EXHIBIT 99.4
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SUPPLY AGREEMENT
BY AND BETWEEN
AGERE SYSTEMS INC.
AND
PROXIM CORPORATION
DATED AS OF AUGUST 5, 2002
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TABLE OF CONTENTS
Page
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1. DEFINITIONS 1
2. TERM OF THE AGREEMENT 4
3. SCOPE OF THE AGREEMENT 4
4. SCHEDULES 7
5. SUPPLIER'S RESPONSIBILITIES 8
6. EXPORT CONTROL 8
7. ELECTRONIC DATA INTERCHANGE 9
8. ORDERS 9
9. BLANKET PURCHASE ORDERS 9
10. FLEXIBLE DELIVERY ARRANGEMENTS 10
11. SHIPPING 10
12. FORECASTS 10
13. PRICES 10
14. BENCHMARKING 10
15. PRICE REVISION 11
16. DUTIES AND TAXES 11
17. PAYMENT TERMS 11
18. DELIVERY, TITLE AND RISK OF LOSS 12
19. PRODUCT MAKEUP AND CHANGES; DISCONTINUATION 12
20. LICENSE TO LICENSED MATERIALS 13
21. RESCHEDULING OR TERMINATION OF ORDERS 15
22. DELIVERY INTERVAL 16
23. WARRANTIES AND WARRANTY EXCLUSIONS 16
24. REPAIRS NOT COVERED UNDER WARRANTY 19
25. INDEMNITY 20
26. INTELLECTUAL PROPERTY INDEMNITY 20
27. TRADEMARKS AND OTHER INDICIA 21
28. CONFIDENTIALITY 22
29. TERMINATION; EXPIRATION OF AGREEMENT 23
30. EXCLUSIVE REMEDIES; LIMITATION OF LIABILITY 24
31. MEDIATION; DISPUTE RESOLUTION 25
32. INSURANCE AND INDEMNIFICATION BY SUPPLIER 25
33. RESELLER CUSTOMERS 26
34. CUSTOMS DUTY DRAWBACK 26
35. FOB 27
36. ADDITIONAL PROVISIONS 27
37. COMPLIANCE WITH LAWS 27
38. MISCELLANEOUS 27
SCHEDULE 3 - PRODUCTS AND PRICE SCHEDULE 33
SCHEDULE 4 - INTERNATIONAL TERMS 35
SCHEDULE 20A - LIMITED USE SOFTWARE LICENSE AGREEMENT 41
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SCHEDULE 20B - LIST OF FIRMWARE 41
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SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT (this "Agreement"), dated as of August 5, 2002
(the "Effective Date"), is by and between Agere Systems Inc., a Delaware
corporation ("Agere" or "Supplier"), and Proxim Corporation, a Delaware
corporation ("Buyer").
R E C I T A L S
A. WHEREAS, the Parties have entered into an Asset Purchase Agreement,
dated as of June 14, 2002 (the "Purchase Agreement"), pursuant to which Agere is
selling, and Buyer is acquiring, Agere's ORiNOCO Business (as defined in the
Purchase Agreement);
B. WHEREAS, in connection with the purchase and sale of the ORiNOCO
Business, Buyer seeks to appoint Agere, and Agere desires to be so appointed, as
Buyer's supplier of the products specified herein on the terms and conditions
set forth herein; and
C. WHEREAS, in furtherance of the foregoing transaction, Agere and Buyer
desire to enter into this Agreement to provide for certain commercial
transactions between the Parties as described herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valid consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
1. DEFINITIONS
For the purposes of this Agreement, in addition to the words and phrases
that are defined throughout the body of this Agreement, the following words and
phrases shall have the following meanings:
"Affiliate" of any Person means any Person that controls, is controlled
by, or is under common control with such Person. As used herein, the term
"control" (including the terms "controlling", "controlled by" and "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities or other interests, by contract
or otherwise.
"Authorized Provider" shall mean (1) any of Supplier's authorized
distributors, dealers and similar entities, which may include Supplier's
Affiliates to which Supplier may assign or subcontract all or part of an Order
for Products, Licensed Materials or services; or (2) any Person who executes an
LOA and who, by doing so, agrees to be bound by the terms and conditions of this
Agreement, except as modified or exempted by the relevant LOA.
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"Buyer's Products" shall mean products designed, produced, marketed, and
distributed by Buyer that contain or incorporate the Products provided under
this Agreement.
"End User" means (i) with respect to Software and Licensed Material, any
third party to whom Buyer or a Sublicensee of Buyer has granted rights to use,
but not to sublicense, Licensed Materials, and (ii) with respect to Products, a
third party who purchases Products primarily for use by such third party or
inclusion by such third party in networks or systems produced and sold by such
third party, and not for resale.
"Firmware" means Software embedded with Product hardware that is not
directly accessible by and cannot be loaded onto, removed from or altered by End
Users of such hardware.
"Governmental Authority" means any federal, state, local, foreign or
international court, government, department, commission, board, bureau, agency,
official or other regulatory, administrative or governmental authority.
"Information" means information, whether or not patentable or
copyrightable, in written, electronic or other tangible or intangible forms,
stored in any medium, including studies, reports, records, books, contracts,
instruments, surveys, discoveries, ideas, concepts, know-how, techniques,
designs, specifications, drawings, blueprints, diagrams, models, prototypes,
samples, flow charts, data, computer data, disks, diskettes, tapes, computer
programs or other software, marketing plans, customer names, communications by
or to attorneys (including attorney-client privileged communications), memos and
other materials prepared by attorneys or under their direction (including
attorney work product), and other technical, financial, employee or business
information or data.
"Licensed Materials" means any Software and Related Documentation
offered under this Agreement for which a license to use, sublicense, modify, or
distribute is granted under the terms and conditions of this Agreement. The term
Licensed Materials includes any third-party provided Software and Related
Documentation to which Supplier has sub-licensing rights and that are
incorporated into Supplier's Licensed Material.
"LOA" shall mean a Letter of Acceptance substantially in the form
attached hereto as Exhibit 1 to Schedule 4 to be used by a Non-U.S. Ordering
Company for the purpose of placing Orders outside of the United States.
"Non-U.S. Ordering Company" shall mean any Affiliate of Buyer located
outside the United States who has entered into a LOA with the appropriate
Supplier Entity in the same geographic area and is therefore authorized to order
Products, Licensed Materials or Services under this Agreement.
"Object Code" shall mean any compiled, assembled, or machine-executable
version of the Software, or any part thereof.
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"Order" shall refer to a written order for the provision of Products, Licensed
Materials or services pursuant to this Agreement, including Blanket Purchase
Orders as specified in Section 9.
"Ordering Company" shall refer to Buyer, any Affiliate of Buyer, or a
Non-U.S. Ordering Company that places an Order under this Agreement or an
applicable LOA.
"Party" shall refer to either Agere or Buyer; "Parties" shall refer to
Agere and Buyer collectively.
"Products" means systems, equipment, chip sets, assemblies and parts
thereof, offered under this Agreement and described in Schedules 3, but does not
include Software.
"Person" means an individual, a general or limited partnership, a
corporation, a trust, a joint venture, an unincorporated organization, a limited
liability entity, any other entity and any Governmental Authority.
"Price Schedule" shall mean the prices for the Products and Licensed
Materials listed in Schedule 3.
"Related Documentation" means materials in any form useful in connection
with Products of Software and/or its use including, but not limited to any
description, specification, listing, flow chart or mode of operation of such
Products or Software (including methods and concepts used therein).
"Reseller Customer" means a customer of Buyer who has an agreement with
Buyer to distribute or resell any of the Products, Licensed Materials or
services to End User customers.
"Software" means the programs, routines and symbolic languages that
control the functioning of Product hardware, including all Firmware, regardless
of the form, whether such Software is provided separately or bundled with or
embedded within such hardware. "Software" may be contained in any medium
whatsoever but shall not be read to mean or include such medium.
"Source Code" means any version of Software incorporating high-level or
assembly language that generally is not directly executable by a processor.
"Sublicensee" means any third party to whom Buyer or another sublicensee
grants rights to use and sublicense Licensed Materials.
"Supplier Entity" shall mean Supplier or an Affiliate or Authorized
Provider in a given geographical area that has executed a LOA with Buyer or a
Non-U.S. Ordering Company. Unless a LOA is executed by a Supplier Entity in a
particular geographical area outside the United States, this Agreement does not
cover that Supplier Entity; provided, however, that
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absence of a LOA does not preclude export in compliance with the applicable
United States export control laws and the laws of Buyer's or Supplier's
geographic location. Unless the context indicates otherwise, any reference to
Supplier in this Agreement shall constitute a reference to the applicable
Supplier Entity.
"United States" means the fifty (50) states comprising the United States
of America and the District of Columbia.
2. TERM OF THE AGREEMENT
The term of this Agreement shall commence on the Effective Date and
shall expire on the third (3rd) anniversary of the Effective Date, unless
earlier terminated in accordance with the provisions hereof (the "Term"). The
Term may be extended for additional one (1) year periods upon the mutual written
agreement of the Parties. The rights and obligations of the Parties which by
their nature would continue beyond the termination, cancellation, or expiration
of this Agreement, shall survive such termination, cancellation or expiration.
3. SCOPE OF THE AGREEMENT
(a) This Agreement contemplates that Buyer will buy on an as ordered
basis from Agere certain Products and Licensed Materials as set forth in
Schedule 3. Subject to Buyer's existing commitments, each of Buyer and Supplier
agree that, through the Term, to the extent Buyer is able to purchase Products
from Supplier consistent with Buyer's future designs at levels of price,
quality, quantity and service that are competitive with the levels obtainable by
Buyer in an arm's length transaction with third Parties, Supplier shall be a
preferred supplier of such Products and related Licensed Materials to Buyer and
Buyer shall use commercially reasonable efforts to purchase such Products from
Supplier to the exclusion of other vendors and suppliers.
(b) Under the terms and conditions of this Agreement, Agere shall sell
to Buyer, for (i) the purpose of incorporation of Product(s) or Licensed
Material(s) into Buyer's finished products for sale or resale to End User
customers or to Reseller Customers or for use as spares or replacement parts for
such finished products ("OEM Sale"); (ii) sales in which the Product(s) or
Licensed Material(s) is resold or sublicensed as part of Bundled Offers by Buyer
to End User customers and/or to Reseller Customers or for use as spares or
replacement parts for such offers ("Value Added Resale" or "VAR"); or (iii) such
other uses or projects to which the Parties may agree in writing. For purposes
of (ii) above, a "Bundled Offer" is a product offering made by Buyer to its End
User customers and/or Reseller Customers consisting of the Products or Licensed
Materials combined with other products or services provided by Buyer, the
combination of which will add additional value to End Users of the Products or
Licensed Materials. Stand alone resale of the Products or Licensed Materials
which does not constitute an OEM Sale or a Value Added Resale is prohibited,
except as expressly permitted herein including but not limited to provision of
spares or replacement parts in connection with a sale permitted hereunder, or as
the Parties may otherwise agree in
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writing.
(c) The only Products and Licensed Materials covered by this Agreement
are those (i) listed on Schedule 3 and/or explicitly stated herein and all
improvements, updates, or upgrades to such Products and Licensed Materials that
are released to the market by Supplier during the Term, or (ii) offered by
Supplier to Buyer under this Agreement by other written notice. Agere may add to
Schedule 3 at any time, provided that Buyer agrees in writing to the addition of
new Products or Licensed Materials.
(d) Buyer and any of its Affiliates in the United States may place or
enter into Orders under this Agreement for the procurement of Products or
Licensed Materials in the United States.
(e) In the event that Buyer, or Buyer's designated contract
manufacturer, wants to procure Products and/or Licensed Materials outside the
United States, the following procedures shall apply:
(1) Prior to submitting or entering into an Order under this
Agreement, the Non-U.S. Ordering Company and the relevant Supplier Entity shall
sign a LOA committing them to utilize the terms and conditions of this Agreement
in any forthcoming procurement of Products or Licensed Materials in their
location, subject to any modified, additional, or deleted terms as set forth in
the LOA. Each LOA shall state the Supplier Entity, the Non-U.S. Ordering
Company, the applicable Products and Licensed Materials, and the geographical
area to which it applies. Each LOA will incorporate by reference the master
terms and conditions of this Agreement, the additional international terms set
forth in Schedule 4 (International Terms), and will specify any agreed upon
changes required by local law, local operational practice, the availability or
variation of services for the geographical area, or any other in-country needs
or concerns. Such additional terms may include, but shall not be limited to:
currency in which payment is to be made, taxes, delivery terms, passage of
title, importer of record, in-country installation and maintenance requirements,
or choice of law, and handling of disputes as well as operational changes (e.g,
lead times, response times, service support plans and offerings, etc.).
Notwithstanding the foregoing, the Parties intend that the terms and conditions
of the Agreement, as supplemented and/or modified by Schedule 4, shall apply
except with respect to those mutually agreed upon provisions which are required
to address (1) local laws/regulations or (2) operational issues resulting from
transacting in the particular country identified in the relevant LOA. Each LOA
shall be deemed a separate contract between the Parties who sign it, and each
Party identified in such LOA shall look only to the other for performance of
their respective obligations under such LOA and any Order placed pursuant to it.
Once a LOA has been executed by the relevant Parties, multiple Orders may be
placed under such LOA.
(2) For deliveries outside of the United States only: (i) should
there be a conflict between the terms and conditions of a LOA and this Agreement
(including the applicable International Terms set forth in Schedule 4), the
terms of the LOA shall prevail;
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and (ii) should there be a conflict between the terms and conditions of this
Agreement and the International Terms, the International Terms shall prevail.
Once a LOA for a specific geographic area is executed between a Non-U.S.
Ordering Company and a Supplier Entity Parties, Orders may be placed under the
LOA following the procedures set forth herein (unless modified or amended by the
relevant LOA). In the event of a conflict between the terms of a LOA or this
Agreement and an Order, the terms of the Order shall prevail, provided the terms
of the Order have been approved in writing by authorized representatives of the
Parties.
(f) It is expressly understood and agreed that this Agreement neither
grants to Supplier an exclusive right or privilege to sell to Buyer any or all
Products, Licensed Materials or services of the type described in this Agreement
which Buyer may require, nor requires the purchase of any Products, Licensed
Materials or services from Supplier by Buyer. It is, therefore, understood that
Buyer may contract with other manufacturers and suppliers for the procurement of
comparable Products, Licensed Materials or services. In addition, Buyer shall at
its sole discretion, decide the extent to which Buyer will market, advertise,
promote, support, or otherwise assist in further offerings of the Products,
Licensed Materials or services.
(g) The relationship of the Parties under this Agreement shall be, and
at all times remain, one of independent contractors and not that of franchiser
and franchisee, joint ventures, or principal and agent. Neither Party shall have
any authority to assume or create obligations on the other's behalf with respect
to such Products or Licensed Materials, and neither Party shall take any action
which has the effect of creating the appearance of its having such authority.
Nothing in this Agreement shall be deemed or construed by the Parties or any
third party as creating the relationship of principal and agent, partnership or
joint venture between the Parties, it being understood and agreed that no
provision contained herein, and no act of the Parties, shall be deemed to create
any relationship between the Parties other than the relationship of independent
contractor.
(h) Neither Party is, or shall hold itself out to be, the representative
of the other. Buyer shall market the Products and Licensed Materials to
customers on such terms and conditions as Buyer chooses, provided Buyer does not
violate this Agreement.
(i) In the event Buyer wishes to sell or license certain of Supplier's
Products or Licensed Materials under Buyer's brands and marks, the following
additional terms and conditions apply:
(1) Supplier will affix Buyer's brands or marks to the Products,
Licensed Materials, documentation, and packaging materials produced for Buyer
pursuant to this Agreement ("Buyer Branded Materials"). It is expressly
acknowledged that this Agreement shall not give Supplier any right, title or
interest in or to Buyer's brands or marks and that any goodwill arising from any
use or distribution of the Buyer Branded Materials shall inure solely to the
benefit of Buyer. Buyer hereby grants Supplier a royalty free, non-exclusive,
non-
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transferable worldwide license:
(a) to duplicate and use Buyer's brands and marks for the
limited purpose of marking Buyer Branded Materials (or having Buyer Branded
Materials made by Supplier's suppliers); and
(b) to market, sell, and distribute such Buyer Branded Materials
exclusively to Buyer or to such Persons as directed to or authorized by Buyer.
(2) To the extent applicable, Supplier will label Products or
Licensed Materials as required by Part 68 of United States Federal
Communications Commission rules, 47 C.F.R. Section 68.300. At the sole
discretion of Supplier, certain Products, Licensed Materials, components,
documentation, or packaging delivered to Buyer may also bear trade names,
trademarks, trade devices, logos, codes, serial numbers, or other symbols of
Supplier or of third Parties, or of any combination thereof (collectively "Other
Marks"). Neither this Agreement nor the purchase and resale of Products or
licensing of Licensed Materials containing such Other Marks shall give Buyer any
right, title, interest, or privilege with respect to any of the Other Marks.
Buyer shall not conduct business or market Products or Licensed Materials under
any of the Other Marks or derivatives or variations thereof. Buyer may disclose
that the Products are manufactured or produced by Supplier, but Buyer shall not
directly or indirectly hold itself out as having any other relation to Supplier
or to any of its affiliates. Buyer shall take all commercially reasonable steps
to ensure that its dealers, distributors, and agents comply with all provisions
of this Section. Notwithstanding the preceding, the presence of Other Marks
shall not affect Buyer's rights to resell Products or sub-license Licensed
Materials in accordance herewith.
(3) With respect to Buyer's Branded Materials, except as expressly
set forth in this Agreement, Buyer shall not, without Supplier's express written
permission, use in advertising, publicity or otherwise any Supplier name,
trademark, service xxxx or symbol, trade dress or any other indicia of origin.
Buyer shall not represent that it is a dealer, distributor, supplier or agent of
Supplier or that it is affiliated with, endorsed by, sponsored by or in any way
connected with Supplier. Buyer shall not imply or state that it has any
authority to bind Supplier or to modify Supplier's warranty.
4. SCHEDULES
The following Schedules are incorporated by reference hereunto and form
a part of this Agreement:
Schedule 3 Agere Products and Price Schedule
Schedule 4 International Terms
Schedule 20A Supplier License Agreement
Schedule 20B List of Firmware
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5. SUPPLIER'S RESPONSIBILITIES
Supplier agrees at all times:
(a) to keep abreast and to keep Buyer abreast of any major developments
in Supplier's industry and to promptly advise Buyer of any developments that
might affect the production of any Product or Licensed Material under this
Agreement or any Order placed hereunder.
(b) to permit Buyer to review, inspect, and evaluate on a periodic basis
(but not unreasonably frequently) Supplier's parts and supplies and Supplier's
facilities.
(c) to immediately notify Buyer's representative thereof and include all
relevant information concerning the delay or potential delay if Supplier has
knowledge that anything prevents or threatens to prevent the timely delivery of
Products or Licensed Materials under this Agreement or an Order placed pursuant
to this Agreement.
(d) to provide timely notice to Buyer of improvements, updates, or
upgrades to Products.
(e) to manufacture the products in compliance with the requirements of
ISO 9002.
(f) to have an established system to allow traceability from production
lots to material lots used in the production lot. This will allow traceability
of specific defective material.
(g) in the event of delinquent Product deliveries, Product shortages or
shortfalls or periods of Product allocations, Supplier shall allocate available
Product to Buyer in a fair and reasonable manner (e.g., on a pro rata basis
based on historical purchases) relative to any and all of Supplier's similarly
situated customers.
6. EXPORT CONTROL
The Parties acknowledge that any Products, Licensed Materials and
services and all other Software and technical information (including, but not
limited to, services and training) provided under this Agreement are subject to
U.S. export laws and regulations and any use or transfer of such Products,
Licensed Materials, services, and technical information must be authorized under
those laws and regulations. The Parties agree that they will not use,
distribute, transfer, or transmit the Products, Licensed Materials, services, or
technical information (even if incorporated into other products) except in
compliance with U.S. export laws and regulations. The Parties each agree to sign
written assurances and other export- related documents as may be required by the
other to comply with U.S. laws and export regulations.
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7. ELECTRONIC DATA INTERCHANGE
Supplier agrees, if requested by Buyer, to use commercially reasonable
efforts to implement "Electronic Data Interchange" or "EDI" as an electronic
means of trading business documents with Buyer. The electronic business
documents may include Orders, acknowledgments, Order changes, ship notices,
invoices, remittance advice, electronic funds transfer (EFT) or such purchasing
communications as may be reasonably requested by Buyer for transactions under
this Agreement.
8. ORDERS
Orders submitted by Buyer for the Products or Licensed Materials shall
be deemed subject to this Agreement unless the Parties otherwise expressly agree
in writing. All Orders shall be subject to acceptance by Supplier. Unless prior
written notice of rejection is received by Buyer from Supplier, Orders issued
under this Agreement shall be deemed to have been accepted by Supplier upon the
occurrence of the earliest of: (1) expiration of five (5) business days from the
date of issuance of the Order; (2) Supplier's written acceptance of the Order;
(3) shipment of the Products or Licensed Materials; or (4) submission of
Supplier's first invoice. Orders shall indicate the Products and Licensed
Materials to be furnished, applicable pricing, product code and Buyer's
warehouse address, requested delivery dates, and any other information
reasonably requested by Supplier. Orders may be submitted in writing or by such
electronic means as mutually agreed.
Changes by Buyer to an Order that has been previously accepted by
Supplier (a "Change Order") are subject to acceptance by Supplier. Change Orders
shall be treated as a separate order. In the event Buyer submits a Change Order
and such change affects Supplier's ability to meet its obligations under the
original Order, any price (or discount, if applicable), shipment date or
services completion date quoted by Supplier with respect to such original Order
is subject to change. Supplier will provide to Buyer written quotations and
expected completion dates for any requested Change Orders. If the Parties agree
on such revised terms, the Change Order shall be deemed accepted.
9. BLANKET PURCHASE ORDERS
Buyer may submit Blanket Purchase Orders under this Agreement. Blanket
Purchase Orders cover a specific period of time as identified on the order. The
quantity of Products or Licensed Material specified in such Blanket Purchase
Orders is Buyer's forecasted usage for the specified period. The forecast is not
a commitment. Buyer's only commitment is for the number of units ordered by
Buyer by specific written requests for product to be released (the "Release"),
except as otherwise stated in this Agreement. A Release shall be treated as an
Order in accordance with this Agreement. Each Release shall specify the number
of units to be shipped by Supplier and the shipment schedule (the "Release
Schedule").
10. FLEXIBLE DELIVERY ARRANGEMENTS
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During the term of this Agreement, and for OEM Sales only, if Buyer
requests and Supplier agrees, such agreement not to be unreasonably withheld,
Supplier will implement certain forms of "Flexible Delivery Arrangements",
including, but not limited to, consignment, demand pull, and pull replenishment,
for designated Product or Licensed Material.
11. SHIPPING
Supplier shall: (1) ship the Product or Licensed Material covered by
this Agreement or Order and shall ship the Order complete if Buyer specifically
states in its Order that the Order shall be shipped complete; (2) ship to the
destination designated in the Agreement or Order; (3) ship according to routing
instructions given by Buyer; (4) place the Agreement and Order number on all
subordinate documents; (5) enclose a packing memorandum with each shipment and,
when more than one package is shipped, identify the package containing the
memorandum; and (6) xxxx the Agreement and Order number on all packages and
shipping papers; provided, however, that Supplier shall not be required to "drop
ship" to locations other than those of Buyer or Buyer's Affiliates or its
contract manufacturers pursuant to Section 13, PRICES except if Buyer agrees to
pay the incremental costs, if any, associated with any such shipment. Adequate
protective packing shall be furnished at no additional charge. Shipping and
routing instructions may be furnished or altered by Buyer without a writing.
12. FORECASTS
Buyer will make a commercially reasonable effort to provide Supplier
with a rolling twelve (12) month non-binding forecast of Product requirements,
including configurations. Buyer will provide the initial forecast within sixty
(60) days of the Effective Date of this Agreement, and thereafter will make a
commercially reasonable effort to update the forecast at least monthly.
13. PRICES
Supplier will invoice Buyer for Products and Licensed Materials in
accordance with the Price Schedule. At Buyer's written request, Supplier agrees
to sell Products and Licensed Materials to Buyer's designated contract
manufacturer or systems integrator as per the Price Schedule shown in this
Agreement when such sales are for use or benefit of Buyer.
14. BENCHMARKING
After the first six (6) months of this Agreement, and on a semi-annual
basis, Supplier and Buyer shall undertake to benchmark prices, quality and
service performance of the Products and Licensed Materials purchased by Buyer.
The purpose of this benchmarking is to keep contract and industry prices,
service and quality levels appropriately aligned. The Products and Licensed
Materials benchmarked shall be the codes that comprise eighty
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percent (80%) of the monetary volume purchased by Buyer. Supplier and Buyer
shall review such benchmark information and Supplier shall develop a plan of
action for improving Product and Licensed Materials price, quality and service
performance as a result of the benchmarking exercise.
15. PRICE REVISION
Supplier and Buyer agree that the prices set forth on the Price Schedule
shall be the prices for the first eighteen (18) months of this Agreement, after
which Supplier and Buyer will review prices on a quarterly basis. Such revision
shall be determined by mutual agreement of the Parties. In the event Supplier
increases the then applicable price of a Product or Licensed Material after the
eighteen-month period, Supplier shall provide written notice to Buyer at least
ninety (90) days prior to the proposed effective date thereof. With respect to
any price changes initiated after , if the Parties fail to agree upon revised
prices by the proposed effective date of such price change, Buyer shall have the
right to submit a "last buy" order for the relevant Products or Licensed
Materials and to have such Products or Licensed Materials deleted from Schedule
3, as applicable, if it so chooses within ninety (90) days after receipt of the
notice; provided that Buyer may defer delivery, in whole or in part, for up to
twelve (12) months after receipt of such notice.
Notwithstanding anything to the contrary herein, Supplier may reduce
prices under this Agreement unilaterally at any time at its discretion and
without being subject to the procedures set forth in this Section.
16. DUTIES AND TAXES
Buyer shall bear all taxes, duties and other similar charges (and any
related interest and penalties), however designated, imposed upon or based upon
the provision, sale, license or use of Products, Licensed Materials or services,
excluding taxes on Supplier's net income, unless Buyer provides Supplier with a
valid tax exemption certificate.
17. PAYMENT TERMS
Buyer shall pay any undisputed invoiced amount within thirty (30) days
from the date of the invoice. If Buyer fails to pay any undisputed invoiced
amount when due, any unpaid amount will be subject to a late payment charge at
the rate of one and one-half percent (1-1/2%) per month (but not to exceed the
then-maximum lawful rate).
Invoices for Products and Licensed Materials will be sent upon shipment
or as soon thereafter as practicable. Partial shipments shall be separately
invoiced and shall be paid by Buyer net thirty (30) days from the date of the
undisputed invoice and not from when the remaining shipments occur. If Buyer
delays shipment, then Supplier may invoice when Supplier is prepared to ship the
Products and Licensed Materials.
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Orders placed under this Agreement are subject to a maximum outstanding
credit limit as reasonably determined by Supplier. Supplier may refuse to accept
orders which may cause Buyer to exceed such credit limit. Each shipment of
Products and Licensed Materials shall constitute an independent transaction, and
Buyer shall pay for same without deduction or set-off.
Payment shall be made only for the Products and Licensed Materials in
the quantities specified in the Order. Buyer may deduct from the amount
indicated on the invoice all items delivered which were not specified. The Buyer
shall notify Supplier in writing and following acknowledgment by Supplier, these
Products shall be returned by the Buyer to Supplier at Supplier's expense. The
expenses borne by the Supplier for such returns shall include without
limitation, customs duties, taxes, levies, insurance and freight.
18. DELIVERY, TITLE AND RISK OF LOSS
Except for those transactions subject to any agreed upon Flexible
Delivery Arrangements, title to Products only and risk of loss to Products and
Licensed Materials shall pass to Buyer upon delivery to Buyer's carrier in
accordance with the terms of this Agreement. Title to all Licensed Materials
(whether or not part of Firmware) furnished by Supplier shall remain with
Supplier. Buyer shall notify Supplier promptly of any claim with respect to loss
which occurs while Supplier has the risk of loss and shall cooperate in every
reasonable way to facilitate the settlement of any claim. For purposes of this
Section, "delivery" shall mean the point at which Supplier or Supplier's
supplier or agent turns over possession of the Product or Licensed Materials to
Buyer, Buyer's employee, Buyer's designated carrier, Buyer's warehouse, or other
Buyer's agent and not necessarily the final destination shown on the Order.
19. PRODUCT MAKEUP AND CHANGES; DISCONTINUATION
Parts incorporated in Products sold hereunder in this Agreement shall be
new.
Supplier shall have the right, in the Supplier's sole discretion, to
change the design or to discontinue the manufacture or availability to Buyer of
a Product or Licensed Material subject to the following terms:
(a) In the event that any such design change affects the form, fit, or
function of the Product or Licensed Material, then the Supplier shall notify
Buyer of such change when the Supplier becomes aware of such change and no later
than 180 days before the change becomes effective. If however Supplier and Buyer
are unable to reach mutual acceptance of the change within 180 days from
notification to the Buyer, then at the expiration of the 180 days, Supplier may
implement such change at the Supplier's sole discretion and the Buyer may as its
exclusive remedies have the following options:
(1) cancel any outstanding purchase orders for undelivered Products
or
-15-
Licensed Materials without incurring any cancellation charges for the Product or
Licensed Material affected by the design change provided that the design change
is the reason for the cancellation, and, have the option of a last buy quantity
(not to exceed the total amount purchased within the prior twelve (12) month
period) of Product or Licensed Materials without the change. In the event of a
last buy, Buyer shall place and schedule for delivery any such order within 120
days of the expiration of the 180 day period, or;
(2) continue to purchase changed Product and Licensed Material at
terms defined in this Agreement.
(b) For discontinuance of manufacturing or availability of any Product
or Licensed Material to the Buyer, Supplier will notify Buyer of such intent no
later than 180 days before implementation. Supplier shall accept Buyer's Orders
for such Products and Licensed Materials during the period following Supplier's
notice and prior to the effective date of notice. Buyer may as its exclusive
remedies have the following options:
(1) cancel any outstanding Orders for undelivered Products or
Licensed Materials that have been discontinued without incurring any
cancellation charges for the Product or Licensed Material; or
(2) have the option to submit during the period following Supplier's
notice and prior to the effective date of notice a last buy (not to exceed the
total amount purchased within the prior twelve (12) month period) of Product or
Licensed Materials without the change. In the event of a last buy, Buyer shall
place and schedule for delivery any such order within 120 days of the expiration
of the 90 day period.
20. LICENSE TO LICENSED MATERIALS
Supplier grants Buyer a personal, non-exclusive license to use Licensed
Materials only in connection with the Product for which such Licensed Materials
are furnished. All Licensed Materials (whether or not part of Firmware)
furnished by Supplier, shall remain the property of Supplier.
If the particular Product for which such Licensed Materials are
furnished becomes temporarily inoperative, Buyer shall have the right to use the
Licensed Materials on a backup Product until operable status is restored.
Unless otherwise set forth in a separate written agreement or as
provided herein, as may be required in connection with a specific Product, no
Source Code version of Software shall be licensed or provided to Buyer under
this Agreement.
Notwithstanding the provisions of this Section, Buyer may sublicense its
right to use Licensed Materials to an End User customer, but only in connection
with the sale or lease to such customer of the Products for which such Licensed
Materials were furnished. Such
-16-
sublicense shall be in writing, shall be executed by Buyer's customer, and shall
incorporate the terms and conditions set forth in this Section except that (i)
such sublicense shall not permit the customer to sublicense the Licensed
Materials or assign such sublicense and (ii) warranties by Supplier under this
Agreement shall not extend to the customer. To the extent the use of a
"tear-open" license is permitted by applicable law, then such license is
acceptable for the purpose of this Agreement. Such sublicense shall
substantially conform to the provisions of the License attached hereto as
Schedule 20A. If such sublicense is issued in the name of the Buyer, Supplier
shall have a right as a third party beneficiary to enforce any of the provisions
thereof. Any third party transferee must agree to require any successive
transferee to correspondingly assume these same obligations. Upon request by
Supplier, Buyer agrees to provide Supplier's independent auditor with copies of
all such sublicenses. The terms of such sublicenses shall survive any
termination of rights under this Agreement.
Failure by Buyer to comply with the material terms and conditions of
such License shall be a material breach of this Agreement. Supplier may cause
Buyer to cancel any sublicense to a customer of Buyer who fails to comply
therewith. If a license or sublicense is canceled, or if Licensed Materials are
no longer needed, all copies of Licensed Materials shall be returned to
Supplier, or Supplier shall be assured that all copies of such Licensed
Materials have been destroyed and Software has been erased from all media. This
paragraph shall not affect (1) the proper sublicense of Licensed Materials made
before Buyer's license is canceled, or (2) Buyer's license hereunder if a
customer of Buyer fails to comply with a sublicense, provided, in either event,
that such sublicenses fully comply and comport with this article.
Subject to the terms stated below, the Licensed Materials shall include
and Supplier hereby grants to Buyer a personal, non-exclusive, non-transferable,
non-sublicensable license to the Firmware Source Code and drivers and utility
programs Source Code, including associated documentation, listed on Schedule
20B, as may be updated from time to time. Such license shall be subject to the
following additional terms:
(a) Buyer shall have the right to reproduce, compile, and make
modifications to or derivatives of ("Derivative Works") the Firmware Source Code
solely for the purpose of creating Object Code to be used as firmware on the
Products that are incorporated into Buyer's products.
(b) Buyer shall have the right to reproduce, compile, and make
modifications to or derivatives of the driver and other utility program Source
Code solely for the purpose of creating Object Code to be distributed and used
with Buyer's products that incorporate the Products.
(c) Supplier agrees that, as between Buyer and Supplier, Buyer shall
have and retain ownership of and title to all Derivative Works made by Buyer,
except that (i) any Derivative Works conceived or implemented by Buyer and
Supplier in a collaborative engineering effort shall be owned jointly by both
Parties with no right of accounting ("Jointly Owned Derivative Works"); and (ii)
any correction ("Fix") to a Product Flaw, discovered,
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conceived or implemented by either Party, will be owned wholly and solely by
Supplier and shall be furnished to Supplier by Buyer. "Product Flaw" shall mean
any deviation in Product performance from the intended function. Buyer hereby
grants to Supplier a non-exclusive, transferable, sublicensable, royalty-free,
worldwide, perpetual license to use, execute, perform, copy, reproduce, modify
and make derivative works of and distribute the Jointly Owned Derivative Works.
(d) Buyer shall be solely responsible for the performance and its use of
such Derivative Works.
(e) In the event that Supplier releases an upgrade or revision to the
Source Code, Buyer shall be solely responsible for incorporating such upgrade or
revision into the Derivative Works. Supplier is not obligated to make such
releases or upgrades or revisions; provided, however, that Supplier agrees to
provide to Buyer in accordance with the terms of this Agreement any upgrades or
revisions that are released.
(f) Buyer may sublicense the Source Code, including Derivative Works and
Jointly Owned Derivative Works, of drivers and utility programs, but not the
Firmware, to a Buyer OEM partner who is not a competitor of Supplier (as
identified in Buyer's then current Forms 10-K or 10-Q from time to time), to use
to incorporate the Products into their products, provided such third-party OEM
partner agrees to substantially the same terms and conditions including
restrictions on disclosure and use of the Source Code and Licensed Materials at
least as restrictive as are contained in this Agreement, and further agrees to
return to Buyer (and not distribute) all copies of such Source Code, Derivative
Works and Jointly Owned Derivative Works. In the case of an OEM partner that has
been identified as a competitor of Supplier, Supplier and Buyer will negotiate
in good faith an agreement whereby Buyer can sublicense the Source Code,
Derivative Works and Jointly Owned Derivative Works to such OEM partner for a
restricted field of use. Supplier shall have the sole discretion to deny such
permission.
(h) All rights not expressly granted herein are reserved to Supplier.
21. RESCHEDULING OR TERMINATION OF ORDERS
(a) Orders may only be rescheduled as follows:
DAYS CANCEL RESCHEDULE
---- ------ ----------
Within 15 days No rescheduling and no termination of Orders.
16 to 30 days 50% 50% (one-time*)
31 days to lead-time 100% 100% (one time*)
One time reschedule by up to 90 days beyond factory promised date is permitted
with no further reschedule. Reschedule percentage is based on a percentage of
monthly original
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demand.
(b) No termination of any Order is permitted following a rescheduling
previously negotiated at Buyer's request. If Buyer terminates any Order, either
in whole or in part, Buyer shall compensate Supplier for loss or damage
resulting from such termination by paying Supplier as follows:
DAYS PERCENT OF LIABILITY
---- --------------------
0 to 15 days 100
Greater than 15 days 0 (only for amounts set forth above)
(c) As used in this Section, "Days" means the number of days between the
date of reschedule request or termination notice and current factory promise
date and "Liability" means the percentage of aggregate purchase price of the
terminated portion of the Order.
22. DELIVERY INTERVAL
The delivery interval applicable to each Order will be agreed upon by
Supplier and Buyer and set forth in the Order.
If Supplier exceeds the agreed to delivery by more than a five (5) day
interval then Buyer's exclusive remedy shall be to either: (a) cancel such
Order, or (b) extend such delivery interval to a later date, subject, however,
to the right to cancel as in (a) preceding if delivery is not made or
performance is not completed on or before such extended delivery date. Supplier
shall be responsible for payment of any express delivery charges required to
deliver the product as quickly as practicable.
Supplier shall immediately notify Buyer as soon as it becomes apparent,
if Supplier is unable to meet the delivery interval for an Order. However,
nothing contained in this paragraph shall waive Buyer's rights as set forth
above in this Section.
23. WARRANTIES AND WARRANTY EXCLUSIONS
a. WARRANTIES TO END USERS:
The Products or Licensed Materials are provided to End Users and Buyer's
Reseller Customers "as is." Supplier makes no warranty to End Users and Buyer's
Reseller Customers of any kind.
b. HARDWARE WARRANTY TO BUYER:
(i) Supplier warrants only to Buyer that it will repair or replace
Products which, at the time of shipment and under proper and normal use (as
unmodified), contain defects in material or workmanship or fail to conform to
Supplier's applicable Product
-19-
descriptions or specifications if any such failure appears in any Product within
eighteen (18) months of the date title to Product is transferred to Buyer.
Supplier will, at its option, either repair or replace the defective Product
without charge at Supplier's manufacturing or repair facility or at Buyer's
facility, or if such repair or replacement is not commercially and reasonably
feasible, will refund the purchase price of the defective Products, provided:
(1) that Buyer notifies Supplier of the purported failure to conform to this
warranty within the warranty period, and (2) that Supplier's examination of the
Product discloses that the purported failure to conform to this warranty is
present. Buyer shall follow Supplier's instructions regarding return of Products
to the place designated by Supplier, and no Products will be accepted for
repair, replacement or refund absent Buyer's following such instructions.
Supplier shall be responsible for any custom duties, local taxes and expenses
related to the importation of repair or replacement Products and any requested
premium transportation. Replaced parts and Products shall become Supplier's
property. Supplier shall not be responsible under this warranty for
deinstallation or reinstallation or for related expenses arising out of the
alteration of Buyer's or a third party's premises or building, or removal,
replacement or relocation of other items not purchased hereunder. If Supplier
determines that the Products do not fail to conform to this warranty, Buyer
shall pay Supplier all costs of handling, inspection, repairs and transportation
at Supplier's then prevailing reasonable rates.
(ii) Supplier shall be solely responsible for repair or replacement
of Product which is installed by Buyer in finished product being purchased by
Supplier from Buyer, unless the Buyer performs improper installation of Product
into finished product or the Product has been damaged or modified by Buyer, in
which case Buyer shall be responsible for repair or replacement.
(iii) Repair and replacement parts and Products provided under the
above warranty are warranted as set forth above, but only for sixty (60) days
from the date of repair or replacement, or, for the remainder of the warranty
period, whichever is greater, and such parts and Products may be new,
remanufactured or refurbished, at the discretion of Supplier, provided such
Products perform as new.
(iv) All rights exercised under this warranty shall be exercised only
by Buyer or Buyer's designated contract manufacturer.
(v) Supplier shall repair or replace defective units within a
commercially reasonable time (not to exceed 30 days) after receipt of such
units.
The foregoing warranty does not extend to the use of Supplier's Products
beyond the specifications; to expendable items; to experimental or developmental
products; to other products, procured from other sources, which were integrated
or assembled by Buyer with Supplier's Products; or to Products which have been
subject to misuse, neglect, accident or abuse; have been improperly wired,
repaired or altered by anyone other than Supplier; have been improperly
installed, stored or maintained by anyone other than Supplier; have been used in
material violation of Supplier's instructions; or have had their serial numbers
or month
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and year of manufacture or shipment removed, defaced or altered.
Supplier makes no warranty, express or implied, to any customer of Buyer
regarding Buyer's total system, and Buyer shall make no representation to the
contrary to a customer.
c. LICENSED MATERIAL WARRANTY TO BUYER
(i) Supplier warrants to Buyer that, upon shipment, Licensed
Materials licensed under this article will be free from defects which result in
a material failure of the applicable Product to operate in accordance with
specifications for such Licensed Materials.
(ii) If under normal and proper licensed use, the Licensed Materials
prove to have such a defect (1) within ninety (90) days from the date of Buyer's
acceptance thereof, Supplier, at its option, will either correct or replace the
same without charge at its facility or, if such repair or replacement is not
commercially and reasonably feasible, provide a refund or credit. No Licensed
Material will be accepted for correction or replacement except upon the written
authorization and in accordance with instructions of Supplier. Any
transportation expenses associated with returning such Licensed Materials to
Supplier shall be borne by Supplier. At Supplier's option, correction may be
incorporated into a new release of the Licensed Materials which will be made
available to Buyer.
(iii) In the event that Supplier determines after investigation that
more than 10% of the Licensed Materials alleged by Buyer to have been defective
were not defective, Buyer shall pay all costs of handling, inspection, testing
and transportation, including travel and subsistence costs incurred by
Supplier's personnel arising in connection with such non-defective Licensed
Materials.
(iv) All rights exercised under this warranty shall be exercised only
by Buyer, whether or not beneficial use of the media containing Licensed
Materials belongs to Buyer or Buyer's customers.
(v) Supplier makes no warranty as to the following: defects other
than those which result in a material failure of the applicable Product to
execute instructions; defects related to Buyer's or a third party's misuse,
neglect, accident or abuse; defects related to Buyer's or a third party's
alteration of Software; the correction of defects appearing in Software used in
violation of the license granted hereby; that Licensed Materials will meet
specifications or requirements of Buyer or its customers; or that the operation
of the Product using the Licensed Materials will be uninterrupted or error-free.
(vi) The foregoing warranty is exclusive and is in lieu of all other
express and implied warranties in connection with the Licensed Materials covered
by this paragraph, including but not limited to, warranties of merchantability
and fitness for a particular purpose. Buyer's sole and exclusive remedy for
breach of this warranty, whether in contract, tort, strict liability or
otherwise, shall be Supplier's obligation to correct, replace, credit or refund,
as set forth above.
-21-
THE FOREGOING WARRANTIES ARE IN LIEU OF AND EXCLUDE ALL OTHER EXPRESS
AND IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT. BUYER'S
SOLE AND EXCLUSIVE REMEDY FOR ANY BREACH OF THIS WARRANTY, WHETHER IN CONTRACT,
TORT, STRICT LIABILITY OR OTHERWISE, SHALL BE SUPPLIER'S OBLIGATION TO REPAIR,
REPLACE OR REFUND AS SET FORTH ABOVE.
24. REPAIRS NOT COVERED UNDER WARRANTY
In addition to repairs provided for in the Section entitled WARRANTIES
AND WARRANTY EXCLUSIONS, Supplier agrees to provide repair service to Buyer on
all Products and Licensed Materials ordered under this Agreement during the term
of this Agreement for five (5) years following the last shipment of such Product
or Licensed Material to Buyer. Buyer and Supplier agree to negotiate in good
faith repair intervals and repair charges should the need arise.
Products and Licensed Materials to be repaired under this Section must
be returned to a location designated by Supplier. Unless otherwise mutually
agreed upon, Supplier shall ship the repaired Products and Licensed Materials
which meets the specifications set forth in this Agreement to the appropriate
Buyer or customer location as shown on the repair order. If at any time Supplier
is unable to meet the agreed to repair interval, Supplier shall immediately
notify Buyer or customer and establish a mutually agreed upon shipment date for
the repaired Products and Licensed Materials.
If Products or Licensed Materials are returned to Supplier for repair as
provided for in this Section, and are determined to be beyond repair, Supplier
shall so notify Buyer or the customer. When Buyer is involved and if requested
by Buyer, Supplier will sell to Buyer a replacement at the then agreed upon
price in this Agreement, or, if this Agreement has expired or there is no agreed
upon price in the Agreement, at Supplier's then current list price for the
Products and Licensed Materials.
Replacement and repaired Products and Licensed Materials shall be
warranted as set forth in Section 23.
It is expressly understood and agreed that this Agreement does not grant
Supplier an exclusive privilege to repair any or all of the Products and
Licensed Materials purchased under this Agreement for which Buyer may require
repair, and Buyer may perform the repairs or contract with Supplier's Authorized
Providers for these services. In addition, Supplier authorizes Buyer and any
Supplier Authorized Provider with whom Buyer may contract to perform repairs on
all Products and Licensed Materials purchased under this Agreement.
All transportation costs and in-transit risk of loss and damage to
Products and
-22-
Licensed Materials returned to Supplier for repair under this Section will be
borne by Buyer and all transportation costs and risk of in-transit loss and
damage associated with the return of such repaired material will be borne by
Buyer.
Invoices to Buyer for repair services hereunder will be paid in
accordance with Section 17, PAYMENT TERMS.
25. INDEMNITY
Supplier will indemnify and save harmless Buyer from any loss or damages
(including reasonable attorneys' fees) awarded against Buyer by final judgment
(or by settlement approved by Supplier) because of claims, suits, or demands of
third Parties for personal injury or tangible property damage (as limited below)
to the extent such loss or damage is caused by or results solely from the
negligent or willful acts of Supplier or its employees or agents provided 1)
Buyer promptly notifies Supplier in writing of any suits, claims or demands
against Buyer for which Supplier is responsible under this indemnity, 2) Buyer
gives Supplier full opportunity and authority to assume the sole defense of and
settle such suits and 3) Buyer furnishes to Supplier upon request all
information and assistance available to Buyer for defense against any such suit,
claim or demand. Supplier's liability under this indemnity, however, shall in no
event exceed $1,000,000 for any one occurrence (except for indemnity pursuant to
the article entitled "INTELLECTUAL PROPERTY INDEMNITY"). This indemnity is in
lieu of all other obligations of Supplier, express or implied, in law or
inequity, to indemnify Buyer (except pursuant to the article entitled
"INTELLECTUAL PROPERTY INDEMNITY").
26. INTELLECTUAL PROPERTY INDEMNITY
(a) In the event of any claim, action, proceeding or suit by a third
party against Buyer alleging an infringement of any patent, copyright, or
trademark, or a violation of any trade secret or proprietary rights by reason of
the use, in accordance with Supplier's technical specifications, of any Product
or Licensed Materials furnished by Supplier to Buyer under this Agreement,
Supplier, at its expense, will defend Buyer, subject to the conditions and
exceptions stated below. Supplier will reimburse Buyer for any cost, expense or
attorneys' fees, incurred at Supplier's written request or authorization, and
will indemnify Buyer against any liability assessed against Buyer by final
judgment or settlement approved by Supplier on account of such infringement or
violation arising out of such use.
(b) If Buyer's use shall be enjoined or in Supplier's reasonable opinion
is likely to be enjoined, Supplier will, at its expense and at its option,
either (1) promptly replace the enjoined Product or Licensed Materials furnished
pursuant to this Agreement with a suitable substitute free of any infringement;
(2) promptly modify it so that it will be free of the infringement; or (3)
procure for Buyer a license or other right to use it. If none of the foregoing
options are practical despite Supplier's commercially reasonable efforts,
Supplier will remove the enjoined Product or Licensed Materials and refund to
Buyer any amounts paid
-23-
to Supplier therefor less a reasonable charge for any actual period of use by
Buyer.
(c) Buyer shall give Supplier prompt written notice of all such claims,
actions, proceedings or suits alleging infringement or violation and Supplier
shall have full and complete authority to assume the sole defense thereof,
including appeals, and to settle same. Buyer shall, upon Supplier's request and
at Supplier's expense, furnish all information and assistance reasonably
available to Buyer and cooperate in every reasonable way to facilitate the
defense and/or settlement of any such claim, action, proceeding or suit.
(d) No undertaking of Supplier under this Section shall extend to any
such alleged infringement or violation to the extent that it: (1) arises from
adherence to design modifications, specifications, drawings, or written
instructions which Supplier is directed by Buyer to follow; or (2) arises from
adherence to instructions to apply Buyer's trademark, trade name or other
identification; or (3) resides in a Product or Licensed Materials which are not
of Supplier's origin and which are furnished by Buyer to Supplier for use under
this Agreement; or (4) relates to uses of Product or Licensed Materials provided
by Supplier in combinations with other Product or Licensed Materials, furnished
either by Supplier or others where such infringement or violation would not
otherwise have occurred. In the foregoing cases numbered (1) through (4), Buyer
will defend and save Supplier harmless, subject to the same terms and conditions
and exceptions stated above, with respect to the Supplier's rights and
obligations under this Section.
(e) The liability of Supplier and Buyer with respect to any and all
claims, actions, proceedings or suits by third Parties alleging infringement of
patents, trademarks or copyrights or violation of trade secrets or proprietary
rights because of, or in connection with, any Products or Licensed Materials
furnished pursuant to this Agreement shall be limited to the specific
undertakings contained in this Section.
27. TRADEMARKS AND OTHER INDICIA
Products and Licensed Materials delivered hereunder will be marketed by
Buyer under trade names and trade dress of Buyer or Buyer's distributors unless
Buyer and Supplier execute a separate trademark license agreement. Products and
Licensed Materials delivered hereunder may also bear certain trade names,
trademarks, trade devices, logos, codes or other symbols of Supplier
(hereinafter "Marks"). Supplier hereby grants Buyer permission to market
Products bearing such Marks in accordance with the terms of this Agreement. If
Supplier grants Buyer permission to use its Marks in Buyer's marketing and
advertising of, and in Buyer's publicity relating to, Products and Licensed
Materials, such use shall conform to Supplier's written standards and guidelines
relating thereto, which may be revised by Supplier from time to time. Such use
shall inure to the benefit of Supplier and shall not invest in Buyer any rights
in or to the Marks. All uses of Marks by Buyer shall be subject to
pre-publication or pre-use review and approval by Supplier. If, in Supplier's
judgment, any use of Marks by Buyer is deemed detrimental to the Marks or
Supplier's reputation, or is deemed otherwise undesirable, Supplier may withdraw
such permission without liability as a result
-24-
thereof upon written notice to Buyer.
Buyer shall not conduct business under any of the Marks or derivatives
or variations thereof, and Buyer shall not directly or indirectly hold itself
out as having any relation to Supplier or its Affiliates other than as set forth
herein. Marks may not be used to identify the Buyer.
Advertising by Buyer which shows and identifies product brands, software
(including related documentation), services or other items not covered by this
Agreement may not use Marks without Supplier's prior written consent. Buyer will
not alter or remove any Marks applied to Products or Licensed Materials without
the written approval of Supplier.
All references to Buyer in this Section shall also be intended to
include Reseller Customers. In its agreements with its Reseller Customers, Buyer
shall use commercially reasonable efforts to require said customers to comply
with the provisions of this article.
Supplier shall remove or obliterate any Identification prior to any use
or disposition of any Product or Licensed Material rejected or not purchased by
Buyer. "Identification" means any semblance of any trade name, trademark,
service xxxx, insignia, symbol, logo, or any other designation or drawing of
Buyer or its Affiliates.
28. CONFIDENTIALITY
(a) Subject to subsection (d) of this Section, each of Agere and Buyer
agrees to hold, and to cause its respective directors, officers, employees,
agents, accountants, counsel and other advisors and representatives to hold, in
strict confidence, with at least the same degree of care that applies to such
Party's confidential and proprietary information, all Information concerning
each other that is either in its possession or furnished by one Party to the
other or its respective directors, officers, employees, agents, accountants,
counsel and other advisors and representatives at any time pursuant to this
Agreement or otherwise, and shall not use any such Information other than for
the purposes of performing its obligations under this Agreement, except, in each
case, to the extent that such Information has been (i) in the public domain
through no fault of such Party or any of their respective directors, officers,
employees, agents, accountants, counsel and other advisors and representatives,
(ii) later lawfully acquired from other sources by such Party which sources are
not themselves bound by a confidentiality obligation, or (iii) independently
generated without reference to any proprietary or confidential Information of
the other Party. Information shall be subject to this Agreement, if it is in
tangible form, only if clearly marked as proprietary or confidential when
disclosed to the receiving Party or, if not in tangible form, its proprietary
nature must first be announced, and it must be reduced to writing and furnished
to the receiving Party within thirty (30) days of the initial disclosure.
(b) Each Party agrees not to release or disclose, or permit to be
released or disclosed, any such Information to any other Person, except its
directors, officers, employees,
-25-
agents, accountants, counsel and other advisors and representatives who need to
know such Information for purposes of performing such Party's obligations under
this Agreement (who shall be advised of their obligations hereunder with respect
to such Information), except in compliance with paragraph (d) of this Section or
with the prior written consent of the other Party.
(c) Without limiting the foregoing, when any Information that is
required to be kept confidential is no longer needed for the purposes
contemplated by this Agreement, each Party will promptly after request of the
other Party either return to the other Party all of such Information in a
tangible form (including all copies thereof and all notes, extracts or summaries
based thereon) or certify to the other Party that it has destroyed such
Information (and such copies thereof and such notes, extracts or summaries based
thereon).
(d) In the event that any Party either determines on the advice of its
counsel that it is required to disclose any Information pursuant to applicable
law or receives any demand under lawful process or from any Governmental
Authority to disclose or provide Information of any other Party that is subject
to the confidentiality provisions hereof, such Party shall notify the other
Party prior to disclosing or providing such Information and shall cooperate at
the expense of the requesting Party in seeking any reasonable protective
arrangements requested by such other Party. Subject to the foregoing, the Person
that received such request may thereafter disclose or provide Information to the
extent required by such law (as so advised by counsel) or by lawful process or
such Governmental Authority.
29. TERMINATION; EXPIRATION OF AGREEMENT
Either Party may terminate this Agreement effective immediately by
written notice if or when it is discovered that the other Party has (a)
intentionally or in a willful, wanton or reckless manner, made any material,
false representation, report or claim relative hereto or (b) engaged in fraud or
criminal conduct relative hereto. In the event that a Party has (x) marketed the
Products or Licensed Materials to customers for purposes of export or resale
contrary to this agreement or (y) violated another Person's copyright, the
non-breaching Party shall have the right to terminate this Agreement if the
breaching Party fails to cure such breach within sixty (60) days after receipt
of written notice of such breach. In the event that a Party (1) becomes
insolvent, (2) invokes as a debtor any laws relating to the relief of debtors'
or creditors' rights, or has had such laws invoked against it, (3) becomes
involved in any liquidation or termination of business, (4) is adjudicated
bankrupt or (5) is involved in any assignment for the benefit of its creditors,
the other Party shall have the right to suspend business under this Agreement
and, if such condition is not cured within ninety (90) days, to terminate this
Agreement.
Either Party may terminate this Agreement on notice if the other Party
has defaulted in the performance of its obligations under this Agreement or a
subordinate agreement. Such termination shall be effective sixty (60) days after
notice by the terminating Party, unless such default or breach has been cured.
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30. EXCLUSIVE REMEDIES; LIMITATION OF LIABILITY
(a) For purposes of the exclusive remedies and limitations of liability
set forth in this Section, each Party shall be deemed to include its respective
subsidiaries and Affiliates and the directors, officers, employees, agents,
representatives, subcontractors and suppliers of each of them; and "damages"
shall be deemed to refer collectively to all injury, damage, loss or expense
incurred.
(b) Supplier's entire liability to Buyer and Buyer's exclusive remedy
against Supplier for any damages caused by any Product, Licensed Material or
service defect or failure, or arising from the performance or non-performance of
any work, regardless of the form of action, whether in contract, tort including
negligence, strict liability or otherwise shall be as follows:
(i) for infringement, the remedies set forth in Section 26,
INTELLECTUAL PROPERTY INDEMNITY;
(ii) for the non-performance of Product. Licensed Material or
service or work performed during the warranty period, the remedies stated in
Section 23, WARRANTIES AND WARRANTY EXCLUSIONS;
(iii) for tangible property damage or bodily injury or death to any
person proximately caused by Supplier's negligence, the amount of proven direct
damages; and
(iv) for any claims not set forth above, Supplier's liability shall
be limited to direct damages that are proven, in an amount not to exceed the
greater of $1,000,000 or the value of the specific Product, License Material
and/or service giving rise to the claim.
(c) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, NEITHER PARTY
SHALL BE LIABLE FOR INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY OR CONSEQUENTIAL
DAMAGES, INCLUDING BUT NOT LIMITED TO LOST PROFITS, SAVINGS OR REVENUES OF ANY
KIND, WHETHER OR NOT ANY SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES. THIS PROVISION SHALL SURVIVE FAILURE OF AN EXCLUSIVE REMEDY.
31. DISPUTE RESOLUTION.
The provisions set forth in this Section shall apply to all disputes,
controversies or claims (whether arising in contract, tort or otherwise) that
may arise out of or relate to, or arise under or in connection with this
Agreement, or the transactions contemplated hereby (including all actions taken
in furtherance of the transactions contemplated hereby), or the commercial or
economic relationship of the Parties relating hereto.
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It is the intent of the Parties to use their respective reasonable best
efforts to resolve expeditiously and on a mutually acceptable negotiated basis
any dispute, controversy or claim between them with respect to the matters
covered hereby that may arise from time to time. In furtherance of the
foregoing, any Party involved in a dispute, controversy or claim may deliver a
notice (an "Escalation Notice") demanding an in-person meeting involving
representatives of the Parties at a senior level of management of the Parties
(or if the Parties agree, of the appropriate strategic business unit or division
within such entity). A copy of any such Escalation Notice shall be given to the
General Counsel, or like officer or official, of each Party involved in the
dispute, controversy or claim (which copy shall state that it is an Escalation
Notice pursuant to this Agreement). Any agenda, location or procedures for such
discussions or negotiations between the Parties may be established by the
Parties from time to time; provided, however, that the Parties shall use their
reasonable best efforts to meet within thirty (30) days of the Escalation
Notice.
In the event the Parties are unable to resolve a dispute, the Parties
shall submit such dispute to binding arbitration administered by the American
Arbitration Association under its Commercial Arbitration Rules, and judgment on
the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
Unless otherwise agreed in writing, the Parties will continue to provide
service and honor all other commitments under this Agreement during the course
of dispute resolution pursuant to the provisions of this Section with respect to
all matters not subject to such dispute, controversy or claim.
32. INSURANCE AND INDEMNIFICATION BY SUPPLIER
Supplier shall maintain and cause its agents to maintain during the term
of this Agreement:
(a) Workers' Compensation insurance as prescribed by the law of the
states or other jurisdiction in which Supplier's obligations under this
Agreement are performed,
(b) employer's liability insurance with limits of at least $100,000 each
occurrence, and
(c) comprehensive general liability (CGL) insurance and comprehensive
automobile liability insurance if the use of motor vehicles is required, each
with limits of at least $250,000 for bodily injury, including death, to any one
person and $1,000,000 for any one occurrence, and $100,000 for each occurrence
of property (as limited below) damage. Supplier agrees that Supplier, Supplier's
insurer and anyone claiming by, through, under or in Supplier's behalf shall
have no claim, right of action or right of insured against under the foregoing
insurance. Upon request of Buyer, Supplier and Supplier's agents shall include a
clause in the applicable insurance policy stating that Buyer is to be notified
in writing at least
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ten (10) days prior to cancellation of or any material change in this policy,
and Supplier shall provide Buyer with suitable evidence of having done so.
Buyer agrees to notify Supplier within a reasonable time of any written
claims or demands against Buyer for which Supplier is responsible under this
Section.
Supplier may self-insure.
33. RESELLER CUSTOMERS
(a) Unless otherwise expressly authorized by Supplier in writing, Buyer
shall not actively sell or distribute Products or provide Licensed Materials to
a customer that Buyer has reason to believe will further distribute or resell
the Products or Licensed Materials, unless such customer is a Reseller Customer
or an End User in the business of building wireless networks. In their
agreements with Buyer, Buyer shall have Reseller Customers agree to distribute
and resell the Products and Licensed Materials only in connection with finished
products and only to End User customers.
(b) Buyer shall instruct its Reseller Customers that they may not use
Supplier Marks to identify and promote the Products and Licensed Materials. No
Reseller Customer shall be authorized to conduct business under Supplier's name,
Xxxx, or variant thereof.
(c) No agency or franchise relationship is created hereby or by any
transaction contemplated in this Agreement, and no exclusive rights of any kind
are granted by this Agreement or any approval hereunder. Buyer shall defend,
indemnify and hold Supplier harmless from and against any claims, damages, costs
and liabilities incurred by Supplier associated with any assertion by any person
that Supplier is responsible for the acts, failures to act, misrepresentations,
or defaults of performance of Buyer or any Reseller Customer of Buyer. Buyer
shall require its Reseller Customer to do the same.
34. CUSTOMS DUTY DRAWBACK
Buyer reserves the right to claim duty drawback on all purchases from
Supplier and Supplier shall cooperate by providing the necessary certificates of
manufacture and delivery or, in instances where the imported merchandise
received further processing, shall furnish certificates of manufacture and
delivery on all articles and merchandise which may be subject to drawback.
35. FOB
Subject to any agreed upon Flexible Delivery Arrangements, FLEXIBLE
DELIVERY ARRANGEMENTS, FOB shall be Supplier's factory of manufacture, freight
charges to be paid at the same time as the invoice for Products is paid, unless
otherwise mutually agreed upon in writing by the Parties.
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36. ADDITIONAL PROVISIONS
The 1980 United Nations Convention on contracts for the international
sale of goods shall not apply to this Agreement or to any Order issued under
this Agreement.
37. COMPLIANCE WITH LAWS
Each Party shall comply with all applicable laws and regulations of the
country/ies in which it operates, and all laws and regulations of the United
States, including (among others) those particularly pertaining to the proper use
and designation of trademarks; the U.S. Foreign Corrupt Practices Act; the U.S.
Export Administration Regulations; anti-boycott laws; and laws pertaining to
data protection. Neither Party shall do anything which would cause the other
Party, or any of its Affiliates, to be in violation of any laws or regulations,
including (among others) the U.S. Foreign Corrupt Practices Act. If at any time
after the Effective Date, this Agreement or the performance of its obligations
by either Party is no longer in compliance with any national, federal, state or
local law or regulation, the Agreement shall either be appropriately amended by
the Parties so as to come into compliance, or may be terminated by either Party.
Each Party shall exercise reasonable efforts to keep the other Party informed of
any applicable laws or regulations of its territory, and any political
subdivisions or agencies; as well as any amendments to such laws or regulations,
whether proposed or adopted, which may affect the rights and obligations of the
Parties, or the promotion, sales, service or maintenance of the Products.
38. MISCELLANEOUS
38.1. COUNTERPARTS; ENTIRE AGREEMENT; CORPORATE POWER
(a) This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement.
(b) This Agreement and any exhibits, schedules and appendices hereto
contain the entire agreement between the Parties with respect to the subject
matter hereof, supersede all previous agreements, negotiations, discussions,
writings, understandings, commitments and conversations with respect to such
subject matter and there are no agreements or understandings between the Parties
other than those set forth or referred to herein.
(c) Each Party represents as follows:
(i) each has the requisite corporate or other power and authority
and has taken all corporate or other action necessary in order to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby; and
(ii) this Agreement has been duly executed and delivered by it and
constitutes a valid and binding agreement of it enforceable in accordance with
the terms
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thereof.
38.2. GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS TO BE
PERFORMED SOLELY WITHIN THE STATE OF NEW YORK, AS TO ALL MATTERS, INCLUDING
MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, ENFORCEABILITY, PERFORMANCE AND
REMEDIES.
38.3. ASSIGNABILITY; SUCCESSORS, SUBCONTRACTING
(a) This Agreement shall be binding upon and inure to the benefit of the
Parties hereto and their respective successors and assigns and the successor(s)
of either party to the business and assets of such Party that relate to this
Agreement; provided, however, that neither Party may assign this Agreement, in
whole or in part, or its respective rights or obligations without the prior
written consent of the other Party, such consent not to be unreasonably
withheld, except as provided in subsections (b) and (c) below.
(b) By the provision of notice thereof in accordance with this
Agreement, either Party may assign this Agreement and its rights and obligations
hereunder, either in whole or in part, to any entity that is, or that was
immediately preceding such assignment, a current subsidiary, business unit,
division or other Affiliate of such Party, in each case that is the successor to
the business and assets of any such Party that relates to this Agreement.
(c) In the event of the attempted assignment by either Party of this
Agreement and its rights and obligations hereunder pursuant to subsection (b),
or in the event either Party hereto shall attempt to sell or transfer any
portion of its business or any assets that relate to this Agreement, such
assigning or transferring Party shall make all necessary effort to confirm that
the successor to the acquiror of such business and/or assets of such Party shall
perform and honor all of such Party's obligations hereunder so that such
performance shall continue uninterrupted through the Term.
(d) Buyer agrees to allow Supplier to subcontract manufacturing services
to designated contract manufacturer(s). This consent to subcontract does not
relieve Supplier of Supplier's responsibilities for performing this Agreement,
and Supplier shall remain liable for compliance by the Supplier's contract
manufacturer(s) with all provisions of this Agreement.
38.4. THIRD PARTY BENEFICIARIES
The provisions of this Agreement are solely for the benefit of
the Parties and are not intended to confer upon any Person except the Parties
any rights or remedies hereunder, and there are no third party beneficiaries of
this Agreement, and this Agreement shall not provide any third Person with any
remedy, claim, liability, reimbursement, claim of
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action or other right in addition to those existing without reference to this
Agreement.
38.5. NOTICES
All notices or other communications under this Agreement shall be in
writing and shall be deemed to be duly given when (a) delivered in person or (b)
deposited in the United States mail or private express mail, postage prepaid,
addressed as follows:
If to Agere, to: Agere Systems Inc.
Attn: Executive Vice President, Client Systems
0000 Xxxxxxxx Xxxxxxx XX
Xxxxxxxxx, XX 00000
with a copy to: Agere Systems Inc.
Attn: Vice President -- Law
0000 Xxxxxxxx Xxxxxxx XX
Xxxxxxxxx, XX 00000
If to Buyer to: Proxim Corporation
Attn: Chief Financial Officer
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
with a copy to: Xxxxxxx Xxxxxxx & Xxxxxxxx
Attn: Xxxxxx Xxxxxxx
00 Xxxxxxxxx Xxxx Xxxxx, Xxxxx 0000
Xxxxxxxxx Xxxx, XX 00000
Any Party may, by notice to the other Party, change the address to which
such notices are to be given.
38.6. SEVERABILITY
If any provision of this Agreement or the application thereof to any
Person or circumstance is determined by a court of competent jurisdiction to be
invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to Persons or circumstances or in jurisdictions
other than those as to which it has been held invalid or unenforceable, shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated thereby, so long as the economic or legal substance of the
transactions contemplated hereby or thereby, as the case may be, is not affected
in any manner adverse to any Party. Upon such determination, the Parties shall
negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the Parties.
38.7. FORCE MAJEURE
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Except with respect to payment obligations hereunder, no Party shall be
deemed in default of this Agreement to the extent that any delay or failure in
the performance of its obligations under this Agreement results from any cause
beyond its reasonable control and without its fault or negligence, such as acts
of God, acts of civil or military authority, embargoes, epidemics, war, riots,
insurrections, fires, explosions, earthquakes, floods, unusually severe weather
conditions, labor problems or unavailability of parts or raw materials, or, in
the case of computer systems, any failure in electrical or air conditioning
equipment. In the event of any such excused delay, the time for performance
shall be extended for a period equal to the time lost by reason of the delay.
38.8. PUBLICITY
Each of Agere and Buyer shall consult with each other prior to issuing
any press releases or otherwise making public statements with respect to this
Agreement or the transactions contemplated hereby. In addition, neither Party
shall issue or release for publication any articles, advertising, or publicity
materials relating to Products, Licensed Materials or services under this
Agreement or mentioning or implying the name, trademarks, logos, trade name,
service xxxx or other Buyer identification of the other Party or any of its
Affiliates or any of its personnel without the prior written consent of the
other Party.
38.9. HEADINGS
The article, section and paragraph headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
38.10. WAIVERS OF DEFAULT
Waiver by any Party of any default by the other Party of any provision
of this Agreement shall not be deemed a waiver by the waiving Party of any
subsequent or other default, nor shall it prejudice the rights of the other
Party.
38.11. AMENDMENTS
No provision of this Agreement shall be deemed waived, amended,
supplemented or modified by any Party, unless such waiver, amendment, supplement
or modification is in writing and signed by the authorized representative of the
Party against whom it is sought to enforce such waiver, amendment, supplement or
modification.
38.12. INTERPRETATION
Words in the singular shall be held to include the plural and vice versa
and words of one gender shall be held to include the other genders as the
context requires. The terms
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"hereof, " "herein, " and "herewith" and words of similar import shall, unless
otherwise stated, be construed to refer to this Agreement as a whole (including
all of the schedules, exhibits and appendices hereto) and not to any particular
provision of this Agreement. Article, section, exhibit, and schedule references
are to the articles, sections, exhibits, and schedules to this Agreement unless
otherwise specified. The word "including" and words of similar import when used
in this Agreement shall mean "including, without limitation," unless the context
otherwise requires or unless otherwise specified. The word "or" shall not be
exclusive. Unless expressly stated to the contrary in this Agreement, all
references to "the date hereof," "the date of this Agreement," "hereby" and
"hereupon" and words of similar import shall all be references to the Effective
Date, regardless of any amendment or restatement hereof.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives as of the Effective Date.
AGERE SYSTEMS INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Executive Vice President
PROXIM CORPORATION
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President & CFO
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