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Exhibit 10.1
CONFIDENTIAL TREATMENT
REQUESTED PURSUANT TO
RULE 406 FOR SELECTED
PORTIONS OF THIS EXHIBIT
Tera Computer Company
and
Xxxxxx Xxxxxxxxxxx
Date: August 16, 1996
________________
Agreement No.: 0100
_____
Revision: A
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CONTENTS
1. AGREEMENT ....................................................... 1
2. RECITALS ........................................................ 1
3. DEFINITIONS ..................................................... 1
4. EFFECTIVE DATE AND TERM ......................................... 2
4.1 TERM ........................................................ 2
5. PRODUCTS ........................................................ 2
5.1 PRODUCT LIST ................................................ 2
6. SPECIFICATIONS .................................................. 3
7. ORDERS, SHIPPING, & ACCEPTANCE ................................. 3
7.1 PURCHASE ORDERS ............................................. 3
7.2 DELIVERY .................................................... 3
7.3 SHIPPING AND FOB ............................................ 3
7.4 FORECAST .................................................... 4
7.5 LEAD TIME AND SCHEDULING OF SHIPMENTS ....................... 4
7.6 RESCHEDULING OF PURCHASE ORDERS ............................. 4
7.7 CANCELLATION ................................................ 4
7.8 SOURCE INSPECTION, ACCEPTANCE, AND REJECTION ................ 5
7.9 REJECTION ................................................... 5
8. XXXXX, PAYMENT, AND MATERIAL HANDLING ........................... 5
8.1 PROTOTYPE AND NON RECURRING ENGINEERING COSTS ............... 5
8.2 PAYMENT SCHEDULE ............................................ 5
8.3 PRICE SCHEDULE - ASSEMBLY ONLY ............................. 6
8.4 PAYMENT TERMS ............................................... 6
8.5 TERA PROVIDED MATERIAL ...................................... 6
8.6 COST TARGET ................................................. 6
8.7 MAINTAINING RECORDS, ACCESS TO PROPERTIES AND INSPECTIONS ... 6
8.8 SUBCONTRACT MANAGEMENT ...................................... 6
8.9 DISCLOSURE TO SUBCONTRACTORS ................................ 6
8.10 APPROVED SOURCES ........................................... 7
8.11 TAXES ...................................................... 7
8.12 DISCREPANT MATERIAL/ QUALITY ASSURANCE SYSTEM .............. 7
8.13 SERIALIZATION/TRACKING PLAN ................................ 7
9. WARRANTIES AND INDEMNITIES ...................................... 7
9.1 PATENT INDEMNITY ............................................ 7
9.2 BUYER INDEMNITY ............................................. 8
9.3 WARRANTIES .................................................. 8
9.4 WARRANTY EXCLUSIONS ......................................... 8
9.5 DISCLAIMER .................................................. 8
9.6 REMEDY LIMITATION ........................................... 8
9.7 SUPPORT UNDER WARRANTY ...................................... 9
9.8 SELLER RECALLS .............................................. 9
10. LIMITATION OF LIABILITY ........................................ 9
10.1 SELLER LIABILITY LIMITATION ................................ 9
10.2 TERA LIABILITY LIMITATION .................................. 9
10.3 MEDICAL USE EXCLUSION ...................................... 9
10.4 GOVERNMENT CONTRACT CLAUSE ................................. 10
11. PROPRIETARY INFORMATION AND INTELLECTUAL PROPERTY RIGHTS ....... 10
11.1 PROPRIETARY INFORMATION MARKING ............................ 10
11.2 RIGHTS IN PROPRIETARY INFORMATION .......................... 10
11.3 DUTY OF CARE ............................................... 10
11.4 DURATION OF OBLIGATION ..................................... 10
11.5 JUDICIALLY ORDERED DISCLOSURE .............................. 11
11.6 DISPOSITION OF PROPRIETARY INFORMATION ..................... 11
12. TRADEMARKS, TRADE NAMES AND PUBLICITY .......................... 11
12.1 LICENSING LIMITATION ....................................... 11
12.2 PUBLICITY LIMITATION ....................................... 11
13. TERMINATION .................................................... 11
13.1 TERMINATION FOR CAUSE ...................................... 11
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13.2 OUTSTANDING PURCHASE ORDERS AND MATERIAL DISPOSITION ....... 12
13.3 INTELLECTUAL PROPERTY RIGHTS ............................... 12
14. MISCELLANEOUS .................................................. 12
14.1 INSURANCE .................................................. 12
14.2 CHANGES .................................................... 13
14.3 RESPONSIBILITY FOR PROPERTY ................................ 13
14.4 EXPORT REGULATIONS ......................................... 13
14.5 INDEPENDENT CONTRACTOR ..................................... 13
14.6 ACCESS TO SAN DIEGO MANUFACTURING FACILITY ................. 14
14.7 NON INTERFERENCE ........................................... 14
14.8 GOVERNING LAW .............................................. 14
14.9 ASSIGNMENT ................................................. 14
14.10 FORCE MAJEURE ............................................. 14
14.11 PROGRESSIVE DISPUTE NEGOTIATION PROCEDURES ................ 14
14.12 AGENCY PRODUCT SUBMISSIONS ................................ 15
14.13 HEADINGS .................................................. 15
14.14 INQUIRIES ................................................. 15
14.15 NON WAIVER ................................................ 15
14.16 NOTICES ................................................... 16
EXHIBIT "A" PRODUCT SPECIFICATIONS
EXHIBIT "B" PROPERTY LISTING
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1. AGREEMENT
THIS AGREEMENT, effective August 16, 1996, (Effective Date) is made by and
between Tera Computer Company, a Washington Corporation having a place of
business at 0000 Xxxxxxxx Xxxxxx Xxxx, Xxxxxxx, XX, 00000-3027 (hereinafter
Tera), and Xxxxxx Xxxxxxxxxxx, a Delaware Corporation, having a place of
business at 00000 Xxx Xxxxxxxx, Xxx Xxxxx, XX 00000 (hereinafter Unisys).
2. RECITALS
Unisys and Tera entered into an Agreement on December 5, 1995, wherein Unisys is
providing Manufacturing Services to Tera ("hereafter Manufacturing Services
Agreement"); and
Unisys and Tera now wish to replace the Manufacturing Services Agreement with
this Agreement wherein Unisys will provide Assembly and Test Services of
Application Specific Integrated Circuit (ASIC) devices ("hereafter ASIC
Agreement"); and
NOW THEREFORE, in consideration of the premises, and the covenants and promises
of the parties set forth herein, and other good and valuable consideration, the
parties intending to be legally bound, it is agreed as follows:
3. DEFINITIONS
Words shall have their normally accepted meanings as employed in the Agreement.
The terms "herein" and "hereof", unless specifically limited, shall have
reference to the entire Agreement. The word "shall" is mandatory, the word "may"
is permissive, the word "or" is not exclusive, the words "includes" and
"including" are not limiting, and the singular includes the plural unless
otherwise specified. The following terms shall have the described meanings:
3.1 "Assembly" shall mean the process of packaging semiconductor device
Products.
3.2 "Build Package" shall mean a package of data used to manufacture Products
meeting requirements of the Specification and defining the requirements of
Services to be provided by Unisys. The Build Package may include electronic
data, electrical testing requirements, mechanical drawings, component
definition, material definitions, quality requirements, and referenced
specifications, together with such other items as necessary to fully define
Tera's requirements.
3.3 "Delivery Date" shall mean the Product shipping date mutually agreed to and
specified on the Purchase Order or the date that Services or test results are
delivered to Tera.
3.4 "Documentation" shall mean tangible embodiment of Information in eye
readable or machine readable form.
3.5 "Proprietary Information" shall mean information, written, visual, or oral,
or samples of, concerning the disclosing party's current or future products,
business plans, financial information, marketing plans or customer lists, or
other information which is clearly marked as confidential or proprietary,
including but not limited to data, knowledge, know-how, designs, programs
formulas, compilations, and methods, and media embodying same.
3.6 "Manufacturing Process" shall mean the processes by which Unisys can
manufacture Products for Tera.
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3.7 "Product" shall mean certified (see "Product Certification:) Application
Specific Integrated Circuits (ASIC) in packaged unit form, except "Prototypes",
designed by Tera and manufactured by Unisys for Tera.
3.8 "Product Certification" shall mean "Product manufactured using a certified
process, operators and materials.
3.9 "Prototypes" shall mean initial working development units of the "Product"
that conform to the mutually agreed upon prototype specifications.
3.10 "Services" shall mean the fabrication, assembly and test of the "Product".
3.11 "Specification" shall mean mutually agreed upon data in eye readable or
machine readable form that define physical, mechanical and electrical
characteristics and tolerances of the Products, materials, components, or
applicable Manufacturing Processes for Products or to define Services.
3.12 "Subcontractor" shall mean a manufacturer or supplier under contract with a
party to buy from or build and supply materials or services to such party.
3.13 "Tooling" shall mean drawings, materials, or other physical devices
provided by Tera or made in whole or in part by Unisys and used in
manufacturing, shipping, or testing the Products.
3.14 "Unit Price" shall mean the price for each unit of a specified "Product"
identified in Section 5 and 8, and is the price for assembly and test exclusive
of die and packages.
4. EFFECTIVE DATE AND TERM.
4.1 TERM
This Agreement shall commence on August 16, 1996 and shall remain in effect
through July 30, 1997 and shall be renewed automatically for one (1) year terms
thereafter unless expressly terminated in writing by either party with six (6)
months notice prior to the renewal date hereof.
5. PRODUCTS.
5.1 PRODUCT LIST
The Tera Products covered by this agreement include:
PART NAME PART NO. INTERPOSER NO.
--------- -------- --------------
MC 32500000 20004100
MD 32500010 20004120
MN 32500020 20004090
MR 32500030 20004110
RF 32500040 20004130
AM 32500050 20004060
ALB 32500060 20004040
C 32500070 20004070
IST 32500080 20004200
SSW 32500090 20004150
TAG 32500100 20004160
ICACHE 32500110 20004080
ALR 32500120 20004050
AA 32500130 20004030
PART NAME PART NO. INTERPOSER NO.
--------- -------- --------------
IX 32500140 20004000
SNX 32500150 20004140
NM 32500160 20004010
ND 32500170 20004020
SDBC 32500200 20004400
MS2P 32500210 20004210
HO 32500290 20004170
HI 32500300 20004180
NO 32500310 20004190
M5P/MASTER 32500510 20000510
M5P2 32500530 20004230
S5P/SLAVE 32500550 20000550
S5P2 32500570 20004220
Scan3 32500800 20000200
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The parties may, from time to time, add new Products and specifications, as
applicable, for the new Product or may remove a Product from the terms of this
Agreement, but only by a mutually agreeable amendment to this Agreement.
6. SPECIFICATIONS.
Attached hereto as Exhibit "A" is an outline of the Specifications for the
Product. All Products provided hereunder shall be manufactured in accordance
with the mutually agreed upon Specifications. Tera recognizes that the quality
of Products manufactured using artwork or other materials furnished by Tera
depends on, among other things, the quality of such materials. Unisys shall not
be responsible for any defects in such Products caused by a defect in the
artwork or other material by Tera.
Any changes to the Specification or Build Package will not be effective until
the change is documented in a change order that is agreed upon and is signed by
both parties hereto. Changes may be accepted by either party subject to charges
specified in a change order agreed upon between the parties. With respect to
such change order, and subject to mutual agreement of both parties, Tera shall
pay for all work in process that does not meet the Specifications set forth in
the change order, any special tooling not previously purchased, any inventory
that is purchased by Unisys pursuant to the Build Package that cannot be used to
meet the requirements specified in the change order, and any other direct costs
to Unisys that are associated with the change order.
7. ORDERS, SHIPPING, & ACCEPTANCE
7.1 PURCHASE ORDERS
Tera will order Products by issuing written, facsimile or electronic purchase
orders. Each purchase order will specify items such as: Products, quantity,
delivery, destination, any additional Specifications/Acceptance Criteria (as
applicable), and price. The following statement shall be on the face of Xxxx's
Purchase Order:
This P.O. issued under the terms and conditions of Agreement 0100 ,
Revision A, dated: August 16, 1996.
7.2 DELIVERY
Unisys shall prepare and pack the Products to prevent damage and deterioration,
and comply with carrier tariffs. Charges for preparation and packing are
included in the Unit Price unless separately specified on the purchase order.
Shipments or deliveries, as specified in this Agreement, shall be strictly in
accordance with: the specified quantities, without shortage or excess; the
specified schedules, neither more than three (3) business days ahead nor more
than two (2) business days behind schedule; and the other requirements of this
Agreement. Unisys shall promptly notify Tera of any anticipated or actual delay,
the reasons thereof, and the actions being taken by Unisys to overcome or
minimize the delay. If requested by Xxxx, Unisys shall, at Unisys expense, ship
via expedited transportation to avoid or minimize the delay to the maximum
extent possible.
7.3 SHIPPING AND FOB
Unisys shall comply with Xxxx's directions regarding shipment, including without
limitation the choice of carrier, method of shipment and destination, and shall
be responsible for placing the Products in the hands of the carrier. Unisys
shall at Tera's request, obtain insurance against all losses or damages to the
Products in shipment, in amounts specified by Tera, and cost of such insurance
shall be billable to Tera. Unit Price does not include freight or insurance.
Products will be shipped freight collect if authorized by Tera in advance, or
freight prepaid by Unisys, and Tera will pay the appropriate freight and
insurance charges. Risk of loss and title to the Products shall pass to Tera
upon delivery of the Product
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to the carrier. Unisys will provide copies or originals of all shipping
documents to Tera on Xxxx's request, and will cooperate with and assist Xxxx in
the filing of any claims against the carrier. The FOB point shall be Rancho
Xxxxxxxx, California.
7.4 FORECAST
Tera will provide Unisys with a rolling twelve (12) month Product forecast
containing anticipated orders for delivery within that twelve (12) month period.
7.5 LEAD TIME AND SCHEDULING OF SHIPMENTS
Standard lead time for Products is three (3) weeks for a volume not to exceed
500 units per month. Volumes exceeding this limit shall be mutually addressed as
required. The estimated shipping date stated in the purchase orders assumes
timely receipt of the Tera supplied materials; the applicable Build Package and
necessary drawings and artwork or data bases, all of which must be complete and
in sufficient detail to permit Unisys to begin production, and may not be
changed except by written agreement signed by an authorized representative of
each party. There may be occasions when Xxxx needs to issue purchase orders with
less than the standard lead times. On these occasions, if weekend, holiday, or
overtime costs are required, Unisys may advise Tera that additional compensation
would be required to accomplish these needs. This amount will be referred to as
"Short Lead Time Premium". If mutual agreement is reached on the additional
compensation, a change order to Tera's purchase order will be issued to reflect
the premium charge. If no agreement is reached, Unisys shall not be required to
honor Tera's purchase order requirements for shorter lead times than the
established standard lead times.
7.6 RESCHEDULING OF PURCHASE ORDERS
Unless otherwise agreed between the parties, Tera may reschedule delivery of any
products on a Purchase Order with Unisys within the following guidelines with no
additional charge:
0-21 calendar days from scheduled ship date: No changes
22-60 calendar days from scheduled ship date: pushout up to 30 calendar days
Tera shall not push out any orders beyond the originally scheduled calendar
quarter unless mutually agreed to by both parties. Only one reschedule per
purchase order is allowed. Any efforts to reschedule Products inside the three
(3) week minimum lead time are subject to "Short Lead Time Premium" and mutual
agreement by both parties.
7.7 CANCELLATION
Unless otherwise agreed between the parties, Tera may cancel delivery of any
Products on purchase orders with Unisys within the following guidelines:
Number of calendar days from Cancellation charge
scheduled shipment at expressed as a
time of receipt of notice percentage of Unit Price
0-21 calendar days 100%
22-45 calendar days 50%
Over 45 calendar days 0%, Mutually agreed upon
unique or long lead materials only
Tera shall pay for any supplier cancellation charges, supplier restocking
charges, and for any special materials made obsolete by the cancellation.
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7.8 SOURCE INSPECTION, ACCEPTANCE, AND REJECTION
Tera reserves the right to inspect all work in process and final Product and
accept or reject such Product or component which is not strictly in conformance
with all of the requirements of this Agreement.
7.9 REJECTION
In the regular course of its business, Tera may reject, refuse acceptance or
revoke acceptance ("rejection" herein) of any or all of the Products or any
tender thereof which are not strictly in conformance with all of the
requirements of this Agreement. Tera shall notify Unisys of such rejection in
writing. At Unisys risk and expense, all such non-conforming Products will be
evaluated within twenty four (24) hours of such notification. All repair,
replacement and other correction shall be accomplished via a Returned Good
Authorization number issued by Unisys within a (2) business day period following
notification of such rejection. Any Product shall be repaired or replaced within
ten (10) business days from date of issuance of Returned Goods Authorization
number, and all required Tera supplied materials are available. Repairs or
replacements shall be accompanied by a written notification specifying that such
items are repaired or are replacements. Any Products repaired or furnished in
replacement shall be subject to all the provisions of this Agreement to the same
extent as Products initially furnished.
8. PRICE, PAYMENT, AND MATERIAL HANDLING.
8.1 PROTOTYPE AND NON RECURRING ENGINEERING COSTS
Costs for the Prototype development, and the Non Recurring Engineering costs
associated with them are as follows:
Development of 600 and 380 pin, 50 mil pkg. $*
Development of 420 pin, 40 mil pkg. $*
Development of SCAN 3 pkg. $*
Test Fixturing (Includes probe cards) $*
Test Characterization $*
Upgrade of Facility for Manufacturing $*
Non Recurring Engineering for Board & Subassembly $*
Prototype Support $*
System Mechanical Engineering (Support through August, 1996) $*
ASIC Assembly (includes first 350 ASIC units, assembly only) $*
Board Assembly $*
TOTAL $*
8.2 PAYMENT SCHEDULE
Payment for the prototype and non recurring engineering charges set forth in 8.1
above are as follows:
Payment Amount Date Due Comments
Initial payment $* 12-04-95 Start up costs
Payment #2 $* 03-28-96 Non-demo benchmark
prepayment
Payment #3 $* 06-28-96 Start up costs
* Information Omitted Pursuant to Confidential Treatment Request
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8.3 PRICE SCHEDULE - Assembly only
Quantity Price
-------- -----
351 - 560 $*
561 - 875 $*
*Information Omitted Pursuant to Confidential Treatment Request
Should an interposer cleaning step be required it will be added at $ * each to
the above prices.
Follow-on ASIC assembly, test production Unit Pricing and lead time to be
mutually agreed to by December 31, 1996, in an amendment to this Agreement. The
SC3 packaged devices will have a separate price schedule.
8.4 PAYMENT TERMS
Tera shall issue payment within net thirty (30) calendar days after the receipt
and acceptance of Unisys conforming Product. Unisys shall not issue any invoice
prior to the scheduled or actual delivery date, whichever is later.
Payment will be made after shipment of Product and receipt of correct invoice.
Unisys shall promptly repay to Tera any amounts paid in excess of amounts due
Unisys.
8.5 TERA PROVIDED MATERIAL
Tera shall provide to Unisys on a consigned basis, ASIC device dice in wafer
form and packages as listed in Section 5 to this Agreement. Unisys and Tera,
jointly acknowledge the objective to achieve Product Certification. Unisys shall
not be liable for damage to components or materials resulting from malfunction,
failure or inability to meet specified performance requirements; or for failure
of any testing program to screen any defective components or materials.
Unisys shall not be responsible for delays, loss, or destruction of parts or
materials where unavoidable or beyond its control, but shall notify Tera of any
such loss or destruction. If any such case occurs, Unisys shall be excused from
performance without liability to Tera except for return of payment to Tera for
which Tera has not received consideration.
8.6 COST TARGET
Tera and Unisys shall mutually agree to a cost target for ASIC device
manufacturing services for the Production devices. In the event that there is a
cost improvement over the target cost, Tera and Unisys shall share the savings
equally.
8.7 MAINTAINING RECORDS, ACCESS TO PROPERTIES AND INSPECTIONS
Unisys agrees to maintain financial records in accordance with generally
accepted accounting principles consistently applied throughout the periods
indicated and permit reasonable access during normal business hours to Tera's
authorized representative to visit, audit, and inspect the properties of Tera in
Unisys possession, and all records related to Tera's Product, its manufacture,
and Product direct material costs.
8.8 SUBCONTRACT MANAGEMENT
Unisys is responsible for the management of its
subcontractors/suppliers/vendors. Unisys shall ensure that each lower tier
subcontract contains all applicable specifications, special requirements, and
clauses needed to comply with the requirements of this Agreement. Any technical,
schedule, or cost problems encountered by Unisys or its subcontractors shall be
promptly reported to Tera.
8.9 DISCLOSURE TO SUBCONTRACTORS
Notwithstanding the limitations of Section 11 Unisys is authorized to disclose
to bona fide subcontractors such information as may be necessary to permit them
to perform their contracts with Unisys, provided
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that such subcontractors agree to maintain such information in confidence and to
protect such information from disclosure to others to the same extent required
of Unisys under Section 11.
8.10 APPROVED SOURCES
Unisys shall procure materials from Tera's documented approved sources of
supply. Any proposed substitutions shall constitute a deviation and require the
completion of a deviation authorization, accepted by Xxxx, before making such
substitution.
Unisys shall use its own specifications and sources of supply for any materials
required for the assembly of "Product" not specified by Tera.
8.11 TAXES
The Unit Price excludes all taxes upon sale of Products which Unisys is required
to pay or collect from Tera. Unisys shall separately state on all invoices any
taxes imposed by federal, state, or local governments applicable to furnishing
the Products or Services. If purchase orders claim exemption for taxes upon the
sale, and Unisys accordingly does not collect such taxes from Tera, Xxxx agrees
to indemnify Unisys against liability for payment of such taxes. Tera shall
furnish an appropriate exemption certificate as requested by Unisys. Tera shall
pay or reimburse Unisys for the gross amount of any present or future sales,
use, excise, value-added, or other tax applicable to the furnishing of any
Products or Services hereunder, excepting, however, any taxes based on Unisys
income. In the alternative, Tera shall provide Unisys with tax exemption
evidence acceptable to the taxing authorities.
8.12 DISCREPANT MATERIAL/ QUALITY ASSURANCE SYSTEM
Unisys agrees to maintain a Discrepant Material and Quality Control System that
meets the requirements of ISO9001.
8.13 SERIALIZATION/TRACKING PLAN
Unisys agrees to maintain an ASIC serialization/tracking plan that will support
identification of wafer and wafer site to the packaged component.
9. WARRANTIES AND INDEMNITIES
9.1 PATENT INDEMNITY
Unisys agrees to indemnify and hold harmless Tera, its subsidiaries, third
parties and end users, from any liability, damage or expense including but not
limited to legal expenses, arising out of a claim of U.S. patent infringement,
copyright infringement or misappropriation of trade secrets based solely upon
the use or sale of Products; and, such indemnification shall be limited to the
Unisys Assembly process. Unisys agrees to defend or settle at Unisys expense,
all suits or proceedings arising out of any of the foregoing, provided that Tera
shall give Unisys prompt written notice of all suits or threats of suit against
Tera, its Subsidiaries, Third Parties and End Users. In any event, Tera at its
own expense, shall have the right to participate in the defense of any such
action through Xxxx's own counsel. If any item is held to be an infringement or
misappropriation for which Tera is indemnified by Unisys, and its use is
enjoined, Unisys shall:
a) procure for Tera and its customers the right to utilize the Product
granted herein, or
b) replace or modify it so it becomes non-infringing (without
compromising Tera's intended use of said Products), or
c) if neither of the foregoing is feasible, with the approval of Tera,
remove said Goods and refund the purchase price and the transportation and
installation cost thereof less depreciation.
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Unisys will not be liable to the extent the infringing item has been modified by
any of the parties indemnified thereunder and such modification is the cause of
any such infringement or misappropriation, or if the infringement is due to the
combination of the Product with product not sold or licensed by Unisys
thereunder.
9.2 BUYER INDEMNITY
Tera agrees to indemnify and hold harmless Unisys and its subsidiaries from any
liability, damage or expense including but not limited to legal expenses,
arising out of a claim based upon representations, act, or negligence of Tera,
it subsidiaries or third parties in connection with the promotion, sale or
licensing of Product to end users or a claim of any end user made directly
against Unisys or it subsidiaries based on promotion, sale or licensing of the
Product to end users by Tera, its subsidiaries or third parties. Xxxx agrees to
defend or settle, at Xxxx's expense, all suits or proceedings arising out of any
of the foregoing; provided that Unisys shall give Tera prompt written notice of
all suits or threats or suit against Unisys and its Subsidiaries. In any event,
Unisys, at it own expense, shall have the right to participate in the defense of
any such action through its own council.
The obligations of Tera under this Section 9.1 shall be limited to the extent
the claim indemnified against is not a result of any violation by Unisys of its
obligations under this Agreement, or is not a result of any act or negligence of
Unisys.
9.3 WARRANTIES
Unisys warrants to Tera that for a period of twelve (12) months after shipment
to Tera the Product shall: (a) conform in all respects to all of the
requirements and Specifications in this Agreement; and (b) be free from all
defects in workmanship. Because the use to which these Products may be put and
the manner of storage and handling are beyond control of Unisys, this warranty
is limited to defects that can be proven to be present at the time of shipment
or delivery of the Products to the carrier
9.4 WARRANTY EXCLUSIONS
Unisys shall have no obligation under this Section 9 to repair or replace
Products when the defects result from accident, disaster, neglect, abuse,
misuse, transportation, alteration, or improperly performed repairs or
activities once Product has been consigned to carrier and is out of the control
of Unisys.
Warranties granted hereunder are given to and enforceable only by Xxxx. No
warranties shall be assignable or transferable to subsequent purchasers or
lessors.
9.5 DISCLAIMER
THE WARRANTIES OF THIS SECTION ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES, WHETHER WRITTEN, ORAL, STATUTORY, EXPRESS, OR IMPLIED, AND UNISYS
DISCLAIMS ALL WARRANTIES OF MERCHANTABILTY AND FITNESS FOR A PARTICULAR PURPOSE,
AND ALL WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE.
9.6 REMEDY LIMITATION
The remedies provided in this Section 9 are Xxxx's sole remedies for any failure
of Unisys to comply with its warranty obligations.
9.7 SUPPORT UNDER WARRANTY
During the warranty period, Tera shall contact Unisys to request repair or
replacement under warranty for Product failure due to a defect in workmanship,
or the manufacturing process defects. Unisys shall promptly repair or replace
such component at no cost to Tera within a reasonable time period. Unisys will
bear all shipping costs, and risk of loss of material in transit in both
directions.
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9.8 SELLER RECALLS
Unisys will bear all shipping costs and risk of loss of material in transit in
both directions for return of all recalls if Unisys notifies Tera of a recall
due to material, manufacturing, or Assembly issues. Replacement will be at
Unisys expense or, if unable to replace, Tera will be credited for the full
amount of the purchase price.
10. LIMITATION OF LIABILITY.
10.1 SELLER LIABILITY LIMITATION
IN NO EVENT WILL UNISYS BE LIABLE FOR (A) ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO LOSS OF USE, REVENUES,
PROFITS OR SAVINGS ARISING OUT OF, RESULTING FROM, OR IN ANY WAY CONNECTED WITH
THE PERFORMANCE OR BREACH OF THIS AGREEMENT, EVEN IF UNISYS KNEW OR SHOULD HAVE
KNOWN, OF THE POSSIBILITY OF SUCH DAMAGES OR (B) CLAIMS, DEMANDS OR ACTIONS
AGAINST TERA BY ANY PERSON, EXCEPT AS PROVIDED IN THIS PARAGRAPH. EXCEPT FOR
UNISYS OBLIGATIONS UNDER THIS PARAGRAPH, UNISYS LIABILITY FOR ANY AND ALL
CAUSES, WHETHER BASED ON NEGLIGENCE, BREACH OF CONTRACT, WARRANTY OR OTHER LEGAL
THEORY, SHALL NOT EXCEED THE ACTUAL AMOUNT PAID BY TERA FOR THE SPECIFIC
PRODUCTS OR SERVICES GIVING RISE TO THE CLAIM. TERA ACKNOWLEDGES AND AGREES THAT
THE PURCHASE PRICE FOR THE PRODUCTS AND SERVICES REFLECTS THE ALLOCATION OF
RISKS AND THE LIMITATIONS OF UNISYS LIABILITY HEREUNDER.
10.2 TERA LIABILITY LIMITATION
IN NO EVENT WILL TERA BE LIABLE FOR (A) ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO LOSS OF USE, REVENUES,
PROFITS OR SAVINGS ARISING OUT OF, RESULTING FROM, OR IN ANY WAY CONNECTED WITH
THE PERFORMANCE OR BREACH OF THIS AGREEMENT, EVEN IF TERA KNEW OR SHOULD HAVE
KNOWN OF THE POSSIBILITY OF SUCH DAMAGES OR (B) CLAIMS, DEMANDS OR ACTIONS
AGAINST UNISYS BY ANY PERSON, EXCEPT AS PROVIDED IN THIS PARAGRAPH.
10.3 MEDICAL USE EXCLUSION
It is agreed that the Products or the services shall not be used or intended for
use in life support devices or systems where malfunction of failure of the
Product can reasonably be expected to result in death or personal injury. Life
support devices or systems are those which: a) are intended for surgical implant
into the body; b) support or sustain life and whose failure to perform, when
properly used in accordance with instruction for use, can reasonably be expected
to result in significant injury to a user. If it is later determined that a
Product or services performed hereunder is used or is to be used in a life
support device or system, Tera hereby expressly agrees to do so at its own risk
and further agrees to indemnify Unisys for any and all damages that may be
incurred due to or resulting from use of the component in a life support device
or system.
10.4 GOVERNMENT CONTRACT CLAUSE
It is agreed that the Products and Services which are to be provided by Unisys
must meet all the terms and conditions that are expressly recited in this
Agreement only; additional terms required for government contracting shall be
the responsibility of Tera.
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11. PROPRIETARY INFORMATION AND INTELLECTUAL PROPERTY RIGHTS
11.1 PROPRIETARY INFORMATION MARKING
Whenever used in this Agreement, the term "Proprietary Information" will mean
information (written, visual, or oral), or samples of, concerning the disclosing
party's current or future products, business plans, financial information,
marketing plans or customer lists, including but not limited to data, knowledge,
know-how, designs, programs formulas, compilations, and methods, and media
embodying same, or other information which is clearly marked as confidential or
proprietary. Notwithstanding the foregoing, the term "Proprietary Information"
will not include any information which (a) was known by the receiving party
prior to receiving the same directly or indirectly from or in connection with
the disclosing party, and without any restriction as to use or disclosure, (b)
is independently developed by the receiving party without use of the Proprietary
Information, (c) is at any time rightfully received from a third party which has
the right and transmits it to the receiving party without any obligation of
confidentiality, or (d) is or becomes a part of the public domain through no
fault or action of the receiving party. Neither party will remove, obscure or
alter any notice of confidentiality, patent, copyright, trade secret or other
proprietary right without the other party's prior written authorization.
11.2 RIGHTS IN PROPRIETARY INFORMATION
Tera and Unisys acknowledge that any Proprietary Information received from the
other party is valuable trade secret, confidential and proprietary information
of the disclosing party. Title, or the right to possess proprietary information,
as between the parties shall, except as otherwise provided herein, remain with
the party which furnishes it to the other party. No rights are granted by either
party to the other with respect to Proprietary Information, except as expressly
stated herein. Neither party shall use, disclose or copy any Proprietary
Information of the other party except for the purposes of and to the extent
necessary for performance under this Agreement, except as expressly stated
herein.
11.3 DUTY OF CARE
Each party shall exercise the degree of care, in no case less than reasonable
care, sufficient to preclude disclosure of the other party's Proprietary
Information to any third party, unless authorized by the disclosing party, and
shall permit disclosure only to its personnel who are involved with the
Agreement and have agreed in writing to be bound by the confidentiality
provisions of this Agreement. The access and use restrictions imposed by each
party under this Section 11.3 will be at least as stringent as those applied to
the receiving party's most valuable confidential and proprietary information.
11.4 DURATION OF OBLIGATION
For a period of five (5) years from the date of disclosure of the Proprietary
Information, each party shall have the obligations stated in this Section 11
regarding Proprietary Information both during and after the expiration,
termination or cancellation of this Agreement, and shall be released from such
obligations only as Proprietary Information is:
(a) at any time in the public domain other than by breach of this
Agreement on the part of the receiving party; or
(b) at any time rightfully received from a third party which has the
right and transmits it to the receiving party without any
obligation of confidentiality; or
(c) independently developed by personnel of the receiving party who
have not had access to Proprietary Information of the other party;
or
(d) rightfully known to the receiving party without any limitation on
use or disclosure prior to receipt thereof from the furnishing
party, as substantiated by tangible evidence antedating disclosure
by the furnishing party to the receiving party.
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11.5 JUDICIALLY ORDERED DISCLOSURE
Neither party is restricted from disclosing Proprietary Information of the other
party pursuant to a judicial or governmental order, but any such disclosure
shall be made only to the extent so ordered and provided only that the party
receiving an order: (1) notifies the other party in a timely manner so that it
may intervene in response to such order, or (2) if timely notice cannot be given
then seeks to obtain a protective order from the court or government for such
information.
11.6 DISPOSITION OF PROPRIETARY INFORMATION
Each party shall promptly return or destroy and certify destruction of all
Proprietary Information furnished by the other party along with all copies
thereof in its possession including copies stored in any computer memory or
storage medium upon demand of the disclosing party or upon the expiration,
termination, or cancellation of this Agreement, whichever first occurs.
12. TRADEMARKS, TRADE NAMES AND PUBLICITY.
12.1 LICENSING LIMITATION
Nothing contained in this Agreement shall be construed as licensing either party
to use any trademark or trade name owned by or used by the other party without
the prior written consent of the other party.
12.2 PUBLICITY LIMITATION
Tera or Unisys shall not, except as may be required by law or federal
regulation, or except with the prior written permission of the other party,
publicly advertise the Agreement or disclose its contents.
13. TERMINATION
13.1 TERMINATION FOR CAUSE
In the event of a material breach of this Agreement by either party, the other
party may, upon not less than sixty (60) calendar days' prior written notice to
the party in breach, terminate this Agreement unless the breach is cured prior
to the end of the notice period. If a material breach is not cured within sixty
(60) calendar days after the notice of default, the other party may pursue its
remedies as follows. Neither party shall exercise these rights without having
first attempted to resolve any dispute in accordance with the provisions of the
Progressive Dispute Negotiation Procedures set forth in Section 14.11.
(a) If Unisys is in material breach of its obligations under Section 9,
WARRANTIES AND INDEMNITIES, Xxxx's sole and exclusive remedies
shall be as set forth therein.
(b) If Tera is in material breach Unisys may terminate this Agreement
and (1) require Tera to take delivery of and to pay for all
finished Products scheduled for shipment at the time of Tera's
default; (2) discontinue all work-in-process unless Tera requests
completion and delivery and provides assurances of payment therefor
acceptable to Unisys; (3) recover from Tera all costs incurred by
Unisys for raw materials and labor for unfinished Products ordered
by Tera, to the extent that Unisys is unable to return such raw
materials for credit, or apply such raw materials and labor to the
completion of Products for purchase by Tera or other Unisys
customers; (4) recover from Tera all amounts due, but unpaid, for
Products previously shipped to Tera and, (5) pursue any and all
other remedies at law to which Unisys may be entitled.
Should any provision of this Agreement be finally determined to contravene any
applicable law or governmental regulation, such provision shall be automatically
terminated and performance thereof by both parties shall be waived to the extent
of such contravention. Should such provision be considered by either party to be
an essential element of this Agreement, the parties hereto agree to negotiate a
new, applicable provision in good faith.
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13.2 OUTSTANDING PURCHASE ORDERS AND MATERIAL DISPOSITION
Notwithstanding anything in this Agreement to the contrary, Tera, at its option,
may require Unisys to fulfill the terms of any purchase order that has been
accepted by Unisys as of the date of any cancellation, expiration, or
termination of this Agreement. All completed work, raw materials, parts,
work-in-progress, capital tooling, maintenance parts, and consumable supplies in
Unisys possession, which are owned by Tera shall be returned, or disposed of as
directed by Xxxx in writing. Unisys shall return all proprietary and
confidential tapes, documentation, and any and all related design material which
are owned by Tera to Tera.
13.3 INTELLECTUAL PROPERTY RIGHTS
Unisys grants to Tera a royalty-free, non-exclusive, non-transferable, worldwide
perpetual license under Unisys intellectual property rights, to use and license
others to use, Unisys designs, Manufacturing Processes, drawings, libraries, and
technical data to permit Xxxx's establishment of a viable alternative source. In
the event this Agreement is allowed to expire, or is canceled or terminated for
any material breach, excluding bankruptcy proceedings under 7 U.S.C. #365(n) and
warranty and indemnity as set forth in Section 9, WARRANTIES AND INDEMNITIES
above, Unisys shall provide reasonable assistance to Tera in locating and
developing a compatible alternate source for Product. Pending the availability
of such alternate source, Unisys shall strive to provide an uninterrupted supply
of Product to Tera. Tera shall use this royalty free, non-exclusive license for
its sole use in Tera's Products. Unisys shall, upon direction of Tera, protect
and preserve property encompassed in this paragraph in the possession of Unisys.
Payment for completed Products delivered to and accepted by Tera shall be in an
amount agreed upon by Unisys and Tera, however, such amount shall not exceed the
Unit Price, and Unisys obligation thereunder to carryout Tera's direction as to
delivery, protection, and preservation shall not be contingent upon prior
agreement as to such amount.
In the event of the commencement of a case against Unisys under the U.S.
bankruptcy laws, whether voluntary or involuntary, Tera may elect to retain its
rights under this Agreement pursuant to 11 U.S.C. #365(n). In this regard, the
designs, Manufacturing Processes, drawings libraries, and technical data
licensed to Tera under Section 12.1(c) shall be deemed to be "intellectual
property" within the meaning of 11 U.S.C. # 101. Unisys obligations under this
Agreement shall be binding on Unisys successors including any trustee or debtor
in possession that may succeed to Unisys rights under this Agreement.
14. MISCELLANEOUS
14.1 INSURANCE
Unisys agrees to carry at all times, a minimum level of insurance of the
following kinds listed below:
1. Workers Compensation Statutory limits in each state in
which Unisys is required to provide
Worker's Compensation coverage.
2. Employer's Liability $500,000
3. Blanket General Liability $5,000,000 combined single unit
including completed products and
services and combined single unit
(umbrella).
Blanket General Liability shall be reviewed annually to assure appropriate
amount of coverage is maintained to protect Tera owned property and materials.
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14.2 CHANGES
Any change in the (a) Product technical requirements and descriptions,
specifications, statement of work, drawings or designs: (b) shipment or packing
methods; (c) place of delivery; (d) amount of Tera furnished material or
property; or (e) Product production methods and processes which may affect form,
fit, function, interchange ability, reliability, or safety of the Products,
shall require the prior mutual, written consent of Tera and Unisys, which
consent shall not be unreasonably withheld. If any such changes causes an
increase or decrease in the cost of or the time required for performance of this
Agreement, an equitable adjustment in the prices and schedules of this Agreement
shall be made to reflect such increase or decrease and this Agreement shall be
modified in writing accordingly. Unless otherwise agreed to in writing, any
Unisys claim for adjustment must be delivered to Tera in writing within forty
five (45) calendar days after a such change.
14.3 RESPONSIBILITY FOR PROPERTY
Unless otherwise specified, Unisys assumes responsibility for any theft, loss,
or damage, other than ordinary wear and tear, for tooling, materials, parts,
data, and any other property of Tera's, upon its delivery to Unisys or its
manufacture or acquisition by Unisys on Tera's behalf. Property owned by Tera
and provided to Unisys for Unisys use in relation to the manufacture and
delivery of Products will be identified in Exhibit "B", hereto. Unisys agrees to
update this listing quarterly for the first year, and annually thereafter and
amend it to this Agreement. All tooling, fixturing, and equipment paid for
directly, or indirectly through Non Recurring Engineering Charges are the
property of Tera.
Unisys will on Tera's request affix suitable labels that indicate Tera's
ownership of tooling, fixtures, equipment, materials, parts, data, and any other
property of Tera's covered by this Section , and such property. Unisys will on
request execute and deliver to Tera for filing in any relevant jurisdiction one
or more UCC-1 Financing Statements, indicating Xxxx's ownership of such property
and its consignment or bailment to Unisys pursuant to this Agreement.
Upon Xxxx's request, Unisys shall promptly return such property to Tera in the
condition received by Unisys, ordinary wear and tear accepted. Unisys agrees
that it is obligated to return such property to Tera, notwithstanding any
pending dispute between the parties, including but not limited to disputes
related to the quality or quantity of Products delivered and disputes related to
amounts owed by one party to the other.
14.4 EXPORT REGULATIONS
Tera acknowledges that if the Products purchased hereunder are to be exported,
they may be subject to the US Commerce Department or State Department Export
Regulations, and Xxxx accepts full responsibility for and agrees to fully comply
with such regulations, including obtaining export licenses and re-export
permission, and agrees to hold Unisys harmless from all claims, damages, fines,
or charges that may arise due to Unisys failure to so comply.
14.5 INDEPENDENT CONTRACTOR
In providing Products or Services hereunder, Unisys is acting as an independent
contractor and not as an agent of Tera. Neither party has the authority
hereunder to assume or create any obligation or responsibility, express or
implied, on behalf of, or in the name of the other party hereto, in any way
whatsoever.
14.6 ACCESS TO SAN DIEGO MANUFACTURING FACILITY
Unisys shall provide free access to the manufacturing areas and Manufacturing
Processes designated for manufacture and Assembly of Products for designated
Tera employees.
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14.7 NON INTERFERENCE
Each Party agrees not to hire, or seek to hire any employee of the other during
the Term of this Agreement or for a period of six (6) months after termination
hereof without prior written consent and approval of both parties.
14.8 GOVERNING LAW
This Agreement shall be governed by the laws of the State of Washington except
with respect to conflict of laws and constitutes the complete agreement between
the parties. Each party will comply with all applicable federal, state, and
local laws, regulations and ordinances including, but not limited to, the
regulations of the U.S. Government relating to export and re-export of software
and technical data. The parties agree to comply with the letter and spirit of
all laws, ordinances, codes, rules, regulations, license and permit provisions,
guidelines, and directives of any other, state or federal governmental authority
having appropriate jurisdiction over environmental protection.
14.9 ASSIGNMENT
A party's rights under this Agreement may not be assigned in whole or in part by
operation of law or otherwise without the other party's prior express written
consent, and any attempted assignment of any rights, duties or obligations
hereunder without such consent shall be void; provided, however, that if Unisys
sells substantially all of its assets required to complete its obligations under
this Agreement, Tera shall, at its sole discretion, have the option to terminate
this Agreement, or to require the Purchaser of such assets of Unisys to assume
all of Unisys obligation under this Agreement.
14.10 FORCE MAJEURE
Neither party shall be liable or be in breach of this agreement if the
performance of this Agreement or of any obligation hereunder (except payment of
monies due) is prevented, restricted or interfered with by any act or condition
beyond the reasonable control of the party affected thereby, including without
limitation: fire or other casualty or accident; strikes or labor disputes; war
or other violence; unavailability of or delays in procuring materials, power or
supplies; or any law, order, proclamation, regulation, ordinance, demand or
requirement of any governmental or intergovernmental agency or body. The party
so affected shall be excused from such performance to the extent of such
prevention, restriction or interference and shall promptly give notice of such
prevention, restriction, or interference to the other party. If such Force
Majeure prevents or delays the performance of Unisys hereunder, Tera may, at its
option, either (a) delete from this Agreement any quantities of the products it
otherwise should have purchased from Unisys but for such Force Majeure event and
shall receive credit, or (b) may extend the Agreement for a period of time equal
to the period of Force Majeure of Unisys.
14.11 PROGRESSIVE DISPUTE NEGOTIATION PROCEDURES
This section will govern any dispute between the parties arising from or related
to the subject matter of this Agreement that is not resolved by agreement
between the respective personnel of the parties for day to day administration
and performance of the Agreement. Prior to filing of any suit with respect to
such a dispute (other than a suit seeking injunctive relief with respect to
intellectual property rights), the party believing itself aggrieved (the
"Invoking Party") will call for progressive management involvement in the
dispute negotiation by written notice to the other party. Such a notice will be
without prejudice to the Invoking Party's right to any other remedy permitted by
this Agreement.
The parties will use their best efforts to arrange personal meetings or
telephone conferences, as needed, at mutually convenient times and places
between negotiators for the parties at the following successive management
levels, each of which will have a period of allotted time, as specified below,
in which to attempt to resolve the dispute.
Level TERA UNISYS Allotted Time
----- ---- ------ -------------
First Program Program 10 business days
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Manager Manager
Second Division VP Division VP 20 business days
Third Designated Designated 30 business days
Corporate Corporate
Officer Officer
No resolution of disputes involving intellectual property or patents will be
undertaken without first consulting and obtaining the consent of the
Intellectual Property/legal counsel of both parties. The allotted time for the
first level negotiators will begin on the effective date of the Invoking Party's
written notice.
If resolution is not achieved by negotiators at any given management level at
the end of their allotted time, then the allotted time for the negotiators at
the next management level, if any, will begin immediately. If resolution is not
achieved by negotiators at the final level within the allotted time, the parties
agree within forty-five (45) calendar days to select a form of alternative
dispute resolution (ADR) from informal non binding arbitration, private judging,
mini-trial, summary jury trial, moderated settlement conference, mediation or
other, and negotiate and ADR agreement for an ADR process. The ADR agreement
shall at least include provisions governing the ADR procedure, rules, discovery,
timing and cost allocations. In no event will such ADR process result in the
imposition of any element of punitive damages in the event of any awards.
If the ADR agreement is not agreed to by the parties within the time as set
forth in this Section 14.11 hereof, then either party may bring suit to resolve
the dispute in a court of competent jurisdiction. In the event of any material
breach between the parties hereto relating to this Agreement or the breach of
this Agreement, the prevailing party in any resulting litigation shall be
entitled to recover from the other party thereto the costs and expenses,
including reasonable attorneys fees, incurred in taking or defending such
action, including on any appeal.
14.12 AGENCY PRODUCT SUBMISSIONS
If Tera seeks regulatory or safety agency approval for Product, Unisys shall
cooperate and fully support Tera. Such cooperation primarily shall consist of
providing design and test data to support the submission.
14.13 HEADINGS
The Section headings are provided for ease of reference and do not form a part
of the Agreement, and shall not be used in interpretation or governing the
meaning of the Agreement.
14.14 INQUIRIES
If any governmental agency contacts Unisys to inquire about or investigate any
product manufactured by Unisys or Tera, Unisys shall use its best efforts to
give notice thereof to Tera within 24 hours of receipt of such contact.
14.15 NON WAIVER
These terms and conditions set forth the entire understanding between the
parties with reference to the subject matter hereof. The failure of either party
to enforce at any time any of the provision hereof shall not constitute a waiver
of such provision or a waiver of the right to enforce any or all provision at
another time. Any modification to this Agreement shall be by mutual agreement,
shall be in writing, and attached as an addendum to this Agreement.
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14.16 NOTICES
Any notice given under this agreement shall be written or sent by facsimile.
Written notice shall be sent registered or certified mail, postage prepaid,
return receipt requested, or by any other overnight delivery service which
delivers to the noticed destination, and provides proof of delivery to sender.
Any facsimile notice must be followed within three (3) business days by written
notice. All notices shall be effective when first received at the following
addresses:
If to Tera: If to Unisys:
----------- -------------
Tera Computer Company Xxxxxx Xxxxxxxxxxx
0000 Xxxxxxxx Xxx. E. 00000 Xxx Xxxxxxxx
Xxxxxxx, XX 00000 Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx Attn: Xxxxxx Xxxxxxx
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In WITNESS WHEREOF, The authorized representatives of the parties have executed
this agreement under seal as of the date(s) set forth below.
DISCLAIMER OF WARRANTIES AND LIMITATIONS OF LIABILITY ARE INCLUDED HEREIN.
TERA COMPUTER COMPANY XXXXXX XXXXXXXXXXX
By: _______________________________ By: ___________________________
Printed: __________________________ Printed: ______________________
Title: _____________________________ Title: _________________________
Date: _____________________________ Date: _________________________
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