CONFIDENTIAL TREATMENT REQUESTED CONFIDENTIAL/LIMITED DISCLOSURE OEM AGREEMENT (hereinafter the “Contract” or “Agreement”) Effective as of 06 May 2003 (hereinafter the “Effective Date”)
Exhibit 10.76
CONFIDENTIAL TREATMENT REQUESTED
CONFIDENTIAL/LIMITED DISCLOSURE
(hereinafter the “Contract” or “Agreement”)
Effective as of 06 May 2003
(hereinafter the “Effective Date”)
BETWEEN:
Path 1 Network Technologies Inc.
0000 Xxxxxx Xx., Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
(“SELLER”)
AND
SCIENTIFIC-ATLANTA, INC.
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxxxx, Xxxxxxx 00000
a Georgia corporation
(“S-A”)
WHEREAS SELLER designs, manufactures and sells certain Products as set forth on Exhibit A, and;
| 1. | DEFINITIONS OF TERMS. |
| 1.1 | “Defect” means, any material malfunction in Equipment or any failure of Equipment to materially satisfy the requirements of this Contract, including any adverse and material deviation from the Specifications, whether discovered upon receipt, upon delivery of Equipment to a customer (distributor or end user) or upon use of Equipment by such customer. Defects shall be designated as either “critical” or “class I” defects. |
| *** | Certain confidential portions of this Exhibit were omitted and replaced with “***” (the “Xxxx”). This Exhibit has been filed separately with the Secretary of the Commission without the Xxxx pursuant to the Company’s Application Requesting Confidential Treatment under Rule 406 under the Securities Act of 1933, as amended. |
1
CONFIDENTIAL TREATMENT REQUESTED
| 1.1.1 | “Critical Defects” means Defects which might reasonably be expected to endanger life or be a hazard to health, including but not limited to Defects which might give an electrical shock, or Defects which might create a fire hazard. |
| 1.1.2 | “Class I Defects” means Defects in Equipment which cause the Equipment to be functionally inoperative, non-performing, materially unusable, or unable to meet the Specifications in all material respects. |
| 1.2 | “Equipment” means the products identified in Exhibit A and manufactured by SELLER to the S-A Specifications included in Exhibit B. Subject to Section 8.3, New Equipment, Equipment shall not include products to which SELLER has granted rights that would prevent or limit such products from being covered under this Agreement. |
| 1.3 | “Purchase Order” means a purchase order for Equipment issued by S-A under this Contract, which purchase order shall reflect the Pricing for the Equipment ordered. Purchase Orders shall contain the following: a reference to this Contract; the identification of the Equipment being purchased; quantity to be purchased; the requested shipping destination and delivery date; and any other special information required by this Contract or by the circumstances of the Purchase Order. Once issued and accepted, a Purchase Order may not be changed or cancelled, except that S-A shall be entitled: (a) to change or cancel any Purchase Order within [***] of issuance; or (b) upon *** notice prior to the then-scheduled delivery date, to change the shipping destination set forth in such Purchase Order or to split such Purchase Order into more than one shipping destination. |
| 1.4 | “Price” or “Pricing” means the per unit price set forth on Exhibit A for the Equipment, which Equipment prices shall be available to S-A for any and all Purchase Orders placed by S-A during the initial *** term of this Contract and thereafter shall be agreed to by the parties, provided, however, that the price after the initial *** of the initial term of this Contract shall be reviewed mutually by the parties on a quarterly basis not be increased over the price for the Equipment as of the end of the preceding initial term or renewal term of the Contract. Throughout the Term of this Contract, Pricing shall be subject to the Most Favored Customer provision and the Cost Reduction provision of this Contract, provided that such determination is made on a basis of similar facts and circumstances, e.g., similar Equipment volumes, warranty terms, configurations, etc. |
| 1.5 | “S-A Customer” means any person or entity that acquires from S-A units of Equipment ordered by S-A under this Contract and, if such person or entity is a distributor or other interim purchaser, the ultimate purchaser of such units of Equipment. When used in this Contract, the term “customer” shall mean, as applicable, S-A or such S-A Customer. |
| 1.6 | “Specifications” means the functional, component performance, system performance, compatibility and operational characteristics, visual look and features of the Equipment as set forth in Exhibit B to this Contract and to the extent not in conflict with Exhibit B, as evidenced by Equipment delivered under this Contract. |
| 1.7 | “Term of this Contract” means the twelve (12) month period following the execution date of this Contract (the date first hereinabove written); provided however that if S-A notifies SELLER prior to |
| *** | Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. |
2
CONFIDENTIAL TREATMENT REQUESTED
the expiration of the then-current term of its intent to order additional Equipment, this Contract shall automatically renew for an additional one (1) year period. In order to ensure continuity, SELLER will, ninety (90) days prior to contract expiration, request that S-A confirm whether it intends to extend the Term of the Contract. S-A will advise SELLER of any plan to extend the Contract Term within thirty (30) days of SELLER’s request.
| 2. | PURCHASE AND SALE OF EQUIPMENT. |
| 2.1 | Placement of Purchase Orders. During the initial twelve (12) month period of the Term of this Contract, S-A shall place Purchase Orders for, and shall purchase units of the Equipment in the quantities desired by S-A. |
| 2.2 | Sale of Equipment. Upon the placement by S-A of Purchase Orders under this Contract, SELLER shall sell the Equipment in the quantities and at the times set forth in the issued Purchase Orders. |
| 2.3 | Private Labeling. Other than SELLER’s Cx1000 product, any and all Equipment purchased under this Contract, shall be privately labeled with the name “S-A” and/or such logos or other names as requested by S-A, as described in the Specifications, S-A shall permit Path 1 to include on each and every S-A privately labeled product the Path 1 logo in such location and with such markings as the parties shall agree, S-A permission shall not be unreasonably withheld. S-A shall have the right to modify such appearance specification upon reasonable advance notice and its agreement to reimburse SELLER for its reasonable costs, fees and expenses costs relating to such modification. Any part of a Equipment bearing the S-A name, color (which is specified as part of the private labeling specification) or logo which is not purchased by S-A under this Contract shall not be sold by SELLER, unless the S-A name, color (which is specified as part of the private labeling specification) and logo are fully deleted, obliterated or masked from such part. If the S-A name or logo cannot be fully deleted, obliterated or masked from any part of Equipment, such part shall be destroyed by SELLER. |
| 2.4 | Sales to Third Parties. During the Term of this Contract, SELLER shall not, without the prior written authorization of S-A, sell, or in any other manner provide, any Equipment privately labeled in accordance with Section 2.3 above, to any party other than S-A. |
| 3. | PURCHASE ORDERS; FORECASTING. |
| 3.1 | Purchase Orders. Equipment shall be ordered by S-A by submitting Purchase Orders to SELLER which shall contain a delivery date for the Equipment set forth therein of a minimum of *** following the date of the Purchase Order. Subject to the establishment of mutually agreeable delivery dates (any requested delivery date that complies with the lead time set forth above shall be conclusively deemed agreeable), and subject to Section 3.1.1 below, SELLER shall accept and acknowledge in writing all Purchase Orders submitted by S-A within *** after receipt thereof. Each acknowledgment shall include firm delivery dates for the Equipment ordered in the Purchase Orders. “Working day” shall mean a regular weekday on which S-A is open for business. Delivery shall be in accordance with accepted Purchase Orders. |
| 3.1.1 | If the delivery date requirement set forth above is not satisfied, SELLER shall be entitled, but shall not be required, to reject any non-conforming Purchase Orders within *** of receipt |
| *** | Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. |
3
CONFIDENTIAL TREATMENT REQUESTED
of the non-conforming Purchase Orders. If SELLER does not reject any non-conforming Purchase Orders within *** of the date of receipt of the applicable Purchase Orders, SELLER shall be deemed to have accepted such non-conforming Purchase Orders, and SELLER shall become obligated to deliver the quantity of Equipment set forth in the non-conforming Purchase Order on the delivery shipment dates set forth therein.
| 3.2 | Terms and Conditions. To the extent not inconsistent with the terms set forth in this Contract, S-A’s Standard Terms and Conditions of Purchase attached as Exhibit C and SELLER’s Quotation and Standard Terms and Conditions attached as Exhibit D shall govern the purchase by S-A and sale by SELLER of the Equipment, and shall be deemed incorporated into and made a part of each Purchase Order, any acknowledgment or acceptance of a Purchase Order or in any invoice issued in accordance with this Contract. In the event of inconsistencies between Exhibits C and D, the provisions of the Uniform Commercial Code of the State of Georgia shall govern to the extent not inconsistent with the terms set forth in this Contract. |
| 3.3 | Forecasting. During the Term of this Contract, on a quarterly basis or at such other time or times as the parties hereto shall agree, S-A shall provide to SELLER a general forecast of S-A Equipment requirements, containing S-A’s anticipated purchases of Equipment from SELLER. SELLER and S-A understand and agree that such forecast is provided for information purposes only, and that it shall in no way be deemed binding upon S-A. |
| 4. | PRICE AND PAYMENT. |
| 4.1 | Price. Unless otherwise agreed in writing, all Prices are FOB at the domestic destination(s) designated by S-A. |
| 4.2 | Shipping and Other Charges. The Price includes all charges for packaging and crating of Equipment for shipment (but not special crating charges) and any taxes (but excluding taxes based solely on SELLER’s income) levied, assessed or imposed on the sale, use or transport of the Equipment to S-A. |
From time to time, S-A may elect to require special or overnight delivery. In such cases, S-A will advise SELLER of the necessary shipping details and S-A will be responsible for any additional costs associated with such shipments, provided that SELLER shall use its best reasonable efforts to minimize such costs, consistent with S-A’s shipping instructions, and S-A shall be entitled to provide SELLER with a valid tax exemption certificate authorized by an appropriate taxing authority.
| 4.3 | Payment Terms. Payment shall be due within *** after the later of (i) receipt of the invoice or (ii) the date of the invoice, which invoice shall not be dated prior to the date of shipment. |
| *** | Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. |
4
CONFIDENTIAL TREATMENT REQUESTED
| 4.4 | Most Favored Customer. If, at any time during the Term of this Contract, SELLER’s actual selling price for products similar to the Equipment to any person or entity, is lower than the Price, as such Price may be adjusted as provided in this Contract, then thereafter the Price shall be reduced to such lower price for all additional Equipment purchased by S-A under this Contract provided that such determination is made on a basis of similar facts and circumstances, e.g., similar Equipment volumes, warranty terms, configurations, payment terms, etc. |
At the request of S-A, SELLER shall certify on an annual basis as to its compliance with the terms of this Section 4.4.
| 4.5 | Cost Reduction. Promptly following the execution and delivery of this Contract and upon the execution and delivery of a mutually-acceptable non-disclosure agreement, S-A and SELLER will work together semi-annually to identify cost reduction opportunities. |
| 5. | DELIVERY. |
| 5.1 | Shipment. |
| (a) | SELLER shall deliver the Equipment, pursuant to the terms in Section 4.1, to S-A’s designated destination(s) and shall ship such Equipment in accordance with, and on the shipment date specified in, the shipping terms of each Purchase Order or other mutually agreed shipping documents. |
| (b) | SELLER shall not be entitled to make partial shipments of Equipment covered by any Purchase Order without the prior express authorization of S-A. |
| 5.2 | Late Delivery. |
| (a) | If SELLER determines that it is reasonably likely that it will not deliver all or any portion of the Equipment covered by a Purchase Order at the times designated therein, SELLER will immediately, and under no circumstances later than five (5) days prior to delivery, advise S-A. If, after such notification, S-A advises SELLER that such delayed delivery will cause a delay in shipment of Equipment to S-A’s customer(s) and S-A provides SELLER documentation thereof, SELLER shall pay a late delivery fee equal to *** of the Price of the late Equipment for each *** that such shipment of Equipment is delayed past the delivery date specified in the Purchase Order, with the first *** being accrued on the first day past the specified delivery date. If SELLER notifies S-A of an anticipated delay and S-A does not advise SELLER of the adverse effect of such delay, no late delivery fee shall be incurred by SELLER. No late delivery fees shall apply to rush orders under Section 3.1.2 above. |
| (b) | SELLER agrees that it will not ship any products or components similar to the Equipment to any other customer of SELLER (other than a customer with a contractual right in effect as of the execution and delivery of this Contract to require SELLER to sell such products or components at such time), if, as a consequence of shipment of such products or components in the applicable period, shipments of Equipment to S-A under this Contract will be delayed. |
| *** | Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. |
5
CONFIDENTIAL TREATMENT REQUESTED
| 5.3 | Testing of Equipment. It is the intent of S-A to purchase from the SELLER only defect-free Equipment. SELLER is responsible for detecting and ensuring that defects in material, workmanship, and integration and support services which are or should be under SELLER’s control are not provided to S-A hereunder. Equipment delivered to S-A under this Contract shall be subjected to workmanship inspection in accordance with the Institute for Interconnection and Packaging of Electronic Circuits IPC-A-610 Class II or better standards, and subjected to in-circuit and functional electrical testing as mutually agreed. In addition, SELLER will perform a final QA or pre-shipment sample audit prior to releasing Equipment for shipment to S-A. Any sampling plan used for in-process or final inspection audits will be based on a statistically valid procedure such as Military Standard (MIL-STD) 105, American Society for Quality Standard (ASQ) Z1.4, or equivalent, with the added stipulation that the acceptance defect level must always be zero (C = 0). SELLER will meet or exceed the provisions of the S-A quality plan for this project, which is to be agreed between SELLER and S-A. |
A complete record of all tests performed shall be kept by the SELLER for at least a ten (10) year period, and shall be made available to S-A upon request.
Representatives of S-A shall be entitled, at their expense, to witness any or all testing or other processing of Equipment at SELLER’s premises upon reasonable notice. In addition, S-A shall be entitled, but not required, to perform its own inspection and testing of delivered Equipment and will advise SELLER of any Equipment requiring repair or replacement due to defects discovered.
| 6. | TITLE AND ASSUMPTION OF RISK. SELLER shall convey good title, free from any claim or encumbrance, to all Equipment (but not any software or firmware) sold and delivered by SELLER under this Contract. Title to the Equipment shall pass at the time of delivery as described in Section 5.1. Any loss or damage to Equipment prior to passing of title shall be at SELLER’s risk. Any loss or damage to Equipment after passing of title shall be at S-A’s risk. |
| 7. | WARRANTIES. |
| 7.1 | Warranties. SELLER hereby represents and warrants to S-A that: |
| 7.1.1 | All Equipment shall conform in all respects to the Specifications and be free from defects in materials and workmanship; and |
| 7.1.2 | All Equipment shall function under ordinary use in conformance with the Specifications. |
| 7.1.3 | SELLER has the right to grant to S-A licenses for any Software incorporated within the Equipment or separate from the Equipment supplied by SELLER to S-A under this Contract; |
| 7.1.4 | No impediment exists to SELLER’s entering into this Contract, and SELLER has not made any agreement with any third party which will interfere with SELLER’s performance under this Contract; |
| 7.1.5 | To the best of SELLER’s knowledge, information and belief, there are no threatened or pending infringement actions against SELLER relating to the Product and there are no infringements of any third party patent, copyright, trade secret, trademark or other third party proprietary rights by SELLER relating to the Product; |
| 7.1.6 | Software incorporated in the Product delivered to S-A or S-A Customers under this Contract does not contain any security or timing mechanism that would in any manner affect the |
6
CONFIDENTIAL TREATMENT REQUESTED
authorized use of such Software, or any code that would permit unauthorized entry or modification of the Software; and
| 7.1.7 | All design documentation and user documentation for the Equipment (including Software) will be complete and accurate as of the date of delivery of the Equipment. |
| 7.1.8 | For a period of one year after delivery, SELLER shall provide S-A with updates or standard upgrades to any software delivered at no additional cost to S-A or S-A Customers provided that Path 1 provides such updates or standard upgrades to its other customers at no cost. |
| 7.2 | Warranty Period. For Equipment sold into S-A’s cable market, Path 1 shall provide warranties set forth above shall apply for the period beginning on the date of shipment and ending on the later of *** thereafter or if Equipment is subsequently delivered by S-A to an S-A Customer *** after the date of shipment by SELLER to S-A (such period, as extended, if applicable, being referred to herein as the “Warranty Period”). The Warranties set forth above shall be transferable to S-A Customers. |
| 7.3 | Warranty Replacement or Repair. Within the Warranty Period and for thirty (30) days thereafter, S-A and S-A Customers shall have the right to return to SELLER, after giving written notice to SELLER within the Warranty Period of an intention to return, Equipment not conforming to the above warranties and to require that SELLER, at SELLER’s expense and option, repair such Equipment or replace such Equipment with new, conforming Equipment. |
| (a) | Procedures; Shipping; No Coverage. In conjunction with the giving of a notice of intention to return, SELLER’s authorized service personnel will provide a return material authorization number which shall accompany any returned items. Transportation costs, if any, incurred in connection with the return of a defective product to SELLER shall be borne by SELLER. Any transportation costs incurred in connection with the redelivery of a repaired or replaced item to S-A or applicable S-A Customer shall be borne by SELLER. |
SELLER shall repair or replace any defective Equipment, and shall ship the repaired or replacement Equipment by the same delivery method used by S-A or the applicable S-A Customer to deliver the Equipment to SELLER, within four (4) weeks of receipt of the defective Equipment. In the event Equipment which is defective and covered under warranty is returned for repair more than two (2) times based on similar reasons relating to functionality or usability, SELLER shall immediately provide S-A or the applicable S-A Customer with new, conforming replacement Equipment and shall retain title to the returned item(s).
If SELLER correctly determines that the allegedly defective Equipment are not covered by the terms of the warranty provided hereunder or that a warranty claim is made after the Warranty Period, the cost of repair by SELLER, and shipping expenses, shall be reimbursed to SELLER by S-A or the applicable S-A Customer at SELLER’s prevailing service prices.
| (b) | Exclusions. The foregoing warranties and remedies are for S-A’s and S-A Customers’ benefit and may only be transferred in connection with the sale or other transfer of the Equipment to |
| *** | Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. |
7
CONFIDENTIAL TREATMENT REQUESTED
another person or entity or the permitted assignment of this Contract. Any and all warranties under this Section shall be void as to Equipment damaged or rendered unserviceable by: (1) misuse, theft, vandalism, fire, water or other peril or (2) improper installation or unauthorized alterations of such Equipment.
| (c) | Reports. Upon the reasonable request of SELLER, S-A will provide SELLER with reports as to reported warranty problems. SELLER will provide S-A, upon its request, with data on repairs and replacements conducted by SELLER on Equipment purchased under this Contract and, to the extent relating to functionality or usability, other similar products or components purchased from SELLER by other persons or entities. |
| 7.4 | Repetitive Warranty Problems. If at any time during the Term of the Contract, the number of defects exceeds *** during any *** consecutive *** , then SELLER will be placed on probation status and will be required to submit a corrective action plan with a recommended solution for S-A’s review and acceptance. Upon S-A’s acceptance of SELLER’s recommended solution, SELLER must demonstrate corrective action effectivity for a minimum period of *** consecutive *** at a below *** Defect rate in order to be removed from probationary status. In the event S-A elects not to accept the SELLER’s recommended solution, then S-A shall be relieved of any obligations under any outstanding Purchase Orders for future delivery of Equipment and shall also be entitled to terminate this Contract in accordance with Section 13.3.5 hereof. |
| 7.5 | Out of Warranty Repairs. SELLER shall provide S-A with all schematics, parts lists, price lists, maintenance and repair manuals, and other documentation reasonably necessary for S-A to conduct out-of-warranty repair of Equipment purchased by it or by SA Customers, together with, at S-A’s request and at cost, any special tooling or fixtures necessary for such repairs (and any drawings thereof needed for such repairs). This information shall be treated as Proprietary Information of SELLER. |
| 7.6 | Warranty Service Commitment. SELLER understands the high level of service commitment which S-A has to its customers. During the Term of this Contract, or for the extent of the Warranty Period and any extension thereof for Equipment provided under this Contract, if more than *** percent of the Equipment returned to SELLER for warranty replacement or repair in any month are not delivered to S-A or the S-A Customer within the time frame provided in Section 7.3, such a month shall be considered a “Month of Deficient Warranty Service.” If more than *** percent of the Equipment returned for warranty replacement or repair experience a recurrence of the same or similar problem within any *** period, or after the second occurrence of a Month of Deficient Warranty Service, S-A, at its option, may require that S-A assume warranty maintenance responsibility for the Equipment. If S-A makes such a requirement, SELLER shall assist S-A in establishing a service facility to permit the transfer of such responsibilities, and SELLER shall reimburse S-A for the cost of providing such warranty service. |
| 8. | CHANGES TO COMPONENT SPECIFICATIONS. |
| 8.1 | Specification Changes. SELLER shall make no change in the Specifications (including but not limited to changes in designs or changes in the parts included in the Equipment) or sources of supply for material or components for Equipment without notifying S-A. provided that SELLER shall make |
| *** | Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. |
8
CONFIDENTIAL TREATMENT REQUESTED
all reasonable attempts to notify S-A as soon as practicable.
| 8.2 | Enhancements and Modifications. S-A shall have the right, but not the obligation, to accept in Equipment any enhancements and modifications proposed by SELLER to the Equipment. |
| 8.3 | New Equipment. At the earliest date possible, SELLER shall notify S-A of any new product or enhancements to or advanced versions of existing products that are made commercially generally available. Upon written agreement between S-A and SELLER as to pricing and other terms, such products shall be considered Equipment under this Agreement and shall be purchased and sold under the terms and conditions of this Agreement. |
| 8.4 | Proposals for Enhancements. S-A may issue to SELLER written proposals for enhancements and modifications to Equipment from time to time. SELLER will respond to such proposals within thirty (30) days and will implement such enhancements and modifications to the Equipment for S-A if commercially reasonable. |
| 8.5 | Ownership of Enhancements and Modifications. SELLER and S-A acknowledge that SELLER owns all intellectual property that is included in the Specifications or that is incorporated into the Equipment. Notwithstanding the foregoing, the parties acknowledge that they may, from time to time, enter into separate written agreements whereby S-A may fully fund the development of enhancements or improvements in which case the parties shall agree as to the rights to and in such resulting enhancements or improvements. |
| 8.6 | Subsequent Orders for Spare Parts. In the event SELLER elects to discontinue manufacturing Equipment, SELLER shall provide to S-A six (6) months notice before such event occurs and will thereafter, for a period of two (2) years from the date of such notice, make available for purchase by S-A any and all Equipment deemed necessary by S-A at prices agreed between SELLER and S-A at the time of notification of discontinuance; |
| 9. | INDEMNIFICATION. SELLER shall indemnify and hold harmless S-A and its directors, officers, partners, employees, agents, subsidiaries, affiliates, and assignees, or any of them, from and against any losses, damages, liabilities, expenses, costs, claims, suits, demands, actions, causes of action, proceedings, judgments, assessments, deficiencies and charges on account of physical damage to tangible property and personal injuries, including death, to all persons, arising from any willful misconduct or negligence of SELLER in the performance (or nonperformance) of this Contract or from the lawful and permitted use of the Equipment; provided that the indemnification obligations of SELLER shall also extend to any S-A Customer and its directors, officers, partners, employees, agents, subsidiaries, affiliates, and assignees. |
| 10. | PROPRIETARY RIGHTS INDEMNIFICATION. |
10.1 Indemnification. In addition to the indemnification set forth in Section 9 above, SELLER shall pay the costs relating to the defense of, and the damages finally awarded in, any suit against S-A (or against any S-A Customer, if indemnified by S-A) to the extent based upon a claim that the Equipment furnished under this Contract infringes any intellectual property right of a third party.
10.2 Procedures. In the event of any allegation of infringement of the type described in Section 10.1 hereof or a claim or suit based thereon (the “Allegation”), S-A (or, as applicable, S-A Customer) shall promptly notify SELLER of such Allegation in writing. If S-A has (or acquires) the right to defend and/or settle any Allegation, S-A shall offer SELLER the right to defend and/or settle the applicable Allegation, and SELLER shall promptly commence efforts to settle or to defend against such Allegation. S-A (or, as applicable, S-A Customer) shall
9
CONFIDENTIAL TREATMENT REQUESTED
reasonably cooperate with SELLER at SELLER’s expense in such settlement or defense.
10.3 Injunction. In the event that the use of the Equipment delivered under this Contract and indemnified by application of Section 10.1 is enjoined, SELLER, at its option, shall do one or more of the following:
| (a) | Procure the right to continue using the infringing Equipment, at no cost to the S-A (or, as applicable, S-A Customer); or |
| (b) | Replace the item with a non-infringing item (or modify the item so it is non-infringing), provided the replacement or modified item complies with the Specifications in all material respects and is priced no higher than the Pricing listed in Exhibit A. |
If SELLER is unable to accomplish (a) or (b) above within ninety (90) days after issuance of such injunction, SELLER shall refund the entire purchase price paid by S-A (or, as applicable, S-A Customer) for the infringing Equipment as well as other equipment acquired from SELLER (or S-A, as applicable), which equipment has been rendered unusable by S-A (or, as applicable, S-A Customer) for any related purpose as a result of such injunction by virtue of its integration with the Equipment, including but not limited to other Equipment acquired under this Contract. If S-A’s Contract or purchase order with the applicable S-A Customer contains an enforceable provision limiting indemnification for proprietary rights infringement to an amount less than the applicable purchase price (such as purchase price less depreciation), the amount of the refunded purchase price shall be limited to the amount payable by S-A to such S-A Customer.
| 11. | CONFIDENTIALITY. |
| 11.1 | Proprietary Information. SELLER and S-A (each, a “party” for the purposes of this Article) agree that any information or data fixed in a tangible medium and furnished by one to the other under or associated with this Contract or the Equipment and conspicuously marked as the confidential or proprietary information of the disclosing party, or if provided orally and is referred to and described in a written memorandum within twenty (20) days after such oral disclosure, is to be deemed confidential or proprietary at the time the information is provided (hereinafter referred to collectively as “Proprietary Information”) and shall not be disclosed to anyone other than the recipient party’s employees or agents or consultants rendering services related to the subject matter of this Contract for a period of five (5) years after the expiration or termination of this Contract. The existence of this Contract and the terms and conditions of this Contract shall be deemed Proprietary Information. |
| 11.2 | Permitted Disclosure. The obligations of Section 11.1 shall not apply to: |
| (i) | disclosures pursuant to an order or judgment of any court or governmental body provided that the disclosing party shall give reasonable notice of such order or judgment to the other party prior to making such disclosure; |
| (ii) | disclosures pursuant to any law, rule or regulation, provided that the disclosing party: has received a written opinion of its counsel that such disclosure is required; has given reasonable notice to the other party in advance of such disclosure; and seeks confidential treatment of such information from the entity to which the disclosure is made; |
| (iii) | Proprietary Information which is or becomes generally available to the public through any means other than a breach by the receiving party of its obligations under this Contract; |
10
CONFIDENTIAL TREATMENT REQUESTED
| (iv) | Proprietary Information which is disclosed to the receiving party without an obligation of confidentiality by a third party who has the right to make such disclosure; |
| (v) | Proprietary Information which is developed independently by the receiving party without use of or benefit from the Proprietary Information or was in possession of the receiving party without obligations of confidentiality prior to receipt under this Contract; or |
| (vi) | Proprietary Information which is required to be disclosed to enforce rights under this Contract. |
| 12. | EXCUSABLE DELAYS. Neither SELLER or S-A (each, a “party” for the purposes of this Article) shall be liable for any delay or non-performance hereunder, resulting from: acts of God; fires; unforeseeable strikes; war; riots; earthquakes; any law, proclamation, regulation or ordinance, demand or requirement of any governmental agency; or any other condition or occurrence whatsoever beyond the reasonable control of such party. If the performance of this Contract is delayed, prevented, restricted or interfered with by reason of any such event, (a) the party whose performance is delayed, prevented, restricted or interfered with shall give prompt written notice to the other party of the event and shall be excused from performance to the extent delayed or prevented; provided, however, that the party whose performance is prevented or delayed shall take reasonable steps to avoid or remove such causes of nonperformance and shall continue performance whenever and to the extent such causes are removed; and (b) if it appears that a time for delivery or performance pursuant to this Contract will be extended for more than thirty (30) days, the party receiving notice under clause (a) above shall have the right to terminate, by written notice to the other parties, any portion of an outstanding Purchase Order covering the delayed performance and the obligations and liabilities of the affected parties with respect to such portion of the Purchase Order shall thereupon lapse and terminate, except to the extent such obligations or rights are intended to survive pursuant to this Contract. Additionally, if it appears that subsequent deliveries of Equipment under this Contract are reasonably likely to be delayed or disrupted for a period of more than sixty (60) days, S-A will have the right to terminate this Contract. |
| 13. | TERM; TERMINATION. |
| 13.1 | Term. The Term of this Contract commences on the date first written above and shall continue as provided in Section 1.7. |
| 13.2 | Termination of Purchase Order. By written notice to SELLER, S-A, as appropriate, may terminate a Purchase Order issued by it, in whole or in part, without any liability to SELLER for items not yet delivered, effective upon such written notice, in the event, other than because of an Excusable Delay pursuant to Article 12, SELLER fails to make delivery of the Equipment set forth in such Purchase Order within fifteen (15) days after the specified time for delivery (or such longer period as S-A may authorize in writing). Notwithstanding the foregoing, the parties agree that SELLER shall have the right to make partial shipments hereunder. |
| 13.3 | Termination of Contract. This Contract may be terminated upon any of the following events, in addition to the rights set forth above, upon written notice: |
| 13.3.1 | By S-A in the event that SELLER makes an assignment for the benefit of creditors (other than a security interest filed in the ordinary course); |
| 13.3.2 | By SELLER in the event that S-A makes an assignment for the benefit of creditors (other than a security interest filed in the ordinary course); |
| 13.3.3 | By S-A in the event that the SELLER becomes insolvent, or voluntary or involuntary |
11
CONFIDENTIAL TREATMENT REQUESTED
| proceedings are instituted by or against SELLER under any bankruptcy or insolvency laws and such proceedings are not terminated within ninety (90) days, or a receiver is appointed for SELLER; |
| 13.3.4 | By SELLER in the event that S-A becomes insolvent, or voluntary or involuntary proceedings are instituted by or against S-A under any bankruptcy or insolvency laws and such proceedings are not terminated within ninety (90) days, or a receiver is appointed for S-A. |
| 13.3.6 | By SELLER in the event that S-A fails to perform any material provision of this Contract, including any obligation to pay for delivered Equipment, and does not cure such failure within a period of sixty (60) days after receipt of written notice specifying such failure and stating its intention to terminate this Contract if such failure is not cured; or |
| 13.3.7 | By either party upon ninety (90) days’ written notice to the other. |
| 13.4 | Survival of Provisions. The obligations of both SELLER and S-A under this Contract, which obligations by their nature would continue beyond the termination, cancellation or expiration of this Contract, shall survive termination, cancellation or expiration of this Contract. |
| 14. | NOTICES. |
| 14.1 | Written Notification. Any notice(s) required or permitted to be given or made by a party under this Contract shall be in writing to the other party at the address of such party as set out within this Section 14. Whenever one party is required or permitted to give written notice to the other pursuant to this Contract, such notice(s) shall be deemed to be duly given on the earliest of (i) actual receipt, irrespective of whether sent by post, telex, cable, facsimile transmission (followed by mailing of a hard copy), overnight courier or other method, or (ii) on the sixth (6th) day after mailing by registered or certified airmail from the country in which the notice originated, return receipt requested and postage prepaid. |
Service of Notice: The phone numbers and facsimile numbers have been added for information purposes only and are not for the purpose of serving notice.
| For Scientific-Atlanta: |
with a copy to: | |
| Scientific-Atlanta, Inc. |
Scientific-Atlanta, Inc. | |
| 0000 Xxxxxxxxx Xxxxxxx |
Office of General Counsel | |
| Xxxxxxxxxxxxx, Xxxxxxx 00000 |
0000 Xxxxxxxxx Xxxxxxx | |
| Attn: Mr. Xxxxxxx Xxxxx |
Xxxxxxxxxxxxx, Xxxxxxx 00000 | |
| telephone number: 0 000 000 0000 |
||
| facsimile number: 1 770 236 3533 |
||
| For SELLER: |
||
12
CONFIDENTIAL TREATMENT REQUESTED
0000 Xxxxxx Xx., Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxx
Telephone number: 0-000-000-0000
Facsimile number: 0-000-000-0000
| 14.2 | Change of Address. A party may from time to time change its address for notification purposes and /or the parties to be notified by giving the other party written notice of the new address and/or parties and the date upon which the change will become effective. |
| 15. | GENERAL. |
| 15.1 | NAFTA Qualified Equipment. SELLER represents and warrants that Equipment deliverable hereunder originates in the USA and complies with the origin requirements specified for Equipment in North American Free Trade Agreement (NAFTA) and that there has been no further production or any other operation(s) outside of the USA. Upon request of S-A at any time during the Term of this Contract, SELLER shall provide to S-A a NAFTA Certificate of Origin, on Customs Form 434, with respect to Equipment. |
| 15.2 | Exportation of Equipment. SELLER acknowledges that S-A intends to ship the Equipment abroad and within the United States. S-A agrees that it will not export any Equipment without first obtaining any and all necessary approvals from the United States Department of Commerce and Department of Defense or other regulatory authorities. SELLER agrees that it will cooperate with S-A in obtaining any such approvals and will advise S-A from time to time of any countries with respect to which SELLER is advised that export approvals are required. |
| 15.3 | Binding Effect. This Contract shall be binding on and inure to the benefit of the parties and their respective successors and assigns. SELLER may not assign this Contract or any rights or obligations hereunder or under any Purchase Order without the prior written consent of S-A. |
| 15.4 | Severability. If any provision of this Contract is declared or found to be illegal, unenforceable or void, the parties shall negotiate in good faith to agree upon a substitute provision that is legal and enforceable and is as nearly as possible consistent with the intentions underlying the original provision. If the remainder of this Contract is not materially affected by such declaration or finding and is capable of substantial performance, then the remainder shall be enforced to the extent permitted by law. |
| 15.5 | Waiver. No delay or omission by any party to exercise any right or power shall impair any such right or power or be construed to be a waiver thereof. A waiver by any party of any of the covenants, conditions or contracts 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, condition or contract herein contained. 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. |
| 15.6 | Cumulative Remedies. The rights and remedies provided in this Contract or otherwise under applicable laws shall be cumulative and the exercise of any particular right or remedy shall not preclude the exercise of any other rights or remedies in addition to, or as an alternative of, such right or remedy, except as expressly provided otherwise in this Contract. |
13
CONFIDENTIAL TREATMENT REQUESTED
| 15.7 | No Third Party Benefit. Nothing in this Contract, expressed or implied, is intended or shall be construed to confer upon or give to any person, firm, or corporation, other than the parties hereto and those other persons or entities specifically granted rights hereunder, and their respective successors and assigns, any remedy or claim by reason of this Contract or any term, covenant or condition hereof, all of which shall be for the sole and exclusive benefit of the parties hereto; provided that S-A Customers shall be entitled to the rights contained herein with respect to warranties and indemnification. |
| 15.8 | Relationships of the Parties. It is expressly understood that the parties intend to establish the relationship of independent contractors, and do not intend to undertake the relationship of principal and agent or to create a joint venture or partnership between them or their respective successors in interests. No party shall have any authority to create or assume, in the name or on behalf of any other party, any obligation, expressed or implied, nor to act or purport to act as the agent or the legally empowered representative of any other party hereto for any purpose whatsoever. |
| 15.9 | Quality Audit. Within thirty (30) days after the execution of this Contract, SELLER shall permit S-A to commence a quality audit of SELLER’s operations. Within ninety (90) days after the conclusion of the quality audit, SELLER shall prepare a plan to correct deficiencies, if any, identified by S-A’s quality audit. Upon concurrence with the plan by S-A, SELLER shall commence implementation of the plan. |
| 15.10 | Applicable Law. This Contract shall be interpreted, construed and governed by the laws of the state of Georgia, other than its choice of law rules. The United Nations Convention on Agreements for the International Sale of Goods shall not apply to this Contract. |
| 15.11 | Entire Contract. This Contract, including all Exhibits hereto, represents the entire understanding and agreement between the parties hereto with respect to the subject matter hereof, supersedes all prior negotiations and agreements and can be modified, amended, supplemented or changed only by an agreement in writing which makes specific reference to this Contract and which is signed by all parties hereto. |
| 15.12 | English Language. All documentation, notices, records, and correspondence under this Contract shall be submitted and maintained in the English language except as otherwise specified herein. |
| 15.13 | Ownership; Grant of Rights |
| 15.13.1 | OEM Right. SELLER hereby grants S-A a nonexclusive, worldwide, royalty free right and license to promote, market, resell and distribute the Products as stand-alone products or as incorporated into or in connection with S-A’s products subject to the terms and conditions of this Agreement. |
| 15.13.2 | S-A Property. |
| (a) | During the term of this Agreement S-A may provide equipment, designs, materials, software and other property of S-A (collectively “S-A Property”) to SELLER for its use in fulfilling its obligations hereunder. All S-A Property furnished to SELLER by S-A or paid for by S-A in connection with this Agreement shall (i) be clearly marked or tagged as the property of S-A; (ii) be and remain personal property; (iii) be subject to inspection by S-A at any time; (iv) be used by SELLER and its subcontractors only to perform its obligations under this Agreement and for interoperability purposes; (v) be kept free of |
14
CONFIDENTIAL TREATMENT REQUESTED
| liens and encumbrances; (vi) be kept separate from other materials, tools, or property of SELLER or held by SELLER; and, (vii) not be modified in any manner by SELLER. |
| (b) | S-A shall retain all rights, title and interest in the S-A Property, if any, and SELLER shall treat and maintain the S-A Property with the same degree of care as SELLER uses with respect to its own valuable equipment, but in no event with less than a reasonable degree of care for equipment of a similar kind and importance. SELLER shall bear all risk of loss or damage to S-A Property until it is returned to S-A. Upon S-A’s request, SELLER shall deliver all S-A Property to S-A in good condition, normal wear and tear excepted, without cost to S-A; the parties shall determine the manner and procedure for returning the S-A Property, and SELLER shall pay the corresponding freight costs. SELLER waives any legal or equitable right it may have to withhold S-A Property, and SELLER shall execute all documents, or instruments evidencing S-A’s ownership of the S-A Property as S-A may from time to time request. |
| 15.13.3 | SELLER Property. Except as expressly and unambiguously granted herein, all rights to the Products and any modifications thereto and all related documentation and materials and any modifications thereto are retained by SELLER, including without limitation, all copyrights, patent rights, trade secret rights, and all other intellectual or industrial property rights therein. |
| 15.13.4 | Software License. For Equipment which includes software, S-A shall be provided with the current version of the appropriate software, and shall be granted a royalty-free, irrevocable, worldwide, perpetual license to use, copy, and distribute including the right to sublicense, the software (“License”) in connection with its use of the applicable Equipment. S-A will sublicense under terms and conditions of its standard software license or standard terms and conditions of sale. Such license shall only be valid for use within or in conjunction with the Equipment as originally intended by SELLER and may not be used for any other purpose or incorporated into any other product without the specific written consent of SELLER. |
| 15.13.5 | Integration License. SELLER acknowledges that the units of Equipment being purchased under this Contract may be sold in conjunction with other items and will need to be integrated with such items and other equipment. In order to ensure that all items of Equipment are interoperable, SELLER hereby grants S-A a royalty-free, irrevocable, worldwide, nonexclusive, perpetual license to use SELLER’s intellectual property as may be necessary to enable the integration of hardware and software being provided by or on behalf of S-A to any S-A Customer with such Equipment. SELLER also agrees that it will provide to S-A information and assistance as may be necessary, including interface specifications, to enable S-A to cause the Equipment to be interoperable with the items and equipment being provided by or on behalf of S-A to any S-A Customer. |
| 15.14 | Escrow Agreement. The parties shall enter into a mutually acceptable Escrow Agreement upon S-A having placed orders totaling 100 units or more. Materials and documentation deposited with an Escrow Service shall be adequate and sufficient to enable the rebuilding by S-A of all SELLER manufactured Equipment and software. SELLER shall also deposit a copy of all software tools necessary for the development and maintenance of the Equipment software. A configuration management process shall be used and this shall be included in the deposited documentation. All costs associated with the establishment and maintenance of this Escrow Agreement shall be borne equally by SELLER and S-A. |
| 16. | MEDIA RELEASES. All media releases or public announcements by SELLER which identify S-A shall be |
15
CONFIDENTIAL TREATMENT REQUESTED
| coordinated with and approved in writing by S-A prior to the release thereof; provided, however, that nothing in this Section 16 shall be construed to limit the right of SELLER to issue such disclosures that are reasonably believed by that party to be required by law or government regulation. |
| 17. | PRODUCT REGULATORY COMPLIANCE. Equipment delivered hereunder will be manufactured, labeled, certified and will perform in compliance with all applicable laws, regulations, standards and/or codes in effect for the Equipment intended use at the time of delivery. It shall be SELLER’s responsibility to secure and maintain any and all certifications required for the Equipment purchased hereunder including Equipment privately labeled for S-A. In order to ensure the relevant laws and regulations are satisfactorily met, SELLER agrees to: |
| (a) | Certify to S-A that the Equipment delivered hereunder is in compliance with regulations, laws, standards and/or codes; |
| (b) | Provide S-A and appropriate enforcement agencies with Manufacturer’s Declarations of Conformity or other specified certification(s) declaring evidence of SELLER’s compliance with specified standards; |
| (c) | Ensure that the Equipment continues to meet the S-A specified compliance levels during the period over which such Equipment is supplied to S-A; |
| (d) | Advise S-A of any changes impacting the product regulatory compliance status of Equipment during the production thereof; |
| (e) | Archive and maintain product regulatory compliance records for a period of ten (10) years from the date of the final shipment of Equipment to S-A. Such records shall include: schematics, Bills of Materials, theory of operation sufficient to understand the schematics, data sheets, specifications, user manuals, engineering test results, laboratory test results evidencing compliance with specified standards, laboratory test certificates, and manufacturer’s declaration of conformity; |
| (g) | Undertake to bring the Equipment into compliance should the applicable legislation, standards, laws or regulations be revised during the period of supply to S-A. |
Unless otherwise directed, all documents of regulatory compliance and notice of any changes in product regulatory compliance status during the period over which Equipment are supplied to S-A shall be forwarded to:
Manager, Product Regulatory Compliance
Mail Code: ATL 1.T257
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxxxx, XX 00000
| 17. | INSURANCE AND LABOR RELATIONS RESPONSIBILITIES. It is expressly understood that SELLER’s personnel are not employees of S-A, that there is NO LABOR RELATIONSHIP between SELLER’s employees and S-A as a result of this Contract, and that S-A is not liable for any professional risk or injuries |
16
CONFIDENTIAL TREATMENT REQUESTED
| caused by accidents, whether at the SELLER employee’s place of business, while in transit, or associated with visits to S-A’s facilities. It is expressly understood that it is SELLER’s responsibility to insure its employees whether at the employee’s place of business, while in transit, or, in the case of visits, at S-A’s facilities and that SELLER’s employees have no right to claim any benefit, salary, fringe benefits or other compensation from S-A as a result of the relationship resulting from this Contract. |
| Policies obtained in compliance with this clause shall provide that S-A shall be notified in writing by the insurer thirty (30) days in advance of cancellation, non-renewal or material change of such policy. |
| SCIENTIFIC-ATLANTA, INC. | ||
| By: |
/s/ XXXXX XXXXXXX | |
| Name: |
Xxxxx Xxxxxxx | |
| Title: |
Vice President and General Manager, Media Networks, Head End Systems, and Digital Transport Business Unit | |
| SELLER | ||
| By: |
/s/ XXXX X. XXXXXX | |
| Name: |
Xxxx X. Xxxxxx | |
| Title: |
CFO & General Counsel | |
17
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT A
| Path 1 Network Technologies |
Path 1 and S-A/BarcoNet Confidential | |
| Chameleon vidX |
9th April, 2003 |
Recommended End Customer Pricing and SA-Discount Price
All pricing reflects a *** warranty
*** Warranty: deduct *** from the recommended S-A Price
*** Warranty: deduct *** from the recommended S-A Price
All 1800 Series products are configured with either 4 or 8 ASI hardware ports
Ports can be enabled via software keys on a per port basis (1,2,3,4,5,6,7,8 where applicable)
All products are 1RU in a Path 1-designed chassis. NRE and logo/branding to be defined by S-A and Path 1
| Enhanced Demultiplexing Gateway |
Quantity 1 to 10 units per month |
SPTS/MPTS Demultiplexing, 960Mbps, potential 1024 Streams Maximum
| ASI to IP |
||||||||||||||||
| ASI Ports |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 | ||||||||
| Recommended Price |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** | ||||||||
| SA-BN Price |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** | ||||||||
| Basic Demultiplexing Gateway 2.5–5 Mbps per SPTS, 55–156 Mbps (40 SPTS per MPTS Max.) per MPTS, SPTS/MPTS Pass-through | ||||||||||||||||
| ASI to IP |
||||||||||||||||
| ASI Ports |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 | ||||||||
| Recommended Price |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** | ||||||||
| SA-BN Price |
*** |
*** |
*** |
*** |
*** |
*** |
*** |
*** | ||||||||
| Enhanced Pass-through Gateway 128 kbps–213 Mbps per port (SPTS or MPTS), SPTS/MPTS Pass-through | ||||||||||||||||
| ASI to IP |
||||||||||||||||
| ASI Ports |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 | ||||||||
| Recommended Price |
*** |
*** |
*** |
*** | ||||||||||||
| SA-BN Price |
*** |
*** |
*** |
*** | ||||||||||||
| Basic Pass-through Gateway 2.5–5 Mbps per SPTS, 55–156 Mbps per MPTS, SPTS/MPTS Pass-through | ||||||||||||||||
| ASI to IP |
||||||||||||||||
| ASI Ports |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 | ||||||||
| Recommended Price |
*** |
*** |
*** | |||||||||||||
| SA-BN Price |
*** |
*** |
*** | |||||||||||||
| Cx1000 Video over IP Gateway As per Data Sheet | ||||||||||||||||
| Cx1000 |
||||||||||||||||
| Recommended Price |
*** |
|||||||||||||||
| SA-BN Price |
*** |
|||||||||||||||
Cx1000 products are 1RU and are offered in the Path 1 Chassis & Logo
ADDITIONAL OPTIONS AND ENGINEERING SUPPORT
Maintenance/Help Desk/Service agreements priced separately
Training and Installation Packages
Engineering field support @ $250 per hour per person. Senior engineering support @ $400 per hour per person, maximum two days on site
(Plus travel and accommodation expenses)
This quote is valid only with Path 1 Network Technologies standard terms & conditions.
| *** | Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission. |
18
CONFIDENTIAL/LIMITED DISCLOSURE
EXHIBIT B
SPECIFICATIONS
19
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT C
S-A STANDARD TERMS AND CONDITIONS OF PURCHASE
1. Seller’s Acceptance of Scientific-Atlanta’s Offer to Buy - Any purchase order is Scientific-Atlanta’s offer to buy from Seller on the terms and conditions stated therein and does not constitute an acceptance of any previously made offer by Seller. Any reference to any previously made offer by Seller is solely for the purpose of incorporating the description and specification of the goods and services contained therein to the extent that such description and specification do not conflict with the description and specification contained in this order. Acceptance of any purchase order is expressly limited to acceptance by Seller of each and every one of these terms and conditions or those contained in other documents expressly incorporated herein by reference and such acceptance will be accomplished by signing and returning the “acceptance—sign and return” copy of a purchase order, by shipping the goods or performing the services called for therein, by acknowledging receipt of the purchase order or by any other conduct on the part of Seller which recognizes the existence of a contract between Scientific-Atlanta (“S-A”) and Seller pertaining to the subject matter hereof. Should Seller attempt to add or to vary in any degree any of these terms and conditions by additional, inconsistent, contrary, or different terms and conditions contained in any response to or acknowledgment or acceptance of a purchase order, such terms and conditions shall be deemed material and are objected to and are rejected by S-A without further notice or objection to Seller.
2. Changes - S-A may at any time make changes within the general scope of any order in drawings, specifications, designs, delivery schedules, quantities, place of delivery, and packing and shipping instructions related to this order. If any such change causes a variation in the cost of furnishing the goods or services covered, and/or in the time required to perform an order, an equitable adjustment in price and/or delivery schedule shall be made. No claim by Seller shall be valid unless submitted within 15 days from the date notice of any such change is received by Seller. Nothing in this clause shall relieve Seller from proceeding without delay in the performance of an order as changed. S-A engineering, technical, and other personnel may from time to time render assistance or give technical advice to, or exchange information with, Seller’s personnel concerning an order. Such assistance, advice, statements, or exchange of information shall not constitute a waiver with respect to any of Seller’s obligations or S-A’s rights hereunder or be authority for any change in the goods or services called for hereunder. Any such waiver or change to be valid and binding upon S-A must be in writing and signed by an authorized representative of S-A’s purchasing department.
3. Prices and Taxes - By acceptance of a purchase order, Seller certifies that the prices stated therein are not in excess of prices quoted or charged any other purchaser in similar quantities for the same goods or services. Unless otherwise specified, prices set forth therein shall be firm prices and shall be deemed to include Federal, State and local taxes applicable to the sale of the goods and/or services ordered.
4. Title - Seller shall convey good title, free from any claim or encumbrance, to all goods sold and delivered by Seller under this Contract. Title to the goods shall pass at the time of delivery to S-A at the destination designated for delivery by S-A in the purchase order.
5. Time of Delivery and Excusable Delays - If Seller fails to make delivery or otherwise to perform at the times stated in the order, or so fails to make progress as to create a reasonable belief that it will not deliver or otherwise perform on time, S-A has the right to cancel, purchase elsewhere, and, unless the delay is excusable as provided below, hold Seller accountable for any additional costs and damages incurred by S-A. Acceptance of any items delivered late shall not constitute a waiver of S-A’s right to demand timely performance as to future deliveries or to recover any damages suffered because of an inexcusable late delivery. Seller will not be liable for S-A’s additional costs and damages if the late delivery or performance is excusable as provided herein. To be excusable, (i) a delay must be unavoidable and due to an act of God, war, riot or other civil insurrection, epidemic, freight embargo, unforeseeable strike, or an act of the government in its sovereign capacity, and (ii) written notice of the occurrence of the event causing the delay must be given to S-A as soon as reasonably possible and in any event within fifteen (15) days after the event occurs. If requested by S-A, Seller shall ship via premium routing to avoid or minimize delay to the maximum extent possible. The added cost of such shipment shall be borne by Seller unless the late delivery is excusable as specified above, in which case each party shall bear 50% of the added cost. Items received more than ten (10) days before scheduled date may, at S-A’s option, be returned at Seller’s expense, or be accepted and payment therefor withheld until it would have been due had the items arrived at the proper time.
6. Warranty - In addition to the warranty customarily offered by Seller in connection with the sale of similar items, Seller warrants that all items delivered pursuant to S-A’s purchase order will be in strict conformity with the specifications (and approved sample, if furnished) and free from defects. IT IS MANDATORY THAT VERIFIABLE HARD EVIDENCE OF ADEQUATE INSPECTION AND TEST CONDUCTED BY THE SELLER BE FURNISHED ALONG WITH EACH LOT OF MATERIAL SUPPLIED TO S-A. Notice of any nonconformity or defect must be given within one (1) year after acceptance by S-A, except that notice may be given later for defects not reasonably discoverable within one year. Promptly after receipt of notice, Seller shall at its own expense take all necessary action to remedy the defect and the results thereof to S-A’s reasonable satisfaction. The foregoing remedies do not limit or exclude any other remedies provided by law.
7. Indemnification - Seller shall indemnify and hold S-A, its officers, directors, agents, employees, subsidiaries, affiliates and any subsequent owner or lessee of any item delivered hereunder, harmless from any loss, damage, liability and expense (including court costs and reasonable attorney’s fees) on account of damage to property, including the property of S-A and injuries (including death) to any persons (including Seller’s employees) arising from any occurrence caused by any tortious act or omission of the Seller, its agents, employees, or subcontractors. Seller further agrees to indemnify and hold the aforesaid indemnitees harmless from any and all loss, damage, liability and expense (including court costs and reasonable attorney’s fees) arising from any claim, demand or legal action based on an allegation that the manufacture, use or sale of any item delivered hereunder infringes any patent, copyright or other intellectual property right of a third party. Seller shall have the right, at its expense, to defend said claims, provided, that before yielding the defense of a claim, S-A may require that adequate security be furnished against any potential resulting judgments. S-A does not warrant that the
26
CONFIDENTIAL TREATMENT REQUESTED
manufacture or delivery of any item under any purchase order will be free from third party claims of infringement of patents or other proprietary rights.
8. Termination - S-A may terminate a purchase order in whole or in part at any time by written (including e-mail) or telegraphic notice to Seller. The notice will state whether the termination is for the convenience of S-A or because of the failure of the Seller to fulfill its obligations thereunder. If the termination is for the convenience of S-A, S-A will reimburse Seller for the actual direct and indirect costs incurred by Seller in good faith in the performance of the terminated purchase order prior to or by reason of such termination, less any amount representing the value of useable inventory or salvage. In no event shall reimbursement plus payments previously made exceed the total price specified in the terminated purchase order. If the termination is because of the failure of Seller to fulfill its obligations thereunder, S-A shall have the right to charge Seller with the extra costs of obtaining elsewhere items similar to those that should have been delivered by Seller and the right to exercise any other appropriate remedies available under law.
9. S-A Property - All materials, software, and tools furnished or paid for by S-A shall be the property of S-A, shall be subject to removal at any time without additional cost upon demand by S-A, shall be used only in filling orders from S-A, shall be kept separate from other materials, software, or tools, and shall be clearly identified as the property of S-A. Seller assumes all liability for loss or damage with the exception of normal wear and tear, and agrees to supply detailed statements of inventory, upon request by S-A. Seller shall not disclose any information of S-A whether written, oral, or in electromagnetic form, which S-A identifies as proprietary or confidential and shall only use such information in the performance of its obligations under this order.
10. Drawings and Specifications - S-A shall at all times have title to all drawings and specifications furnished by S-A to Seller and intended for use in connection with a purchase order and Seller shall not reproduce or disclose such drawings and specifications to any person, firm or corporation other than Seller’s employees, subcontractors, or government inspectors as necessary for the performance of the purchase order. The Seller shall at S-A’s request or upon completion of a purchase order, promptly return all drawings and specifications and all copies thereof to S-A. Seller shall impose and enforce these use restrictions on its employees, subcontractors and suppliers.
11. Assignment - No assignment of any rights, including rights to moneys due or to become due under a purchase order, or delegation of any duties thereunder shall be binding upon S-A unless and until its written consent has been obtained.
12. Applicable Law - All purchase orders shall be governed by the laws of the State of Georgia without regard to its rules of conflicts of laws.
13. Compliance with Law - Seller represents and warrants that all goods specified in a purchase order will be manufactured and furnished in accordance with all applicable provisions of the following laws and regulations issued thereunder: FAIR LABOR STANDARDS ACT OF 1938, as amended (29 USC 201), OCCUPATIONAL SAFETY AND HEALTH ACT OF 1970, as amended (15 USC 651), and the CONSUMER PRODUCTS SAFETY ACT, as amended (15 USC 2051). Seller agrees to indemnify, save, and hold harmless S-A, its officers, directors, employees, agents, subsidiaries and affiliates from any and all losses, penalties, and expense, including court costs and reasonable attorney’s fees, resulting from Seller’s non-compliance with the laws and regulations identified above and all other laws and regulations governing Seller’s conduct in reference to a purchase order.
14. Product Regulatory Compliance - Goods delivered to S-A hereunder will be manufactured, labeled, certified and will perform in compliance with all applicable laws, regulations, standards and/or codes specified by S-A and as in effect for the goods intended use at the time of delivery. It shall be Seller’s responsibility to secure and maintain any and all certifications required for the goods purchased hereunder including goods privately labeled for S-A. In order to ensure the relevant laws and regulations are satisfactorily met, Seller agrees to: (a) Certify to S-A that the goods delivered hereunder are in compliance with the S-A specified regulations, laws, standards and/or codes. (b) Provide S-A and appropriate enforcement agencies with Manufacturer’s Declarations of Conformity or other specified certification(s) declaring evidence of Seller’s compliance with specified standards. (c) Ensure that the goods continue to meet the S-A specified compliance levels during the period over which such goods are supplied to S-A. (d) Advise S-A of any changes impacting the product regulatory compliance status of goods during the production thereof. (e) Archive and maintain product regulatory compliance records for a period of ten (10) years from the date of the final shipment of goods to S-A. Such records shall include: schematics, Bills of Materials, theory of operation sufficient to understand the schematics, data sheets, specifications, user manuals, engineering test results, laboratory test results evidencing compliance with specified standards, laboratory test certificates, and manufacturer’s declaration of conformity. (f) Allow S-A, S-A customers and enforcement agencies to inspect Seller’s product regulatory compliance records in order to verify that the goods comply with the laws, regulations, standards and/or codes specified by S-A. (g) Undertake to bring the goods into compliance should the applicable legislation, standards, laws or regulations be revised during the period of supply to S-A. Unless otherwise directed, all documents of regulatory compliance and notice of any changes in product regulatory compliance status during the period over which goods are supplied to S-A shall be forwarded to: Manager, Product Regulatory Compliance, Mail Code: ATL 1.T257, 0000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxxxxxx, XX 00000
15 U.S. Government Procurement Law - If a government contract number appears on the face of a purchase order or if Seller is otherwise informed that a purchase order is placed in aid of the performance of a contract with the United States Government, or a subcontract of any tier thereunder, then a purchase order shall be deemed to include all terms and conditions (hereinafter “Government Terms and Conditions”) required by law, regulation, or by such Government contract or subcontract to be included therein. The Government Terms and Conditions shall prevail over any other terms and conditions of such purchase order that are inconsistent with the Government Terms and Conditions. Upon request, S-A agrees to furnish Seller copies of the Government Terms and Conditions, and Seller agrees to furnish S-A upon request certificates in such form as S-A may require certifying that Seller is in compliance with the Government Terms and Conditions.
16. Non-Solicitation Of S-A Employees - Seller agrees that for a period of twelve (12) months after the date of this Purchase Order, Seller will not, directly or indirectly, on its own behalf or on behalf of another person or entity, recruit, solicit, or induce or attempt to recruit, solicit or induce any employee of S-A with whom Seller or its employees, agents or subcontractors has had contact in connection with this Purchase Order, to leave his or her
27
CONFIDENTIAL TREATMENT REQUESTED
employment with S-A to go to work, as an employee, consultant or independent contractor, for Seller or any affiliated entity of Seller.
17. Quality - (a) All official instructions, binding agreements, or deviations/exceptions to specifications must be in writing through the S-A procurement representative to be considered valid. (b) Seller must maintain a robust quality management system and a continuous improvement plan. (c) Seller agrees to ship defect-free product, zero (0) days late, not more than five (5) days earlier than S-A’s dock date, with a one hundred percent (100%) accurate part count or be subject to S-A’s supplier development, probation, and disqualification program. (d) Product will be shipped as specified in external and internal packaging that protects it from damage due to shipping, handling, and electro-static discharge. (e) Seller will not change any Seller design, process, material or sub-supplier/sub-contractor which alters the characteristics of any specified requirements or impacts product fit, form, or function as defined by the S-A drawing or Seller’s standard catalog product specification without getting prior written S-A approval. (f) If Seller’s product is found to be nonconforming at any time within warranty, Seller is liable for such product and the resultant cost of any S-A rework labor, equipment time, and unsalvageable material. (g) In the event Seller does not meet all requirements of subparagraph (c) herein, Seller agrees to provide containment within twenty-four (24) hours and, when requested by S-A, a documented final corrective action report or action plan within fourteen (14) days. (h) Seller may be required to undergo qualification assessments (possibly on-site), conduct verification production runs (with S-A present and/or results provided), and provide first article product with applicable analytical results, certificates of conformance, and/or calibration certifications. (i) If requested by S-A, Seller must provide records of process controls (e.g., inspection and test results) for at least one (1) year after the product manufacturing date code. (j) Seller may be placed on S-A’s probation status due to excessive defects, poor on-time delivery, non-responsiveness to quality issues, or poor state of the business relationship. (k) S-A reserves the right to visit any Seller facility or to have a sub-contractor(s) visit S-A. (l) Seller cannot ship material manufactured greater than one (1) year and eleven (11) months after the Seller’s manufacturing date without prior written S-A approval. (m) Where applicable, Seller’s material will conform to: IPC-A-610C Class II (Acceptability for Electronic Assemblies), IPC/EIA J-STD-001C Class II (Requirements for Soldered Electrical and Electronic Assemblies), and Bellcore TR-NTW-00357 Level II (General Requirements for Assuring Reliability of Components used in Telecommunications).
28
CONFIDENTIAL TREATMENT REQUESTED
EXHIBIT D
SELLER STANDARD TERMS AND CONDITIONS
| 1. | GENERAL. As used herein, the term “Path1” shall mean Path 1 Network Technologies, Inc. and its affiliates and the term “Customer” shall mean the person or entity desiring to license goods from Path1. Path1’s quotation [(“Quotation”) does not constitute an offer, but merely an invitation for Customer to place an order (“Order”) with Path1 consistent with the terms set forth in Path1’s Quotation and subject to these terms and conditions (“Terms and Conditions”). These Terms and Conditions apply to all Quotations made and Orders accepted by Path1. The Quotation, the Order and these Terms and Conditions together shall form this “Agreement.” |
| 2. | AGREEMENT FORMATION. The purpose of a Customer’s Order is to serve as an offer of the terms set forth in the Quotation and these Terms and Conditions. All Orders are subject to acceptance by Path1. No form of acceptance except Path1’s written acknowledgement sent to Customer, or Path1’s commencement of performance shall constitute a valid acceptance of a Customer’s Order. Path1 will not be bound by any terms of Customer’s Order that are inconsistent with, or that add to, the terms set forth in Path1’s Quotation or these Terms and Conditions, without Path1’s express prior written consent thereto. If Customer does not agree to these Terms and Conditions, then Customer shall not place an Order to license Path1 products (“Products”). Path1’s failure to further object to any such additional terms or modifications contained in any communication from Customer or proposed by any course of dealing or performance between Path1 and Customer shall not be deemed a waiver of the provisions hereof or an approval of the terms or modifications therein. Path1 marketing staff is not authorized to modify these Terms and Conditions. Any term or condition of these Terms and Conditions shall prevail in the event that there is an inconsistency between it and any term or condition of any communication from Customer or of any course of dealing or performance between Customer and Path1. Path1 shall be deemed to have accepted, and shall be bound by, this Agreement upon the earliest of: (a) the date Path1 returns to Customer a written acknowledgement of its acceptance of Customer’s Order; and (b) the date Path1 ships to Customer any of the Products listed in the Quotation. |
| 3. | LICENSE. Notwithstanding any language to the contrary in this Agreement, the Products (including but not limited to any software in object code form embedded in or accompanying any Product (“Software”)) listed in the Quotation are sold subject to various licenses. Subject to this Agreement, Path1 grants to Customer a limited, perpetual, non-exclusive, nontransferable (except as set forth in Section 21) right to use the Products in the configuration set forth in the Quotation (for clarification, the Quotation may limit the number of video streams, the number of ports, the maximum speed range, feature set processing, etc.) in accordance with any documentation accompanying such Products. Except as otherwise required by law, Customer shall have no right to copy the Software. |
| 4. | OWNERSHIP. Except for the limited right of internal use set forth in this Section 3, as between Customer and Path1, Path1 shall retain all right, title and interest to all intellectual property embodied in the Products. Except as set forth in Section 3, no express or implied licenses are granted by either party under this Agreement. |
| 5. | PRICES. Prices for Products shall be in accordance with the Quotation. The prices attached hereto are valid for thirty (30) days of receipt of the Quotation. The amount of all transportation charges from Path1’s shipping location and of all taxes and other charges, other than taxes imposed on Path1’s income, now or hereafter imposed by any governmental authority upon the manufacture, production, sale, purchase, delivery, possession, import, export, or resale of the Products specified in the Quotation, which may be paid by Path1 or for which Path1 may be liable, shall be the responsibility of Customer and shall be paid to Path1 in addition to the purchase price of the Products, unless otherwise agreed in writing. |
| 6. | TERMS OF PAYMENT. Unless otherwise set forth on the face hereof, all invoices shall be paid in full within thirty (30) days of the invoice date in U.S. dollars. On any invoice (or portion thereof) which remains unpaid on the date when due to Path1, Customer agrees to pay a service charge of one and one-half percent (1-1/2%) per month (or such lower rate as may be the maximum allowable by law) from any such due date until the date of payment. If Path1 believes in good faith that Customer’s ability to make any payment required hereunder is or may be impaired, Path1 may cancel this Agreement (or any remaining balance thereof), and Customer shall remain liable to pay for any Products previously shipped. When partial shipments are made, payments shall become due in accordance with the designated terms upon submission of an invoice covering any such partial shipment. |
29
CONFIDENTIAL TREATMENT REQUESTED
| 7. | DELIVERY. All Products shall be delivered F.O.B. (INCO Terms 2000) Path1’s designated shipping point, but title shall not pass. Subject to Path1’s right of stoppage in transit, delivery of Products to a carrier at the shipping point in good condition or delivery by Path1 to Customer’s representative at Path1’s warehouse or plant shall constitute delivery to Customer, and risk of loss shall thereupon pass to Customer. Customer shall keep the Products in good Order and repair until the licensing fees have been paid in full and shall promptly pay all taxes and assessments upon the Products or use of the Products. In the absence of specific shipping instructions, Path1 shall select a carrier who shall be deemed to act as Customer’s agent, notwithstanding any payment by Path1 of freight charges made for Customer’s account. Path1 shall have no liability for any events occurring during shipment; any claim for damages or loss must be filed with the carrier. Delivery of any installment of Products within thirty (30) days after the date specified therefor shall constitute a timely delivery. Thereafter, delivery shall be deemed timely unless Path1 receives written notice of cancellation prior to shipment. Any information regarding delays in Customer’s schedule that will affect Path1’s delivery, must be made available to us. Any such information not passed on to us in time for us to reschedule delivery will not be considered sufficient cause to delay payment to us. If shipment is delayed at the request of Customer or by governmental actions, payment becomes due when Path1 is ready to make shipment. |
| 8. | SHIPMENTS. All shipping dates are approximate. Path1 will exercise reasonable efforts to fill all Orders according to the agreed schedule(s); provided, however, that Path1 shall not be responsible for any failure to perform or delay in performing which is directly or indirectly due to any governmental or military regulation or requirement, act of God, act of terrorism, war, riot, embargo, fire, flood, natural disaster, strike or other labor dispute, unavailability of materials or transportation facilities, or any other unforeseen circumstances or causes beyond Path1’s control (“Force Majeure Event”). Any affected delivery date shall be deemed extended for a period of time equal to the delay incurred. |
| 9. | ACCEPTANCE OF PRODUCTS. Acceptance shall be deemed to have occurred upon receipt. Customer may reject a Product only if such Product fails in some material respect to meet the specifications therefor. In any event, Customer shall pay for the shipment as otherwise provided herein and shall be entitled to a refund of the purchase price for properly rejected Products at the time they are ultimately rejected, provided that if Path1 disputes the rejection, refund shall be made, if at all, at the time the dispute is finally resolved. Whether or not Path1 accepts Customer’s basis for rejection, promptly on receipt of a notice of rejection, Path1 shall use its reasonable efforts to repair or provide replacement Products. |
| 10. | WARRANTY / DISCLAIMER OF WARRANTY. PATH1 WARRANTS THAT THE PRODUCTS WILL SUBSTANTIALLY CONFORM IN ALL MATERIAL RESPECTS TO THE AGREED UPON SPECIFICATIONS FOR A PERIOD OF ONE YEAR FROM THE DATE OF SHIPMENT. PRIOVIDED, HOWEVER, THAT THE PRODUCTS SOLD HEREUNDER AS OF THE DATE OF SALE HAVE NOT MET ALL REQUIRED INDEPENDENT TESTING AND CERTIFICATIONS. CUSTOMER’S SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF THE FOREGOING WARRANTY SHALL BE REPAIR OR REPLACEMENT OF PRODUCT, OR AT PATH1’S OPTION IF REPAIR OR REPLACEMENT IS IMPRACTICAL, REFUND FOR RETURNED NONCONFORMING UNITS OF PRODUCT. |
| PRODUCT OFFERED “AS IS” OR “AS INSPECTED,” HOWEVER, IS NOT COVERED BY THE ABOVE WARRANTY. PATH1 SHALL PAY THE COSTS OF ANY SUCH REPAIR OR REPLACEMENT, INCLUDING TRANSPORTATION COSTS INCURRED IN RETURNING REPAIRED OR REPLACED PRODUCTS TO CUSTOMER UNLESS (I) THE PRODUCT IS NOT DEFECTIVE, IN WHICH CASE CUSTOMER SHALL PAY PATH1’S REASONABLE COSTS OF INSPECTION AND ALL TRANSPORTATION CHARGES, OR (II) THE PRODUCT IS DEFECTIVE DUE TO CUSTOMER’S OR ANY THIRD PARTY’S DAMAGE, MISUSE, ABUSE, OR FAILURE TO USE THE PRODUCT FOR ITS INTENDED PURPOSE, IN WHICH CASE CUSTOMER SHALL PAY ALL COSTS OF REPAIR OR REPLACEMENT AND TRANSPORTATION. |
| PATH1 MAKES NO OTHER WARRANTIES, STATUTORY, EXPRESS OR IMPLIED, WITH RESPECT TO PRODUCTS SUPPLIED UNDER THIS AGREEMENT AND DISCLAIMS ALL OTHER WARRANTIES INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. |
| Some jurisdictions do not allow the limitation or disclaimer of certain implied warranties, so the above limitation or disclaimer may not apply to Customer. |
| 11. | PRODUCT RETURNS. Customer may return Products pursuant to Sections 9 and 10. Customer will bear the cost of shipping and insurance for return of Products to Path1. Customer must return any such Products with the bar code label intact and in the original container, or an equivalent container with protective capabilities at least as strong as the original container, which shall conspicuously bear the return materials authorization (“RMA”) number Customer obtains from Path1 prior to return. Customer must comply with Path1’s RMA procedure which shall be made available to Customer upon request. |
| 12. | CUSTOMER REPRESENTATIONS AND WARRANTIES. Customer represents and warrants that (i) it has and shall maintain in good standing all licenses, permits or other certificates of regulatory authority to use the Products; (ii) it shall not, nor allow third parties to, remove any inscription, serial number, metal plate, marking or other form of identification affixed by the manufacturer or Path1 to the Products, including such marking which identifies Path1 as the developer thereof; (iii) it does not have the authority, and shall not, make any representations or warranties to third parties with regard to the Products or their performance; (iv) it shall comply with all applicable laws and governmental regulations and assist Path1 in its compliance with same; (v) it shall not, nor allow third parties to, disassemble, decompile or otherwise reverse engineer the Products (including but not limited to the Software) or otherwise attempt to learn the structure, algorithms or any source code contained therein or any ideas underlying the Products; (vi) it shall not, nor allow third parties to, modify the Product (including but not limited to the Software) or combine the |
30
CONFIDENTIAL TREATMENT REQUESTED
| Product (including but not limited to the Software) with any other product or software; (vii) it shall use the Products in compliance with the Path1 instructions for appropriate use; and (viii) Customer shall indemnify and hold Path1 harmless with respect to any claims or suits brought against Path1 due to a breach by Customer of this Section 12. |
| 13. | LIMITATION OF LIABILITY. IN NO EVENT SHALL PATH1 BE LIABLE FOR COSTS OF PROCUREMENT OF SUBSTITUTE GOODS BY CUSTOMER, OR FOR ANY LOSS OF PROFITS OR LOSS OF USE, LOSS OF DATA, OR FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE, OR OTHER DAMAGES HOWEVER CAUSED, WHETHER OR NOT PATH1 HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE. THIS EXCLUSION ALSO INCLUDES ANY LIABILITY WHICH MAY ARISE OUT OF THIRD PARTY CLAIMS AGAINST CUSTOMER. PATH1 ASSUMES NO OBLIGATIONS OR LIABILITY OF ANY KIND WITH RESPECT TO INFRINGEMENTS OR ALLEGED INFRINGEMENTS OF UNITED STATES OR FOREIGN PATENTS, COPYRIGHTS, TRADEMARKS, OR OTHER PROPRIETARY OR INTELLECTUAL PROPERTY RIGHTS ARISING OUT OF CUSTOMER’S LICENSE, USE, OR POSSESSION OF THE PRODUCTS. THE ESSENTIAL PURPOSE OF THIS PROVISION IS TO LIMIT THE POTENTIAL LIABILITY OF PATH1 ARISING OUT OF THIS TRANSACTION AND/OR LICENSING OF PRODUCTS TO CUSTOMER. |
| Some jurisdictions do not allow the limitation or exclusion of liability for incidental or consequential damages, so the above limitation or exclusion may not apply to Customer. |
| 14. | INDEMNIFICATION. |
| a. | Path1 will indemnify and hold harmless Customer from any and all liability, damages, costs and expenses arising out of any claims of any third party that any Product shipped hereunder infringes on any US patent or copyright, and Path1 shall, at its own expense, defend Customer, its agents and employees against any and all third party losses, costs, damages, claims, liabilities or expenses, including but not limited to reasonable attorneys’ fees and costs; provided that Path1 is promptly notified in writing of such claim or suit and Path1 shall have sole control of the defense and/or settlement thereof. |
| b. | Path1 shall have no obligation under this Section 14 if and to the extent that such claim arises from: (i) compliance by Path1 with Customer’s specifications, (ii) modification of the Product other than by Path1, or (iii) combination of the Product with products other than those supplied by Path1. Customer will indemnify Path1 for any claims referred to in the foregoing sentence in the same manner as provided in Section 14.a |
| 15. | USE AND SAFETY. Customer acknowledges that it is Customer’s responsibility to provide proper safety devices and equipment to safeguard the user from harm for any particular use, operation or set up, and to adequately safeguard the Product in conformance with all applicable federal, state and local government safety standards and all industry safety standards. Customer shall, at its own expense, defend, indemnify and hold harmless Path1, its agents and employees against any and all third party losses, costs, damages, claims, liabilities or expenses, including but not limited to reasonable attorneys’ fees and costs arising out of the use or operation of the Product, except for claims for repair or replacement of defective equipment or parts as provided in Section 15 hereof; provided that Path1 is promptly notified in writing of such claim or suit and Path1 shall have sole control of the defense and/or settlement thereof. |
| 16. | DEFAULT AND CANCELLATION. In the event of Customer’s default in payment for the Products licensed hereunder, Customer shall be responsible for all reasonable costs and expenses incurred by Path1 in collection of any sums owing by Customer (including reasonable attorneys’ fees), and Path1 may decline to make further shipments to Customer without in any way affecting its rights under this Agreement. If, despite any such breach by Customer, Path1 elects to continue to make shipments, such shipments shall not constitute a waiver of any breach by Customer or in any way affect Path1’s legal remedies arising from such breach. Should Customer elect to cancel its Order, Customer shall be liable to Path1 for reasonable cancellation charges which shall include without limitation all costs and expenses incurred by Path1 in connection with procuring and filling Customer’s Order, which shall not exceed the actual sales price of the Products cancelled [Xxxx, insert a specific amount or percentage of licensing fees?]. If Customer becomes bankrupt or insolvent, or files or has filed against it in any petition in bankruptcy, or makes an arrangement for the benefit of its creditors, or suffers a receiver or similar party to be appointed, Path1 shall be entitled to cancel this Agreement without judicial intervention or declaration of default of Customer and without prejudice to any right or remedy which shall have accrued or shall thereafter accrue to Path1. Upon such cancellation, Customer shall return all Products to Path1 and the license set forth in Section 3 shall be revoked. Sections 1, 6 and 10-25 shall survive termination of this Agreement by their terms. |
| 17. | MODIFICATION/WAIVER. Any change made by Path1 to this Agreement will be deemed accepted by Customer unless within five (5) days from the date Path1 delivers notice of such change Customer notifies Path1 in writing of Customer’s objection to such change. This Agreement shall not be modified, supplemented, qualified, or interpreted by any trade usage or prior course of dealing not made a part of this Agreement by its express terms. The failure by Path1 to enforce at any time any of the provisions of this Agreement, or to exercise any election or option provided herein, shall in no way be construed as a waiver of such provision or option, nor in any way affect the validity of this Agreement (or any part hereof), or the right of Path1 thereafter to enforce each and every such provision. Any waiver by Path1 must be in writing and such waiver shall only apply to the particular instance in question. Path1’s marketing personnel do not have the authority to grant waivers. |
| 18. | NON-DISCLOSURE OF CONFIDENTIAL MATTER. |
| a. | Each party agrees to treat any confidential technical or business information obtained from the other as confidential, in accordance with the Mutual Nondisclosure Agreement signed by the parties. Customer acknowledges that the Products contain valuable trade secrets. |
31
CONFIDENTIAL TREATMENT REQUESTED
| b. | If either party breaches any of its obligations with respect to confidentiality, the other party shall be entitled to equitable relief, including specific performance or an injunction (without need to post a bond), in addition to any other rights or remedies, including money damages, provided by law. |
| 19. | NOTICES. Any notice contemplated by or made pursuant to this Agreement shall be in writing and shall be deemed delivered on the date of delivery if delivered personally, or three (3) days after mailing if placed in the U.S. mail, postage prepaid, registered or certified mail, return receipt requested, addressed to Customer or Path1 (as the case may be) at the address shown on the Quotation, or such other address as shall be designated by at least ten (10) days prior written notice. |
| 20. | APPLICABLE LAW/CONSENT TO JURISDICTION. This Agreement is entered into in San Diego County, California and shall be governed by and construed under the laws of the State of California, excluding its conflict of laws principles, and excluding the United Nations Convention on Contracts for the International Sale of Goods. The parties agree that the exclusive jurisdiction and venue of any action with respect to this Agreement shall be the State Courts in San Diego County, California, or, if there is federal jurisdiction, the U.S. District Court for the Southern District of California. Customer agrees that service of process in any such action may be effected by delivery of the summons to Customer in the manner provided for delivery of notices set forth in Section 19 if any legal action is brought in connection with this Agreement, and the prevailing party shall be entitled to receive its attorneys’ fees and court costs in addition to any other relief it may receive. |
| 21. | ASSIGNMENT. Path1 or Customer shall not assign any of its rights or delegate any of its responsibilities under this Agreement (by operation of law or otherwise), and any purported attempt to do so will be null and void, unless agreed to by both parties in writing, except that in the event of a merger, spin-off or other reorganization, a transfer of all or substantially all of the voting stock or shares of a party, or any sale to any entity which buys all or substantially all of its assets, each party may assign this Agreement to the successor organization without the prior approval of the other party. |
| 22. | U.S. GOVERNMENT RESTRICTED RIGHTS. If a unit or agency of the U.S. government is given certain rights to use the Products (including but not limited to the Software or Path1 technical data), this provision applies. The Products and Software, as appropriate, (a) are or contain existing computer software, and accompanying documentation and were developed at private expense, (b) are trade secrets of Path1 for all purposes of the Freedom of Information Act, (c) are “commercial items” and/or “commercial computer software” as defined in XXX 0.000, XXXXX 252.227-7014(a)(1) and DFARS section 252.227-7015, subject to limited utilization as expressly stated in this Agreement, (d) in all respects are proprietary data belonging to Path1, and (e) are unpublished and all rights are reserved under the copyright law of the United States. For civilian agencies and entities given certain rights to use the Products, and any legend or xxxx thereof, the rights to use the Products are limited to “Restricted Rights,” and use, reproduction or disclosure is subject to restrictions set forth in this Agreement, the provisions in FAR 12.212 or DFARS 227.7202-3 -227.7202-4 and, to the extent required under U.S. federal law, the minimum restricted rights set forth in FAR 52.227-14, Restricted Rights Notice (June 1987) Alternate III(g)(3) or FAR 52.227-19. To the extent any technical data is provided pursuant to this Agreement, such data is protected per FAR 12.211 and DFARS 227.7102-2 and to the extent explicitly required by the U.S. government, is subject to limited rights set forth in DFARS 252.227.7015 and DFARS 252.227-7037. In the event that any of the above referenced agency regulations are modified or amended, the subsequent equivalent regulation shall apply. |
| 23. | VALIDITY OF CONTRACT. If any provision of this Agreement is held to be invalid or unenforceable, in whole or in part, such provision, or part thereof, shall be severed, and the remaining provisions shall be enforceable to the maximum extent possible. |
| 24. | INDEPENDENT CONTRACTORS. The relationship of Path1 to Customer is that of independent contractors. This Agreement does not create a partnership, association or other business entity. |
| 25. | INTEGRATION. This Agreement contains the entire agreement between the parties hereof and supersedes any prior or contemporaneous oral or written understandings, agreements, or communications between them relating to the subject matter hereof. |
32