Exhibit 10.4
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE
CONFIDENTIAL PORTIONS HAVE BEEN REDACTED AND ARE DENOTED BY [*]. THE
CONFIDENTIAL PORTIONS HAVE BEEN SEPARATELY FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION.
AGREEMENT NUMBER
AGREEMENT FOR
PURCHASE AND LICENSE OF BAY NETWORKS
PRODUCTS AND SERVICES
THIS AGREEMENT is effective as of December 10, 1997 (the "Effective Date") and
is made between BAY NETWORKS USA, INC., a Delaware corporation with offices at ▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, acting on behalf of itself and
its affiliates ("Bay"), and Ziplink, LLC, ("Customer"), with offices at ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
1. PURCHASE OF HARDWARE, SOFTWARE LICENSES AND SERVICES
Under this Agreement, Customer may purchase from Bay certain equipment
("Hardware"), licenses for software including revisions and updates ("Software"
and "Software Release"), or installation, Hardware maintenance, Software
maintenance, professional services, and educational services (collectively
"Services") that are listed in Bay's then-current U.S. price list (the "Price
List").
2. ORDERS
Customer agrees that orders placed with Bay for Hardware and Software
(collectively, the "Products") and for Services are placed under this Agreement.
No order will be effective until accepted by Bay's order acknowledgment (an
"Acknowledgment"). Bay shall not unreasonably refuse to acknowledge any order
meeting standard business criteria. This Agreement shall govern all orders
regardless of any preprinted terms on Customer's order and Bay's Acknowledgment
and shall constitute the entire agreement between Customer and Bay. In the case
of the equipment and services listed on the initial attachment and exhibits to
this Agreement, this Agreement shall serve as the purchase order.
3. PRICES, TAXES, COSTS AND PAYMENT
A. PRODUCT PRICES. The parties have agreed upon pricing for specific Bay
Products. The pricing for the Products is attached as Exhibit 1 to this
Agreement. The pricing in Exhibit 1 is expressly conditional upon Customer
accepting delivery of the entire six million two hundred sixty three thousand
one hundred eighty dollars ($6,263,180) worth of Product (after discount and
before taxes) by December 26, 1997.
B. SERVICE PRICES. The prices for Services are as follows:
ATTACHMENT A- Resident On-Site Engineer: * - Monthly payments begin when
engineer is placed on site.
ATTACHMENT B- Network Management: * - Payable on the
Management/Implementation schedule below.
ATTACHMENT C- Maintenance: * -Effective date is June 20, 1998, billed at
the beginning of each quarter.
ATTACHMENT D- Installation/Implementation: *. - Payable on
Management/implementation Schedule.
ATTACHMENT E- Project Management: *. - Payable on
Management/Implementation Schedule.
The Management/Implementation payment schedule shall be: One third payable on
March 20, 1998, one third payable on June 20, 1998, and the final third payable
when Ninety-five percent of the originally scheduled POPs are installed and
accepting paying customer traffic. For Network Management full payment shall be
due when the test criteria described on Attachment F is completed.
C. TAXES AND OTHER LEVIES.
Prices do not include any tax, value-added tax, fee, duty or
governmental charge, however designated (except for Bay's franchise taxes or for
taxes on Bay's net income), which may be levied or based on the Products or
Services, or the importation, movement, delivery, use, or possession of
Products, including replacement and repair parts. All such taxes and fees shall
be for the account of Customer and any such taxes or fees required to be paid or
collected by Bay shall be paid by Customer to Bay unless Customer provides Bay
with proof of exemption acceptable to the appropriate authority.
D. COSTS. Bay agrees to pay for all applicable transportation costs for products
shipped in calendar 1997. Thereafter
The parties have caused this Agreement to be executed by their authorized
representatives.
--------------------------------------------------------------------------------
ZIPLINK, LLC. BAY NETWORKS USA, INC.
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇ BY: /s/ ▇. ▇▇▇▇▇▇▇
NAME: ▇▇▇▇▇ ▇. ▇▇▇▇▇ NAME: MANARAS
TITLE: CEO TITLE: SR. COUNSEL
DATE: 12/23/97 DATE: 12-23-97
--------------------------------------------------------------------------------
Bay's Agreement for End Use Customers (Rev. USA 1/97)
transportation costs shall be added to the price of goods sold.
E. PAYMENT. Payment for the Products delivered on or before December 26, 1997,
shall be made in two payments, the first of which shall be in the amount of $2.0
million paid thirty days from the date hereof, with the entire remaining amount
paid on March 20, 1998. All payments are to be made in U.S. dollars. Terms of
payment for Services shall be net thirty days from the date of invoice. If and
to the extent that final acceptance (as defined in section 4E below) of all
products takes place before March 20, 1998, all amounts unpaid as of the date of
final acceptance shall then become due and payable within ten days, but in no
case later than March 20, 1998.
*
G. SERVICE PRICE ESCALATION. Bay agrees that the price for the service component
described in Attachment C, "Everyday with Labor Service Description" for the
three renewal periods following the initial one year term will not be raised by
more than two times the percentage increase in the Consumer Price Index - Urban
Wage Earners and Clerical Workers, All Items, Northeast (1982-1984 = 100,
October 1997 = 165.8) as reported by the Bureau of Labor Statistics (or any
successor index most closely resembling such index) as measured from March 1998
to the first month of any such period. For the purposes of this section only,
the base service price for the year period from June 20, 1998, shall be deemed
to be *.
4. TITLE, RISK OF LOSS, SHIPMENT, RETURNS, AND CHANGES
A. TITLE, RISK OF LOSS, SECURITY INTEREST. For shipments to locations in the
United States, title to Hardware and risk of loss passes to Customer when
presented by Bay or its agent to the carrier, except that for the initial order
Bay retains the risk of loss until delivery. Bay retains and Customer grants Bay
a purchase money security interest in each of the Products until paid for in
full. For shipments to locations outside of the United States, title to Hardware
passes to Customer upon receipt by Bay of payment in full for the corresponding
Product. Risks of loss and damage to Products pass from Bay to Customer upon
arrival at the port of entry in the destination country specified in Customer's
order.
B. SHIPMENT. Bay ships Products by a method and carrier selected by Bay. Bay
will ship freight collect, uninsured if so instructed on Customer's order using
a carrier acceptable to Bay. Notwithstanding the foregoing, the initial order
will be
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shipped at Bay's expense and risk.
C. RETURNS. Products received by Customer as a result of an error by Bay in
shipment may be returned for credit. Products with defects covered by the
warranty or covered under a Service order may be returned for repair or
replacement. Customer agrees to first obtain from Bay a return material
authorization number and to return the corresponding Product within 10 days
after receiving the return material authorization number.
D. CHANGES. Customer cannot cancel or reschedule any order in whole or in part
15 days or less before the ship date on the Acknowledgment, nor after the
Product has shipped.
E. FINAL ACCEPTANCE. The Products shall be deemed finally accepted when Bay
demonstrates to the Customer that a) the Products are capable of accessing WebTV
devices through 56K technology at connectivity equal to or better than current
WebTV connectivity (excluding busy signals) as measured by WebTV, and b) the
routers interoperate with WorldCom's Stratacom ATM service.
5. SOFTWARE LICENSES
A. LICENSE FOR CUSTOMER'S OWN USE OF SOFTWARE. Customer's purchase of licenses
is for its own use of the Software and associated user manuals. Customer's
right to use the Software is subject to the "shrink-wrap" license agreement
which accompanies the Software media (and is reproduced in the accompanying
user manual), the "License Agreement".
B. LICENSE FOR USE OF SOFTWARE RELEASES. Certain Services include the delivery
of revisions and updates to Software previously licensed by Customer
("Software Releases") with accompanying release notes, user manuals or
other documentation. Customer's right to use a Software Release is governed
by the License Agreement.
C. LIMITATIONS. Customer may not translate, decompile, disassemble, use for any
competitive analysis, or reverse engineer the Software or its user manuals in
any way. Customer agrees to not translate any portion of the Software or
associated user manuals into any other format or language without Bay's prior
written permission.
6. WARRANTIES
A. WARRANTY PERIOD. The warranty period for the Products shall run from the date
of delivery until June 20, 1998, which date shall be the commencement date of
the first period of the maintenance contract. During the warranty periods, Bay
shall deliver services at the quality and response levels provided for in the
maintenance contract.
B. HARDWARE WARRANTY. Bay warrants each item of Hardware to be free from defects
in workmanship and material for its respective warranty period which begins on
the date Hardware is shipped to Customer. Customer's exclusive remedy and Bay's
sole obligation and liability under this warranty is to repair or replace at
Bay's discretion any failed Hardware item returned by Customer under a proper
return material authorization number.
C. SOFTWARE WARRANTY. Bay warrants each item of Software, as delivered by Bay
and properly installed and operated on the Hardware or other equipment it is
originally licensed for, to function substantially as described in its
accompanying user manual, during its respective warranty period which begins on
the date Software is first shipped to Customer. If any item of Software fails to
so function during its warranty period, as the sole remedy Bay or Bay's supplier
will at its discretion provide a suitable fix, patch or workaround for the
problem which may be included in a future Software Release. For specific
Software which is distributed by Bay as a licensee of third parties, warranty
terms offered by such third parties to end-users may also apply to Customer.
During the term of the Software Warranty Bay will provide any new software
releases applicable to the Products at no additional costs to Customer.
D. SERVICE WARRANTY. Bay warrants that Services will be performed in a
professional and workmanlike manner and within response times set forth in
Schedule C respecting the maintenance period.
E. LIMITATIONS. Bay does not warrant that any item of Software or a Software
Release is error-free or that its use will be uninterrupted. Bay is not
obligated to remedy any Software defect which cannot be reproduced with the
latest Software Release. These warranties do not apply to any Product which has
been (i) altered, except by Bay or according to its instructions, (ii) used in
conjunction with another vendor's product resulting in the defect, or (iii)
damaged by improper environment, abuse, misuse, accident or negligence.
Replacement parts furnished under this warranty may be refurbished or contain
refurbished components. THE FOREGOING WARRANTIES AND LIMITATIONS ARE EXCLUSIVE
REMEDIES AND ARE IN LIEU OF ALL OTHER WARRANTIES EXPRESS OR IMPLIED, INCLUDING
WITHOUT LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. ANY PRODUCT THAT MAY BE FURNISHED BY BAY WHICH IS NOT LISTED IN THE
PRICE LIST, OR WHICH IS IDENTIFIED IN THE PRICE LIST AS AN "AS IS" PRODUCT, IS
FURNISHED "AS IS" WITH NO WARRANTIES OF ANY KIND.
Page 3
7. SERVICES
A. SERVICE DESCRIPTIONS. The Services to performed by Bay under this Agreement
are set forth in ATTACHMENTS A through E to this Agreement.
B. PRODUCT ELIGIBILITY. To be eligible for maintenance Service, Hardware must be
in good operating condition at revision levels specified by Bay, and Software
must be at the then-current or immediately preceding Software Release. Bay
charges its standard rates then in effect to make Products eligible for
maintenance Service coverage.
C. RELOCATION OF PRODUCTS. Relocation of Products under maintenance Service is
the sole responsibility of Customer and may result in adjustments to the price
for Service and changes to Service response times. If such Products are
relocated to another country or a remote location, continued Service is subject
to reasonable availability from Bay or a Bay authorized service provider.
D. HAZARDS. Customer agrees to notify Bay in advance if the furnishing of
Services will be in an environment which could pose a health or safety hazard to
Bay's employees or service providers.
E. REPLACEMENT PARTS AND SERVICE TOOLS. All failed parts replaced during Service
coverage become the property of Bay on an exchange basis, whether replaced under
warranty, on a per call request, or during maintenance Service coverage periods.
Replacement parts may be refurbished or contain refurbished components.
Diagnostics, documentation, spare parts, tools, test equipment and other
material used in the performance of Services may be furnished by Bay, or already
included with Products, or otherwise available by Bay at Customer's facility.
Bay grants no title or license to such material which remains the exclusive
property of Bay. Customer agrees to allow Bay immediate access to and recovery
of all such material at Bay's request.
F. LIMITATIONS. Bay's Service does not apply to any Hardware or Software which
has been (i) altered, except by Bay or as otherwise instructed by Bay, (ii) used
in conjunction with another vendor's product resulting in the defect, or (iii)
damaged by improper environment, abuse, misuse, accident or negligence. Where
required by law, Bay will refund the Service price of a covered defective
Product if repair or replacement of the failed Product cannot be made.
8. PROPRIETARY RIGHTS AND INFORMATION
A. USE OF PROPRIETARY INFORMATION. "Proprietary Information" includes,
without limitation, diagnostics, the Software and Software Releases, all
user manuals, other documentation, as well as electronically and visually
transmitted printed materials and information disclosed by Customer or
Bay, such as new product information, financial or technical data, that is
marked with a proprietary or confidential legend. Each party agrees to
hold the Proprietary Information of the other in confidence and to use the
Proprietary Information only for the purposes expressly permitted, and to
disclose Proprietary Information only to its employees and contractors as
allowed by the disclosing party and then only on a need-to-know basis.
Each party agrees to maintain adequate internal procedures, including
appropriate agreements with employees and authorized third parties, to
protect the confidentiality of the Proprietary Information. Each party is
entitled to appropriate injunctive relief in the event of any unauthorized
disclosure or use of its Proprietary Information by the other party.
B. LIMITATIONS. Proprietary Information does not include information which
(i) is rightfully in the receiving party's possession in a complete and
tangible form before it is received from the disclosing party, (ii) is or
becomes a matter of public knowledge through no fault of the receiving
party, (iii) is rightfully furnished to the receiving party by a third
party without restriction on disclosure or use, or (iv) is independently
developed by the receiving party without use of or reference to the
disclosing party's Proprietary Information.
C. RESERVATION OF RIGHTS. Bay, on behalf of itself and its suppliers,
reserves all proprietary rights in and to (i) all designs, engineering
details, and other data pertaining to the Products and Services, (ii) all
original works, computer programs, fixes, updates (but not Customer's
developed programs), discoveries, inventions, patents, know-how and
techniques arising out of work done wholly or in part by Bay or its
contractors, and (iii) any and all products developed as a result of such
work. The performance by Bay of professional Services shall not be deemed
a work-for-hire but shall instead be subject to this section.
D. ADMINISTRATIVE PROCEDURES. Customer is responsible for the security of its
own proprietary and confidential information and for maintaining adequate
procedures apart from the Products to reconstruct lost or altered files,
data or programs.
9. CLAIMS OF INFRINGEMENT
A. INDEMNIFICATION. Bay agrees to defend at its own expense any action brought
against Customer to the extent that it is based on a claim that any Product or
Service as furnished by Bay infringes a United States patent, copyright, trade
▇▇▇▇, or
Page 4
other intellectual property right and will pay any costs and damages
finally awarded against Customer in any such actions which are attributable to
any such claim. Bay's obligation under the preceding sentence is subject to the
conditions that (i) Customer promptly notifies Bay in writing of any such claim,
(ii) Bay has sole control of such defense and all negotiations for any
settlement or compromise unless in the reasonable opinion of Customer's counsel
there exists a conflict of interest which impairs Bay's ability to adequately
represent Customer's interest, and (iii) should any Product become, or in Bay's
opinion be likely to become, the subject of any such claim, Customer permits
Bay, at Bay's option and expense, to procure for Customer the right to continue
using such Product, to replace or modify it so that it becomes non-infringing,
or to grant Customer a credit for such Product as depreciated on a three-year,
straight-line basis, and accept its return.
B. LIMITATIONS. Bay has no liability to Customer under this section entitled
CLAIMS OF INFRINGEMENT with respect to any claim which is based upon or results
from (i) the combination of any Product with any equipment, device, firmware or
software not furnished by Bay, (ii) any modification of any Product by a party
other than Bay or as otherwise instructed by Bay, (iii) Customer's failure to
install or have installed changes, revisions or updates as instructed by Bay, or
(iv) Bay's compliance with Customer's specifications, designs or instructions.
10. TERM OF AGREEMENT AND TERMINATION
A. TERM AND TERMINATION. The term of this Agreement shall expire 12 months
after Final Acceptance. Thereafter, this Agreement will renew for
successive 12 month terms unless an authorized representative of one party
provides the other party with written notification of its intent not to
renew at least 30 days prior to the expiration of the then current term.
Either party may terminate this Agreement if (i) the other party becomes
insolvent, files or has filed against it a petition in bankruptcy, or
ceases doing business; or (ii) the other party fails to cure a material
breach within 30 days after receipt of written notice of such breach from
the party not in default. Upon termination by Bay for Customer's breach,
Bay may cancel unfulfilled Customer orders.
B. CONTINUING EFFECT. Any expiration or earlier termination of this Agreement
does not modify or alter any of the obligations of the parties which
accrued prior to such expiration or termination. The sections of this
Agreement which address taxes, duty, fee, payment, proprietary rights and
information, warranties, export and re-export, remedies, limitations,
termination and governing law shall survive any expiration or termination
of this Agreement. The section entitled SOFTWARE LICENSES also survives
any expiration or termination provided Customer continues to comply with
its provisions. Section 3F shall survive any termination or expiration of
this Agreement.
C. EFFECT OF TERMINATION. Neither party is liable to the other for damages in
any form solely by reason of the expiration or earlier termination of this
Agreement.
11. INDEMNITY AND LIABILITY
A. INDEMNITY. Bay agrees to indemnify Customer against any claim arising out
of or resulting from Bay's furnishing of Products or Services or this
Agreement, if such claim (i) is attributable to bodily injury, death, or
to injury to or destruction of physical property, and (ii) is caused by
the negligent act or omission of Bay. This obligation on the part of Bay
is subject to Customer's obligation to (a) give Bay prompt written notice
of any such claim, (b) grant Bay control of the defense and settlement of
such claim, and (c) assist fully in the defense provided that Bay
reimburses Customer's out-of pocket costs. Bay has no liability for any
settlement or compromise made without its prior written consent. Under no
circumstances is Bay liable for any third-party claims except for those
described in this section and in the section entitled CLAIMS OF
INFRINGEMENT.
B. INSURANCE. Bay, at its expense, agrees to maintain adequate insurance
coverage to protect against its liabilities under this Agreement. Insurance
coverage will include (a) worker's compensation insurance, (b) comprehensive
general liability insurance, including coverage for Product liability, bodily
injury and property damage, and (c) automobile liability insurance.
C. LIABILITY. IN NO EVENT WILL EITHER PARTY OR THEIR RESPECTIVE SUPPLIERS BE
LIABLE FOR (1) ANY COST OF SUBSTITUTE PROCUREMENT, SPECIAL, INDIRECT,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES, OR (2) ANY DAMAGES RESULTING FROM
INACCURATE OR LOST DATA OR LOSS OF USE OR PROFITS ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT, THE FURNISHING OF SERVICES, OR THE USE OR
PERFORMANCE OF PRODUCTS EVEN IF INFORMED OF SUCH DAMAGES. EXCEPT FOR DAMAGES
RESULTING FROM BODILY INJURY OR DEATH TO PERSONS, OR ARISING UNDER THE SECTION
ENTITLED "CLAIMS OF INFRINGEMENT", IN NO EVENT WILL BAY'S TOTAL LIABILITY FOR
(1) ANY DAMAGES IN ANY ACTION BASED ON OR ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT EXCEED THE TOTAL AMOUNT PAID TO BAY FOR PRODUCTS UNDER THIS
AGREEMENT, OR (2) CLAIMS BASED UPON
Page 5
BAY'S OBLIGATIONS UNDER THE SECTION ENTITLED "SERVICES" EXCEED THE TOTAL AMOUNT
PAID TO BAY FOR SUCH SERVICES.
12. EXPORT AND RE-EXPORT
Customer agrees not to export, directly or indirectly, any Products, Software,
Software Release or related technical data or information without first
obtaining any required export licenses or other governmental approvals. Without
limiting the foregoing, Customer, on behalf of itself and its subsidiaries and
affiliates, agrees that it will not, without first obtaining all export licenses
and approvals required by the United States government, (i) export, re-export,
transfer or divert any such Software, Software Release or technical data, or any
direct product thereof, to any country to which such exports or re-exports are
restricted or embargoed under United States export control laws and regulations,
or to any national or resident of such restricted or embargoed countries, or
(ii) provide any Product, Software, Software Release or related technical data
or information to any military end user or for any military end use, including
the design, development or production of any chemical, nuclear, or biological
weapons.
13. JOINT MARKETING AND REFERENCE SITES
In consideration of the extraordinary pricing and payment terms provided
Customer by Bay herein, Customer agrees to act as both a demonstration site and
reference selling account for Bay. Customer shall, upon reasonable advance
notice and with due consideration for Customer's operational issues and
requirements, provide select potential Bay customers with tours, demonstrations
and references. Customer and Bay shall prepare either a joint press release and
collateral materials to be released after the execution of this and all
associated agreements, or each may elect to make a separate release, but such
separate release shall be subject to review and approval by the other party.
14. PRODUCT RETURNS
Bay has granted Customer certain extraordinary discounts on 1,920 ports which
replace certain ports Customer had previously obtained from another
manufacturer. In consideration of such discounts Customer shall deliver to Bay
equipment from such other manufacturer supporting 1,200 ports, together with all
applicable documentation and software.
15. GENERAL
A. If any provision of this Agreement is held to be invalid or unenforceable,
the remainder of the provisions shall remain in full force and effect.
B. Bay and Customer agree to comply with the provisions of all applicable laws
and regulations.
C. Neither party is liable for its failure or delay to perform its obligations
due to strikes, wars, revolutions, acts of terrorism, fires, floods, explosions,
earthquakes, parts or labor shortages, government regulations, or other causes
beyond its reasonable control.
D. Except in any case of assignment in connection with the sale or other
transfer of all or substantially all of Customer's ISP business (whether in a
merger, consolidation, reorganization, outright sale or otherwise) this
Agreement may not be assigned by Customer without prior written permission from
Bay. Any attempt by Customer to assign any right, or delegate any duty or
obligation which arises under this Agreement without such permission will be
voidable.
F. Any waiver, amendment or modification of any right or remedy, or of these
terms and conditions will not be effective unless in writing and signed by an
authorized person of the party against whom enforcement is sought. Neither party
shall be bound by typographical or clerical errors.
G. Any notices required to be given shall be in writing and may be sent by mail,
telefax, courier service or otherwise delivered to the party to be notified. All
notices sent to Customer shall be to the address indicated on the signature page
of this Agreement. All notices sent to Bay shall be addressed to ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Manager, Contracts.
H. This Agreement is governed by the laws of the State of California. Customer
and Bay expressly exclude the application of the United Nations Convention on
Contracts for the International Sale of Goods to this Agreement.
Page 6
ATTACHMENT A
On-Site Resident Engineer
Service Description
1. BY MARCH 1, 1998, Bay will assign a resident on-site engineer ( the
"On-Site Engineer") to perform the services described herein ("Services").
The On-Site Engineer will perform these Services at Customer's U.S.
facility identified in Customer's purchase order ("Facility"). ZipLink
will provide tier 1 and tier 2 support which includes active monitoring of
the network. Bay Networks Professional Services will provide dedicated
personnel who provide tier 3 and tier 4 support of Bay Networks Products
to the ZipLink tier 1 and tier 2 personnel. This support will be provided
to a ZipLink work center that is staffed with employees, other contract
employees and to ZipLink Customers that utilize Bay Networks products. The
Bay Networks Professional Services Contract Employees will be expected to
act as ZipLink employees when interfacing with ZipLink Customers on behalf
of ZipLink. The On-Site Engineer shall have the skills appropriate to the
tasks required, and his responsibilities shall include overseeing the
day-to-day operation and the well-being of the Bay equipment, INSTALLING
SOFTWARE UPGRADES, acting as the escalation point for all operational and
technical issues between Bay and Customer and assisting in training
Customer personnel and generating and maintaining network configuration
documentation. Subject to availability of resources, On Site Engineers
will also be offered to Customer on a per day basis at Bay's then current
published prices, provided Bay shall have been provided reasonable advance
written notice of Customers per-day requirements.
2. The "Start Date" for each On-Site Engineer will be confirmed by Bay to
Customer in writing. Customer agrees to notify Bay in writing at least
ninety (90) days prior to the expiration of the first twelve months if
Customer elects to renew such purchase order, subject to Bay's then
current prices or as otherwise mutually agreed.
3. If travel is requested by Customer in the performance of Services,
Customer will reimburse Bay as follows:
(i) commercial transportation - reimbursable on an "incurred cost" basis at
economy, tourist or coach rates. Travel time for each On-Site Engineer
will be considered hours of work expended by each On-Site Engineer;
(ii) private automobile - reimbursable at Bay's then current standard rate
(currently $0.315 per mile);
(iii) per diem - reimbursable for actual hotels, meals, and local transportation
costs;
(iv) all travel, transportation, and per diem expenses, copies of which are to
accompany Bay invoices, for which reimbursement is sought; Customer's
administrator shall promptly authorize all reimbursement which meets the
requirements of 3(i), (ii) and (iii) above. Reimbursements other than as
described above shall require the written authorization of Customer's
administrator.
(v) reimbursement shall be made by Customer within thirty (30) days after
receipt by Customer of an invoice from Bay.
4. The On-Site Engineer will perform the Services five (5) days per week
(Monday through Friday) and will continue to be subject to Bay's personnel
policies during the term of the Agreement including, but not limited to,
holiday, vacation and sick day policies, salary, benefits and compensation
plans. Bay will use reasonable efforts to schedule vacation for each
On-Site Engineer so as not to severely interfere with or unduly delay any
particular or special requirements of Customer provided Customer advises
Bay in advance of such requirements. Bay may schedule training and/or
other required meetings for each On-Site Engineer to attend at reasonable
intervals during the term of this Agreement. These training classes and
meetings will be scheduled at mutually agreed upon times. In the case of
any planned absences such as vacation, training, required meetings and the
like, Bay shall arrange alternate coverage so that Customer has 52 weeks
per year of coverage, less holidays observed locally. Customer
acknowledges that unplanned absences may be inevitable and Bay shall not
be required to provide replacement coverage on short-term illness days or
the like, but shall use its best efforts to provide coverage if illness or
other unplanned absence are expected to last more than a few days. Hours
of work will be limited to forty (40) hours a week based on a work
schedule mutually agreed to by the parties, but generally on a daytime
weekday schedule. Any hours that may be reasonably required to be
performed in excess of the combination of five (5) eight (8) hour days per
week will be provided upon reasonable prior written request, and will be
subject to Bay's approval, not to be unreasonably withheld; such excess
hours will be offset by equal time off during the normal work period, the
allocation of such time off being mutually agreed upon in advance between
the parties. Non-business hours shifts and shift work is to be project
related and for the purposes of providing tier 3 and 4 support during
these projects, not for tier 1 and 2 coverage of the center. The On-Site
Engineer should be
Page 7
available via beeper (for Zip Link deemed network emergencies) 24 hours a
day, 7 days per week with the exception of vacation. Outside the normal
working time of 40 hours per week, time will be deducted from future
credited hours at the overtime rate of 100% of the hourly rate quoted in
this proposal, less applicable discounts.
5. Customer will provide, promptly upon arrival at the Facility by each
On-Site Engineer, all necessary office space for each such On-Site
Engineer, full and unrestricted access to a telefax machine, a telephone
for calls related to the Services being performed and an adequate area for
storage of related equipment. Customer acknowledges and agrees that
performance by the On-Site Engineer of his/her obligations under this
Agreement is expressly conditional upon the full performance by Customer
of its obligations hereunder. Customer understands that Bay will furnish
each On-Site Engineer with one (1) portable computer with standard
business software application packages (i.e. spreadsheet, word processing,
and mail). If any additional computer resources, tools or test equipment
are required for the On-Site Engineer to perform his/her work, they will
be furnished by Customer at no cost.
6. Customer acknowledges that Bay may replace the On-Site Engineer at any
time upon thirty (30) days prior written notice delivered to Customer's
administrator. Customer agrees that it will not offer employment to any
On-Site Engineer during the term of this Agreement and for a period of one
(1) year after it expires or terminates.
7. Customer will provide direction in the day-to-day performance of Services,
but each On-Site Engineer will at all times be and remain an employee of
Bay and not an employee of Customer. Bay shall maintain sole control and
discretion over the services rendered hereunder. Each On-Site Engineer
will observe Customer's reasonable rules and regulations that Customer
makes known to him/her in writing and in advance with respect to the
safety of persons and property while at the Facility. Each party will
comply with all applicable governmental laws, ordinances, rules and
regulations applicable to the Services.
Page 8
ATTACHMENT B
Network Management
Network Management (NM) as defined by the various standard organizations
consists of 5 general areas:
a) Fault management
b) Configuration Management
c) Accounting Management
d) Performance Management, and
e) Security Management
The Network Management system that we are proposing for Ziplink will cover all
of the above areas. We will be using a combination of existing Bay Networks
flagship NM systems such as Optivity and also customized and high performance
system based on the NetExpert System from Objective System Integrators, Inc.
Our system will actively manage Ziplink networks based on real time data. It is
an intelligent system that will change and adapt to Ziplink networks over time.
The system will generate customized reports as required for tracking and
historical trending. It will also allow for automated responses to routine
events without operators intervention.
WORK TO BE PERFORMED
1) Network Evaluation, data gathering
2) System Engineering, Requirement document
3) Database design
4) Customization for Ziplink specific needs
5) Custom reports
6) Phased deployment, installation and training
7) Delivery of Documentation
8) Training of Customer Personnel
RESOURCE
Two NM specialists, one Consultant, and one project manager to coordinate with
the other NM specialists from other projects
DURATION
Approximately 6 months
OSI SOFTWARE
A Sun Microsystem hardware platform will be required and an OSI software
platform may be required in order for Bay to perform its work hereunder. Ziplink
shall be responsible for purchasing this hardware and software.
METHODOLOGY
A Bay Networks Consultant will meet with Ziplink to determine its needs and
requirements. He will study the network, understand the traffic and the
connectivity, observe and comment on the operations of the network. He will also
review the current mode of management of the network. From this set of data he
will provide a written set of system engineering documents and the preliminary
NM requirement document. With Ziplink comments and feedback, this document will
be the basis for the Database design and for the customization of the various
existing NM modules to fit Ziplink environment.
Page 9
Reports will also be customized to reflect Ziplink network.
As each phase of the development is completed, they will be deployed into
Ziplink networks. Training will be provided in each step.
Page 10
ATTACHMENT C
EVERYDAY WITH LABOR SERVICE DESCRIPTION
1. TRC Access and Information Services
Customer shall be entitled to Technical Response Center ("TRC") support. The TRC
is a telephone handling service staffed by Bay's product support personnel which
provides assistance with diagnosis of defects or failures in the Bay hardware
and software products to conform with published documentation. Currently Bay has
TRCs in Billerica Massachusetts; Santa Clara, California; Valbonne, France;
North Sydney, Australia and Tokyo, Japan.
Customer shall have TRC access seven days per week, twenty-four hours per day,
with no restriction on the number or qualification of Customer's personnel who
are eligible to place telephone calls to report product related questions or
problems. Customer will also receive one annual subscription for Bay's technical
reference library; including CD-Rom and hard copy documentation.
2. Software Updates; Software Fixes
Under this Service Description, Customer shall be entitled to receive Software
Releases, which include new features, enhancements and improvements to Bay's
software, as they are made generally available for release by Bay, for products
covered under the terms of this Service Description.
If Bay diagnoses that a reported problem is due to nonconformance to published
specifications of a supported software version, then Bay will provide any
software fix for the reported nonconformance available at the time the problem
is reported. If there is no such available fix, Bay will use reasonable
commercial efforts to remedy such nonconformance, which may include a workaround
or other temporary fix to the software. If the software is not a currently
supported version, and the nonconformance has been corrected in a supported
version, Customer will be advised to upgrade in order to obtain assistance. Bay
does not promise or guarantee that all nonconformance of the software can be
corrected.
If Bay is unable to complete its diagnosis telephonically, Bay may, at its sole
discretion, dispatch a service technician to the Customer's site in order to
facilitate Bay's diagnosis. There shall be no additional charge to Customer for
such dispatch unless made by Bay at the request of Customer.
3. Hardware Support
Bay will provide same business day on-site replacement of Bay Networks' field
replaceable hardware components at each covered site. The principal period of
maintenance for this Service Description is seven days per week, twenty-four
hours per day.
If Bay diagnoses that a reported problem is due to a failed hardware component,
Bay shall dispatch a service technician to arrive on-site (i) within four hours
following completion of diagnosis to perform on-site replacement, if the
products to be repaired or replaced are installed less than 50 miles from the
nearest parts depot of Bay or any of its authorized representatives, or (ii)
within six hours following completion of diagnosis to perform on-site
replacement if the products to be repaired or replaced are installed more than
50 miles but less than 100 miles from the nearest parts depot of Bay or any of
its authorized representatives, AND AS SOON AS REASONABLY POSSIBLE IN THE CASE
OF PRODUCTS INSTALLED MORE THAN 100 MILES FROM A BAY OFFICE.
On-site replacement is the de-installation by Bay Networks of a defective field
replaceable hardware product component and the installation of a replacement
hardware Product component. The failed component which is de-installed by Bay
Networks shall become the property of Bay Networks on an exchange basis.
Page 11
4. Responsibilities of Customer
Customer shall ensure that a V.32 modem, or such other modem as Bay may
designate, is installed on the Customer network in order to facilitate Bay's
dial-in diagnostics capability. Customer shall provide Bay all necessary
authorizations for remote access by Bay to the Customer network. Customer agrees
to provide the service technician with immediate access to the products to be
maintained. Customer must advise Bay in writing, of any change of locations for
products to insure proper dispatch and delivery. Customer is responsible for
ensuring that the products are used and maintained in accordance with the
applicable product documentation.
At any site where Customer is purchasing this Service Description for a
particular product, Customer must cover all "like" products at such site under
this Service Description. (By way of example, all Access feeder Nodes (AFNs) are
"like" products. Therefore, an Ethernet AFN is a "like" product to a Token Ring
AFN, but not a "like" product to an Ethernet ASN.) Customer may not split the
coverage of a group of "like" products at any one site between this Service
Description and Service Descriptions BF2300XXX, BG2300XXX, BH2300XXX, BJ2300XXX
or BK2300XXX.
5. Conditions
Bay's support obligations are expressly conditional upon the products not being:
(i) subject to unusual mechanical stress or unusual electrical or environmental
conditions; (ii) subject to misuse, accident or disaster including without
limitation fire, flood, water, wind, lightning or other acts of God; (iii)
altered or modified unless performed or authorized by Bay. Bay shall have no
liability or obligations hereunder for failure of the products to conform to
published specifications resulting from the combination of the products with any
third party hardware or software not authorized in Bay's published documentation
or when caused by Customer's inability to use the products if they are operating
substantially in accordance with published specifications.
Page 12
ATTACHMENT D
INSTALLATION/IMPLENTATION SERVICE DESCRIPTION
Bay Networks Staging and Integration Services will provide configuration setup,
integration, and testing at each designated Zip Link facility with our staging
and integration facility with a dedicated staff. All hardware and software is
staged to mutually agreed specifications.
Staging and Option
INSTALLATION INTEGRATION SERVICES
o Unpacking the equipment at your site
o Placing the equipment on-site in its designated location
o Powering up and verifying that the equipment is properly functioning
o Connecting the equipment to your network
o Verifying that the equipment is operable on your network
PLACEMENT
o Receiving and inspecting all equipment at Zip Link Site integration
facility
o Placing the equipment in a designated rack or for tabletop
installation
INSTALLATION
o Unpacking the equipment at your site o Placing the equipment on-site in its
designated location o Powering up and verifying that the equipment is properly
functioning o Connecting the equipment to your network o Verifying that the
equipment is operable on your network
ASSEMBLY
o Inserting and connecting system components and cables
o Verifying firmware configuration and parameters
o Performing appropriate diagnostics to verify proper operation
o Loading system software
o Configuring IP, OSPF, and PPP protocols
o Testing the basic configuration by powering it up and conducting a
network ping test
ACCEPTANCE
o Review of the Bay Networks INSTALLATION INFORMATION PACKAGe with your
designated representative
o Verifying that the equipment meets installation specification
o Obtaining your designated representative's sign-off of completion
Page 13
ATTACHMENT E
BAY NETWORKS PROJECT MANAGER
Bay Networks will provide a highly disciplined Project Manager who possesses
proven technical and program management expertise, for the period of performance
of this contract. As an integral component for the success of the overall
project, The Project Manager will:
/X/ act as primary interface to Bay Networks' management on problem
identification and resolution,
/X/ ensure timely completion of all required Bay Networks tasks through
proactive planning and management activities,
/X/ establish project goals, milestones, and deliverables,
/X/ work with your designated Project Manager to anticipate, evaluate, and
resolve potential project risks,
/X/ minimize disruptions and/or delays through effective contingency planning,
/X/ act as primary contact for Bay Networks project, technical, financial
data, and
/X/ provide technical and/or project management expertise as required.
The Project Manager will have direct control and responsibility for key Bay
Networks Professional Services operational, personnel and financial resources
necessary to ensure successful completion of this project.
The Project Manager will submit to you a Project Status Report as agreed on by
the project the during the Period of Performance. The Project Manager will
maintain close and frequent contact with your organization to include project
status and issues.
Your Project Manager will be the primary team contact to Bay Networks for
network support, implementation, and planning issues as well as the overall
manager for the successful completion of the project. S/he may manage the
efforts of other skilled, experienced individuals assigned to manage or
implement specific project tasks.
PROJECT PLAN
Bay Networks will develop and maintain a Project Plan. The Project Plan will
describe how Bay Networks will organize and manage resources required to
complete your network design and implementation. Bay Networks will develop the
Project Plan using a variety of tools, to include Lotus Notes and Microsoft
Project, according to the Statement of Work. It will include a project
organization, functional matrix, work breakdown structure, responsibility
account matrix, detailed schedules, staffing plans, schedule of deliverables,
including your furnished items, and a risk management plan.
STATUS REPORTING AND PROBLEM ESCALATION
The Bay Networks Project Manager will undertake the necessary steps required to
develop contingency plans as a means to resolve potential issues. The Project
Manager will then review the outlined plans with your team and obtain agreement
on the proposed alternatives. If the key event or activity is related to
activities outside the Bay Networks project scope, the Bay Networks Project
Manager will notify your Project Manager of the situation.
We will conduct major milestones review meetings / conference calls with you.
Bay Networks will present all required documentation and develop a Status Report
for approval at the review meeting. Planning techniques such as PERT (Program
Evaluation and Review Technique) and CPM (Critical Path Method) are commonly
used to develop and review implementation progress. You will be asked to review
all items and approve items completed
Bay Networks will either provide a Project Review with you or provide a summary
report as required. Bay Networks will present complete Project status, including
a discussion of technical issues, schedules, deliverables, Project risks, and
action items.
The Bay Networks Project Manager will conduct telephone conference meetings with
the various Bay Networks project leaders in a weekly basis or as required. Major
issues will be identified and a summary report will be made available to your
Page 14
team.
CONTRACT MANAGEMENT AND CHANGE CONTROL
Bay Networks and your team will agree on a change control procedure. The Change
Control Procedure will control all requests for change to the network Statement
of Requirements and changes to the work proposed herein. Work changes caused by
late information, inaccurate information, and your supplier delinquencies will
require changes to the scope of this agreement governed by the Change Control
Procedure.
Page 15
ATTACHMENT F
NETWORK MANAGEMENT COMPLETION CRITERIA
(To be agreed upon between the technical staffs of Bay and Customer)
Page 16
Exhibit 1
---------
*
AMENDMENT NO. 1
TO
AGREEMENT FOR
PURCHASE AND LICENSE OF BAY NETWORKS PRODUCTS AND SERVICES
THIS Amendment No. 1 ("Amendment") is effective as of June 25, 1998 (the
"Effective Date") and is made between BAY NETWORKS USA, INC., a Delaware
corporation with offices at ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇,▇▇▇▇▇▇ on behalf of itself and its affiliates ("Bay"), and Ziplink, LLC,
("Customer"), with offices at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS, the parties have entered into an agreement number 980138 for the
purchase and license of Bay products and services with an effective date of
December 10, 1997 (the "Agreement"); and
WHEREAS, the parties desire to modify the Agreement.
NOW, THEREFORE, the parties hereby agree as follows.
Discounts For Certain Additional Products
Subject to Section 1(D) below, all Bay Remote Access products purchased by
Ziplink after the Effective Date of this Amendment shall be discounted at *
off of Bay Networks' List Price current on the date of purchase by Ziplink.
Subject to Section 1(D) below, all Bay Backbone Node Router products purchased
by Ziplink after the Effective Date of this Amendment shall be discounted at *
off of Bay Networks' List Price current on the date of purchase by Ziplink. For
all other Bay products, including all System 5000 products purchased by Ziplink
after the Effective Date of this Amendment, the discount shall be * off of
Bay Networks List Price current on the date of purchase by Ziplink. The
discounts in 1(A) and 1(B) above shall apply only to orders placed by Ziplink
during the twelve month period commencing on the Effective Date of this
Amendment, provided that such discounts shall be limited to the first fifteen
million dollars of product (at the Bay Networks then-current List Price)
purchased during such twelve month period. For all orders placed by Ziplink in
excess of fifteen million dollars at List Price, the discount shall be * off
of Bay's then-current List Price for the Remote Access products and * off of
Bay's then-current List Price for the Backbone Router products. No discounts or
price reductions in sections 1 or 2 of this Amendment shall limit or effect any
of Bay's obligations or Ziplink's rights under Section 3F of the Agreement.
Payment
Ziplink agrees to make payment to Bay in full for all outstanding invoices
and all amounts owed to Bay (as of the Effective Date of the Amendment) for
the Products listed in Exhibit 1 to the Agreement (referred to as the
"Initial Product Purchase") no later than June 26, 1998. In exchange for this
payment, Bay agrees to reduce the aggregate total value of such invoices for
the Initial Product Purchase by * dollars. The Resident On-Site Engineer
Services in ATTACHMENT A to the Agreement shall continue to be billed to
Ziplink on a monthly basis.
The Network Management Services in ATTACHMENT B to the Agreement shall be
subject to later mutual agreement of the parties with respect to deliverables,
milestones and the payment schedule. In the event the parties cannot reach a
mutually acceptable agreement, Ziplink can terminate its obligations respecting
Network Management services from Bay and no amount whether for previously
performed or future Network Management services shall be due or payable to Bay.
The Maintenance Services in ATTACHMENT C to the Agreement shall billed at the
beginning of each quarter as currently set forth in Section 3(B) of the
Agreement provided however, that Bay agrees to reduce maintenance ▇▇▇▇▇▇▇▇
otherwise due and owing by * dollars. This * dollar reduction will be
effected on a pro-rata basis as an effective * discount over the first *
million dollars of maintenance ▇▇▇▇▇▇▇▇. The first * dollars of maintenance
▇▇▇▇▇▇▇▇ includes the * Maintenance Price set forth in Section 3(B) of the
Agreement.
Ziplink agrees to make payment to Bay for the Installation/Implementation
Services and the Project Management Services described in ATTACHMENTS D and E of
the Agreement, respectively, as follows: (i) fifty percent shall be due ten days
following the date upon which the fifteenth Point of Presence has been installed
and (ii) fifty percent shall be due ten days following the date upon which the
twenty-fifth Point of Presence has been installed. For all Bay products
purchased on or after June 1, 1998, payment will be due and owing net thirty
days from the date of invoice. Section 4(E) of the Agreement is hereby deleted.
Bay Professional Services purchased by Ziplink in support of future product
purchases will be subject to Bay's standard terms and conditions.
Warranty and Maintenance
The warranty for the Initial Product Purchase shall commence ten days following
the date upon which the fifteenth Point of Presence has been installed (the
"Warranty Start Date"). The warranty period shall be ninety days. Hardware and
Software Maintenance for the Initial Product Purchase shall continue ninety days
after the Warranty Start Date.
The warranty for all purchases of Bay product purchased on or after June 1, 1998
shall commence upon the tenth day following installation of each such purchase.
The warranty period shall be as set forth in the Bay Price List current on the
date of such purchase by Ziptink.
In the event of a conflict between the terms of this Amendment and the terms of
the Agreement, then the terms of this Amendment shall govern.
The parties have caused this Agreement to be executed by their authorized
representatives.
ZIPLINK, LLC BAY NETWORKS USA, INC.
BY: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
NAME: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ NAME: ▇▇▇▇ ▇▇▇▇▇▇▇
TITLE: President TITLE: Senior Counsel
DATE: 7/17/98 DATE: 7/17/98
