PRODUCT DEVELOPMENT AGREEMENT
This Product Development Agreement ("Agreement") is made and entered into as of July 22, 1996 ("Effective Date"),
by and between Cisco Systems, Inc., a California corporation, having principal offices at 170 West Tasman Drive, San Jose, California 95134-1706 ("Cisco"), and Terayon Corporation, a California corporation, having principal offices at 2952 Bunker Hill La
ne, Santa Clara, California 95054 ("Terayon").
Common objectives of the parties in entering into this Agreement include: (i) to develop an end-to-end system providing Internet/WAN access through the Cable System (as defined below) to the end user, and (i
i) to develop efficient interconnection protocols between Cisco products, including the Cisco 75xx Router family and the Cisco Lightstream 1010 ATM Switch, and products that Terayon will develop (as described below), which together will form the basis of
an end-to-end system for the Cable System market.
The parties hereby agree as follows:
Definitions. For purposes of this Agreement, the following terms shall
------------ have the following meanings:
1.1 "Teralink" shall mean a head-end c
able modem concentrator chassis or cable data modem terminal server ("CDMTS"), which includes the channel controller unit(s) and other components based on Terayon technology. Teralink as defined herein includes all versions developed by Terayon including
the Teralink 1000, Teralink 2000, and other Terayon designs, and includes all components including but not limited to the RF circuitry and ASIC component, which are resident on a VME Board; CPU, TDM interface, Utopia, SAR, and Ethernet interface.
1.2 "Terapro" shall mean a subscriber-end remote unit and modem device based on Terayon technology, which will provide data transmission from the subscriber through the hybrid fiber coax ("HFC") system to the Teralink and on to the cable head-end p
latform.
1.3 "sCDMA" shall mean Terayon's Synchronous Code Division Multiple Access spread spectrum communication digital access scheme which Terayon shall incorporate into Terayon's physical layer modules resident and other components in t
he Terapro and Teralink.
1.4 "Terayon Technology" shall mean Terayon's Teralink, Terapro, and sCDMA as defined in Sections 1.1 - 1.3 above, including, without limitation, integrated circuits, design documentation, board schematics, source
code, designs, technology, ideas, know-how, processes, formulas, data, techniques, improvements, modifications, inventions (whether patentable or not), works of authorship, derivative works, circuits, mask works, layouts, algorithms, and computer programs
relating thereto, and all patents, patent rights, copyrights, mask work rights, trade secret rights and other intellectual property and proprietary rights therein anywhere in the world.
1.5 "IF Interfaces" shall mean collectively three separate interfaces:
(a) I/F4 Interface: The I/F4 interface is the interface between the Teralink and the 75xx Router, which supports a standard ATM interface compliant with ATM Forum UNI 3.1. At the physical layer, the I/F4 interface
supports a SONET/SDH based interface. The I/F4 also supports a management interface using a separate 10Base-T Ethernet interface for local exchange of management information such as TeraPro modem configuration information and RF channel up/down status inf
ormation between the router and the TeraLink system. Both the data interface and the local management interface supported by I/F4 are jointly being developed by Terayon and Cisco.
(b) I/F6 Interface: The I/F6 is the IP interface betwee
n the router located at the headend or remote distribution hub and the PC located at the subscriber premise. Several of the functions supported by the I/F6 interface are unique to the CATV data network. For example, there is an intimate relationship betwe
e
n the Logical IP Subnet (LIS) over CATV data network and the CATV RF channel parameters. The I/F6 interface supports LIS configuration with routers and directly connected PCs using RF channels in the CATV data network. All ARP messages originated by the P
C
s in the router's IP subnetwork are passed on to the router through the I/F6 interface. In addition, the router participates via the I/F6 interface in the DHCP message exchange between the PC and the DHCP server and uses the information to bind the PC MAC
address, the PC IP address, and the TeraPro modem identifier. Terayon and Cisco are jointly specifying the I/F6 interface.
(c) I/F7 Interface: The I/F7 is the IP interface between the DHCP server located at the headend or remote distr
ibution hub and the PC located at the subscriber premise. The I/F7 interface supports dynamic assignment of IP addresses to the PC using DHCP on PC powerup. As mentioned earlier, the router participates in the DHCP message exchange between the PC and the
D
HCP server. As part of specifying the DHCP interface across I/F7, Terayon and Cisco are also working together to resolve issues such as inclusion of the TeraPro modem identifier in the DHCP messages across I/F5 interface and DHCP affecting the I/F7 during
TeraPro modem power loss.
1.6 "Cisco Technology" shall mean the IF Interfaces as defined in paragraph 1.5 above.
1.7 "Cable System" shall mean an end-to-end system that provides high-speed data communications, including Internet, digital video and other data services, as well as WAN services over the cable HFC infrastructure.
1.8 "Lightstream 1010 ATM Switch" shall mean a Cisco device
-------------------- providing high speed LAN bridging.
1.9 "75xx Router" shall mean Cisco's OSI layer 3 device that
---- can decide which of several paths network traffic will follow and can forward packets from one network to another.
1.10 "Cable Operators" shall mean cable television operators, cable equipment integrators, as well as VARs, resellers and distributors who sell cable equipment and/or services.
2. Development Activities.
-----------------------
2.1 The parties will jointly develop the IF Interfaces for a Cable System incorporating Cisco Technology and Terayon Technology.
2.2 The parties intend to work together in the future to develop additional products and future generations of systems as agreed to by the parties in writing.
3. Development Obligations.
------------------------
3.1 Preparation of Statement of Work. The parties have jointly
-----------------------------
---- prepared a statement of work ("Statement of Work") set forth as Attachment A, detailing the development activities and obligations of each party, specifications for the interface for the Cable System, and a milestone schedule for the completion of su
ch activities and obligations. The parties understand and agree that the Statement of Work may be modified, from time to time, but only if such modification is agreed to by both parties.
3.2 Prototype. The parties shall use commercially reasonable
---------- efforts to undertake and complete development of a prototype model of the Cable System.
3.3 Joint Development. As more specifically set forth in the
------------------ Statement of Work, Cisco and Terayon will use commercially diligent efforts to develop the Interfaces.
3.4 Development Schedule and Specifications. The parties will use
---------------------------------------- commercially diligent efforts to pre
pare a Development Schedule and Specifications for the prototype of the Cable System ("Phase I System") with which the parties will agree to and comply. Each party represents that it is capable of successfully completing its portion of the Phase I System
and the Phase I System may be available for field trials by Cable Operators no later than October 1, 1996.
3.5 Delay. Should a developing party ("Developing Party") incur
------ delay in meeting the Development Schedule, tha
t Developing Party shall promptly notify the other party in writing of any delay in meeting the Development Schedule hereunder. The parties agree to work together in good faith to develop a mutually acceptable revised development schedule taking such dela
y
into account, and to meet the revised development schedule. However, should the Developing Party fail to meet the revised development schedule, the other party at its election shall be relieved of its obligations under Sections 4 and 6 below upon written
notice to the Developing Party.
4. Field Trial Obligations
-----------------------
4.1 Upon satisfactory completion of the Phase I System, the parties agree that they shall conduct at least two field trials of the Phase I System (along with any modifications thereto) to be sponsored by one or more Cable Operators. The select
ion of the field trials, the cost sharing, and the implementation and support procedures shall be mutually agreed to by the parties. All data, procedures and results of the field trials shall be shared by the parties.
5. Ownership Of Interfaces; Licenses
---------------------------------
5.1 Ownership. For the convenience of the parties, the ownership
---------- of the jointly developed Interfaces shall be assigned to Cisco. Cisco shall use commercially
reasonable efforts, consistent with its general policies and practices, to protect and enforce the important proprietary elements of such technologies.
5.2 License. Cisco hereby grants to Terayon a perpetual (but with
----
---- respect to copyrighted works, until the expiration of such copyright rights), fully paid, irrevocable, royalty-free, non-exclusive worldwide right and license to make, have made, modify, improve, make derivative works, use, sell, lease, license and s
u
blicense the Interfaces. For the purposes of Section 11, this license shall be the equivalent of ownership and each party shall be free to make its own business decisions regarding disclosures relating to the Interfaces in the conduct of their respective
businesses.
6. Phase II System. Cisco and Terayon will endeavor to develop a
---------------
Phase II Cable System, the goals of which include:
6.1 Cable System cost reduction.
6.2 Cable System simplification, integration and improvement.
This statement of intention shall not be binding on either party until a definitive agreement concerning the Phase II System is entered into in writing by each of the parties.
7. Marketing, Sales and OEM Relationship.
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