1
CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT 10.15
CHIP MANUFACTURING AGREEMENT
This Chip Manufacturing Agreement ("Agreement") is entered into effective as of
November 12, 1998 (the "Effective Date"), by and between Jaycor Networks, Inc.,
a Delaware corporation, having a place of business at 0000 Xxxxx Xxxxxx Xxxxx,
Xxx Xxxxx, XX 00000 ("Purchaser"), and Adaptec, Inc., a Delaware corporation
having a place of business at 000 X. Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, XX 00000
("Adaptec").
RECITALS
A. On November 12, 1998, Purchaser and Adaptec are entering into a certain
Asset Acquisition Agreement under which Purchaser shall acquire certain assets
of Adaptec, including intellectual property and technology related to certain
fibre channel chip and board level products.
B. During a transition period not to exceed the lifetime of certain fibre
channel chip products transferred to Purchaser under the Asset Acquisition
Agreement and in no event not more than two years, Purchaser desires for Adaptec
to perform certain manufacturing services, including purchasing, assembly and
manufacture, testing, and packaging of such fibre channel chip products, and to
sell and ship such products to Purchaser, and Adaptec is willing to perform such
services.
C. The parties desire to define the general terms and conditions governing
Adaptec's manufacture of such products, and the purchase and sale of such
products, all as further set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants and agreements set forth in this Agreement, the parties agree as
follows:
AGREEMENT
1. DEFINITIONS
1.1 "Confidential Information" shall have the meaning set forth in
the Mutual Confidential Disclosure Agreement, dated September 2, 1998, executed
between the parties ("MNDA"), attached hereto as Exhibit C, and shall include
the terms and conditions of this Agreement, which shall constitute confidential
information of both parties.
1.2 "Deliver, Delivered or Delivery" means the delivery of the
Products ordered pursuant to a particular Purchase Order to the Delivery Point
for shipment in accordance with Purchaser's instructions.
2
1.3 "Delivery Point" means the San Francisco Bay Area.
1.4 "Lead Time" means 1) the minimum amount of time prior to the
requested Delivery of each respective Product that Adaptec must receive a
Purchase Order for the Product, and 2) the maximum amount of time that Adaptec
has after receiving a Purchase Order before Adaptec must Deliver the ordered
Product, as specified in Exhibit A.
1.5 "Packaging Specification" means Adaptec's standard packaging
process and format for each respective Product as set forth in Adaptec's
applicable standard assembly specification as may be amended from time to time
by Adaptec, including without limitation the use and placement of Adaptec
stickers and logos on such packaging.
1.6 "Price" means the price for each respective Product, initially
as set forth in Exhibit A and Section 4, as may be adjusted from time to time in
accordance with Section 4.
1.7 "Product" means a fibre channel chip level product to be
manufactured and sold by Adaptec hereunder, as set forth in Exhibit A.
1.8 "Purchase Orders" means written or electronically transmitted
purchase orders to Adaptec for the Products, including the description of the
Product, quantity, Delivery Point, requested Delivery date, shipping destination
and other relevant information relating to the order and shipment.
1.9 "Purchaser Documentation" means the documentation to be
provided to Adaptec by Purchaser for each respective Product, including mask
sets and the items listed on Exhibit B.
1.10 "Purchaser Technology" means technical information specific to
the Products, including Product design documentation (including Purchaser
Documentation) and test data.
1.11 "Quarterly Review Meeting" shall mean a meeting scheduled by
Purchaser between Purchaser and Adaptec for the purpose of reviewing production,
forecasts, pricing, and related matters.
1.12 "Services" means the manufacturing services performed by
Adaptec hereunder, including purchasing, assembly and manufacture, testing,
packaging and shipping.
1.13 "Specifications" means the respective specifications for each
Product, as agreed in writing by the parties.
1.14 "Final Test Program" means the wafer sort and final testing
process and criteria, including the quality assurance program, with respect to
each Product to determine whether such Product meets the Specifications.
2
3
1.15 "Inventory" means Adaptec's inventory of components for
Products, partially completed Products, and completed Products consistent with
Purchaser's outstanding Purchase Orders.
1.16 "Standard Cost" means the standard cost of a component or
Product, as set forth in Adaptec's SAP system, plus the cost of freight,
clearance and duties between Singapore and Milpitas.
1.17 "Minimum Lot Size" means the minimum quantity of each type of
Product that may be manufactured at one time, as specified in Exhibit A.
2. TERM OF AGREEMENT
The term of this Agreement ("Term") shall commence on the Effective Date
and shall continue until the end of life of the longest surviving Products,
subject to earlier termination as provided in Section 16.
3. MANUFACTURE OF PRODUCTS
3.1 Manufacture of Products. During the Term, Adaptec shall use
reasonable commercial efforts to manufacture the Products in accordance with the
terms of this Agreement. Adaptec will commence performance of the Services with
respect to a Product upon receipt of a Purchase Order therefor. Adaptec may, at
its sole discretion, allocate production and delivery among Adaptec's customers.
3.2 Provision of Purchaser Documentation and Purchaser Technology.
As soon as required after the Effective Date, Purchaser will deliver to Adaptec
the Purchaser Documentation. Subject to the terms and conditions of this
Agreement, Purchaser grants to Adaptec and its subcontractors, during the Term
of this Agreement, a non-exclusive, non-transferable license to use the
Purchaser Technology solely to perform the Services.
3.3 Packaging. Adaptec will package each Product substantially in
accordance with the applicable Packaging Specification.
3.4 Meetings. Purchaser shall be responsible for scheduling the
Quarterly Review Meeting and for preparing the agenda for discussion. Each party
shall use reasonable efforts to have appropriate personnel attend such meetings
in order to conduct a thorough operations review in accordance with the agenda.
3.5 Contractors. Adaptec may retain third parties ("Contractors")
and subsidiary companies ("Subsidiaries ") to furnish services to it in
connection with the performance of its obligations hereunder and permit such
Contractors and Subsidiaries to have
3
4
access to Purchaser's Confidential Information, but only to the extent and
insofar as reasonably required in connection with the performance of Adaptec's
obligations under this Agreement; provided that all such Contractors and
Subsidiaries shall be required by Adaptec to execute a written agreement (a)
sufficient to secure compliance by such Contractors and Subsidiaries with
Adaptec's obligations of confidentiality concerning Confidential Information set
forth in Section 17; (b) acknowledging the Contractor's or Subsidiary's
obligation to assign all work product in connection with performance hereunder;
and (c) effecting assignments of all Intellectual Property Rights concerning any
Purchaser Technology to Purchaser. Purchaser, upon request, may review such
agreements at any time before or after execution by such Contractors and
Subsidiaries to ensure compliance with this Agreement.
4. PRICING
Subject to the terms and conditions of this Agreement, Adaptec agrees to
sell the Products at the respective Prices set forth on Exhibit A. Any Price
which is not set forth on Exhibit A initially will be set at the *
.
All Prices shall be reviewed at the Quarterly Review Meeting, and shall be
adjusted including for variations in the yield of each Product such that they
are approximately equivalent to *
. Unless otherwise agreed to in writing by Adaptec, all Prices are
exclusive of transportation and insurance costs, and all taxes, duties and
assessments (except taxes levied against Adaptec's income), including state and
local use, sales property and similar taxes. Purchaser agrees to pay such taxes
unless Purchaser has provided Adaptec with (i) an exemption resale certificate
in the appropriate form for the jurisdiction of Purchaser's place of business
and any jurisdiction to which Product is to be directly shipped hereunder, or
(ii) written evidence that such sale is otherwise exempt from such taxes. Where
applicable, transportation and taxes shall appear as separate items on Adaptec's
invoice.
5. FORECASTS, ORDERING & ADJUSTMENTS
5.1 Forecasts. Purchaser will provide Adaptec, on the Effective
Date, and thereafter on the first day of each calendar month, a forecast of
Purchaser's quantity requirements for each Product for each of the next twelve
(12) months. While such forecasts will not be regarded as a commitment to
purchase, they shall represent and reflect Purchaser's good faith expectations
of customer demand. Purchaser acknowledges that forecasts will be used by
Adaptec for material and manufacturing planning purposes.
5.2 Purchase Orders. On the first day of each calendar month,
Purchaser shall issue a Purchase Order to Adaptec to initiate the performance of
Services with respect to the Products. Each Purchase Order will be issued by
Purchaser in accordance with the applicable Lead Time(s) to allow Delivery
during the Term and, together with previously issued Purchase Orders, shall
cover the ordering of Products to be delivered during *
. Quantities specified in each Purchase Order shall be at least the
Minimum Lot Size for each Product ordered. Adaptec shall use reasonable efforts
to acknowledge the Purchase Order
4
* "Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission."
5
and to confirm the scheduled Delivery Date within forty-eight (48) hours. No
Purchase Order shall be binding until accepted by Adaptec.
5.3 No Cancellation. Purchaser may not cancel any Products ordered
or on order for Delivery. Upon Purchaser's request, Adaptec will use reasonable
efforts to reschedule Products scheduled for Delivery within the three (3) month
window of Section 5.2, and to revise applicable shipping instructions. However,
such adjustment may be subject to additional costs or charges and may not be
feasible for short time frames.
5.4 Agreement Controls. Except for the Products, quantities and
other matters necessary to be specified by a Purchase Order, to the extent
accepted by Adaptec, the terms governing the manufacture, delivery, acceptance
and payment for the Products will be governed by the terms and conditions of
this Agreement. In the case of conflict between this Agreement and any Purchase
Order, invoice, acknowledgment or similar document, the terms of this Agreement
will prevail. Any remedies at law or equity not specifically disclaimed or
modified by this Agreement remain available to both parties.
5.5 End Of Life. In the event Purchaser forecasts purchases of
less than 3,000 units of Products during any six (6) month period occurring
after the first twelve (12) months of the Term, the parties will negotiate with
respect to appropriate procedures and timing to discontinue manufacture of the
Products and, absent special circumstances, will proceed to implement such end
of life procedures.
6. DELIVERY, CARRIER & RISK OF LOSS
6.1 Delivery of Product; Risk of Loss. All Products purchased
hereunder shall be Delivered F.O.B. Adaptec's dock or facility in the San
Francisco Bay Area, and title and risk of loss or damage to the Products will
pass to Purchaser at such Delivery Point. All quoted Delivery dates are
estimates only and Adaptec shall not be liable for any failure to meet a quoted
Delivery date. Notwithstanding the foregoing, Adaptec will make reasonable
commercial efforts to meet approved Delivery dates.
6.2 Shipment. Unless otherwise agreed by the parties, shipment
costs from San Francisco and Milpitas to destinations within the United States
shall be freight collect. The carrier will be selected by Adaptec. In no event
shall Adaptec be liable for any delay in delivery, or assume any liability in
connection with shipment, nor shall the carrier be deemed an agent of Adaptec.
All claims for damages must be filed with the carrier. Shipments may be made in
installments. Unless otherwise agreed in writing or as set forth in the
Packaging Specification, all Products will be packed and shipped in accordance
with Adaptec's normal practices.
7. PAYMENTS
Upon Delivery of the Products, Adaptec will send an invoice to Purchaser
identifying the Purchase Order and confirming the quantity and description of
all Products that have been
5
6
shipped. Purchaser will pay invoices for Products, or such other invoices as are
issued under this Agreement, within thirty (30) days of receipt. Payment of
invoices shall be made to Adaptec as Adaptec may direct in its invoice (or
otherwise in writing). Payment does not constitute final acceptance of the
Products and is subject to adjustments for errors, shortages and defects.
Shipments, deliveries, and performance of the Services shall at all times be
subject to the approval of Adaptec's credit department and Adaptec may at any
time decline to make any shipments or deliveries or perform any Services except
upon receipt of payment, or upon terms and conditions or security satisfactory
to Adaptec. If shipments are delayed by Purchaser, payment shall become due, at
Adaptec's option, thirty (30) days after the date Adaptec is prepared to make
shipment.
8. QUALITY AND INSPECTION
8.1 Process and Quality. Adaptec will manufacture the Products in
accordance with its general process and quality procedures.
8.2 Yield Improvement. Adaptec will use reasonable commercial
efforts to improve Product yield, but shall not be liable for Product yield
except as provided in Sections 9 and 10.
8.3 Adaptec Testing. Adaptec shall fully test all Products
Delivered hereunder in accordance with the applicable Final Test Program. From
time to time, Purchaser may request that Adaptec supply modifications to the
Final Test Program in order to address the requirements of Purchaser's
customers. Adaptec shall develop such modifications as directed in writing by
Purchaser, but any additional efforts or costs to Adaptec resulting from the
development or use of such modifications shall be charged to Purchaser at
Adaptec's standard time and materials rates, and shall be paid for as provided
in Section 7.
8.4 Design Faults. In the event the Product does not pass the
Final Test Program due to a design-related error in the Product or an error in
the Final Test Program, Adaptec shall so notify Purchaser. Such Products shall
be deemed to conform to the Specifications and other requirements of this
Agreement, and may not be rejected by Purchaser.
8.5 Failure Analysis. Upon Purchaser's request, Adaptec shall
provide a time and materials estimate for the performance of failure analysis on
defective Products supplied by Purchaser. Upon Purchaser's acceptance of
Adaptec's estimate and Adaptec's completion of the failure analysis, Adaptec
shall provide to Purchaser appropriate failure analysis data indicating the
defect or failure mode of the defective Products. Adaptec shall invoice
Purchaser for the actual time and materials required for such failure analysis
in accordance with Section 7 unless the cause of failure constitutes a breach of
the warranty in Section 10.1, in which case Adaptec shall pay for the costs of
the failure analysis.
8.6 Reliability Analysis. Upon Purchaser's request, Adaptec shall
provide a time and materials estimate for the performance of reliability testing
on Products supplied by
6
7
Purchaser. Upon Purchaser's acceptance of Adaptec's estimate and Adaptec's
completion of the reliability testing, Adaptec shall provide to Purchaser
appropriate reliability data indicating the reliability of the tested Products.
Adaptec shall invoice Purchaser for the actual time and materials required for
such reliability testing in accordance with Section 7.
8.7 Increased Capacity Requirements. In the event Purchaser's
Purchase Orders for Products exceed * , it may be
necessary for Adaptec to add additional test capacity. In such event, Adaptec
will invoice Purchaser for the actual time and materials required to provide
such additional test capacity in accordance with Section 7.
9. ACCEPTANCE AND REJECTION OF PRODUCTS
Any Product Delivered hereunder shall be deemed accepted by Purchaser
unless Adaptec receives written notice of a defect or non-conformity with
respect to such Product within thirty (30) days of shipment to Purchaser or its
Customer. In the event a Product appears not to conform to the Specifications,
Purchaser shall promptly notify Adaptec and afford Adaptec a reasonable
opportunity to inspect such Product. No Product shall be returned to Adaptec
without compliance with Adaptec's Return Material Authorization ("RMA")
procedures.
10. WARRANTY
10.1 Materials and Workmanship. Adaptec warrants that the Products
purchased and Delivered hereunder will, for a period of one (1) year ("Warranty
Period"), commencing on the date of Delivery, be free from defects in material
and workmanship and conform to the Specifications. Notwithstanding the
foregoing, the warranty in this Section 10.1 will not extend to defects
attributable to the Product design or defects arising from compliance with the
Specifications or defects in the Final Test Program.
10.2 Warranty Remedy. If any Product is found to breach the
warranty specified in Section 10.1 during the Warranty Period, Purchaser may
send a notice to Adaptec informing it of the breach of warranty. If the failure
occurs during the Term, the Products shall be returned to Adaptec and Adaptec
shall, at Adaptec's expense, (i) promptly replace such defective Products, and
return the replaced units to Purchaser, or (ii) if not commercially feasible to
replace such defective Products, then refund the actual purchase price paid by
Purchaser for such defective Products. If the failure occurs during the Warranty
Period, but after the Term, the defective Products shall be returned to Adaptec
and Adaptec shall reimburse Purchaser for the lesser of its actual cost of
replacement of such defective Product and the actual purchase price paid by
Purchaser for such defective Product. Subject to confirmation of a defect,
Adaptec will make payment of any refund or reimbursement within thirty (30) days
of receipt of the Product and, as applicable, documentation of Purchaser's
actual cost of replacement.
10.3 RMA Procedures. All returns of the Products made by Purchaser
shall comply with the RMA Specification then in effect, a current version of
which is attached hereto as Exhibit D.
7
* "Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission."
8
10.4 No Liability. Adaptec shall have no liability or obligation to
Purchaser under this Section 10 with respect to any Products which have been
subjected to abuse, misuse, improper use, negligence, accident, alteration,
repair or rework performed by unauthorized parties.
10.5 Disclaimer of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN
SECTION 10.1, THE PRODUCTS ARE PROVIDED "AS IS" AND ADAPTEC 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.
11. PRODUCT CHANGES
11.1 On Adaptec's Notice. In no event shall Adaptec make any
modification to the Products without Purchaser's prior written approval, which
shall not unreasonably be withheld or delayed.
11.2 At Purchaser's Request. Should Purchaser desire modifications
in the Product which do not affect form, fit or function of the Product,
Purchaser shall submit its request to Adaptec in writing, and Adaptec shall use
reasonable commercial efforts to respond to such request in writing within five
(5) business days, setting forth the impact of such proposed change on the
performance of the Services and the Price of the Products. Any change affecting
safety or necessary for proper functioning of the Products will be implemented
by Adaptec as soon as possible. Unless the parties agree otherwise, requested
changes will not affect the Products already scheduled or rescheduled for
Delivery as of the date such request is received by Adaptec. Purchaser shall be
responsible for payment for any inventory which is made obsolete, any yield loss
as a consequence of the implementation of the change, and all additional
services provided by Adaptec to implement such changes.
11.3 Change Management. All changes to a Product shall be subject
to Adaptec's standard change management procedure.
12. TRADEMARK LICENSE
12.1 Trademark License. Subject to the terms and conditions of this
Agreement, Adaptec hereby grants to Purchaser and Purchaser accepts a worldwide,
nontransferable, fully-paid and royalty-free right and license to use the
Adaptec PCI ID and the Adaptec: trademarks "AIC", "Adaptec" and the Adaptec
stylized "a" logotype (the "Adaptec Marks") solely as affixed or incorporated by
Adaptec into Products and on corresponding packaging supplied by Adaptec to
Purchaser hereunder. Purchaser acknowledges and agrees that Adaptec owns and
will continue to own all right, title and interest in and to the Adaptec Marks
and any and all goodwill therein and thereto, whether arising as a result of
Purchaser's use of the
8
9
Adaptec Marks or otherwise. Purchaser hereby assigns and, if and as Adaptec may
request in the future, agrees to assign and affirm assignment to Adaptec of all
such right, title and interest in the Adaptec Marks and related goodwill. If
requested by Adaptec, Purchaser will cooperate with Adaptec in securing any
trademark registrations and other indicia of ownership for which Purchaser's
cooperation is required as a matter of applicable local law as a result of
Purchaser's use of the Adaptec Marks. Purchaser agrees to use the Adaptec Marks
only in the exact manner of use by Adaptec.
12.2 Private Labeling. If Purchaser repackages Products received
from Adaptec, Purchaser agrees to repackage in packaging using Purchaser's
marks. Purchaser further agrees to use commercially reasonable efforts to cease
all use of the Adaptec Marks as soon as feasible.
13. OWNERSHIP OF PURCHASER TECHNOLOGY
Purchaser owns the Purchaser Technology. Notwithstanding the foregoing,
Purchaser is aware that Adaptec is in the business of developing and
manufacturing products similar to the Products, and intends to continue to
manufacture the same in the future. Nothing in this Agreement shall limit the
ability of Adaptec to produce products or portions of products which are similar
to the Products for customers other than Purchaser, either during the term of
this Agreement or after its termination, provided that in doing so., Adaptec
does not (a) infringe Purchaser's intellectual property rights, (b) use
Purchaser Technology or Purchaser Confidential Information, or (c) breach the
terms of the Asset Acquisition Agreement or Cross-License Agreement entered into
contemporaneously herewith.
14. PROPRIETARY RIGHTS INDEMNITY
14.1 Adaptec Indemnity. Adaptec shall, at its expense and at
Purchaser's request, defend any claim or action brought against Purchaser, and
Purchaser's subsidiaries, affiliates, directors, officers, employees, agents and
independent contractors, to the extent it is based on a claim that the
manufacturing process for the Products infringes any patent, copyright, mask
work right or other intellectual property right, or misappropriates any trade
secret, of a third party ("Claim"). Adaptec, shall pay all costs of defense and
settlement, together with any judgment which may be finally awarded; provided:
(a) Purchaser gives Adaptec reasonably prompt notice in writing of any such
Claim and permits Adaptec, through counsel of its choice, to defend and/or
settle such Claim; and (b) Purchaser provides Adaptec information, assistance
and authority, at Adaptec's expense, to enable Adaptec to defend such Claim.
Adaptec shall not be responsible for any settlement made by Purchaser without
Adaptec's written permission.
14.2 Exceptions. Adaptec will not have liability under this Section
14 to the extent that the Claim results from (a) the use of the Purchaser
Documentation or otherwise from
9
10
the Product design or features; or (b) Purchaser's combination, operation, or
use of the Products with designs, devices, parts, or software not supplied by
Adaptec.
14.3 Purchaser Indemnity. Purchaser shall, at its expense and at
Adaptec's request, defend any claim or action brought against Adaptec, and
Adaptec's subsidiaries, affiliates, directors, officers, employees, agents and
independent contractors, to the extent it is based on a claim that the Purchaser
Documentation, the Product design or any third party intellectual property
incorporated in Product at the direction of Purchaser, infringes any patent,
copyright, mask work right or other intellectual property right, or
misappropriates any trade secret, of a third party ("Claim"). Purchaser shall
pay all costs of defense and settlement, together with any judgment which may be
finally awarded; provided: (a) Adaptec gives Purchaser reasonably prompt notice
in writing of any such suit and permits Purchaser, through counsel of its
choice, to defend and/or settle such Claim; and (b) Adaptec provides Purchaser
information, assistance and authority, at Purchaser's expense, to enable
Purchaser to defend such Claim. Purchaser shall not be responsible for any
settlement made by Adaptec without Purchaser's written permission.
14.4 Exceptions. Purchaser will not have liability under this
Section 14 to the extent that such Claim results from Adaptec's manufacturing
process.
15. GENERAL INDEMNITY
Each party hereto (the "Indemnifying Party") shall, at its own expense,
defend the other party, and its subsidiaries, affiliates, directors, officers,
employees, agents and independent contractors (collectively, the "Indemnified
Party"), from and against any and all loss, cost, liability or expense
(including costs and reasonable fees of attorneys and other professionals)
arising out of or in connection with the negligence of the Indemnifying Party's
agents and employees. Such indemnity shall include claims brought with respect
to the defective design of the Product for which Purchaser shall be the
indemnifying party. The Indemnifying Party shall pay all costs of defense and
settlement, together with any judgment which may be finally awarded; provided:
(a) the Indemnified Party gives the Indemnifying Party reasonably prompt notice
in writing of any such suit and permits the Indemnifying Party, through counsel
of its choice, to defend and/or settle such Claim; and (b) the Indemnified Party
provides the Indemnifying Party information, assistance and authority, at the
Indemnifying Party's expense, to enable the Indemnifying Party to defend such
Claim. The Indemnifying Party shall not be responsible for any settlement made
by the Indemnified Party without the Indemnifying Party's written permission.
16. TERMINATION
16.1 Termination Without Cause. Purchaser may, for any reason or
for no reason whatsoever, terminate this Agreement, in whole, or in part, upon
two (2) months advance notice to Adaptec.
10
11
16.2 Effect Of Termination Without Cause. In the event Purchaser
terminates this Agreement pursuant to Section 16.1, Purchaser shall pay to
Adaptec all amounts due to Adaptec, including, 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. Adaptec shall promptly
invoice such amounts after the effective date of termination, and payment shall
be made within thirty (30) days of the invoice date.
16.3 Termination For Default. Either party may suspend its
performance and/or terminate this Agreement immediately upon written notice at
any time if:
(a) 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;
(b) The other party is in material breach of any warranty,
term, condition or covenant of Section 17; or
(c) 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.
16.4 Effect of Termination in General. The following terms apply to
any termination under this Agreement, including without limitation, termination
for convenience and for default:
(a) Immediately upon any termination of this Agreement,
Adaptec shall, to the extent and at times specified by Purchaser, stop all work
on outstanding Purchase Orders, incur no further direct cost, and protect all
property in which Purchaser has or may acquire an interest pursuant to this
Section 16.
(b) 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 Adaptec shall immediately deliver
to Purchaser any and all Purchaser Technology, Inventory or other property of
the Purchaser within Adaptec's possession or control. Such items shall be
delivered FOB the Adaptec facility at which they are located (i.e., Singapore or
Milpitas). Notwithstanding the foregoing, Adaptec shall have no obligation to
deliver any Inventory until and unless Purchaser has paid in full all amounts
due to Adaptec.
11
12
(d) If this Agreement is terminated by Adaptec pursuant to
Section 16.3, then Purchaser shall immediately pay to Adaptec all amounts due to
Adaptec, including the full purchase price for all outstanding Purchase Orders.
(e) Notwithstanding any termination of this Agreement, the
provisions of Section 7, 9, 10, 12, 13, 14, 15, 17, 18 and the relevant sections
of Sections 16 and 19 shall remain in effect.
17. CONFIDENTIALITY
Each party will protect the other's Confidential Information in accordance
with the terms of the MNDA. Notwithstanding the terms of the MNDA, Purchaser may
disclose the terms and conditions of this Agreement to investors and potential
investors, subject to such parties' agreement to maintain such terms and
conditions in confidence.
18. LIMITATION OF LIABILITY
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, AND EXCEPT AS SET FORTH IN
SECTIONS 14 AND 15, 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.
19. GENERAL
19.1 Notice. Any notice shall be considered given if delivered
personally or if sent by either party to the other by prepaid Federal Express,
registered or certified mail, or by telefax (followed by a confirming hard copy)
addressed to the address specified below, or to such other address as the party
provides by written notice:
If to Adaptec:
Adaptec, Inc.
000 X. Xxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Vice President, Operations
cc: General Counsel
12
13
If to Purchaser:
Jaycor Networks, Inc.
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Attention: President
19.2 Assignment. Neither party shall assign any of its rights or
privileges hereunder without the prior written consent of the other party;
provided, however, that Adaptec may subcontract the performance of any or all of
the Services without Purchaser's consent, subject to provision of written notice
to Purchaser identifying such subcontractor. Any attempt at assignment in
derogation of the foregoing shall be null and void. Subject to the foregoing,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto, their subsidiaries, and their respective successors and assigns.
19.3 Allocation of Risk. The parties acknowledge and affirm that
the sections on limitation of liability, warranties and disclaimer of warranties
and damage limitation in this Agreement allocate the risks between the parties.
This allocation is reflected in the pricing of the Products and is an essential
element of the basis of the bargain between the parties.
19.4 Export Control.
(a) Representation. Purchaser agrees to comply strictly and
fully with all export controls imposed on the Products by any country or
organization in whose jurisdiction Purchaser operates or does business.
Purchaser will not knowingly, export or reexport any Product to any country
prohibited under United States Export Administration Regulations, without first
obtaining a valid license to so export or reexport the Products.
(b) Responsibility. All export permits, import certificates,
insurance, duty, customs clearance charges and/or licenses and related costs
will be Purchaser's responsibility.
19.5 Waiver. No failure or delay on the part of either party in the
exercise of any right or privilege hereunder shall operate as a waiver thereof
or as a waiver of the exercise of any other right or privilege hereunder, nor
shall any single or partial exercise of any such right or privilege preclude
other or further exercise thereof or of any other right or privilege.
19.6 Governing Law; Attorneys' Fees. This Agreement shall be
governed by and enforced in accordance with California law as applied to
contracts entered into in California by California residents to be performed
entirely within the State of California. In the event either party is required
to seek legal recourse to enforce its rights hereunder, the prevailing party
shall be
13
14
entitled to receive, in addition to any other award, all costs in connection
therewith, including reasonable attorneys' fees.
19.7 Titles. Any titles included herein are for convenience only
and are not to be used in the interpretation of this Agreement.
19.8 Severability. If any provision of this Agreement is held to be
ineffective, unenforceable or illegal for any reason, such provision partially
will be enforced to the maximum extent permitted by law, and the remainder of
this Agreement will remain in full force and effect.
19.9 Force Majeure. Neither of the parties shall be deemed to be in
default of this Agreement to the extent any failure to perform hereunder is a
result of conditions beyond the other party's reasonable control, 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), and neither party shall
have the right to terminate this Agreement for any such delay or default on the
part of the other party.
19.11 Integration. This Agreement and its Exhibits embodies the
entire understanding of the parties and supersedes any prior agreements,
representations or understandings between the parties as it relates to the
subject matter hereof. No amendment or modification of this Agreement shall be
valid or binding unless in writing and signed by duly authorized representatives
of each party.
19.12 Publicity. Except as required by law, neither party will
disclose the terms of this Agreement to any third party without the express
written consent of the other, which consent shall not unreasonably be withheld
or delayed.
19.13 Relationship. The parties are independent contractors. Nothing
contained herein and no action taken pursuant hereto shall constitute the
parties as joint ventures or the agents of the other party for any purpose or in
any sense whatsoever.
19.14 Counterparts. This Agreement may be executed in counterparts,
each of which constitutes an original, and together which constitute the
Agreement.
14
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the Effective Date.
JAYCOR NETWORKS, INC ADAPTEC, INC.
("Purchaser") ("Adaptec")
By: /s/ XXXXX X. XXXXXXXX By: /s/ XXXXX XXXXXXX
------------------------------- -----------------------------------
Name: Name:
----------------------------- ---------------------------------
Title: Title:
---------------------------- --------------------------------
15
16
EXHIBIT A
Products, Prices, Lead Times & Minimum Lot Sizes
Lead Time: * .
Minimum Lot Size: *
PRODUCT PART NUMBER PRICE
------- ----------- -----
INTEGRATED CIRCUITS:
* * *
* * *
16
* "Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission."
17
EXHIBIT B
Purchaser Documentation
Masks for the Product, embodying the following registered Mask Works:
Part number: 736711
Description: AIC-110AG (PT1) TSMC 2B
Mask Number: 7367001001111110
Effective Date of Registration: *
Part Number: 739911
Description: AIC-1160AG (PT2) TSMC 2B (G388)
Effective Date of Registration: *
Technology Deliverables:
-design database, simulation files, and test vectors located at
directories:
*
-layout database and bonding diagrams
(archived magnetic tape prepared at time tape was sent for mask
preparation)
17
* "Confidential portion has been omitted and filed separately with the
Securities and Exchange Commission."
18
EXHIBIT C
Master Mutual Non-Disclosure Agreement
18
19
MUTUAL CONFIDENTIAL DISCLOSURE AGREEMENT
Agreement dated Sept 2, 1998, between Jaycor Networks, Inc. ("Jaycor")
and Adaptec, Inc., ("Adaptec")
1. Background. Jaycor and Adaptec intend to engage in discussions
and negotiations concerning a possible business transaction between the parties.
In the course of such discussions and negotiations, it is anticipated that each
party may disclose or deliver to the other certain trade secrets or confidential
or proprietary information for the purpose of enabling the parties, and their
respective employees, officers, directors, agents and advisors (collectively,
"Representatives"), to evaluate the feasibility of such business transaction.
Jaycor and Adaptec have entered into this Agreement in order to assure the
confidentiality of such trade secrets and confidential or proprietary
information in accordance with the terms of this Agreement.
2. Proprietary Information. As used in this Agreement, the term
"Proprietary Information" shall mean all trade secrets or confidential or
proprietary information designated as such in writing by a disclosing party,
whether by letter or by the use of an appropriate proprietary stamp or legend,
prior to or at the time any such trade secret or confidential or proprietary
information is disclosed to the receiving party. Notwithstanding the foregoing,
information which is orally or visually disclosed by one party to the other, or
is disclosed in writing without an appropriate letter, proprietary stamp or
legend, shall constitute Proprietary Information if (i) it would be apparent to
a reasonable person, familiar with the disclosing party's business and the
industry in which it operates, that such information is of a confidential or
proprietary nature the maintenance of which is important to the disclosing party
or if (ii) a disclosing party, within thirty (30) days after such disclosure,
delivers to the receiving party a written document or documents describing such
information and referencing the place and date of such oral, visual or written
disclosure and the names of the Representatives of the receiving party to whom
such disclosure was made.
3. Disclosure Of Proprietary Information, The receiving party shall
hold in confidence, and shall not disclose (or permit or suffer disclosure) to
any person other than its Representatives, any Proprietary Information of the
disclosing party. The receiving party and its Representatives shall use such
Proprietary Information only for the purpose for which it was disclosed and
shall not use or exploit such Proprietary Information for its own benefit or the
benefit of another without the prior written consent of the disclosing party.
Without limitation of the foregoing, each party shall not cause or permit
reverse engineering of the other party's Proprietary Information or
decompilation or disassembly of any software programs which are part of the
Proprietary Information. The receiving party shall disclose Proprietary
Information received by it under this Agreement only to Representatives who have
a need to know such Proprietary Information in the course of the performance of
their duties in connection with the transaction contemplated by this Agreement,
and who are bound to protect the confidentiality of such Proprietary
Information. The receiving party will promptly report to the disclosing party
any actual or suspected violation of the terms of this Agreement and will take
all reasonable further steps requested by the disclosing party to prevent,
control of remedy any such violation.
-1-
20
4. Limitation on Obligations. The obligations of the receiving
party specified in Section 3 above shall not apply, and the receiving party
shall have no further obligations, with respect to any Proprietary Information
to the extent the receiving party can demonstrate that such Proprietary
Information:
(a) is generally known to the public at the time of
disclosure or becomes generally known through no wrongful act on the part of the
receiving party;
(b) is in the receiving party's possession at the time of
disclosure;
(c) becomes known to the receiving party through disclosure
by sources other than the disclosing party having the legal right to disclose
such Proprietary Information;
(d) is independently developed by the receiving party
without reference to or reliance upon the Proprietary Information; or
(e) is required to be disclosed by the receiving party to
comply with applicable laws or governmental regulations, provided that the
receiving party provides prior written notice of such disclosure to the
disclosing party and takes reasonable and lawful actions to avoid and/or
minimize the extent of such disclosure.
5. Ownership of Proprietary Information. The parties agree that the
disclosing party is and shall remain the exclusive owner of the Proprietary
Information and all patent, copyright, trade secret, trademark and other
intellectual property rights therein. No license or conveyance of any such
rights to the receiving party by the disclosing party is granted or implied
under this Agreement.
6. Return of Documents. The receiving party shall, upon the
termination of this Agreement or the request of the disclosing party, return to
the disclosing party all drawings, documents and other tangible manifestations
of Proprietary Information received by the receiving party pursuant to this
Agreement (and all copies and reproductions thereof).
7. Miscellaneous
(a) This Agreement supersedes all prior agreements, written
or oral, between Jaycor and Adaptec relating to the subject matter of this
Agreement. This Agreement may not be modified, amended or discharged, in whole
or in part, except by an agreement in writing signed by the parties.
(b) This Agreement will be binding upon and inure to the
benefit of the parties hereto and their respective heirs, successors and
assigns.
(c) This Agreement shall be construed and interpreted in
accordance with the laws of the State of California, without reference to any
conflicts of laws rules. In the event of
-2-
21
any dispute arising out of this Agreement, the prevailing party shall be
entitled to an award of its costs and attorneys' fees.
(d) The parties agree that any breach of this Agreement will
cause substantial and irreparable damages and, therefore, in the event of any
such breach, in addition to other remedies which may be available, and the
injured party shall have the right to seek specific performance and other
injunctive and equitable relief.
EXECUTED as of the day and year first set forth above.
Jaycor Networks, Inc. Adaptec, Inc.
By: /s/ XXXXX X. XXXXXXXX By: /s/ XXXXXX XXXXXX
------------------------------- -------------------------------------
Title: President & CEO Title: VP Adaptec, Inc
------------------------- ----------------------------------
-3-
22
EXHIBIT D
RMA Procedure
[ADAPTEC LOGO] FACSIMILE TRANSMISSION
--------------------------------------------------------------------------------
TO:
COMPANY
FAX:
DATE: November 24, 1998
FROM: Xxxxx Xxxxxx
FAX# (000) 000-0000
SUBJECT: RETURN AUTHORIZATION
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FYI RESPONSE TO YOUR FAX CONTROL # RESPONSE RQRD
URGENT X RESPONSE TO YOUR REQUEST X RESPOND BY
--------------------------------------------------------------------------------
19
Initials____
23
[ADAPTEC LOGO]
OEM RMA REQUEST INFORMATION
THE FOLLOWING INFORMATION AND PROCEDURES ARE REQUIRED WHEN REQUESTING A RETURN
MATERIAL AUTHORIZATION (RMA) NUMBER.
A. Submit RMA requests via Fax to the following number:
Fax Number: 000-000-0000
RMA Customer Service Representatives:
Xxxxxxx Xxxxxx
Xxxxx Xxxxxx
B. Provide the following information with your request:
1. Full company name and ship to address.
2. Contact person with phone & Fax number.
3. Quantity returning, model number and Adaptec six digit part
number located component side up, on an white label affixed to a
surface mounted IC. The bar-coded serial number, is located on
the backside of the product.
EXAMPLE: QTY. 2
AHA-1542CF SINGLE = ADAPTEC MODEL NUMBER
571600 = ADAPTEC SIX DIGIT PART NUMBER
9352 = ADAPTEC FOUR DIGITAL DATE CODE
4. Your part number if applicable.
5. P.O. number or debit memo number if applicable.
6. Any special instructions or requirements.
20
Initials____
24
7. MINIMUM RETURN QUANTITY OF 10 PRODUCTS PER RMA REQUEST ONCE A
MONTH. IF QUANTITY IS LESS THAN 10 PRODUCTS PER REQUEST, THAN A
RMA CAN BE ISSUED TWICE A MONTH.
C. UPON RECEIPT OF THE ABOVE INFORMATION, WARRANTY STATUS WILL BE
DETERMINED, AND A CONFIRMATION LETTER WITH THE RMA NUMBER WILL BE FAXED
TO YOU WITHIN 48 HOURS.
D. Place products in individual anti-static bags, and package utilizing
proper packing insulation. If shipping in multiple cartons, boxes should
be numbered; 1 of 3, 2 of 3, etc.
E. Return only products and quantities authorized on request confirmation.
All return shipments will be verified with original return request, and
customer notified of any discrepancies received. For international
customers, provide a pre-alert prior
NOTE: AU INTERNATIONAL CUSTOMERS TO PROVIDE A PRE-ALERT BEFORE
SHIPPING PRODUCTS.
F. ENCLOSE A PACKING SLIP, CLEARLY LABEL EACH BOX WITH THE RMA NUMBER AND
SHIP FREIGHT PRE-PAID. ANY PACKAGE RECEIVED WITHOUT A VALID RMA NUMBER
CLEARLY MARKED ON THE OUTSIDE OF THE BOX WILL BE RETURNED UNOPENED.
G. CUSTOMERS RETURN MATERIALS TO:
ADAPTEC, INC.
ATTN: RECEIVING - M/S 225
000 XXXXX XXXXXXXX XXXX.
XXXXXXXX, XX 00000
ATTN: RMA #RXXXXX
H. Repaired products will be returned freight pre-paid by Adaptec no later
than 15 working days from date of receipt of defective materials.
I. If products are deemed unrepairable due to obsolescence or
unavailability of replacement parts, Adaptec will at their option either
replace products with current equivalent products, or issue credit at
the last listed purchase price.
J. The RMA number will be valid for 30 days from date of issuance and will
be canceled if products are not received in that time frame, unless
customer requests an extension.
21
Initials____
25
NOTE: COMPLIANCE TO ALL OF THE ABOVE INFORMATION WILL INSURE THAT AN RMA
REQUEST IS COMPLETED IN A TIMELY AND EFFICIENT MANNER WITHOUT ANY
UNNECESSARY DELAYS.
[ADAPTEC LOGO]
DEFECTIVE MATERIALS RMA REQUEST
TO: ADAPTEC RMA DEPT. DATE:
FAX #: 000-000-0000 COMPANY NAME:
------------------------------
ATTN: Xxxxx Xxxxxx CONTACT NAME:
------------------------------
Xxxxxxx Xxxxxx FAX # & TELEPHONE#:
------------------------------ CUSTOMER ID#:
------------------------------ SHIP TO ADDRESS:
------------------------------
------------------------------
------------------------------
-----------------------------------------------------------------------------------------------
QTY ADAPTEC MODEL NUMBER ADAPTEC P/N CUSTOMER PIN DATE CODES
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------
22
Initials___
