Amendment No. 1
To OEM-IN Software License Agreement
This Amendment is the First Amendment ("Amendment No. 1") to the OEM-IN Software License Agreement (with Reproduction Rights) dated December 3, 2002 ("License Agreement"), by and between Cisco Systems, Inc., a California corporation with offices at 170 W. Tasman Dr. San Jose, California 95134 ("Cisco") and Visual Networks Operations, Inc., a Delaware corporation with offices at 2092 Gaither Road, Rockville, Maryland 20850("Licensor.") and is made retroactive to December 3, 2002 ("Effective Date"). All defined terms used in this Amendment No. 1 have the same meaning as in the License Agreement. The terms and conditions of this Amendment No. 1 supersede and replace any terms and conditions of the License Agreement, which are inconsistent with these terms and conditions. All other terms and conditions of the License Agreement remain in full force and effect.
Whereas, the Parties desire to amend Exhibit A, Software and Royalties, and Exhibit G, Licensor Support (Software), of the License Agreement; and
Now therefore, the Parties agree as follows:
1. Exhibit A and Exhibit G, attached hereto, shall replace Exhibit A and Exhibit G of the License Agreement, in their respective entirety, retroactive to December 3, 2002.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1, as of the date first above written.
Agreed: Agreed:
CISCO SYSTEMS, INC. VISUAL NETWORKS OPERATIONS, INC.
By: /s/ Anson Chen By: /s/ Steven G. Hindman
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Name: Anson Chen Name: Steven G. Hindman
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Title: VP/GM, INSMBU Title: Executive Vice President
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Date: December 30, 2002 Date: December 19, 2002
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Cisco Systems, Inc. Confidential Information For Internal Use Only.
*** Confidential Information has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.
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Exhibit A
SOFTWARE, ROYALTIES, AND SUPPORT COMPENSATION
1. Payment. For each Software copy reproduced and distributed for revenue by or under the sublicense rights of Cisco, Cisco shall pay a per copy royalty of [***] of Net Invoice Price received by Cisco from the distribution of the Software. In the event Software is sold on a stand-alone basis, "Net Invoice Price" shall mean the Cisco's actual revenue received from the distribution of the Software hereunder, less deductions for refunds, returns, taxes, export fees and duties.
In the event Software is bundled with other Cisco products, "Net Invoice Price" shall mean the amount equal to Licensor's Proportionate Share (as determined below) of Cisco's actual revenue received from the distribution of the Software hereunder, less deductions for refunds, returns, taxes, export fees and duties. "Licensor's Proportionate Share" shall be determined by dividing the reference price of the Software by the sum of the list prices of the bundle components.
[***]
2. Payment Terms. All undisputed royalties will be paid quarterly, pursuant to Cisco's fiscal year. Cisco will provide Licensor within forty-five (45) days after the end of a Cisco fiscal quarter, (a) a report, substantially in the form as follows, showing the total invoices sent to Cisco's customers in the previous quarter and the Net Revenue received therefrom; and (b) a payment equal to royalties owed to Licensor related thereto (or, if the credits owed to Cisco hereunder exceed the amount of royalties owed in a particular quarter, an invoice, payable by Visual within thirty (30) days of receipt, for the amount of the excess). Cisco shall be entitled to credit for returns of the Software within [***] days from the date Cisco ships the Software. Any such credit will be offset against or deducted from royalties or other fees due to Licensor hereunder. In the event a customer makes a return for which Cisco does not receive a credit, Cisco shall be entitled to a credit against a future purchase by the same customer of the returned Software (or a subsequent version of such Software). To the extent that any royalties are in dispute, the parties agree to reasonably cooperate to resolve such dispute as quickly as reasonably possible.
Licensor retains complete discretion to change its software product price list or to discount the list price of its products. Notwithstanding any changes in Licensor's software product price list, the prices set forth in the Reference Price List shall not increase during the term of this Agreement. Licensor shall provide Cisco with written notice of a modification to its software product price list ninety (90) days before the effective date of any such modification unless the parties agree in writing to a shorter notice period. If Licensor's list price on its software products is reduced, Licensor will extend the price reduction to Cisco as of the date of written notice of such price reduction.
Cisco Systems, Inc. Confidential Information For Internal Use Only.
*** Confidential Information has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.
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CISCO SYSTEMS FY (YEAR) (QUARTER)
-------------------------------------------------------------------------------- Software Units Shipped Net Invoice Price Royalty -------------------------------------------------------------------------------- xxxxx --------------------------------------------------------------------------------
-------------------------------------------------------------------------------- yyyyy -------------------------------------------------------------------------------- TOTALS: --------------------------------------------------------------------------------
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TOTAL ACCRUAL: $0.0
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3. Audit Rights. Cisco shall maintain, for a period of [***] years after the end of the year to which they pertain, complete records of the Software manufactured and/or distributed by Cisco in order to calculate and confirm Cisco's royalty obligations hereunder. Upon reasonable prior notice, Licensor will have the right, exercisable not more than once every [***] to appoint an independent accounting firm or other agent reasonably acceptable to Cisco, at Licensor's expense, to examine such financial books, records and accounts during Cisco's normal business hours to verify the royalties due from Cisco to Licensor herein, subject to execution of Cisco's standard confidentiality agreement by the accounting firm or agent; provided, however, that execution of such agreement will not preclude such firm from reporting its results to Licensor. In the event an audit discloses an underpayment or overpayment of royalties due hereunder, the appropriate party will promptly remit the amounts due to the other party. If any such audit discloses a shortfall in payment to Licensor of more than five percent (5%) for any quarter, Cisco agrees to pay or reimburse Licensor for the expenses of such audit.
4. [***]
5. Support Compensation. Licensor shall be compensated for and shall perform Level 1 through Level 3 support, as follows:
(a) Initial Support Agreements: Cisco shall pay Licensor [***] of the net revenue received by Cisco of the portion of each initial Single-Year SAS Support Agreement, initial Multi-Year SAS Support Agreement and Master SAS Support Agreement sold covering support for the Software attributable to support of the Software.[***]
(b) Support Agreement Renewals: Cisco shall be responsible for generating all renewal sales and shall pay Licensor [***] of net revenue for each Support Agreement Renewal, provided that Licensor submits a report to Cisco within forty-five (45) days after each Cisco fiscal quarter end, detailing a list of Customers and Cisco support contracts expiring in the following quarter. Such report shall list the Customer name,
Cisco Systems, Inc. Confidential Information For Internal Use Only.
*** Confidential Information has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.
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Support Agreement number, term of support, effective date of support, the Software identification numbers being renewed, and the total list price. Cisco shall thereafter submit a quarterly renewal report to Licensor in accordance with subparagraph (e) below. Licensor's obligation to submit support renewal reports to Cisco is contingent upon Cisco providing report information identified in subparagraph (f) below to Licensor for Licensor to complete support renewal reports for otherwise new support contracts. Licensor's obligations to submit renewal reports shall cease when Cisco has implemented an automated ability to track Support Agreement renewals and has provided Licensor thirty (30) days' advance written notice of such automation.
(c) [***]
(d) Shared Support: Although Cisco will endeavor to discourage Support Agreement sales and Renewals to Customers by a Cisco service integrator through Cisco's SIS'98 or other shared support programs ("Shared Support") when such sale or renewals are identified and accepted, the same percentage compensation noted in subparagraph (b) above shall be paid to Licensor.
(e) [***]
(f) Quarterly Report: For Initial Support Agreements and Renewals, Cisco shall submit (a) a report to Licensor within forty-five (45) days after each Cisco fiscal quarter end, detailing each Customer invoiced for support during such quarter, the Customer name, Support Agreement number, term of support, effective date of support Software identification numbers, and the total list price; and (b) a payment equal to support fees owed to Licensor by Cisco in accordance with this Section 5. Licensor shall identify and advise Cisco of any issues pertaining to the quarterly reports within fifteen (15) business days after receipt of Cisco's report. If no issues are raised with such timeframe, the report shall be deemed accepted by Licensor. Cisco and Licensor will work in good faith to resolve any issues within a further thirty-day period.
(g) Non-Payment: In the event that Cisco is not in receipt of the invoiced support fees due from a Customer, Cisco may terminate the support of that individual Customer, less a pro-rata amount for the Licensor's agreed support compensation commencing on the date support started through the date that Cisco notifies Licensor that it has terminated support
(h) Credits: Section 2 of this Exhibit A to the Agreement regarding credit for returns or offsets against License fees due to Licensor also will apply with regard to maintenance and support fees. In addition, If a Cisco customer cancels or terminates its annual maintenance agreement with Cisco for which it has paid maintenance fees in advance and Cisco provides a pro-rata credit or refund to the customer of the unused portion of the maintenance fees paid, Licensor will provide Cisco with a credit or refund in the amount of the unused portion of the maintenance fees paid to Licensor as of the date Licensor is notified of such cancellation or termination. On a quarterly basis, Cisco will notify Licensor of such refund or credit.
Cisco Systems, Inc. Confidential Information For Internal Use Only.
*** Confidential Information has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.
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(i) Payment Schedule: Cisco shall pay Licensor the compensation reflected in subsection (a), (b), and (e) above, as applicable, for the term of such Support Agreement or Support Agreement Renewal together with any additional percentage based upon customer satisfaction bonus goals outlined in Exhibit G and any additional fees for Shared Support, within forty-five (45) days after Cisco's fiscal quarter end. Any supplement payment or credit shall be paid to Licensor during the immediate subsequent quarter; whereby Cisco shall make one payment during its fiscal quarter to Licensor for all then-current applicable compensation. Any credit or refund due Cisco shall be issued or paid by Licensor within forty-five (45) days following the Cisco fiscal quarter in which Cisco provides notice of such credit or refund to Licensor.
(j) Change in Compensation: At any time after the first twelve (12) months from the effective date of Exhibit G, upon thirty (30) days' written notice to Licensor, Cisco may, at its election, request additional Software training above from Licensor so that Cisco may assume additional support obligations after such training. Such additional training shall be offered to Cisco at a [***] discount off Licensor's standard pricing for support training. If Cisco assumes additional support responsibilities, compensation to Licensor shall be negotiated in good faith at a lower compensation percentage.
k) [***]
Cisco Systems, Inc. Confidential Information For Internal Use Only.
*** Confidential Information has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.
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EXHIBIT G
EXHIBIT G to License Agreement LICENSOR SUPPORT (Software)
This Exhibit G pertains to support for Licensor's Software.
Definitions: The following terms shall have the meaning assigned to them. Capitalized terms not defined herein shall have the meaning assigned to them in the Agreement.
"Agreement" means that OEM Software License Agreement by and between Licensor and Cisco, effective December 3, 2002.
"Customer" means Cisco's end-user of the Software who is requesting support.
"INSMBU" means Cisco's Intelligent Network Services Management Business Unit.
"Error" means a bug in the Software.
"Maintenance Release" means an incremental release of Software that provides maintenance fixes and may provide additional Software features. Maintenance releases are designated by Cisco as a change in the digit(s) to the right of the tenths digit of the Software version number [x.x.(x)].
"Major Release" means a release of Software that provides additional Software features and/or functions. Major Releases are designated by Cisco as a change in the ones digit of the Software version number [(x).x.x].
"Minor Release" means an incremental release of Software that provides maintenance fixes and additional Software features. Minor releases are designated by Cisco as a change in the tenths digit(s) of the Software version number [x.(x).x].
"Multi-Year Support Agreement" means a Support Agreement having a term greater than one (1) year.
"SAS" means Cisco's current standard software application service offering which includes Software bug fixes and patches and maintenance Updates (Minor Releases).
"Single-Year Support Agreement" means a Customer Support Agreement having a term of at least one (1) year, but less than two (2) years.
Cisco Systems, Inc. Confidential Information For Internal Use Only.
*** Confidential Information has been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.
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"Support Agreement" means a support contract between Cisco and a Customer for the provision by Cisco of support and ma ...
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