MASTER SALES AGREEMENT
Purchaser: Evans & Sutherland Computer Corporation
Address: 600 Komas Drive
Salt Lake City, Utah 84158 USA
This Master Sales Agreement ("Agreement") is made the as of August 27, 2001,
("Effective Date") by and between ATI Technologies Inc., acting on its own and
on behalf of its subsidiaries, a corporation with its principal place of
business at 33 Commerce Valley Drive East, Markham, Ontario Canada L3T 7N6
("ATI") and the Purchaser identified above.
WHEREAS, ATI desires to sell to Purchaser and Purchaser desires to
purchase from ATI certain graphics, video and/or multimedia related controllers,
boards, and related software;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein set forth, the parties, intending to be legally bound, agree as
follows:
1. Agreement to Purchase. ATI agrees to sell the Products (as defined below) to
Purchaser, and Purchaser agrees to purchase and accept delivery of the Products
from ATI, subject to the terms and conditions described below. Purchaser shall
have the right to use such Products for its own purposes, to resell such
Products worldwide, and to combine such Products with its own products or its
suppliers or customers' products for resale worldwide. "Products" mean the ATI
hardware products identified in Attachment 1 including the related Software
rights therein described in section 7 below. During the term of this Agreement,
Attachment 1 may be modified to add or delete products with the written consent
of both parties. ATI shall be free to fulfill its obligations hereunder through
any of its affiliated companies.
2. Price. The price for each Product shall be as set out in Attachment 1, as
amended in writing by the parties from time to time. Purchaser will also pay ATI
an additional Software and engineering support fee of US $1,250,000 in
accordance with the payment schedule set out in Attachment 1.
3. Minimum Purchase Commitment. Purchaser agrees to purchase from ATI a non
refundable minimum purchase commitment of US $2,000,000 of Product in accordance
with the Product prices set forth in Attachment 1 during the first two years of
this Agreement (the "Minimum Commitment"). The Minimum Commitment amount will be
paid in accordance with the payments schedule set out in ,Attachment 1. If at
the end of such: two-year period, Purchaser has not placed purchase orders equal
to this Minimum Commitment, then: at ATI's: option: (a) ATI will waive the
Minimum Commitment requirement; or (b) deliver to Purchaser within sixty (60)
days from the end of the term of this Agreement, the number of chips which is
equal to the difference between the Minimum Commitment and the number of chips
actually purchased by Purchaser (the `Commitment Deficiency").
4. Non-exclusivity. The relationship between ATI and Purchaser under this
Agreement: is non-exclusive. ATI may sell the Products or similar products to
other purchasers in such a form and under such terms as ATI may desire.
5. Proprietary Rights. Purchaser acknowledges and agrees that ATI will retain
all (Proprietary Rights (as defined below) in the Products. "Proprietary Rights"
means all patent rights, patent applications, rights to apply for patents,
copyrights, copyright registrations, trade secrets, trademarks, service marks,
trademark and service mark registrations and all related goodwill.
6. Proprietary Rights Notices. Purchaser will leave intact all Proprietary
Rights notices (including, without limitation, copyright notices, patent
registration numbers and trademark notices) on all Products or documentation
supplied by AT I.
1
7. Software Rights. ATI will provide all software related to the Products (the
"Software") to Purchaser in accordance with the Software License Agreement set
out in Attachment 3 hereto.
8. Term. The term of this Agreement shall commence on the Effective Date and
shall continue for an initial period of three (3) years ("Initial Term"), and
shall automatically renew thereafter for consecutive one year periods (such
renewal periods and the Initial Term collectively referred to as the "Term"),
unless sooner terminated in accordance with Section 29 hereof or unless
Purchaser provides at least sixty (60) days prior written notice of its intent
that the Term not renew.
9. Taxes. The Purchaser shall be liable for all applicable Federal, Provincial,
State and local sales and use taxes. The Purchaser shall be liable for any
import and/or excise taxes, customs and duties incurred for licenses for
clearance required at point of entry and destination.
10. Payment. Payment shall be made by the Purchaser net thirty (30) days from
the later of (i) the date of actual delivery to Purchaser's designated facility
or (ii) the date an invoice is received by Purchaser.
11. Effective Date of Price Decreases. Price decreases shall be effective
immediately upon written announcement by ATI and shall apply to all Products
subsequently ordered by Purchaser.
12. Forecasts. Upon execution of this Agreement and within five (5) days from
the end of each calendar month thereafter, Purchaser will provide ATI with a
written forecast setting forth Purchaser's anticipated monthly needs for the
delivery of Products for the following four (4) calendar month period (including
the month in which the forecast is provided).
13. Lead Time. Estimated lead time for delivery of ATI standard Products and
spare parts covered by this Agreement will be ninety (90) working days after
date of receipt of accepted purchase orders. If Purchaser requests a shorter
lead time on a particular purchase order, ATI will consider such a request on a
case by case basis.
14. Finished Goods Inventory. Purchaser shall be entitled to specify a quantity
of up to two weeks average demand for each currently forecasted Product listed
in Attachment 1, to be maintained at ATI's facilities or a mutually agreed to
alternate location as finished goods inventory available for sale only to
Purchaser (the "Finished Goods Inventory"). Such Products may be purchased by
Purchaser pursuant to the provisions of this Agreement. AT[ will dedicate and
maintain a suitable storage location at its plant or a mutually agreed to
alternate location where the Finished Goods Inventory shall be stored and
segregated from all of ATI's other inventory. Purchaser is obligated to purchase
all Finished Goods Inventory held by ATI at Purchaser's request. Should
Purchaser no longer have requirements for such inventory of ATI's generic
products included in Finished Goods Inventory, ATI will make reasonable efforts
to sell such inventory to other customers upon written request from Purchaser.
15. Placing Orders. Purchaser agrees to issue purchase orders or releases, which
may be issued against blanket purchase orders (individually an "Order" and
collectively, "Orders"), for all Products in accordance with the terms of this
Agreement.. Each Order shall be in the form of a written or electronic
communication and shall contain the following information:
(a) A description of the Products;
(b) The quantity of Products;
(c) The requested delivery date;
(d) The location to which the Products are to be shipped;
(e) The location to which invoices shall be sent for payment; and
(f) Transportation instructions.
All Orders under this Agreement shall be provided on Purchaser's form of
purchase order. In the event of a conflict between the Order and the terms and
conditions contained in this Agreement and the Attachments hereto, the terms and
conditions contained in this Agreement and the Attachments hereto shall
supersede and control over the Order. ATI shall accept and acknowledge Orders
within five (5) days of ATI's receipt of such Order.
16. Orders - General. No modification to any Order, this Agreement or the
Attachments hereto and no inconsistent or additional terms contained in any
2
quotation, purchase order, acknowledgment or invoice, shall be valid without the
prior written consent of an authorized representative of ATI and Purchaser.
ATI's failure to object to any provisions contained in any communication from
Purchaser shall not be deemed a waiver of the provisions of this Agreement and
the Attachments hereto. The provisions of this Agreement supersede all prior
oral or written quotations, communications, agreements and understandings of the
parties with respect to the subject matter of this Agreement. These terms and
conditions shall be applicable whether or not they are attached to or enclosed
with the Products to be sold hereunder.
17. Rescheduling/Cancellation. Order cancellations, rescheduling and/or changes
are subject to the following:
(a) Orders providing for delivery in excess of ninety (90) days may be
canceled at no charge to Purchaser;
(b) Orders providing for delivery in excess of sixty (60) days and not
greater than (90) days may not be canceled but may be rescheduled at
no charge provided the delivery date is not delayed for more than
thirty (30) days and the type of Product may be changed, at no
charge to Purchaser;
(c) Orders providing for delivery in excess of thirty (30) days but not
greater than sixty (60) days may not be canceled, but may be delayed
provided the delivery date is not delayed for more than thirty (30)
days and the type of Product may be changed at no charge to
Purchaser on up to fifty percent (50%) of any order, provided the
total dollar amount of the Order is not decreased. Greater than
fifty percent (50%) of any Order may be changed upon payment of a
fifteen percent (15%) charge;
(d) Orders providing for delivery within thirty (30) days is a fixed
order which may not be canceled, rescheduled and/or changed, except
that an Order may be delayed for up to thirty (30) days upon payment
of a fifteen percent (15%) charge.
18. Delivery. All products shall be delivered by ATI f.o.b. ATI's point of
shipment. ATI's normal freight terms to Purchaser shall be freight prepaid by
ATI and added to the invoice amount. Shipments will be insured as specified in
the order. Any changes to these freight terms requires the prior written
approval of ATI.
19. Title and Liability. Title and liability for loss or damage to the product
shall pass to Purchaser upon ATI's delivery of the Product to a carrier for
shipment to the Purchaser and any loss or damage thereafter shall not relieve
the Purchaser of any obligations hereunder.
20. Package and Shipment. All Products shall be packaged and packed in
accordance with ATI's normal practices. Packages will be marked as directed by
Purchaser. ATI will take all commercially reasonable steps to deliver Product by
the delivery date stated in the Order. ATI will obtain Purchaser's approval
before making any shipment more than 7 calendar days prior to or more than 7
calendar days following the stated delivery date. If ATI will not ship the
specified quantity of Product ordered for delivery within 30 calendar days of
the stated delivery date, ATI will notify Purchaser and provide an estimated
delivery date. If the specified method of transportation would not permit ATI to
meet the stated delivery date, the Product affected will be shipped by air
transportation or other expedient means acceptable to Purchaser, and ATI will
pay for any resulting increase in the freight cost over that which Purchaser
would have been required to pay by the specified method of transportation.
Should only a portion of the Product be available for shipment to meet the
requested delivery date, ATI will ship the available Product unless directed by
Purchaser to reschedule shipment.
21. Inspection. All Products purchased hereunder are subject to Purchaser's
inspection and acceptance provided that if Purchaser has no I-accepted or
rejected the Product with fourteen (14) days of receipt, Purchaser shall be
deemed to have accepted such Product. No Product shall be returned to ATI
without ATI's consent and a Return Material Authorization ("RMA") number which
will be issued by ATI and must accompany any returned Product.
22. Specifications. All Products will be manufactured in accordance with the
specifications, drawings and technical information, if any, attached or referred
to in Attachment 2 hereto (the "Specifications"). In the event ATI makes
material changes to the form, fit, and/or function of the Products which would
reduce the reliability, performance, or function thereof, or which is a material
deviation from Product roadmaps disclosed to Purchaser, ATI will provide
Purchaser with notice thereof at least 60 days prior to such implementation. If
such change or deviation materially affects or delays Purchaser's product
development, for a period of more than 60 days from the dates shown in Section
4.3 of the Addendum To Master Sales Agreement, then the payments in the Purchase
Schedule listed in Attachment 1 hereto will be adjusted by an amount of time
equal to the delay.
23. Purchaser Changes to Specifications. Purchaser may, from time to time,
request changes to the Product Specifications and ATI agrees to make
commercially reasonable efforts to comply with such reasonable change requests.
If Specification changes result in an increase in the cost or in the time
required to manufacture such Products, at ATI's discretion, a proportionate
3
adjustment to the prices and/or lead times will be made. Any adjustment to
prices shall be in writing and ATI shall not be required to implement such
changes until ATI and Purchaser have mutually agreed upon such modifications and
price changes.
24. Use of Documentation. Unless otherwise agreed by ATI in writing, all
documentation, including Specifications, delivered pursuant to this Agreement
and all information contained therein may be reproduced only for inspection,
testing, maintenance and repair purposes. Neither receipt nor possession of
documentation delivered pursuant to this Agreement confers or transfers any
right to use, reproduce or disclose the documentation, any part thereof, or
information contained therein, for any other purpose. The foregoing restrictions
shall not apply to documentation clearly intended for use by end users.
25. Confidential Information. The documentation referred to above and any other
material related to the Products and provided under the terms of this Agreement
are or encompass trade secrets or confidential information of ATI or its
suppliers ("Confidential Information"). Purchaser shall not make the
Confidential Information available in any form to any person other than
Purchaser's employees whose job performance requires such access. Purchaser
shall protect the confidentiality of Confidential Information with the same
degree of care that it exercises with respect to its own information of like
import, but in no event less than reasonable care, for a period of five (5)
years from the date of disclosure. Purchaser shall not be liable for the
disclosure of Confidential Information which: (a) is known to Purchaser lawfully
by its own efforts prior to being received from ATI; (b) is or becomes publicly
known through no wrongful act of Purchaser; (c) is obtained by Purchaser
lawfully from a third party not having an obligation to maintain confidentiality
and not being in wrongful possession of the confidential information; (d) is
independently developed by Purchaser without breach of this Agreement; (e) is
disclosed under operation of law; or (f) is disclosed by Purchaser with ATI's
prior written approval.
26. Warranty and Indemnification.
(a) ATI represents and warrants that board Products shall be free from
defects in material and workmanship under normal use and service for
a period of two (2) years from when first sold. to an end user. ATI
represents and warrants that component (ASIC) Products shall be free
from defects in material and workmanship under normal use and
service for a period of one (1) year from when first sold to an end
user. An end user shall be deemed to have bought the Product no
later than ninety (90) days after shipment of the Product to the
Purchaser. Notwithstanding the forgoing, if the Product sold by ATI
to Purchaser is a component (ASIC) Product, ATI shall only be liable
under the foregoing warranty if a defect can be proven in respect of
such Product. ATI's entire obligation under this warranty is
limited, at its sole option, to the repair or replacement of the
Product within the foregoing warranty period. Such Product must be
returned to ATI in accordance with ATI's standard RMA procedure.
This warranty shall not apply to any Product which has been repaired
or altered, except by ATI, or to any Product which has been subject
to misuse or accident.
(b) ATI shall defend, indemnify and hold Purchaser harmless against any
and all assertions, claims, suits, actions or proceedings
(collectively, "Claims") brought against Purchaser based on a Claim
that any Product or the manufacture, use, sale or distribution of
any Product purchased by Purchaser hereunder constitutes an
infringement of any patent, copyright, trademark, trade secret or
other intellectual property right of any third party in the US,
Canada, European Union or Japan. ATI shall pay all damages and costs
incurred by or awarded against Purchaser related to or resulting
from such Claims. If Purchaser is enjoined, or it appears likely to
ATI that Purchaser may be enjoined, from using, selling or
distributing any Product purchased by Purchaser hereunder, ATI
shall, at its own expense and option, either (i) procure the right
for Purchaser and Purchaser's customers to use, sell and distribute
such Product; (ii) replace the infringing Products with
non-infringing products that have substantially the same quality and
performance; or (iii) modify any infringing Product so it becomes
non-infringing, but having substantially the same quality and
performance; or (iv) if none of the actions described in (i), (ii)
or (iii) is commercially feasible, as determined by ATI in its
discretion, terminate this Agreement immediately and authorize
Purchaser to return the infringing Product in its inventory and
credit to Purchaser the full purchase price paid by Purchaser. The
foregoing states ATI's total liability and obligation for such
Claims. ATI shall have sole control and authority with respect to
the defense, settlement or compromise of any Claim covered by this
section. Purchaser shall provide prompt written notice of such a
Claim and reasonable assistance and cooperation in connection with
ATI's defense, settlement or compromise thereof.
4
Notwithstanding the foregoing, ATI shall have no liability for any
Claim which Purchaser has not promptly notified ATI of in writing,
and for:
(A) Any infringement based upon use of Products in
combination with any materials not furnished directly by
ATI;
(B) Damages attributable to continued sales after Purchaser
first receives notice of the alleged infringement;
(C) Any infringement based upon a modification or change to
the Products not first authorized by ATI in writing;
(D) Use of its Products in a manner for which they were not
designed or not according to their Specifications;
(E) Use of an earlier version of the Products when a later
version has been made available to Purchaser and use of
such later version would have avoided the infringement;
and
(F) Any infringement arising from ATI's compliance with any
unique specifications or design requirements provided or
requested by Purchaser:
(G) Any infringement relating to any MPEG or MPEG 2
technology.
27. Disclaimer and Limited Liability.
EXCEPT AS EXPRESSLY STATED ABOVE IN SECTION 26, ALL WARRANTIES ARE DISCLAIMED,
INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY,
ACCURACY, CONDITION, OWNERSHIP, FITNESS FOR A PARTICULAR PURPOSE, AND/OR
NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.
NEITHER PARTY, NOR ANY OF ITS AFFILIATES, WILL BE LIABLE TO THE OTHER PARTY FOR
ANY SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTAL DAMAGES, EVEN IF INFORMED OF
THE POSSIBILITY THEREOF IN ADVANCE. THESE LIMITATIONS APPLY TO ALL CAUSES OF
ACTION IN THE AGGREGATE, INCLUDING WITHOUT LIMITATION BREACH OF CONTRACT, BREACH
OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATION AND OTHER TORTS. IN
NO EVENT WILL ATI'S OR ITS AFFILIATES OR SUPPLIERS AGGREGATE LIABILITY UNDER
THIS AGREEMENT, REGARDLESS OF THE FORM OF CLAIM OR ACTION, EXCEED A SUM EQUAL TO
THE AMOUNTS PAID BY PURCHASER TO ATI IN THE ONE (1) YEAR PERIOD IMMEDIATELY
PRECEEDING THE DATE ON WHICH A WRITTEN DEMAND FOR DAMAGES IS MADE. THIS
LIMITATION DOES NOT APPLY TO DAMAGES FOR INFRINGEMENT OF THIRD PARTY
INTELLECTUAL PROPERTY RIGHTS, BREACH OF CONFIDENTIALITY OR TRADE SECRET
MISAPPROPRIATION, NOR TO CLAIMS ARISING FROM GROSS NEGLIGENCE, WILLFUL
MISCONDUCT OR FRAUD.
28. Technical Support. In the event an emergency occurs and Purchaser's
personnel are in need of assistance, AT[ will provide reasonable field support
in the form of telephone consultation during ATI's normal business hours. If
requested by Purchaser and acceptable to ATI, ATI may provide FAE support at
Purchaser's facility.
29. Termination. This Agreement will terminate:
a) In the event of a material breach by one party in the
performance of its duties, obligations or undertakings
under this Agreement, the other party will have the
right to give written notice to the breaching party
advising such party of the specific breach involved. If
the breaching party has not remedied such breach within
thirty (30) days after such notice, the other party will
have the right, in addition to any other rights and
remedies it may have, to terminate this Agreement
immediately upon written notice to the defaulting party.
The thirty (30) day cure period is not applicable to
breaches of confidentiality or improper disclosure of
proprietary technology or other trade secrets.
5
b) In the event that Purchaser fails to make any payments
hereunder, ATI shall have the right to give written
notice to Purchaser advising Purchaser of the specific
nonpayment involved. If Purchaser has not made the
requisite payment within fifteen (15) days after such
notice, ATI will have the right, in addition to any
other rights and remedies it may have, to terminate this
Agreement immediately upon written notice to Purchaser.
c) In the event that a party has been the subject of any
voluntary or involuntary proceeding relating to
bankruptcy, insolvency, liquidation, receivership,
composition of or assignment for the benefit of
creditors, the other party may terminate this Agreement
by providing written notice to such party.
d) 120 days following ATI's notice to Purchaser advising
that all Products to be sold hereunder are now
end-of-life.
30. Effect of Termination. After termination:
(a) Payment, delivery, and confidentiality obligations
arising prior to termination will remain in force.
(b) In the event of termination of this Agreement due to
Purchaser's material breach the due date for all
invoices for Products shall automatically be accelerated
so that they shall immediately become due and payable on
the effective date of termination, even if longer terms
had been provided previously.
(c) Notwithstanding the termination of this Agreement,
Purchaser may use and sell any Product held in inventory
at such time, and continue to exercise its rights and
licenses in the Software under Section 7 to provide
support to its customers for products incorporating the
Product.
(d) Neither party will be liable for damages of any kind as
a result of exercising its right to terminate this
Agreement.
31. Applicable Law. This Agreement shall be governed by and enforced in
accordance with the laws of the State of California without reference to its
conflict of laws principles.
32. Force Majeure. If the performance of this Agreement or any obligation under
it (except payment of monies due) is prevented, restricted or interfered with by
reason of acts of God, acts of government, or any other cause not within the
reasonable control or anticipation of either party, the party so affected shall
be excused from such performance, but only for so long as and to the extent that
such a force prevents, restricts or interferes with that party's performance.
The party affected by the other party's delay or inability to perform may elect
to suspend this Agreement for the duration of the force majeure condition and
(i) at its option buy, sell, obtain or furnish elsewhere material to be bought,
sold, obtained or furnished under this Agreement and (ii) once the force majeure
condition ceases, resume performance under this Agreement. When the delay or
nonperformance continues for a period of a least thirty (30) days, either party
may terminate this Agreement or any part of it relating to Product not already
shipped. Where partial supplies of Product are available to AD, ATI will
allocate such supplies proportionately among Purchaser and ATI's other
customers.
33. Asslgnment. Neither party shall assign or delegate this Agreement, or. any
of their rights or duties hereunder, directly, indirectly, by operation of law,
or otherwise, and any such puported assignment or delegation shall be void,
except with the express written permission of the other party which permission
will not be unreasonably withheld. Notwithstanding the foregoing, any assignment
pursuant to a merger, change of control of ownership or sale of substantially
all of the assets of any party shall be expressly allowed hereunder without
written consent of any other party. Without limiting the foregoing, any
permitted assigns or successors of an assigning party shall be bound by all
terms and conditions of this Agreement.
34. Notices. All notices required to be given under this Agreement and any
communication sent with respect to this Agreement shall be given in writing and
shall be deemed received by the party to whom the notice or correspondence is
sent (a) one day after the notice or communication is sent via reliable
overnight commercial courier (charges prepaid), (b) on the date a party
acknowledges receipt of the notice or communication sent via certified or
registered mail, (c) three days after the notice or communication is sent via
first class mail, (d) on the date a party receives such notice by confirmed
facsimile or other electronic transmission, provided that a copy of such notice
is sent to such party via first class mail within two days thereafter, or (e) on
the date the notice or communication is personally delivered to the other party,
at the addresses set forth as follows:
6
Purchaser: ATI:
Evans &'Sutherland Computer Corporation ATI Technologies Inc.
600 Komas Drive Legal Department
Salt Lake City, Utah 75 Tiverton Court
84158 USA Unionville, Ontario
Attention: Legal Department Canada L3R 9S3
With Copy to:
ATI Technologies Inc.
OEM Sales
33 Commerce Valley Drive East
Thornhill, Ontario
Canada L3T 7N6
35. Relationship of Parties. Other than as provided herein, this Agreement does
not create any exclusive arrangement between the parties, and either party
hereto may meet, exchange information, enter into agreements and conduct
business relationships of any kind with third parties, to the exclusion of the
other party. Subject to the terms and conditions of this Agreement and except as
otherwise agreed to in writing by the parties, discussion and/or communications
between the parties will not serve to impair the right of either party to
develop, make, use, procure, and/or market products or services now or in the
future that may be competitive with those offered by the other, nor to develop
and provide products to competitors of the other party, nor require either party
to disclose any planning or other information to the other.
36. Press Release. Each party acknowledges that the other may do a press release
relating to this Agreement or to the subsequent addition of any Products hereto
with the prior approval of the other party, which approval will not be
unreasonably withheld. The releasing party will provide the other with a copy of
any such announcement for approval before being publicly released.
37. Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, the parties will negotiate in good faith to restate such
provision to reflect the original intentions of the parties as nearly as
possible in accordance with applicable law and the remaining provisions of this
Agreement shall be enforced as if this Agreement was entered into with the
restated provision
38. Survival. Sections 5, 6, 7 (subject to the survival limitations of that
section), 25, 26, 27, 30, 31 and 34 shall survive any termination of this
Agreement and shall bind the parties and their legal representatives,
successors, heirs and assigns.
39. Entire Agreement. This Agreement and all Attachments hereto constitute the
final written expression of all terms of the Agreement relating to the
transactions described herein. This Agreement supersedes all previous
communications, representations, agreements, promises or statements, either oral
or written, with respect to such transactions. No addition to or modification of
any provision of this Agreement will be binding unIess in writing and signed by
the parties hereto.
ATI TECHNOLOGIES INC. EVANS & SUTHERLAND COMPUTER
CORPORATION
By: /S/ Dave Orton By: /S/ James R. Oyler
Name: Dave Orton Name James R. Oyler
Title: President and CEO Title: President and CEO
Date: 8/27/01 Date: 8/30/01
7
ATTACHMENT 1
Name and Price of Products
Products
The following Radeon chips currently produced or in development are considered
to be the "Products" under the terms of this Agreement:
8200
8300
8350
Bridget
Theater
Production "per chip" prices:
1. Production graphics chips (Rxxx) will be sold to Purchaser at US
$185 per chip.
2. Production AGP Bridget chips will be sold to Purchaser at US $15 per chip.
3. Production Theater chips will be sold to Purchaser at US $15 per chip.
Purchase Schedule
Purchaser will make the following payments on the following dates in respect of
Software license and support fees and the Minimum Commitment payments for
Products:
o Execution of this Agreement $250,000 (SW license fee)
o 31 Oct 01 $250,000 (SW license fee)
o 28 Feb 02 $250,000 (chip commitment)
+ $500,000 (SW license fee)
o 31 May 02 $250,000 (chip commitment)
+ $250,000 (SW license fee)
o 31 Aug 02 $300,000 (chip commitment)
o 30 Nov 02 $300,000 (chip commitment)
o 28 Feb 03 $300,000 (chip commitment)
o 31 May 03 $300,000 (chip commitment)
o 31 Aug 03 $300,000 (chip commitment)
All amounts are in USD.
ATI Delivery Schedule
If the delivery of product or samples from ATI is delayed by more than 60 days
from the dates shown in Section 4.3 of the Addendum To Master Sales Agreement,
then the Purchase Schedule listed above will be adjusted by an amount of time
equal to the delay in ATI actual delivery dates.
8
ATTACHMENT 2
Specifications
ATI Product specifications for the following Products:
8200
8300
8350
Bridget
Theater
9
ATTACHMENT 3
Software License Agreement
10
ADDENDUM
TO
MASTER SALES AGREEMENT
This Addendum ("Addendum") is made with reference to, and
supplements and is a part of, the Master Sales Agreement ("Agreement"), made as
of August 13, 2001 by and between ATI Technologies Inc., acting on its own and
on behalf of its subsidiaries ("ATI"), and Evans & Sutherland Computer
Corporation ("Purchaser"). Except as modified by this Addendum, the terms of the
Agreement are un-amended and in full force and effect, and will apply to the
subject matter hereof. If any terms of this Addendum conflict with the
Agreement, the terms of the Agreement will govern, and the conflicting terms of
this Addendum will be deemed modified to be consistent herewith. Capitalized
terms used but not defined herein have the meanings given them in the Agreement
and Attachment 3 thereto.
Purpose:
A. ATI designs, manufactures and markets graphics, video and/or
multimedia related controllers, boards and related software.
B. Purchaser has substantial expertise in, and designs, manufactures
and markets, high end image generator ("IG") products for the visualization,
simulation and training market (the "Visual Simulation Market").
C. ATI and Purchaser desire to initiate a strategic relationship
pursuant to which ATI will enable the development by Purchaser of IG products
based on ATI's standard commercial high-end Radeon(R) family of graphics chips
and related software technology, and grant to Purchaser the non-exclusive,
worldwide right to develop, market and sell such products in the Visual
Simulation Market.
In consideration of the mutual premises and covenants contained
herein, the parties hereto hereby agree as follows:
Agreement:
1. Resources. Each party will commit the number of qualified and
experienced personnel which are necessary to perform its obligations in this
Addendum and the Agreement.
2. Contacts. Each party will designate a management level person who
will act as the point of contact for all matters relating to this Addendum and
the Agreement. Purchaser's contact person is: Jeff Kirk. ATI's contact person is
Andy Thompson.
3. Meetings. The parties will hold regular status meetings to review
and coordinate activity relating to this Addendum and the Agreement. In
particular, the parties will address ATI's technology roadmap, and suggestions
by Purchaser as to features and functionality that it perceives to be desirable
for future product releases.
4. ATI Deliverables.
4.1 Source Code. ATI will provide Purchaser with current
software driver Source Code for the Products during the term of the
Agreement as available, together with each update and release to the
code, including all releases of the 8200 driver Source Code, 8300
driver Source Code, and 8350 driver Source Code, BIOS source code
and driver Source Code for Linux OS. Use of the code will be
governed by a separate license agreement attached as Attachment 3 to
the Agreement. Initial delivery of the code will take place at a
mutually agreed time and place in early July, 2001, and will consist
of MS Windows based OpenGL and DirectX driver Source Code for the
8200 chip.
4.2 Hardware Design Documents. ATI will provide
Purchaser with current hardware design documents for the Products
during the term of the Agreement as available, including schematics,
board layouts, and timing information, together with each update to
11
the designs. This includes, but is not limited to, the hardware
design documents for the 8200, 8300, 8350, and AGP bridge chips.
Initial delivery of the documents will take place at a mutually
agreed time and place in early July, 2001.
4.3 Sample Product. ATI will provide Purchaser with a
reasonable number of Radon graphics chips, bridge chips and complete
board samples to enable Purchaser to test, evaluate and manufacture
prototypes of the IG graphics boards and products developed by
Purchaser. Samples will be delivered to Purchaser as available, at a
mutually agreed time and place, for each new chip design and with
each new turn. Nominally these deliveries will be at schedule points
designated by ATI as "sample" availability and "production"
availability. The anticipated schedule for delivery of sample chips
and boards is as follows:
8200 samples - immediately upon execution of the Agreement
8200 production - mid September 2001
8300 samples - first week of January 2002
8300 production - first week of April 2002
8350 samples - tbd
8350 production - tbd
4.4 Product Changes. ATI acknowledges that Purchaser will
design IG products based on Product designs and specifications
disclosed to Purchaser by ATI, and as anticipated by the roadmap. In
the event AT[ makes material changes to the form, fit, and/or
function of the Products which would reduce the reliability,
performance, or function thereof, or which is a material deviation
from Product roadmaps disclosed to Purchaser, ATI will provide
Purchaser with notice thereof at least 60 days prior to such
implementation.
5. Purchaser IG Products. Purchaser intends to design IG products
based on ATI Products and related software technology for use only in the Visual
Simulation Market. Purchaser will make design modifications and extensions to
ATI's standard commercial high-end graphics products. These design modifications
and extensions will typically include the design of unique graphics boards that
employ multiple AT[ graphics chips, the addition of other chips and hardware to
support features and performance unique to the Visual Simulation Market and the
modification of ATI's standard software driver Source Code to support these
unique graphics board designs.
6. Fee. Purchaser will pay ATI a fee of US $1,250,000 in
consideration of ATI's agreements hereunder, including the Software licenses and
support contemplated in the Agreement and this Addendum. This fee will be
payable as set out in Attachment 1 of the Agreement.
7. Support.
7.1 Engineering Support. During the first two (2) years
of the Initial Term, subject to Purchaser making the required
Software license and Minimum Commitment payments when due, AT[ will
provide support to Purchaser consisting of and subject to the
following conditions (as well as the terms and conditions of the
Software License Agreement between the parties dated of even date
herewith) to Purchaser:
(a) Up to 200 hours of hardware engineering
design support. To the extent additional hardware
support is required beyond 200 hours, ATI will work with
Purchaser in a commercially reasonable manner to assist
Purchaser with any hardware issues that arise, provided
that ATI will determine the level of such support and
may terminate such additional assistance at any time, in
its sole discretion, unless the parties mutually agree
in writing to an appropriate support fee payment amount
for such assistance. ATI will provide architectural
assistance and consulting only as it relates to hardware
in the Products. In no event will support be provided in
12
relation to Purchaser's product. ATI will provide
sufficient documentation on hardware, interconnects,
board-level information, and register-level
specifications, to permit the design of circuit boards
using the Products. In addition, the documentation of
Product internals shall be sufficient to permit software
programmers full-access to all internal graphic chip
features so that Purchaser can bring the appropriate
modifications to the OpenGL (and DirectX) drivers
(b) Access to one software driver expert
during regular business hours. ATI will provide Software
updates (approximately two per year), including
documentation, initial set up assistance and consulting
only as it relates to the Software. No support will be
provided in relation to Purchaser's own software or
Purchaser's enhancements to ATI's Software.
(c) All support will be coordinated through
designated program managers who shall manage the
parties' interaction.
Support will commence concurrently with the initial delivery by ATI
of its Source Code and hardware designs, and will continue during
the Term of the Agreement.
7.2 Fee and Payment. Engineering support payments are
included as part of the Software License fee payments. Sections 9.
and 10. of the Agreement will apply to all payments made pursuant to
this Addendum.
7.3 Support Option. At least ninety (90) days prior to
the end of the second year of the Initial Term, Purchaser will have
the option to purchase continuing support from ATI beyond the first
two years of the Initial Term on a time and materials basis, as
required, at ATI's then current rates as agreed to by the parties in
writing. Such support will include support similar to the hardware
support provided in Section 7.1 (a) and access to a designated
engineer to provide software support as provided in Section 7.1(b).
This additional support will also include any updates to Product
documentation and Software. The parties will coordinate such
additional support in accordance with Section 7.1(c).
8. Confidentiality.
8.1 Restrictions. ATI will hold in confidence, and will
use solely for purposes of or as provided in this Agreement, any
Purchaser Confidential Information disclosed to it or derived from
Purchaser Confidential Information disclosed to it, and will protect
the confidentiality of such with the same degree of care that it
exercises with respect to its own information of like import, but in
no event less than reasonable care, for a period of 5 years from the
date of disclosure.
8.2 Exceptions. If ATI is required by legal, judicial or
administrative process or applicable laws (including federal
securities laws) to disclose Purchaser Confidential Information, ATI
will give Purchaser notice of the required disclosure and provide
commercially reasonable assistance, at Purchaser's expense, in
seeking to quash or limit the disclosure.
8.3 Return of Confidential Information. All materials
containing Purchaser Confidential Information will be returned or
destroyed upon termination of this Agreement.
8.4 "Purchaser Confidential Information" means
information relating to Purchaser, including but not limited to
information relating to Purchaser's business, products and product
roadmaps, (i) disclosed in tangible form that is clearly marked or
identified as confidential or proprietary at the time of disclosure
or (ii) disclosed in non-tangible form, identified as confidential
or proprietary at the time of disclosure, and summarized
sufficiently for identification and designated as confidential in a
written memorandum sent to ATI within 30 days after disclosure.
Confidential Information does not include information (A) used with
the permission of the Purchaser; (B) in the possession of or known
to ATI prior to its receipt from Purchaser; (C) which is or becomes
a matter of general public knowledge through no fault of ATI; (D)
which is developed independently by or on behalf of ATI; or (E)
which ATI lawfully receives from any third party having no duty of
confidence to the Purchaser. The terms and conditions of this
Addendum and the Agreement are Confidential Information.
9. Similar Development. ATI understands that Purchaser may currently
or in the future be developing technology internally, or receiving technology
from third parties that may be similar to technology developed by Purchaser with
the use of or access to ATI Confidential Information. Accordingly, nothing in
this Agreement will be construed as a representation or inference that Purchaser
13
will not develop products, or have products developed for it, or enter into
joint ventures, alliances, or licensing arrangements that operate substantially
similar to and/or compete with the technology developed by Purchaser following
use of or access to ATI Confidential Information, provided however that
Purchaser will not use any patents, copyrights, mask works or other intellectual
property rights ATI without obtaining the appropriate rights and licenses from
ATI.
10. Residuals. Notwithstanding anything herein to the contrary, any
party may use Residuals for any purpose, including without limitation use in
development, manufacture, promotion, sale and maintenance of its products and
services; provided that this right to Residuals does not represent a license
under any patents, copyrights, mask works or other intellectual property rights
of the disclosing party. The term "Residuals" means any information retained in
the unaided memories of the receiving party's employees who have had access to
the disclosing party's confidential information pursuant to the terms of this
Agreement. An employee's memory is unaided if the employee has not intentionally
memorized the confidential information for the purpose of retaining and
subsequently using or disclosing it.
11. Non-Solicitation. During the term of this Agreement and for one
year thereafter, the parties will not directly or indirectly solicit to hire any
employee of the other party who is an employee of the other party during the
term of this Agreement; provided, however, that the parties will not be
prevented from (i) soliciting to hire employees through classified advertising
or (ii) hiring any employee of the other party so long as such hiring was not
initially solicited, directly or indirectly, by the hiring party. In the event
that during the term of this Agreement and for one year thereafter, either party
does hire any employee of the other party who is an employee of the other party
during the term of this Agreement, regardless whether such employee was
solicited or not, that event will not constitute a material breach of this
Agreement, and the hiring party will pay to the other party a personnel
recruitment fee in the amount of 50% of such employee's last effective base
salary prior to leaving employment with the other party.
12. Term of Addendum. The term of this Addendum will be for the same
length as the term of the Agreement. This Addendum will terminate immediately
upon termination of the Agreement.
ATI TECHNOLOGIES INC. EVANS & SUTHERLAND COMPUTER
CORPORATION
By: /S/ Dave Orton By: /S/ James R. Oyler
Name: Dave Orton Name James R. Oyler
Title: President and CEO Title: President and CEO
Date: 8/27/01 Date: 8/30/01
14