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Exhibit 10.10
PURCHASE OFFER AGREEMENT FOR OEM MANUFACTURER
Customer: Agreement #: JV1201
Mercury Computer Systems, Inc. Date: February 16, 1995
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Thank you for doing business with IBM Microelectronics Division. This is a
master purchase offer agreement between you, the buyer, and us, International
Business Machines Corporation. You sign this Agreement only once after that,
this Agreement will govern your purchases of eligible IBM products (Products)
from us on an ongoing basis. Your IBM sales representative can give you a list
of the eligible IBM Products. You may order Products under this Agreement by
sending us a written request or by fax. If we can fill your order, we will send
you an acknowledgment, referencing this Agreement, for the Products IBM will
ship to you. We will provide Products under IBM's then current prices, charges,
and warranty periods, unless otherwise negotiated between us. Your IBM sales
representative can also give you information about IBM's prices, charges, and
warranty periods.
This Agreement, its front and back, and any acknowledgment IBM issues under it,
together called POA, are the complete agreement on this subject and replace all
prior oral or written communications between us about it. The POA cannot be
changed unless each of us signs a written modification.
Agreed to: for and on behalf of
MERCURY COMPUTER SYSTEM INC.
Signed: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Manager of Contracts
Agreed to:
INTERNATIONAL BUSINESS
MACHINES CORPORATION
Microelectronics Division
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Signed: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Print Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Director of Marketing
and Sales Operations
1. USE OF PRODUCTS
You represent that Products will be: A) integrated or incorporated in your
systems or Subsystems or as specified by IBM in an acknowledgment: or B)
distributed in incidental additional quantities for integration or incorporation
in systems or subsystems you have sold. You may also use up to 10% of the
Products internally.
2. SHIPMENT, TITLE, AND RISK OF LOSS
IBM Will Schedule each Product under IBM's applicable shipment schedule. We may
not ship Product if you cannot give us satisfactory assurances that you have
complied and can comply with any of the POA terms, including payment and use of
Products. Title to and risk of loss for a Product Pass to you when we deliver
the Product to the carrier. IBM keeps title to any software or other code under
the POA.
3. PRICES, INVOICING, PAYMENT TERMS AND TAXES
The prices Shown in Exhibit A hereto will apply to the Products.[*] We will
invoice you for the Products, including related taxes and any other charges
under this POA. Terms of payment are [*]. You will also pay a late charge
of [*] of the balance due for each month you are
late in paying IBM.
4. CANCELLATION
You may cancel an order before we ship it. If you do so at your convenience, for
standard Product you shall pay the following charges unless otherwise mutually
negotiated.
Days before
Acknowledged Shipment Dates Percent of Purchase Price
90 days or more [*]
60-89 days [*]
30-59 days [*]
0-29 days [*]
* Information omitted for confidential treatment.
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Charges for the cancellation of customized Product will be mutually negotiated
and set forth in Exhibit A hereto.
5. CHANGES
It is our objective to fill an order acknowledged by us. In situations such as
supply constraints, we may not be able to fill your order; we will inform you of
this, and you may cancel the order without charge. We may withdraw a Product
from the list on 60 days' notice. We may change a Product's specifications at
any time. Customer's prior approval is required for any change which affects the
form, fit, function, or reliability of a Product.
6. MANUALS AND DISKETTES
You can modify manuals and diskettes we provide under this POA as needed to
support your use of Products. Distributed manuals and diskettes must not include
anything that suggests we are the source of the manuals or diskettes or
Products. You can distribute modified manuals and diskettes only for use with
Products. You must make diskettes available subject to a license agreement
acceptable to us. You must include a copyright notice in distributed manuals and
diskettes. The copyright notice must comply with the copyright law and must
identify the owner as you "and others". You must also include a U.S. Government
user Restricted Rights notice.
7. PATENTS AND COPYRIGHTS
If a third party claims that a Product we provide under this POA infringes that
party's patent or copyright, we will defend you against that claim at our
expense and pay all costs, damages, and attorney's fees that a court finally
awards, provided that you: 1) promptly notify us in writing of the claim: and 2)
allow us to control, and cooperate with us in, the defense and any related
settlement negotiations. If such a claim is made or appears likely to be made,
about a Product in your inventory, you agree to permit us to either enable you
to continue to market and use the Product, or to modify and replace it. If IBM
determines that none of these alternatives is reasonably available, you will
return the Product to us on our written request for an appropriate credit or
refund as IBM decides. This is IBM's entire obligation to you regarding any
claim of infringement.
IBM has no obligation regarding any claim based on any of the following: A)
modification of a Product by you or at your direction or its use in other than
its specified operating environment; B) the combination, operation, or use of a
Product with any product, data, or apparatus that IBM did not provide; or C)
infringement by a non-IBM Product alone, as opposed to its combination as part
of a system of Products that IBM provides.
8. LIMITED WARRANTIES
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IBM warrants a Product to be free from defects in material and workmanship, in
the U.S.A., for one year from the date of shipment.
Products shipped outside of the U.S.A., samples, prototypes, and test vehicles,
and any IBM services provided under this POA are AS IS. IBM manufactures
Products from new or serviceable used parts. Exchanged parts become the property
of IBM.
If you believe that a Product is not as warranted, you will: A) promptly notify
us in writing; B) at our request, return the Product freight prepaid to our
designated location. If IBM decides the Product does not meet its warranty, we
will, at our option, repair or replace the Product, or issue a credit or refund
of the purchase price. This warranty will not include credit, repair, or
replacement of a Product which has a defect due to your, or another's, actions
or omissions.
THE FOREGOING WARRANTIES REPLACE ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS OR USE FOR A
PARTICULAR PURPOSE.
9. LIABILITIES
Circumstances may arise where, because of a default or other liability, you are
entitled to recover damages from us. In each such instance, regardless of the
basis on which damages can be claimed, the following terms apply. IBM is
responsible for: 1) payments referred to in our patent and copyright terms
described above; and 2) bodily injury (including death), and damage to real
property and tangible personal property caused by the Product; and 3) the amount
of any other actual loss or damage, up to the greater of $100,000 or the charge
for the Product subject to the claim.
Under no circumstances is IBM liable for any of the following: A) third-party
claims against you for losses or damages other than those in items 1) and 2), in
this Section 9; B) loss of, or damage to your or another's records or data; or
C) economic consequential damages (including lost profits or savings) or
incidental damages, even if we are informed of their possibility.
10. SOFTWARE
If IBM provides you software or other code ("software") under this POA, the
software will be subject to this POA and any license agreement provided with the
software. If you object to a license agreement, you must return the software
within 10 days of when you receive it. If IBM does not provide a license
agreement, the software will be subject to this POA and all copyright laws.
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11. ENGINEERING CHANGES
We may issue mandatory engineering changes, such as those required for safety.
You will install those engineering changes as directed by us, subject to the
provisions of Section 5 of this Agreement.
12. ENDING THE AGREEMENT
Either of us may end this POA by a 30 day written notice. All clauses and
acknowledgments which by their nature extend beyond the end of this POA remain
in effect until they have been fulfilled, and they apply to respective
successors and assigns.
13. GENERAL
All information exchanged under this POA is nonconfidential. Any exchange of
confidential information must be made under a separate signed confidentiality
agreement.
Except for your obligation to pay, neither of us will be responsible for failing
to perform under this POA for acts of God, natural disasters, embargoes and
similar causes beyond its reasonable control.
Neither this POA, nor the sale of Products under it, will be deemed to give
either of us any licenses, immunities or other rights, directly or by
implication, under the trademarks, trade names, patents, copyrights or any other
intellectual property rights of the other.
You will keep suitable records to show you have complied with the terms of this
POA. At IBM's request, you will demonstrate to us that you have fully complied
with the terms of this POA.
Neither of us will bring a legal action against the other more than two years
after the cause of action arose, except for actions for nonpayment and
enforcement of intellectual property rights. Each of us waives the right to a
jury trial in a dispute under this POA.
Failure by either of us to demand performance or to exercise a right, when
entitled, does not prevent us from doing so later for that default or any other
one.
Each of us will comply with all applicable United States, European Economic
Commission, and other country or country group laws and regulations, including
those relating to exports. You represent that you do not intend now, or in the
future, to ship, directly or indirectly, any IBM Product, data, or information,
to a prohibited country or country group or its nationals.
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The headings in this POA are for reference only. They will not affect the
meaning or interpretation of the POA.
You will not assign your rights or delegate your duties under this POA without
our written consent.
The substantive laws of the Commonwealth of Massachusetts govern this Agreement.
14. Exhibit A hereto sets forth the part numbers of Products under this
Agreement, and applicable prices, volume commitments, cancellation and
reschedule schedule, and requirements for good die.
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EXHIBIT A
1. SCOPE OF WORK
1.1 IBM will provide assembly services for Mercury's printed circuit cards.
These require Surface Mount Technology (SMT) or wave solder assembly processes.
Mercury will order the assembly services from IBM by issuing its Purchase Order
for up to [*] cards of any one particular part number.
These services also include soldering in accordance with Mercury's Drawings and
BOMs.
IBM will perform these assembly and solder services in accordance with the
schedule in Section 2 below. There will be no electrical costing provided by
IBM. Assembled and soldered cards will be shipped to Mercury. Technical
requirements are set forth in Section 3.3 below. Mercury will provide all
components and printed circuit cards ("Items").
Mercury is responsible for the quality of the cards and components which IBM
will assemble. IBM will not perform services which include incorporating any
items which have obvious or readily ascertainable defects. In the event IBM
identifies any such items, they will be returned freight collect to Mercury
for repair or replacement. The delivery schedule will be offset by the amount
of time between the date the items are returned to Mercury to the date the
items are received by IBM.
1.2 The Deliverables are:
From Mercury to IBM:
A. Hardware:
Selected quantity of printed circuit cards (up to *)
Components required for assembly
B. Data and Setup Drawings:
▇▇▇▇ of Materials (BOMs)
Assembly prints and drawings sufficient for solder stencil
fabrication and placement machine programing
Component placement (centroid) data
Gerber data
From IBM to Mercury:
The selected quantity of completed card assemblies (up to *)
1.3 Changes to Statement of Work
Mercury may, at any time and from time to time, by written notice to IBM,
request changes to the part numbers, specifications, or work scope. IBM shall
submit a written report to Mercury setting forth the probable effect, if any, of
the requested change in regard to the work and the effort on any change in
prices or delivery. IBM shall not proceed with any change until authorized in
writing by Mercury. The parties shall promptly amend this Agreement to
incorporate any agreed changes.
2. DELIVERY
Attach 1 Page 1 0519
*Information omitted for confidential treatment.
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2.1 To order the assembly services, Mercury will notify IBM at least 2 weeks
prior to its required shipment date by issuing its Purchase Order for a
particular part number or part numbers. This Purchase Order will contain
selected quantity of circuit cards to be assembled and the shipment
date. For new part numbers, Mercury will furnish its Data and Setup Drawing and
Deliverables at least 3 weeks prior to the shipment date. Mercury will furnish
the Hardware Deliverables at least two weeks prior to the shipment date.
2.2 All completed assemblies will be shipped to Mercury FOB Collect, using
Mercury's specified carrier, from Endicott, New York. Any risk of loss shall
pass to Mercury upon delivery to the carrier for shipment.
3. SPECIAL ITEMS
3.1 Damage to Items
IBM shall be liable to Mercury for any loss or damage to Mercury's consigned
parts or components due to the negligence of IBM while in IBM's custody.
Excluded from this responsibility is reasonable wear and tear, or loss,
damage, or destruction caused by circumstances beyond IBM's control while in
IBM's care, custody and control. All replacement parts or components shall
become Mercury's property and shall be subject to all the terms and conditions
of this Agreement. In such event, IBM's maximum liability shall be the lesser
of the actual cost of the part or component damaged (substantiation to be
provided by Mercury) or the price charged IBM for the service performed
(associated with that part) hereunder.
3.2 Acceptance and Rejection
3.2.1 Acceptance
Acceptance or rejection of Product shall be determined by Mercury comparing
the output produced by IBM for conformance to the Specifications attached as
Attachment 2 to the Supplement (dated May 5, 1995) to POA No. JV1201, Section 1
above. Mercury will notify IBM whether the Product is accepted or rejected
within thirty (30) calendar days from the date of shipment. Any Product not
expressly rejected by Mercury within this time period shall be deemed accepted.
3.2.2 Rejection
In the case of rejection Mercury shall: (i) promptly notify IBM in writing of
the basis for such rejection, (ii) follow IBM's instructions for the return of
the Product, and (iii) return such Product freight collect to IBM's designated
facility. If IBM agrees the Product is defective, IBM will repair the rejected
Product or issue a credit for the purchase price applicable to the rejected
Product.
If IBM uses Items and these Items fail to meet specifications, Mercury will
waive its right of rejection.
3.3 Technical Requirements
a. The following are technical requirements for Mercury:
[*]
* Information omitted for confidential treatment.
Attach 1 Page 2 0519
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b. The following are IBM practices to be followed:
1) IBM will build assemblies to IPC 610 workmanship standards.
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ATTACHMENT 1 - STATEMENT OF WORK
SCOPE OF WORK
1 IBM will perform manufacturing services as follows:
RFS 3916001
IBM will provide prototype assembly services for Customer's [*][*][*].
Customer will order the assembly services from IBM by issuing its Purchase
Order for up to [*] boards.
These services will include soldering in accordance with Customer's assembly
prints and drawings for [*][*][*], which are now in IBM's possession.
These assembly services will require a first order NRE (Non Recurring Expense)
set-up and tooling charge.
The purchase of one NRE will cover assembly of the first three Part Numbers
stated above. The purchase of another NRE will cover assembly of the next four
Part Numbers stated above. The purchase of another NRE will cover the assembly
of the next two Part Numbers stated above. The purchase of another NRE will
cover the assembly of the last four Part Numbers stated above.
IBM will perform these prototype assembly and soldering services in accordance
with the schedule below. There will be no electrical testing provided by IBM.
Assembled and soldered prototype boards will be shipped to Customer. Customer
will provide all components and printed circuit boards.
A. Hardware:
Set-up hardware of two printed circuit boards and their components which
need only be mechanically good
Selected quantities of printed circuit boards (up to 400 per Part Number)
Components required for assembly
B. Data and Set-up Drawings
RFS 3916001 SCHEDULES
To order the assembly services, Customer will notify IBM at least 1 week prior
the Build Date by issuing its Purchase Order for a requested quantity [*][*][*].
Customer will furnish the Data, Set-up Drawings, and Set-up hardware at least 1
week prior to the Build Date.
Customer will furnish its Build Hardware Deliverables at least 2 working
Attachment 1 Page 1 3916001
* Information omitted for confidential treatment.
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days prior to the Build Date.
Estimated Board Assembly ship date will be scheduled for 10 Business Days
following the Build Start Date for 5 - 199 boards, and 15 Business days
following the Build Start Date for 200 - 400 boards.
RFS 3916001 TECHNICAL EXCEPTIONS/ASSUMPTIONS
Parts will be supplied on tape and reel, or in tubes or trays.
1.2 The Deliverables are:
a. Items from Customer to IBM:
A. Hardware:
Set-up hardware of two printed circuit boards and their components which
need only be mechanically good
Selected quantities of printed circuit boards (up to [*] per Part Number)
Components required for assembly
B. Data and Set-up Drawings
▇▇▇▇ of Materials
Assembly prints and drawings sufficient for solder stencil fabrication
and placement machine programming
Component placement (centroid) data
Gerber data
b. Products from IBM to Customer:
The selected quantity of completed board assemblies (up to 400 per Part
Number)
1.3 Changes to Statement of Work
Customer may, at any time and from time to time, by written notice to IBM,
request changes to the part numbers, specifications, or work scope. IBM shall
submit a written report to Customer setting forth the probable effect, if
any, of the requested change in regard to the work and the effect on any
change in prices, payments or delivery. IBM shall not proceed with any change
until authorized in writing by Customer. The parties shall promptly amend
this Agreement to incorporate any agreed changes.
2. DELIVERY
2.1 Customer requests IBM to turnaround this work in 10 business days after
IBM's receipt of all Items.
2.2 All Product will be shipped to Customer FOB Collect from Endicott, New
York. Title to and risk of loss for products shall pass to Customer upon
delivery to Customer's carrier except if product is given to Customer's
carrier in Bromont, Canada, this will not be deemed to alter the passage of
title in the United States. In the event of a dispute regarding passage of
title to products, the parties agree title will be deemed to have passed in
the United States as this is a transaction between two United States
companies which title and sale takes place in the United States.
3. SPECIAL ITEMS.
3.1 Damage to Items
In case of damage to or deterioration, destruction or loss of any Items
during the processing such that completion of the processing is rendered
impracticable, IBM will repeat or continue the processing without charge
provided Customer provides a replacement Item without cost to IBM. IBM shall
have no other liability with respect to damaged or lost Items and shall not
be responsible for the value of such Items.
3.2 Acceptance and Rejection
3.2.1 Acceptance
Acceptance or rejection of Product shall be determined by Customer comparing
the output produced by IBM for conformance to Attachment A, Quality and/or
Engineering Specifications or the requirements specified in
Attachment 1 Page 2 3916001
* Information omitted for confidential treatment.
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the Scope of Work above in Section 1.1 Customer will notify IBM whether the
Product is accepted or rejected within ten (10) calendar days from the date of
shipment. Any Product not expressly rejected by Customer within this time period
shall be deemed accepted.
2.2 Rejection
In the case of rejection Customer shall:
1. promptly notify IBM in writing of the basis for such rejection,
2. follow IBM's instructions for the return of the Product, and
3. return such Product freight collect to IBM's designated facility.
If IBM agrees the Product is defective, IBM will repair the rejected Product or
issue a credit for the purchase price of the service performed by IBM applicable
to the rejected Product.
If IBM uses Items and these Items fail to meet specifications, Customer will
waive its right of rejection.
3.3 Warranties
IBM warrants that all Services performed or Products delivered hereunder to be
free from defects in material and workmanship for a period thirty (30) days
from the date of shipment by IBM to Customer. IBM shall, at its option, repair
any defective Product, or issue a credit equal to the purchase price of the
Service performed by IBM, provided that Customer complies with Section 3.2.2
above.
IBM makes no warranty or representation regarding the infringement of the
intellectual property rights of third parties.
THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
3.4 Used Parts
Each IBM product is manufactured from new parts, or new and used parts. In some
cases, the product may not be new and may have been previously installed.
Regardless of the product's production status, our warranty terms apply. Where a
type of services involves the exchange of a product or part, the item IBM or
your reseller replaces becomes yours. The replacement may not be new, but will
be in good working order.
4. NOTICES
Note to Customer - please insert the name and address of the individual who
will be your contact for this agreement:
Customer Contact: IBM Contact:
_____________________________ ▇▇▇▇ ▇▇▇▇▇▇
IBM Microelectronics
_____________________________ D/U 13G
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_____________________________ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
_____________________________
_____________________________
Please supply the name and addresses for the following:
Ship To Name and Address: ▇▇▇▇ To Name and Address:
▇▇▇▇ ▇▇▇▇▇▇▇ ______________________________________
Mercury Customer Systems, Inc.
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
______________________________________
______________________________________
5. Term of Agreement
This Agreement shall begin on the date signed by IBM, and shall expire on
04/30/98.
Attachment 1 Page 4 3916001
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Attachments to Attachment 1:
If Terms and Conditions of this IBM Quotation 3916001 are in conflict with
those of the existing Supplement to the Purchase Offer Agreement V1201, as
amended, then Terms and Conditions of the Supplement to the Purchase Offer
Agreement take precedence.
page 5 3916001
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Attachment 2
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* Information omitted for confidential treatment.
