1
EXHIBIT 10(w)
Agreement for ASIC Design and Purchase of Products
between
IBM Microelectronics 0000 Xxxxx Xxxxxx Xxxxx Xxxxxxxx, Xxxxxxx
and
Rainbow Technologies, Inc. and its wholly owned subsidiary, Mykotronx, Inc.
Agreement Number: X0617
Commencement Date:
IBM Customer Account Representative:
Xxx Xxxxxxxxxxx
Mykotronx, Inc. Rainbow Technologies, Inc
000 Xxx Xxxx Xxx 00 Xxxxxxxxxx Xxxxx
Xxxxx 000 Xxxxxx, Xxxxxxxxxx 00000
Xxxxxxxx, Xxxxxxxxxx 00000
This agreement ("Agreement") is entered into by and between International
Business Machines Corporation, incorporated under the laws of the State of New
York ("IBM") and Rainbow Technologies, Inc. incorporated under the laws of the
State of Delaware ("Buyer") and its wholly owned subsidiary, Mykotronx, Inc.
("Mykotronx"), incorporated under the laws of the State of California.
This Agreement and its attachments ("Attachments) sets forth the terms and
conditions pursuant to which semiconductor products will be designed,
manufactured, sold and purchased. The terms and conditions by which IBM licenses
to Mykotronx the IBM Design Kits specified in Attachment A are governed by the
IBM Design Kit License initially executed by IBM and Mykotronx on May 9,1997.
The product is being designed by Mykotronx on behalf of Buyer.
1.0 DEFINITIONS
1.1 "ASIC(s)" means application specific integrated circuits.
1.2 "ASIC Tool Kits" means any computer aided design software and
data provided by IBM and used by Mykotronx for the purpose of
designing or checking ASIC designs, as updated or enhanced
from time to time by IBM.
1.3 "Buyer Deliverable Items" means any information and materials
supplied to IBM by Buyer and/or Mykotronx, as set forth in
Attachment B, including, without limitation, software,
schematics, netlists, microcode, designs or techniques, as
accepted by IBM and utilized in the design of or otherwise
incorporated into a Product.
1.4 "Engineering Change" means a mechanical or electrical change
to the Product which affects form, fit, function or
maintainability.
1.5 "IBM Deliverable Items" means the information, materials and
tools supplied to Mykotronx by IBM, as set forth in Attachment
B, including, without limitation, IBM Design Kits, ASIC Tool
Kits and Prototype devices.
1
2
1.6 "IBM Design Kits" means any IBM computer aided design software
and data (including libraries) provided to Buyer or Mykotronx
for the purpose of designing or testing ASIC designs, as
updated and enhanced from time to time. The term "IBM Design
Kits" includes ASIC Tool Kits.
1.7 "Initial ASIC Design Review Checklist" ("IDR") means a report
in form and content as regularly used by IBM to make a
preliminary assessment of the feasibility of Buyer's proposed
Product design.
1.8 "Milestones" means completion of the (i) initial design review
("IDR Milestone"), (ii) pre-layout and timing analysis ("RTL
Milestone"), and (iii) the release to manufacturing ("RTM
Milestone") stages of work and the payment milestones
("Payment Milestones") set forth in Section 2.0 of Attachment
C.
1.9 "Non-recurring Engineering Charges" ("NRE Charges") means the
costs for NRE Services.
1.10 "Non-recurring Engineering Services" ("NRE Services") means
engineering services provided by IBM to develop Products to be
manufactured under this Agreement, which shall include
delivery of Prototypes as specified in Attachment C.
1.11 "Product(s)" means production units of the ASIC product(s) to
be sold and purchased under this Agreement as specified in
Attachment A and as may be amended by the parties to include
additional Products. Products shall not include Prototypes.
1.12 "Product Specifications" means the specifications for each
Product including, without limitation, the post-layout
electronic data interchange format ("EDIF") and timing
requirements (including clock skew requirements), a statement
of Post-layout test coverage and I/O placement; as documented
in the RTM, expressly or by specific incorporation.
1.13 "Prototype Acceptance" means Buyer's written approval that
Buyer's Prototype evaluation demonstrates Prototype
conformance to Product Specifications.
1.14 "Prototype device(s)" or 'Prototypes" means a preliminary
version of a Product which may or may not be functional and
which is not suitable for production in commercial quantities.
1.15 "Purchase Order Lead Time" means the required minimum amount
of time between IBM's receipt of the Purchase Order issued by
Buyer and the requested shipment date necessary to accommodate
manufacturing cycle time, as specified in Attachment C.
1.16 "Release to Layout Checklist" ("RTL") means a performance
approval report in form and content as regularly used by IBM
to document completion of the pre-layout Level Sensitive Scan
Design ("LSSD") and timing analysis milestone of the SOW.
1.17 "Release to Manufacturing Checklist" ("RTM") means a
performance approval report in form and content as regularly
used by IBM to document the design review milestone at the
completion of the post- layout timing analysis.
2
3
1.18 "Scheduled Shipment Date" means the date for shipment of
Product requested by Buyer in a Purchase Order and accepted by
IBM in accordance with Section 6.0 of this Agreement.
1.19 "Shipment Date" means the date for shipment of Product
requested by Buyer in a Purchase Order.
1.20 "Statement of Work" or "SOW" means a statement of work as set
forth in Attachment A that identifies the respective design
obligations that the parties agree to complete for the
development of particular Products.
2.0 TERM OF AGREEMENT - This Agreement shall become effective on the date
it is executed by the parties (the "Commencement Date"). The term of
this Agreement will begin an the Commencement Date and will be
effective for a period of three (3) years after the date of execution
(the "Contract Period"), subject, however, to earlier termination as
permitted under Section 13.0.
3.0 WORK SCOPE
3.1 IBM will provide Buyer with engineering support and assistance
and Buyer (or Mykotronx) will provide IBM with the Buyer
Deliverable items and cooperate with IBM in the use of IBM
Deliverable Items to enable IBM to manufacture Products, in
accordance with the SOW. The Products are designed for
verification on IBM ASIC tools and to be manufactured by IBM
under this Agreement. The terms and conditions by which IBM
licenses the IBM Design Kits to Mykotronx are exclusively
governed by the IBM Design Kit License Agreement, which is
hereby incorporated by reference.
3.2 IBM will assign field design center engineering support to
Mykotronx regarding the use of the ASIC Tool Kit and IBM's
ASIC design methodology. This support may be provided to
Mykotronx on-site as mutually agreed to by IBM and Buyer. The
support obligations of IBM shall end when IBM has provided the
items in Attachment B under "IBM Deliverable Items".
3.3 In the event that multiple Products are developed under this
Agreement or this Agreement is amended to include other
Products, each such Product shall be developed under and
subject to a separate SOW, separate development checklist and
separate Product pricing.
3.4 Buyer will not utilize Products in conjunction with any
medical implantation or other direct life support applications
where malfunction may result in injury, harm or death to
persons, or used in conjunction with aviation, nuclear
materials, or other ultra-hazardous activities (collectively,
"Ultra-hazardous Uses"). Buyer agrees to require the same
commitment from its own customers in all contracts or sale
documents under which the customer sells the Product or a
device incorporating the device.
4.0 ASIC PRODUCT DESIGN
4.1 IBM's ASIC development checklists shall document the
development of each of Mykotronx Product design.
3
4
4.1.1 The IDR will be used to make a preliminary
feasibility assessment of each of Mykotronx proposed
Product design and to advise Mykotronx of any areas
where Buyer's design(s) do not conform to IBM design
requirements.
4.1.2 The RTL shall include, expressly or by specific
incorporation, the design specifications for each
Product required by Mykotronx to successfully place,
route, time and conform to LSSD and provide static
timing analysis. The RTL shall also document the fact
that such information is available to Mykotronx and
has been communicated to Mykotronx before each
Product netlist is released to layout. Mykotronx'
signature on the RTL shall record Mykotronx'
acknowledgment of satisfactory completion of all work
on such Product through such Milestone.
4.1.3 Mykotronx' signature on the RTM shall record
Mykotronx' acknowledgment of (i) satisfactory
completion of all work on such Product through the
RTM Milestone and (ii) the specifications to which
IBM's warranty obligations, set forth in Section
14.0, apply. To the extent that specifications and
test parameters contained in the RTM vary those set
forth in the RTL, the specifications contained in the
RTM shall govern.
4.1.4 Mykotronx' signature on the RTL and RTM checklists
shall not be unreasonably withheld.
4.2 All Milestone and Prototype delivery schedules are estimates
only.
4.3 Any data relating to a Product design that Mykotronx is to
furnish to IBM must be compatible with IBM tools, with which
IBM will verify all design and engineering work for
conformance to IBM's technology ground rules.
4.4 Buyer may request changes to any Product design during the
course of the SOW by submitting a written request to IBM. Upon
receipt by IBM of any such request, IBM shall promptly inform
Buyer of the effect of the requested change on the SOW
including estimated completion of the design work to
incorporate any requested changes and applicable price
increase(s), if any. IBM may, however, continue work without
regard to the requested change until both parties have agreed
in writing to adjustment in price and estimated completion
date terms, unless Buyer specifically notifies IBM in writing
to halt work.
4.5 Buyer may, for the applicable unit price specified in Section
4.0 of Attachment C, order Prototypes in addition to the
quantity included in the NRE Charges at any time before five
(5) working days prior to RTM signoff. Subject to the RTM
signoff and adequate yield from the initial wafer lot, IBM
shall use reasonable efforts to deliver such additional
Prototypes within two (2) weeks of the estimated delivery date
for Prototypes.
4.6 Subject to the terms and conditions of this Agreement, both
parties will exercise reasonable diligence in performing the
design activities set forth in the SOW for each Product.
4.7 IBM agrees to provide Products to Mykotronx as requested by
Mykotronx and accepted by IBM subject to the provisions of
Section 5.0 and Section 6.0.
4
5
4.8 All computer data provided to IBM by Mykotronx will be free
from any virus, worm or other routines that would permit
unauthorized access or otherwise harm software, hardware or
data.
5.0 PRODUCT DEMAND FORECASTS
5.1 The first Product demand forecast agreed to by Buyer and IBM
is set forth in Attachment C. The forecast covers twelve (12)
months broken out by Product and month. During the term of
this Agreement, Buyer will provide IBM with updated Product
demand forecasts on a quarterly basis covering a rolling
twelve (12) month period (not to extend beyond the Contract
Period), which will be reviewed for approval by IBM within ten
(10) days of receipt by IBM. Updated forecasts shall be in
substantially the same format as the first forecast in
Attachment C. Forecasts shall be provided to IBM's Customer
Account Representative as identified above. Forecasts shall
constitute good faith estimates of Buyer's anticipated
requirements for Products for the periods indicated based on
current market conditions, and IBM's acceptance shall
constitute IBM's good faith intention to quote and supply such
requirements if requested and ordered by Buyer in accordance
with this Section 5.0. Notwithstanding the foregoing, Product
demand forecasts accepted by IBM shall not contractually
obligate IBM to supply, nor contractually obligate Buyer to
purchase, the quantities of units of Product set forth in such
forecasts.
5.2 Buyer may request Products that exceed Product demand
forecasts previously accepted by IBM. Such requests are
subject to rejection by IBM for any reason, including, without
limitation, resource availability.
6.0 PURCHASE ORDERS
6.1 Buyer shall order NRE Services by issuing written purchase
orders. Purchase orders for NRE Services will be deemed
accepted by IBM unless rejected in writing by IBM, specifying
the reasons for rejection, within fourteen (14) calendar days
after IBM's receipt of such purchase order.
6.2 Buyer shall order Products by issuing written purchase orders.
Purchase orders for Products must be received by IBM in
advance, with at least the Purchase Order Lead Time specified
in Attachment C, to allow IBM to meet Buyer's requested
Shipment Date.
6.2.1 Requested Shipment Dates will be deemed accepted
(subject to the Purchase Order Lead Time) by IBM if
the purchase order requesting such Shipment Date is
accepted by IBM. If so accepted, a requested Shipment
Date shall constitute a Scheduled Shipment Date.
Buyer agrees to accept delivery of Products up to
thirty (30) days in advance of the Scheduled Shipment
Date.
6.2.2 Subject to IBM's written acceptance, Buyer may from
time to time request an improved Scheduled Shipment
Date. IBM will accept requests for improved Scheduled
Shipment Dates to the extent that request results in
no additional expense to IBM. If such a request will
result in additional expense to IBM, then IBM will
quote the added charges to Buyer. IBM shall not act
on the request without the express written
authorization of Buyer. Upon shipment of Product on
or before the agreed to date such charges shall
become due and payable in accordance with the payment
provisions of Section 9.0 of this Agreement.
5
6
6.3 Purchase orders for Products will be deemed accepted by IBM
unless rejected in writing by IBM, specifying the reasons for
rejection, within fourteen (14) calendar days after IBM's
receipt of such purchase order. Purchase orders for Products
may be rejected by IBM if such purchase order requests a
quantity of Products that (i) exceeds the most recent Product
demand forecast accepted by IBM or (ii) a Shipment Date IBM
deems unacceptable, or (iii) does not comply with the terms
and conditions of this Agreement, or if Buyer is in breach of
this Agreement.
6.4 Purchase orders issued to IBM shall include the following:
6.4.1 NRE Services and/or Product(s) being ordered;
6.4.2 quantity of units of Product requested (in increments
of the minimum ship pack quantity set forth in
Attachment C ("SPQ") only);
6.4.3 NRE Charges and/or unit price per Attachment C;
6.4.4 billing address;
6.4.5 shipping instructions, including carrier, destination
address and requested shipment dates;
6.4.6 reference to this Agreement and Agreement Number.
6.5 This Agreement shall take precedence over and govern in case
of any additional, different or conflicting terms and
conditions in any purchase order(s) or any other form of
either party. Purchase orders and other forms of either party
may not vary the terms of this Agreement. Additional,
different or conflicting terms and conditions on a purchase
order or other form shall be of no effect.
6.6 Notwithstanding any other provision of this Agreement, in the
event that IBM's ability to supply the Product is constrained
(except as caused by Buyer) for reasons which include, but are
not limited to, component availability, and the Scheduled
Shipment Date cannot be met, IBM will reduce the quantities of
Products to be supplied to Buyer in proportion to the
reduction in quantities of products of the same technology or
utilizing the same manufacturing process to be supplied to
satisfy others. In the event of such constraint, IBM will
provide Buyer written notice of the constraint and the
quantity of Products to be supplied by the Scheduled Shipment
Date. Such notice shall include estimated date for delivery of
the balance of the order. Within ten (10) business days after
the date of the notice, Buyer shall have the right to notify
IBM, in writing, that it is canceling the balance of the order
which IBM will not ship by the Scheduled Shipment Date, except
that Buyer shall remain responsible for compensating IBM at a
rate to be agreed upon, for any work in process on that
portion of the order. Such cancellation or receipt of such
allocated supply and later delivery of all undelivered ordered
quantities after the constraint ends shall constitute Buyer's
exclusive remedy in the event of such supply constraint.
6
7
7.0 PRICING
7.1 Buyer shall pay IBM the NRE Charge applicable to such Product
as set forth in Attachment C, as well as other sums for
special services as are separately listed or referenced in
Attachment C.
7.2 The unit price for each unit of Product ordered shall be
calculated at the time the applicable purchase order is
accepted using the Product's Price Quantity Matrix set forth
in Attachment C. The quantity used as an input into such Price
Quantity Matrix shall be the cumulative quantity of units of
Product as set forth on the purchase orders accepted by IBM in
the year of purchase, including the units of Product requested
in the purchase order that is the subject of such price
calculation. If Buyer fails to purchase _________ units of
Product in the first year of production, then Buyer agrees to
pay IBM the total amount it would have paid had it purchased
the units, pursuant to Attachment C, within thirty (30)
days after receipt of an invoice from IBM.
7.3 Price is based on the description of the Product, as set forth
in Attachment A. IBM reserves the right to re-quote Product
prices if changes in the Product design require a different
chip size, package option, manufacturing technology or other
similar change from the Product description set forth in
Attachment A, but in no event shall IBM required to charge
Buyer a price below IBM's full cost for the Product. Prices
may not be increased due to fluctuations in yield or rejection
rates or as a result of IBM changing the location of
manufacture.
8.0 TITLE AND SHIPMENT
8.1 Title and risk of loss for a Product pass to Buyer when IBM
delivers the Product to the carrier.
8.2 Products shall be shipped from the manufacturing location FOB
for domestic U.S. destinations and ExWorks (as defined in the
1990 INCO Terms) for international shipments. Products shall
be shipped in increments of the minimum SPQ.
8.3 In no event shall IBM be deemed to assume any liability in
connection with any shipment, nor shall the carrier be
construed as an agent of IBM.
9.0 INVOICING, PAYMENT TERMS, TAXES
9.1 NRE Charges shall accrue and be invoiced on the schedule set
forth in Section 2.0 of Attachment C. IBM shall invoice Buyer
for all units of Product upon shipment. All payments under
this Agreement shall be due within thirty (30) days of the
date of invoice. If Buyer's account becomes in arrears or if
Buyer exceeds its credit limit with IBM, in addition to any
other right under this Agreement, IBM reserves the right to
cease development work or stop shipment to Buyer or ship to
Buyer on a cash-in-advance basis until Buyer's account is
again current.
9.2 IBM reserves a purchase money security interest in Products
purchased under this Agreement in the amount of the price and
in Buyer's proceeds from the same, including, without
limitation, accounts receivable. Purchase money security
interests will be satisfied by payment in full. Buyer agrees
to execute UCC-1 financing statements or other appropriate
documents to be filed in order to perfect IBM's security
interest.
9.3 Buyer is responsible for all taxes related to Products except
for taxes based on IBM's net income.
9.4 Buyer shall provide IBM with a copy of a valid reseller's
exemption certificate for Products purchased for resale for
each applicable
7
8
taxing jurisdiction. Based on such certificate, and where the
law permits, IBM will treat Buyer as exempt from applicable
state and local sales tax for Products purchased hereunder.
Buyer shall notify IBM promptly in writing of any modification
or revocation of its exempt status. Buyer shall reimburse IBM
for any and all assessments resulting from a refusal by a
taxing jurisdiction to recognize any Buyer reseller's
exemption certificate, or from Buyer's failure to have a valid
reseller's exemption certificate. If Buyer purchases Product
under this Agreement for internal use, Buyer agrees to notify
IBM and pay applicable sales tax.
10.0 INTEREST ON OVERDUE PAYMENTS Buyer will be liable for interest on any
overdue payment under this Agreement commencing on the date such
payment becomes due at an annual rate equal eighteen percent (18%) per
year.
11.1 CANCELLATION CHARGES, RESCHEDULING AND ORDER CHANGE PROVISIONS
11.1 Buyer may cancel a purchase order or any portion thereof upon
written notice to IBM. If Buyer cancels a purchase order for
NRE Services or Prototypes, or if Buyer unreasonably withholds
its signature from the RTL or RTM, IBM will cease further work
in connection with the Product and invoice Buyer for the total
of all unpaid NRE Charges applicable to the next Payment
Milestone (Section 2.0 of Attachment C), an NRE cancellation
charge pursuant to Section 3.0 of Attachment C and the
applicable unit price for any canceled Prototype devices that
were ordered pursuant to Section 4.5 of this Agreement. For
purchase orders for units of Product, a cancellation charge as
specified in Section 9.0 of Attachment C will immediately
become due for each cancelled unit.
11.2 For a purchase order for production units which is more than
thirty (30) days, but less than the Purchase Order Lead Time,
from its Scheduled Shipment Date, Buyer may request in writing
a one-time deferral of the Scheduled Shipment Date for not
more than ninety (90) days, with no cancellation charge
imposed. However, if this purchase order is subsequently
deferred or canceled, then the cancellation charge specified
in Section 9.0 of Attachment C will be due.
11.3 Cancellation charges shall not apply to those orders canceled
by Buyer pursuant to paragraph 6.6 above.
12.0 ENGINEERING CHANGES
12.1 IBM may implement Engineering Changes required to satisfy
governmental standards, protect Product, system or data
integrity, or for environmental, health or safety reasons
("Mandatory Engineering Changes").
12.2 For all previously shipped Product not incorporating Mandatory
Engineering Changes, IBM may provide replacement Products
(including parts, materials and documentation) at the expense
of the party at fault. Buyer must use reasonable efforts to
install Mandatory Engineering Changes on all Buyer installed
Products and Products in its inventory. If IBM requests the
return of Products displaced by installation of replacement
Products, Buyer will promptly return any displaced Products to
IBM after installation of such replacement Products, at IBM's
expense.
8
9
12.3 In addition to Mandatory Engineering Changes, IBM may
implement Engineering Changes that result in cost reductions
to the Product ("Elective Engineering Changes") with prior
approval from Buyer. Such approval shall not be unreasonably
withheld. IBM shall give Buyer prompt notice of Elective
Engineering Changes.
12.4 IBM may make available other Engineering Changes ("Optional
Engineering Changes"). The cost of any Optional Engineering
Changes that Buyer desires to implement will be borne by Buyer
and will be determined through a request for quote process.
13.0 TERMINATION OF AGREEMENT
13.1 If either party is in material default of a provision of this
Agreement and such default is not corrected within thirty (30)
days of receipt of written notice, this Agreement may be
terminated by the party not in default.
13.1.1 If Buyer terminates due to IBM default, all
previously accepted purchase orders shall be
automatically canceled without charge to Buyer,
except for any specific purchase order(s) that the
parties mutually agree not to cancel.
13.1.2 If IBM terminates due to Buyer default, at IBM's
discretion, all previously accepted purchase orders
shall be automatically canceled and adjustment
charges and cancellation charges will apply in
addition to any other amounts then due.
13.2 Notwithstanding the provisions of Section 13.1, either party
shall have the right to terminate this Agreement immediately
if:
13.2.1 The other party files a petition in bankruptcy,
undergoes a reorganization pursuant to a petition in
bankruptcy, is adjudicated a bankrupt, becomes
insolvent, becomes dissolved or liquidated, files a
petition for dissolution or liquidation, makes an
assignment for benefit of creditors, or has a
receiver appointed for its business; or
13.2.2 The other party is subject to property attachment or
court injunction or court order which has a
substantial negative effect on its ability to fulfill
its obligations under this Agreement.
13.3 IBM may terminate this Agreement, or its obligations with
respect to specifically affected Products, immediately if:
13.3.1 Buyer unreasonably withholds its consent for IBM to
make Elective Engineering Changes under Section 12.0;
or
13.3.2 IBM receives a claim or charge, or IBM otherwise has
a reasonable basis to believe any time during the
term of this Agreement, that any of the Buyer
Deliverable Items infringe third party intellectual
property rights.
13.4 In the event this Agreement is terminated pursuant to Section
13.1.2, 13.2 or 13.3, all amounts due and payable to the
non-terminating party as of the date of such termination shall
become immediately due and payable.
9
10
13.5 Either party may terminate this Agreement without cause upon
one (1) year's prior written notice to the other. If Buyer is
the terminating party, all previously accepted purchase orders
will be filled, but IBM shall not be obligated to accept
further purchase orders after receiving notice. If IBM is the
terminating party, IBM will continue to accept new purchase
orders pursuant to Section 6.0 during the notice period.
13.6 All Products shipped against accepted purchase orders will be
subject to the terms and conditions of this Agreement
notwithstanding any termination or expiration of the term of
this Agreement. All amounts due for Prototypes or Product
delivered or NRE Services performed under this Agreement prior
to termination or expiration shall be paid in accordance with
the terms and conditions of this Agreement, notwithstanding
any such termination or expiration of this Agreement.
14.0 WARRANTIES
14.1 IBM warrants that each unit of Product after delivery will be
free from defects in material and workmanship and will conform
to the Product Specifications as set forth in the RTM for the
applicable period set forth in Attachment C. Delivery to Buyer
of each unit of Product is deemed to occur five (5) days after
shipment from IBM. Buyer acknowledges that the functionality
of Products is contingent upon Buyer's designs and, therefore,
the warranty of this Section 14.1 does not apply to the
functionality of Products fabricated hereunder. This warranty
does not include repair of damage resulting from failure to
provide a suitable installation environment, or any use for
other than the intended purpose, accident, disaster, neglect,
misuse, transportation, alterations, or non-IBM repairs or
activities.
14.2 Any unit of Product that fails to conform to the warranty of
Section 14.1, while under warranty, may be returned,
transportation prepaid by Buyer, to the location IBM
designates for repair, replacement or credit, at IBM's
discretion. IBM will repair or replace such units or provide a
credit to Buyer for the purchase price paid for such units by
Buyer. IBM will ship replacement units back to Buyer,
transportation prepaid by IBM, and such units of Product will
be considered newly delivered for warranty purposes.
14.3 Should any unit of Product returned to IBM hereunder be found
by IBM to be free from defects or non-conformities, IBM will
return such unit of Product to Buyer transportation prepaid by
IBM. Payment for such unit of Product will be due and payable
by Buyer upon receipt of the invoice.
14.4 Prototypes provided by IBM under this Agreement are provided
on an "AS IS" basis, without warranty of any kind.
14.5 No course of dealing, course of performance, usage of trade,
or Product or Prototype description shall be deemed to
establish a warranty, express or implied.
14.6 THE FOREGOING WARRANTIES MADE BY IBM ARE EXCLUSIVE AND IN LIEU
OF ANY OTHER WARRANTIES, EXPRESS OR IMPLIED INCLUDING, WITHOUT
10
11
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, AND ANY IMPLIED WARRANTIES
OF NON-INFRINGEMENT.
15.0 CONFIDENTIAL INFORMATION - The existence and contents of this Agreement
are confidential to the parties and neither party shall disclose the
same without the prior written permission of the other party. If a
party wishes to exchange other confidential information, the exchange
will be made under the terms of the separate agreement for exchange of
confidential information (Agreement Number Vl793) as executed between
IBM and Mykotronx on May 8, 1997.
16.0 TRADEMARKS AND TRADE NAMES
16.1 Neither this Agreement, nor the sale of Products hereunder,
shall be deemed to give either party any right to use the
other party's trademarks or any of the other party's trade
names without specific, prior written consent.
17.0 INTELLECTUAL PROPERTY RIGHTS
17.1 Buyer represents, and IBM acknowledges Buyer's representation,
that all Buyer Deliverable Items for the Products are the
property of Buyer. Buyer represents and warrants it is the
rightful owner, or authorized licensee (with all requisite
rights to sublicense) of the Buyer Deliverable Items and all
other designs, information, and materials supplied to IBM
hereunder, and that no part of such materials knowingly
incorporate or infringe the intellectual property of any third
party.
17.2 IBM or its licensors shall retain and have all intellectual
property rights (including, without limitation, mask work
rights) associated with any intellectual property furnished by
IBM in connection with this Agreement, including without
limitation, (i) all base array layers, (ii) all IBM-licensed
library elements (including, without limitation, any
megafunctions or cores), and (iii) all design methodologies
and tools, (iv) all IBM-furnished modifications of any of the
foregoing. To the extent Buyer has access to such intellectual
property, Buyer shall use such intellectual property solely
for the purpose of designing Prototypes and Products for
manufacture pursuant to this Agreement. Buyer hereby conveys
to IBM any intellectual property rights Buyer may acquire
therein.
17.3 IBM shall own any masks made by IBM using logic data provided
by Buyer. IBM will use any tangible netlist tape(s), and
tangible GDS 11 tape(s) received from Buyer or generated
exclusively for Buyer hereunder, and any masks made from such
GDS 11 tape(s), only to manufacture Products for sale to
Buyer.
17.4 If in the course of performance under this Agreement either
party discovers or invents any process, pattern, device or
other invention, that party shall be deemed the owner of such
discovery or invention. In the event any such invention is
jointly discovered or invented by the parties, the parties
shall be deemed joint owners of such discovery or invention
without any duty of accounting.
17.5 The parties understand and agree that no license or other
right is granted herein to either party, directly or by
implication, estoppel
11
12
or otherwise, with respect to any know-how, inventions,
patents, trade secrets, copyrights, mask works or other
intellectual property rights, except as may be required by IBM
to manufacture the Product(s). No additional license or other
right, express or implied, shall arise from the consummation
of this Agreement, or from any acts, statements or dealings
leading to such consummation.
18.0 INTELLECTUAL PROPERTY INDEMNIFICATION
18.1 IBM shall indemnify Buyer from and against any damages finally
settled or awarded by a court of competent jurisdiction
resulting from any direct infringement of any patents or
copyrights of a third party in any country in which IBM sells
similar products that expose IBM to similar liabilities as the
Product, arising as a result of any of IBM's manufacturing
process, equipment or testing, that is not specifically
required by Buyer's designs, specifications or instructions.
IBM shall defend at its own expense, including attorney's
fees, any suit brought against Buyer alleging such
infringement. In the event that Buyer becomes enjoined from
using Product in its inventory due to such infringement, IBM
at its option and expense, will secure for Buyer the right to
continue to use and market the Product or modify or replace
the Product with a non-infringing product. If IBM determines
that neither of the foregoing alternatives is reasonably
available, Buyer may return the Product in Buyer's inventory
to IBM for a credit equal to the price paid for the units of
Product affected. IBM shall have no obligation regarding any
claim based upon modification of the Product by Buyer or its
customers, use of the Product in other than its intended
operating environment or the combination, operation or use of
the Product with non-IBM products or equipment.
18.2 Buyer shall indemnify IBM from and against any damages finally
settled or awarded by a court of competent jurisdiction
resulting from any direct infringement of any patents or
copyrights of a third party in any country where Buyer uses
or distributes the Product, arising as a result of IBM's
compliance with any of Buyer's design, specifications,
instructions or modifications of the Product by Buyer and
shall defend at its own expense, including attorney's fees,
any suit brought against IBM alleging any such infringement.
18.3 The rights provided in Sections 18.1 and 18.2 are contingent
upon the parties seeking to enforce indemnification by giving
prompt written notice to the indemnifying party regarding any
claim, demand or action for which the indemnified party seeks
indemnification. The indemnified party is required to fully
cooperate with the indemnifying party at the indemnifying
party's expense and shall allow the indemnifying party to
control the defense or settlement of any such claim, demand or
action, including obtaining the written consent of the
indemnifying party prior to any settlement proposal or
settlement. IBM shall have the right to waive Buyer's
obligations under Section 18.2 and provide for its own
defense, at IBM's sole discretion and expense.
18.4 The purchase, receipt or possession of the Product from or
through IBM carries no license or immunity, express or
implied, under any patent of IBM covering the combination of
the Product with other products or the use of any such
combination, or under any patent or
12
13
other intellectual property right of any third party
relating to the Product or its combinations with any other
products.
18.5 Except as expressly stated in this Agreement, this Section
18.0 states the entire liability of the parties and their
exclusive remedies with respect to infringement and all other
warranties against infringement of any intellectual property
rights, statutory, express or implied are hereby disclaimed.
19.0 INDEPENDENT PARTIES - Each party hereto is an independent contractor
and is not an agent of the other party for any purpose whatsoever.
Neither party shall make any warranties or representations on the other
party's behalf, nor shall it assume or create any other obligations on
the other party's behalf. IBM and Buyer agree to indemnify from and
against any damages finally awarded by a court of competent
jurisdiction resulting from any violation of this Section 19.0.
20.0 LIMITATION OF REMEDIES
20.1 IBM's entire liability and Buyer's exclusive remedy are set
forth in this Section:
20.1.1 In all situations involving non-conforming or
defective Products furnished under this Agreement as
set forth in Section 14.1, Buyer's exclusive remedy
is the replacement of the Products or a credit to
Buyer of the purchase price paid for such units by
Buyer, at IBM's sole discretion.
20.1.2 IBM's liability for actual damages for any cause
whatsoever (other than as set forth in Section
20.1.1), shall be limited to the greater of
________________ (__________) or the applicable unit
price for the specific units of Product that caused
the damages or that are the subject matter of, or are
directly related to, the cause of action. This
limitation will apply, except as otherwise stated in
this Section, regardless of the form of action,
whether in contract or in tort, including negligence.
This limitation will not apply to the payment of
costs, damages and attorney's fees referred to in
Section 18.0. This limitation will also not apply to
claims by Buyer for bodily injury or damage to real
property or tangible personal property caused by
IBM's negligence.
20.1.3 In no event will either party be liable to the other
party for any lost profits, lost savings, incidental
damages or other consequential damages, even if
advised of the possibility of such damages, except as
provided in Section 18.0. In addition IBM will not be
liable for any claim based on any third-party claim,
except as provided in Section 18.0. Similarly, IBM
will not be liable for any damages caused by
defective or non-conforming Products located outside
the fifty states of the United States, the District
of Columbia or Puerto Rico. In no event will IBM be
liable for any damages caused by Buyer's failure to
perform Buyer's responsibilities.
20.1.4 In addition, IBM shall have no liability when the
Products are used in conjunction with any
Ultra-hazardous Uses.
13
14
21.0 SUBCONTRACT AND ASSIGNMENT
21.1 IBM has the right to subcontract its responsibilities under
this Agreement, provided that any subcontractor retained by
IBM is obligated in writing to the same obligations as set
forth herein with respect to IBM. In the event that IBM does
subcontract certain portions of its responsibilities, the term
"employee" as used herein shall be deemed to include such
subcontractor and/or its employees.
21.2 Customer shall not assign its rights under the Agreement or
delegate or subcontract its duties without prior written
consent from IBM. IBM shall be free to assign its rights under
the Agreement or delegate or subcontract its duties or
obligations under the Agreement without Customer's consent.
21.3 During the term of this Agreement and for one (1) year
thereafter, Buyer shall not solicit any IBM employee who is
directly engaged in performing activities under this Agreement
to fill out an application for employment; nor shall Buyer
solicit the employees of any third party engaged on behalf of
IBM in performing activities that are related to this
Agreement.
22.0 COMPETITIVE PRODUCTS AND SERVICES - Neither this Agreement nor any
activities hereunder will impair any right of IBM or Buyer to design,
develop, manufacture, market, service, or otherwise deal in, directly
or indirectly, other products or services including those which are
competitive with those offered by IBM or Buyer.
23.0 PROMOTIONAL ACTIVITY - Press releases and other like publicity,
advertising or promotional material which mention the other party by
name, this Agreement or any term hereof shall be agreed upon by both
parties in writing prior to any release.
24.0 FORCE MAJEURE - Except for payments due IBM, neither party shall be in
default or liable for any delay or failure of compliance with this
Agreement due to an act of nature, public enemy, freight embargo, or
other cause if such act of nature, public enemy, freight embargo, or
other cause is beyond the control of the non-performing party. A
non-performing party shall cure as soon as practicable.
25.0 NOTICES
25.1 All notices shall be in writing and shall be deemed delivered
when sent by certified mail return receipt requested.
IBM Corp. Rainbow Technologies, Inc
Dept. LJGV - 965-3J 00 Xxxxxxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx 00000
Xxxxx Xxxxxxxx, XX 00000
Attn: Contract Administrator Attn: Director of Materials
25.2 Day to day activities under this Agreement will be directed by
the Technical Coordinators identified in Attachment A, who
will be responsible for maintaining technical liaison between
the parties. Either party may change its respective
representative designated for receipt of notices, or its
Technical Coordinator and their addresses designated for
notices by notifying the other party in the same manner as any
other notice.
14
15
26.0 GENERAL PROVISIONS
26.1 This Agreement may be executed in any number of identical
counterparts, each of which shall be deemed to be an original,
and all of which together shall be deemed to be one and the
same instrument when each party has signed one such
counterpart.
26.2 The activities of each party and its employees, agents or
representatives while on the other party's premises (including
any design center) shall comply with the host company's
policies and procedures for such facilities, including
security procedures and visitation guidelines.
26.3 Each party will comply with all applicable federal, state and
local laws, regulations and ordinances including, without
limitation, the regulations of the U.S. Government relating to
the export of commodities and technical data insofar as they
relate to the activities under this Agreement. Buyer agrees
that machines, commodities, and technical data provided under
this Agreement are subject to restrictions under the export
control laws and regulations of the United States of America,
including, without limitation, the U.S. Export Administration
Act and the U.S. Export Administration Regulations. Buyer
hereby gives its written assurance that neither machines,
commodities or technical data provided by IBM under this
Agreement, nor the direct product thereof, will be exported,
or re- exported, directly or indirectly, to prohibited
countries or nationals thereof without first obtaining
applicable government approval. Buyer agrees it is responsible
for obtaining required government documents and approvals
prior to export of any machine, commodity, or technical data.
26.4 This Agreement shall be construed, and the legal relations
between the parties hereto shall be determined, in accordance
with the substantive laws of the State of New York, without
regard to the conflict of laws principles thereof. Any
proceedings to resolve disputes relating to this Agreement,
shall be commenced in the State of New York. The parties
hereto expressly waive any right they may have to a jury trial
and agree that any proceeding under this Agreement shall be
tried by a judge without a jury.
26.5 If any section or subsection of this Agreement is found by
competent judicial authority to be invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of any such section or subsection in every
other respect and the remainder of this Agreement shall
continue in effect so long as the redacted Agreement still
expresses the intent of the parties. If the intent of the
parties cannot be preserved, this Agreement shall be either
renegotiated or terminated.
26.6 No actions, regardless of form, arising out of this Agreement,
may be brought by either party more than two (2) years after
the cause of action has arisen, or, in the case of nonpayment,
more than two (2) years from the date the last payment was
due.
26.7 This Agreement may be modified only by a written amendment
signed by persons authorized to so bind Buyer and IBM. This
Agreement shall not be supplemented or modified by any course
of dealing, course of
15
16
performance or trade usage. The term "this Agreement" as used
herein includes any applicable Attachments or future written
amendment(s) made in accordance with this Section.
26.8 Failure by either party to insist in any instance on strict
conformance by the other to any term of this Agreement or
failure by either party to act in the event of a breach will
not be construed as a consent to or waiver of any subsequent
breach of the same or of any other term contained in this
Agreement
26.9 All obligations and duties which by their nature survive the
expiration or termination of this Agreement shall remain in
effect beyond any expiration or termination, including,
without limitation, Sections 8.0, 9.0, 10.0, 13.6, 14.0, 15.0,
16.0, 17.0, 18.0. 19.0 and 20.0.
26.10 The headings in this Agreement are for convenience only and
are not intended to affect the meaning or interpretation of
this Agreement.
27.0 MYKOTRONX - Mykotronx shall be bound by those provisions of this
Agreement relevant to its performance of its obligations. However,
Mykotronx has no rights whatsoever under this Agreement. In no event
and under no circumstances shall Buyer make any claim or assert any
right against IBM in any way based upon the performance of Mykotronx
and IBM shall be able to exercise any and all rights available to it
under this Agreement, against Buyer, based upon failure or alleged
failure of Mykotronx to perform its obligations hereunder, as if Buyer
had been the party that was always responsible for those obligations.
In the event Mykotronx makes any claim against IBM arising from or in
any way relating to this Agreement, then IBM shall be able to rely
fully on and assert those provisions of this Agreement that limit its
liability (Section 20, for example) and that govern choice of law
(Section 26.4) and statute of limitations (Section 26.6). Additionally,
Buyer shall fully defend and indemnify IBM against such claim.
28.0 SOLE AGREEMENT - The parties acknowledge that each has read this
Agreement and its Attachments, understands them, and agrees to be bound
by their terms and conditions. Further, the parties agree that this
Agreement and its Attachments and the IBM Design Kit License Agreement,
are the complete and exclusive statement of the agreement between the
parties, which supersedes all proposals and all prior agreements, oral
or written, and all other communications between the parties relating
to the subject matter hereof.
Agreed to: Agreed to:
INTERNATIONAL BUSINESS MYKOTRONX, INC.
MACHINES CORPORATION B
By:
------------------------- -----------------------
Name: Xxxxx X. Xxxxxx Name: Xxxx Xxxxx
Title: VP North American Sales Title: Vice President
Dated: September 04, 1997 Dated: 21 -AVG q
Agreed to:
16
17
RAINBOW TECHNOLOGIES, INC.
By:
-----------------------
Name: Xxx Xxxxxxx
Title: Vice President
Dated: 2O-AUG-97
This agreement shall not bind either party to any obligations unless and until
it is executed in writing by both parties.
17