EXHIBIT 10.9
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. OMITTED INFORMATION HAS BEEN REPLACED BY [*].
FLEXTRONICS MANUFACTURING IRELAND AND STORAGE SYSTEMS INC. EUROPE
MANUFACTURING SERVICE AGREEMENT
SECTION 0.0 PREFACE AND PARTIES
This Manufacturing Service Agreement ("Agreement") is made and entered into
as of 4 August 2000 by and between Flextronics International Cork B.V. Ireland
(FIC), a division of Flextronics International, having its place of business at
Xxxxxxxx Xxxxxxxxxx Xxxx, Xxxxxx Xxxx, Xxxx, Xxxxxxx and LSI Storage Systems
Europe Holdings, Ltd. (SSE) having its place of business at Xxxxxxxx Xxxxxxxxxx
Xxxx, Xxxxxx Xxxx, Xxxx, Xxxxxxx; SSE being a division of LSI Logic Storage
Systems, Inc., a Delaware corporation, with a place of business located at 0000
Xxxxx Xxxx Xxxx, Xxxxxxx, XX 00000-0000 XXX (LSI-SSI).
RECITALS
WHEREAS, SSE desires to have FIC procure Components (as defined below)
manufacture, assemble and ship certain Product Units (herein defined) pursuant
to one or more Purchase Orders (hereinafter defined) issued by SSE in accordance
with this Agreement; and
WHEREAS, FIC desires to procure, manufacture, assemble and ship such
Product Units for SSE hereunder;
NOW, THEREFORE, SSE and FIC, intending to be legally bound, hereby agree as
follows:
SECTION 1.0 DEFINITIONS
Definitions. The following terms, in singular and/or plural forms of the
same term as and wherever used herein, shall have the meanings set forth in this
Section:
1.1 "BOM" shall mean SSE's xxxx of materials which includes a listing or
reference for the Components included in or required for the manufacture or
assembly of the Product Units based on their Specifications. Generic or staple
Components may be provided for in general terms sufficient to give SSE an
estimate of approximate cost.
1.2 "Components" shall mean parts, materials, and supplies procured for,
included in or required for each Product Unit, as provided in the BOM for such
Product Unit. The Components will include all equipment or intellectual Property
Rights included in or required for each Product Unit. Components may be
manufactured by or for FIC (FIC Components) from SSE's approved vendor list or
obtained from or through SSE (SSE Components), if so indicated in the BOM for
the Product Units.
1.3 "Days" shall mean Calendar days unless otherwise specified, provided
that if a deadline fails on a Saturday, Sunday or holiday, it shall be extended
until the following regular business day.
1.4 "Delivery" shall mean delivery of Product Units, FOB FIC's facility.
1.5 "Intellectual Property Rights" shall mean any rights under patent,
semi-conductor chip protection, copyright, trade secret, trademark, or similar
laws which would restrict the manufacture, assembly, or distribution of the
Product Units or the subsequent use, sale, or repair of the Products as
purchased by SSE from FIC hereunder.
1.6 "Manufacturing and Design Documentation" shall mean materials and media
provided to FIC by SSE or third-party contractors, suppliers, or licensors
acting at SSE request or created by SSE or third-party
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contractors, suppliers, or licensors acting at SSE request, in each case
specifically for use in the manufacture and assembly of Product Units hereunder,
including but not limited to drawings, routings, BOMs, schematics, circuit
diagrams, Specifications, and test documents.
1.7 "Excess Material" shall mean Components on hand that are no longer
needed for current production of SSE's Product Units or that there is no SSE
open Purchase Order for the following [*] or valid forecast for the following
[*].
1.8 "Material(s)" shall mean Components identified in the BOM which are
collectively used to produce the Product Unit(s).
1.9 "Manufacturing Lead Time" shall mean the total aggregate lead time of
that Component of the Product Unit having the longest lead time, plus the time
necessary for receiving, inspection, manufacturing, systems integration, test
and distribution as designated by FIC.
1.10 "NRE" shall mean nonrecurring charges for special development or other
activities listed under this designation in a Statement of Work.
1.11 "Obsolete Material" shall mean Materials on hand and non-cancelable
FIC order that can no longer be used on SSE's Product Unit(s) and are not
returnable nor useable on FIC production for other customers.
1.12 "Purchase Order" shall mean an order to purchase a specific quantity
of a Product Unit submitted by SSE and accepted by FIC, in accordance with, and
which shall specifically reference this Agreement. Such Purchase Order shall
include the quantity and type of Product Units to be manufactured and purchased;
the unit price; the Product Unit revision level; scheduled delivery dates
(unless submitted on open delivery terms); and "sold to", "invoice to", and
"ship to" addresses. The terms of this Agreement shall control over any printed
terms on a Purchase Order, acknowledgement, confirmation, or invoice.
1.13 "Product Unit" shall mean the product identified by SSE's part number
or assembly identification name specified in its Purchase Order issued under
this Agreement as more fully described in SSE's Specifications including any and
all modifications, changes and improvements made to such Product Unit during the
term of this Agreement, which comprises the integrated unit described in each
Statement of Work. There can be multiple versions of a Product Unit, based on
differences provided for under BOMs and Statements of Work.
1.14 "Specifications" shall mean the description of the Product Unit, as
provided through detailed drawings, an approved vendor list, in process and
final test criteria, or similar documentation.
1.15 "Statement of Work" shall mean a document relating to a particular
Product Unit, documented and agreed on by FIC and SSE, which refers to the
Specifications for the Product Unit that FIC agrees to manufacture or assembly
pursuant to Purchase Orders SSE may submit hereunder. If multiple versions of a
Product Unit are contemplated, an initial Statement of Work may give a
generalized description or provide sample specifications and leave the detailed
specifications of each version to the terms of further BOMs, Statements of Work,
or ordering procedures. Price terms, packaging, and applicable testing
procedures for each Product Unit will be set forth in a Statement of Work. A
Statement of Work may include minimum volume purchase commitments to be
satisfied through future Purchase Orders. A Statement of Work may be implemented
by reference to a new or changed BOM. A Statement of Work may provide for
special packaging or logo requirements.
SECTION 2.0 AGREEMENT TO MANUFACTURE
2.1 Scope of Work. FIC shall procure and manufacture Components and sell
the resulting Product Units to SSE, and SSE shall order and purchase Product
Units, as specified on Exhibit A, from FIC in accordance with the terms and
conditions of this Agreement.
2.2 Specifications. SSE shall have primary responsibility for the
preparation of the Specifications for the Product Units, and shall provide FIC
with copies of preliminary, working draft, and completed portions of the
Specifications for review. The parties agree to cooperate with each other to
implement changes to the
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Specifications made by SSE from time to time. The parties shall jointly review
the impact of such changes, and, in the event FIC believes that any such change
will affect the work performed by FIC under this Agreement, it shall notify SSE
and advise SSE of any such effect, including any impact on the manufacture or
assembly of the Product Unit, design considerations, and/or the costs to be
incurred by FIC and SSE as a result of such changes. A description of the
then-current Product Units and their Specifications shall be attached as Exhibit
B. SSE agrees to purchase from FIC all Products Units manufactured in accordance
with the terms of this Agreement.
2.3 Project Coordination. Each party shall appoint technical coordinators
to maintain technical liaison with the other party in connection with the
manufacture of the Product Units. Communication between the parties regarding
the design or engineering of the product shall be between the designated
coordinators.
2.4 Consigned Materials. Upon agreement with FIC, SSE may supply consigned
materials to FIC. All consigned materials will be delivered to FIC in sufficient
time and in sufficient quantities, including normal attrition levels, to allow
FIC to meet scheduled delivery dates for the applicable Product Units. All
consigned materials shall be in good condition and working order. SSE assumes
liability for the quality of all consigned materials and FIC shall not be
responsible for any defects or deficiencies therein prior to consigned materials
undergoing FIC's receiving inspection process for cosmetic inspection or parts
found to be defective based on test results.
SECTION 3.0 PURCHASE ORDERS/FORECASTS AND RESCHEDULING & CANCELLATIONS
3.1 Forecasts. On a [*] basis, SSE shall provide FIC with a minimum [*]
forecast of Product Unit requirements. This forecast is to be used for Component
procurement purposes. SSE hereby authorizes FIC, and FIC shall be required to
make such purchases as are reasonably necessary to meet SSE's forecast. SSE will
be responsible for all Excess Material and/or Obsolete Material as defined
within the terms of this Agreement. FIC shall make Component purchase
commitments to suppliers as are reasonably necessary to meet SSE's forecasts
taking into consideration the Manufacturing Lead Time of the actual Components.
3.2 Purchase Orders. SSE will order Product Units by issuing Purchase
Orders to FIC. Each Purchase Order shall cover SSE's estimated requirements
derived from the Forecast, for a period of at least [*]. Purchase Orders may be
delivered to FIC by any reasonable means, including but not limited to postal
delivery, courier delivery, facsimile transmission, or electronic mail. Purchase
Orders, regardless of delivery means, will be confirmed by FIC. No Purchase
Order shall be binding upon FIC unless and until it is accepted by FIC in
writing. Within [*] of receipt of a Purchase Order, FIC shall either accept or
reject the same. If FIC is unable to meet the delivery schedule set forth in a
Purchase Order or finds the same to be unacceptable for some other reason, FIC
and SSE shall negotiate in good faith to resolve the disputed matter(s).
3.3 Purchase Order Releases. SSE shall issue FIC firm Purchase Order
releases a minimum of [*] prior to the required delivery date based on accepted
forecasts. FIC will use reasonable efforts to meet increases within the
Manufacturing Lead Time if the Purchase Order Release is net based on accepted
forecasts.
3.4 Rescheduling of Released Orders. FIC agrees to use its best efforts to
accommodate requests for rescheduling (acceleration and delay) and before
accepting such rescheduling requests will quote applicable charges resulting
from changes in costs associated with such rescheduling SSE may reschedule
delivery of Product Units by sending FIC a written change order. Deliveries may
be rescheduled in accordance with the schedule contained in Exhibit C attached
to this Agreement.
3.5 Cancellations. In the event that SSE wishes to cancel some quantity of
Product Units ordered pursuant to this Agreement, FIC upon receipt of such
written notice shall stop work to the extent specified therein. SSE's
termination liability shall be limited to the terms set forth in Exhibit C
attached to this Agreement.
3.6 Cancellation Charges. As specified in Exhibit C, with respect to
canceled Purchase Orders, SSE agrees to pay FIC: a) for Components (other than
items provided or paid for by SSE acquired solely for the execution of such
Purchase Order), and FIC's out-of-pocket costs for such Components, minus
amounts
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saved as a result of any return, reuse, or sale; and b) for completed work and
work in progress that cannot be used to fill other orders, FIC's costs for
actual and reasonable labor and supplies incurred pursuant to SSE's Purchase
Orders up to the date of receipt of notice of cancellation. In no event shall
cancellation charges set forth in Exhibit C exceed the price of the Components
and/or the Product Units, as the case may be, covered by the canceled portion of
the Purchase Order.
Obligations for payment for NRE, as set forth in Statements of Work or
Purchase Orders, are not subject to reduction unless associated costs can be
actually avoided. If such cost can be avoided, all reasonable effort will be
made to minimize such cost and to reduce the requirement payments in an
equitable manner. FIC will provide SSE with documentation adequate to support
such claim for cancellation charges. Components and completed work and work in
progress that are paid for by SSE pursuant to such cancellation charges shall be
SSE's property and shall be held or delivered to SSE as SSE may request.
Notwithstanding the foregoing, SSE shall have no obligation to pay
cancellation charges where cancellations are the result of any failure of FIC to
perform its obligations under this Agreement.
SECTION 4.0 PAYMENT AND SHIPPING TERMS
4.1 Invoices and Payment. FIC may invoice for Product Units upon
completion and shipment of such Product Units pursuant to Purchase Orders. To
the extent FIC is entitled to do so under a Statement of Work, FIC may invoice
for NRE and associated charges, if any, as set forth in such Statement of Work,
upon commencement of production or as otherwise set forth in the applicable
Statement of Work. Payment is due [*] from date of invoice, and payment shall be
made by wire transfer or as otherwise agreed upon. In the event SSE fails to
make payment within [*] after date of invoice, FIC may, at its option, unless
the invoice is in dispute, (1) cease shipments to SSE immediately and/or 2) make
a good faith effort to expedite the resolution of the dispute.
4.2 Packaging and Shipping. FIC shall package each Product Unit to SSE's
Specifications, or, if not specified by SSE, to good commercial standards. All
shipments made by FIC to SSE shall be F.O.B. FIC. Title, risk of loss and damage
shall pass from FIC to SSE upon delivery to the F.O.B. point. Shipments will be
made in accordance with SSE's specific routing instructions, including method of
carrier to be used, and all special and incidental charges resulting from the
choice of freight carrier shall be borne by SSE.
4.3 Security Interest. FIC may request, and SSE in its sole discretion may
grant, a purchase money security interest in each of the Product Units (except
to the extent such Product Units embody Consigned Materials) produced pursuant
to this Agreement in the amount of its purchase price. This interest will be
satisfied by payment in full for the Product Units. A copy of this Agreement
and/or appropriate UCC documents may be filed on FIC's behalf with appropriate
state authorities at any time after signature by SSE as a financing statement in
order to perfect FIC's security interest. SSE agrees to execute any and all such
documents necessary to perfect said purchase money security interest.
4.4 Taxes. SSE shall be responsible for sales, use, or custom taxes or
duties resulting from the sale or shipment of Product Units in accordance with
its Purchase Orders. SSE shall provide tax exemption numbers, if applicable, for
such purchases.
SECTION 5.0 WARRANTY
5.1 Warranty. FIC warrants to SSE that Product Units assembled or
manufactured by FIC will (i) conform in all respects to their mutually agreed
upon Specifications: (ii) will be merchantable, of good workmanship and be tree
from defects in workmanship and programming under normal use and service for a
[*] after shipment by FIC. FIC's obligation under this warranty is limited to
promptly replacing or repairing at its option and expense any such
non-compliance Product Unit(s), or paying SSE its cost of remedying such
non-compliance. All defective Product Units shall be returned to FIC
manufacturing facility, F.O.B. SSE, with reference to a FIC supplied Returned
Materials Authorization number ("RMA"). The foregoing warranties shall inure to
SSE, its successors and assigns, and those who purchase or use each Product
Unit.
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THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES WHETHER STATUTORY,
EXPRESS OR IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR PARTICULAR PURPOSE AND FOR ALL OTHER OBLIGATIONS OR LIABILITIES
ON FIC'S PART.
FIC NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME FOR FIC ANY
OTHER LIABILITY IN CONNECTION WITH THE SALE OF THE SAID ITEMS. THIS WARRANTY
SHALL NOT APPLY TO ANY OF SUCH PRODUCTS WHICH SHALL HAVE BEEN REPAIRED OR
ALTERED EXCEPT BY FIC OR WHICH SHALL HAVE BEEN SUBJECT TO MISUSE, NEGLIGENCE, OR
ACCIDENT. A PRIOR WRITTEN AUTHORIZATION MUST BE OBTAINED FROM FIC BEFORE ANY
ITEMS CAN BE RETURNED TO FIC PURSUANT TO A WARRANTY CLAIM.
SECTION 6.0 RESPONSIBILITY FOR ADDITIONAL COSTS AND EXCESS INVENTORY
6.1 Excess Inventory. In the event that FIC purchases or orders Components
and related materials in order to meet its obligations to SSE's with respect the
quantity of Product Units specified in the Forecast and/or a Purchase Order(s),
SSE shall be required to purchase the unused portion of Components and related
materials at [*], from FIC upon notice, [*]: if (i) SSE fails to purchase such
Product Units in accordance with Purchase Orders(s); and (ii) FIC using best
efforts cannot return, or cancel or use the Components or related materials. The
total cost to be borne by SSE shall not exceed the unit cost of the Components
and any related materials, multiplied by the quantity in excess plus a [*]
handling fee.
6.2 Additional Costs. Product Unit pricing shall remain firm for Product
Units on SSE Purchase Orders which have been accepted by FIC except as follows:
A. In the event there is an increase or decrease in the cost of
materials which affects the Product Unit cost to SSE, FIC shall document
such increase to SSE so that SSE may, and FIC shall be required to pursue
alternative pricing (from other sources and customer sources and advise SSI
through the change control process) in order to maintain the original cost
("Alternative Pricing"). If such an alternative cannot be achieved [*] from
the time FIC documents such increase to SSE, the prices in Exhibit A shall
be adjusted to reflect the actual cost of any such increase or decrease
effective for orders shipped pursuant to Purchase Orders on the first day
of the expiration of the [*].
B. Provided SSE has been provided with notice and agrees, SSI-E will
be responsible for certain charges defined as those charges constituting
costs and expenses not contained in the quoted contract price, where the
cause is due to SSE's actions, including but not limited to:
1. Overtime: Overtime charges and actual expenses incurred as a
result of delays in the normal production or interruption in the work
flow process where such delays or interruption are caused by: (a) SSE
change in Product Unit Specification or product test which impacts a
build in progress, or (b) failure to provide sufficient quantities or a
reasonable quality level of consigned materials where applicable to
sustain the production schedule.
2. Obsolete Materials: Any inventory rendered obsolete as a
result of a SSE; engineering, field manufacturing, design, test, or
other change. Such obsolete inventory shall be invoiced at the [*]
handling, and shall be packaged and delivered to SSE by FIC, F.O.B. FIC
shipping point, within [*] of the change effective date.
3. Packaging Expenses: Expenses incurred due to SSE's packaging
requirements unless such packaging requirements were contained in the
Specifications.
4. Unique Equipment: SSE and FIC will mutually agree on any NRE
charges for unique equipment, which may result from adding new Product
Units, or engineering changes, which modify existing Product Units. This
equipment may consist of in-circuit test equipment, functional test
equipment, special component tooling, and special assembly tooling PCBA
pallets or modifications thereof.
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SECTION 7.0 QUALITY CONTROL STANDARDS
7.1 Quality Assurance. FIC shall implement and maintain such quality
assurance standards as are reasonably feasible to produce and deliver to SSE
Product Units that are defect-free, as well as to meet any other quality and
reliability standards agreed to between the parties.
7.2 Ongoing Inspection and Testing. All Product Units shall be subject to
inspection, acceptance testing and review for conformance to ongoing quality
control standards as may be established in the Specifications and/or Statement
of Work, together with other standard industry practices and procedures.
Inspection and testing shall be at FIC's premises during normal business hours
or, following a reasonable notice to FIC, on SSE's premises or at a location
selected by SSE (including the premises of any customer of SSE). When conducted
on FIC's premises by FIC, copies of all documents prepared by FIC indicating the
results of such inspection and testing shall be provided to SSE at SSE's
request. Inspection and testing at SSE's facilities or locations designated by
SSE shall be commenced for each Product Unit within a period normally not more
than [*] after arrival thereof. The inspection and testing shall be in
accordance with quality control procedures and tests agreed upon by the parties.
7.3 Facility Surveys. Following reasonable notice to FIC, SSE reserves the
right to review, during regular business hours, FIC's physical facilities and
FIC's quality control procedures, both prior to first Product deliveries and
periodically thereafter, in order to assure compliance with the Specifications
and other standard industry practices and procedures. FIC shall maintain quality
control procedures mutually agreed upon by SSE and FIC. In the event that SSE
determines in good faith, during any facilities survey, that FIC's procedure is
insufficient to insure consistent acceptable quality as defined in Exhibit E,
SSE shall so advise FIC, specifying the deficiency SSE believes exists and
reasonable proposals for correction. In the event that FIC shall fail to effect
the suggested correction or reasonably satisfy SSE as to the lack of need for
such correction within [*], SSE may terminate this Agreement and cancel all
then-outstanding Purchase Orders for Products and Parts without liability or
consequence similar to recoveries outline on Exhibit C.
7.4 Acceptance Testing Results. SSE shall provide notification to FIC upon
completion of acceptance testing setting forth the specific date of acceptance
or rejection of each Product Unit included in the notification. If any Product
Unit is rejected, FIC shall, at SSE's option, either issue SSE full credit for
return of the defective Product Unit, or proceed forthwith to correct the
defects indicated by SSE, either by repairing the defective Product Unit at the
point of delivery or within FIC's facility, if possible, or by supplying a new
Product Unit. The cost associated with any such repair or replacement, including
transportation charges for return to FIC and subsequent return to SSE, shall be
borne by FIC.
7.5 Failure to Meet Minimum Standards. If, during either qualification or
acceptance testing, SSE determines that the Product Units are not defect-free or
cannot comply with minimum quality standards as defined in Exhibit E, this
Agreement may be terminated at SSE's option and SSE may cancel without liability
or consequence any Purchase Order previously issued.
7.6 FIC Personnel. FIC shall provide, at SSE's request and at locations
selected by SSE, and at reasonable charge to SSE, technically competent
personnel of FIC to assist in the identification and resolution of any
performance problems which may jeopardize the progress of the first installation
of the Product. FIC shall also provide, at SSE's request, any performance
information available from any source which could aid SSE in evaluation of
Product performance.
7.7 No Waiver of Warranty. In no event shall the inspection,
qualification, and acceptance of any Product Unit pursuant to this Section 7.0,
or the payment for any such Product Unit by SSE, in any way impair or reduce
SSE's rights under the warranty of Section 5 of this Agreement, or SSE's rights
to further inspection or testing.
SECTION 8.0 SPECIFICATION, ENGINEERING AND OTHER CHANGES
8.1 Engineering Design Changes. All engineering changes and sourcing
changes must be approved by SSE before implementation by FIC. FIC will advise
SSE within [*], how soon and at what cost, engineering changes can be
implemented. The cost increases or decreases incurred as a result of engineering
and/or
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sourcing changes will be reviewed and an equitable adjustment shall be made in
the unit price of such effected Product Units, or shipping schedule or both,
including increased or decreased costs to FIC, as approved by SSE, for any
material that is rendered excess and/or obsolete pursuant to Section 6 above,
due to such engineering change. Such engineering change will be implemented only
upon receipt by FIC of SSE's written request to proceed with the change,
provided however that SSE and FIC will mutually agree upon the effective date of
the change.
8.2 Change in Source of Parts. FIC will purchase Materials only from
vendors specified, approved, and qualified by SSE. FIC shall notify SSE in
advance of any proposed change and the reasons for the proposed change in the
source (including addition of new vendors) of purchased Material and SSE shall
have the right to approve or reject such source change.
8.3 Out of Warranty Repair. FIC agrees to repair any out-of-warranty
Product Units which SSE may elect to have repaired by FIC and which FIC deems
repairable. FIC further agrees to update all such repaired Product Units to the
latest engineering change and to xxxx or tag the same to show the latest
revision level. The cost to SSE for such repair by FIC shall be at the repair
prices set forth in Exhibit A.
SECTION 9.0 CONFIDENTIAL INFORMATION.
9.1 Disclosure of Confidential Information. Each party agrees that it may
be desirable to disclose Confidential Information to the other party.
Confidential Information may also include confidential, proprietary and/or trade
secret information that is owned by third parties, which third parties have
granted sufficient rights to a party to permit such party to provide
Confidential Information to the other party hereunder; for purposes of this
Section, references to either party shall include any applicable third party
owners/licensors of Confidential Information; and is clearly marked as
"Confidential".
9.2 Use of Confidential Information. Recipient agrees that it shall limit
its disclosure of the Confidential Information of Disclosure solely to
Representatives, who have a need to know such Confidential information for
purposes of this Agreement. Without limiting the foregoing, Recipient agrees to
treat Disclosure's Confidential Information with at least the same degree of
care and protection that it uses with its own confidential information and trade
secrets of similar kind and value. In any case where Recipient provides
Disclosure's Confidential Information to a Representative, Recipient shall
require that such Representative enter a written agreement with Recipient
containing terms and conditions covering the disclosure, use and protection of
such Confidential Information that are at least as protective and restrictive as
the applicable terms and conditions of this Section.
9.3 Reproduction or Duplication of Confidential Information. Recipient may
reproduce or duplicate portions or all of Disclosure's Confidential Information
disclosed hereunder, provided that Recipient shall reproduce and include in all
such copies of Confidential Information prepared by Recipient the copyright
notices and proprietary legends of Disclosure as they appear therein when
originally furnished to Recipient. Further, Recipient shall not remove any
proprietary, copyright, trade secret or other legend from any form of
Confidential Information.
9.4 Exclusions to Obligation of Confidentiality. Recipient shall have no
obligation hereunder as to Confidential Information provided by Disclosure that
(1) is known to Recipient at the time of disclosure, (ii) is independently
developed by Recipient provided Recipient can show that such development was
accomplished by or on behalf of Recipient without the use of or any reference to
Confidential Information supplied to Recipient by Disclosure, (iii) becomes
rightfully known to Recipient from a source other than Disclosure without
restriction on subsequent disclosure or use, (iv) is or becomes part of the
public domain through no wrongful act of Recipient, or (vi) is furnished to a
third party by Disclosure without Disclosure requiring such third party to
undertake an obligation of confidentiality. Further, Recipient may disclose
Confidential Information of Disclosure pursuant to a judicial or governmental
request, requirement or order, provided that Recipient gives Disclosure
sufficient prior notice to contest, or to seek a protective order restricting
further disclosure of Confidential Information provided in response to, such
request, requirement or order.
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9.5 Confidentiality of Agreement. The parties agree that they shall
consider the terms and conditions of this Agreement to be Confidential
Information, and that neither shall disclose such terms and conditions or the
relationship between the parties to any third party without the express written
permission of the other party, provided, however, that a party may, at any time
and without notice to the other party, disclose any portion of any of its
standard form agreements that have been incorporated herein to any third party.
Press releases and other like publicity, advertising or promotional material
that mention this Agreement or the other party by name shall be agreed upon by
both parties in writing prior to any release.
9.6 No Ownership Interest Transferred. Recipient acknowledges that it is
granted only the limited right to use Confidential Information provided herein,
and that such right is revocable at will by Disclosure and not coupled with any
interest in the Confidential Information. Neither party transfers to the other
any right of ownership in or title to any Confidential Information or other
intellectual property hereunder, either expressly or by implication, estoppel or
otherwise.
9.7 Termination of Possession of Confidential Information; Survival of
Obligations. On Disclosure's request, Recipient shall (1) promptly return or
destroy all Confidential Information of Disclosure, (ii) discontinue all further
use of Confidential Information of Disclosure, and (iii) certify in writing to
Disclosure that such actions have been taken. The obligations of the parties
under this Attachment relating to the confidentiality of Confidential
Information shall survive and continue after any termination of this Letter for
a period of [*] after the date of such termination.
SECTION 10.0 TERM AND TERMINATION
10.1 Term and Termination. The initial term of this Agreement shall
commence on the date of execution hereof and shall be in effect for an initial
term of [*] with automatic [*] renewals (every [*]) unless terminated according
to one or more of the following provisions:
A. At any time upon the mutual written agreement of both parties.
B. At the end of the Initial Term or any subsequent [*] by either
party upon written notice to the other party received not less than [*]
prior to the expiration of any such term;
C. By either party upon [*] written notice to the other party
following a material breach of the Agreement by the other party and the
breaching party's failure to cure such breach with reasonable promptness in
light of all surrounding circumstances;
D. By either party upon the other party seeking an order for relief
under the bankruptcy laws of the United States or similar laws of any other
jurisdiction, a composition with or assignment for the benefit of
creditors, or the dissolution or liquidation.
E. Upon any such termination, SSE shall be liable, in the event of
any cancellation of current Purchase Orders with FIC, according to the
terms contained in Exhibit C.
F. Survival. Notwithstanding any termination of this Agreement, the
provisions of Sections 1.0 Definitions, Section 5.0 Warranty, Section 11
Intellectual Property & Indemnification, and Section 12.0 Miscellaneous,
shall continue in accordance with their terms.
SECTION 11.0 INTELLECTUAL PROPERTY & INDEMNIFICATION
11.1 Product Indemnification. Each party shall indemnify and defend the
other party against any and all claims, suits, losses, expenses, and
liabilities, for bodily injury, personal injury, death, and property damage
asserted or brought or asserted by any person or entity arising out of the
design, installation or use of any Product Unit(s) manufactured by FIC under
this Agreement unless such claim alleges that FIC's manufacturing process is
directly or indirectly at fault. Such indemnification shall include attorney's
fees and all other costs incurred by FIC in the defense of such claims, asserted
liabilities or causes of actions. Both parties shall carry and maintain
liability insurance coverage to satisfactorily cover its obligations under this
Agreement.
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11.2 Patents, Copyright, Trade Secret and Other Proprietary Rights.
A. SSE agrees to defend at its expense any suit brought against FIC
based upon a claim that finished Product Unit(s) manufactured by FIC under
this Agreement infringes on a patent, copyright, trade secret and other
proprietary right, foreign or domestic, and to pay the amount of any
settlement or the costs and damages finally awarded provided that FIC
promptly notifies SSE and provides SSE with reasonable assistance in the
defense of any such action.
B. FIC, at its own expense, shall indemnify and defend SSE and any
subsequent owner of the Product Units, and shall pay any damages, agreed
upon settlement amounts, or necessary costs (including attorney fees and
expenses) finally awarded with respect to all proceedings or claims against
FIC for the infringement of any Intellectual Property Rights resulting from
FIC's manufacture and assembly processes or the use of FIC's Components
where such use necessarily and solely causes the infringement. FIC shall
not have any liability hereunder based on (1) required compliance by FIC
with Specifications originating or furnished by SSE (or the combination of
the Product Units with other apparatus not included in the deliveries to
SSE), if such compliance (or combination) necessarily and solely gives rise
to such proceedings or claims; (2) infringement or alleged infringement
caused solely by SSE Components; (3) SSE's failure to provide prompt notice
to FIC of any such proceeding or claim and copies of all communications,
notices, and/or other actions relating to such claim; or (4) infringement
resulting from modifications or alterations made after shipment by FIC. SSE
shall not agree to settle any such proceeding or claim without the written
consent of FIC, which consent shall not be unreasonably withheld.
11.3 Limitation of Liability. Except for Infringement, either party's
maximum aggregate liability under, arising from or in connection with this
Agreement, whether arising in contract, tort (including negligence) or
otherwise, shall be limited to the price paid for the Product(s) giving rise to
the claim.
IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER, OR TO ANY THIRD
PARTY, FOR ANY LOST PROFITS, LOST SAVINGS, INCIDENTAL OR OTHER CONSEQUENTIAL
DAMAGES, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11.4 No Other Rights. Except for any licenses and immunities that are
expressly granted by this Agreement, nothing in this Agreement of any course of
dealing between the parties will be deemed to create a license from either party
to the other of any Intellectual Property Right, whether by estoppel,
implication otherwise.
SECTION 12.0 MISCELLANEOUS
12.1 Entire Agreement. This Agreement shall constitute the entire
Agreement between the Parties with respect to the transactions contemplated
hereby, and supersedes all prior agreements and understandings between the
Parties relating to such transactions. Any representations, promises, warranties
or statements made by either party that differ in any way from the terns of this
Agreement shall not be binding on either party unless made in writing and signed
by a duly authorized representative of each party. The Exhibits listed below are
considered to be a part of this Agreement:
Exhibit A Product Unit Pricing
Exhibit B Description and Product Unit Specifications
Exhibit C Reschedule and Cancellation Term
Exhibit D Non-Disclosure Agreement
Exhibit E Statement of Work
SSE and FIC shall comply with all terms and conditions stated in this
Agreement and with all product specifications contained in customer issued
purchase orders. In the event of inconsistency, the order of precedence shall be
as follows:
(1) This Agreement
9
(2) Exhibits to this Agreement
(3) Product Specifications on the face of SSE's Purchase Order(s)
(4) Statement of Work
12.2 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted assigns.
Neither party hereto shall in any way sell, transfer, assign, or otherwise
dispose of any of the rights, privileges, duties and obligations granted or
imposed upon it under this Agreement; provided however, that FIC shall have the
right to assign its right, duties and responsibilities under this Agreement to
any affiliate of FIC. An affiliate of FIC means any corporation partnership or
other business entity which controls or is controlled by, or is under common
control with FIC.
12.3 Severability. In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal or
unenforceable in any respect, except in those instances where removal or
elimination of such invalid, illegal, or unenforceable provision or provisions
would result in a failure of consideration under this Agreement, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, and this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
12.4 Force Majeure. FIC shall not be liable for any delay in performance
or failure to perform, in whole or in part when due to labor dispute, strike,
war or act of war (whether an actual declaration is made or not), insurrection,
riot civil commotion, act of public enemy, accident, fire, flood, or other act
of God, act of any governmental authority, judicial action, or similar causes
beyond the reasonable control of FIC. If an event of force majeure occurs, FIC
shall promptly notify SSE.
12.5 Independent Contractor. FlC and SSE are and shall be independent
contractors to one another, and nothing herein shall be deemed to cause this
Agreement to create an agency, partnership, or joint venture between the
parties. Each party shall have sole responsibility for the supervision and
payment of its personnel and, except as agreed in writing, all other costs and
expenses required to perform its obligations hereunder.
12.6 Disputes. This Agreement shall be construed in accordance with Irish
law. FIC and SSE shall meet to discuss and resolve all matters not specifically
provided for in this Agreement and which require a decision and all differences,
disputes and disagreements ("Disputes") which may arise between the parties. If
the parties are still unable to resolve any such matters they shall reconvene
for further discussions within [*] of the previous meeting. If the parties are
still unable to resolve such matters at the reconvened meeting then the matters
shall be referred to the Vice President of each of the respective parties for a
decision. In the event that any Dispute cannot be resolved between the parties,
the Dispute shall be finally settled under the Rules of Arbitration of the
International Chamber of Commerce as at present in force. The appointing
authority shall be the international Court of Arbitration of the International
Chamber of Commerce by one arbitrator appointed in accordance with the said
Rules. The seat of arbitration shall be London. The language to be used in the
arbitral shall be English.
12.7 Confidential Information. Confidential Information shall be governed
by the Non-Disclosure Agreement executed between FIC and SSE which is attached
hereto and incorporated as Exhibit D.
12.9 Freedom of Action. Except as restricted by Intellectual Property
Rights of a party hereto or of third parties, nothing in this Agreement shall
limit the right of SSE or FIC to develop, have developed, procure and/or market
products or services now or in the future, except where such products or
services are competitive with those that are subject to this Agreement.
12.10 FIC Compliance with Governmental Legal Requirements. FIC shall
comply with the provision of all applicable federal, state, and local laws,
regulations, rules, and ordinances applicable to the transactions governed by
this Agreement.
12.11 Waiver. No failure or delay on the part of either party thereto in
exercising any right or remedy under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right
10
or remedy. No provision of this agreement may be waived except in writing signed
by the party granting such waiver.
12.12 Notice. Unless otherwise specified in this Agreement, all notices
and other communications permitted or required hereunder shall be in writing and
shall be mailed, faxed or otherwise delivered to the other party at the address
set forth below, and shall be effective [upon receipt?]. Each notice to SSE or
FIC shall be addressed, until notice change thereof, as follows
SSE FIC
--- ---
Kilbarry Industrial Park Kilbarry Industrial Park
Dublin Hill Dublin Hill
Cork, Ireland Cork, Ireland
Attn: [*] Attn: [*]
Copy to:
SSE Legal
LSI Storage Systems, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
XXX
(tel: 000-000-0000)
12.13 Export Requirements. FIC shall comply with all U.S. export laws and
regulations which control the Products and associated technical data which LSI
Logic furnishes to Reseller under this Agreement, including without limitation
the Export Administration Regulations administered by the U.S. Department of
Commerce, and the International Traffic in Arms Regulations administered by the
U.S. Department of State.
12.14 Facilities Accommodation. FIC shall, at no additional charge,
provide SSE with [*] space at FIC premises in Cork Ireland for a period of [*]
from the effective date of this Agreement, which shall include utilities,
maintenance and parking for the purpose of SSE personnel to work at FIC
facilities and provide on-site support and coordination for FIC as contemplated
under the terms and conditions of this Agreement.
12.15 Publicity. Reseller and LSI Logic agree to communicate and cooperate
with respect to advertising and publicity regarding this Agreement and their
relationship, and to obtain the written consent of the other before publishing
or releasing any such advertising or publicity.
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date first above written.
Flextronics International Cork B.V. Ireland LSI Storage Systems Europe Holding, Ltd.
By: By:
---------------------------------------- ----------------------------------------
[*], on behalf of Flextronics [*], on behalf of LSI Storage
International Cork B.V. Ireland Systems Europe Holdings, Ltd.
Date: Date: 8/21/2000
11
FLEXTRONICS MANUFACTURING IRELAND AND STORAGE SYSTEMS INC.
EUROPE MANUFACTURING
SERVICE AGREEMENT
EXHIBIT A
PRODUCT PRICING
[*]
12
FLEXTRONICS MANUFACTURING IRELAND AND STORAGE SYSTEMS INC.
EUROPE MANUFACTURING
SERVICE AGREEMENT
EXHIBIT B
PRODUCT SPECIFICATIONS
[*]
13
FLEXTRONICS MANUFACTURING IRELAND AND STORAGE SYSTEMS INC.
EUROPE MANUFACTURING
SERVICE AGREEMENT
EXHIBIT C
CANCELLATION/RESCHEDULE
[*]
14
FLEXTRONICS MANUFACTURING IRELAND AND STORAGE SYSTEMS INC.
EUROPE MANUFACTURING
SERVICE AGREEMENT
EXHIBIT D
NON-DISCLOSURE AGREEMENT
MUTUAL NONDISCLOSURE AGREEMENT
THIS MUTUAL NONDISCLOSURE AGREEMENT ("NDA") is made by and between LSI
Logic Corporation (hereinafter "LSI"), having its principal place of business at
0000 XxXxxxxx Xxxx., Xxxxxxxx, XX 00000 and having its principal place
of business at .
This NDA is effective as of ("Effective Date") and governs all
disclosures of the subject matter herein described made since that date until
this NDA is terminated, which shall be upon written notice having been given by
either party hereto to the other party or in any event [*] following the
Effective Date.
In consideration of the premises and covenants of this NDA, the parties
agree as follows:
1. Each party hereto desires to furnish to the other party certain
information that the party furnishing such information regards as proprietary.
Such information may include, but is not limited to, information of the
disclosing party relating to products, manufacturing processes, business
strategies and plans, customer lists and research and development programs and
such other information, if any, as follows: ("Confidential
Information").
Confidential Information may be furnished in any tangible or intangible
form including, but not limited to, writings, drawings, computer tapes and other
electronic media, samples and verbal communications. Any Confidential
Information furnished in tangible form shall be conspicuously marked as such and
the content of any verbal communication will be reduced to a writing which
identifies the Confidential Information for the record within [*] of the
disclosure of the Confidential Information with a copy of such writing furnished
within such time period to the party receiving such Confidential Information.
2. All Confidential Information furnished pursuant to this NDA is done so
solely for the purpose of evaluation of each party's potential interest in
mutual business activity relating to: LSI Storage Systems Box Build.
No other right, license or authorization, express or implied, to use is
granted and each party agrees to be so limited with respect to all Confidential
Information hereby received. In addition, neither party makes any warranty as to
the accuracy of any Confidential Information. All right, title, and interest in
the Confidential Information shall remain that of the disclosing party.
3. Each party agrees that for a [*] from the date of disclosure it shall
not disclose Confidential Information received from the disclosing party to any
third party nor use such Confidential Information for any purpose other than to
evaluate its interest in the mutual business described above.
The receiving party shall use the same degree of care in maintaining the
confidentiality of the confidential Information as it uses with respect to its
own information that is regarded as confidential and/or proprietary by such
party, but in any case shall at least use reasonable care. Each party agrees
that it will restrict the access of all Confidential Information to only those
of its employees and consultants who have need to be informed of the
Confidential Information for the purposes for which the Confidential Information
is provided, which persons will be bound to the receiving party by an agreement
of confidentiality that contains substantially the same obligations contained in
this NDA.
4. The obligations of confidentiality and limitations of use shall continue
beyond the termination of this NDA; provided, however, neither party shall be
liable for any disclosure of Confidential Information or further restriction on
use where: i) the same information was in the public domain at the time it was
disclosed or later comes within the public domain, except through the acts or
omissions of the receiving party; ii) the same information was known to the
receiving party at the time of its disclosure; iii) the same information is
approved for release by written authorization of the disclosing party; iv) the
same information becomes known to the receiving party from a source other than
the disclosing party without breach of an obligation of
15
confidentiality; v) the same information is disclosed to one or more third
parties by the disclosing party without restriction; or vi) the same information
is independently developed by employees or representatives of the receiving
party without access to the Confidential Information.
5. Each party agrees that it will make no copies of any Confidential
Information received from the other party without the receiving party having
first obtained the written authorization for such copies from the disclosing
party.
6. Upon request by the disclosing party, all items of Confidential
Information shall be returned to the disclosing party.
7. Each receiving party acknowledges that the Confidential Information may
be controlled by the U.S. Department of Commerce Export Administration
Regulations or other requirements of the U.S. Government regulating the export
of the Confidential Information. Each such party agrees that it shall not
attempt to nor knowingly export or reexport Confidential Information of the
disclosing party to any country without first having obtained all necessary
approvals therefor.
8. The parties agree that this NDA and all disputes arising hereunder shall
be governed by the laws of the State of California. In addition, it is
acknowledged and agreed that since a breach of the obligations of this NDA is
likely to cause irreparable harm to the disclosing party and that money damages
alone would be inadequate as a remedy for a breach of such obligations, the
receiving party agrees that it will not object to the disclosing party seeking
injunctive relief of any provision of this NDA, the party against whom such
relief is sought agrees to waive and hereby does waive any requirement that the
party seeking the injunctive relief post a bond or any other security. 9. This
NDA constitutes the entire understanding between the parties as to the
Confidential Information. No amendment or modification of this NDA shall be
valid or binding on the parties unless made in writing and signed on behalf of
each of the parties by their respective duly authorized representatives.
This NDA has been signed by the duly authorized representatives of the
parties in identical counterparts, all of which comprise but one agreement on
the subject matter hereof.
LSI LOGIC CORPORATION
By: /s/ XXXXXX X. XXXX
--------------------------------------------------------
Name Xxxxxx X. Xxxx
Title: Supply [Illegible] Mgmt
Date: 11/10/99
DII Dovatron
By: /s/ XXXXX XXXXXXXX
--------------------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Director of Program Management
Date: 11/16/99
16
FLEXTRONICS MANUFACTURING IRELAND AND STORAGE SYSTEMS INC.
EUROPE MANUFACTURING
SERVICE AGREEMENT
EXHIBIT E
STATEMENT OF WORK
1.0 Minimum Quality: This Statement of Work details the minimum quality
standards referred to in sections 7.3 and 7.5 of the Manufacturing
Agreement.
[*]
17
