Manufacturing Rights License Agreement - Emulex Corp. and Egenera Inc.
MANUFACTURING RIGHTS LICENSE AGREEMENT
BETWEEN
EMULEX CORPORATION
AND
EGENERA, INC.
This Agreement is entered into by and between Egenera, Inc. ("Egenera"), a
Delaware corporation with offices at 165 Forest Street, Marlborough, MA 01752,
and Emulex Corporation ("Emulex"), a California corporation with offices at 3535
Harbor Boulevard, Costa Mesa, CA 92626, and shall be effective as of the later
of the dates on which the parties execute the Agreement ("Effective Date").
Now, therefore, the parties agree as follows:
1. DEFINITIONS
1.1 "Egenera Product" means the Egenera BladeFrame.
1.2 "Emulex Product" means the Emulex cLAN Falcon ASIC (GNNA100-01),
cLAN5300 Board Stack Assembly (891000002), and cLAN1000 Host Bus
Adapter (cLAN1000). The term "Emulex Product" shall include the
Software, as defined below, unless context indicates otherwise.
1.3 "Software" means any software, firmware, or other code necessary for
the operation of the Emulex Product. The Software includes the cLAN
Linux 1.3 code base.
1.4 "Source Documentation" means documentation necessary for Egenera to
have the Emulex Product manufactured. Source Documentation includes
the Emulex Product approved vendor list; schematics; costed bill of
materials, quality and reliability data; DVT, DFM, and DFT;
packaging data; engineering change orders; and process flows.
1.5 "Additional Documentation" means the Falcon ASIC source code, which
will be included for documentation purposes only.
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1.6 "Product Documentation" means a copy of the Emulex Product user
manual and diagnostic software documentation, if any.
1.7 "Derivative Work" means a product or other work that is based upon
one or more pre-existing products or other works, such as a
revision, modification, translation (including compilation or
recapitulation), abridgment, condensation, expansion, or any other
form in which a pre-existing product or work may be recast, adapted,
transformed, or otherwise altered, and that, if prepared without
authorization by the owner of the pre-existing work, would
constitute an infringement of the owner's intellectual property
rights.
2. SCOPE OF AGREEMENT
Subject to payment of the royalties as described in Section 5, Emulex
hereby licenses Egenera to manufacture, use, and sell or otherwise
distribute the Emulex Product in accordance with the terms and conditions
of this Agreement. This Agreement is non-exclusive and the parties may
enter into similar agreements with other parties.
3. TERM AND TERMINATION
3.1 This Agreement shall commence on the Effective Date and, unless
terminated as provided elsewhere herein, shall remain in full force
and effect for a period of two years. Egenera may request renewal of
this Agreement for an additional term of one year by providing a
written renewal request to Emulex no later than ninety days prior to
the end of the initial term.
3.2 Egenera may terminate this Agreement at any time, without cause, by
giving Emulex at least ten days' prior written notice. Either party
may immediately terminate this Agreement if the other party fails to
perform any of the material obligations imposed upon it under the
terms of this Agreement so as to be in default hereunder and fails
to cure such default within thirty days after receiving written
notice thereof.
3.3 The licenses granted hereunder shall end upon termination or
expiration of this Agreement, except as may be required for Egenera
to continue to support its end users' use and operation of the
Emulex Product. Termination or expiration of this Agreement will not
relieve the parties of any obligations incurred prior to the date of
termination.
4. GRANT OF LICENSE
4.1 During the term of this Agreement, Emulex hereby grants to Egenera
all appropriate rights and licenses under Emulex's applicable
patents, copyrights, and other intellectual property rights,
including the Source Documentation ("Emulex IP") necessary to enable
Egenera to have the Emulex Product manufactured by Manufacturers'
Services Limited ("MSL"), and to use, market, promote, lease, sell
and otherwise distribute the Emulex Product, when such Emulex
Product is incorporated into the Egenera Product or for add-ons and
field replacements, and to have the Emulex Product repaired by MSL.
Emulex also
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grants Egenera the right to reproduce or have reproduced the
Software for distribution in binary code form for use with the
Emulex Product. Egenera shall not have the right to (a) make any
Derivative Work of the Emulex Product, except as may be necessary to
allow Egenera to develop, market, sell or otherwise distribute the
Egenera Product; (b) make any Derivative Work of the Emulex Product,
Software, or Source Documentation, where such Derivative Work would,
in practices customary to the computer industry, be considered a new
or succeeding generation of the Emulex Product; or (c) use the
Emulex IP to create products that compete, directly or indirectly,
with the Emulex Product or other products manufactured and sold or
otherwise distributed by Emulex. Egenera shall use the Additional
Documentation for documentation purposes only, and shall not make
any Derivative Work of the Additional Documentation without Emulex's
express written permission.
4.2 Emulex agrees that Egenera shall have the right to have the Emulex
Product manufactured and repaired by a contract manufacturer other
than MSL if MSL (a) is unable to manufacture the Emulex Product in
sufficient quantities to fulfill Egenera's orders; (b) experiences a
decrease in Emulex Product quality such that Egenera is unable to
meet its customers' requirements; or (c) otherwise defaults in its
obligations to manufacture the Emulex Product; and (d) any or all of
the foregoing are not remedied within a reasonable time after
Egenera provides notice and an opportunity to cure such default. If
Egenera elects, under this Section, to have the Emulex Product
manufactured by a contract manufacturer other than MSL, Egenera
shall provide Emulex with timely written notice of such change,
including name and address of the new contract manufacturer and the
reason for the change.
4.3 Emulex hereby grants Egenera a worldwide, nonexclusive, royalty
free, fully paid-up right and license to use, adapt, make, or have
made Derivative Works of all or any portion of the Product
Documentation, solely for use and distribution with the Emulex
Product.
4.4 Egenera shall make all Product purchases directly from MSL. Emulex
shall authorize MSL to accept Product orders from Egenera and/or
Egenera's contract manufacturers; however, Egenera shall be solely
responsible for managing the relationships between MSL and each of
the contract manufacturers. As of the Effective Date hereof,
Egenera's contract manufacturers are: (a) SMTC - Boston, with
offices at Franklin Industrial Park, 109 Constitution Blvd., Unit
160, Franklin, MA 02038; (b) SMTC - Canada, with offices at 635 Hood
Road, Markham, Ontario L3R 4N6, Canada; and (c) DTI, with offices at
476 Highland Colony Parkway, P.O. Box 748, Ridgeland, MS 39158-0748.
Egenera may add or delete contract manufacturers by prior written
request to Emulex and Emulex will authorize MSL to accept orders
from new contract manufacturers.
4.5 Except as specified herein, Emulex shall retain all right, title,
and interest in and to the Emulex Product, Software, Product
Documentation, and the Emulex IP licensed hereunder.
4.6 Egenera shall not publicize or use the name or trademark of Emulex
in any manner related to this Agreement without Emulex's written
consent. Egenera
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shall not issue any press release or other publicity regarding this
Agreement without Emulex's prior written consent.
5. ROYALTIES AND AUDIT RIGHTS
5.1 As of the Effective Date hereof and in consideration for the Emulex
IP license granted hereunder, Egenera shall pay to Emulex royalties
of [**]% of Egenera's cost of goods for the following Emulex
Products:
Falcon ASIC (GNNA100-01)
CLAN5300 Board Stack Assembly (891000002)
CLAN1000 HBA (cLAN1000)
Upon the Effective Date, Emulex shall fully disclose to Egenera
Emulex's cost of goods for the Emulex Products, including MSL's
warranty terms, for the first calendar quarter that this Agreement
is in effect. Such information shall be in the form of a price sheet
and costed bill of materials, and shall be transmitted to Egenera
electronically. Thereafter, Egenera will negotiate such costs and
warranty terms with MSL and will notify Emulex within thirty days of
the end of each calendar quarter of the total amount due from
Egenera to MSL during that quarter, in order that Emulex may
calculate royalties due from Egenera hereunder.
Emulex hereby represents that the Emulex Product costs are
negotiated with MSL quarterly; and that since Egenera's royalty
payments are based on those costs, the total royalty payments due
from Egenera to Emulex will change in accordance with any change in
Emulex Product costs.
5.2 Egenera shall pay such royalties no later than thirty days after the
end of each calendar quarter. The royalties described or
contemplated under this Agreement shall be paid in U.S. dollars.
Such royalties do not include federal, state, or local excise,
sales, or use taxes. If such taxes are applicable, Egenera shall be
responsible for calculating the appropriate tax and adding it to the
royalty payments. Emulex shall not be required to issue invoices or
calculate any taxes that may be due hereunder.
5.3 Egenera shall make royalty payments by wire transfer to the
following account:
Silicon Valley Bank
38 Technology Drive, Suite 150
Irvine, CA 92618
Account #06005926-70
ABA #1211-4039-9
5.4 Egenera shall keep written records documenting its manufacture of
the Emulex Products in sufficient detail to allow Emulex to
determine whether Egenera's royalty payments are accurate. At the
end of each calendar quarter, Egenera shall furnish a report to
Emulex summarizing its Emulex Product manufacturing activities,
including at a minimum, the number of Emulex Products manufactured
and related royalty calculations.
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5.5 Emulex shall have the right, no more frequently than once per year,
upon reasonable prior notice and subject to appropriate
confidentiality provisions, to audit Egenera's records to determine
the accuracy of Egenera's royalty payments; however, if Emulex
reasonably determines that Egenera's royalties are underpaid in any
one calendar quarter by five percent or more, Emulex may increase
the frequency of its audits to quarterly until Egenera demonstrates
to Emulex's reasonable satisfaction that its royalty payments are
accurate. In the event any underpayment is discovered, Egenera shall
immediately make payment to correct the underpayment.
6. SUPPORT SERVICES
6.1 Emulex shall provide Egenera with manufacturing transition support
services as follows: 20 hours from the date that Emulex makes the
Emulex IP available to Egenera through June 30, 2002; and ten hours
per calendar quarter thereafter through the term of this Agreement.
Such manufacturing transition support shall include services such as
training, time with key suppliers, and the like.
6.2 Emulex shall provide Egenera with general engineering support in the
form of technical consultation as follows: 10 hours per calendar
quarter through the term of this Agreement. Requests for such
support shall be made by Egenera to a support coordinator to be
named by Emulex, who will track and report the time used by Egenera.
6.3 All support described in this Section 6 shall be on a resources
available basis only. The quarterly hourly limits shall not be
cumulative; if Egenera uses less time than allotted per quarter, the
remaining time shall not carry forward into subsequent quarters. If
Egenera's requests for support exceed the time limits set forth
herein, Egenera may request additional support, Emulex will evaluate
Egenera's request in light of resource availability and other
relevant factors, and if Emulex accepts Egenera's request, the
parties will mutually agree to time limits and the type of support
required. Egenera shall pay $[**] per hour of support in excess of
the hourly limits set forth above.
6.4 If Emulex personnel incur travel or other expenses while providing
support to Egenera, Egenera shall reimburse Emulex for actual,
documented costs of travel, lodging, meals, and other necessary
related expenses.
7. REPRESENTATIONS AND WARRANTIES
7.1 Emulex makes no warranties whatsoever, express or implied, with
respect to the Emulex IP. Egenera agrees that the Emulex IP is
accepted and utilized "AS IS" without warranty of any kind. Emulex
does not warrant to correct any defects or errors that may exist in
the Emulex Product, Software, Source Documentation, or Product
Documentation.
7.2 Emulex represents and warrants that it has the right to enter into
this Agreement and to grant the licenses granted herein.
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7.3 THE EXPRESS WARRANTIES SET FORTH IN THIS SECTION ARE IN LIEU OF ALL
OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND
NON-INFRINGEMENT.
8. CONFIDENTIAL INFORMATION
8.1 Both parties may, in connection with this Agreement, disclose to the
other party information considered confidential and proprietary
information of the disclosing party ("Confidential Information").
Information shall be considered Confidential Information if
identified as confidential in nature by the disclosing party at the
time of disclosure, or which by its nature is normally and
reasonably considered confidential, such as information related to
past, present or future research, development, or business affairs,
any proprietary products, materials or methodologies, or any other
information which provides the disclosing party with a competitive
advantage. The Source Documentation shall be considered Confidential
Information. Neither party shall disclose such Confidential
Information to any third party without the prior written consent of
the disclosing party. The receiving party shall protect the
disclosing party's Confidential Information with the same degree of
care that it regularly uses to protect its own Confidential
Information from unauthorized use or disclosure. No rights or
licenses under patents, trademarks, trade secrets, or copyrights are
granted or implied by any disclosure of Confidential Information.
8.2 The obligations of confidentiality imposed by this Agreement shall
not apply to any Confidential Information that: (a) is rightfully
received from a third party without accompanying markings or
disclosure restrictions; (b) is independently developed by employees
of the receiving party who have not had access to such Confidential
Information; (c) is or becomes publicly available through no
wrongful act of the receiving party; (d) is already known by the
receiving party as evidenced by documentation bearing a date prior
to the date of disclosure; or, (e) is approved for release in
writing by an authorized representative of the disclosing party. In
addition, each party shall be entitled to disclose the other party's
Confidential Information to the extent such disclosure is requested
by the order of a court of competent jurisdiction, administrative
agency, or other governmental body, provided that the party required
to make the disclosure shall provide prompt, advance notice thereof
to enable the other party to seek a protective order or otherwise
prevent such disclosure.
8.3 The terms and conditions of this Agreement, but not its existence,
are considered Confidential Information.
9. INDEMNIFICATION
9.1 Emulex shall indemnify and hold Egenera harmless from and against
any claim or suit brought against Egenera to the extent that such
action is based upon a claim that any Emulex Product manufactured
hereunder infringes a patent, copyright, trade secret, or any
intellectual property right of any third party, and to indemnify
Egenera for its related costs, expenses, and damages, including
reasonable attorneys' fees, and to pay those costs, expenses and
damages
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incurred by Egenera, provided that Egenera gives Emulex prompt
written notice of any infringement claim, available information, and
sole authority and control to settle or defend the claim, at
Emulex's expense. Emulex reserves the right to choose the attorneys
who may pursue any action that arises under this section.
9.2 Emulex shall have no liability to Egenera to the extent that a claim
of infringement is based upon: (i) compliance with designs, plans,
or specifications of Egenera; (ii) the combination of the Emulex
Product with other product or devices not purchased hereunder where
the Emulex Product itself would not be infringing; or (iii)
modifications of the Emulex Product made by Egenera where unmodified
Emulex Product would not be infringing.
10. LIABILITY FOR INJURY
Emulex shall indemnify and defend Egenera against all claims, suits,
losses, expenses, and liabilities for bodily injury, death, and property
damage caused by use of the Emulex Product, or through the negligence of
Emulex or any person for whose actions Emulex is legally liable. Emulex
shall carry and maintain Worker's Compensation, errors and omissions, and
general liability insurance coverage to adequately cover Emulex's
obligations under this Section.
11. LIMITATION OF LIABILITY
NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY DIRECT, INDIRECT,
SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING LOST PROFITS,
ARISING OUT OF THIS AGREEMENT OR ANY PERFORMANCE HEREUNDER, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
12. MISCELLANEOUS PROVISIONS
12.1 Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the state of California, without regard for its rules
concerning the conflicts of law.
12.2 Relationship of the Parties
The parties are and shall remain at all times, independent
contractors in the performance of this Agreement and nothing herein
shall be deemed to create a joint venture, partnership or agency
relationship between the parties. Neither party shall have the right
or authority to assume or to create any obligation or
responsibility, express or implied, on behalf of the other except as
may be expressly provided otherwise in this Agreement. Each party
shall be solely responsible for the performance of its employees
hereunder and for all costs and expenses of its employees, to
include but not be limited to employee benefits.
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12.3 Successors and Assigns
Egenera may not assign any of its rights or obligations hereunder
without the prior written consent of Emulex, which consent Emulex
may grant in its sole discretion. Any attempt to assign any rights,
duties or obligations hereunder without Emulex's written consent
will be void, and shall be considered a material breach of this
Agreement.
12.4 Waiver
The failure of either party to insist upon or enforce strict
conformance by the other party of any provision of this Agreement or
to exercise any right under this Agreement shall not be construed as
a waiver or relinquishment of such party's right unless made in
writing and shall not constitute any subsequent waiver or
relinquishment.
12.5 Amendment and Modification
To be valid, amendments or modifications to the Agreement must be in
writing and signed by authorized representatives of both parties.
Any verbal agreements, discussions, and understandings, expressed or
implied, shall not constitute an amendment to this Agreement.
12.6 Invalid Provisions
If any provision of this Agreement is finally held by a court of
competent jurisdiction to be illegal or unenforceable, the legality,
validity, and enforceability of the remaining provisions of this
Agreement shall not be affected or impaired.
12.7 Survivorship
The provisions of this Agreement which by their nature survive
termination or expiration of the Agreement, including but not
limited to the provisions of Sections 3.3 (Term and Termination), 7
(Representations and Warranties), 8 (Confidential Information), 9
(Indemnification), 10 (Liability for Injury), 11 (Limitation of
Liability), and 12 (Miscellaneous Provisions) of this Agreement
shall survive the termination or expiration of this Agreement.
12.8 Force Majeure
Neither party shall be responsible for any delay in performing this
Agreement to the extent that such delay is caused by fire, flood,
hurricane, earthquake, explosion, war, strike, embargo, government
law or regulation, action of civil or military authority, or act of
God.
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12.9 Attorneys' Fees
If either party commences litigation to enforce any provision of
this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and expenses of litigation, including
fees and expenses of any appeal.
12.10 Notices
Unless otherwise expressly provided for, all notices, requests,
demands, consents or other communications required or pertaining to
this Agreement shall be sent by next business day courier, fax
followed by confirmation by mail, e-mail, or some other method that
provides proof of delivery, to the address set forth below:
Emulex: Emulex Corporation
3535 Harbor Blvd.
Costa Mesa, CA 92626
Attn: Contracts Administration
Egenera: Egenera, Inc.
165 Forest Street
Marlborough, MA 01752
Attn: John Ralen
In case of mailing, the effective date of delivery of any notice,
demand, or consent shall be considered to be five days after proper
mailing.
12.11 Other Communications
Each party will designate one or more persons to act as primary
contacts. These contacts will facilitate communication between the
parties in relation to this Agreement, including without limitation,
the activities set forth in Sections 5 and 6. The names, telephone
and facsimile numbers of the contacts will be provided by the
parties to each other, and may be changed by written notice.
12.12 Headings
The section and paragraph headings of this Agreement are intended as
a convenience only, and shall not affect the interpretation of its
provisions.
12.13 Conflicting Terms
The parties agree that the terms and conditions of this Agreement
shall prevail, notwithstanding any contrary or additional terms in
any purchase order, sales acknowledgment, confirmation or any other
document issued by either party in relation to this Agreement.
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12.14 Export Authorization
Regardless of any disclosure made by Egenera to Emulex of any
ultimate destination of the Emulex Products, Egenera will not
export, re-export or re-sell any Emulex Product without first
obtaining prior written authorization from the U.S. Department of
Commerce or any other Agency or Department of the United States
Government, as and if required.
13. ENTIRE AGREEMENT
This Agreement constitutes the entire Agreement between the parties and
supersedes all prior or contemporaneous agreements, discussions, and
understandings between the parties, either express or implied. The
following Attachments are part of this Agreement and are incorporated
herein by this reference.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
EMULEX CORPORATION EGENERA, INC.
By: /s/Paul F. Folino By: /s/Thomas F. Sheehan
-------------------------------- -----------------------------------
(Signature) (Signature)
Name: Paul F. Folino Name: Thomas F. Sheehan
-------------------------------- -----------------------------------
(Please Print or Type) (Please Print or Type)
Title: President & CEO Title:
----------------------------
Date: March 22, 2002 Date:
----------------------------
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AMENDMENT NO. 1
TO
MANUFACTURING RIGHTS LICENSE AGREEMENT
BETWEEN
EGENERA, INC.
AND
EMULEX CORPORATION
The parties agree that the above referenced Agreement is amended as follows.
This Amendment shall be effective as of the later of the dates on which this
Amendment is executed by the parties ("Effective Date").
1. The first sentence of Section 1.2 is hereby amended to including the
following: cLAN Raven ASIC (GNAX-500-1) and cLAN5000 switch.
2. Section 1.4 is hereby amended to read as follows: "Source Documentation"
means documentation necessary for Egenera to have the Emulex Product
manufactured. Source Documentation includes the Emulex Product approved
vendor list; schematics; costed bill of materials, quality and reliability
data; DVT, DFM, and DFT; packaging data; engineering change orders;
process flows; the Falcon ASIC and Raven ASIC source code; and the
existing Alegro fab design files for the cLAN5300 switch.
3. Section 1.5 is hereby deleted in its entirety and the remaining paragraphs
of Section 1 renumbered accordingly.
4. Section 1.6 is hereby amended to read as follows: "Product Documentation"
means a copy of the Emulex Product user manual, diagnostic software
documentation, and diagnostic source code for the Falcon ASIC and Raven
ASIC.
5. Section 2 is hereby amended as follows: the clause "Subject to payment of
the royalties as described in Section 5,..." is deleted.
6. The first sentence of Section 4.1 is hereby amended as follows: "During
the term of this Agreement, Emulex hereby grants to Egenera a worldwide,
nonexclusive, royalty free, fully paid-up right and license under Emulex's
applicable patents, copyrights, and other intellectual property rights..."
The last sentence of Section 4.1 is hereby deleted.
7. Section 5 (Royalties and Audit Rights) is hereby deleted in its entirety.
8. Section 6.2 is hereby amended to include the following: "Notwithstanding
the foregoing, Emulex shall have no obligation to provide any support to
Egenera in connection with the Raven ASIC or cLAN5000 switch."
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9. Except as amended above, all terms and conditions of the Agreement remain
in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their duly authorized representatives.
EMULEX CORPORATION EGENERA, INC.
By: /s/ Michael J. Rockenbach By: /s/ James H. Kelly
-------------------------------- --------------------------------
(Signature) (Signature)
Name: Michael J. Rockenbach Name: James H. Kelly
---------------------------------- -------------------------------------
(Printed or Typed) (Printed or Typed)
Title: Exec. V.P., & CFO Title: VP Manufacturing
Date: 9/23/02 Date: 20 September 2002
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AMENDMENT NO. 2
TO
MANUFACTURING RIGHTS LICENSE AGREEMENT
BETWEEN
EGENERA, INC.
AND
EMULEX CORPORATION
The parties agree that the above referenced Agreement is amended as follows.
This Amendment shall be effective as of the later of the dates on which this
Amendment is executed by the parties ("Effective Date").
1. The parties hereby agree to extend the term of the Agreement for an
additional three (3) years, to expire on April 9, 2007, unless terminated
earlier as provided in Section 3 of the Agreement.
2. Except as amended above, all terms and conditions of the Agreement remain
in full force and effect.
IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their duly authorized representatives.
EMULEX CORPORATION EGENERA, INC.
By: /s/ Paul Folino By: /s/ Thomas Sheehan
----------------------------- ------------------------------
(Signature) (Signature)
Name: Paul Folino Name: Thomas Sheehan
--------------------------------- -----------------------------------
(Printed or Typed) (Printed or Typed)
Title: Chairman and CEO Title: Chief Financial Officer
Date: 2/6/04 Date: 27 January 2004
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