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*** Confidential Treatment has been requested for portions of this document.
EXHIBIT 10.24
CHAPARRAL TECHNOLOGIES, INC.
HARDWARE AGREEMENT
This Hardware Agreement and the attached Schedules ("Agreement") is between the
following parties:
SELLER: BUYER:
Chaparral Technologies, Inc. nStor
0000 Xxxxx Xxxxxxx Xxxxxx 000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000 Xxxx Xxxx, XX 00000
THE PARTIES AGREE AS FOLLOWS:
1. Certification. Buyer hereby agrees, represents and certifies all
Hardware Products purchased from Seller pursuant to this Agreement
shall be integrated into Buyer's products, which are assembled or
manufactured, in the regular course of Buyer's business. Additionally,
Buyer acknowledges the Hardware Products and the pricing of Hardware
Products by Seller are based on Seller's reliance on Buyer's
representations the Hardware Products will be integrated. Buyer
expressly agrees not to resell or transfer any of the Hardware Products
as stand alone units and any attempt to do so without Seller's prior
written permission shall be a material breach of this Agreement.
2. Hardware Products and Pricing. The Hardware Products which Buyer is
authorized to purchase from Seller and the corresponding Prices are
listed on Schedule 1. Additionally, Buyer's products which will
incorporate or integrate Seller's Hardware Products shall be listed on
Schedule 1. Buyer shall supply to Seller, upon Seller's request and
expense, a sample of Buyer's product(s) which incorporate Seller's
Hardware Products.
3. Pricing and Forecasts. Buyer will provide monthly a six (6) month
rolling Hardware Product forecast. Lead times shall be negotiable for
quantities of Hardware Products not forecasted by Buyer. Hardware
Product prices shall be based on buyer's Hardware Product forecast for
a six (6) month period. After the first ninety (90) days for the
Effective Date, Seller reserves the right to change the price of
Hardware Products in accordance with Schedule 1.
4. Subcontractors. Seller agrees Buyer's subcontractors listed in Schedule
1 ("Subcontractors") shall be entitled to receive Products at the
address listed in Schedule 1 for the purpose of manufacturing on behalf
of Buyer. Buyer is solely responsible and liable to Seller for
Subcontractor's actions, errors or omissions for noncompliance with
Section 1 Certification and the other terms of this Agreement.
5. Terms of Sale. The Terms of Sale which govern the purchase of Hardware
Products pursuant to the Agreement are attached hereto as Schedule 2.
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6. Term. The term of this Agreement is for a period of one (1) year and
shall automatically be renewed for periods of one (1) year unless
terminated earlier by either party with ninety (90) days written
notice.
7. Termination. This Agreement may be terminated by either party with a
ninety (90) day written notice. In the event of such terminations,
neither party shall be liable to the other party other than in the
event Buyer terminates this Agreement, Buyer shall immediately pay to
Seller all amounts due to Seller, including the full purchase price for
all outstanding purchase orders and the full purchase price of any and
all "risk - buy" inventory. Any terms of this Agreement not specified
on Schedule 1, attached, which by their nature extend beyond its
termination remain in effect until fulfilled and apply to respective
successors and assigns.
8. Confidentiality. No confidential information shall be deemed to be
given or received in confidence by either party pursuant to this
Agreement unless and to the extent it is covered by a separate written
nondisclosure agreement which shall be attached hereto as Schedule 3.
9. Audit. Buyer agrees to keep accurate books and records to show
compliance with this Agreement at the address listed above. Seller may
conduct unannounced audits of buyer's books and records in order to
assure compliance during Buyer's regular business hours and at Seller's
expense. Noncompliance by Buyer is grounds for termination of this
Agreement.
10. Arbitration. Any disputes between Buyer and Seller with respect to this
Agreement shall be settled by binding, final arbitration in accordance
with the commercial arbitration rules of the American Arbitration
Association then in effect (the "AAA Rules") [unless a non-AAA
arbitration is mutually agreed upon by Buyer and Seller]. Any
arbitration proceeding shall be conducted in either Boulder County,
Colorado or in Denver, Colorado. Any judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction over
the subject matter thereof. The arbitrator shall have the authority to
grant any equitable and legal remedies available. In the event of any
litigation between Buyer and Seller relating to this Agreement, the
prevailing party will be entitled to recover reasonable attorney's fees
and all costs. The parties agree this Agreement shall be governed by
Colorado law, excluding its conflict of laws rules. No action against
the Seller for breach hereof shall be commenced more than one (1) year
after the accrual of the cause of action.
11. General. All notices shall be sent to each party in writing at the
addresses listed above. Notice is effective immediately upon receipt.
This Agreement sets forth the entire understanding and agreement of the
parties with respect to the subject matter hereof and supersedes all
other oral or written representations and understandings. The failure
to enforce any right will not be deemed a waiver of such or any other
right including the right to enforce a subsequent breach of the same
obligations. This Agreement may be assigned, amended or modified only
in writing and signed by the parties. This Agreement will not be
construed as a teaming agreement, joint venture or other business
relationship.
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SELLER: BUYER:
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ XXXXX XXXXXXX
--------------------------- -----------------------------
Printed: Xxxxxxx X. Xxxxxxxx Printed: Xxxxx Xxxxxxx
---------------------- ------------------------
Title: Vice President, Finance Title: Chief Financial Officer
------------------------ --------------------------
Effective Date: June 18, 1999 Date: June 18, 1999
--------------- ---------------------------
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SCHEDULE 1
HARDWARE PRODUCTS AND PRICE LISTS
HARDWARE PRODUCTS
Product Pricing:
Buyer's G, K and M-series board-level prices, with production shipments for G
and K Series product commencing no later than July of 1999, are as follows:
PRODUCT MSRP 250-699 700-1249 1250-2499 2500
G5312 [***] [***] [***] [***] [***]
G7313 [***] [***] [***] [***] [***]
K5312 [***] [***] [***] [***] [***]
K7313 [***] [***] [***] [***] [***]
M5314 [***] [***] [***] [***] [***]
M7325 [***] [***] [***] [***] [***]
TERMS:
1. Volume pricing based on a minimum combined annual product shipments of
[***] units, which shall be reviewed quarterly for accuracy during the
quarterly business review.
2. Prices are for Seller standard products. Special Pricing Agreements are
negotiated separately.
3. If the purchase order quantity drops to less than [***] per quarter, the
pricing will reflect the [***] units per year volume.
4. Prices do not include memory or battery.
5. Standard lead-time for Seller products is 120 days.
6. Subject to the provisions below all Purchase Orders placed within 120 days
of Seller's delivery date shall be non-cancelable.
Buyer may reschedule Purchase Orders within 120 days of shipment from Seller in
accordance with the following schedule:
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DAYS BEFORE SCHEDULED SHIP DATE PO PUSH-OUT %* PO UPSIDE %
------------------------------- -------------- -----------
0-30 [***] [***]
31-60 [***] [***]
61-90 [***] [***]
91-120 [***] [***]
120+ [***] [***]
* Maximum 1 push-out per Purchase Order
Seller commits its best efforts to satisfy unplanned upside requirements beyond
the flexibility committed above, but may be constrained by component level
lead-times and related supply.
Buyer may cancel Purchase Orders in accordance with the following schedule:
DAYS BEFORE SCHEDULED SHIP DATE CANCELLATION CHARGES AS A PERCENT OF PRODUCT PRICE
------------------------------- --------------------------------------------------
0-30 [***]
31-60 [***]
61-90 [***]
91-120 [***]
120+ [***]
Cancellation charges will be calculated from the date Seller receives written
notice from Buyer. In the event Buyer cancels any Purchase Order as the direct
result of any delay caused by Seller, none of the above charges shall be
applicable. Buyer may cancel a Purchase Order, in writing, within three (3) days
of a missed shipment date. Seller will have previously notified Buyer, in
writing, of the originally acknowledged shipment date. Seller and Buyer will
agree to examine an alternative schedule before Seller acknowledges the
cancellation of a Purchase Order.
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HARDWARE PRODUCT
STANDARD TERMS OF SALE
The following Standard Terms of Sale ("Terms of Sale") apply to the Hardware
Products which Buyer is authorized to purchase pursuant to the Hardware
Agreement ("Agreement") entered into between Seller and Buyer on the Agreement
Effective Date.
1. TERMS OF SALE. THE TERMS OF SALE CONTAINED HEREIN APPLY TO ALL
QUOTATIONS MADE AND PURCHASE ORDERS ENTERED INTO BY THE SELLER, WHETHER
IN DOCUMENTARY FORM, OR TRANSMITTED BY ELECTRONIC MEANS. SOME OF THE
TERMS SET OUT HERE MAY DIFFER FROM THOSE IN BUYER'S PURCHASE ORDERS,
AND SOME MAY BE NEW. THIS ACCEPTANCE IS CONDITIONAL ON BUYER'S ASSENT
TO THE TERMS SET OUT HERE IN LIEU OF THOSE IN BUYER'S PURCHASE ORDER.
SELLER'S FAILURE TO OBJECT TO PROVISIONS CONTAINED IN ANY COMMUNICATION
FROM BUYER SHALL NOT BE DEEMED A WAIVER OF THE PROVISIONS OF THIS
ACCEPTANCE. ANY CHANGES IN THE TERMS CONTAINED HEREIN MUST SPECIFICALLY
BE AGREED TO IN WRITING, SUCH AS A SPECIAL PRICING AGREEMENT, BY AN
OFFICER OR AUTHORIZED MANAGER OF THE SELLER BEFORE BECOMING BINDING ON
EITHER THE SELLER OR THE BUYER.
All purchase orders or agreements must be approved and accepted by the
Seller at its home office. These terms shall be applicable whether or
not they are attached or enclosed with the Hardware Products to be sold
hereunder. No shipments will be made until the Seller receives a signed
purchase order. These terms do not apply to the licensing of software
products offered by Seller. The terms that govern the software products
licensed to Buyer is a separate agreement.
2. HARDWARE PRODUCTS. The Hardware Products which Buyer is authorized to
purchase pursuant to these Terms of Sale are listed in the Agreement.
3. TAXES. Unless otherwise specifically provided herein, the amount of any
present or future sales, revenue, excise, or other tax applicable to
the Hardware Products covered by a purchase order or the manufacture,
or sale thereof, shall be added to the purchase price and shall be paid
by the Buyer, or in lieu thereof the Buyer shall provide the Seller
with a tax exemption certificate thereafter. In the event Seller is
required to pay any such tax, fee or charge, at the time of sale, or
thereafter, the Buyer shall reimburse Seller therefor.
4. SHIPMENT. Unless otherwise specified on a sales acknowledgment form
received from Seller, shipment of goods within and outside the U.S.
shall be delivered FOB Seller's dock and title and liability for loss,
or damage thereto, shall pass to Buyer upon Seller's tender of delivery
of the goods to a carrier for shipment to Buyer, and any loss or damage
thereafter shall not relieve Buyer of any obligation hereunder. Buyer
shall reimburse Seller for taxes and any other expenses incurred for
licenses or clearance required at port of entry and destination. Seller
may deliver the goods in installments. Unless otherwise agreed, all
items
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shall be packaged and packed in accordance with Seller's normal
practices. Buyer shall pay the per unit carriage and insurance amount
attributable to each Hardware Product, as specified in the Agreement
and confirmed by way of a sales acknowledgment form sent by Seller to
Buyer.
5. PAYMENT. Unless otherwise agreed, all invoices are due and payable (30)
days from the date of invoice or with a 2 percent (2%) discount for
payment received within ten days of date of invoice. No other discounts
are authorized. Shipments, deliveries, and performance of work shall at
all times be subject to the approval of the Seller's credit department,
and the Seller may at any time decline to make any shipments or
deliveries or perform any work except upon receipt or payment, or upon
terms and conditions or security satisfactory to the credit department.
If in the judgment of the Seller, the financial condition of the Buyer
at any time does not justify continuation of production, or shipment on
the terms of payment originally specified, the Seller may require full
or partial payment in advance and, in the event of the bankruptcy or
insolvency of the Buyer, or in the event any proceeding is brought by
or against the Buyer under the bankruptcy or insolvency laws, the
Seller shall be entitled to cancel any order then outstanding, and
shall receive reimbursement for its cancellation charges. Each shipment
shall be considered a separate and independent transactions, and
payment therefor shall be made accordingly. If shipments are delayed by
the Buyer, payments shall become due on the date when the Seller is
prepared to make shipment. If the work covered by the purchase order is
delayed by the Buyer, payments shall be made based on the purchase
price, and the percentage of completion. Hardware Products held for the
Buyer shall be at the risk and expense of the Buyer.
Buyer grants and Seller retains a purchase money security interest in
each Hardware Product furnished hereunder, and any proceeds thereof,
until the full purchase thereof shall have been paid in full.
6. SHIPPING DATES. All shipping dates are estimates only and are dependent
upon prompt receipt of all necessary information from Buyer. Shipments
may be made in installments. Seller shall be excused from performance
and shall not be liable for any delay in delivery or in non-delivery,
in whole or in part, caused by the occurrence of any contingency beyond
the reasonable control of Seller, including but not limited to, war
(whether an actual declaration thereof is made), sabotage, or other act
of civil disobedience, judicial action, labor dispute, accident,
earthquakes, defaults of suppliers, fire, act of God, shortage of
labor, fuel, raw material or machinery or technical or yield failures
where Seller has exercised ordinary care in the prevention thereof.
Seller may at its sole discretion allocate production and delivery
among Seller's customers.
7. RESCHEDULING/CANCELLATION. No delivery delay requested by Buyer on a
purchase order placed will be effective unless covered by an amendment
to the purchase order that provides for the payment of any agreed upon
costs the delay imposes on Seller, and that is signed by and duly
authorized representative of Seller. Hardware Products returned for
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convenience of Buyer, if accepted by Seller, shall be subject to a
restocking fee. Buyer may not cancel or reschedule any orders for
delivery within one hundred twenty (120) days for any Hardware Products
without Seller's prior written consent. A cancellation charge shall be
assessed to Buyer on purchase orders for any Hardware Products within
ninety (90) one hundred twenty (120) days of the scheduled delivery
date. The amount of such charge shall be based on the quantity canceled
and the time remaining.
8. INSPECTION. Unless otherwise specified and agreed upon, the Hardware
Products to be furnished by Seller under Buyer's purchase order shall
be subject to the Seller's standard inspection at the place of
manufacture. If it has been agreed upon and specified in Buyer's
purchase order Buyer is to inspect or provide for inspection at place
of manufacture, such inspection shall be so conducted as to not
interfere unreasonable with Seller's operations and consequent
approval, or rejection shall be made before shipment of the Hardware
Products. Notwithstanding the foregoing, upon receipt of Hardware
Products by Buyer which appear not to conform to the description of the
Hardware Products in the Agreement, the Buyer shall immediately notify
the Seller of such conditions and afford the Seller a reasonable
opportunity to inspect the Hardware Products. No Hardware products
shall be returned without Seller's consent. Seller's Return Material
Authorization Number must accompany the return of all Hardware Products
to Seller.
9. LIMITED WARRANTY. THE FOLLOWING WARRANTY IS IN LIEU OF ALL WARRANTIES,
EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND
NON-INFRINGEMENT OF THIRD PARTIES INTELLECTUAL PROPERTY RIGHTS AND OF
ALL OTHER OBLIGATIONS OR LIABILITIES ON SELLER'S PART. THIS WARRANTY
NEITHER ASSUMES NOR AUTHORIZES ANY OTHER PERSON TO ASSUME FOR SELLER
ANY OTHER LIABILITY IN CONNECTION WITH THE SALE OF SELLER'S PRODUCTS.
THIS WARRANTY DOES NOT APPLY TO PROBLEMS ARISING FROM BATTERY LEAKAGE
OR USE OF IMPROPER EXTERNAL POWER SOURCES.
Seller warrants to Buyer that Hardware Product delivered under this
Agreement is 100% defect free. Seller also warrants to the Buyer the
following Hardware Products against defects in material workmanship
under normal use and service for the period of three (3) year from the
date of shipment. Seller's obligations under this provision are
limited, and its sole option to: (i) replacing, (ii) repairing or,
(iii) giving credit for any Hardware Product which shall, within the
warranty period, be returned to Seller's factory, transportation
charges prepaid, and which is, after examination, disclosed to Seller's
satisfaction to be thus defective. Prior to returning any Hardware
Product to Seller, Customer must request and obtain a Return Material
Authorization form from Seller. This warranty shall not apply to any
Hardware Products which have been repaired or altered except by Seller,
or which shall have been subject to misuse, negligence or accident or
not maintained in accordance with handling or operating instructions
supplied by Seller. Any Hardware Products replaced or returned for
repair are warranted for a period on ninety (90) days, but in no event
will the
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warranty be extended beyond the original warranty period. This warranty
applies exclusively to Buyer and does not extend to Buyer's customers.
10. PATENT INFRINGEMENT. Buyer shall hold Seller harmless from and defend
against any costs, expenses, damages, or liabilities arising from
Seller's compliance with Buyer's designs, instructions, or
specifications. Except as set forth above, Seller agrees to defend, or
at Seller's option settle, at Seller's own expense and under Seller's
sole control, any claim, suit, demand, or proceeding, including
attorney's fees (an "Action") resulting from any alleged infringement
of United States patents owned by third parties by Hardware Products as
sold and purchased by Buyer and from Seller, provided Buyer (I) gives
to Seller prompt notice of any such action, (II) authorizes Seller to
settle or defend any such Action, and (III) assists Seller in so doing
upon Seller's request (at Seller's expense). Should, as a result of any
such Action, Buyer be enjoined from selling or using the Hardware
Product, Seller shall either: (1) procure for Buyer the right to use or
sell the Hardware Product; (2) modify the Hardware Product so that it
becomes non-infringing; (3) upon receipt of the Hardware Product,
provide to Buyer a non-infringing product meeting the same function
specifications as the Hardware Product or (4) authorize the return of
the Hardware Product to the Seller, and upon its receipt refund to
Buyer the cost of the Hardware Product. Buyer will use commercially
reasonable efforts to assist Seller in mitigating its damages
hereunder. Seller shall not be liable for any costs or expenses
incurred without Seller's prior written authorization. Notwithstanding
the foregoing, in no event shall Seller's liability hereunder exceed
the aggregate amount paid by Buyer to Seller for those Hardware
Products incorporating the allegedly infringing technology licensed or
purchased under, or in conjunction with this Agreement during the
twelve (12) months immediately preceding the initiation of such Action.
The foregoing states the entire liability to Seller for infringement of
the patents of third parties, and in particular, Seller has no
obligations to indemnify Buyer for infringement of patents resulting
from combinations of the Hardware Product with other products, whether
or not supplied by Seller. THIS PROVISION IS STATED IN LIEU OF ANY
OTHER EXPRESSED, IMPLIED, OR STATUTORY WARRANTY AGAINST INFRINGEMENT
AND SHALL BE THE SOLE AND EXCLUSIVE REMEDY FOR PATENT INFRINGEMENT OF
ANY KIND.
11. DAMAGE LIMITATION. INDEPENDENTLY OF ANY OTHER REMEDY LIMITATION HEREOF
AND NOTWITHSTANDING ANY FAILURE OF THE ESSENTIAL PURPOSE OF ANY SUCH
LIMITED REMEDY, IT IS AGREED IN NO EVENT SHALL SELLER BE LIABLE FOR
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND UNDER THIS
AGREEMENT.
12. U.S. GOVERNMENT CONTRACTS. If Buyer's original purchase order indicates
by contract number it is placed under a government contract, only the
following provisions of the current Federal Aquisition Regulations are
applicable in accorance with the terms thereof, with an appropriate
substitition of parties, as the case may be -- i.e., "Contracting
Officer" shall mean "Buyer," "Contractor" shall mean "Seller," and the
term "Contract" shall mean this order:
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52.202-1. Definitions; 52.232-11, Extras; 52.219-9; Variation
in Quantity; 52.232-23, Assignment of Claims; 52.228-2,
Additional Bond Security; 52.225-11, Certain Communist Areas;
52.222-4, Contract Work Hours and Safety Standards Act --
Overtime Compensation; 52.222-20, Xxxxx-Xxxxx Public Contracts
Act; 52.222-25, Equal Opportunity; Officials Not to Benefit;
52.203-5, Covenant Against Contingent Fees;
52.249-1, Termination for Convenience of the Government (Fixed
Price) (Short Form) (only to the extent that Buyer's contract
is terminated for the convenience of the government); 52.2-1,
Contractor Inspection Requirements; 52.227-1, Authorization
and Consent;
52.227-2, Notice and Assistance Regarding Patent and Copyright
Information; 52.247-1, Commercial Xxxx of Lading Notations;
52.233-35, Affirmative Action for Special Disabled and Vietnam
Era Veterans; 52.222-1, Notice to the Government of Labor
Disputes; 52.215-1, Examination of Records by Controller
General; 52.220-3, Utilization of Labor Surplus Area Concerns.
13. HARDWARE PRODUCT CHANGES. Seller reserves the right, at its sole
discretion, to discontinue manufacturing or supplying any Hardware
Product which has not been firmly scheduled for delivery to Buyer.
Seller also reserves the right to change or improve any Hardware
Product or specification provided that such changes do not affect form,
fit or function. Changes that do not affect form, fit or function will
be made upon giving thirty (30) day's advance notification to Buyer,
and shipments will be made upon the approval of the Buyer. Seller may
from time, to time, delete or obsolete a Hardware Product.
14. INTERNATIONAL ORDERS. Seller shall use its best efforts to obtain
export licenses for shipment from the United States to foreign
countries on behalf of Buyer, provided that Buyer has supplied Seller
with all the information necessary to obtain such licenses. Buyer shall
be responsible for obtaining all import licenses required by any
country and all re-export licenses. Buyer shall comply with all
applicable provisions of the Export Administration Regulations of the
United States Department of Commerce, or any amendment thereto, in
effect with respect to all Hardware Product hereunder, and shall
provide Seller with all documentation and data necessary or desirable
in monitoring such compliance. Buyer agrees to hold Seller harmless
against any liability arising from the failure of Buyer or Buyer's
customers to comply with such regulations. This provision shall survive
any termination, transfer, or expiration of the Agreement. Seller shall
have no duty to ship any Hardware Products under a purchase order if
appropriate licenses, permits and the like are not granted by the
countries of import and export.
15. SALE CONVEY NO LICENSE. Seller's Hardware Products are offered for sale
and are sold by Seller subject to the condition that such sales does
not convey any license, expressly, or by implication, estoppel
otherwise, under any patent, mask work, or copyright, or any assembly,
circuit, combination, method or process witch any such Hardware
Products are used. Seller expressly reserves all its rights under such
patents, mask works or copyrights.
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16. TECHNICAL SUPPORT. Buyer shall maintain sufficient technical personnel
and resources to support, and shall use its best efforts to support,
the Hardware Products at Buyer's customers. Such support shall include,
but not be limited to, providing telephone assistance during normal
business hours and user documentation from Buyer to their customer.
Supplier will provide technical support to Buyer's personnel via
telephone assistance and website support for Hardware Product
documentation and firmware online at: xxx.xxxxxxxxxxxx.xxx.
In addition, Buyer shall make its technical personnel available for
technical training two (2) times per year, which training shall take
place at a location to be agreed upon between the parties. Seller shall
pay the costs of materials for the training hereunder; all travel costs
associated with attending the training for each party shall be borne by
such party.
17. RETURN MATERIAL AUTHORIZATION. In the event that Buyer needs to return
Hardware Products, purchased under the terms and conditions of this
Agreement, Buyer shall call or use electronic mail to request a RMA
Number from Seller's Corporate Sales Department. No product can be
received on Seller's dock unless properly authorized and will be
returned to Buyer. Seller will provide RMA Numbers within two (2)
business days. Buyer will use Seller's packing materials to return any
Hardware Product.
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