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Featured OEM Agreements
OEM PURCHASE AGREEMENT
by and between
HEWLETT-PACKARD COMPANY
and
BROCADE COMMUNICATIONS SYSTEMS, INC.
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OEM PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into between
HEWLETT-PACKARD COMPANY, a Delaware corporation ("HP") and BROCADE
COMMUNICATIONS SYSTEMS, INC., a Delaware corporation, having its
principal place of business at 1745 Technology Drive, San Jose,
California 95110, and Brocade Communications Switzerland SarL., a
corporation organized under the laws of Geneva, and having its
principal place of business at 29 Route de l'Aeroport, Case Postale
105, CH-1215, Geneva 15, Switzerland, (collectively "Supplier")
("Supplier"), effective as of December 16, 2002, (the "Effective
Date"). The parties hereby agree as follows:
1. SCOPE OF AGREEMENT
1.1 General. This Agreement specifies the terms and conditions
under which Supplier will sell, license, and support the OEM
Products listed in Exhibit (A) to this Agreement. The OEM
Products are regarded as "Original Equipment Manufacturer"
products that will either be sold separately or incorporated
into HP Products for resale worldwide under HP's private label
or [*] under Supplier's label, as set forth herein. The OEM
Products and the HP Products will be marketed, serviced, and
supported by HP's field organization and channel partners,
subject to the marketing, service, and support obligations of
Supplier pursuant to this Agreement.
1.2 Eligible Purchasers. This Agreement enables HP [*] to purchase
OEM Products from Supplier under the terms of this Agreement
or any subsequent Product Addendum. The terms and conditions
of this Agreement will control and take precedence over any
conflicting terms in a Product Addendum unless a subsequently
executed OEM Product addendum specifically refers to and
amends a term of this Agreement.
1.3 Term Of Agreement. This Agreement will commence as of the
Effective Date and continue for a two-year period (the
"Term"), unless terminated earlier under the terms of this
Agreement. [*] This Agreement may be terminated at the end of
the initial Term or at the end of any subsequent renewal
period if one party provides the other at least [*] prior
written notice of its intent to terminate.
1.4 [*] Volume. [*] in this Agreement [*] HP to purchase any [*]
quantity of OEM Products. This Agreement sets forth the terms
and conditions during the Term which govern Orders and
acknowledgments for OEM Products. Any Order or acknowledgment
or other legally binding volume commitment for Product which
is entered during the Term will remain governed by this
Agreement notwithstanding expiration or termination of this
Agreement for any reason. Unless otherwise agreed, if HP
fails, for any reason or no reason, to purchase committed
volume, Supplier's sole and exclusive remedy will be to [*],
except that HP will have [*] within which to purchase Product
at the then current volume
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rate and pricing then in effect. In no event will HP be liable
for [*]; provided that Supplier may invoice HP Supplier's
customary [*] if HP fails to comply with Section 3.9; and
provided further that HP will remain obligated to pay amounts
due and owing under Sections 4.2 and 4.3.
2. DEFINITIONS
The following capitalized terms will have these meanings throughout
this Agreement:
2.1 "Days" means business days.
2.2 "Delivery Date" means the date specified in an Order for the
delivery of OEM Products by Supplier to the destination
required under the Order.
2.3 "Documentation" means the user and technical manuals and other
documentation that Supplier will make available with the OEM
Products.
2.4 [*]
2.5 "E-Room" means that secure, password-protected web application
accessible by Supplier and HP that indicates all transaction
activity of OEM Products between Supplier and HP under this
Agreement.
2.6 "Failure" means an instance where the OEM Product does not
conform to specifications in Exhibit (A) or contains a defect
in workmanship, materials, or design that prevents the OEM
Product from fully performing as set forth in Exhibit (A).
2.7 "Forecast" means HP's estimate, submitted to Supplier in
writing, of its stocking requirements for OEM Products
(including, without limitation, Parts) over a six-month period
or such other period designated by the parties.
2.8 [*] OEM Product unit(s) is confirmed upon HP's publication to
the E-Room of an SAP 411 movement-type transaction indicating
such unit conversion.
2.9 "HP Products" means those products or systems that will
incorporate or be distributed in conjunction with the OEM
Products and that will be marketed and sold to end-user
customers by HP and its distributors.
2.10 "HP Property" means all property, including without
limitation, models, tools, equipment, copies of designs and
documentation and other materials that may be furnished to
Supplier by HP or on HP's behalf or separately paid for by HP
for
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use by Supplier in connection with this Agreement.
2.11 "Intellectual Property Rights" means all rights in patents,
copyrights, moral rights, trade secrets, mask works, Marks,
and other similar rights.
2.12 "Lead Time" means the time between the date an Order is
received by Supplier and the [*].
2.13 "Marks" means the trademarks, service marks, trademark and
service mark applications, trade dress, trade names, logos,
insignia, symbols, designs, or other marks identifying a party
or its products.
2.14 "Noncomplying Product" means any OEM Product received by HP
that does not comply with the Specifications as set forth in
Exhibit (A) or does not otherwise comply with the requirements
of an Order as set forth in Section 3.1 herein, and the
provisions of this Agreement. Noncomplying Products include,
without limitation, dead-on-arrival products.
2.15 "OEM Products" means the products listed in Exhibit (A), all
related Documentation, Software licenses and media, Parts, and
other deliverables provided pursuant to this Agreement.
2.16 "Orders" means a written or electronic purchase order or
release issued by HP to Supplier for purchase of the OEM
Products.
2.17 "Parts" means the replacement parts (FRUs), components,
consumables, or other products that are to be supplied under
this Agreement or that may be supplied in conjunction with or
as additions to the OEM Products.
2.18 "Product Addendum" means an addendum to this Agreement entered
into between Supplier and an Eligible Purchaser naming
additional OEM Products and product specific requirements in
addition to those requirements specified in this Agreement.
2.19 "Shipment Date" means the date confirmed by Supplier to HP
regarding a particular Order for the shipment of OEM Products
by Supplier to the destination required under the Order.
2.20 [*] means those [*] as listed in Exhibit (B) to which Supplier
shall deliver OEM Products as ordered by HP under this
Agreement and more particularly in Exhibit (J) attached
hereto.
2.21 "Software" means any software or firmware included, bundled,
or licensed in
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conjunction with the OEM Products, as listed in Exhibit (A).
The Software described herein is licensed and not sold.
2.22 "Specifications" means the technical and functional
requirements for the OEM Products as specified or referenced
in Exhibit (A) or as agreed to in writing by the parties.
2.23 "[*] Level" means the actual [*] [*] level to be maintained at
each designated [*] for a given planning period which shall be
[*] to the then-current [*] , subject to the limitation in
Section 3.5 below.
2.24 [*].
2.25 "Subsidiary" means an entity controlled by or under common
control with a party to this Agreement, through ownership or
control of more than 50% of the voting power of the shares or
other means of ownership or control, provided that such
control continues to exist.
2.26 "Support" means ongoing maintenance and technical support for
the OEM Products provided by Supplier to HP as more fully
described in Exhibit (D).
2.27 "Technical Information" means Supplier's information and
technology necessary to support OEM Products and to exercise
any other rights provided under this Agreement, specifically
including, without limitation, Supplier's [*] technology
deemed necessary by HP to support OEM Products and to exercise
any rights provided under this Agreement, including, but not
limited to: (i) specifications, software, schematics, designs,
drawings or other materials pertinent to the most current
revision level of manufacturing of the OEM Products; (ii)
copies of all inspection, [*] procedures and any other work
processes; (iii) supplier history files; (iv) support
documentation; and (v) any additional technical information or
materials listed in this Agreement.
2.28 "Technical Materials" means any production software [*] of OEM
Products.
3. ORDER, SHIPMENT, AND INVENTORY OF OEM PRODUCTS
3.1 Orders. Each delivery of OEM Products to [*] will be initiated
by [*] [*] [*] Order issued to Supplier by HP. Each Order will
include: (i) unit quantity; (ii) shipping destination; (iii)
Delivery Date; and (iv) other instructions or requirements
pertinent to the Order. HP may schedule regular intervals for
deliveries by an appropriate Order setting forth the
intervals. To the extent of any inconsistency between the
terms of an Order and the terms of this Agreement, the
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terms specified in this Agreement will control and take
precedence. Any additional terms contained in Orders or
Supplier's Order acknowledgements shall not be binding unless
accepted by the other party in writing. At the end of each
month, Supplier will [*] [*] of OEM Products [*] [*] . HP's
world-wide and site management teams shall participate in
periodic [*] management meetings with Supplier to discuss [*]
acceptable [*] and [*] on hand. HP and Supplier shall make [*]
efforts to implement a system that provides on line inventory
[*] visibility, and engage [*] . Supplier shall implement a
buffer stock of [*] of FGI based on HP's forecast ("Buffer
Stock"). In the event that HP draws upon the Buffer Stock
faster than forecasted, replenishment of the Buffer Stock
shall be subject to a minimum lead time of [*].
3.2 Order Acknowledgment. An Order will be deemed to have been
placed as of the date of receipt of the Order by Supplier.
Supplier will promptly confirm the receipt of an Order either
electronically or by facsimile transmission within Forecasts
and Lead Time requirements of this Agreement either
electronically or by facsimile to HP within [*]. For Orders
exceeding Forecast, Supplier will have [*] in which to reject
the Order with respect to the excess. If an HP Order exceeds
the Forecast or shortens the Lead Time, Supplier will use its
[*] efforts to fill such excess or accommodate such shorter
Lead Time.
3.3 Emergency Orders. If HP deems it necessary, HP may order OEM
Products by facsimile on an emergency basis ("Emergency
Order") subject to the availability of such OEM Products in
Supplier's inventory. Supplier will use its [*] efforts to
ship the Emergency Order to HP's designated Eligible
Purchaser(s) [*] upon receipt of such Emergency Order by
Supplier. Subject to HP's approval, HP will pay [*] related to
such Emergency Orders.
3.4 Forecasts. HP will provide a [*] rolling Forecast monthly of
its projected Orders [*] [*] , to be provided to Supplier
between the eleventh and fifteenth day of the month preceding
the month applicable to such Forecast. Any quantities listed
in any Forecast or other correspondence between the parties
are [*]. HP may [*] revise any such Forecasts, provided that
such revisions occur at least [*] prior to the projected Order
Shipment Date.
3.5 Lead Time. Lead Time for each OEM Product within the
then-current Forecast unit volume will be no more than [*]
without prior written consent from HP. Lead Time for FRU
products within the then-current Forecast unit volume from
Supplier to the designated HP global service support
organization will be no more than [*] . Notwithstanding the
foregoing, Lead Time specifically and only for OEM Product
units ordered by HP under [*] order will be no more than [*]
as measured from the date of shipment.
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3.6 [*]. Pursuant to the terms and conditions of the Agreement,
Supplier will maintain [*] the obligation [*] [*]. HP's
payment obligation and transfer of title to HP for such OEM
Products shall occur [*] [*] of such OEM Product units [*] .
Under the terms and conditions set forth in Exhibit (J) of the
Agreement, Supplier will [*] [*] HP's Order requirements as
defined by the most current HP forecast. Supplier will [*] [*]
to support the flexibility plan outlined in order changes. If
[*], Supplier will use [*] efforts to [*] Additionally,
Supplier will [*] to maintain the then-current required
Stocking Level of inventory for each [*]. Supplier will ship
ordered OEM Products to HP-designated [*]; however, HP may
request [*] changes [*].
3.7 [*] Level Requirements. Supplier shall deliver the
then-current [*] Level volumes to the [*] locations as [*]
specified in the [*] which shall apply ([*] as specified in
advance by HP). Supplier may make [*] shipments of OEM
Products or ship [*] units to the [*].
3.8 Product Supply Assurance. Supplier agrees that, during the
Term of the Agreement and specifically in the event of any
allocated OEM Product status initiated or experienced by
Supplier, Supplier will [*] give all HP Orders no less order
fulfillment and shipping [*] than that given to Supplier's [*]
with [*] volumes of OEM Products, with such allocation to be
made on a [*] between HP and Supplier's other [*].
3.9 [*] Inventory
(a) In the event any OEM Product unit(s) shall [*] [*] for
greater than [*], then, upon [*] notification from [*] of [*]
request to [*] will, within [*] [*] receipt of [*] notice,
elect to either [*] [*] of such units [*] [*] , or [*] at [*])
of the units from the [*] [*].
(b) In the event [*] does not confirm its intent to [*] such
units within [*] of receipt of [*] notice, such units shall be
deemed [*] [*] [*].
(c) [*] of OEM Product units [*] [*] from the [*] under this
Section shall be at [*] [*].
3.9 Order Changes. HP may, [*] any Order within Forecast, subject
to the following Order increase limitations: [*] permissible
[*] increase in Forecast; [*] permissible [*] increase in
Forecast; and [*] permissible [*] increase in Forecast. In the
event HP increases any Order, Supplier will use [*] efforts to
fulfill such Order for the Delivery Date requested by HP.
3.10 Shipment Requirements. Supplier will give HP [*] notice if it
[*] or [*] that it will
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not meet a Delivery Date or that only a portion of the OEM
Products will be available for shipment to meet a Delivery
Date. For partial shipments, Supplier will ship the available
OEM Products unless directed by HP to reschedule shipment. If
Supplier ships any OEM Product by a method other than as
specified in the corresponding Order, [*] will [*] in the [*]
of freight. Upon [*] by the parties, [*] may utilize [*]
options to any HP-designated delivery destination in the same
manner as delivered [*] unless otherwise [*] by the parties.
If HP designates a [*] location outside the country in which
the Order is placed, [*] agrees to pay [*] associated with the
shipment.
3.11 Meeting Delivery Dates. If due to Supplier's failure to make a
timely shipment, the specified method of transportation would
not permit Supplier to meet the Delivery Date, the OEM
Products affected will be shipped by air transportation or
other expedient means [*]. [*] will [*] for any resulting [*]
in the freight cost [*] that which [*] would have been
required [*] by the specified method of transportation.
3.12 Title And Risk Of Loss. Title to OEM Product hardware and
media ordered under this Agreement and risk of loss or damage
for each OEM Product unit will pass from [*] upon [*] of such
unit(s) [*] the designated [*] or upon [*] of product [*] , as
more fully described in Exhibit (J) attached hereto.
3.13 Packing List. Each delivery of OEM Products to HP must include
a packing list that contains at least:
(a) The Order number and the HP part number;
(b) The quantity of OEM Products or Parts shipped; and,
(c) The date of shipment.
3.14 Packaging. Supplier must preserve, package, handle, and pack
all OEM Products as specified in Exhibit (A-3).
3.15 Responsibility For Damage. [*] will be liable for any loss or
damage due to its failure to properly preserve, package,
handle, or pack OEM Products in accordance with Exhibit (A).
In order to assert a claim against Supplier under the
provisions of this Section 3.17, HP will not be required to
first assert any claims for such loss or damage against the
common carrier involved. Further, HP will not be liable for
any loss or damage due to a release of chemicals or other
hazardous materials to the environment prior to Supplier's
release of the corresponding OEM Product to the designated
carrier.
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4. PRICES AND PAYMENT TERMS
4.1 OEM Product Pricing and Discounts. Supplier's prices for the
OEM Products and Parts are listed in Exhibit (C), payable in
U.S. currency unless otherwise agreed, and may not be [*]
without [*] consent. All OEM Products (including Parts and
Software) under this Agreement shall be subject to [*]
adjustment, to be agreed between the parties as follows, and
[*] [*]) [*] for the duration of the Term(s) of this
Agreement. Supplier and HP agree to initiate in [*] pricing
discussions beginning upon the [*] of the the-current [*] for
pricing for each such successive [*] . In general, the [*] [*]
[*]. The [*] will be [*] determined by [*] and determined in
good faith based upon [*], [*], and other relevant factors to
the business model.
4.2 Changed Prices. Subject to the terms and conditions of Section
4.5 below, if during the Term and any extensions thereof, [*]
or [*] are put in effect by mutual agreement of HP and
Supplier, or reduced prices or price formulas are otherwise
put in effect by Supplier, then [*] or [*] (if resulting in
[*] than the then [*]) [*] to all Orders accepted by Supplier
after the [*] of such [*] or [*] and to all [*] Orders.
4.3 Payment Procedure. Payment for OEM Products will be net [*]
after [*] of each OEM Product unit(s) [*] [*]. No invoice may
be dated earlier than date of Delivery. Any [*] will be
calculated from the same date. Payment will be in U.S.
currency unless otherwise stated. [*] will not be liable for
any [*] related to or [*] for unordered or Noncomplying
Products provided that [*] does not [*] such unordered or
Noncomplying Product(s).
4.4 Offset. With respect to any payment, reimbursement or other
amount owed by Supplier to HP under this Agreement, [*] may
[*] any such amount [*] against any amount then [*] or to be
[*] (including amounts to be [*] under future invoices) by [*]
to [*] under this Agreement or any other agreement.
4.5 [*] Warranty. If during the Term or any extensions thereof,
Supplier provides a [*] or [*] to [*] with [*] terms and
conditions and [*] volumes of OEM Products or newer OEM
Products as set forth in Section 10.3 herein (with such [*]
volumes as measured over Supplier's most recent [*]), then
Supplier agrees to offer such [*] or [*] [*] to the third
party. Supplier agrees to fulfill its obligations in this
Section in good faith and further agrees that it will not
create any [*] or other conditions that serve to deny [*] the
[*] of its [*]. In addition, [*] may [*] any amounts due under
this Agreement against future invoices.
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4.6 Sales Taxes And Duties. Prices are [*] of all taxes or duties
imposed after [*] of the respective OEM Product units (other
than taxes levied on [*] income) that [*] may be required to
collect or pay upon shipment of the OEM Products. [*] shall be
responsible for all such taxes or duties imposed on OEM
Products before[*]. Any taxes or duties applicable to [*]
under this Section 4.5 must appear as a separate item on
Supplier's invoice. HP agrees to [*] such taxes or duties
unless HP is [*] from such taxes or duties. Where applicable,
HP will provide Supplier with an exemption resale certificate
or other proof of exemption. In the event that Supplier is
later assessed by any taxing authority taxes, which are the
legal obligation of HP, HP will [*] [*] Supplier for such
taxes or duties [*] by Supplier. This clause shall survive the
termination of the Agreement.
5. NONCOMPLYING PRODUCTS
5.1 Repair Or Replacement. HP's acceptance of each OEM Product
unit shall occur upon [*] of such unit(s) unless HP notifies
Supplier in writing sent by mail, facsimile, or other
electronic means within [*] after [*] that such OEM Product
unit is a Noncomplying Product. Supplier shall [*] or [*] (at
[*]) each such Noncomplying Product pursuant to the warranty
provisions under Article (9) herein. HP may [*], subject to
the provisions of Article (18) below, to return a Noncomplying
Product for replacement or repair at [*]. Determination of
whether to repair or replace such Noncomplying Products will
be at Supplier's sole option. Additionally, HP may return for
repair or replacement an entire lot of OEM Products if a
tested sample (consisting of not less than [*]) of that lot
contains greater than [*] Noncomplying Products. In the event
of an overshipment, HP may elect to keep the additional units,
subject to the payment procedures in Section 4.3.
5.2 Replacement and Repair Period. Supplier will return the
replacement or repaired OEM Products as soon as possible but
in no event later than [*] after receipt of the Noncomplying
Product from HP. Supplier's opportunity to cure any failure to
meet such deadline, pursuant to Article (18) below, will apply
to only [*] such breaches per [*] during the Term.
6. RETURN OF PRODUCTS
6.1 Return Materials Authorization. All OEM Products returned by
HP to Supplier must be accompanied by a Return Materials
Authorization ("RMA"). Supplier will issue an RMA for OEM
Products for which HP has verified Failure within
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[*] of HP's request.
6.2 Return Charges. All Noncomplying Products returned by HP to
Supplier within the respective warranty period for each OEM
Product, and all replacement or repaired OEM Products shipped
by Supplier to HP to replace Noncomplying Products will be at
[*], including [*] ([*] for replacement or repaired OEM
Products).
6.3 Duty To Remove Marks Or Destroy Noncomplying Products.
Supplier agrees not to sell, transfer, distribute, or
otherwise convey any part, component, product, or service
bearing or incorporating HP Marks, part numbers, or other
identifiers, including any HP packaging, copyrights, or code
(that are human-readable and physically appear thereon) to any
party other than to Eligible Purchasers. Supplier will remove
from all rejected, returned, or unpurchased OEM Products any
such HP Marks or identifiers, even if such removal would
require destruction of the OEM Products. Supplier further
agrees not to represent that such OEM Products that are
Noncomplying Products are built for HP or to HP
specifications. Supplier will [*] [*] [*], or [*] [*] as a
result of Supplier's breach of its obligations under this
Section 6.3.
7. ENGINEERING PROCESS OR DESIGN CHANGES
7.1 Supplier Proposed Changes. Supplier will not, [*] (which such
consent shall not be unreasonably withheld), make or
incorporate in OEM Products any of the following changes
(collectively, "Engineering Changes"):
(1) Process or design changes affecting form, fit, or
function;
(2) [*], or;
(3) Process step discontinuances affecting: (a) the
electrical performance, mechanical form, fit, or
function, or software compatibility that affects
form, fit, or function; and (b) the environmental
compatibility or chemical characteristics, or the [*]
of OEM Products.
7.2 Notice Of Proposed Change. Supplier will give HP notice of any
proposed Engineering Change, and will provide evaluation
samples and other appropriate information as specified by HP
at least [*] prior to the first scheduled release of any OEM
products involving a
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change to the respective firmware that would affect OEM
Product form, fit, or function, and at least [*] prior to the
first proposed shipment of any OEM Products involving any
other Engineering Change. Regardless of whether HP approves a
proposed Engineering Change, Lead Time will not be changed
except as provided in Section 3.4 above.
7.3 Request for Enhancement. HP proposed changes and enhancement
requests will be reviewed, as appropriate, by the [*] teams of
Supplier. Where [*] and [*] by HP and Supplier, such changes
will be implemented in the [*] or as otherwise specifically
agreed.
7.4 HP Proposed Changes. HP may change HP-supplied drawings,
designs, [*] [*] prior to [*] of corresponding released OEM
Products. Any such change will be phased in upon a date and
upon terms [*]. If any such change [*] affects the prices or
delivery schedules of OEM Products, [*] [*] [*] will be made
provided that Supplier makes a [*] claim for an adjustment
within [*] from the date HP gives notice to Supplier of the
change and HP agrees [*] to the adjustment.
7.5 Option To Terminate. If the parties are [*], acting reasonably
and in good faith, upon an adjustment pursuant to Section 7.3
above, [*] may without any liability terminate this Agreement
as to any OEM Products affected, subject to the terms and
conditions of Article (24) herein.
7.6 Safety Standard Changes. Supplier will [*] give notice to HP
if any upgrade, substitution, or other change to an OEM
Product is required to make that product meet applicable
safety standards or other governmental statutes, rules,
orders, or regulations, even those that are not defined as
Engineering Changes in Section 7.1 above. All affected OEM
Products [*], [*], either be [*] for upgrade to current
revisions or upgraded by Supplier [*] pursuant to the
procedures outlined in Section 10.4 below. If an OEM Product
meets applicable safety standards and other governmental
requirements at the time of manufacture, HP and Supplier will
[*] of any subsequent upgrade, substitution, or other required
change required in an [*] based on good faith discussions
between the parties. If such discussions render no [*]
solution, the parties may either mutually agree to escalate
the matter to their respective vice presidents or general
managers, as applicable, or in the alternative, [*].
7.7 Technical Cooperation. Subject to the confidentiality
provisions in Article (21) below, during the term of the
Agreement, the parties will discuss architecture and explore
the possibilities for technically integrating Supplier and HP
products. Each party will designate a technical representative
to lead these discussions as well as to address other
technical issues relating to the product enhancements and
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co-marketing alliance. Supplier agrees to share and review
with HP engineers the following for current and future
products (which such information shall not be unreasonably
withheld or delayed):
(a) [*];
(b) [*] information necessary for HP [*] efficiently;
(c) [*] information necessary for HP [*] problems;
(d) [*] issues and resolution for such items, and;
(e) New product features and quarterly roadmap.
8. QUALITY
8.1 Quality Programs. Supplier agrees to maintain [*] quality
program for all OEM Products. Supplier's program will be in
accordance with the current version of [*], and if applicable,
any additional or substitute quality requirements agreed to by
the parties in writing. Supplier will, upon HP's request,
provide to HP copies of[*].
8.2 HP's Right To Inspect. Supplier grants HP the right to inspect
(upon reasonable notice and during normal business hours) [*],
the OEM Products and all associated [*]. [*] may be inspected
at any time during the Term or any extensions thereof. HP's
inspection may be for any reason [*] related to this
Agreement, including to assure Supplier's compliance with HP's
requirements. HP's right of inspection will apply as well[*].
Supplier will inform [*] of HP's right to inspect, and, if
necessary, use all reasonable efforts to secure such rights
for HP.
9. WARRANTIES
9.1 Product Warranties. Supplier represents and warrants to HP
that, for a period of [*] months from the date of [*] for each
hardware OEM Product unit (excluding SFP's) and [*] for each
Software and [*] OEM Product, that all OEM Products under this
Agreement will:
(1) Be manufactured, processed, and assembled by Supplier
or by companies under Supplier's direction;
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(2) Conform to the then-current Specifications and other
criteria referred to in this Agreement or agreed to
by the parties in writing;
(3) Be new, except as otherwise provided by the parties;
(4) Conform strictly to the requirements of all Orders as
set forth under the terms and conditions of this
Agreement;
(5) Be free from defects in design, material, and
workmanship;
(6) [*].
9.2 OEM Product [*] Warranties. Supplier represents and warrants
with regard to all OEM Products (including Software and
Documentation to the extent included with, licensed, or
distributed in conjunction with OEM Products) that, subject to
the terms and conditions of Article (15) herein, not to
Supplier's reasonable knowledge, violate or infringe any third
party Intellectual Property Rights and Supplier warrants that
it is not aware of any facts upon which such claim could be
made. If Supplier learns of any claim or any facts upon which
claim could be made, it will promptly notify HP of such
information.
Notwithstanding the foregoing, a breach of this Section 9.2 in
no way constitutes a material breach of the Agreement. If
Supplier breaches this intellectual property warranty, HP may
immediately [*] and may immediately cancel any unfilled
accepted Orders without liability, such remedies being in
addition to any other remedies provided by this Agreement, or
otherwise available to HP under law or equity, subject to the
limitation of liability in Article (23) below. If a U.S.
District Court or any court worldwide adjudges that Product,
or any item or part thereof, infringes any United States
Patent or any patent worldwide, irrespective of whether
further right of appeal lies available to Supplier, or if
Product or use is enjoined at any stage of the proceedings,
any unfilled Accepted Orders [*] without liability for HP.
Supplier will have responsibility and is obligated for a
breach of the foregoing warranty to the extent that any
Product is used in an infringing system and the Product does
not have a substantially non-infringing use.
9.3 Warranty Periods. All warranties set forth in Sections 9.1 and
9.2 above will [*] payment by HP. The warranties set forth in
Sections 9.1(2) and 9.1(5) are effective upon Delivery, are
continuing, and will remain in effect for the longer of
Supplier's normal warranty period or as stated in Exhibit (H)
following acceptance of the OEM Product. All warranties set
forth in Section 9.2 are effective at Delivery, are
continuing, and will remain in effect [*].
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9.4 Software and Documentation Warranty. If Product includes or
constitutes Software, Supplier provides additional warranties,
and warrants Software and related Documentation as set forth
in Exhibit (I).
9.5 Services and Support Warranty. Supplier warrants that all
Services and Support will be provided in a professional and
workmanlike manner by competent, experienced personnel
possessing suitable expertise in the subject matter.
9.6 Compliance with Applicable Law. [*] warrants that it will
comply with Applicable Law in its performance under this
Agreement.
9.7 Warranty Exclusions. The warranties specifically set forth in
Section 9.1(1-5) will not apply to any OEM Product or Parts to
the extent such OEM Product or Parts: (i) have been improperly
installed, repaired, altered, or otherwise modified (other
than by Supplier or Supplier's authorized Subcontractors);
(ii) have been subjected to misuse, abuse, negligence or
accident; (iii) have been used in a manner contrary to
Specifications or Supplier's written instructions or
Documentation; (iv) are comprised of materials provided or a
design stipulated by HP and not approved by Supplier in
writing or; (v) are used Product or Parts (to the extent HP
may have waived Section 9.1 in a particular instance), and do
not cover normal wear and tear.
9.8 DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
SUPPLIER MAKES NO OTHER WARRANTIES, EITHER EXPRESS OR IMPLIED,
REGARDING PRODUCT INCLUDING MERCHANTABILITY AND FITNESS FOR
ANY PARTICULAR PURPOSE.
9.9 [*] Warranty. In addition to the warranties specified above,
Supplier warrants to HP all OEM Products [*] against [*] for a
period of [*] after [*] of such OEM Product unit. An [*]
means:
(a) unit failures that (i) are caused by [*] failure or
defect, provided that such failure or defect is attributable
to Supplier, and (ii) [*] [*] of the [*] (as listed in Exhibit
(H), Section 4.1), [*] [*] [*] , or;
(b) the occurrence of more than one failure classified as
a Hazard Class (2) or higher safety incident defined as (i) a
[*] condition that is likely to produce [*] bodily injury or
property damage and is likely to occur after a single event,
or (ii) a noncompliance event involving a safety-related
standard, license, or testing agency evaluation, or;
(c) any known problem which, in HP's [*] subject to
Supplier's concurrence (which such concurrence shall not be
unreasonably withheld or delayed) creates a
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significant risk to the health or safety of individuals who
operate the OEM Product or to the continuous business
operations of companies or organizations that employ the OEM
Product for an intended or reasonably foreseeable use.
10. SUPPORT SERVICES
10.1 General. Supplier will provide trained HP support personnel
with Support for the OEM Products as specified in Exhibit (D).
Supplier will maintain such number of qualified personnel as
is necessary to provide timely and knowledgeable maintenance
and support service in accordance with the terms and
conditions of Exhibit (D). Supplier warrants that all Support
will be provided in a professional and workmanlike manner. HP
will provide direct maintenance and support to HP's customers
with respect to the use of the OEM Product as distributed with
HP Products. Supplier and HP will maintain and support each
OEM Product distributed by HP for [*] and [*] after the date
of last Shipment Date by Supplier to [*] [*] of each OEM
Product unit. HP acknowledges that Supplier may independently
offer and provide support services to OEM Product customers;
however, in no event may Supplier use HP Confidential
Information or HP Property to direct or provide such support
without HP's prior consent. Response times and problem
classification for the OEM Products are as set forth in
Exhibit (D).
10.2 New HP Products. Upon request by HP, Supplier will use
reasonable efforts to provide HP with the OEM Products adapted
for use with new releases of HP Products within timeframes and
at such additional costs, if any, to be negotiated by the
parties, provided that HP makes available to Supplier such HP
Property as may be reasonably necessary for Supplier to
develop any adaptation.
10.3 New Product Supply Assurance. Supplier agrees that, during the
term of the Agreement and any extensions thereof, any such
newer products will be made available to HP for shipment [*]
the [*] date made [*] by Supplier to [*] with [*] volumes of
OEM Products (as measured over Supplier's most recent [*]),
and shall be made available to HP in [*] quantity to
accommodate all HP Orders within Forecast designating such
newer products. In the event of any allocated OEM product
status initiated by Supplier, Supplier will [*] give all HP
Orders [*] and [*] than that given to Supplier's [*] with [*]
volumes of OEM Products (as measured over Supplier's most
[*]), with such [*] to be made on a [*] between HP and
Supplier's [*].
10.4 HP Property. HP may, at HP's sole election, provide to
Supplier HP Property under the terms of an HP Equipment Loan
Agreement attached as Exhibit (E) to this Agreement, solely
for use in Supplier's manufacturing, testing, adapting and
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supporting the OEM Products. All HP Property will be clearly
segregated from Supplier's property and identified as the sole
property of HP. HP Property may not be transferred, assigned,
loaned or otherwise encumbered in any way. HP Property may be
provided to third parties for fulfillment of Supplier's
obligations hereunder only upon HP's prior written consent. HP
property will be returned to HP, [*], upon termination of this
Agreement.
10.5 Substitute Products. If Supplier develops any generally
available products that are to replace the OEM Product(s) or
that are the same or substantially similar to the OEM Products
available under this Agreement, HP will have the right to
substitute the newer products at [*] as the substantially
similar OEM Products for all subsequent purchases under this
Agreement. Such substitute products must be compatible with
the current version of the OEM Products.
10.6 Failure Rate. Notwithstanding that the warranties given in
Section 9.1 above apply to [*] of the hardware components of
OEM Products, Supplier and HP acknowledge that a failure rate
equivalent to the rates as measured over [*] set forth in
Section 4.1 of Exhibit (H) is expected. If the actual failure
rate for OEM Products exceeds this expected rate, Supplier
will provide additional engineering and technical support
needed to bring the actual failure rate within the specified
failure rate.
10.7 Class Failure Remedies. Upon the occurrence of any of the
following events: (i) a failure rate exceeding[*]; (ii) [*];
or (iii) a safety standard change under Section 7.5 above
(each referred to as a "Class Failure"), HP will have the
following additional remedies for a [*] period after [*] of
such OEM Product unit(s):
(1) In the event of a Class Failure, Supplier will use
its reasonable efforts to provide a initial root
cause analysis, failure analysis, and corrective
action plan to HP no later than [*] following the
receipt of the Class Failure part. HP will make
available such information and assistance as
reasonably required to allow Supplier to conduct its
root cause analysis and provide its corrective action
plan.
(2) If, after review of the root cause analysis and
corrective action plan, [*] determines in its [*]
opinion that the Class Failure necessitates [*] may
then elect to have the OEM products: (i) returned to
Supplier for repair or replacement; (ii) repaired or
replaced by Supplier in the field; or (iii) repaired
or replaced by HP in the field, including products in
distributor inventory and HP's installed base. [*]
perform a field repair, [*] the appropriate
replacement OEM products, spares, or upgrades [*]
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and will, within [*] after completion[*]. Supplier
will give such OEM products, spares, or upgrades
Supplier's [*] [*] [*].
10.8 Survival Of Support Obligations. Supplier's maintenance and
support obligations specified in this Article (10), and in the
Support Terms in Exhibit (D) will run for the Term and any
additional periods under Section 1.3 above and will continue
for a period of [*] after the date of last Shipment Date by
Supplier to [*] [*] of each OEM Product unit. This obligation
includes, without limitation, making necessary Parts available
to HP as further provided in the Support Terms.
11. OBSOLESCENCE AND MANUFACTURING RIGHTS
11.1 [*] Rightst. In the event HP becomes entitled to terminate
this Agreement [*] in accordance with Article (20) hereunder,
then Supplier shall [*] [*] to [*] purchase orders [*] OEM
Products at the [*] [*] Supplier can demonstrate to HP's
reasonable satisfaction that its performance is no longer
impaired. This Section is not intended to [*] [*] a
royalty-free license to use, manufacture, sell or import the
Products. Instead, it is intended to permit [*] [*] Products
[*] [*] in limited circumstances; under such circumstances,
[*] will [*] [*] [*] set forth hereunder for the OEM Products
ordered pursuant to this Section.
11.2 [*] Rights. Subject to the terms and conditions of this
Agreement and specifically that of Section 19.1 below,
Supplier acknowledges its obligation to manufacture, supply,
and support the OEM Products [*]. If, however, after [*] of
such products, Supplier seeks to discontinue the supply or
support of any OEM Product (a "Discontinued Product"),
Supplier will give notice to HP no less than [*] in advance of
the last date the Discontinued Product can be ordered. After
receipt of notice of discontinuance, HP may, at its option:
(1) [*] [*] [*] [*] as set forth in [*] above if during
[*] such product discontinuance event occurs, or;
(2) In accordance with the terms and conditions of this
Section 11.2, place orders for any demand during the
[*] of such notice for delivery of Discontinued
Products prior to the end of the notice period. To
the extent that such orders exceed HP's previous
Forecast for such Discontinued Products, the orders
shall be non-cancelable. Supplier shall accept only
forecasted orders in the [*] of the stated notice
period, and such orders shall be non-cancelable. All
shipments must be completed prior to the end-of-life
date stated in such notice by Supplier to HP above,
or;
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(3) Subject to the terms and conditions of Section 11.3
below, [*].
11.3 HP's Right [*]. In the event of: (i) an uncured breach by
Supplier of this Agreement as defined in Sections 20.2 (3),
(4), and (5) that causes a cessation in the supply of OEM
Products to HP (and such cessation is not due to a force
majeure event as described in Article (19)) and; (ii) as part
of the Resolution Process outlined in Section 20.5, HP
demonstrably showing that the [*] available to HP under
Sections 11.1 and 11.2 above are [*]. In evaluating the extent
to which an [*]," [*] shall consider without restriction: (1)
the time required to implement [*], (2) the cost of
implementing the [*], and (3) the risks involved in
implementing [*]. If [*] will be [*] for a period of [*] and
thereafter subject to a [*] at a [*] approximately [*] to
the[*].
11.3.1 Supplier will furnish to HP all [*] relating to the
Discontinued OEM Product at Supplier's [*] within [*] after HP
has notified Supplier of HP's exercise of its rights under
this Section 12.2. HP will [*] on such [*] within [*] after
receipt of Supplier's invoice or receipt of such [*],
whichever is later. If HP [*] to obtain possession of any such
[*] [*] [*] Supplier's invoice.
11.3.2 Supplier will furnish to HP within [*] after HP's
written request, the names and addresses of [*]. Supplier will
use [*] efforts to enable HP to [*].
11.3.3 Supplier will furnish to HP [*] [*] deemed necessary
[*] to service and support the Discontinued OEM Product.
11.3.4 Supplier will [*] it may have with third parties [*]
Discontinued OEM Product.
11.4 Consulting Services. In support of [*] or other services
provided to HP herein, Supplier will, upon HP's request,
provide additional consulting services at the rate of [*],
plus [*].
12. TRAINING
12.1 Technical Training. Supplier will provide to HP [*] technical
training classes for HP technical personnel. The schedule for
such classes will be as mutually agreed in writing by the
parties, with the first of such training provided by Supplier
no later than [*] before FCS (first customer shipment) for
each respective OEM Product. Each class provided by Supplier
under this Section will accommodate at least [*] HP personnel,
and will be made available at Supplier's designated training
site in San Jose, California. At HP's sole election and upon
not less than
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[*] advance notice to Supplier, after the first training class
is provided by Supplier, Supplier will provide the [*] [*] [*]
[*]. All such training provided by Supplier will be [*].
Supplier will maintain a designated training contact for HP
learning products personnel, and will provide technical
support to an HP trainer for the first [*] classes taught by
HP utilizing the training provided hereunder by Supplier. HP
may further request and Supplier will provide, for up to [*]
HP technical personnel, additional training [*] as reasonably
necessary to inform HP personnel of each upgraded, enhanced,
or new version of the OEM Products. Other training (including
without limitation Supplier's Educational Services technical
training) will be provided upon mutually agreed terms and
conditions.
12.2 Presales Training. Supplier will provide to HP no later than
[*] before FCS for each respective OEM Product, presales
training at Supplier's San Jose, California facility
sufficient to cover up to [*] HP trainers in order to allow HP
to become fully familiar with the OEM Product and its market.
Such training will be [*]. HP may further request and Supplier
will provide additional training [*] as reasonably necessary
to inform up to [*] HP personnel of each upgraded, enhanced,
or new version of the OEM Products.
12.3 HP's Rights in Training Classes and Materials. Subject to the
provisions of Article (21) herein, HP may [*] [*] under this
Agreement (excluding Supplier's Educational Services classes,
methods, and materials). None of the training materials
provided [*] by Supplier to HP under this Article (12) may be
offered for resale by HP to HP's Customers. Supplier will
provide all such presales training and technical training
materials to HP no later than [*] before FCS for each
respective OEM Product.
13. MARKETING AND LICENSING
13.1 Marketing and Distribution. HP will have the authority to
market the OEM Products and the HP Products containing the OEM
Products to the extent it deems appropriate and in its [*].
Without limiting the generality of the foregoing sentence,
nothing in this Agreement shall be construed or interpreted to
place a [*] obligation upon HP with respect to marketing or
distributing the HP Products or OEM Products or to preclude HP
from independently developing, purchasing, licensing, or
marketing any product which performs the same or similar
function as the OEM Products. HP will have the right to use
its own business and license terms for all marketing and
distribution of the OEM Products and HP Products. HP will take
all reasonable steps to describe OEM Products accurately.
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13.2 Distribution Rights. For so long as HP has the right to
distribute any of Supplier's OEM products by virtue of any
then-current agreement between HP and Supplier, Supplier [*]
[*] the OEM Products or any other OEM products that perform
the same or similar functionality; provided that nothing in
this Section 13.2 shall be construed to prevent Supplier from
[*] [*] [*] [*] [*] , or; (ii) [*] to whom Supplier has [*]
[*]. For purposes of this Section 13.2, an [*] is any person
or entity who purchases the OEM Product[*].
13.3 Sales and Marketing Activity. During the Term of this
Agreement and any extension(s) thereof, Supplier shall, upon
request of HP, deliver to HP [*] sales, training, product,
educational, and marketing collateral intended by Supplier for
use in the distribution, sale, or marketing of the OEM
Products. All such collateral content intended by Supplier for
use with the OEM Products shall be developed by Supplier and
provided to HP in electronic form. All such collateral and
related sales activity from or by Supplier, its employees,
agents, and subcontractors (excluding Supplier's current and
future indirect channels of distribution that are resellers,
service bureaus, third party distributors, or third party OEMs
(any of which who are neither owned nor controlled in whole or
in part by Supplier) which in turn sell or distribute the OEM
Products to End Users), which is intended by Supplier for [*]
shall be first coordinated through the HP-designated business
contact as listed in Exhibit (G) attached hereto [*], before
Supplier may direct any such collateral or sales activity to
such HP customers.
13.4 POS Data. For the term of the Agreement, HP shall provide to
Supplier, on a monthly basis, "Point of Sale Data" relative to
the OEM Products. Within [*] after the end of each calendar
month, HP shall provide a Point of Sale Data report covering
the sales during that month. For the purposes of this
Agreement, "Point of Sale Data" shall refer [*] to: the
geographic location, separated by country internationally and
by zip code domestically, of each of the OEM Products sold by
HP (as determined by the "ship to" address); the HP Product
Number identification for each of the Products sold; and the
total number of the Products sold. [*] provide the Point of
Sale Data. Such Point of Sale Data shall be deemed
Confidential Information subject to the provisions of Article
21 (Confidentiality) of the Agreement. This Point of Sale Data
shall only be used for [*]. Supplier will destroy the provided
data as soon as its legal obligation to maintain it is
fulfilled.
13.5 Software License. Supplier hereby grants to HP, under
Supplier's Intellectual Property Rights, a non-exclusive,
worldwide, license to use, display, distribute, import, and
disclose the Software both separately and in combination, in
object code format only, and only for use in conjunction with
the support and distribution of OEM Products or associated HP
Products. The license grant under this Section 13.5 includes
the right of HP to sublicense distributors, resellers, and
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other third parties solely to the extent necessary to allow HP
to distribute and support the OEM Products and associated HP
Products through HP's distribution and support channels. The
rights granted to HP under this Section 13.5 also include the
right of End Users to continue use of the Software in
conjunction with the operation of the OEM Products so long as
they are not in breach of the HP End-User license agreement
issued with the particular OEM Product(s), and HP shall retain
the license set forth above for the sole purpose of assisting
End-Users with the maintenance and support of the OEM
Products. The rights granted in this Section 13.5 shall also
apply to all subsequent versions or revisions of the Software
that are provided to HP either at no charge or for a fee, as
described in Exhibit (C), whether generally or privately
released, including all bug fixes, error corrections, updates,
enhancements, license keys, or minor modifications of the
Software or Documentation released for use with the OEM
Product(s) during the Term of the Agreement and any extensions
thereof, and irrespective of whether such subsequent versions
or revisions are differentiated by version number (e.g., 1.x
or x.1) or nomenclature. Notwithstanding the foregoing,
Supplier may offer and HP may choose to purchase paid Software
upgrades at mutually agreed pricing.
13.6 Device Object License. Supplier will use all reasonable
efforts to develop, test, and distribute to HP [*] a device
object applicable to HP's OpenView Storage software product
according to the specifications and requirements set forth in
HP OpenView Storage Area Manager Developer's Guide, Edition
1200, as referenced in Exhibit (A-6) attached hereto. Supplier
hereby grants to HP, under Supplier's intellectual property
rights, a non-exclusive, worldwide license to use, reproduce,
display, translate, import, disclose, distribute, modify and
prepare [*] compilations of such device object as developed by
Supplier, for use with OEM Products and HP Products. These
rights are exercisable in any medium. Such license will
include the right of HP to sublicense distributors, resellers,
and other third parties to achieve the foregoing.
13.7 License to the Documentation. Supplier hereby grants to HP,
under Supplier's intellectual property rights, a
non-exclusive, worldwide license to use, reproduce, display,
import, disclose, distribute, and prepare compilations of the
Documentation and compilations based upon the Documentation
for use in conjunction with the support and distribution of
Software. These rights are exercisable in any medium. Such
license will include the right of HP to sublicense
distributors, resellers, and other third parties to achieve
the foregoing. The right to prepare compilations is granted
solely for the purposes of combining Documentation of more
than one Software, condensing Documentation, and formatting
and preparing Documentation for user accessibility. The rights
granted to HP under this Section 13.7 are subject to the
payment obligations as generally set forth in Article (4)
above and more particularly in Exhibit (C)
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attached hereto provided, however, that (a) End-Users shall be
permitted continued use of the Documentation in conjunction
with the operation of the OEM Products so long as they are not
in breach of the HP End-User license agreement issued with the
particular OEM Product(s), and (b) HP shall retain the license
set forth above for the purpose of assisting End-Users with
the maintenance and support of the OEM Products.
13.8 License to Photograph (Marketing Materials). Supplier hereby
grants to HP, under Supplier's intellectual property rights, a
non-exclusive, worldwide license to capture visual images of
the Software screen displays and packaging, the Documentation
and the CD-ROM, if any, and to use, reproduce, display,
perform, distribute, import and modify such photographs and
modifications and images solely in connection with HP's
marketing and support of the Software and training with
respect to the Software. Such license will include the right
of HP to sublicense distributors, resellers, and other third
parties to achieve the foregoing. The rights granted to HP
under this Section 13.8 are subject to Supplier's right to
review and approve (which such approval shall not be
unreasonably withheld or untimely delayed) any visual images
submitted by HP (excluding HP's standard then-current
trademarks, servicemarks, and logos), and the payment
obligations as generally set forth in Article (4) above and
more particularly in Exhibit (C) attached hereto.
13.9 Restrictions. HP will not decompile, reverse engineer,
disassemble, or otherwise modify any Software without written
authorization from Supplier, except as permitted by law.
13.10 Localized Versions. The licenses granted hereunder with
respect to the Software and associated Documentation will
include all localized versions thereof available from
Supplier. In the event HP reasonably requires a localized
version of the Software, then Supplier agrees to negotiate [*]
the commercial terms and conditions under which such localized
version would be produced for HP. All of the licensing terms
for such localized version would be consistent with this
Agreement.
13.11 Limited Right of Sublicense and License. The parties expressly
agree that no right of sublicense to the Software is hereby
granted under this Agreement by Supplier to HP except for the
right of HP to sublicense the Documentation and object code of
the Software directly to End-User Customers. Based on
Supplier's representations herein, HP agrees that Supplier is
the owner of the Software and Documentation contained in the
OEM Products.
13.12 Localized Software. The licenses granted hereunder for the
Software and Documentation shall include any localized
version(s) thereof which Supplier
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publishes or makes generally available during the Term of this
Agreement and any extension(s) thereof.
13.13 End User License Terms. Supplier hereby grants to HP the right
to use and HP will use its then-current standard form software
license terms for marketing and licensing Software under this
Agreement. Such terms will be substantially in the form of
that as set forth in Exhibit (I) attached hereto.
13.14 No Rights In Marks. Except as otherwise specified in this
Agreement, nothing in this Agreement should be construed to
grant either party any rights in the Marks of the other party.
HP and Supplier acknowledge, however, that HP may use the name
of Supplier and the name of the OEM Products in advertising
and marketing the OEM Products or the HP Products. The OEM
Products will be affixed with copyright notices sufficient to
give notice as to the rights of the parties in their
respective products.
13.15 HP Marks. Supplier will ensure that the OEM Products contain
the HP Marks, serial number, format, and packaging specified
by HP and conforming to the HP specifications as set forth in
Exhibit (A). Except as provided herein, Supplier will have no
other right or license in any HP Marks.
14. LOSS OF BUSINESS CONTROL
14.1 Business Continuity. Supplier will develop and keep current a
formal business continuity plan that details Supplier's
strategies for response to and recovery from a broad spectrum
of potential disasters that could disrupt operations and
timely delivery of Product, material and services required
pursuant to this Agreement.
14.2 Safety, Security and Fire Protection. Supplier will be
responsible for maintaining [*] [*], [*] all warehouse and
storage facilities and operations (except HP Warehouses) in
accordance with applicable and prudent safety, security, fire
protection standards. Supplier will allow [*] such facilities
and operations and will cooperate in the resolution of
recommendations for improvement.
15. INTELLECTUAL PROPERTY PROTECTION
15.1 Supplier's Duty to Defend. Except as provided in Section 15.4,
Supplier will, to the maximum extent permitted by law, [*]
and[*] , on a worldwide basis, HP, [*], officers, directors,
employees, agents and representatives (individually, an
"Indemnitee" and collectively, "Indenmitees") from and against
any [*]:
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(i) any [*];
(ii) any combination of any [*] with an [*] in an
application which is intended by Supplier or reasonably
inferable as intended by Supplier from Specifications,
Supplier's written designs or Documentation, where there is no
substantial non-infringing use of the indemnified Product
other than as part of that combination;
(iii) any [*];
(iv) any [*];
(v) a [*], or;
(vii) anything else (including [*]) provided as part of
[*];
or use of any of the foregoing, constitutes an [*] "IP
Claim"). Supplier will have the same duty [*] as set forth in
the previous sentence in cases where any of the following
applies with respect to an IP Claim: (a) there is a breach of
[*] [*] ; (b) [*] is a direct infringer; (e) [*] is a
contributory infringer; or (d) [*] has induced infringement.
Without limiting the generality of the foregoing, Supplier
will pay [*] incurred by Indemnitees and will pay any[*].
15.2 HP's Duty to Notify. HP will give Supplier [*] notice of any
IP Claim. If Supplier assumes defense of such IP Claim without
reservation of rights, HP will provide Supplier the authority,
information and reasonable assistance (at [*] expense)
necessary to defend. Supplier will control defense, and HP
will not settle such IP Claim without Supplier's consent, [*];
provided that if Supplier does not diligently pursue
resolution of such IP Claim or fails to provide HP, upon
request at any time and from time to time, with reasonable
assurance that it will diligently pursue resolution, then HP
may, without in any way limiting its other rights and
remedies, defend the claim [*]. Any settlement or compromise
Supplier desires to enter into will be [*]. HP and any other
Indemnitee may, in its or their discretion, participate in the
defense of such IP Claim.
15.3 Actions After Injunction or Order. If the use or combination
of any Product is enjoined, if the combination of any Product
with an HP Product is enjoined where such combination is
intended by Supplier or reasonably inferable from
Specifications, Supplier's written designs or Documentation or
if a court or government agency enters an injunction or order
forbidding the importing of any Product or preventing the
Delivery of any Product to HP (any of which Product being
referred to as "Infringing Product"), Supplier [*], as may be
reasonable under the facts and circumstances and within a [*]
time, [*], and having reviewed its options with HP:
15.3.1 Procure for HP and its customers the right to
continue using or combining the Infringing Product;
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15.3.2 Replace the Infringing Product with a non-infringing
Product acceptable to HP and of equivalent form, fit, function
and performance;
15.3.3 Modify the Infringing Product to be non-infringing,
without detracting from form, fit, function or performance; or
15.3.4 Replace the Infringing Product with a non-infringing
Product acceptable to HP and of equivalent form, fit, function
and performance from a third party supplier on HP's approved
vendor list at the time of the infringement and pay to HP the
sum of: (a) [*].
If none of the foregoing options is commercially achievable,
HP may return the affected Product, and Supplier will [*] with
respect thereto.
In addition to the above, Supplier will pay HP [*]. If a
change in any Product or the use thereof is required due to an
IP Claim, Supplier will [*] HP for its [*] in procuring a
reasonable substitute product, including [*].
15.4 Limitations. Nothing in this Article (15) applies to any
Product or Parts to the extent such Product or Parts (i) have
been improperly installed, repaired, altered or otherwise
modified (other than by Supplier or Supplier's authorized
Subcontractors), (ii) have be subjected to misuse, abuse,
negligence or accident, (iii) have been used in a manner
contrary to Specifications or Supplier's written instructions
or Documentation or (iv) are comprised of materials provided
or a design stipulated by HP and not approved by Supplier in
writing to the extent that the claim arises from Supplier's
compliance with a Unique Specification; provided that all
implementations of that Unique Specification necessarily
constitute or require an unauthorized use or infringement of a
third party Intellectual Property Right and Supplier is
unaware of such unauthorized use or infringement; and provided
further that Supplier (a) has not [*] such Unique
Specification, (b) has not provided [*] such Unique
Specification or (c) has not [*] to such Unique Specification.
To the extent that any of the foregoing limitations would
otherwise apply, it will not apply where the Product is
claimed to be an unauthorized use, misappropriation or
infringement on account of a manufacturing process used by
Supplier unless HP has required Supplier to use in manufacture
of such Product the particular manufacturing steps that
resulted in such claim.
16. TRADE REQUIREMENTS
16.1 The parties understand that this Agreement is subject to
compliance with U.S. and other national export, import,
customs and trade-related laws and regulations and
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Supplier understands that it is responsible for implementing
procedures to ensure its material compliance with all
guidelines established under the HP Regional Trade Guidelines
as set forth under Exhibit (K) attached hereto; provided
however, that to the extent Supplier, upon timely advance
notice, can demonstrably show that compliance with any
particular provision would create a significant hardship, then
HP and Supplier will negotiate in good faith to resolve such
objection. The parties acknowledge that they are knowledgeable
about all such laws, regulations, and HP requirements and
agree to comply with the same as applicable.
16.2 Supplier, at each of its sites, is responsible for determining
the appropriate country of origin ("CO") for the product(s) it
manufactures or assembles for HP and for marking these
products in accordance with the requirements set out in BF
Regional Trade Guidelines. Further, Supplier will cooperate
fully with HP in supplying data to facilitate HP's origin
reporting requirements and qualification for preferential
origin programs such as NAFTA, IFTA, FMF, EXIM and the like
including, but not limited to, [*].
16.3 The following trade data elements must be able to be printed
out or be capable of being transferred electronically on each
commercial invoice prior to shipment of Product and must be
sent to HP via the standard electronic/EDI shipping
confirmation signal:
- Country of Origin [*]
- Import Country HTS Classification [*]
- ECCN [*]
- License [*]
- Destination Control Statement
- HP Part Number
- Appropriate INCOTERM
Further, Supplier must maintain, and reproduce upon demand,
all documentation relating to the international transport of
HP goods for a period of not less than [*] from the date of
each shipment. All such record keeping system will comport
with the legal requirements of the U.S. and other nations
including, but not limited to, requirements set out in Parts
762 and 772, U.S. Department of Commerce, Export
Administration Regulations and the U.S. Customs Record-Keeping
Regulations, 19 C.F.R. 163.
Supplier will provide [*] notice to HP (via the site's
appointed HP representative) in the event of an action by the
U.S. or other national government customs/export authorities
that relates specifically to goods or services provided to HP
by Supplier's sites.
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Supplier will afford HP, and HP's duly appointed agents,
reasonable [*] for trade compliance audit purposes and further
agrees to respond in a timely manner to HP's requests for
production of trade control records and to comply with all
[*].
16.4 Supplier must be capable of producing accurate and complete
shipping documentation for each Supplier site and each
shipment from such site. Supplier is responsible for knowing
and understanding shipping documentation standards applied in
the normal course of international business and for knowing
and understanding additional requirements outlined in HP
Regional Trade Guidelines.
16.5 Supplier is responsible for knowing and understanding the
terms of sale governing its agreement(s) with HP. Supplier is
responsible for understanding the scope of its
responsibilities under the applicable sales term(s), for
ensuring that [*] are likewise educated, and for implementing
procedures to ensure that the site, the site's employees and
the site's agents fulfill the Supplier's responsibilities
under the applicable term(s).
16.6 For each transaction where HP is to be importer of record, the
Supplier is responsible for ensuring that commercial
documentation accurately reflects the actual price paid or
payable between HP and Supplier's site. It is Supplier's
responsibility that each of its sites reconciles its financial
records against commercial documentation in order to validate
HP's use of transaction value, whenever possible, for
declarations to Customs. When transaction value cannot be
applied, Supplier will apply sequentially the World Trade
Organization ("WTO") valuation rules for HP transactions.
Supplier acknowledges that it is knowledgeable about the
requirements for transaction value declarations and agrees to
comply with same.
16.7 Duty Drawback. Unless otherwise requested, Supplier will allow
HP to be the importer of record for all Deliveries. If HP is
not importer of record and Supplier obtains duty drawback
rights to Product, Supplier will, [*], provide HP with
documents required by the customs authorities of the country
of receipt to prove importation and to transfer duty drawback
rights to HP if HP has paid [*] deposit of the subject duties.
17. CLASSIFICATION AND LICENSING AUTHORITY
17.1 Where Products are of HP's design, technology, software or
manufactured to HP's functional specification, HP will assist
the Supplier in the export of the commodities by providing
Export Control Commodity Numbers ("ECCN") and Harmonized
Tariff Code Numbers ("HTS") on behalf of HP's subsidiary
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Hewlett-Packard International GmbH ("HPIG"). Supplier will
comply with Applicable Law governing import or export of
Product and will be solely responsible for obtaining all
requisite licenses and other authorizations. Supplier will not
export, re-export or otherwise disclose, directly or
indirectly, technical data or the direct product of such
technical data received from HP without HP's prior knowledge
and written consent.
17.2 Supplier's Declaration. Where Products are of Supplier's
design, technology, software or manufactured to the Supplier's
functional specification; the Supplier will provide HP with
the correct ECCN or with sufficient technical information to
determine classification. Additionally, the Supplier must
provide any additional information that it knows will affect
the determination of license authority.
17.3 Country of Origin Marking. The Supplier will mark the
containers, in English, as well as all Product and Spares with
the Country of Origin, in compliance with Section 304 of the
United States Tariff Act. If the Product or Spares itself
cannot be marked legibly due to size, then its immediate
container must be marked with a signed certificate stating
Country of Origin (manufacture) by quantity and part number
(HP's and Supplier's).
18. GOVERNMENTAL COMPLIANCE
18.1 Duty to Comply. Supplier, its agents, employees and
Subcontractors will comply with all Applicable Law in its
performance of this Agreement. Upon request, Supplier agrees
to [*] any applicable law or regulations. HP is neither
responsible for monitoring Supplier's nor Supplier's
Subcontractor's compliance with any Applicable Law.
18.2 Social and Environmental Responsibility. Supplier warrants
that in all countries in which Supplier and, to Supplier's
knowledge, information and belief, Supplier's authorized
Subcontractors do business, its and their operations comply
with all applicable laws and regulations governing protection
of the environment, employee health and safety, and labor and
employment practices, including but not limited to, laws and
regulations relating to working hours, working conditions,
wages, benefits, child labor, forced labor, freedom of
association and equal employment opportunity. Supplier [*] HP
Supplier Social and Environmental Responsibility Agreement and
comply with HP's Supplier Code of Conduct
(www.hp.com/go/supplierE), [*].
18.3 Environmental Requirements. Without limiting the generality of
Sections 18.1 and 18.2 above, Supplier warrants and agrees
that:
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18.3.1 Product Content. All Products and their packaging
will comply with HP's General Specifications for Environment,
DWG No. A-5951-1745-1 www.hp.com/go/supplierE) and, for
purposes of this Agreement, such specifications are part of
the Specifications for the Product.
18.3.2 Shipment. All Products will be shipped in conformance
with all applicable national and international transportation
regulations including, where applicable, regulations regarding
chemicals and hazardous materials or dangerous goods,
including regulations regarding fumigation and aeration. All
packaging materials, including pallets, [*] where applicable.
18.3.3 Chemical Substances. Each chemical substance
contained in the Product [*] chemical substances compiled and
published by the United States Environmental Protection Agency
pursuant to the Toxic Substances Control Act.
18.3.4 Supplier will provide complete and accurate Material
Safety Data Sheets (MSDS) for Product to HP prior to shipment.
18.3.5 Environmental Information. Supplier will furnish HP
any information reasonably requested by HP to confirm
compliance with Applicable Law or to determine the
environmental effects of materials included in the Products or
in its packaging.
18.3.6 Supplier will comply with all Applicable Law
governing import or export of Product and will be solely
responsible for obtaining all requisite licenses and other
authorizations.
18.3.7 Disposition of Excess Materials. Supplier will
recycle or dispose of any excess or waste materials generated
from manufacture of Product [*] in compliance with the
provisions of this Agreement, Applicable Law [*].
18.3.8 Manufacturer will continuously implement and maintain
processes and policies designed to protect the environment at
any facility at which Product manufacturing operations are
performed under this Agreement.
18.3.9 Take Back. Supplier will accept back [*] material
included in the Product or its packaging returned freight
prepaid by HP from any country that legally requires Product
take back from the user at the end of the Product life.
18.4 Ozone Depleting Substances. Supplier hereby certifies that [*]
Product:
18.4.1 Contains any "Class I Substance" or "Class II
Substance" as those terms are defined in 42 U.S.C. Section
7671 and implementing regulations of the United
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States Environmental Protection Agency at 40 C.F.R. Part 82,
as now in existence or hereafter amended; or
18.4.2 Has been manufactured with a process that uses any
"Class I or Class II Substance."
18.5 Procurement Regulations. HP is a commercial corporation that
is also a contractor and subcontractor for the U.S.
government. All of the Products to be purchased from
Subcontractor by HP pursuant to a subcontract/purchase order
in the United States, it's territories, possessions, the
District of Columbia and the Commonwealth of Puerto Rico are
deemed to be "Commercial Items" as defined in Federal
Acquisition Regulation ("FAR") 2. 10 1, Part 12 and 52.202. 1
(c). Notwithstanding any other clause in HP's contract with
the U.S. government, only those clauses identified in the
clause at FAR 52.244-6 are required to be in agreements
(subcontracts) for commercial items or commercial components.
In addition, and in accordance with determinations made as a
result of U.S. government audits, HP is required to flow down
FAR 52.219-9, Small Business Subcontracting Plan, on all
subcontracts/purchase orders with large business concerns that
exceed $500,000 in value.
Pursuant to FAR 52.212-5(e) and/or FAR 44.402(b),
subcontractor, meaning any supplier, distributor, vendor or
firm that furnishes supplies or services to or for a prime
contractor or another subcontractor in support of U.S.
government business, [*] the following FAR clauses, [*]:
FAR 52.222-26, Equal Opportunity (February 1999)
FAR 52.219-8, Utilization of Small Business Concerns (October
2000)
APPLICABLE IF THE SUBCONTRACT/PURCHASE ORDER EXCEEDS $2,500:
FAR 52.222-41, Service Contract Act of 1965, as Amended (May
1989) if the purchase order is principally for the furnishing
of services through the use of service employees.
APPLICABLE IF THE SUBCONTRACT/PURCHASE ORDER IS FOR $10,000 OR
MORE:
FAR 52.222-35, Affirmative Action for Disabled Veterans and
Veterans of the Vietnam Era (April 1998)
FAR 52.222-36, Affirmative Action for Workers with
Disabilities (June 1998)
APPLICABLE IF THE SUBCONTRACT/PURCHASE ORDER EXCEEDS $500,000
AND SUBCONTRACTOR IS NOT A SMALL BUSINESS:
FAR 52.219-9, Small Business Subcontracting Plan (October
2000)
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18.6 Anti-Terrorism Security Measures. Supplier acknowledges that
its failure to comply with the laws, or regulations of any
applicable governmental authority, U.S. CTPAT or equivalent
security guidelines or TAPA[*] security requirements will be
considered by HP as negligence and failure on the part of
Supplier to provide due care for HP shipments. Supplier will
be liable for all [*] imposed on HP, and [*], relating to
Supplier's noncompliance with any such security regulations,
guidelines or requirements.
19. FORCE MAJEURE EVENTS
19.1 Delaying Causes. Neither party will be liable for any delay in
performance under this Agreement caused by any act of God or
other cause beyond Supplier's reasonable control and without
Supplier's fault or negligence including but not limited to
fire, flood, war, embargo, riot or an unforeseeable
intervention of any government authority, which causes
complete business interruption (a "Delaying Cause"). A
Delaying Cause does not include delays in transportation, [*]
or economic considerations or inefficiencies. No Delaying
Cause will suspend or excuse either party's obligations as set
forth in Articles 15, 21, and 22.
19.2 Occurrence of a Delaying Cause. Any party whose performance is
affected by a Delaying Cause will notify the other party [*]
upon commencement of a Delaying Cause and will provide its
best estimate of the expected duration of such occurrence.
Upon notice to Supplier during pendency of a Delaying Cause,
HP may [*] unfilled Accepted Orders [*]. Any party whose
performance is affected by a Delaying Cause will exercise
reasonable diligence to overcome and effect cessation of the
Delaying Cause and to mitigate effects thereof. Performance of
the parties' respective obligations to purchase and sell
Product will be suspended to the extent affected by, and for
the duration of, a Delaying Cause, and during pendency of a
Delaying Cause affecting Supplier's ability to make timely
Delivery, HP may purchase replacement Product elsewhere and
[*]. If, however, Supplier's performance is delayed for
reasons set forth above for a cumulative period of [*]
calendar days or more, HP, notwithstanding any other provision
of this Agreement to the contrary, [*] issued hereunder by
notice to Supplier.
19.3 Resumption of Performance. The parties will resume performance
under this Agreement once the Delaying Cause ceases, and HP
may, upon written notice not later than [*] following such
cessation, extend the Term up to the length of time the
Delaying Cause endured.
20. EVENTS OF DEFAULT
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20.1 Notice Of Breach. If either party is in breach of any
provision of this Agreement, the non-breaching party may, by
written notice to the breaching party, except as otherwise
prohibited by the United States bankruptcy laws, terminate the
whole or any part of this Agreement or any Order, unless the
breaching party cures the breach within [*] after receipt of
such written notice.
20.2 Causes Of Breach. For purposes of Section 20.1 above, the term
"breach" includes without limitation any:
(1) Proceeding, whether voluntary or involuntary, in
bankruptcy or insolvency by or against a party;
(2) Appointment, with or without a party's consent, of a
receiver or an assignee for the benefit of creditors;
(3) Failure by Supplier to make a delivery of OEM
Products in accordance with the requirements of this
Agreement or any accepted Order;
(4) Failure by Supplier to replace or repair Noncomplying
Products in a timely manner as required by Article
(5) above; or
(5) Other failure by a party to comply with any material
provision of this Agreement with additional failure
to provide the non-breaching party, upon written
request, with reasonable assurances of future
performance.
20.3 HP's Rights Upon Breach. In the event HP terminates this
Agreement in whole or in part as provided above for a material
breach by Supplier, in addition to any other remedies provided
HP under this Agreement, HP may procure, upon such terms and
in such manner as HP reasonably deems appropriate, products
and services substantially similar in functionality to the OEM
Product and services as to which this Agreement is terminated.
Supplier agrees to continue the performance of this Agreement
to the extent not terminated under the provisions of this
Section.
20.4 Purchase Hold. If any Eligible Purchaser having the right to
purchase an OEM Product under this Agreement or under any
other agreement with Supplier believes in good faith that an
OEM Product is defective, then, irrespective of any other
rights provided HP hereunder, HP may implement a [*]. Such [*]
may be removed if HP reasonably believes that Supplier has
taken sufficient action to correct the defect or given
sufficient assurances that such defect will be corrected [*].
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20.5 Escalated Resolution Process. In the event of any dispute
arising from or regarding the subject matter of this
Agreement, the parties agree to negotiate in good faith an
equitable resolution of the disputed matter. If the parties
are not able to resolve the dispute within [*] of first
written communication of the dispute, then the parties agree
to escalate such resolution process to their respective
Escalation Management as designated in Exhibit (G). The
Escalation Management shall meet within [*] of escalation to
resolve the disputed matter. If the dispute is not resolved
within an additional [*] period from the end of the [*] period
set forth above, then either HP or Supplier may commence
legal, equitable, or other action upon providing the other
party not less than [*] prior written notice of such intent.
21. CONFIDENTIAL INFORMATION
21.1 Confidential Information. During the Term, a party (the
"Recipient") may receive or have access to certain information
of the other party (the "Discloser") that is marked as
"Confidential Information," including, though not limited to,
information or data concerning the Discloser's products or
product plans, business operations, strategies, customers and
related business information. The Recipient will protect the
confidentiality of Confidential Information with the same
degree of care as the Recipient uses for its own similar
information, but not less than reasonable care. Confidential
Information may only be used by those employees of the
Recipient who have a need to know such information for
purposes related to this Agreement. Supplier will, upon HP's
written request, use commercially reasonable efforts to cause
any entity or person designated by HP to enter into a
nondisclosure agreement which affords materially comparable
protections for HP's Confidential Information as the
Confidential Disclosure Agreement referenced in Exhibit (F).
The parties acknowledge that all Technical Information and
Forecasts are deemed Confidential Information to be protected
for a term of [*] from date of disclosure.
21.2 Exclusions. The foregoing confidentiality obligations will not
apply to any information that: (a) is known by the Recipient
prior to disclosure; (b) was developed by the Recipient prior
to disclosure or is subsequently developed independently and
without reference to the disclosure; (c) is or becomes
publicly available through no fault of the Recipient; (d) is
rightfully received from a third party with no duty of
confidentiality; (e) is disclosed by the Recipient with the
Discloser's written approval or; (f) is disclosed under
operation of law.
22. INSURANCE AND INDEMNITY
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22.1 Without limiting any of the obligations or liabilities of
Supplier, Supplier will maintain [*] as long as this Agreement
is in effect, insurance policies of the kind and limits listed
below:
Worker's Compensation Insurance: Supplier will maintain
Workers Compensation Insurance as required by Applicable Law
having jurisdiction over Supplier's employees wherever work is
to be performed under this Agreement.
Employer's Liability Insurance: Supplier will maintain
Employer's Liability Insurance in an amount keeping with the
law of the nation, state, territory or province having
jurisdiction over Supplier's employees wherever work is to be
performed under this Agreement [*].
General Liability Insurance: Supplier will maintain
Comprehensive or Commercial General Liability Insurance
(including but not limited to premises and operations,
products and completed operations, broad form contractual
liability, broad form property damage and personal injury
liability) with a minimum limit of [*] combined single limit
per occurrence and [*] in the aggregate, for claims of bodily
injury, including death, and property damage that may arise
from use of the Products or acts or omissions of Supplier
under this Agreement. Each policy obtained by Supplier will
[*] a loss covered thereunder.
Claims Made Coverage. If any policies have "claims made"
coverage, Supplier will maintain such coverages [*]. Any such
coverage must have a retroactive date no later than the date
upon which work commenced under this Agreement.
Additional Requirements. All deductibles on policies providing
coverage will be paid by Supplier. In the event Supplier is
self insured for matters described in Article (14), Supplier
agrees to respond to any claims o |
