exv10w4



 






Visual Networks Confidential,




SERVICES AGREEMENT




between




VISUAL NETWORKS OPERATIONS, INC.




and




MBT International, Inc.




 









 








Visual Networks Confidential,




Table of Contents




	 	 	 	 	 	 	 
	1.
	 	DEFINITIONS	 	 	1	 
	2.
	 	TERM	 	 	3	 
	3.
	 	SERVICES	 	 	3	 
	4.
	 	ACCEPTANCE	 	 	4	 
	5.
	 	PERFORMANCE STANDARDS AND SCHEDULES	 	 	5	 
	6.
	 	VENDOR PERSONNEL	 	 	6	 
	7.
	 	PLACE OF PERFORMANCE AND RESOURCE REQUIREMENTS	 	 	6	 
	8.
	 	CONTRACT MANAGEMENT	 	 	7	 
	9.
	 	VISUAL RESPONSIBILITIES	 	 	8	 
	10.
	 	CHARGES	 	 	8	 
	11.
	 	INVOICING AND PAYMENT	 	 	9	 
	12.
	 	INTELLECTUAL PROPERTY RIGHTS	 	 	10	 
	13.
	 	VISUAL DATA; PRIVACY; CONFIDENTIALITY	 	 	11	 
	14.
	 	AUDITS	 	 	12	 
	15.
	 	REPRESENTATIONS AND WARRANTIES	 	 	13	 
	16.
	 	INDEMNITIES	 	 	14	 
	17.
	 	INSURANCE AND RISK OF LOSS	 	 	16	 
	18.
	 	LIABILITY	 	 	17	 
	19.
	 	DISPUTES AND GOVERNING LAW	 	 	18	 
	20.
	 	TERMINATION	 	 	18	 
	21.
	 	GENERAL	 	 	19	 






Schedules




Schedule A  —  First Statement of Work

Schedule B  —  Pro-Forma Service Levels

Schedule C  —  Pricing Commitment

Schedule D  —  Competitors




-i-









 





Visual Networks Confidential,




SERVICES AGREEMENT




     This Services Agreement (this “Agreement”), dated as of July 30th, 2004 (the “Effective
Date”), is made and entered into by and between VISUAL NETWORKS OPERATIONS, INC., a Delaware
corporation (“Visual”), and MBT International, Inc., a New Jersey corporation (“Vendor”). The term
“Party” shall mean either Visual or Vendor, as appropriate, and the term “Parties” shall mean
Visual and Vendor.



Recitals



Whereas, Visual markets certain equipment, software, and services to its customers worldwide;



Whereas, Vendor has established one or more offshore development centers in India with low cost,
reliable, and high quality labor and resources; and



Whereas, Vendor provides software services globally and desires to provide such services for
Visual;



Whereas, Visual desires to engage Vendor in performing global software services as reflected in one
or more Statement(s) of Work incorporating this Agreement by reference;



Now, therefore, in consideration of the mutual promises and covenants set forth herein, and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Visual and Vendor agree as follows:




Terms




1 Definitions.



The following words, when used in this Agreement with an initial capital letter, have the following
meaning:





	1.1.1	 	“Acceptance Criteria” shall mean compliance with the Specifications in a Statement of Work
or other standard agreed between the Parties in writing, and as further defined in Section
4.1.1, below.
	 
	1.1.2	 	“Affiliate(s)” shall mean Vendor Affiliate(s) or Visual Affiliate(s), as applicable.
	 
	1.1.3	 	“Confidential Information” shall mean any information that either Party discloses, whether
in writing, electronically or orally, to the other Party and any proprietary information of
either Party that the other Party obtains under this Agreement, whether in tangible or
intangible form. By way of example and not limitation, Confidential Information includes:
(i) any information concerning a Party’s, its agents’ or licensors’ technology, such as
systems, source code, databases, hardware, software, programs, applications, engine protocols,
routines, models, displays and manuals, including the selection, coordination, and arrangement
of the contents thereof; and (ii) any information concerning a Party’s, its agents’ or
licensors’ financial or business plans or operations, such as research activities and plans,
marketing or sales plans, pricing or pricing strategies, operational techniques, internal
controls, compliance policies, methods of operation, security procedures, strategic plans, the
identity of customers and customer contacts, customer data, and unpublished financial
information, including information concerning revenues, profits and profit margins; and (iii)
in the case of Visual, any and all Work Product as defined in Section 12.3.
	 
	1.1.4	 	“Control” and its derivatives (such as “Controlled”) shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and policies of an
entity by ownership, contract, or otherwise.
	 
	1.1.5	 	“Deliverable” shall mean any Work Product in any tangible or recordable form produced in the
course of performing the Services that is listed or described in this Agreement or a Statement
of Work as a Deliverable.




-1-









 





Visual Networks Confidential,



	1.1.6	 	“Delivery Schedule: is defined in Section 5.1, below.
	 
	1.1.7	 	“Equipment” shall mean the computer and telecommunications equipment used by Vendor to
provide the Services.
	 
	1.1.8	 	“Fixed Price” shall mean with respect to a Statement of Work, that Vendor agrees to fulfill
its terms for one flat fee, all inclusive.
	 
	1.1.9	 	“Including” and its derivatives (such as “include” and “includes”) shall mean “including
without limitation”. This term is to be interpreted as defined, whether or not capitalized in
this Agreement.
	 
	1.1.10	 	“Losses” shall mean all losses, liabilities, damages and claims including claims for
payment, and all related costs and expenses (including reasonable legal fees and disbursements
and costs of investigation, litigation, settlement, judgment, interest and penalties).
	 
	1.1.11	 	“Nonconformity” shall mean any failure, error, defect, or inadequacy of a Deliverable
identified by either Party specified in the Acceptance Criteria.
	 
	1.1.12	 	“Service Level” is defined in Section 5.1, below.
	 
	1.1.13	 	“SoW RFP” is defined in Section 3.2(a)(1), below.
	 
	1.1.14	 	“Software” shall mean application software and systems software unless a more specific
reference is required.
	 
	1.1.15	 	“Statement of Work” or “SoW” shall mean a document executed by the Parties referencing this
Agreement setting forth at least the following elements:






	 	•	 	Scope of Project
	 
	 	•	 	Deliverables and Specifications
	 
	 	•	 	Milestones and Delivery Schedule
	 
	 	•	 	Acceptance Criteria
	 
	 	•	 	Location of Work
	 
	 	•	 	Payment Calculation Method (whether Fixed Price or Time and Materials)
	 
	 	•	 	Authorized Reimbursable Expenses
	 
	 	•	 	Key Personnel
	 
	 	•	 	Term
	 
	 	•	 	Service Level Required
	 
	 	•	 	Service Level Credits for failure to achieve the Service Level
	 
	 	•	 	Late Delivery Credits for failure to deliver Deliverables on time






	1.1.16	 	“Termination Date” shall mean: (i) in the case of this Agreement, the date on which this
Agreement expires or terminates, or (ii) in the case of a Statement of Work, the date on which
such Statement of Work expires or terminates as stated therein, if specified.
	 
	1.1.17	 	“Time and Materials” or ‘T&M” shall mean, with respect to a Statement of Work, that the fees
shall be calculated based upon the number of person/hours provided plus the cost of materials
used in performance. The rate Vendor shall charge for any work performed on this basis is set
forth on Schedule C, which Vendor guarantees it will not change for any SoW executed during
the Initial Term, and thereafter may change only by mutual written consent.
	 
	1.1.18	 	“Vendor Affiliates” shall mean all entities Controlled by Vendor, Controlling Vendor, or
under common Control with Vendor.






	 	(a)	 	“Vendor Software” shall mean any and all Software used by Vendor in providing
the Services that is owned by Vendor or a Vendor Affiliate.




-2-









 











Visual Networks Confidential,





	1.1.19	 	“Visual Affiliates” shall mean all entities Controlled by Visual, Controlling Visual, or
under common Control with Visual.
	 
	1.1.20	 	“Visual Data” shall mean all information of Visual and Visual Affiliates respecting their
businesses, including information relating to their customers, technology, operations,
facilities, consumer markets, products, capacities, systems, innovations, inventions, designs,
business methodologies, improvements, trade secrets, copyrightable subject matter and
proprietary information, all as provided to or obtained by Vendor during the Term.
	 
	1.1.21	 	“Visual Software” shall mean any and all Software owned by Visual or a Visual Affiliate and
used by Vendor in providing the Services.




2 Term.





	2.1	 	General. The initial and all renewal terms of this Agreement are referred to
collectively as the “Term.” All Statements of Work shall be coterminous with this Agreement,
unless a Statement of Work expressly provides for a different term, which shall apply to that
Statement of Work only.
	 
	2.2	 	Initial Term of the Agreement. The initial term of this Agreement shall begin on the
Effective Date and expire on the later of: (a) two (2) calendar years thereafter or (b) upon
the completion of all Statements of Work executed before that date, whichever is later,
provided however that the Agreement shall remain in force beyond the initial two year period
only with respect to the incomplete Statements of Work, unless the Agreement is renewed.
	 
	2.3	 	Renewal Terms of the Agreement. Upon each then-existing expiration date, the
Agreement shall renew automatically for one (1) calendar year, unless either Party notifies
the other Party at least ninety (90) days prior to the next expiration date that such Party
does not desire to renew.





3 Services.





	3.1	 	General. Vendor shall provide the services, functions and responsibilities described
in each Statement of Work executed under this Agreement, as such services, functions and
responsibilities may evolve during the Term and as they may be supplemented, enhanced,
modified or replaced (the “Services”).
	 
	3.2	 	Statements of Work. Vendor will be engaged to perform specific Services and provide
specific Deliverables memorialized in a Statement of Work negotiated and executed as described
below. Schedule A contains the initial Statement of Work.






	3.2.1	 	The process for requesting, developing, and executing Statements of Work is as follows:






	3.2.1.1	 	Visual may initiate a request for Services by providing such request in writing (each such
request, a “SoW RFP”) to Vendor (and possibly to the other vendors as well) in accordance with
the procedures described below in this Agreement. Vendor will, within the thirty (30) days of
receiving such SoW RFP, prepare and deliver to Visual a proposed Statement of Work that is
responsive in all respects to such SoW RFP. Vendor shall perform all due diligence necessary
to provide to Visual a proposed Statement of Work. Once submitted to Visual, a proposed
Statement of Work shall constitute an offer by Vendor to perform the Services and provide the
Deliverables, if any, on the terms set forth therein, and shall be irrevocable for ninety (90)
days from Visual’s receipt of the proposed Statement of Work.
	 
	3.2.1.2	 	The proposed Statement of Work shall become effective when, and if, accepted and executed
by Visual. Visual may provide Vendor with comments regarding such proposed Statement of
Work, and Vendor shall promptly respond to such comments, if any. Services relating to a
proposed Statement of Work shall be provided by Vendor to Visual only upon the acceptance and
execution of a Statement of Work by Visual.
	 
	3.2.1.3	 	Visual shall not be liable for any Vendor charges or costs relating to a Statement of Work
prior to its execution, unless such effort was expressly chargeable under another Statement of
Work.






	3.2.2	 	Each Statement of Work shall incorporate, be subject to the terms of, and become part of, this Agreement.




-3-









 











Visual Networks Confidential,





	3.2.3	 	Visual may supplement the specifications, functionality, requirements, and deployment
plan under a Statement of Work with additional information throughout the Statement of Work
term, provided that if such supplements result in a change that requires additional effort and
expense on the part of Vendor, the payment provisions shall be modified by mutual written
consent.






	3.3	 	Services Performed by Visual or Third Party. Visual may seek to engage third parties
to provide services that are the same as or similar to the Statements of Work and SoW RFPs
described herein without providing Vendor any opportunity to bid on such services. Visual may
provide itself, or use third parties to provide, any products or services that are the same as
or similar to the Services, overlap with, replace or are in addition to the Services.
	 
	3.4	 	Disaster Recovery. Vendor shall provide disaster recovery and business continuity
services relating to the Services. As requested by Visual, Vendor shall cooperate with and
integrate Vendor’s disaster recovery and business continuity plans and tests with Visual’s
disaster recovery and business continuity plans and tests.





4 Acceptance.





	4.1	 	Acceptance Testing.






	4.1.1	 	“Acceptance Criteria” means the criteria used to determine whether a Deliverable is ready
for Acceptance. Acceptance Criteria include the requirement that the applicable Deliverable:
(i) has been completed and delivered to Visual; (ii) meets or exceeds Visual’s requirements,
including any specifications for such Deliverable; (iii) in the case of Software Deliverables,
successful completion of all applicable quality assurance and related tests (including unit,
string, regression, functional, integration, system/performance, stress/volume, as applicable)
by Vendor; (iii) has been properly and fully documented, and (iv) such other criteria as may
be developed and agreed upon by the Parties.






	4.1.2	 	Each Deliverable will be subject to Acceptance Testing by Visual. Visual will have thirty
(30) calendar days (the “Acceptance Test Period”) from the date a Deliverable is delivered to
Visual to perform acceptance testing (“Acceptance Testing”). The parties may specify a
difference Acceptance Test Period in an SOW for services performed under such SOW if
applicable. If Visual does not reject delivery by the end of the Acceptance Test Period, the
Deliverable will be deemed accepted.






	4.1.3	 	If a Deliverable meets its Acceptance Criteria and no Nonconformities are identified during
Acceptance Testing, then Visual will provide Vendor written notification (the “Notice of
Acceptance”) that such Deliverable has been Accepted.






	4.2	 	Failure to Satisfy Acceptance Criteria. If a Deliverable fails to meet the relevant
Acceptance Criteria or contains any Nonconformities (a “Nonconforming Deliverable”), Visual
shall deliver Vendor written notification of such describing the issues with such Deliverable.
Promptly after receiving the notice of Nonconformity, and at no additional charge, Vendor
shall correct the Nonconformity (and any other problems of which it has knowledge) and
redeliver the Deliverable to Visual or re-perform the activities related to the Deliverable,
as the case may be.






	4.2.1	 	Vendor Correction/Re-performance. Upon completion of such corrections and Vendor’s
redelivery to Visual or re-performance of a Deliverable, the Acceptance Test Period will be
extended by thirty (30) calendar days unless Visual otherwise agrees in writing. Visual shall
have such extended Acceptance Test Period to retest the Deliverable or take other action to
determine whether the previously reported Nonconformity has been corrected and if the
Deliverable or performance of the Deliverable meets the relevant Acceptance Criteria. This
process will be repeated as necessary until all Nonconformities are corrected and the
Deliverable meets its Acceptance Criteria, or as otherwise provided in this Section 4.
	 
	4.2.2	 	Failure to Cure Nonconformity. If Vendor does not re-deliver each Nonconforming Deliverable
that was the subject of a Notice of Nonconformity in a reasonable period of time not to exceed
the earlier of five (5) calendar days or two (2) repetitions under this Section 4.2.2, then
Visual may, at its option, do any one or more of the following:




-4-









 











Visual Networks Confidential,





	4.2.2.1	 	Extend the period of time for Vendor to correct the Nonconformities in connection with the
Deliverable;
	 
	4.2.2.2	 	Conditionally accept such Deliverable or performance of such Deliverable, as applicable,
upon the condition that Vendor correct the Nonconformities in accordance with a remediation
plan approved in writing by Visual;






	 	(1)	 	If payment under the SoW is in the form of a fixed price, rather than
time & materials, (i) pay Vendor an equitable portion of the fees allocated to
the Deliverable that reflects the extent to which such Deliverable or
performance conforms to its Acceptance Criteria, withholding the balance of the
fixed price to apply it (ii) directly or by use of a third-party contractor to
make the necessary corrections, and (iii) charge Vendor (or deduct from amounts
Visual owes Vendor) an amount equal to the commercially reasonable costs
incurred by Visual in making such correction itself or through a third-party
contractor beyond what Vendor would have charged Visual had the Deliverable
been properly delivered;






	4.2.2.3	 	(i) Accept the Deliverable or performance of the Deliverable in its nonconforming
condition, and

(ii) reduce Vendor’s charges allocated to the Deliverable by an amount that
shall equitably reflect the reduced value of the Deliverable; or

	 
	4.2.2.4	 	Terminate the relevant Statement(s) of Work (and any other related Services as determined
by Visual in its reasonable discretion), in whole or in part, as of a date specified in a
written notice of termination.






	4.3	 	Acceptance.






	4.3.1	 	General. A Deliverable or performance of a Deliverable shall be deemed to be Accepted only
upon the earlier of the following (each such event, an “Acceptance”): (i) receipt of a Notice
of Acceptance from Visual; or (ii) expiration of the Acceptance Test Period for such
Deliverable.
	 
	4.3.2	 	Related Deliverables. Acceptance by Visual of a Deliverable (other than acceptance of a
solution as a whole) shall not be binding on Visual to the extent that the results of an
Acceptance Test of subsequent or related Deliverables indicates that modification or other
rework is required or appropriate. If the parties agree that any such modification or rework
of a previously accepted Deliverable is required because of another related Deliverable, then
Vendor shall perform such modification or rework at no additional charge to Visual. Such
agreement shall not be unreasonably withheld. A new Acceptance Test Period shall apply in
connection with all such Deliverables. If the parties reasonably disagree that a modification
or rework is required, then Visual may request the performance of the modification or rework
as part of a Change Order.





5 Performance Standards and Schedules.





	5.1	 	General. Statements of Work may contain (a) quantitative performance standards for
the Services (the “Service Levels”), and/or (b) a schedule for the delivery and Acceptance of
Deliverables (each a “Delivery Schedule”). Schedule B sets forth certain pro-forma Service
Levels that may be incorporated into a Statement of Work. Vendor’s performance shall meet or
exceed the standards and service levels set forth in the Statement of Work and Schedule B.
	 
	5.2	 	Periodic Review. At the request of Visual, the Parties shall meet to review the
Service Levels and Delivery Schedule. The Parties shall make mutually agreed adjustments and
additions, as appropriate, to reflect Visual’s evolving business needs and Vendor’s increased
productivity in performing the Services.
	 
	5.3	 	Service Level and Delivery Failures.






	5.3.1	 	If Vendor fails to meet any Service Level or Delivery Schedule, Vendor shall (i) report in
writing on the causes of such failure, including performing a root cause analysis of the
failure; (ii) advise Visual of the status of remedial efforts being undertaken with respect to
the failure; (iii) minimize the impact of and correct the failure; (iv) begin meeting the
Service Level and/or Delivery Schedule; and (v) take appropriate preventive measures so that the failure does not recur.




-5-









 











Visual Networks Confidential,





	5.3.2	 	Vendor recognizes that its failure to meet a Service Level or Delivery Schedule may have a
material adverse impact on Visual’s business and that the damage from Vendor’s failure to meet
such Service Levels or Delivery Schedule is not susceptible of precise determination.
Accordingly, in the event that Vendor fails to meet any Service Level or Delivery Schedule for
reasons other than the wrongful or negligent actions of Visual or circumstances that
constitute force majeure under this Agreement, then in addition to any non-monetary remedies
available to Visual under this Agreement, at law or in equity, Visual may elect in lieu of
pursuing other monetary remedies to recover, as its sole and exclusive monetary remedy for
such failure, one or both of the following financial credits as liquidated damages: (i)
“Service Level Credits” for Service Level failures and/or (ii) “Late Delivery Credits” for
Vendor’s failure to deliver a Deliverable(s) pursuant to the Delivery Schedule. Each SoW
shall define the terms “Service Level Credit: and “Late Delivery Credit” appropriate for the
task covered by the SoW. This Section 5.3.2 shall not limit Visual’s rights with respect to
the events upon which Visual may rely as a basis for Visual’s termination of this Agreement
for cause.





6 Vendor Personnel.





	6.1	 	Vendor Contract Executive. On or before the Effective Date, Vendor shall designate
one individual to whom all Visual communications concerning this Agreement and the Services
may be addressed and who has authority to act for Vendor in connection with all aspects of
this Agreement (the “Vendor Contract Executive”) and one alternate who will substitute for the
Vendor Contract Executive when the individual designated as the Vendor Contract Executive is
not available.
	 
	6.2	 	Assignment of Vendor Personnel. Vendor shall assign an adequate number of trained
personnel to perform the Services. If Visual in good faith objects to any Vendor personnel
assigned to perform Services under this Agreement, then Vendor shall discuss such objections
with Visual and attempt to resolve Visual’s concerns on a mutually agreeable basis.
	 
	6.3	 	Vendor Responsibilities Regarding Dealings with Vendor Personnel. Vendor personnel
performing Services will at all times be under Vendor’s exclusive direction and control and
will be Vendor’s employees. Vendor will pay all wages, salaries and other amounts due to its
personnel in connection with the Services and will be responsible for all financial,
reporting, and legal obligations including US social security and non-US social welfare
benefits, income tax withholdings, unemployment taxes and compensation, worker’s compensation,
statutory and other benefits, and other federal, state/provincial and local laws. Vendor will
compensate all its personnel performing Services under this Master Agreement in compliance
with applicable laws. Vendor will be solely responsible for obtaining and maintaining any
required immigration visas or work permits for or pertaining to Vendor personnel. At Vendor’s
reasonable request, Visual will provide Vendor with such attestations and other assistance as
Visual may deem appropriate in connection with obtaining U.S. immigration visas.
	 
	6.4	 	No Team Member Changes. Vendor shall retain the Key Personnel listed in a Statement
of Work, and shall not remove any individual employee working on a project until the SoW is
completed, without Visual’s prior written consent, unless the employee is terminated for cause
or leaves Vendor’s employ of his or her own volition and without inducement by Vendor. Vendor
shall use its reasonable best efforts to retain the core team that has worked on Visual’s
projects, consisting of the Customer Delivery Manager (“CDM”), architects, program and project
managers and key developers, to work on additional projects in new Statements of Work. Vendor
shall notify Visual if changes occur in the core team available for projects for Visual.





7 Place of Performance and Resource Requirements.





	7.1	 	Generally. Services will be performed at Vendor’s of Vendor’s Affiliate’s facilities
unless otherwise stated in the SoW.




-6-









 











Visual Networks Confidential,





	7.2	 	Offshore Facilities and Resources. Except as expressly described otherwise in a
Statement of Work, Vendor shall be responsible for providing the facilities, furniture,
equipment, telecommunications, software, and other resources as necessary to provide the
Services to Visual (collectively “Vendor Resources”). Vendor Resources shall adhere to Visual’s security,
disaster recovery, and other applicable policies and procedures that are made available to
Vendor prior to the execution of a SoW, and if no policies are delivered to Vendor, then
Vendor shall conform to commercially reasonable policies in the areas of security, disaster
recovery and the like. Vendor will provide Visual representatives reasonable office space
and access to Vendor Resources when visiting Vendor facilities in connection with the
Services.
	 
	7.3	 	On-Site Resources. Visual will make available the reasonable use of office space,
furniture, equipment, desktop computers, software, and office supplies for Vendor personnel
authorized to work at a Visual facility. Vendor personnel located and authorized to work at
Visual’s facilities will comply with all applicable Visual polices and procedures. Visual
facilities and resources will be made available to Vendor on an “as is, where is” basis.
Vendor will use the Visual Resources for the sole purpose of providing the Services and will
be responsible for damage to the Visual resources caused by Vendor personnel. When the Visual
resources are no longer required for performance of the Services, Vendor will return the
Visual resources to Visual in substantially the same condition as when Vendor began use of the
Visual resource, subject to reasonable wear and tear.





8 Contract Management.





	8.1	 	Change Order Process. The “Change Order Process” shall be the process by which the
Parties will amend the Services under a Statement of Work. This process may be initiated by
either the Visual Contract Executive, the Vendor Contract Executive, or their designees in the
manner described below:






	8.1.1	 	The requester shall document in detail the revisions sought and the rationale/justification
for the revisions proposed.
	 
	8.1.2	 	The responding Party shall promptly review and respond to any change proposed by the other
Party, indicating its views as to the advisability of the proposed change and the likely
change in costs of making the change.
	 
	8.1.3	 	If the Parties cannot agree on a change request, the issue shall be escalated within each
Party’s organization.
	 
	8.1.4	 	A Change Order shall not result in additional charges under a fixed price Statement of Work
if:
	 
	8.1.4.1	 	the Change Order requires services that (A) are not materially different from the Services
under such Statement of Work; and (B) can be offset by a similar reduction of effort in other
Services; or
	 
	8.1.4.2	 	the Change Order elaborates and clarifies Visual’s other specifications or requirements.
	 
	8.1.5	 	Vendor shall be entitled to charge for any additional services or efforts or materials
required in connection with any Change Order over and above the amount set forth in a fixed
price Statement of Work at rates set forth in Schedule C.
	 
	8.1.6	 	A change request must be signed by both Parties to authorize implementation of the change(s)
in such request. The change(s) shall be documented and made part of the applicable
Statement(s) of Work.






	8.2	 	Reports and Meetings.






	8.2.1	 	Reports. Within thirty (30) days after the Effective Date, the Parties shall determine an
appropriate set of periodic reports to be issued by Vendor to Visual in addition to any
reports set forth in a Statement of Work.
	 
	8.2.2	 	Meetings and/or Conference Calls. In addition to the meetings and conference calls set
forth in a Statement of Work, the Parties shall hold such periodic and other meetings and/or
conference calls as they determine are necessary or appropriate from time to time. As of the
Effective Date, the Parties anticipate that the following meetings and/or conference calls
will be held:




-7-









 











Visual Networks Confidential,





	8.2.2.1	 	a monthly meeting or conference call among operational personnel representing Visual and
Vendor to discuss daily performance and planned or anticipated activities, changes that might
adversely affect performance, and otherwise address, review and discuss matters specific to
Visual; and
	 
	8.2.2.2	 	an annual senior management meeting or conference call by the Parties.






	8.3	 	Use of Subcontractors. Except for sub-contractors who are Vendor Affiliates, Vendor
shall obtain Visual’s written consent prior to subcontracting any of its obligations under
this Agreement. In the event that a subcontractor’s performance is deficient, Vendor shall
promptly take steps to remedy the situation, which may include replacement of the
subcontractor. Vendor’s subcontractors shall be subject to all of the provisions of this
Agreement as if they were Vendor. Vendor shall remain responsible for its subcontractors to
the same extent as if such obligations were performed by Vendor or Vendor’s employees. Vendor
shall not disclose any Confidential Information of Visual to any subcontractor unless and
until such subcontractor has agreed in writing to protect the confidentiality of such
Confidential Information in a manner substantially equivalent to that required of Vendor.
	 
	8.4	 	Project Management Tools. Vendor shall provide Visual access to Vendor’s project
management and time tracking records and systems relating to the Services (including fixed
priced Statements of Work). As requested by Visual, Vendor shall input (manually or
electronically through an interface) data in Visual’s project management and time tracking
systems.





9 Visual Responsibilities.





	9.1	 	Visual Contract Executive. Visual’s Software Project Manager (Meenal Jobalia, as of
the Effective Date) shall be the individual to whom all Vendor communications concerning this
Agreement and the Services may be addressed and who has authority to act for Visual in
connection with all aspects of this Agreement (the “Visual Contract Executive”). The Visual
Contract Executive may designate an alternate who will substitute for the Visual Contract
Executive when the Visual Contract Executive is not available.
	 
	9.2	 	Cooperation. In addition to its other responsibilities under this Agreement, Visual
shall cooperate with Vendor by, among other things, making available, as reasonably requested
by Vendor, management decisions, information, approvals and acceptances so that Vendor may
accomplish its obligations and responsibilities hereunder.
	 
	9.3	 	Visual’s Responsibilities. Visual agrees to perform those tasks and assume those
responsibilities specified in each Statement of Work and acknowledges that Vendor’s
performance may be dependent upon Visual’s timely and effective performance of such tasks and
the assumption of such responsibilities as well as timely decisions and approvals by Visual.
Vendor’s non-performance of its obligations will be excused if and to the extent that it
results from Visual’s material failure of performance.





10 Charges.





	10.1	 	In General. Each Statement of Work shall be charged on a: (i) fixed price basis for
one or more Deliverables, (ii) fixed price basis for a fixed level of effort, or (iii) a time
and materials basis.
	 
	10.2	 	Schedule C. Schedule C sets forth all of Vendor’s charges (and any adjustment
thereto), including Vendor’s rates for (i) fixed levels of effort and (ii) time and material
priced Statements of Work. All charges shall be in United States dollars without regard to
fluctuations in currency exchange rates.
	 
	10.3	 	Short Term Assignments — Travel and Living Expenses. As approved in advance by
Visual, Vendor may pass-through to Visual the actual and reasonable travel and living expenses
for personnel working at a Visual facility for an assignment of less than three (3) continuous
months.
	 
	10.4	 	Incidental Expenses. Vendor acknowledges that, except as may be otherwise provided
in this Agreement, expenses that Vendor expects to incur in performing the Services (including
travel and lodging, document reproduction and shipping, and long-distance telephone) are
included in Vendor’s charges and rates set forth in this Agreement. Accordingly, such Vendor
expenses are not separately reimbursable by Visual unless, on a case-by-case basis for unusual expenses,
Visual has agreed in advance and in writing to reimburse Vendor for the expense.




-8-









 











Visual Networks Confidential,





	10.5	 	Taxes. The Parties’ respective responsibilities for taxes arising under or in
connection with this Agreement shall be as follows:






	10.5.1	 	Each Party shall be responsible for any personal property taxes on property it owns or
leases, for franchise and privilege taxes on its business, and for taxes based on its net
income or gross receipts.
	 
	10.5.2	 	Vendor shall be responsible for any sales, use, excise, value-added, services, consumption
and other taxes and duties payable by Vendor on the goods or services used or consumed by
Vendor in providing the Services where the tax is imposed on Vendor’s acquisition or use of
such goods or services and the amount of tax is measured by Vendor’s costs in acquiring such
goods or services.
	 
	10.5.3	 	Vendor shall be responsible for any sales, use, excise, value-added, services, consumption
or other similar tax imposed by a jurisdiction in India that is assessed on the provision of
the Services as a whole, or on any particular Service. Visual shall be responsible for any
sales, use, excise, value-added, services, consumption or other similar tax imposed by any
jurisdiction outside of India that is assessed on the provision of the Services as a whole, or
on any particular Service. Vendor shall notify Visual promptly upon learning that any new
taxes payable by Visual have been or will soon be imposed.
	 
	10.5.4	 	The Parties agree to cooperate with each other to enable each to more accurately determine
its own tax liability and to minimize such liability to the extent legally permissible.
Vendor’s invoices shall separately state the amounts of any taxes Vendor is collecting from
Visual, and Vendor shall remit such taxes to the appropriate authorities. Visual may withhold
taxes as required by law. Each Party shall provide and make available to the other any resale
certificates, information regarding out-of-state or out-of-country sales or use of equipment,
materials or services, and other exemption certificates or information reasonably requested by
the other Party.
	 
	10.5.5	 	Vendor shall promptly notify Visual of, and coordinate with Visual the response to and
settlement of, any claim for taxes asserted by applicable taxing authorities for which Visual
is responsible hereunder, it being understood that with respect to any claim arising out of a
form or return signed by a Party to this Agreement, such Party shall have the right to elect
to control the response to and settlement of the claim, but the other Party shall have all
rights to participate in the responses and settlements that are appropriate to its potential
responsibilities or liabilities. If Visual requests Vendor to challenge the imposition of any
tax, Vendor shall do so in a timely manner and Visual shall reimburse Vendor for the
reasonable out-of-pocket legal fees and expenses it incurs. Visual shall be entitled to any
tax refunds or rebates granted to the extent such refunds or rebates are of taxes that were
paid by Visual.





11 Invoicing and Payment.





	11.1	 	Invoicing. Statements of Work state the manner of payment for the services and
deliverables.






	11.1.1	 	Fixed charges under a Statement of Work will be invoiced in the month that the final
Deliverable under that Statement of Work is Accepted, unless otherwise stated in such
Statement of Work (e.g., Fixed charges may be allocated among several Deliverables). Vendor
shall invoice Visual for all other amounts due, including the Time and Materials charges under
an SoW that is not a Fixed Price, under this Agreement on a monthly basis in arrears. Vendor
shall include the calculations utilized to establish the charges.
	 
	11.1.2	 	To the extent a credit may be due to Visual pursuant to this Agreement, Vendor shall provide
Visual with an appropriate credit against amounts then due and owing; if no further payments
are due to Vendor, Vendor shall pay such amounts to Visual within thirty (30) days.
	 
	11.1.3	 	Vendor shall render a single consolidated invoice for each month’s charges showing such: (i)
content and details specified by Visual, and (ii) accompanied by such supporting documentation
as reasonably specified by Visual. Such invoice and documentation shall assist Visual in
satisfying its internal accounting and chargeback requirements.




-9-









 











Visual Networks Confidential,





	11.2	 	Payment Due. Subject to the other provisions of this Article 11, invoices provided
for under Section 11.1 and properly submitted to Visual pursuant to this Agreement shall be
due and payable by Visual within thirty (30) days after receipt thereof.
	 
	11.3	 	Accountability. Vendor shall maintain complete and accurate records of any
supporting documentation for all amounts billable to and payments made by Visual hereunder, in
accordance with generally accepted accounting principles applied on a consistent basis. Vendor
shall promptly provide Visual with documentation and other information with respect to each
invoice as may be reasonably requested by Visual to verify accuracy and compliance with the
provisions of this Agreement.
	 
	11.4	 	Disputed Charges. Visual may withhold or set-off payment of particular charges that
Visual disputes in good faith. If, upon resolution of a dispute, it is agreed that the amount
was properly charged, Visual shall promptly pay Vendor the disputed amount plus interest as
provided in Section 11.5, below, for late payment.
	 
	11.5	 	Late Payment. Vendor shall have the right to charge Visual interest at the rate of
12% per annum, computed daily and compounded monthly, on any amount properly invoiced and not
paid within the allotted time for payment, beginning on the day after the due date.





12 Intellectual Property Rights.





	12.1	 	Third Party Software. Vendor shall not use third party Software in providing the
Services unless expressly permitted by Visual in accordance with the following.






	12.1.1	 	General. Vendor shall not use third party Software or open source code in performing the
Services without Visual’s prior written consent.
	 
	12.1.2	 	Visual Third Party Software. If Vendor requests the use of third party Software licensed by
Visual to perform the Services and Visual agrees that Vendor may use such third party software
to the extent permitted by law, Vendor shall (i) identify Vendor’s usage requirements (e.g.,
number of licenses or users), and (ii) cooperate with Visual in determining whether a required
consent is necessary from the third party licensor of such Software. Notwithstanding anything
to the contrary, if a required consent is necessary, Vendor shall not use such third party
Software until the Parties obtain the required consent. Any fees from third parties relating
to such required consents shall be set forth in the applicable Statement of Work and borne by
Vendor






	12.2	 	Visual Software. Visual shall retain all right, title and interest in and to Visual Software, and all
modifications, enhancement and derivative works thereof made pursuant to this Agreement.
Visual grants to Vendor a worldwide, paid-up, royalty-free, nonexclusive license during the
Term to use Visual Software for the sole purpose of, and solely to the extent required for,
providing the Services to Visual. Except as otherwise expressly requested or approved by
Visual, Vendor shall cease all use of Visual Software upon expiration or termination of the
applicable Statement(s) of Work.
	 
	12.3	 	Ownership of Work Product. Software, Deliverables, documentation, specifications,
materials, algorithms, methods, and all other ideas and items provided, conceived, or
developed pursuant to this Agreement (collectively, “Work Product”), whether created solely or
jointly by Vendor, its subcontractors or third parties shall be considered “works made for
hire” for Visual. Visual shall have all right, title and interest in and to all Work Product.






	12.3.1	 	To the extent any Work Product is not deemed a “work for hire” by operation of law, Vendor
hereby irrevocably assigns, transfers and conveys to Visual without further consideration all
of its right, title and interest in such Work Product, including all rights of patent,
copyright, trade secret and other proprietary rights (including moral rights) in such
materials. Vendor acknowledges that Visual and the assigns of Visual shall have the right to
obtain and hold in their own name all intellectual property rights in and to such Work
Product.
	 
	12.3.2	 	Vendor agrees to execute any documents or take any other actions as may reasonably be
necessary, or as Visual may reasonably request, to perfect Visual’s ownership of such Work
Product. Vendor is responsible for having and will have in place with all Vendor personnel
(either directly or indirectly through their respective employers) such agreements respecting
Visual’s rights described in this Agreement in and to Work Product.




-10-









 











Visual Networks Confidential,





	12.4	 	Embedded Software. Vendor shall not integrate, embed, or otherwise include any
pre-existing software, materials, or other intellectual property into Work Product without
Visual’s prior written approval. To the extent any Work Product depends on, integrates with,
has embedded, or otherwise includes Vendor or third party software, material, other
intellectual property (collectively “Work Product Supplement”), Vendor hereby grants to Visual
a perpetual, non-terminable, transferable, worldwide, fully paid-up, nonexclusive license
(with the right to sub-license) to make, have made, use, copy, maintain, modify, enhance,
display, perform, distribute or create derivative works of such Work Product Supplement.
	 
	12.5	 	Residual Knowledge. Nothing contained in this Agreement shall restrict either Party
from the use of any general ideas, concepts or know-how relating to the Services which either
Party, individually or jointly, develops or discloses under this Agreement, provided that in
doing so such Party does not breach its obligations under Section 13 or infringe the
intellectual property rights of the other Party or third parties who have licensed or provided
materials to the other Party.





13 Visual Data; Privacy; Confidentiality.





	13.1	 	Visual Data.






	13.1.1	 	General. Visual Data shall be and remain the property of Visual. Vendor shall not possess
or assert any lien or other right against or to Visual Data. No Visual Data, or any part
thereof, shall be sold, assigned, leased, or otherwise disposed of to third parties by Vendor
or commercially exploited by or on behalf of Vendor, its employees or agents. Vendor shall
provide Visual complete and timely access to all Visual Data maintained by Vendor when and as
requested by Visual. Upon Visual’s request, the termination or expiration of this Agreement
for any reason or, with respect to any particular Visual Data, on such earlier date that the
same shall be no longer required by Vendor in order to render the Services hereunder, such
Visual Data (including copies thereof) shall be promptly returned to Visual by Vendor in a
form reasonably requested by Visual (including machine readable formats) or, if Visual so
elects, shall be destroyed. Visual Data shall not be utilized by Vendor for any purpose other
than that of rendering the Services under this Agreement.
	 
	13.1.2	 	Safeguards. Vendor shall establish and maintain safeguards against the destruction, loss,
or alteration of Visual Data in the possession of Vendor which are no less rigorous than those
maintained by Vendor for its own information of a similar nature. Visual shall have the right
to establish backup security for data and to keep backup data and data files in its possession
if it chooses. Without limiting the generality of above subsection:
	 
	13.1.2.1	 	Vendor shall ensure that personnel of Vendor and its subcontractors do not attempt to
access, or allow access to, any data, files or programs within the information systems
environment to which they are not entitled under this Agreement. If such access is attained,
Vendor shall immediately report such incident to Visual, describe in detail any accessed
materials and return to Visual any copied or removed materials.
	 
	13.1.2.2	 	Vendor shall implement appropriate security measures to guard against the unauthorized
access, alteration or destruction of Software and Visual Data. In the event that the current
systems security measures are found to be inadequate by the Parties, the Parties shall address
this issue and obtain adequate systems security measures to guard against such unauthorized
access, alteration or destruction of Software and Visual Data.






	13.2	 	Privacy and Data Protection.






	13.2.1	 	Vendor acknowledges that Visual is and/or will be subject to United States federal and state
laws and other laws throughout the world including the Gramm-Leach-Bliley Act, Title V, and
applicable regulations thereto and laws relating to the collection, use, processing,
protection or disclosure of data relating to individuals or corporations, including personal
data, (collectively, the “Privacy and Data Protection Laws”) governing collection and
maintaining the privacy and confidentiality of personal information as defined in the
Privacy Laws or information that relates to a specific, identifiable, individual person
(collectively, “Personal Information”) of Visual’s Customers and employees and the
individuals about whom Visual has or collects personal and other information. Visual and
Vendor agree to cooperate with each other with respect to the other’s obligations under the
Privacy and Data Protection Laws. Each of Vendor and Visual will comply with all applicable
Privacy and Data Protection Laws relating to the collection, use and disclosure of Visual’s
and Visual’s Customers’, employees and other individuals’ Personal Information provided to
or accessible by Vendor pursuant to the Agreement.




-11-









 











Visual Networks Confidential,





	13.2.2	 	Vendor shall perform the Services and Vendor’s other obligations in a manner that complies
with all policies of Visual provided to Vendor before the Effective Date as well as applicable
Privacy and Data Protection Laws during the provision of the Services (including European
Directive 95/46/EC on the protection of individuals with regard to the processing of personal
data and on the free movement of such data, and any legislation implementing such article, and
any legislation implementing the same in the relevant state (collectively, the “Directive”)).
Vendor will not take any action that puts Visual in breach of its obligations under the
Privacy or Data Protection Laws and nothing in the Agreement will be deemed to prevent Visual
from taking the steps it reasonably deems necessary to comply with the Privacy and Data
Protection Laws.






	13.3	 	Confidentiality.






	13.3.1	 	Obligations. Each Party’s Confidential Information shall remain the property of that Party
except as expressly provided elsewhere in this Agreement. Visual and Vendor shall each use at
least the same degree of care, but in any event no less than a reasonable degree of care, to
prevent disclosing to third parties the Confidential Information of the other as it employs to
avoid unauthorized disclosure, publication or dissemination of its own information of a
similar nature; provided, however, that the Parties may disclose such information to persons
and entities performing services required hereunder where (i) use of such person or entity is
authorized under this Agreement, (ii) such disclosure is necessary or otherwise naturally
occurs in that person or entity’s scope of responsibility, and (iii) such person or entity
agrees in writing to assume the obligations described in this Section. Each Party shall use
Confidential Information of the Party only for the purposes contemplated by this Agreement.
	 
	13.3.2	 	Exclusions. This Section 13.3 shall not apply to any particular information which Vendor or
Visual can demonstrate: (i) was, at the time of disclosure to it, in the public domain; (ii)
after disclosure to it, is published or otherwise becomes part of the public domain through no
fault of the receiving Party; (iii) was in the possession of the receiving Party at the time
of disclosure to it; (iv) was received after disclosure to it from a third party who had a
lawful right to disclose such information to it without any obligation to restrict its further
use or disclosure; or (v) was independently developed by the receiving Party without reference
to Confidential Information of the furnishing Party. In addition, a Party shall not be
considered to have breached its obligations by disclosing Confidential Information of the
other Party as required to satisfy any legal requirement of a competent government body,
provided that, upon receiving any such request and to the extent that it may legally do so,
such Party advises the other Party promptly and prior to making such disclosure in order that
the other Party may interpose an objection to such disclosure, take action to assure
confidential handling of the Confidential Information, or take such other action as it deems
appropriate to protect the Confidential Information.
	 
	13.3.3	 	Loss of Confidential Information. In the event of any disclosure or loss of, or inability
to account for, any Confidential Information of the furnishing Party, the receiving Party
shall promptly, at its own expense: (i) notify the furnishing Party in writing; (ii) take such
actions as may be necessary or reasonably requested by the furnishing Party to minimize the
violation; and (iii) cooperate in all reasonable respects with the furnishing Party to
minimize the violation and any damage resulting therefrom.






	13.4	 	No Implied Rights. Nothing contained in this Section 11 shall
be construed as obligating a Party to disclose its Confidential Information to the other Party, or as granting to
or conferring on a Party, expressly or impliedly, any rights or license to the Confidential Information of the other Party.





14 Audits.





-12-









 








Visual Networks Confidential,





	14.1	 	Audit Rights. Vendor shall provide to Visual, its auditors (including internal audit
staff and external auditors), inspectors, regulators and other representatives as Visual may
from time to time designate in writing, access at all reasonable times to any facility or part
of a facility at which either Vendor or any of its subcontractors is providing the Services,
to Equipment and Software used in providing the Services, to Vendor personnel, and to data and
records relating to Vendor’s performance of the Services, for the purpose of performing audits
and inspections of either Vendor or any of its subcontractors to:






	14.1.1	 	Verify the accuracy of Vendor’s charges and invoices;
	 
	14.1.2	 	Verify the integrity of Visual Data and examine the systems that process, store, support and
transmit that data; and
	 
	14.1.3	 	Examine Vendor’s performance of the Services and compliance with this Agreement, including,
to the extent applicable to the Services performed by Vendor and the charges therefor,
performing (i) audits of practices and procedures, (ii) audits of systems, (iii) audits of
general controls and security practices and procedures, (iv) audits of the efficiency and
costs of Vendor in performing the Services, and (v) audits necessary to enable Visual to meet
applicable regulatory requirements.
	 
	 	 	Vendor shall provide to such auditors, inspectors, regulators and representatives such
assistance as they reasonably require, including installing and operating audit software.
Vendor shall cooperate fully with Visual or its designees in connection with audit functions
and with regard to examinations by regulatory authorities. Visual’s auditors and other
representatives shall comply with Vendor’s reasonable security requirements.






	14.2	 	Audit Follow-up.






	14.2.1	 	Following an audit or examination, Visual shall conduct (in the case of an internal audit),
or request its external auditors or examiners to conduct, an exit conference with Vendor to
obtain factual concurrence with issues identified in the review. Vendor shall make available
promptly to Visual the results of any review or audit conducted by Vendor or its contractors,
agents or representatives (including internal and external auditors) relating to Vendor’s
operating practices and procedures to the extent relevant to the Services or Visual.
	 
	14.2.2	 	Vendor and Visual shall meet to review each audit report promptly after the issuance thereof
and to mutually agree upon the appropriate manner, if any, in which to respond to the changes
suggested by the audit report. The Parties shall develop operating procedures for the sharing
of audit and regulatory findings and reports related to Vendor’s operating practices and
procedures produced by auditors or regulators of either Party.






	14.3	 	Records Retention. Until (i) six (6) years after expiration or termination of this
Agreement, (ii) all pending matters relating to this Agreement (e.g., disputes) are closed,
(iii) no longer required to meet Visual’s records retention policy as such policy may be
adjusted from time to time, or (iv) no longer required by applicable law, rule or regulation,
whichever is latest, Vendor will maintain and provide access upon request to the records,
documents and other information required to meet Visual’s audit rights under this Agreement.





15 Representations and Warranties.





	15.1	 	Work Standards. Vendor represents and warrants that the Services shall be rendered
with promptness and diligence and shall be executed in a workmanlike manner, in accordance
with the practices and high professional standards used in well-managed operations performing
services similar to the Services.
	 
	15.2	 	Industry Certifications. Vendor represents and warrants that it has and shall
maintain ISO 9001:2000 (or its successor) certification, the Software Engineering Institute Capability
Maturity Model (CMM) Level Five (or its successor), and BS 7799 security certifications for
each Vendor facility used to provide the Services.




-13-









 











Visual Networks Confidential,





	15.3	 	 Efficiency and Cost Effectiveness. Under any SoW providing for payment on the basis
of time and materials, Vendor represents and warrants that it shall perform the Services in
the most cost-effective manner consistent with the required level of quality and performance.
	 
	15.4	 	Deliverable Warranty. Vendor represents and warrants that each Deliverable produced
or provided under this Agreement will not deviate from the specifications and documentation
for such Deliverable and will remain free of any Nonconformity for twelve (12) months after
Acceptance unless specified differently in the Statement of Work (SOW). If any Deliverable
does not conform to the foregoing representation and warranty, Vendor shall promptly remedy
such Nonconformity at no charge to Visual.
	 
	15.5	 	Documentation. Documentation delivered with each Software Deliverable shall be
sufficient to allow: a knowledgeable information technology professional to understand,
maintain, support and modify such Software Deliverable and understand the functions and
features of such Software Deliverable and the procedures for exercising such functions and
features.
	 
	15.6	 	Non-Infringement. Each Party represents and warrants that it (a) shall perform its
responsibilities under this Agreement in a manner that does not infringe, or constitute an
infringement or misappropriation of, any patent, copyright, trademark, trade secret or other
proprietary rights of any third party; and (b) has and will have the right to grant all of the
licenses and other rights granted and/or to be granted under this Agreement and each Statement
of Work.
	 
	15.7	 	Virus. Vendor represents and warrants that Vendor and its personnel shall not code
or insert, and shall not permit to be coded or inserted, any viruses (including Trojan horses,
worms, backdoors, and similar items) into any Deliverables, Software, or system. Vendor
further covenants and warrants that it will use and maintain, and cause its contractors and
subcontractors to use and maintain then current anti-virus software.
	 
	15.8	 	Disabling Code. Vendor represents and warrants that it will not insert into any
Deliverables, Software, or system any code which would have the effect of disabling or
otherwise shutting down all or any portion of Visual’s or its customers’ businesses, the
Services, or the products that Visual markets.
	 
	15.9	 	Compliance with Laws and Regulations.






	15.9.1	 	General. Each Party represents and warrants to the other that it shall perform its
responsibilities under this Agreement in a manner reasonably designed to ensure compliance
with all laws, regulations ordinances and codes applicable to this Agreement and the Services
and identifying and procuring required permits, certificates, approvals and inspections. If a
charge of non-compliance with any such laws, regulations, ordinances, or codes occurs, then
the Party so charged shall promptly notify the other Party of such charge in writing.
	 
	15.9.2	 	Export Laws. The Parties acknowledge that certain Software and technical data to be
provided under this Master Agreement and certain transactions under this Master Agreement may
be subject to import and export controls under the laws and regulations of the United States
and other countries. Without limiting the generality of the foregoing, each Party will comply
with all such import and export related laws and regulations. Vendor will include with copies
of all Software provided by Visual that Vendor will use outside of the United States
documentation stating that “These commodities, technology or software were exported from the
United States in accordance with Export Administration Regulations. Diversion or re-export
contrary to U.S. law is prohibited.” Vendor further represents and warrants to Visual that
(i) neither Vendor nor any Vendor personnel are included on any Entity List or Denied Persons
List (as maintained by the Department of Commerce Bureau of Industry and Security); and (ii)
Vendor will never involve any entity or person included on any such Entity List or Denied
Persons List with the Visual account.






	15.10	 	Disclaimer. EXCEPT AS PROVIDED IN THIS AGREEMENT, THERE ARE NO OTHER EXPRESS
WARRANTIES AND THERE ARE NO IMPLIED WARRANTIES, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.





16 Indemnities.





	16.1	 	Indemnities by Vendor. Vendor agrees to indemnify, defend and hold harmless Visual
and Visual Affiliates, and their respective officers, directors, employees, agents, successors
and assigns, from any and all Losses arising from, in connection with, or based on allegations
of, any of the following:




-14-









 











Visual Networks Confidential,





	16.1.1	 	Any claim for taxes that are not Visual’s responsibility under Section 10.5 (Taxes);
	 
	16.1.2	 	Vendor’s breach of its obligations under Sections 6.3 (Vendor Responsibilities Regarding
Vendor Personnel), 13 (Visual Data; Privacy; Confidentiality), 15.8 (Disabling Code), 15.9
(Compliance with Laws and Regulations), and 1.3 (Non-Compete); or
	 
	16.1.3	 	Any claims of infringement of any patent, trade secret, copyright or other proprietary
rights alleged to have occurred because of systems or other resources provided by Vendor to
Visual, based upon performance of the Services by Vendor, or relating to a breach of this
Agreement by Vendor; provided that Vendor’s indemnification obligations under this Section
16.1.3 shall be reduced to the extent that such Losses result from claims of infringement
based on (a) the use of any Deliverable in combination with any other computer hardware or
software programs other than as contemplated under this Agreement or (b) modifications by
Visual of any Deliverable.






	16.2	 	Indemnities by Visual. Visual agrees to indemnify, defend and hold harmless Vendor
and Vendor Affiliates, and their respective officers, directors, employees, agents, successors
and assigns, from any and all Losses and threatened Losses arising from, in connection with,
or based on allegations of, any of the following:






	16.2.1	 	Visual’s breach of its obligations under Section 13 (Visual Data; Privacy; Confidentiality);
or
	 
	16.2.2	 	Any claims of infringement of any patent, trade secret, copyright or other proprietary
rights, alleged to have occurred because of systems or other resources provided by Visual to
Vendor or based upon Visual’s activities under this Agreement.






	16.3	 	Additional Indemnities. Vendor and Visual each agree to indemnify, defend and hold
harmless the other and their Affiliates, and their respective officers, directors, employees,
agents, successors and assigns, from any and all Losses and threatened Losses arising from, in
connection with, or based on allegations of, any of the following: (a) the death or bodily
injury of any agent, employee, customer, business invitee, or business visitor or other person
caused by the tortious conduct of the indemnitor; (b) the damage, loss or destruction of any
real or tangible personal property caused by the tortious conduct of the indemnitor; and (c)
any claim, demand, charge, action, cause of action, or other proceeding asserted against the
indemnitee but resulting from an act or omission of the indemnitor in its capacity as an
employer of a person.
	 
	16.4	 	Indemnification Procedures. The following procedures shall apply with respect to
third party claims for which indemnification is sought under this Section 16:






	16.4.1	 	Notice. Promptly after receipt by any person or entity entitled to indemnification under
Sections 16.1 through 16.3 of notice of the commencement or threatened commencement of any
civil, criminal, administrative, or investigative action or proceeding involving a claim in
respect of which the indemnitee will seek indemnification pursuant to any such Section, the
indemnitee shall notify the indemnitor of such claim in writing. No failure to so notify an
indemnitor shall relieve it of its obligations under this Agreement except to the extent that
it can demonstrate damages attributable to such failure. Within fifteen (15) days following
receipt of written notice from the indemnitee relating to any claim, but no later than ten
(10) days before the date on which any response to a complaint or summons is due, the
indemnitor shall notify the indemnitee in writing if the indemnitor elects to assume control
of the defense and settlement of that claim (a “Notice of Election”).
	 
	16.4.2	 	Procedure Following Notice of Election. If the indemnitor delivers a Notice of Election
relating to any claim within the required notice period, the indemnitor shall be entitled to
have sole control over the defense and settlement of such claim; provided that (i) the
indemnitee shall be entitled to participate in the defense of such claim and to employ counsel
at its own expense to assist in the
handling of such claim, and (ii) the indemnitor shall obtain the prior written approval of
the indemnitee before entering into any settlement of such claim or ceasing to defend
against such claim (which approval shall not be unreasonably withheld). After the
indemnitor has delivered a Notice of Election relating to any claim in accordance with the
preceding paragraph, the indemnitor shall not be liable to the indemnitee for any legal
expenses incurred by the indemnitee in connection with the defense of that claim. In
addition, the indemnitor shall not be required to indemnify the indemnitee for any amount
paid or payable by the indemnitee in the settlement of any claim for which the indemnitor
has delivered a timely Notice of Election if such amount was agreed to without the written
consent of the indemnitor.




-15-









 











Visual Networks Confidential,





	16.4.3	 	Procedure Where No Notice of Election Is Delivered. If the indemnitor does not deliver a
Notice of Election relating to any claim within the required notice period, the indemnitee
shall have the right to defend the claim in such manner as it may deem appropriate, at the
cost and expense of the indemnitor. The indemnitor shall promptly reimburse the indemnitee
for all such costs and expenses.






	16.5	 	Subrogation. In the event that an indemnitor shall be obligated to indemnify an
indemnitee, the indemnitor shall, upon payment of such indemnity in full, be subrogated to all
rights of the indemnitee with respect to the claims to which such indemnification relates.





17 Insurance and Risk of Loss.





	17.1	 	Insurance Coverage. Vendor shall during the Term have and maintain in force at least
the following insurance coverage’s:






	17.1.1	 	Employer’s Liability Insurance and Worker’s Compensation Insurance, including coverage for
occupational injury, illness and disease, and other similar social insurance in accordance
with the laws of the country, state or territory exercising jurisdiction over the employee
with minimum limits per employee and per event of $100,000 and a minimum aggregate limit of
$500,000 or the minimum limits required by law, whichever limits are greater.
	 
	17.1.2	 	Comprehensive General Liability Insurance, including Products, Completed Operations,
Premises Operations Personal and Advertising Injury, Contractual and Broad Form Property
Damage liability coverage’s, on an occurrence basis, with a minimum combined single limit per
occurrence of $1,000,000 and a minimum combined single aggregate limit of $2,000,000. This
coverage shall be endorsed to name Visual as additional insured.
	 
	17.1.3	 	Property Insurance, including Extra Expense and Business Income coverage, for all risks of
physical loss of or damage to buildings, business personal property or other property that is
in the possession, care, custody or control of Vendor pursuant to this Agreement. Such
insurance shall have a minimum limit adequate to cover risks on a replacement costs basis.
This coverage shall be endorsed to name Visual as loss payee.
	 
	17.1.4	 	Automotive Liability Insurance covering use of all owned, non-owned and hired automobiles
for bodily injury, property damage, uninsured motorist and underinsured motorist liability
with a minimum combined single limit per accident of $1,000,000 or the minimum limit required
by law, whichever limit is greater. This coverage shall be endorsed to name Visual as
additional insured.
	 
	17.1.5	 	Errors and Omissions Liability Insurance covering liability for loss or damage due to an
act, error, omission or negligence, or due to machine malfunction, with a minimum limit per
event of $5,000,000.
	 
	17.1.6	 	Umbrella Liability Insurance with a minimum limit of $5,000,000 in excess of the insurance
coverage described in Sections 17.1.1 through 17.1.5






	17.2	 	Insurance Terms.






	17.2.1	 	The insurance coverage under Sections 17.1.1 through 17.1.5 shall be primary, and all
coverage shall be non-contributing with respect to any other insurance or self insurance which
may be maintained by Visual. All coverage required by Section 17.1 shall include a waiver of
subrogation and a waiver of any insured-versus-insured exclusion regarding Visual. To the
extent any coverage is written on a claims-made basis, it shall have a retroactive date prior
to the Effective Date and shall allow for reporting of claims for at least one (1) year after the Term.




-16-









 











Visual Networks Confidential,





	17.2.2	 	Vendor shall cause its insurers to issue certificates of insurance evidencing that the
coverage and policy endorsements required under this Agreement are maintained in force and
that not less than thirty (30) days written notice shall be given to Visual prior to any
modification, cancellation or non-renewal of the policies. The insurers selected by Vendor
shall have an A.M. Best rating of A or better, or, if such ratings are no longer available,
with a comparable rating from a recognized insurance rating agency. Vendor shall assure that
its subcontractors, if any, maintain insurance coverage as specified in this Article 17 naming
Vendor as an additional insured or loss payee where relevant or Vendor shall assure that its
subcontractors, if any, are endorsed as additional insureds on Vendor coverage specified by
this Article 17.
	 
	17.2.3	 	In the case of loss or damage or other event that requires notice or other action under the
terms of any insurance coverage specified in this Article 17, Vendor shall be solely
responsible to take such action. Vendor shall provide Visual with contemporaneous notice and
with such other information as Visual may request regarding the event.





18 Liability.





	18.1	 	General Intent. Subject to the specific provisions of this Section 18, it is the
intent of the Parties that each Party shall be liable to the other Party for any actual
damages incurred by the non-breaching Party as a result of the breaching Party’s failure to
perform its obligations in the manner required by this Agreement.
	 
	18.2	 	Liability Restrictions.






	18.2.1	 	SUBJECT TO SECTION 18.3, IN NO EVENT, WHETHER IN CONTRACT OR IN TORT (INCLUDING BREACH OF
WARRANTY, NEGLIGENCE AND STRICT LIABILITY IN TORT), SHALL A PARTY BE LIABLE FOR INDIRECT OR
CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES EVEN IF SUCH PARTY HAS BEEN ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES IN ADVANCE.
	 
	18.2.2	 	Subject to Section 18.3, each Party’s total liability to the other, whether in contract or
in tort (including breach of warranty, negligence and strict liability in tort) shall be
limited to an amount equal to the total charges payable to Vendor pursuant to this Agreement
for the greater of: (i) twelve (12) months prior to the month in which the event giving rise
to liability occurred or (ii) the total charges payable under the Statement of Work in which
the event giving rise to the liability occurred.






	18.3	 	Exclusions. The limitations set forth in Section 18.2 shall not apply with respect
to: (a) damages occasioned by a Party’s willful misconduct or gross negligence; (b) damages
occasioned by a Party’s breach of Section 13 (Visual Data; Privacy; Confidentiality); (c)
claims that are the subject of indemnification pursuant to Section 16; (e) damages occasioned
by improper or wrongful termination of this Agreement or abandonment of the work by Vendor;
and (e) damages or liability arising out of Vendor’s breach of Section 1.3 (Non-Compete).
	 
	18.4	 	Force Majeure. Neither Party shall be liable for any default or delay in the
performance of its obligations under this Agreement except for the obligation of payment: (a)
if and to the extent such default or delay is caused, directly or indirectly, by: fire,
flood, earthquake, elements of nature or acts of God, riots, civil disorders, rebellions or
revolutions in any country, or any other similar cause beyond the reasonable control of such
Party, and (b) provided the non-performing Party is without fault in causing such default or
delay, and such default or delay could not have been prevented by reasonable precautions and
cannot reasonably be circumvented by the non-performing Party through the use of alternate
sources, workaround plans or other means (including, with respect to Vendor, by Vendor meeting
its obligations for performing disaster recovery services as described in this Agreement). In
such event the non-performing Party shall be excused from further performance or observance of
the obligation(s) so affected for as long as such circumstances prevail and such Party
continues to use its best efforts to recommence performance or observance whenever and to
whatever extent possible without delay. Any Party so delayed in its performance shall
immediately notify the Party to whom performance is due by telephone (to be confirmed in
writing within two (2) days of the inception of such
delay) and describe at a reasonable level of detail
the circumstances causing such delay. If any force
majeure event substantially prevents, hinders, or
delays performance of the Services necessary for the
performance of Visual functions reasonably
identified by Visual as critical for more than seven
(7) consecutive days, then Visual may terminate this
Agreement without liability as of a date specified
by Visual in a written notice of termination to
Vendor.




-17-









 











Visual Networks Confidential,




19 Disputes and Governing Law.





	19.1	 	Arbitration. Any dispute arising out of or relating to this Agreement will be
finally settled by arbitration conducted in accordance with the rules of the American
Arbitration Association (“AAA”) by majority decision of three (3) arbitrators. Each Party
will appoint one (1) arbitrator within thirty (30) days of a request by a Party for
arbitration. If either Party fails to timely appoint its arbitrator, the AAA will appoint an
arbitrator for that Party. The third arbitrator will be appointed by the other two
arbitrators. The third arbitrator will serve as chairman of the arbitration. The seat of
arbitration will be the metro Washington, D.C. area. The language of the arbitration will be
English. Each Party will bear its own expenses in the arbitration and will share equally the
costs of the arbitration; provided, however, that the arbitrators may, in their discretion,
award costs and fees to the prevailing Party. Judgment upon the award may be entered in any
court having jurisdiction over the award or over the applicable Party or its assets.
	 
	19.2	 	Continued Performance. Each Party agrees to continue performing its obligations
under this Agreement while any dispute is being resolved except to the extent the issue in
dispute precludes performance.
	 
	19.3	 	Governing Law. This Agreement and performance under it shall be governed by and
construed in accordance with the laws of state of Maryland without regard to its choice of law
principles.





20 Termination.





	20.1	 	Termination for Cause.






	20.1.1	 	In the event that Vendor:
	 
	20.1.1.1	 	Commits a material breach of this Agreement or any Statement of Work which is not cured
within thirty (30) days after written notice;






or




	20.1.1.2	 	Commits numerous breaches of its duties or obligations which collectively would constitute
a material breach of this Agreement or any Statement of Work which are not cured within thirty
(30) days after written notice;






then Visual may, by giving notice to Vendor, terminate, in whole or in part, this
Agreement and/or any Statement(s) of Work as of a date specified in the notice of
termination. If Visual chooses to terminate this Agreement or any Statement(s) of
Work in part, the charges payable thereunder will be equitably adjusted to reflect
those Services that are terminated.




	20.1.2	 	In the event, Visual commits a material breach of this Agreement which is not cured within
thirty (30) days after written notice or commits numerous breaches of its duties or
obligations which collectively would constitute a material breach of this Agreement which are
not cured within thirty (30) days after written notice or Visual fails to pay Vendor when due
charges under a Statement of Work and fails to make such payment within thirty (30) days of
written notice from Vendor of the failure to make such payment, Vendor may, by giving written
notice to Visual, terminate that Statement of Work and this Agreement as of a date specified
in the notice of termination.
	 
	1.2.	 	Termination for Convenience. Visual may terminate this Agreement or any
Statement of Work for convenience and without cause at any time by giving Vendor at least
thirty (30) calendar days prior written notice designating the date
on which such termination shall be effective. Vendor shall cooperate with Visual to effect
an orderly transition of Services from Vendor to Visual or its designee.
	 
	 	 	If Visual chooses to terminate for convenience any fixed priced Statement of Work under
which Vendor has partially completed certain Deliverables, the charges payable shall be
equitably adjusted to compensate Vendor for the Deliverables completed. Further, Visual
shall pay Vendor for Services performed on an incomplete part of the SoW at Vendor’s rates
for T&M shown on Schedule C. In the event that a purported termination for cause by Visual
under Section 20.1 is determined by a competent authority not to be properly a termination
for cause, then such termination by Visual shall be deemed to be a termination for
convenience under this Section 1.2.




-18-









 











Visual Networks Confidential,





	20.2	 	Termination for Insolvency. In the event that either party (a) files for bankruptcy;
(b) becomes or is declared insolvent or is the subject of any proceedings related to its
liquidation, insolvency or the appointment of a receiver or similar officer for it; (c) makes
an assignment for the benefit of all or substantially all of its credits; or (d) enters into
an agreement for the composition, extension or readjustment of substantially all of its
obligations, then the other party may, by giving written notice of termination to the other,
terminate this Agreement as of a date specified in such notice of termination. However, Vendor
may not terminate under this Section if Visual provides Vendor with security reasonably
acceptable to Vendor for full payment of fees to be incurred in the future.
	 
	20.3	 	Termination/Expiration Assistance.






	20.3.1	 	Commencing three (3) months prior to the Termination Date or on such other date as Visual
may request, and continuing through the Termination Date, Vendor shall provide to Visual, or
at Visual’s request to Visual’s designee, all reasonable assistance requested by Visual to
allow the Services to continue without interruption or adverse effect and to facilitate the
orderly transfer of the Services to Visual or its designee (“Termination Assistance”).
Vendor’s obligation to provide Termination Assistance shall apply regardless of the reason
that this Agreement or any Statement of Work terminates. Termination Assistance shall include
without limitation the following:
	 
	20.3.1.1	 	Vendor shall assist in the development of a transition plan, shall make available
necessary personnel and resources to facilitate the transition, and shall provide training,
documentation and other materials necessary to enable Visual or its designee to assume
responsibility for the Services.
	 
	20.3.1.2	 	If and to the extent that a third party is designated by Visual to assume responsibility
for some or all of the Services, Vendor shall provide Termination Assistance to Visual’s
designee. Vendor shall provide the designee such information regarding the Services as is
reasonably required for the designee to assume responsibility for, and continue the
performance of, the Services in an orderly manner. Vendor shall have the right to receive
from such designee, in a form reasonably acceptable to Vendor, written assurances that (A) the
designee shall maintain at all times the confidentiality of any Vendor Confidential
Information; and (B) the designee shall use such Vendor Confidential Information only for the
purpose of providing services to Visual.
	 
	20.3.1.3	 	Vendor shall use reasonable efforts to assist Visual or its designee to obtain any
necessary rights to any third party services then being utilized by Vendor in the performance
of the Services, including services being provided through third party service or maintenance
contracts regarding telecommunications or Software.
	 
	20.3.1.4	 	In providing Termination Assistance, Vendor shall provide Visual and its designee with
reasonable access to and use of all Vendor Resources used by Vendor to provide the Services
(subject to restrictions in agreements with third parties).
	 
	20.3.1.5	 	Vendor’s costs incurred in providing this Termination Assistance shall be charged at the
rates in Schedule C.
	 
	20.3.2	 	For a period of three (3) months following the Termination Date, Vendor shall provide, at
Visual’s request, any or all of the Services that are subject to termination or expiration.
To the extent Vendor is to perform Services under this Paragraph (b), the provisions of this
Agreement shall be applicable as such provisions would have been applicable to such Services
prior to the Termination Date and such Termination Assistance shall be charged at the time and material rates set forth in Schedule C.




-19-









 











Visual Networks Confidential,




21 General.





	1.3.	 	Non-Compete. Without the express written approval of Visual, Vendor shall
not: assign personnel performing the Services to work on a project for a Competitor listed on
schedule D, for a similar project, for the period the personnel are performing the Services
and for six (6) months thereafter. Vendor shall require all personnel performing Services for
Visual hereunder to enter into a confidentiality and non-compete agreement with Visual as a
third party beneficiary in a form reasonably acceptable to Visual that prohibits the
individual from working for a Competitor listed on schedule D for six months following
termination. In addition to the foregoing, Vendor acknowledges that in no event shall Vendor
perform any services or provide any deliverables, software or systems to any person or entity
in contravention of its obligations under Section 13.3.
	 
	1.4.	 	Non-Solicitation. During the course of this Agreement and for a period of
one year thereafter, neither party shall directly or indirectly solicit, employ, make
arrangements for sub-contracting or otherwise knowingly participate in any ventures with any
individual who worked on any Statement of Work hereunder as an employee or contractor of the
other or as an employee of the other’s sub-contractor without the other party’s prior consent.
	 
	21.1	 	Binding Nature and Assignment. Neither Party may, or shall have the power to, assign
this Agreement without the prior written consent of the other Party, except that (a) Vendor
may assign this Agreement to any Vendor Affiliate without Visual’s prior written consent, and
(b) Visual may assign this Agreement to any Visual Affiliate without Vendor’s prior written
consent. Subject to the foregoing, this Agreement shall be binding on the Parties hereto and
their respective successors and assigns.
	 
	21.2	 	Entire Agreement; Amendment. This Agreement, including any Schedules referred to
herein and attached hereto, each of which is incorporated herein for all purposes, constitutes
the entire agreement between the Parties with respect to the subject matter hereof and
supersedes all prior agreements, whether written or oral, with respect to the subject matter
contained in this Agreement. No change, waiver, or discharge hereof shall be valid unless in
writing and signed by an authorized representative of the Party against which such change,
waiver, or discharge is sought to be enforced.
	 
	21.3	 	Notices. All notices, requests, demands, and determinations under this Agreement
(other than routine operational communications), shall be in writing and shall be deemed duly
given (a) when delivered by hand, (b) one (1) day after being given to an express courier with
a reliable system for tracking delivery, (c) when sent by confirmed facsimile with a copy sent
by another means specified in this Section, or (d) six (6) days after the day of mailing, when
mailed by United States mail, registered or certified mail, return receipt requested, postage
prepaid, and addressed as follows:





	 	 	 	 	 
	 

	 	In the case of Visual:
	 	In the case of Vendor:
	 
	 	 	 	 
	 

	 	Software Project Manager
	 	Vikram Ramchandra
	 

	 	Meenal Jobalia
	 	MBT International, Inc.
	 

	 	2092 Gaither Road
	 	One Gateway Center Suite 2600
	 

	 	Rockville, Maryland 20850
	 	Newark, NJ 07102
	 
	 	 	 	 
	 

	 	With a copy to:	 	 
	 
	 	 	 	 
	 

	 	Chief Financial Officer
	 	President – MBT International, Inc.
	 

	 	Don Clarke
	 	Terrace Tower
	 

	 	2092 Gaither Road
	 	5619 DTC Parkway, Suite 920
	 

	 	Rockville, Maryland 20850
	 	Greenwood Village, CO 80011







	 	 	A Party may from time to time change its address or designee for notification purposes by
giving the other prior written notice of the new address or designee and the date upon which
it will become effective.




-20-









 











Visual Networks Confidential,





	21.4	 	Relationship of Parties. Vendor, in furnishing the Services hereunder, is acting as
an independent contractor, and Vendor has the sole right and obligation to supervise, manage,
contract, direct, procure, perform or cause to be performed, all work to be performed by
Vendor under this Agreement. Vendor is not an agent of Visual and has no authority to
represent Visual as to any matters, except as expressly authorized in this Agreement.
	 
	21.5	 	Severability. In the event that any provision of this Agreement conflicts with the
law under which this Agreement is to be construed or if any such provision is held invalid by
an arbitrator or a court with jurisdiction over the Parties, such provision shall be deemed to
be restated to reflect as nearly as possible the original intentions of the Parties in
accordance with applicable law. The remainder of this Agreement shall remain in full force
and effect.
	 
	21.6	 	Consents and Approval. Except where expressly provided as being in the discretion of
a Party, where agreement, approval, acceptance, consent, or similar action by either Party is
required under this Agreement, such action shall be taken in writing and shall not be
unreasonably delayed or withheld. An approval or consent given by a Party under this
Agreement shall not relieve the other Party from responsibility for complying with the
requirements of this Agreement, nor shall it be construed as a waiver of any rights under this
Agreement, except as and to the extent otherwise expressly provided in such approval or
consent.
	 
	21.7	 	Waivers. A delay or omission by either Party hereto to exercise any right or power
under this Agreement shall not be construed to be a waiver thereof. A waiver by either of the
Parties hereto of any of the covenants to be performed by the other or any breach thereof
shall not be construed to be a waiver of any succeeding breach thereof or of any other
covenant herein contained.
	 
	21.8	 	Cumulative Remedies. Except as otherwise expressly provided herein, all remedies
provided for in this Agreement shall be cumulative and in addition to and not in lieu of any
other remedies available to either Party at law, in equity or otherwise.
	 
	21.9	 	Survival. Any provision of this Agreement which contemplates performance or
observance subsequent to any termination or expiration of this Agreement shall survive any
termination or expiration of this Agreement and continue in full force and effect.
	 
	21.10	 	Public Disclosures. All media releases, public announcements, and public
disclosures by either Party relating to this Agreement or the subject matter of this
Agreement, including promotional or marketing material, but not including announcements
intended solely for internal distribution or disclosures to the extent required to meet legal
or regulatory requirements beyond the reasonable control of the disclosing Party, shall be
coordinated with and approved by the other Party prior to release.
	 
	21.11	 	Covenant of Good Faith. Each Party agrees that, in its respective dealings with the
other Party under or in connection with this Agreement, it shall act in good faith.
	 
	21.12	 	Future Engagements. Each Party agrees that this Agreement was executed for the
performance of one or more pilot project(s) to evaluate Vendor’s performance of the Services.
If Visual desires to engage Vendor under a potential build-operate and transfer sourcing model
or to perform subsequent larger scale software development or maintenance services, Vendor
agrees to negotiate with Visual for a more comprehensive successor agreement or an amendment
to this Agreement, as reasonably requested by Visual.
	 
	21.13	 	Headings. The article and section headings and the table of contents used herein
are for reference and convenience only and shall not enter into the interpretation hereof.
	 
	21.14	 	Counterparts. This Agreement may be executed in several counterparts, all of which
taken together shall constitute one single agreement between the parties hereto.





     IN WITNESS WHEREOF, Visual and Vendor have each caused this Agreement to be signed and
delivered by it’s duly authorized officer, all as of the date first set forth above.



-21-









 





Visual Networks Confidential,




	 	 	 	 	 	 	 	 	 	 	 
	Visual Networks Operations, Inc.	 	 	 	Vendor	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Wayne Fuller
	 	 	 	By:
	 	/s/ Patrick L. Murtha	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	Print Name: Wayne Fuller	 	 	 	Print Name: Patrick L. Murtha	 	 
	Title: Executive Vice President, Operations	 	 	 	Title: President, US Operations	 	 






	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	Print Name:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 





-22-









 






Visual Networks Confidential,




SCHEDULE B: Service Levels




Quality Goals





	 	1.	 	Total number of customer impacting bugs uncovered during the Final Acceptance Testing
Phase should be 0.
	 
	 	2.	 	If there are customer impacting bugs uncovered during the Acceptance Testing Phase
(Initial and Final) then they should be fixed in accordance with the below guidelines.
Failure to fix these shall result in prompt notification to the Visual Networks Project
Manager.






	 	•	 	Critical Bug : Required functionality is not implemented and there is no workaround
for the customer; Unrecoverable error in system software; For internal testing,
important and timely tests are being blocked by this defect
	 
	 	•	 	Major Bug : Defect impacts the functional requirements and there is a workaround for
this defect; Defect could result in customer perception of poor quality; Defect does
not significantly block overall system operation
	 
	 	•	 	Average Bug : Defect impacts the functional requirements in a modest way, without
significant impact if encountered by a customer
	 
	 	•	 	Minor Bug : Impact of this defect is highly unlikely to be noticed by customer; The
lowest rating for a noted defect; Does not imply that the effort to resolve the defect
is minor





	 	 	 	 	 
	Bug Severity	 	Priority	 
	Critical
	 	 	1	 
	Major
	 	 	2	 
	Average
	 	 	3	 
	Minor
	 	 	4	 







	 	3.	 	Metrics will be used by each test phase to ensure the testing efforts are progressing
according to schedule.






	 	a.	 	Repair Efficiency Percentage





	 	 	 	 	 	 	 
	 

	 	=
	 	# of defects correctly fixed the first time per stage
	 	* 100
	 

	 	 	 	 

	 	 
	 

	 	 	 	Total defects attempted to be fixed per stage	 	 





The Repair Efficiency Percentage indicates the percentage of defects that are correctly
fixed after first being identified. Most test phase exit criteria include meeting an
80% threshold for this metric.



-23-









 






Visual Networks Confidential,







	 	b.	 	Defect Resolution Rate





	 	 	 	 	 	 	 
	 

	 	=
	 	Cumulative # of defects correctly fixed
	 	* 100
	 

	 	 	 	 

	 	 
	 

	 	 	 	Cumulative # of defects	 	 







The Defect Resolution Rate indicates the percentage of defects identified for all test
passes of a test execution that have been fixed. Most test phase exit criteria include
meeting an 80% threshold for this metric.




	 	c.	 	Test Pass Rate





	 	 	 	 	 	 	 
	 

	 	=
	 	# of tests passed
	 	* 100
	 

	 	 	 	 

	 	 
	 

	 	 	 	Total # of tests	 	 







The Test Pass Rate indicates the percentage of test conditions that have passed the
test. For the Verification Test phase, the exit criteria include meeting an 80%
threshold for this metric.




	 	4.	 	Conduct functional specification, design (preliminary & final), code, system
integration and verification reviews with Visual Networks team. All user-interface and
system design, as well as base class code changes have to be approved by the Visual
Networks Technical Lead.





Process Compliance





	 	1.	 	Kick-off Meeting stated in the Statement of Work should occur within 4 weeks from the
date of the signed contract with the onsite CDM as stated in the Management proposal.
	 
	 	2.	 	All milestones stated in the Statement of Work should not deviate in reality by more
than 10% (# of days) from the actual dates submitted in the schedule.






	 	a.	 	Preliminary Design Review
	 
	 	b.	 	Product Assurance /Test Review
	 
	 	c.	 	Final Design Review
	 
	 	d.	 	Internal & external (with Visual Networks) code reviews
	 
	 	e.	 	Final code complete
	 
	 	f.	 	Start Verification Test Phase
	 
	 	g.	 	Completion of Verification Test phase
	 
	 	h.	 	First Acceptance review
	 
	 	i.	 	Code Integration Review
	 
	 	j.	 	Final Acceptance review




-24-









 











Visual Networks Confidential,





	 	3.	 	Ability to check-in, at least once in 2 weeks, to the code base on the project branch
of ClearCase (Rockville, MD) during all phases of the project life-cycle.
	 
	 	4.	 	Ability to deliver all builds of the software to Visual Networks after the code
completion phase.
	 
	 	5.	 	Ability to send key vendor team member to VNWK during the final code integration,
testing, and sign-off phase as suggested in the Management proposal.
	 
	 	6.	 	Responsible for documenting the review minutes and managing the action items. Meeting
minutes will be published to the Visual Networks team within 2 business days of the time of
the meeting.
	 
	 	7.	 	Turn-around time for resolving action items should be at most 3 days from the date the
issue was noted.
	 
	 	8.	 	Comply accurately and timely on all necessary project reporting as stated in the
Statement of Work (daily, weekly and monthly).





Adherence to Standards and Guidelines





	 	1.	 	All code developed shall be in compliance with the coding standards (C#, C++).
	 
	 	2.	 	All user-interfaces shall be in compliance with the user interface standards.
	 
	 	3.	 	All System Integration and Verification Test cases created by the vendor will be
recorded in the Test Director tool repository during these Test phases.
	 
	 	4.	 	All the System Integration and Verification Test results should be recorded in the Test
Director tool repository during these Test phases.
	 
	 	5.	 	All bugs found during the Verification & Validation, as well as the Acceptance Test
phases should be entered into the Rockville-based ClearQuest bug tracking system.
	 
	 	6.	 	Complete all the necessary documentation (design documents, code reviews, design
reviews, functional specifications).




-25-









 







Visual Networks Confidential,




Schedule C: Vendor Rates



A. During the Term, the blended rate specified below shall apply to any charges based on Time and
Materials, and shall be used in figuring any fixed price bid.





$[***]/hour per team member.


B. The team blended rate would cover:



1) 10 members, composed of 1 Project Lead/Technical Architect, 3 Senior Developers and 6
Developers/Testers.



2) Infrastructure costs for each team member such as desk space, LAN , email, printing
facilities, supplies and the like



3) Two managers, one a Customer Delivery Manager and one an Offshore Program Manager, in
part-time positions. The Customer Delivery Manager (based in the US) and the Program Manager (based
in India) are involved in helping the customer in future strategic and tactical planning for the
ODC, road map for the ODC (in terms of skills required etc.), identifying risks and discussing them
with the customer, representing the customer within the ODC and of course progress and status
reporting.



4) A PC for each team member, with Microsoft operating system as well as basic Office software
and standard Windows development tools. Any other specific software required by Visual for
executing projects is not included and would be charged separately.



5) The price includes reasonable voice communication costs for interactions between the team in
India and the team at Visual. The price however does not include any specific data network costs
for links between Vendor and Visual.



 



[***] INDICATES MATERIAL THAT HAS BEEN OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED. ALL SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 24b-2 UNDER THE SECURITIES AND EXCHANGE ACT OF 1934, AS AMENDED.





-26-









 








Visual Networks Confidential,



Schedule D: Competitors of Visual Networks Operations, Inc.




Concord

Micromuse

InfoVista

Packeteer

Allot

Peribit

Expand

Network Physics

NetScout

Compuware

Adtran

Paradyne





-27-