EXHIBIT 10.2
AGREEMENT
This AGREEMENT is made this 17th day of July, 1995, by and between Vitesse
Semiconductor Corp. ("Vitesse"), a Delaware Corporation, having an office at 000
Xxxxx Xxxxx, Xxxxxxxxx, XX 00000 and Gadzoox Microsystems, Inc. a California
Corporation having an office at 00 Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000.
Gadzoox desires to develop an integrated circuit for use in products. Vitesse
desires rights to sell this integrated circuit in the general market under its
own name as a Vitesse standard product. In consideration of the premises and the
mutual covenants set forth below, Gadzoox and Vitesse agree as follows:
1.0 DEFINITIONS
1.1 "Product Specification" means the functional description and
detailed specifications for the VSC7120QJ Fibre Channel
Repeater.
1.2 "Licensed Design" means the VSC7120QJ and any Subcircuit. A
description and specification of the function of the VSC7120QJ
is listed in Appendix A.
1.3 "Licensed Product" means a product sold or otherwise distributed
by Vitesse which incorporates the Licensed Design.
1.4 "Gross Revenue" means the ultimate worldwide revenue, in U.S.
Dollars, received by Vitesse for Licensed Products sold by
Vitesse.
1.5 "Net Sales" means the total amounts invoiced by Vitesse,
adjusted for replacements, returns, or credits for defective
product, not including amounts separately itemized on the
invoice, such as customs duties, sales, excise, use, import, and
export taxes, other taxes, insurance, and shipping charges. Net
Sales shall not include any sales to Gadzoox.
2.0 DEVELOPMENT
2.1 The Product Specification, designs, and layouts will be agreed
to by both parties and listed in Appendix A.
2.2 Gadzoox shall design, layout, characterize, and revise as
necessary the integrated circuit described by, and which will
perform and comply with the Product Specification. Vitesse will
provide Gadzoox with the design and layout of similar functions
which will be used, or modified for use, in the product.
2.3 Vitesse will create tooling for manufacturing based on the
design and layout provided by Gadzoox, process wafers, and
provide hardware and software for the testing of wafer and
packaged units.
2.4 Should either party choose or agree to make any changes to the
product description as specified in Appendix A., an Engineering
Change Notice (ECN) shall be completed by the parties and
submitted for incorporation herein. No verbal authorizations or
changes are to be substituted for the ECN.
2.5 Gadzoox shall follow the standard documentation and design
review procedures used by Vitesse. These procedures are listed
in Appendix B.
3.0 LICENSES
3.1 Gadzoox grants to Vitesse a worldwide, exclusive,
royalty-bearing license under the Licensed Design to make, have
made, use, have used, sell, and otherwise transfer Licensed
Product.
3.2 The royalty rate for the Licensed Design is based on Vitesse's
Gross Revenue from Net Sales of the Licensed Product and is to
be the following:
Ten percent (10%) of the first $100,000
Seven percent (7%) of the next $200,000
Five percent (5%) of the next $400,000
Three percent (3%) of Gross Revenue thereafter until the
total sum of royalties paid is $1 million.
4.0 PREFERENTIAL PRICING
4.1 Vitesse will sell the licensed design to Gadzoox for use in
Gadzoox products at a price not to exceed the lowest price
offered to any other customer for an equivalent quantity. During
the term of any purchase order placed by Gadzoox, Vitesse will
adjust the price of any unshipped quantity to maintain this
preference.
5.0 OTHER CONSIDERATION
5.1 Vitesse agrees to provide Gadzoox with five hundred (500) units
of the VSC7120 at no cost when the product meets the mutually
agreed upon specifications listed in Appendix A.
6.0 CONFIDENTIALITY
6.1 Both parties shall execute a Vitesse Non-Disclosure Agreement.
6.2 Documents or other information shall be deemed to contain
confidential information only if exchanged in accordance with
the terms and conditions of the Confidential Disclosure
Agreement.
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6.3 Within thirty days after the termination of this Agreement, the
receiving party shall return to the disclosing party all copies
of any Confidential Material for which the period of confidence
has not expired.
7.0 TERM AND TERMINATION
7.1 This Agreement becomes effective upon the date when the last of
the signatures required below has been affixed and shall run for
seven years from that date.
7.2 Either party may terminate this Agreement for material breach of
its provisions if the breach continues for sixty days after
written notification of the breach and intent to terminate.
7.3 Termination does not relieve either party of any liability
accrued before termination. Obligations as to Confidential
Material survive any termination.
8.0 WARRANTIES
8.1 Gadzoox warrants that it has the full right and power to grant
the license under the Licensed Design as set forth herein.
9.0 ASSIGNMENT
9.1 Neither party shall assign this Agreement or delegate any of its
duties or responsibilities without the prior written consent of
the other party except to a successor in ownership of
substantially all assets of that party who shall assume in
writing all the terms and conditions of this Agreement.
10.0 COMMUNICATIONS
10.1 Vitesse shall send Gadzoox written revenue statements providing
a summary of Vitesse's Gross Revenue generated from Net Sales of
the Licensed Product. The revenue statement shall provide a
breakout of which revenue is attributed to Gadzoox. These
revenue statements shall be provided to Gadzoox every six months
after the first sale to a third party. Vitesse will calculate,
based on the revenue statement, the royalty payments due to
Gadzoox.
10.2 Any notice required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such
other address as the party shall specify in writing. Such notice
shall be deemed given upon personal delivery to the appropriate
address or if sent certified or registered mail, three days
after the date of mailing.
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10.3 The addresses are:
For Gadzoox:
Attn: Xxxxxxxx Xxxxx
Gadzoox Microsystems, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
For Vitesse:
Attn: Xxxxxxx Xxxxxxxxxx VP
Vitesse Semiconductor Corporation
000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
11.0 AUDIT RIGHTS WITH RESPECT TO COMPLIANCE WITH SECTION 10.1
11.1 Vitesse will maintain accounting records to substantiate the
revenue statements of Section 9.1. Vitesse will retain its
accounting records and other records pertaining to this
Agreement for the term of this Agreement and for one (1) year
after its expiration or termination.
11.2 Gadzoox will have access, upon reasonable notice to Vitesse, to
the above records for audit purposes during Vitesse's normal
business hours for the term of this Agreement and during the
period for which Vitesse is required to maintain records as
provided above. Any Gadzoox audit will relate only to records
pertaining to this Agreement.
12.0 DISCLOSURE
12.1 Neither party will in any manner, unless required to comply with
any applicable Federal, State, and local laws, ordinances,
rules, and regulations, advertise, publish, or otherwise
disclose the fact that they have entered this Agreement without
first obtaining the other party's written consent.
13.0 LIMITATION OF LIABILITY
13.1 Neither party shall make a claim against, nor be liable to the
other, for actual damages in excess of the amounts due but not
paid (if any) pursuant to the terms of this Agreement, or for
any consequential, special, incidental or punitive damages,
including, but not limited to lost profit suffered by the other
as a result of its breach.
13.2 If any action in law or in equity is necessary to enforce the
terms of this Agreement, the prevailing party shall be entitled
to the reasonable attorney's fees, costs, and expenses in
addition to any other relief which such prevailing party may be
entitled.
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14.0 MISCELLANEOUS
14.1 Nothing in this Agreement creates any joint venture,
partnership, agency, or other relationship between the parties.
Neither party's personnel shall be considered to be employees of
the other for any purpose.
14.2 Each party shall pay all taxes due in any country as a result of
its furnishing consideration hereunder.
14.3 This Agreement shall be construed in accordance with the laws of
the State of California. If any provisions of this Agreement are
for any reason found by a court of competent jurisdiction to be
unenforceable, the remainder of this Agreement shall continue in
full force and effect. Both parties expressly waive any right
they may have to a jury trial as to any matter arising under
this Agreement.
14.4 This Agreement constitutes the full and complete understanding
and agreement of the parties hereto and supersedes all prior
understandings and agreements. Any waiver, modification, or
amendment of the provision of this Agreement shall be effective
only in writing and signed by the parties hereto.
IN WITNESS WHEREOF, the parties have signed this Agreement on the dates
indicated below:
Accepted and Agreed: Accepted and Agreed:
VITESSE SEMICONDUCTOR CORPORATION GADZOOX MICROSYSTEMS, INC.
BY: /s/ Xxxxxxx Xxxxxxxxxx BY: /s/ Xxxxxxxx Xxxxx
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Authorized Signature Authorized Signature
PRINT NAME: Xxxxxxx Xxxxxxxxxx PRINT NAME: Xxxxxxxx Xxxxx
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TITLE: Vice President and General Manager TITLE: President
DATE: July 17, 1995 DATE: 7/20/95
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