Agreement.
17.5 The license shall also extend and Software shall be deemed to include
any revisions to the Software as are supplied by Systems Provider and accepted
by MCI. MCI reserves the right to control the shipment of all version updates
to the Software under this Agreement.
17.6 Systems Provider grants MCI a license during the term of this
agreement to incorporate portions of Systems Provider's documentation in the
Integrated Business Solution's documentation at no charge, provided that MCI
properly incorporates and references Systems Provider's copyright in such
portion of the documentation.
18. TERM AND TERMINATION
18.1 This Agreement shall commence on the Effective Date and shall continue
for three (3) years from the Effective Date. It shall be renewed automatically
for successive one-(1) year terms unless either party gives written notice of
termination to the other sixty-(60) days prior to expiration, or unless
terminated pursuant to Section 18.2 or 18.5 of this Agreement.
18.2 Subject to Section 18.3, either party shall have the right to
terminate this Agreement as follows:
(a) Upon the breach by the other party of any material term of
this Agreement;
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(b) Upon the issuance of an injunction by a court or regulatory
agency of competent jurisdiction enjoining continued
performance by the parties, under this Agreement;
(c) Upon the filing of voluntary or involuntary bankruptcy by the
other party or the declaration of insolvency, however
evidenced, by the other party which is not dismissed within
thirty (30) days after the date of filing;
(d) Upon change of control of the other party or of any division
or subsidiary of the other party that is relevant to
performance under this Agreement if such change can be
reasonably interpreted by the terminating party as
substantially detrimental to the relationship between the two
parties.
18.3 If a party wishes to terminate this Agreement under Section 18.2
above, such party shall give the other party written notice of its intention to
terminate under this section 18, specifying in reasonable detail the reason(s)
for such termination and in the event that the non-terminating party does not
cure the reason thirty (30) days after such notice, this Agreement shall, at
the option of the party giving notice, terminate.
18.4 If a party terminates this Agreement under Section 18.2 above, at
MCI's request Systems Provider will fulfill all orders accepted under Section
10.1 prior to the date of the receipt of notice given in Section 18.3. Systems
Provider shall also refund to MCI any unused portions of maintenance and
support Services fees paid by MCI associated with any returned Products.
18.5 Notwithstanding anything to the contrary contained herein, either
party may terminate this Agreement at any time for its convenience.
19. CONFIDENTIALITY
19.1 Each party agrees to treat all information and materials received from
the other party that are labeled "Confidential" or "Proprietary" as
confidential information ("Confidential Information") of the other party. Each
party further agrees to use at least the same degree of care to avoid
disclosure or dissemination of the other party's Confidential Information as it
uses to protect its own confidential materials, but in any event, at least a
reasonable degree of care. Neither party shall use the Confidential
Information of the other party for its own benefit or for the benefit of any
third party, except as expressly permitted in this Agreement.
19.2 Each party agrees to advise all of its employees, agents,
subcontractors or consultants that may have access to or otherwise receive the
Confidential Information of the other party of all obligations pertaining to
the protection of the Confidential Information of the other party under this
Agreement.
19.3 Neither party shall disclose Confidential Information of the other
party to any third party (other than independent contractors having a
"need-to-know") without the other party's prior written consent; provided,
however, that a party shall not be liable for disclosure of information
designated as "Confidential" or "Proprietary" by the other party if the same:
(a) is in the public domain at the time of disclosure; or
(b) becomes known to the other party from a third-party source
under no obligation to maintain confidentiality; or
(c) becomes publicly available through no fault or failure to act
by the receiving party in breach of this Agreement; or
(d) is already known by the receiving party when received, or is
independently
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developed by the receiving party without reference to the
information provided by the other party, as established by
documentary evidence; or
(e) is required by a court or other governmental authority to be
disclosed (provided that the receiving party has used
reasonable efforts to make such disclosure subject to a
protective order or confidentiality agreement).
19.4 If, in order to fulfill the purposes of this Agreement, it is
necessary for the party receiving Confidential Information of the other party
to copy the same, in whole or in part, the receiving party may do so, but
solely for the purpose of enabling such party to perform under this Agreement.
19.5 Upon achieving the purpose(s) intended, or in the event of the earlier
termination of this Agreement, each party shall immediately return and/or
destroy all materials containing Confidential Information of the other party.
Each party shall further certify in writing to the other party that all copies
or partial copies of material containing Confidential Information of the other
party have been returned and/or destroyed.
20. TRADEMARKS, TRADE NAMES AND MARKETING
20.1 Except for any announcement intended solely for internal distribution
(i.e., to any party under this Agreement) or any disclosure required in the
opinion of discloser's legal advisors by legal, accounting, or regulatory
requirements, all media releases, public announcements, or public disclosures
for general distribution (including, but not limited to, promotional or
marketing material) by any party under this Agreement, or by any of their
employees or agents relating to this Agreement or its subject matter, other
than general statements that a contractual relationship exists between the
parties, shall be coordinated with and approved in writing by the other party
prior to the release thereof.
20.2 In the advertising and sale or distribution of the Products, MCI may
use Systems Provider's regular logos, corporate name, trade names and
trademarks (the "Trademarks"). For this purpose, Systems Provider grants MCI a
non-exclusive, royalty-free, limited license to use the Trademarks, provided
that MCI displays the symbol "TM" adjacent to each use of a Trademark the first
time a Trademark is used, or displays such other symbols and notices as may be
prescribed by Systems Provider. Systems Provider will provide MCI with a list
of its Trademarks and with a copy of its graphics standards manual, which shall
define the appropriate usage of such Trademarks.
20.3 MCI acknowledges that it has been advised by Systems Provider that
Systems Provider is the exclusive owner of the Trademarks. The use of the
Trademarks by MCI does not convey to MCI any right, title or interest in or to
the Trademarks. MCI may not register any Trademark in any jurisdiction unless
such registration is made on behalf and for the benefit of Systems Provider and
is expressly approved by Systems Provider in advance and writing.
20.4 MCI will not make or permit alteration of the goods or removal or
modification of any tags, proprietary notices, labels, or any other identifying
marks placed by Systems Provider or its agents on its Products or associated
literature.
20.5 MCI agrees not to use the Systems Provider corporate name, trademarks,
trade names and copyright legends with respect to any Products or materials not
provided by Systems Provider, or in the way which might result in confusion as
to Systems Provider and MCI being separate and distinct entities.
20.6 Notwithstanding Section 20.1, MCI may describe its relationship with
Systems Provider in MCI's proposals and statements of qualification issued for
specific MCI prospects or clients without obtaining Systems Provider's approval
and without submitting such description to Systems Provider.
20.7 Systems Provider agrees not to use MCI's corporate name, trademarks,
trade names, copyright legends or
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other intellectual property without the prior written permission of MCI.
INSURANCE AND INDEMNITY
21.1 Insurance. During the term of this Agreement, the Systems Provider
shall maintain insurance, the kinds and in the amounts specified with insurers
of recognized responsibility, licensed to do business in the State(s) where the
work is being performed and having either: an A.M. best rating of A8, a
Standard & Poor's rating of AA, or ▇▇▇▇▇ 's rating of Aa2. If any work
provided for or to be performed under this Agreement is subcontracted, the
Systems Provider shall require the subcontractor to maintain and furnish
insurance equivalent to that required of Systems Provider.
(a) Comprehensive or Commercial General Liability. In accordance
with the above, the Systems Provider and any subcontractor
shall maintain the following insurance: $1 million per
occurrence combined single limit, $2 million general
aggregate, and will include coverage for contractual
liability, use of independent Systems Providers and Products
and completed operations.
(b) Business Automobile Liability Insurance. Coverage or owned,
hired, leased, rented and non-owned vehicles in the amount of
$1 million combined single limit per occurrence for bodily
injury and property damage.
(c) Worker's Compensation & Employers' Liability Insurance.
Workers' Compensation in the maximum amount(s) and with
benefits required by the laws of the state in which the Work
is performed and the state(s) the employees are hired, if the
state(s) are other than that in which the Work is performed.
Employers' Liability with minimum limit of liability of:
Bodily Injury by Accident $1 million each accident
Bodily Injury by Disease $1 million policy limit
Bodily Injury by Disease $1 million each employee
A combination of primary and excess/umbrella liability
policies will be acceptable, as a means to meet the limit
required under this Agreement. The required minimum limits of
the coverage shown above DO NOT limit or diminish the Systems
Provider's liability under this Agreement.
The Systems Provider will submit to MCI a standard "Accord"
insurance certificate for comparable form acceptable to MCI
signed by an authorized representative of such insurance
company(ies), certifying that the insurance coverage(s)
required hereunder is in effect for the purposes of this
Agreement. If the event Systems Provider fails to maintain
adequate coverage as outlined above in this Article, Systems
Provider will notify MCI of such a lapse. In addition, if
System Providers coverage lapses Systems Provider will have
thirty (30) days to obtain adequate coverage as outlined
herein.
The Systems Provider, its subcontractor and its insurers shall
waive all rights of recovery against MCI for any injuries to
persons or damage to property related to performance of this
Agreement.
The Systems Provider and its subcontractor shall ensure full
compliance with terms of the Occupational Safety and Health
Administration (OSHA) and all local jurisdiction's safety and
health regulations during the full term of this Agreement.
The Systems Provider shall submit to MCI certificates of
insurance evidencing the above coverage. Should the Systems
Provider at any time neglect or refuse to provide the
insurance required herein, or should such insurance be
canceled or non-renewed, MCI shall have the right to terminate
this contract, or secure substitute coverage whose cost shall
be deducted from payments owed the Systems Provider.
The Systems Provider, at its own expenses, shall indemnify and
hold harmless against any and all
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claims, expenses (including attorneys' fees) from loss or
liability for damage to property including property owned,
leased or borrowed by MCI and injuries, including death, to
all persons to the extent arising out of Systems Provider's
performance of this Agreement, unless by reasons of any and
all acts or omissions or negligence by MCI, its agents or
employees.
21.2 Payment. Payment of any amounts due pursuant to any indemnity
contained in this Agreement shall be made to MCI within thirty (30) days of
receipt of notice of same day Systems Provider.
21.3 Attorneys' Fees and Court Costs. In the event, either party takes
action to enforce this Agreement or to recover damages for a breach by the
other party, each party will be responsible for their own fees, expenses and
court costs.
21.4 Indemnification. Systems Provider agrees to indemnify and hold
harmless MCI its affiliates, directors, officers and employees, from any and
all claims, damages, fines, penalties, attorneys' fees, court costs or other
consequences arising out of Systems Provider's breach of any covenant or
representation set forth herein or Systems Provider's failure to abide by the
terms of this Agreement.
22. LIENS
22.1 As MCI requires, before submitting any invoice for payment, or at any
other time that MCI requires, Systems Provider shall deliver to MCI a
satisfactory release of any and all liens for which System Provider has under
their control arising in connection with the Products and Work under this
Agreement.
22.2 Systems Provider shall dispose of any claim and defend any suit or
injunction brought to enforce any lien arising from the performance and/or use
of any Products and Work under this Agreement, and shall pay all expenses
associated with such proceedings.
22.3 MCI may withhold from any payment or consideration otherwise due
Systems Provider, any sum that MCI has reason to believe may be needed to
satisfy any lien arising out the Work under this Agreement. Prior to the time
of any such withholding, MCI shall notify Systems Provider in writing of the
nature of the lien and the amount of money to be withheld pursuant to this
Article and afford Systems Provider reasonable opportunity to satisfy the lien.
22.4 Systems Provider shall reimburse MCI for all monies, including all
costs and reasonable attorneys' fees, incurred by MCI in removing liens arising
out of the Work under this Agreement. Such reimbursement may be deducted from
any payment or consideration otherwise due Systems Provider. Systems Provider
shall, upon written request by MCI, promptly pay MCI any amounts due under this
Article.
23. GENERAL
23.1 Limitation of Liability: NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PURSUANT TO THIS AGREEMENT FOR ANY AMOUNTS REPRESENTING LOSS OF BUSINESS OR
INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES OF THE OTHER PARTY EVEN IF ADVISED
OF THEIR POSSIBLE EXISTENCE.
23.2 Force Majeure: Neither party shall be held liable to the other for
failure to fulfill its obligations hereunder if, and to the extent, due to
causes beyond its control.
23.3 Costs and Expenses: Except as specifically provided herein, each party
shall bear its own costs and expenses.
23.4 Waiver: The failure by either party to enforce, at any time or for any
period, any one or more of the terms of this agreement, shall not constitute
waiver of these terms, or subsequently the parties right to enforce all terms
and conditions of this Agreement.
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23.5 Unenforceable Provisions:
(a) If any provision of this Agreement is held to be invalid, illegal
or unenforceable by a court of competent jurisdiction, the validity, legality
and enforceability of the remaining provisions of this Agreement shall continue
in full force and effect.
(b) It is expressly agreed that each provision of this Agreement that
provides for a limitation of liability or remedies, disclaimer of warranties,
indemnification of a party or exclusion of damages or other remedies is
severable and independent of any other provision and is intended to be enforced
as such. Further, it is expressly agreed that in the event any remedy under
this agreement is determined to have failed its essential purpose, all
limitations of liability and exclusions of damages or other remedies set forth
in this Agreement shall remain in effect.
23.6 Independent Contractors: Nothing in this Agreement is intended to or
shall be deemed to create a partnership, joint venture or agency relationship
between the parties of any kind for any purpose. The parties shall be and
remain independent contractors at all times. Neither parties shall have any
authority to, nor shall either attempt to, bind or commit the other party for
any purpose. Neither party shall make representations or warranties concerning
the Products or Services of the others that are inconsistent with those made by
the other party in its then current published materials or with the obligations
under this Agreement. Each party is solely responsible for the supervision and
control of its personnel and for the terms of their employment, including, but
not limited to, work assignments, labor relations, hiring and discharging,
performance evaluations, wages, hours, Social Security and tax withholding,
workers' compensation, and unemployment insurance.
23.7 Nonexclusivity: it is expressly understood and agreed that this
Agreement does not grant to Systems Provider an exclusive right to provide to
MCI any or all of the Products and Services of the type provided by Systems
Provider and shall not prevent MCI from developing or acquiring from other
suppliers such Products and Services. Systems Provider agrees that
acquisitions by MCI pursuant to this Agreement shall neither restrict the right
of MCI to cease acquiring nor require MCI to continue any level of such
acquisitions. Estimates or forecasts furnished by MCI to Systems Provider
shall not constitute commitments. It is also understood and agreed that
nothing in this Agreement shall restrict Systems Provider in any way from
marketing and selling any Products to or through any third party including, but
not limited to, clients or competitors of MCI.
23.8 Limitation of Actions: Neither party may bring an action, regardless
of form, arising out of this Agreement, more than two years after such party
becomes aware of the facts giving rise to the cause of action. For
non-payment, neither party may bring an action more than two years after the
date the last payment was due.
23.9 Notices: Whenever one party is required or permitted to give notice to
the other pursuant to this Agreement, such notice shall be effective when hand
delivered to the party for whom intended against a signed receipt thereof, or
five (5) days following deposit of the same into the mail, registered or
certified, return receipt requested, postage prepaid, or when delivered by a
third party courier service where receipt is verified by the receiving party's
acknowledgment and addressed to the Relationship Director of the other party,
with a copy to General Counsel. If a notice is mailed, the sending party
promptly will confirm such mailing by sending a copy thereof via facsimile
transmission to the Relationship Director of the other party. During the term
of this Agreement, all notices regarding this Agreement and anything contained
herein, will be directed to the following addresses:
Originals: Visual Networks, Inc.
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Attn: Chief Financial Officer/▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇-▇▇▇-▇▇▇▇(fax)
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MCI Telecommunications Corporation
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇/Procurement
▇▇▇-▇▇▇-▇▇▇▇
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Copies: MCI Telecommunications Corporation
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▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
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23.10 Governing Law: This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York.
23.11 Changes to Appendices: Subject to Article 11, Systems Provider
reserves the right to change list prices, Products offered, and other schedules
and programs, and MCI reserves the right to change the list of affiliated
organizations, as set forth in the appendices to this Agreement. At such
times, the party will issue a written revision to the applicable Appendix and
all such revisions automatically are incorporated as amendments to this
Agreement. For changes which, in, Systems Provider's opinion, may adversely
affect MCI, Systems Provider will provide at least thirty (30) days notice,
prior to the effective date of such change.
23.12 Assignment: The rights of either party under this Agreement may not be
assigned, in whole or in part, by operation of law or otherwise, without the
express written consent of the other party which such consent shall not be
unreasonably withheld or delayed, and any attempted assignment of rights,
duties or obligations hereunder without such consent shall be null and void.
Notwithstanding the foregoing, MCI may assign this Agreement to any affiliated
entity of MCI.
23.13 Arbitration: Any dispute or disagreement arising between the parties
in connection with this Agreement, which is not settled to the mutual
satisfaction of the parties within thirty (30) days (or such longer period as
may be mutually agreed upon) from the date that either party informs the other
in writing that such dispute or disagreement exists, shall be settled by
arbitration in accordance with the J.A.M.S./ENDISPUTE Arbitration Rules and
Procedures, as amended by this Agreement. The cost of the arbitration,
including the fees and expenses of the arbitrator(s), will be shared equally by
the parties unless the award otherwise provides. Each party shall bear the
cost of preparing and presenting its case. The parties agree that this
provisions and the arbitrator's authority to grant relief shall be subject to
the United States Arbitration Act, 9 U.S.C. 1-16 et seq. ("USAA"), the
provisions of this Agreement, and the ABA-AAA Code of Ethics for Arbitrators in
Commercial Disputes. The parties agree that the arbitrator(s)) shall have no
power or authority to make awards or issue orders of any kind except as
expressly permitted by this Agreement, and in no event shall the arbitrator(s)
have the authority to make any award that provides for punitive or exemplary
damages. The decision of the arbitrator(s) shall follow the plain meaning of
the relevant documents, and shall be final and binding upon the parties. The
award may be confirmed and enforced in any court of competent jurisdiction.
All post-award proceedings shall be governed by the USAA.
23.14 Entire Agreement: This instrument contains the entire Agreement
between the parties hereto and supersedes all prior negotiations,
representations or agreements, whether written or oral.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
VISUAL NETWORKS, INC. MCI TELECOMMUNICATIONS, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /S/ B.R. ▇▇▇▇▇
--------------------- --------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: B.R. ▇▇▇▇▇
Title: Sr V.P./CFO/Treas. Title: Director, Network Acquisition
Date: 9/16/97 Date: 10/3/97
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