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EXHIBIT 10.51
BUSINESS AGREEMENT
PREAMBLE
This Business Agreement ("Agreement"), effective April 30, 1998
("Effective Date") is made by and between Maxtor Corporation, a Delaware
corporation, having principal places of business at 000 Xxxxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx 00000 and 0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000
("Maxtor"), and Texas Instruments Incorporated, a Delaware corporation, and its
wholly owned subsidiaries having its principal place of business at 0000 Xxxxxx
Xxxx, Xxxxxx Xxxxx 00000 ("TI").
RECITALS
WHEREAS, TI is in the business of designing, manufacturing and selling
integrated circuits ("Product") for hard disk drives and wishes to sell such
Product to manufacturers of disk drives such as Maxtor, (line items on Exhibit
A);
WHEREAS, "Maxtor" shall include Maxtor Peripherals (S) Pte Ltd, having a
place of business at Xx 0 Xxx Xx Xxx Xxxxxx 00, Xxx Xx Xxx Xxxxxxxxxx Xxxx 0,
Xxxxxxxxx 000000;
WHEREAS, Maxtor wishes to secure a supply of Product and to purchase
quantities of such Product from TI meeting the specifications set forth on
Exhibit A and for use in Maxtor's application ("Application");
WHEREAS, TI shall manufacture and deliver to Maxtor, its agents, and/or
its subsidiaries, Product as set forth in this Agreement, including its Terms
and Conditions;
WHEREAS, the parties recognize that the disk drive market is very
demanding of quality, timeliness, and price, and that the essence of the
relationship between Maxtor and TI is flexibility; timely delivery of necessary
quantities of qualified, high-yield Products; and low costs;
WHEREAS, if problems should be encountered with respect to any aspect of
this Agreement or if the parties should encounter any problems not covered by
this Agreement, Maxtor and TI shall discuss them in a cooperative and sincere
spirit and attempt to arrive at a mutually acceptable solution; and
WHEREAS, this Agreement commences on the Effective Date and terminates
on December 31, 2002, ("Termination Date") unless terminated earlier;
NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
ADEQUACY OF WHICH IS HEREBY ACKNOWLEDGED, AND IN CONSIDERATION OF THE ABOVE
PREMISES AND THE MUTUAL PROMISES CONTAINED IN THIS AGREEMENT, THE PARTIES AGREE
AS FOLLOWS:
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TERMS AND CONDITIONS
ARTICLE I - PRODUCTS
1.1 Product.
1.1.1 Purchase and Supply. Maxtor wishes to secure a supply of
Product and to purchase quantities of such Product from TI meeting the
respective specifications set forth on Exhibit A hereto which, when agreed upon
in writing by the parties shall be integrated to this Agreement, and for use in
Maxtor's Application. TI wishes to supply such Product to Maxtor on such
conditions and on the terms and conditions of this Agreement. Therefore, subject
to the terms and conditions of this Agreement, Maxtor will purchase and TI will
supply Product for the term of this Agreement. Maxtor's obligation to purchase
Product from TI is contingent upon TI's Product meeting agreed upon time to
market requirements, Product specifications and functional requirements, price
requirements, and the other terms and conditions of this Agreement. Nothing in
this Agreement shall be construed as an obligation for Maxtor to purchase any
Products, except as expressly provided in any Order (as defined below) issued by
Maxtor.
1.1.2 Specification. As of the Effective Date, Exhibit A may not be
attached. The parties will from time to time agree in writing upon
specifications for the Product or amendments to agreed-upon specifications and
such agreed-upon specifications or amendments shall become part of Exhibit A and
shall be incorporated into this Agreement when each such written agreement is
made.
1.1.3 Packing. Unless otherwise specified in this Agreement or an
Order, all Products are to be packed and identified in accordance with sound
commercial practices to:
(i) obtain reasonable transportation rates;
(ii) comply with requirements of common carriers; and
(iii) ensure arrival at the intended destination without
damage.
Packages shall be construed for handling with a mechanical device. A complete
packing list specifying Maxtor's applicable purchase order number, quantity of
Products shipped, and part number shall be enclosed with all shipments under
this Agreement. TI shall xxxx each container with necessary shipping
information, including the applicable purchase order number, date of shipment,
and name and address of TI and Maxtor.
1.1.4 Freedom of Action. Nothing in this Agreement shall prevent
either party from engaging in similar business with other persons, including,
without limit, competitors of the other party, provided that the confidentiality
terms of this Agreement are not breached.
1.1.5 Sole Source. TI will use due care to provide an uninterrupted
supply of Product.
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1.2 Warranty. Each of TI's warranties made hereunder is materially
relied upon by Maxtor in entering into this Agreement or any Order.
1.2.1 Authority Warranty. Each party represents and warrants that
all corporate action necessary for the authorization, execution and delivery of
this Agreement by such party and the performance of its obligations under this
Agreement has been taken. Further, each party represents and warrants that
neither the execution of this Agreement nor any performance of this Agreement
shall conflict with or be prohibited by any interest, agreement, obligation,
contract, order, law, regulation, or duty, oral or written, to which it is a
party by which it is bound.
1.2.2 Product Warranty. TI warrants the Product, within three (3)
years after shipment, to:
(i) have a clear title, free of all security interests,
encumbrances, or liens;
(ii) be new
(iii) be free from defects in workmanship and materials;
(iv) conform to applicable agreed upon specifications,
drawings, or other descriptions given, including those set forth in this
Agreement;
The above is the Product Warranty ("Product Warranty"). A unit of Product which
meets all of the standards of the Product Warranty shall be a Conforming Product
("Conforming Product"). Replaced Product shall be subject to the provisions of
this warranty to the same extent as the original Product except that the
warranty period shall run from the last delivery date of the Replaced Product.
1.2.3 Price Warranty. [*]
1.2.4 Scope of Warranty. The above warranties shall run to Maxtor.
(i) Warranty Disclaimer. EXCEPT FOR THE WARRANTIES SET FORTH
ABOVE, TI GRANTS NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED, FOR THE
PRODUCT, AND DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR
A PARTICULAR PURPOSE.
1.3 Remedies. If TI breaches its warranties as contained herein, TI's
sole, maximum liability shall be (by mutual agreement of the parties) to repair,
replace, or credit Maxtor's account for any goods which are returned by Maxtor
during the warranty period set forth above, provided that (a) TI is promptly
notified in writing upon discovery by Maxtor that the Products failed to conform
to this contract with a reasonably detailed explanation of any alleged
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deficiencies, (b) the Products are returned to TI, F.O.B. Maxtor, and (c) TI's
examination of the goods shall disclose that such alleged deficiencies actually
exist and were not caused by accident, misuse, neglect, alteration, improper
installation, unauthorized repair or improper testing. If the Products were
improperly sent to TI, Maxtor shall reimburse TI for the transportation charges
paid by TI for the Products. If TI elects to repair or replace the goods, TI
shall have a reasonable time to make the repairs or replacement. Such repair,
replacement or credit shall constitute fulfillment of all liability of TI to
Maxtor whether based in contract, tort, indemnity, statutory provision or
otherwise.
1.4 Prices.
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ARTICLE II - PROCEDURES
2.1 Qualification.
2.1.1 Qualification. The respective obligations of the parties
pursuant to this Agreement shall be subject to the successful qualification of
TI's Product and its manufacturing process in Maxtor's Application, as Maxtor
deems necessary. Maxtor and TI shall cooperate to set up the necessary processes
and procedures to accomplish and facilitate such qualification. TI's Product
must complete qualification by Maxtor in order to be tendered under this
Agreement, and must consistently perform according to the applicable agreed upon
specification. Maxtor will use its reasonable commercial efforts to qualify and
utilize TI's Product in new or additional Applications.
2.1.2 Changes. TI shall make reasonable efforts to provide Maxtor
ninety (90) days notice in writing of any changes in Product design, material,
production process, or plant
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location which affect the form, fit or function of the product in order to allow
it to requalify the Product, before any Product is manufactured by the new
design, material, process or in the new location and sold to Maxtor.
2.2 Tooling. Unless otherwise specified in this Agreement, all tooling
and/or all other articles required for TI's performance under this Agreement
shall be furnished by TI, maintained in good condition and replaced when
necessary at TI's expense. If Maxtor agrees to pay TI for special tooling or
other items either separately or as a stated part of the unit price of Products,
title to same shall be and remain in Maxtor upon payment, and the tooling shall
be treated as property of Maxtor, furnished by Maxtor to TI.
2.3 Forecasts. Maxtor shall forecast its requirements for Products to
TI, as provided below, on a non-binding basis, and TI shall use its reasonable
commercial efforts to maintain the ability to supply Maxtor's requirements from
TI. Notwithstanding the above, nothing in this Agreement shall be construed as
an obligation for Maxtor to purchase any Products, or for TI to supply any
Products, except as expressly provided in any Order issued by Maxtor and
accepted by TI.
2.3.1 Forecasts. During the term of this Agreement, Maxtor shall
provide TI, on a monthly basis, with a nine (9) month rolling forecast setting
forth its estimated requirements and shall provide Orders based on its
requirements for the first three (3) months of the forecast. Product lead-times
will [be] as set forth in Exhibit A or as later mutually agreed by the parties.
Maxtor's forecast is provided solely for TI's convenience and for its planning
purposes; no forecast shall be construed as an authorization by Maxtor to order
any materials for, or to allocate any labor or equipment for the manufacture of
the Product nor impose on TI any obligation to supply Product. Maxtor will not
be responsible for any of TI's cost or expense for materials, Product, labor, or
other commitments or expenses, other than as authorized in Orders.
2.4 Orders.
2.4.1 Orders. All purchases and sales shall be initiated by Maxtor's
issuance of written purchase orders sent via airmail, facsimile or courier
("Order"). Such Orders shall reference this Agreement and state the unit
quantities, unit descriptions, price, requested delivery dates and shipment
instructions. The receipt by TI of an Order shall be indicated by written
acknowledgment within five (5) work days. TI shall accept all Orders which
conform to the requirements of this Agreement and which, cumulatively, do not
for any quarter exceed Maxtor's most recent forecast by more than thirty percent
(30%). Acceptance of Orders in excess of such limit shall be subject to
negotiation and agreement by the parties. Nothing in this Agreement shall be
construed as an obligation for Maxtor to purchase any Products, except as
expressly provided in any Order issued by Maxtor. No modification of this
Agreement will be effective unless made in writing signed by both parties, which
expressly intends to modify this Agreement. The preprinted terms and conditions
of purchase orders, acceptances, confirmations and similar business documents
shall have no effect as amendments of, objections to, or modifications of this
Agreement.
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2.4.2 End of Life. In the event that TI determines that a Product is
at end of life, TI shall give Maxtor at least twelve (12) months advanced notice
of such projected end of life. Such notice shall include the planned last
purchase order date and the planned last shipment date for the end of life
Product. Within a reasonable time following such notice, the parties will
negotiate in good faith purchase of life-time buy quantities (including price
and delivery) and/or other alternatives to satisfy Maxtor's reasonable need for
the discontinued product.
2.4.3 End of Term. In the event of the expiration or termination of
this Agreement, any Orders placed and accepted before such expiration or
termination shall be completed according to the terms of this Agreement.
2.5 Inspection. Maxtor and TI shall cooperate to inspect Products, and
nothing in this section shall limit Maxtor's other rights and remedies.
2.5.1 Inspection by Maxtor. Maxtor may test each lot or Order of
Product to ensure that the Products meet the agreed upon specifications and
acceptance criteria, and TI shall not ship any Products that do not Conform. All
Product (including raw materials, components, subassemblies, and end products)
may be inspected and tested by Maxtor or Maxtor's agent at all reasonable times
and places before, during and after manufacture or shipment. In no event shall
Maxtor be liable for any reduction in value of samples used in connection with
any inspection or test. If any inspection or test is to be made on TI's
premises, Maxtor shall provide at least ten (10) work days notice thereof and TI
shall, without additional charge, provide reasonable facilities and assistance
during normal business hours for the safety and convenience of inspectors in
such manner as not unduly to delay the work. In the event of a TI device
epidemic failure (as defined below), Maxtor has the right to inspect TI's
facilities where the product is manufactured with two working days notice.
Inspection of Products at TI's facility shall be without prejudice to Maxtor's
right to inspect and reject such Products upon delivery to Maxtor's facility.
Where applicable, Maxtor may, at its option, inspect all products or inspect a
statistical sample selected from each lot, and Product, lots or Orders may be
inspected more than once.
2.5.2 Inspection by TI. TI will ensure that all Product are tested
in accordance with the agreed upon specifications and requirements, as may be
amended from time to time. TI will provide only those Product conforming to the
agreed upon specifications and requirements, unless TI has obtained prior
written approval from Maxtor for any deviation from such specifications. TI
further agrees to maintain adequate authenticated inspection test documents that
relate to work performed under this Agreement. Such records shall be retained by
TI for a period of three (3) years after completion of this Agreement and made
available to Maxtor upon request. TI agrees to supply Maxtor with inspection and
test reports, affidavits, certifications, or any other documents as may be
reasonably requested, subject to appropriate confidentiality restrictions.
2.5.3 In Case of Failure of Inspection. If the above inspection or
testing detects Products which do not Conform to the agreed upon specifications
or the requirements of this Agreement, Maxtor and TI will closely cooperate to
identify and find a way to correct the causes of the problem(s). Maxtor may
refuse to accept Product which do not conform. Maxtor may
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reject entire lots or Orders if lot acceptance criteria established in the
specifications are not fulfilled; provided that any canceled portion of an Order
shall nevertheless by counted as purchased for purposes of determining Maxtor's
right to any quantity discounts. The rejected Product may, at Maxtor's
discretion, be returned to TI at TI's expense in accordance with Section 1.3,
Remedies. Maxtor may immediately stop future shipments of Product until the
cause(s) for non-conformity, as mutually determined by parties, has been
corrected. Maxtor will use its reasonable commercial efforts to assist TI in
identifying the cause(s) for rejection.
2.6 Shipping.
2.6.1 Shipping. TI shall use the freight carrier designated by
Maxtor in its order.
2.6.2 Timeliness. TI shall use its reasonable efforts to meet a 100%
on time delivery commitment. If TI's performance falls below 100% on-time
deliveries, then TI shall implement a corrective action plan acceptable to
Maxtor which brings the deliveries back to 100% on-time. If TI is unable to
deliver any Product on schedule, TI shall promptly notify Maxtor giving a new
delivery date, and Maxtor may:
(i) accept the new delivery date; or
(ii) reschedule the delivery by means of a Change Order, or
(iii) cancel the delayed portion of the Order if TI fails to
meet the originally promised delivery date plus 10 days; provided that any
cancelled portion of an Order shall nevertheless by counted as purchased for
purposes of determining Maxtor's right to any quantity discounts.
At Maxtor's request, TI will provide Maxtor with daily notification
of shipping delays. Such notification will include action plans for recovery or
expediting of the affected Product. TI shall provide Maxtor notice of the
departure of any shipment of Product from TI's site.
2.8 Acceptance. If, after [*] from the date of receipt by Maxtor, Maxtor
has not rejected the Product, it will be deemed to have been accepted by Maxtor.
Maxtor also may accept the Product by written notice. The act of inspection or
payment by Maxtor for the Product will not be construed as Maxtor's acceptance
of any Product. Acceptance of any Product shall not affect the Product warranty
or any related remedy.
2.9 Returns. Returns of product to TI under warranty shall be in
accordance with Section 1.3, Remedies. If TI requests, Maxtor will apply TI's
Return Materials Authorization (RMA) or similar number to the returned Products
and/or related documentation, provided, however, that TI must supply such RMA
number to Maxtor on a timely basis.
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2.10 Epidemics. The procedures and remedies for epidemics are in
addition to all other of Maxtor's rights and remedies available under this
Agreement.
2.10.1 Epidemic Defined. An epidemic failure shall occur when a) one
half of one percent (.5%) or the threshold amount stated in the Specification,
whichever is less, of the Product shall be non-conforming over a period of
thirty (30) days or more or b) one percent (1%) of Maxtor's application
delivered to one or more customers shall fail due to a failure of the TI device
within six (6) months of delivery.
2.10.2 Effect of Epidemic. In the event that the Products supplied
by TI to Maxtor should develop any epidemic failure, the parties will meet in
order to work out technical methods to remedy the problem. In such event,
shipment of undelivered Products related to the Order or Orders will be
postponed, at Maxtor's written request, until the cause of the epidemic has been
corrected. In case upon the expiration of 30 (thirty) days from the date of
Maxtor's notice regarding the epidemic, TI has not yet remedied the same, then
Maxtor shall be entitled to cancel pending Orders without any liability for such
cancellation and without prejudice to Maxtor's rights for damages or any other
remedy as may specifically be provided for in this agreement; provided that any
cancelled portion of an Order shall nevertheless be counted as purchased for
purposes of determining Maxtor's right to any quantity discounts. In the event
that a remedy has been found, all Product units subsequently delivered to Maxtor
shall incorporate the modification remedying the defect. Product units
previously delivered to Maxtor will be remedied in accordance with Section 1.3,
Remedies.
2.11 Invoicing. TI will issue the invoices for the Products and will
date them with a date equal or subsequent to shipment date. Invoices shall
reference purchase order number, item number and description of Products, unit
price of Products, and total amounts due.
2.12 Payment.
2.12.1 Terms. Invoices shall be due and payable within [*] after the
date of invoice. In cases where an invoice is not issued, payment shall be due
within [*] after the delivery of the Product. Maxtor's payment advice shall
reference TI's invoice number(s) and date(s).
2.12.2 Currency. Unless expressly provided to the contrary, all
amounts stated in this Agreement and all sums payable under this Agreement shall
be denominated in United States Dollars and all payments made under this
Agreement shall be made by wire transfer, cashier's check, or other ready funds
(as mutually agreed) in United States Dollars to payee's account at payee's
designated United States bank.
2.12.3 Disputes. Maxtor shall have [*] after the invoice date to
contest in good faith the amounts and items charged.
2.12.4 Bills. TI's bills shall list all open invoices, invoice
dates, and amounts unpaid; payments received, and credits issued.
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2.12.5 Payment Applications. Payments shall be applied to open
invoices according to Maxtor's payment advice, but, in the event the payment
advice does not specify invoices, then payments shall be applied to oldest items
first.
2.13 Order Changes. No Order shall be deemed or construed to be
modified, amended, rescinded, canceled, or waived in whole or in part, except by
a written Change Order signed by a Maxtor authorized representative.
2.13.1 Reschedules. Maxtor may reschedule delivery of products
ordered upon thirty (30) days' written notice for standard Products and ninety
(90) days' written notice for custom Products.
2.13.2 Cancellation. Maxtor may cancel Order(s) for any reason by
notifying TI in writing upon thirty (30) days prior to the scheduled shipment
date for standard Products and ninety (90) days prior to the scheduled shipment
date for custom Products. TI will cease work on the affected Order in accordance
with such notice. Maxtor will:
(i) purchase and pay for any units of Product that have been
completed as of the effective date of the cancellation;
(ii) will pay TI the actual overhead, labor and materials
costs incurred by TI in connection with the Production of any Products that are
partially completed as of the effective date of cancellation up to the total
purchase price under the canceled order(s);
(iii) pay the costs of components and other materials procured
by TI specifically on account of the canceled order(s), and receive title to
such items;
(iv) pay any cancellation or restocking charges imposed by
vendors on account of any canceled orders pursuant to clauses (iii) and (iv)
above.
TI will use its reasonable efforts to return components and other materials to
its vendors and/or use them in other activities at TI. TI will in any event use
its reasonable efforts to mitigate the cancellation charges under this
Agreement.
2.14 Engineering Changes. TI shall not make any changes in the form,
fit, or function of the Product or any process by which they are produced except
as set forth in this section.
2.14.1 Definition. Engineering change(s) are those mechanical,
electrical, firmware, piece part, or software design or specification changes,
made to the Products, or, which, if made, could materially affect the
qualification, schedule, performance, reliability, availability, serviceability,
appearance, dimensions, tolerances, safety or costs, such determination to be
made by mutual agreement of the parties.
2.14.2 TI Changes. TI will notify Maxtor of any engineering changes
proposed to be made by TI to Products or any process by which they are produced
as outlined in the Maxtor Specification for General Semiconductor.
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2.14.3 Maxtor Change(s). Maxtor may request, in writing and in a
manner similar to TI's request, that TI incorporate any non-critical engineering
change into the Products, and TI will provide to Maxtor its written response as
to its willingness to make such change within five (5) working days after
receipt of Maxtor's request. For critical engineering changes, as determined by
Maxtor, TI will respond within two (2) working days of Maxtor's written request.
TI's response will state the estimated production price change and non-recurring
expenses, if any, expected to be created by the engineering change, and the
effect on the schedule, performance, reliability, availability, safety,
serviceability, appearance, dimensions, tolerances, composition of bills of
material, and of the Products. The parties will agree to any additional costs to
be paid by Maxtor prior to the change being made. TI will not unreasonably
refuse to incorporate Maxtor's engineering changes into the Products.
2.14.4 Unforeseen Changes. In the event of a serious and unforeseen
safety or technical problem with the Products provided under this Agreement, an
emergency engineering change may be required. Such problem may or may not result
in the Products failing to meet the applicable Specifications. Maxtor and TI
shall mutually agree as to the resolution of such problems.
2.14.5 Impacts. In the event an engineering change is implemented,
the applicable Specifications will be amended as required and the Product will
be subject to requalification. In the event any Maxtor required engineering
change directly causes a negative financial impact to TI due to incorporation of
such change into a Product, the parties agree to promptly meet to discuss fair
allocation of such financial impact. TI agrees to use its reasonable efforts to
notify Maxtor of such financial impact prior to incorporation of such
engineering change, and in any event, notify Maxtor as soon as TI becomes aware
of such impact. Maxtor will determine whether the Product must be requalified in
whole or in part as a result of any engineering change.
2.15 Shortages. TI agrees that in the event of a shortage of capacity or
material that will affect the supply of the Product, Maxtor's Order(s), subject
to normal lead-time requirements, shall always be filled according to an
allocation plan at least as favorable as those provided to all other TI
customers with similar or lesser quantity forecasts and Orders, purchasing under
similar conditions. TI shall provide Maxtor with as much notice as possible if
it anticipates or has reason to believe that TI's output of the Product will not
be sufficient to meet all of Maxtor's requirements for any period.
ARTICLE III - INTELLECTUAL PROPERTY
3.1 Confidentiality.
3.1.1 Confidential Information. "Confidential Information" shall
mean any information disclosed by one party to the other pursuant to this
Agreement which is in written, graphic, machine readable or other tangible form
and is marked "Confidential", "Proprietary" or in some other manner to indicate
its confidential nature. Confidential Information may also include oral
information disclosed by one party to the other pursuant to this Agreement,
provided that such information is designated as confidential at the time of
disclosure and reduce to a
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written summary by the disclosing party, within thirty (30) days after its oral
disclosure, which is marked in a manner to indicate its confidential nature and
delivered to the receiving party. Each party shall treat as confidential all
Confidential Information of the other party, shall not use such Confidential
Information except as expressly set forth in this Agreement or otherwise
authorized in writing, shall implement reasonable procedures to prohibit the
disclosure, unauthorized duplication, misuse or removal of the other party's
Confidential Information and shall not disclose such Confidential Information to
any third person except as may be necessary and required in connection with the
rights and obligations of such party under this Agreement, and subject to
confidentiality obligations at least as protective as those set forth in this
Agreement. Each of the parties shall use the same procedures and degree of care
which its uses to prevent the disclosure of its own confidential information of
like importance to prevent the disclosure or misuse of Confidential Information
disclosed to it by the other party under this Agreement, but in no event less
than reasonable care. The party disclosing an item of Confidential Information
shall be the Discloser ("Discloser"), and the party receiving an item of
Confidential Information shall be the Receiver ("Receiver"). Notwithstanding the
above, neither party shall have liability to the other with regard to any
Confidential Information of the other which:
(i) was generally known and available in the public domain
at the time it was disclosed or becomes generally known and available in the
public domain through no fault of Receiver;
(ii) was known to Receiver at the time of disclosure;
(iii) is disclosed with the prior written approval of
Discloser;
(iv) was independently developed by Receiver without any use
of the Confidential Information;
(v) becomes known to Receiver from a source other than the
Discloser without breach of this Agreement by Receiver and otherwise not in
violation of the Discloser's rights;
(vi) is disclosed pursuant to the order or requirement of a
court, administrative agency, or other governmental body; provided that Receiver
shall provide prompt, advanced notice to Discloser;
(vii) is disclosed by Discloser to a third party without
obligation of confidentiality.
3.1.2 Use of Confidential Information. Notwithstanding any
termination, expiration, or cancellation under this Agreement, Receiver will not
use the Confidential Information for a period of three (3) years, for any other
purpose than pursuing the transactions and relationship contemplated by this
Agreement.
3.1.3 Term of Nondisclosure Obligation. Notwithstanding the term of
this Agreement, the obligations of TI and Maxtor under this Agreement with
respect to any
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Confidential Information shall continue for a period of three (3) years after
the date of disclosure of the Confidential Information.
3.1.4 Export Controls. Recipient agrees that it will not knowingly
(i) export or re-export, directly or indirectly, any
technical data (as defined by the U.S. Export Administration regulations)
received under this Agreement to,
(ii) disclose such technical data for use in, or
(iii) export or re-export, directly or indirectly, as any
direct product of such technical data to, any destination to which such export
or re-export is restricted or prohibited by U.S. law, without obtaining prior
authorization from the U.S. Department of Commerce.
3.2 Publicity. Neither party shall publicly announce or disclose the
existence of this Agreement or its terms and conditions, or advertise or release
any publicity or press release regarding this Agreement, without the prior
written consent of the other party. Nothing in this Agreement shall limit a
party from making such disclosures as are required by law or court order,
provided notice of such disclosures is given to the other party.
ARTICLE IV - LIABILITIES
4.1 Compliance with Laws. Each party shall, in the performance of work or
services under this Agreement, fully comply with all applicable national, state,
and local laws, rules, regulations, and ordinances.
4.2 Infringement Indemnity.
4.2.1 TI shall defend any proceeding brought against Maxtor insofar
as the proceeding is based on a claim that any Products manufactured and
supplied by TI to Maxtor directly infringes any duly issued United States,
European Union or Japan patent, copyright or trademark and TI shall pay all
damages and costs finally awarded therein against Maxtor, provided that TI is
promptly informed and furnished a copy of each communication, notice or other
action relating to the alleged infringement and is given authority, information
and assistance (as TI's expense) necessary to defend or settle the proceeding.
TI shall not be obligated to defend or be liable for costs and damages if the
infringement arises out of compliance with Maxtor's specifications, or from a
combination with, an addition to, or a modification of the Products after
delivery by TI, or from use of the Products, or any part thereof, in the
practice of a process. Subject to Section 4.2.2 below, TI's obligations
hereunder shall not apply to any infringement occurring after Maxtor has
received notice of such proceeding or other communication alleging the
infringement unless TI has given written permission for such continuing
infringement.
4.2.2 If the Products manufactured and supplied by TI to Maxtor
shall be held to infringe any United States, European Union or Japan patent,
copyright or trademark, and Maxtor
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shall be enjoined from using same, or if TI discontinues shipment pursuant to
Section 4.2.3 below, TI will exert all reasonable efforts, at its option and at
its expense, to:
(a) procure for Maxtor the right to use such Products free
of any liability for patent infringement, or
(b) replace such Products with a noninfringing substitute
otherwise complying substantially with all requirements of this Agreement, or
(c) refund the purchase price and the transportation costs
of such Products.
4.2.3 If the infringement by Maxtor is alleged prior to completion
of delivery of the Products under this Agreement, TI may decline to make further
shipments without being in breach of this Agreement. If TI has not been enjoined
from selling the Products to Maxtor, Maxtor may opt for TI to continue shipments
whereupon the obligations herein stated with respect to TI shall reciprocally
apply to Maxtor. This obligation by Maxtor shall include, but is not limited to,
all damages awarded under 35 U.S.C. Sections 284 and 285.
4.2.4 THE SALE BY TI OF THE PRODUCTS ORDERED HEREUNDER DOES NOT
GRANT TO, CONVEY OR CONFER UPON MAXTOR OR MAXTOR'S CUSTOMERS, OR UPON ANYONE
CLAIMING UNDER MAXTOR A LICENSE, EXPRESS OR IMPLIED, UNDER ANY PATENT RIGHT,
COPYRIGHT, MASK WORK RIGHT OR OTHER INTELLECTUAL PROPERTY RIGHT OF TI COVERING
OR RELATING TO ANY COMBINATION, MACHINE OR PROCESS IN WHICH SAID PRODUCTS MIGHT
BE OR ARE USED. THE FOREGOING STATES THE SOLE LIABILITY OF THE PARTIES FOR
INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT AND IS IN LIEU OF ALL WARRANTIES,
EXPRESS, IMPLIED OR STATUTORY, IN REGARD THERETO.
4.3 Insurance. TI shall maintain commercial general liability insurance
in appropriate amounts and shall furnish proof of such insurance to Maxtor upon
request.
4.4 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, OR INCIDENTAL DAMAGES, HOWEVER CAUSED,
ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES, ARISING IN ANY WAY OUT OF THIS AGREEMENT OR ANY
AGREEMENT, UNDERTAKING, OR PERFORMANCE THAT MAY BE PROMISED, PERFORMED, OR
EXECUTED TO IMPLEMENT THIS AGREEMENT.
ARTICLE V - DISPUTE RESOLUTION
5.1 Escalation.The parties agree that any material dispute between the parties
relating to this Agreement will be submitted to a panel of two senior executives
of Maxtor and TI. Either party may initiate this proceeding by notifying the
other party pursuant to the notice provisions of this Agreement. Within five (5)
days from the date of receipt of the notice, the parties' executives shall
confer (via telephone or in person) in an effort to resolve such dispute. Each
party's
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executives shall be identified by notice to the other party, and may be
changed at any time by notice.
5.2 Choice of Law. This Agreement and any agreement, undertaking, or
performance that may be promised, performed, or executed to implement this
Agreement shall be governed by and construed under the laws of the State of
California, as they apply to agreements made between residents of California for
performance solely within California. The parties expressly agree that this
Agreement and any agreement, undertaking, or performance that may be promised,
performed, or executed to implement this Agreement shall not be subject to and
shall not be interpreted by the United Nations Convention on Contracts for the
International Sale of Goods.
5.3 Limit of Time to Bring Action. No actions, regardless of form,
arising out of this Agreement, may be brought by either party more than two (2)
years after such actions arose, or in the case of nonpayment, more than two (2)
years from the date the last payment was due.
ARTICLE VI - GENERAL
6.1 Term and Termination.
6.1.1 Term. This Agreement shall become effective on the Effective
Date and shall remain in force until the Termination Date, and on and effective
the Termination Date this Agreement shall terminate.
6.1.2 Renewal. The parties may agree in writing to extend this
Agreement for one or more terms of one (1) year.
6.1.3 Termination for Convenience. Maxtor may terminate this
Agreement at any time for any reason or no reason upon giving written notice of
termination to TI. Upon receipt of such notice, TI shall immediately cease to
incur expenses pursuant to this Agreement that has been terminated unless
otherwise directed in the termination notice. TI shall also take all reasonable
steps to mitigate the cost to Maxtor for terminating this Agreement. Within
sixty (60) days from the date of notice, TI shall notify Maxtor of costs
directly incurred under this agreement up to the date of termination. In no
event shall such cost exceed the unpaid balance due:
(i) for conforming material delivered prior to receipt of
Maxtor's termination notice; and
(ii) on purchase orders previously issued in conformance with
this Agreement.
In addition to the foregoing, in the event that this Agreement is terminated
pursuant to Section 6.1, Maxtor's entire liability shall be to purchase all
finished goods, die bank inventory work in progress, and Maxtor unique materials
that have been purchased within lead time by TI to fulfill Maxtor's Order(s), at
the costs shown in the table below:
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COST OF GOODS SOLD*
Work-in-Progress/Finished Die 65%
Assembly/Test/Finished Goods 100%
Percentages are of the costs of goods sold charged to Maxtor at the time of
termination.
6.1.4 Termination for Cause. This Agreement shall be terminated for
cause:
(i) If either party materially defaults in the performance
of any provision of this Agreement, then the non-defaulting party may give
written notice to the defaulting party that if the default is not cured within
thirty (30) calendar days, the Agreement will be terminated at the end of that
period and such termination shall not prejudice or limit either party's
remedies; or
(ii) If either party violates any intellectual property,
confidentiality, or license provision of this Agreement, then the non-defaulting
party may give written notice to the defaulting party of such violation and of
immediate termination and the Agreement will be terminated when such notice is
given and such termination shall not prejudice or limit either party's remedies;
or
(iii) Upon:
(a) the institution by or against either party of
insolvency, receivership or bankruptcy proceedings or any other proceedings for
the settlement of its debts; or
(b) either party's making an assignment for the
benefit of creditors; or
(c) either party's dissolution,
this Agreement shall terminate immediately without notice and shall be deemed to
have been terminated by the party not so affected and such termination shall not
prejudice or limit either party's remedies.
6.1.5 Duties Upon Termination. Upon any termination or expiration of
this Agreement:
(i) neither party shall retain any copies of any
Confidential information which may have been entrusted to; and
(ii) neither party shall be liable to the other because of
such termination for compensation, reimbursement or damages on account of the
loss of prospective profits or anticipated sales or on account of expenditures,
investments, leases or commitments in
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connection with the business or good will of Maxtor or TI, or for any other
reason growing out of such termination.
6.1.6 Survival. The terms of this Agreement which by their nature
may survive the termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement.
6.2 General.
6.2.1 Assignment. Neither party shall transfer or assign its rights
under this Agreement directly or indirectly including without limit in the cases
of merger, acquisition of greater then fifty percent (50%) ownership or control
interest in such party by any party, or sale of its assets, without the prior
written consent of the other party, which consent shall not be unreasonably
withheld. Subject to the above sentence, this Agreement shall be binding upon
and inure to the benefit of the parties, their successors and assigns. Any
purported assignment of this Agreement by a party without the prior written
consent of the other party shall be void.
6.2.2 Consents. No consent required to be given under this Agreement
shall be unreasonably withheld.
6.2.3 Counterparts. This Agreement shall be prepared in two
identical and original counterparts and both of which together shall be one and
the same instrument and either of which may be used for purposes of proof.
6.2.4 Cumulation of Remedies. All remedies available to either party
under this Agreement are cumulative and may be exercised concurrently or
separately, and the exercise of any one remedy shall not be deemed an election
of such remedy to the exclusion of other remedies.
6.2.5 Independent Parties. Persons furnished by each party shall be
solely the employees or agent of such party and shall be under the sole and
exclusive direction and control of the furnishing party. They shall not be
considered employees of the other party for any purpose. Each party shall remain
an independent contractor and shall be responsible for compliance with all laws,
rules and regulations involving, but not limited to, employment of labor, hours
of labor, health and safety, working conditions and payment of wages. Each party
shall also be solely responsible for payment of taxes, including federal, state
and municipal taxes, chargeable or assessed with respect to its employees, such
as social security, unemployment, worker's compensation, liability insurance and
federal and state withholding. Neither party nor its employees, officers,
directors, or agents shall hold itself out as the agent, employee, legal
partner, or joint venturer of the party, and shall make no commitment or
engagement on the account of or on behalf of the other party.
6.2.6 Force Majeure. Nonperformance of either party shall be excused
to the extent that performance is rendered impossible by strike, fire, flood,
governmental acts, orders or restrictions, or any other reason where failure to
perform is beyond the control and not caused by the negligence of the
nonperforming party. In the event of any delay caused by such
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contingency, the delayed party may defer any performance or delivery prevented
by the force majeure condition for a period equal to the time lost by reason of
such delay, provided, however, that the delayed party promptly commences and
reasonably and diligently pursues actions to cure or circumvent such cause.
Whenever any cause delays or threatens to delay the timely performance of this
Agreement, TI shall immediately notify Maxtor of all relevant information with
respect to such cause. If TI is delayed in any performance or delivery by more
than thirty (30) days, Maxtor may terminate the delayed performance or delivery
or this Agreement and such termination shall not be a breach of this Agreement
and shall be without penalty.
6.2.7 Governing Language. English shall be the language of this
Agreement and the English language shall govern all disputes, performance and
interpretations.
6.2.8 Headings. The descriptive headings of the several Articles and
Sections of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement and shall not affect the interpretation of
this Agreement.
6.2.9 Joint Work Product. The parties further acknowledge that they
have thoroughly reviewed this Agreement and bargained over its terms and that
for convenience, Maxtor has written down the terms of this Agreement.
Accordingly, this Agreement shall be construed without regard to the party or
parties for its preparation and shall be deemed to have been prepared jointly by
the parties.
6.2.10 Notices. Any notice required or permitted to be given under
this Agreement shall be in writing and shall be deemed to be sufficiently given
if delivered by hand or if sent by courier with a receipt requested or by
registered air mail, postage prepaid, addressed to Maxtor or to TI, as the case
may be, at the addresses first set forth above or to such other address as may
be furnished for such purpose by notice duly given under this Agreement. Such
notice shall be deemed to have been given when delivered by hand or five (5)
days after deposit with the courier or mail service. Any party may change its
address for such communications by giving such notice to the other party in
conformance with this section.
6.2.11 Severance. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions
shall nevertheless remain in full force and effect. The parties agree to
renegotiate any term held invalid and to be bound by the mutually agreed
substitute provisions.
6.2.12 Time. The words day, month, quarter, year, and the like shall
mean calendar day, month, quarter, year, and the like, unless expressly provided
to the contrary.
6.2.13 Waiver. The failure of any party to this Agreement at any
time or times to require performance of any provision of this Agreement shall in
no manner affect such party's available remedies or right at a later time to
enforce the same. No waiver by any party of any condition, or of the breach of
any term, covenant, representation or warranty contained in this Agreement,
whether by conduct or otherwise (in any one or more instances) shall be deemed
to be or construed as a further or continuing waiver of any such condition or
breach or of any
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remedy or as a waiver of any other condition or as a breach of any other term,
covenant, representation or warranty of this Agreement.
ARTICLE VII - EXECUTION
7.1 Entire Agreement. The terms and conditions of this Agreement are the
entire agreement between the parties and supersede all previous agreements,
proposals, and understandings, whether oral or written, between the parties with
respect to the subject matter of this Agreement (except for confidentiality
agreements governing the exchange of information prior to the Effective Date
which shall continue to govern periods prior to the Effective Date) and no
agreement or understanding varying or extending the same shall be binding upon
either party unless in a written document signed by both parties. This Agreement
shall supersede all inconsistent or additional terms contained in any future
purchase orders, sale acknowledgments or other similar documents delivered by
the parties.
7.2 Execution. This Agreement shall not be effective until it has been
executed by TI and accepted by an authorized representative of Maxtor at a
principal place of business.
7.3 Electronic Execution. To expedite the process of entering into this
Agreement, the parties acknowledge that Transmitted Copies of this Agreement
shall be equivalent to original documents until such time as original documents
are completely executed, produced, and delivered, and in the event of the use of
Transmitted Copies, each party shall use its reasonable efforts, at its own to
expense, to execute, produce, and deliver original copies. "Transmitted Copies"
shall mean copies which are reproduced or transmitted via photocopy, facsimile,
or other process of complete and accurate reproduction and transmission.
In witness whereof, the parties have executed this Agreement as of
the Effective Date.
MAXTOR CORPORATION TI
By: /s/ XX Xxxxxxxxxx By: /s/ Xxxxxxx X. XxXxxxxx
---------------------------- -----------------------------------
(signature) (signature)
DA Xxxxxxxxxx Xxxxxxx X. XxXxxxxx
------------------------------- --------------------------------------
(print name) (print name)
VP, Materials Vice President
------------------------------- --------------------------------------
(title) (title)
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EXHIBIT A
PRODUCTS AND PRICING
ITEM TI REFERENCE % OF BUSINESS LEAD-TIME PRICE TIME
---- ------------ ------------- --------- ----- ----
[*]
[*] IDENTIFIES REDACTED MATERIAL DELETED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
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BUSINESS AGREEMENT
MAXTOR CORPORATION
BUSINESS AGREEMENT
NO. TXN002
ADDENDUM TO EXHIBIT A
PRODUCTS AND PRICING
REASON FOR ADDENDUM
ITEM TI REFERENCE % OF BUSINESS LEAD-TIME PRICE TIME (UPDATE OR ADD)
---- ------------ ------------- --------- ----- ---- ---------------
Comments:
OFFER EXPIRATION DATE FOR QUOTATION
TERMS AND CONDITIONS
Upon signing of this document by both TI and Maxtor, the above pricing will be
added to the Maxtor Business Agreement (#TXN002) as shown and will be subject to
all terms and conditions included therein. If this document is not signed by
both TI and Maxtor by the expiration date shown above, then the offer is
invalidated and will have to be re-quoted.
MAXTOR CORPORATION TI
BY: BY:
---------------------------- -----------------------------------
(signature) (signature)
------------------------------- --------------------------------------
(print name) (print name)
------------------------------- --------------------------------------
(title) (title)
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