1
EXHIBIT 10.18
Effective Date: Adaptec use only:
November 12, 1998 Agreement #________
VOLUME PURCHASE AGREEMENT
BETWEEN
JAYCOR NETWORKS, INC. ("JNI")
0000 XXXXX XXXXXX XXXXX
XXX XXXXX, XXXXXXXXXX 00000
AND
ADAPTEC, INC. ("ADAPTEC")
000 XXXXX XXXXXXXX XXXXXXXXX
XXXXXXXX, XXXXXXXXXX 00000
JNI enters into this Agreement to sell to Adaptec certain products described in
Exhibits A and B attached hereto, as may be amended by mutual written agreement
of the parties (the "Products") in accordance with the terms and conditions
contained in this Agreement
This Agreement consists of this cover page, the attached Terms and Conditions
and Exhibits A (Unrestricted Products and Net Price) and B (Restricted Products
and Net Price) attached. Notwithstanding any pre-printed terms and conditions in
any other document, the terms and conditions of this Agreement shall govern all
purchases of the Products by Adaptec. JNI has read, understands and agrees to
the terms of this Agreement. Each of the undersigned is duly authorized to sign
this Agreement on behalf of the party it represents.
ADAPTEC, INC. JAYCOR NETWORKS, INC.
By: /s/ XXXXXXX XXXXXXX By: /s/ XXXXX X. XXXXXXXX
-------------------------------- -------------------------------------
Signature Signature
Xxxxxxx Xxxxxxx
----------------------------------- ----------------------------------------
(Print or type Name) (Print or type Name)
Title: Vice President Title:
Corporate Procurement ----------------------------------
-----------------------------------
Date: 12-7-98 Date:
------------------------------ -----------------------------------
1
2
ADAPTEC, INC.
TERMS AND CONDITIONS
1. DEFINITIONS
"Adaptec Products" shall mean any Product which JNI receives from
Adaptec pursuant to a Manufacturing Agreement and which is resold to
Adaptec under this Agreement.
"Manufacturing Agreements" shall mean (i) the Chip Manufacturing and
Transition Agreement and (ii) the Board Manufacturing and Transition
Agreement, between Adaptec and JNI, of even date herewith.
"Non-Adaptec Product" shall mean any Product which is not an Adaptec
Product. "Restricted Product" shall mean the chip-level Products listed
in Exhibit B.
2. PRICES AND TAXES, RESALE RESTRICTION
(a) As requested by Adaptec, JNI shall quote to Adaptec its prices
for the Products, which price quotes shall be valid for a period
of thirty (30) days from issuance, and shall apply to any
purchase order issued by Adaptec within such thirty (30) day
period. The execution of this Agreement constitutes a warranty
by JNI that at no time will the prices charged Adaptec for
Products or services ordered under this Agreement exceed:
(i) the prices charged any other JNI customer during the ninety
(90) day period preceding any price quote from JNI to Adaptec
purchasing "substantially similar" Products in similar volumes,
where two products are "substantially similar" if they are the
same, or they have substantially the same functionality,
components and feature sets and are perceived or marketed as
competing products; or
(ii) one hundred fifteen percent (11 15%) of JNI's actual
manufacturing cost for Restricted Products (or the actual price
paid by JNI if the Restricted Product is an Adaptec Product) as
determined by GAAP.
Unless otherwise specified, the prices set forth in this
Agreement are exclusive of all applicable federal, state, and
local taxes, and transportation charges.
(b) Adaptec will have the right to resell Products without
restriction of any kind, except that Adaptec may not sell
products incorporating a Restricted Product if a) such product
is substantially similar in functions, features, and performance
characteristics to the Restricted Product incorporated therein,
and b) such product does not add significant additional value to
the Restricted Product.
3. FORECAST, PURCHASE ORDERS, DELIVERY DATES AND INVOICES
(a) Adaptec will provide JNI, on the Effective Date, and thereafter
on the first day of each calendar month, a rolling forecast of
Adaptec's quantity requirements for each Product for each of the
next six (6) months. While such forecasts will not be regarded
as a commitment to purchase, they shall represent and reflect
Adaptec's good faith expectations of customer demand.
(b) JNI will provide to Adaptec sufficient prior written notice of
JNI's intention to discontinue the manufacture or sale of any
Product so as to allow Adaptec to place orders for such Products
with delivery dates at least twelve (12) months after JNI's
date of notification.
(c) Adaptec will initiate purchases under this Agreement by
submitting written purchase orders to JNI any time after the
Effective Date of this Agreement at JNI's communications numbers
or address set forth on the cover page. All purchase orders will
contain the following: (a) identification of the Products being
ordered, (b) quantity of Products
2
3
ordered, (c) shipping instructions, (d) delivery schedule, (e)
destination and billing address if different from Adaptec's
address listed on the cover page and (f) the price for the
Products as specified on Exhibit A. JNI will use reasonable
commercial efforts to notify Adaptec in writing of its
acceptance of a purchase order (including the delivery schedule
specified therein) within two business days of receipt of the
purchase order. JNI will accept purchase orders from Adaptec
which comply with the provisions of this Agreement, including
JNI's required lead times for Product manufacturing, and
provided Adaptec is not in breach of any payment or other
provision hereof. JNI may, at its sole discretion, allocate
production and delivery among JNI's customers.
(d) Subject to the provisions of Section 4(c) above, JNI shall
deliver Products on the dates specified in the purchase order
provided JNI receives such purchase order in accordance with the
lead times for the respective Products and provided further that
such requested delivery date is no later than six (6) months
after the expiration of this Agreement.
(e) JNI will submit invoices showing the following information:
agreement number; item number; description of item; quantity of
item; unit prices; each applicable tax; extended totals; and any
other information specified elsewhere herein. Payment of the
applicable invoice will not constitute acceptance of Products
and will be subject to adjustment for errors, shortages, defects
in the Products or other failure of JNI to meet the requirements
of this Agreement. Adaptec may at any time set off any amount
owed by Adaptec to JNI against any amount owed by JNI to
Adaptec. Adaptec shall pay all invoices issued by JNI for the
Products within thirty (30) days of the invoice date.
4. OVERSHIPMENTS
Adaptec will pay only for maximum number of Products ordered.
Overshipments will be held by Adaptec at JNI's risk and expense for a
reasonable time awaiting shipping instructions. Return shipping charges
for excess quantities of Products will be at JNI's expense.
5. PACKING AND SHIPMENT
Unless otherwise specified, the prices included in Exhibit A are
inclusive of all charges for packing, handling, storage or other packing
requirements. Unless otherwise specified, JNI will package and pack all
Products in a manner which is (i) in accordance with good commercial
practice, (ii) acceptable to common carriers for shipment at the lowest
rate for the particular Products, (iii) in accordance with I.C.C.
regulations, and (iv) adequate to ensure safe arrival of the Products at
the named destination. An itemized packing list must accompany each
shipment. Partial or complete delivery may be made up to (2) two days in
advance of the scheduled delivery dates. For Products which are not
managed by JNI's manufacturing or operations groups and which are not
Adaptec Products, JNI shall also supply a certificate of conformance
with each shipment of such Products made to Adaptec. In no event shall
JNI be liable for any delay in delivery, or assume any liability In
connection with shipment, nor shall the carrier be deemed an agent of
JNI.
6. F.O.B. POINT
Unless otherwise specifically provided on the face of any purchase order
submitted under this Agreement, the Products ordered hereunder shall be
delivered F.O.B. JNI's point of shipment. Adaptec will pay freight
charges for shipping.
7. WARRANTY
(a) JNI warrants that for a period of one (1) year from the date of
delivery to Adaptec, all Products delivered (i) will be free
from defects in workmanship, material, and manufacture, (ii)
will comply with the requirements of this Agreement and any
purchase order submitted and accepted hereunder, including any
drawings or specifications incorporated in any purchase order
submitted hereunder or samples furnished by JNI, (iii) will be
free from defects in design (except to the extent that JNI
incorporates or utilizes designs supplied by Adaptec in
connection with the applicable purchase order), and (iv) will
conform to JNI's published specifications The foregoing
warranties are in addition to all other warranties, whether
express or implied, and will survive any delivery, inspection,
acceptance or payment by Adaptec. In no event will JNI have
liability for any Products which have been subjected to abuse,
misuse improper use, negligence, accident, alteration, repair or
rework performed by unauthorized parties.
(b) JNI warrants that the Products will accurately process date/time
data (including, but not limited to, calculating,
3
comparing, and sequencing) from, into and between the twentieth
century and the twenty-first century, and the years 1999 and
2000, including leap year calculations, and will, when used in
combination with other equipment or software, accurately process
date/time data if the other equipment or software properly
exchanges date/time data with it.
(c) If any Products delivered do not meet the warranties specified
herein or otherwise applicable, Adaptec may, at its option, (I)
require JNI to correct any defective or nonconforming Products
by repair (where practicable) or replacement at no cost to
Adaptec, or (ii) return such defective or nonconforming Products
to JNI at JNI's expense and recover from JNI the order price
thereof, or (iii) correct the defective or nonconforming
Products itself and charge JNI with the cost of such correction.
(d) EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 7, THE PRODUCTS
ARE PROVIDED "AS IS", AND JNI MAKES NO REPRESENTATION OR
WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING
BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE AND NONINFRINGEMENT.
8. INSPECTION AND ACCEPTANCE
(a) Any Product delivered by JNI shall be deemed accepted by Adaptec
unless JNI receives written notice of a defect or non-conformity
with respect to such Product within thirty (30) days of shipment
to Adaptec. In case any item is defective in material or
workmanship, or otherwise not in conformity with the
requirements of any purchase order submitted under this
agreement, Adaptec will have the right (i) to reject it, (ii) to
require its correction, if practicable, or (iii) to accept it
with an adjustment in price. Any item that has been rejected or
required to be corrected must be replaced or corrected by and at
the expense of JNI promptly after notice. All returns of the
Products by Adaptec shall comply with JNI's RMA procedures then
in effect..
9. CHANGE ORDERS
(a) As agreed to by JNI, Adaptec may at any time, by a written
order, suspend performance under any purchase order for Products
previously submitted under this Agreement, increase or decrease
the ordered quantities, change the due date or make any other
changes desired by Adaptec. If any such change results in a
change in price in the cost or time required by JNI for
performance under the changed purchase order, JNI shall so
notify Adaptec in writing and the parties shall agree on an
equitable adjustment in the order price or delivery schedule, or
both. No claim by JNI for such an adjustment will be valid
without the prior written approval of Adaptec.
Notwithstanding the foregoing, by written notice to JNI, Adaptec
may at its discretion and with no additional charges incurred,
increase or decrease Product quantities contained in any
purchase order, except to the extent that JNI has placed
non-cancelable purchase orders with Adaptec under the
Manufacturing Agreements for Adaptec Products for the purpose of
filling Adaptec's purchase orders under this Agreement and JNI
cannot resell such ordered Adaptec Products within three (3)
months of Adaptec's decrease.
(b) Nothing in this Section 9 is intended to excuse JNI from
proceeding under the relevant purchase order as changed or
amended.
10. CANCELLATION FOR DEFAULT
(a) It is understood and agreed that time is of the essence for any
purchase order submitted under this Agreement because the
Products or service ordered are needed for products of Adaptec
that have a very short, carefully timed market life; failure of
JNI to deliver on the due date could cause Adaptec's Products to
be unmarketable. Adaptec may, by written notice, terminate this
Agreement or cancel any purchase order previously submitted
under this Agreement in whole or in part if, in Adaptec's
good-faith opinion, JNI has defaulted under this Agreement by
(i) failure to make delivery of the Products or to perform the
services within the time specified in the relevant purchase
order, or any extension thereof by written change order or
amendment; (ii) failure to replace or correct defective items in
accordance with the provisions of Sections 7 or 8 above; (iii)
failure to perform any of the other provisions of this Agreement
or any purchase order submitted under this Agreement; or (iv)
failure to make progress under any
4
4
purchase order submitted under this Agreement so as to endanger
performance in accordance with its terms. Notwithstanding the
foregoing, JNI shall not be deemed in default to the extent that
JNI's failure is the result of Adaptec's failure to perform
under the relevant Manufacturing Agreement.
(b) If this Agreement or any purchase order previously submitted
hereunder is canceled for JNI's default, Adaptec may procure,
upon reasonable terms, Products or services similar or
substantially similar to those ordered from JNI.
(c) If all or a portion of this Agreement or any purchase order
previously submitted hereunder is canceled for JNI's default,
Adaptec may require JNI to transfer title and to deliver to
Adaptec, in the manner and to the extent directed by Adaptec,
all completed Products not yet delivered. JNI will, upon
direction of Adaptec, protect and preserve the property listed
in this paragraph that is in the possession of JNI. Payment for
Products delivered to and accepted by Adaptec under this
paragraph will be in an amount (not to exceed the contract
price) reasonably agreed upon by JNI and Adaptec.
(d) Nothing in this Section 10 is intended to excuse JNI from
proceeding with any uncanceled portion of any purchase order
submitted under this Agreement.
11. TERMINATION FOR CONVENIENCE
(a) Adaptec may not cancel any Products ordered or on order for
delivery within a three (3) month period. Upon Adaptec's
request, JNI will use reasonable efforts to reschedule Products
scheduled for delivery within (3) months of Adaptec's
cancellation.
(b) Upon such termination, JNI will, to the extent and at the times
specified by Adaptec, stop all work under all affected purchase
orders.
12. RISK OF LOSS OR DAMAGE
Title and risk of loss or damage will pass to Adaptec upon delivery of
the Products by JNI to-the carrier, F.O.B. JNI's point of shipment.
13. WAIVER
The failure of either party to enforce at any time any of the provisions
of this Agreement, to exercise any election or option provided herein,
or to require at any time the performance by the other party of any of
the provisions herein will not in any way be construed to be a waiver of
such provisions.
14. REMEDIES
The remedies stated herein are in addition to all other remedies at low
or in equity.
15. INDEMNIFICATION
(a) JNI agrees to indemnify Adaptec, its agents, customers,
successors, and assigns against any loss, damage, and liability
(including costs and expenses) for actual or alleged
infringement of any patent, copyright or trademark arising out
of the use or sale of the Products ordered by Adaptec, its
agents or Customers ("Claim") (except to the extent based on
designs supplied by Adaptec in connection with the purchase
order for such Products); provided, however, that Adaptec: must
promptly notify JNI of any suit, claim or demand involving such
infringement, reasonably cooperate in the defense or settlement
of such Claim (at JNI's expense) and permit JNI to defend
against or settle the same. If any injunction is issued as the
result of any such infringement JNI agrees, at JNI's option, to
(i) refund to Adaptec the amounts paid to JNI for the Products
covered by the injunction, or (iii) furnish Adaptec with
acceptable and noninfringing Products.
(b) JNI agrees to indemnify Adaptec against any and all liability
and expense resulting from any alleged defect in the Products,
whether latent or patent, including allegedly improper
construction and design, or from the failure of the Products to
comply with specifications; provided, however, that Adaptec
must promptly notify JNI upon learning of
5
5
any of any suit, claim or demand involving such defect and
reasonably Cooperate in the defense or settlement of such claim
(at JNI's expense).
(c) JNI warrants that there are no liabilities for royalties,
mechanics liens or other encumbrances on the Products supplied
and agrees to indemnify Adaptec; against any such liabilities.
(d) JNI will not have liability (i) under Sections 15 (a) or 15(b)
to the extent that a Claim results from designs supplied by
Adaptec: in connection with the purchase order for the Products
giving rise to the Claim; or (ii) under Section 15(a) to the
extent that a Claim results from Adaptec's combination,
operation, or use of the Products with designs, devices, parts,
or software not supplied by JNI.
16. LIMITATION OF LIABILITY
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, AND EXCEPT AS SET FORTH
IN SECTIONS 15 AND 17, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER OR ANY OTHER PERSON FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING BUT NOT LIMITED TO, LOSS OF
PROFITS OR DAMAGES TO THE OTHER PARTY'S BUSINESS REPUTATION HOWEVER
CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN AN ACTION FOR
CONTRACT, STRICT LIABILITY OR TORT (INCLUDING NEGLIGENCE) OR OTHERWISE,
WHETHER OR NOT THE FIRST PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGE AND NOTWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY
REMEDY.
17. NON-DISCLOSURE OF CONFIDENTIAL MATTER
JNI will not quote for sale to others, without Adaptec's written
authorization, any Products purchased under Adaptec's specifications or
drawings. All specifications, drawings, samples, and other data
furnished by Adaptec will be treated by JNI as confidential information,
will remain Adaptec's property, and will be returned to Adaptec on
request. The terms of this Agreement and any purchase order submitted
hereunder shall be treated by Adaptec and by JNI as each treats its own
confidential information, and no press release or other like publicity
regarding this Agreement shall be made without the other party's
approval.
18. ASSIGNMENTS
The rights and liabilities of the parties to this Agreement will bind
and inure to the benefit of their respective successors, executors and
administrators, as the case may be. Neither party shall assign any of
its rights or privileges hereunder without the prior written consent of
the other party. Any attempted assignment in violation of the provisions
of this Section 17 will be void.
19. NOTICE OF DELAYS; PRODUCT SHORTAGES
Whenever any event delays or threatens to delay the timely performance
under this Agreement or any purchase order submitted hereunder, JNI will
immediately notify Adaptec of such event and furnish all relevant
details. Receipt by Adaptec of such notice will not constitute a waiver
of the due dates hereunder or under any purchase order submitted
hereunder. In the event of product shortages, JNI shall allocate to
Adaptec available Products in the ratio that the Products then under
order from Adaptec bear to Me total orders of JNI for the same or
similar products.
20. FORCE MAJEURE
Neither party shall be liable for any failure or delay in its
performance under this Agreement due to causes, including but not
limited to, acts of God, war, strikes, fires, floods, earthquakes, work
stoppages and embargoes, material shortages, subcontractor delays,
equipment or other facilities failures (which delays or failures are
beyond the reasonable control, without negligence, of the defaulting
party); provided that the delayed party: (i) gives the other party
written notice of such delay and cause promptly, and in any event within
(10) days of discovery thereof, and (ii) uses its reasonable efforts to
correct such failure or delay in its performance. They delayed party's
time for performance or cure under this Section shall be extended for a
period equal to the duration of the cause or forty-five (45) days,
whichever is less.
6
6
20. NOTICES
Unless otherwise specified in this Agreement, any notice which may be or
is required to be given under this Agreement shall be written and sent
by fax, mail or personally delivered. Such notices shall be delivered
or sent to the address or communications numbers set forth on the cover
page of this Agreement.
21. GOVERNING LAW AND JURISDICTION
The laws of the State of California, U.S.A., specifically including the
provisions of the California Uniform Commercial Code, shall exclusively
govern this Agreement. The federal and state courts within Santa Xxxxx
County, California shall have exclusive jurisdiction to adjudicate any
dispute arising out of this Agreement. JNI hereby expressly consents to
the personal jurisdiction of the federal and state courts within
California.
22. AMENDMENT
This Agreement may be amended only by a written amendment duly signed by
authorized representatives of both parties.
23. SEVERABILITY
If any provision of this Agreement is held invalid by any low, rule,
order or regulation of any government, or by the final determination of
any state or federal court, such Invalidity shall not affect the
enforceability of any other provisions not held to be invalid.
24. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement of the parties and
supersedes any and all prior and contemporaneous oral or written
understandings and agreements as to the subject matter hereof. In the
event of a conflict between this Agreement and any purchase order, the
terms of this Agreement will prevail.
25. TERMS AND TERMINATION
(a) Unless earlier terminated under the provisions of Section 10,
the term of this Agreement is two (2) years from the Effective
Date, and will automatically renew for an additional (1) one
year term unless either party notifies the other of its
intention to terminate this Agreement within (90) ninety days of
the expiration of the term then in effect. In the event JNI
notifies Adaptec of its intention to terminate, Adaptec shall
have the option of placing a final purchase order for delivery
of Products for the (6) six-month period following termination.
Except as otherwise provided in Section 10, in the event of a
termination or expiration, the provisions of this Agreement
shall continue to apply to all purchase orders submitted by
Adaptec: prior to the effective date of such termination or
expiration. Except as otherwise provided in this Agreement
termination or expiration shall not relieve or release the party
from making payments which may be owing to the other party under
the terms of this Agreement. The provisions of Section 7, 10,
11, 13 through 17 and 20 through 25 shall survive expiration or
termination of this Agreement for any reason.
(b) Termination For Default Either party may suspend its performance
and/or terminate this Agreement immediately upon written notice
at any time if:
(i) The other party is in material breach of any warranty,
term, condition or covenant of this Agreement other than
those contained in Section 17 and fails to cure that
breach within thirty (30) days after written notice of
that breach and of the first party's Intention to
suspend its performance or terminate;
(ii) The other party is in material breach of any warranty,
term, condition or covenant of Section 17; or
(iii) The other party: (i) becomes insolvent; (ii) admits in
writing its insolvency or inability to pay its debts or
perform its obligations as they mature; or (iii) makes a
general assignment for the benefit of creditors.
(c) Effect of Termination in General. The following terms apply to
any termination under this Agreement, including without
limitation, termination for convenience and for default:
7
7
(i) Immediately upon any termination of this Agreement, JNI shall,
to the extent and at times specified by Adaptec, stop all work
on outstanding purchase orders, incur no further direct cost,
and protect all property in which Adaptec, has or may acquire an
interest pursuant to this Section 25.
(ii) immediately upon any termination of this Agreement, each party
will return to the other party or, pursuant to the other party's
written instructions, destroy all materials in its possession
containing Confidential Information of the other party. Returned
Confidential Information materials shall be shipped freight
collect. In addition JNI shall immediately deliver to Adaptec
any Adaptec designs, inventory or other property of Adaptec
within JNI's possession or control. Such items shall be
delivered FOB the JNI facility at which they are located.
Notwithstanding the foregoing, JNI shall have no obligation to
deliver any inventory until and unless Adaptec has paid in full
all amounts due to JNI.
(iii) If this Agreement is terminated by JNI pursuant to Section
25(b), then Adaptec shall immediately pay to JNI, for all
Products ordered under outstanding purchase orders not fulfilled
due to such termination, the full purchase price for all
materials in finished goods and the proportionate price (based
on status of completion) of any work in process. Upon Adaptec's
payment, such items shall be delivered FOB the JNI facility at
which they are located.
8
8
EXHIBIT A
UNRESTRICTED PRODUCTS
Host Bus Adapter products based on the ASICS set forth in Exhibit B (AHA-F940
and AHA-F950, and the Rio Host Bus Adapters to be designated).
9
9
EXHIBIT B
RESTRICTED PRODUCTS
The Restricted Products are the Emerald ASIC (AIC 1160G REV A2) and the RIO
ASIC (AIC 1165).
10
