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EXHIBIT 10.1
Tera Computer Company
and
Unisys Corporation
Date: October 1, 1998
Agreement No.: ATO 980901
Revision: A
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AGREEMENT NO.: ATO 980901
CONTENTS
1. AGREEMENT...................................................................1
2. RECITALS....................................................................1
3. DEFINITIONS.................................................................1
4. EFFECTIVE DATE AND TERM.....................................................2
4.1 TERM....................................................................2
5. PRODUCTS....................................................................3
5.1 PRODUCT LIST............................................................3
6. SPECIFICATIONS..............................................................3
7. ORDERS, SHIPPING, & ACCEPTANCE.............................................3
7.1 PURCHASE ORDERS.........................................................3
7.2 DELIVERY................................................................3
7.3 SHIPPING AND FOB........................................................4
7.4 FORECAST................................................................4
7.5 LEAD TIME AND SCHEDULING OF SHIPMENTS...................................4
7.6 RESCHEDULING OF PURCHASE ORDERS.........................................4
7.7 CANCELLATION............................................................4
7.8 SOURCE INSPECTION, ACCEPTANCE, AND REJECTION............................5
7.9 REJECTION...............................................................5
8. PRICE, PAYMENT, AND MATERIAL HANDLING.......................................5
8.1 PRICE SCHEDULE - ASSEMBLY AND TEST ONLY................................5
8.2 PAYMENT TERMS...........................................................5
8.3 MATERIAL SUPPLY RESPONSIBILITY..........................................5
8.4 QUARTERLY BUSINESS REVIEWS..............................................7
8.5 SUBCONTRACT MANAGEMENT..................................................6
8.6 DISCLOSURE TO SUBCONTRACTORS............................................6
8.7 APPROVED SOURCES........................................................7
8.8 TAXES...................................................................7
8.9 DISCREPANT MATERIAL/ QUALITY ASSURANCE SYSTEM...........................7
8.10 SERIALIZATION/TRACKING PLAN............................................7
9. WARRANTIES AND INDEMNITIES..................................................7
9.1 PATENT INDEMNITY........................................................7
9.2 BUYER INDEMNITY.........................................................8
9.3 WARRANTIES..............................................................8
9.4 WARRANTY EXCLUSIONS.....................................................8
9.5 DISCLAIMER..............................................................8
9.6 REMEDY LIMITATION.......................................................9
9.7 SUPPORT UNDER WARRANTY..................................................9
9.8 SELLER RECALLS..........................................................9
10. LIMITATION OF LIABILITY....................................................9
10.1 SELLER LIABILITY LIMITATION............................................9
10.2 TERA LIABILITY LIMITATION..............................................9
10.3 MEDICAL USE EXCLUSION..................................................9
10.4 GOVERNMENT CONTRACT CLAUSE............................................10
11. PROPRIETARY INFORMATION AND INTELLECTUAL PROPERTY RIGHTS..................10
11.1 PROPRIETARY INFORMATION MARKING.......................................10
11.2 RIGHTS IN PROPRIETARY INFORMATION.....................................10
11.3 DUTY OF CARE..........................................................10
11.4 DURATION OF OBLIGATION................................................11
11.5 JUDICIALLY ORDERED DISCLOSURE.........................................11
11.6 DISPOSITION OF PROPRIETARY INFORMATION................................11
12. TRADEMARKS, TRADE NAMES AND PUBLICITY.....................................11
12.1 LICENSING LIMITATION..................................................11
12.2 PUBLICITY LIMITATION..................................................11
13. TERMINATION...............................................................11
13.1 CANCELLATION FOR CAUSE................................................11
13.2 TERMINATION AND CANCELLATION..........................................12
13.3 OUTSTANDING PURCHASE ORDERS AND MATERIAL DISPOSITION..................12
13.4 INTELLECTUAL PROPERTY RIGHTS..........................................13
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AGREEMENT NO. ATO 980901
14. MISCELLANEOUS.............................................................13
14.1 INSURANCE.............................................................13
14.2 CHANGES...............................................................13
14.3 RESPONSIBILITY FOR PROPERTY...........................................14
14.4 EXPORT REGULATIONS....................................................14
14.5 INDEPENDENT CONTRACTOR................................................14
14.6 ACCESS TO SAN DIEGO MANUFACTURING FACILITY............................14
14.7 NON INTERFERENCE......................................................14
14.8 GOVERNING LAW.........................................................14
14.9 ASSIGNMENT............................................................15
14.10 FORCE MAJEURE........................................................15
14.11 PROGRESSIVE DISPUTE NEGOTIATION PROCEDURES...........................15
14.12 AGENCY PRODUCT SUBMISSIONS...........................................16
14.13 HEADINGS.............................................................16
14.14 INQUIRIES............................................................16
14.15 NON WAIVER...........................................................16
14.16 NOTICES..............................................................17
EXHIBIT "A" PRICING SCHEDULE
EXHIBIT "B" PRODUCT SPECIFICATIONS
EXHIBIT "C" QUARTERLY BUSINESS REVIEW AGENDA
EXHIBIT "D" TERA PROPERTY
1. AGREEMENT
THIS AGREEMENT, effective October 1, 1998 (Effective Date) is made by and
between Tera Computer Company, a Washington Corporation having a place of
business at 2815 Eastlake Avenue East, Seattle, WA, 98102-3027 (hereinafter
Tera), and Unisys Corporation, a Delaware Corporation, having a place of
business at 10850 Via Frontera, San Diego, CA 92127 (hereinafter Unisys).
2. RECITALS
Unisys and Tera entered into an Agreement on December 5, 1995, wherein Unisys
provided Manufacturing Services to Tera ("hereafter Manufacturing Services
Agreement"); and
Unisys and Tera replaced the original Manufacturing Services Agreement with
Agreement Number 0100 dated August 16, 1996 wherein Unisys provided Assembly and
Test Services of Application Specific Integrated Circuit (ASIC) devices. This
current Agreement ("hereafter ASIC Agreement") replaces Agreement Number 0100;
and
NOW THEREFORE, in consideration of the premises, and the covenants and promises
of the parties set forth herein, and other good and valuable consideration, the
parties intending to be legally bound, it is agreed as follows:
3. DEFINITIONS
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Words shall have their normally accepted meanings as employed in the Agreement.
The terms "herein" and "hereof", unless specifically limited, shall have
reference to the entire Agreement. The word "shall" is mandatory, the word "may"
is permissive, the word "or" is not exclusive, the words "includes" and
"including" are not limiting, and the singular includes the plural unless
otherwise specified. The following terms shall have the described meanings:
3.1 "Assembly" shall mean the process of packaging semiconductor device
Products.
3.2 "Billable Product" shall mean Product assembled by Unisys that conforms to
Unisys physical and workmanship standards. (This Product is commonly referred to
as Bin 1 or Bin 2 Product.)
3.3 "Bin 1 Product" shall mean all Product that passes the ITS 9000 tests and
350KE and 350KB options that also pass root controller tests.
3.4 "Bin 2 Product" shall mean Product that does not pass tests due to a die or
interposer fault that is beyond Unisys control.
3.5 "Build Package" shall mean a package of data used to manufacture Products
meeting requirements of the Specification and defining the requirements of
Services to be provided by Unisys. The Build Package may include electronic
data, electrical testing requirements, mechanical drawings, component
definition, material definitions, quality requirements, and referenced
specifications, together with such other items as necessary to fully define
Tera's requirements.
3.6 "Delivery Date" shall mean the date that Products, Services or test results
shipped by Unisys arrive at the designated Tera destination. Such date shall be
mutually agreed to and specified on the TERA supplied Purchase Order or
forecast. Notwithstanding the above, the FOB point which shall be where goods
are transferred to the carrier.
3.7 "Documentation" shall mean tangible embodiment of Information in eye
readable or machine readable form.
3.8 "Proprietary Information" shall mean information, written, visual, or oral,
or samples of, concerning the disclosing party's current or future products,
business plans, financial information, marketing plans or customer lists, or
other information which is clearly marked as confidential or proprietary,
including but not limited to data, knowledge, know-how, designs, programs
formulas, compilations, and methods, and media embodying same.
3.9 "Manufacturing Process" shall mean the processes by which Unisys can
manufacture Products for Tera.
3.10 "Product" shall mean certified (see "Product Certification:) Application
Specific Integrated Circuits (ASIC) in packaged unit form, except "Prototypes",
designed by Tera and manufactured by Unisys for Tera.
3.11 "Product Certification" shall mean "Product manufactured using a certified
process, operators and materials.
3.12 "Prototypes" shall mean initial working development units of the "Product"
that conform to the mutually agreed upon prototype specifications.
3.13 "Services" shall mean the fabrication, assembly and test of the "Product".
3.14 "Specification" shall mean mutually agreed upon data in eye readable or
machine readable form that define physical, mechanical and electrical
characteristics and tolerances of the Products, materials, components, or
applicable Manufacturing Processes for Products or to define Services.
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3.15 "Subcontractor" shall mean a manufacturer or supplier under contract with a
party to buy from or build and supply materials or services to such party.
3.16 "Tooling" shall mean drawings, materials, or other physical devices
provided by Tera or made in whole or in part by Unisys and used in
manufacturing, shipping, or testing the Products.
3.17 "Unit Price" shall mean the price for each unit of a specified "Product"
identified in Section 5 and is the price for assembly and test exclusive of die
and packages.
3.18 "Last Time Buy" shall mean sufficient materials to cover the time necessary
to select a new supplier and begin receiving production quantities from them.
4. EFFECTIVE DATE AND TERM.
4.1 TERM
This Agreement shall commence on October 1, 1998 and shall remain in effect
through June 30, 1999 and may be renewed annually thereafter by mutual agreement
of the parties. Either party may terminate this Agreement after giving the other
party six (6) months written notice of such intention of termination.
5. PRODUCTS.
5.1 PRODUCT LIST
The Tera Products covered by this Agreement are as listed in Exhibit A hereof.
These Products and the Processes listed in Exhibit B can be revised in
accordance with the procedure called out in Section 14.2 hereof.
6. SPECIFICATIONS.
Attached hereto as Exhibit "B" is an outline of the Specifications for the
Product. All Products provided hereunder shall be manufactured in accordance
with the mutually agreed upon Specifications. Tera recognizes that the quality
of Products manufactured using Build Packages, tooling or other materials
furnished by Tera depends on, among other things, the quality of such materials.
Unisys shall not be responsible for any defects in such Products caused by a
defect in the Build Package, tooling or other material supplied by Tera.
Any changes to the Specification or Build Package will not be effective until
the change is documented in a change order that is agreed upon and is signed by
both parties hereto. Changes may be accepted by either party subject to charges
specified in a change order agreed upon between the parties. With respect to
such change order, and subject to mutual agreement of both parties, Tera shall
pay for all work in process that does not meet the Specifications set forth in
the change order, any special tooling not previously purchased, any inventory
that is purchased by Unisys pursuant to the Build Package that cannot be used to
meet the requirements specified in the change order, provided that materials on
hand do not exceed ninety (90) days worth of supply, and any other direct costs
to Unisys that are associated with the change order.
7. ORDERS, SHIPPING, & ACCEPTANCE
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AGREEMENT NO. ATO 980901
7.1 PURCHASE ORDERS
Tera will order Products by issuing written, facsimile or electronic purchase
orders. Each purchase order will specify items such as: Products, quantity,
delivery, destination, any additional Specifications / Acceptance Criteria (as
applicable), and price.
The following statement shall be on the face of Tera's Purchase Orders: This
P.O. is issued under the terms and conditions of Agreement ATO 980901 , Revision
A, dated: October 1, 1998.
7.2 DELIVERY
Unisys shall prepare and pack the Products to prevent damage and deterioration,
and comply with carrier tariffs. Charges for preparation and packing are
included in the Unit Price unless separately specified on the purchase order.
Shipments or deliveries, as specified in this Agreement, shall be strictly in
accordance with: the specified quantities, allowing overshipment of ten (10)
percent of the specified quantity or four (4) units whichever is larger, without
shortage; the specified schedules, neither more than three (3) business days
ahead nor more than two (2) business days behind schedule; and the other
requirements of this Agreement. Unisys shall promptly notify Tera of any
anticipated or actual delay, the reasons thereof, and the actions being taken by
Unisys to overcome or minimize the delay. If requested by Tera, Unisys shall, at
Unisys expense, ship via expedited transportation to avoid or minimize the delay
to the maximum extent possible.
7.3 SHIPPING AND FOB
Unisys shall comply with Tera's directions regarding shipment, including without
limitation the choice of carrier, method of shipment and destination, and shall
be responsible for placing the Products in the hands of the carrier. Unisys
shall at Tera's request, obtain insurance against all losses or damages to the
Products in shipment, in amounts specified by Tera, and cost of such insurance
shall be billable to Tera. Unit Price does not include freight or insurance.
Products will be shipped freight collect or, if authorized by Tera in advance,
freight prepaid by Unisys, and Tera will pay the appropriate freight and
insurance charges. Risk of loss and title to the Products shall pass to Tera
upon delivery of the Product to the carrier. Unisys will provide copies or
originals of all shipping documents to Tera upon Tera's request, and will
cooperate with and assist Tera in the filing of any claims against the carrier.
The FOB point shall be Rancho Bernardo, California.
7.4 FORECAST
Tera will provide Unisys with a unit volume forecast by Part Number covering a
rolling twelve (12) month time period. The forecast will be by month for the
first six (6) months, and by quarter thereafter. The initial three months of
this forecast shall be firm requirements which authorize Unisys to procure
materials and schedule manufacturing and test capacity. The forecast will be
revised and updated at the quarterly business meeting.
7.5 LEAD TIME AND SCHEDULING OF SHIPMENTS
Standard lead time for Products is twenty one (21) days for a volume not to
exceed 500 units per month. Volumes exceeding this limit shall be mutually
addressed as required. The estimated shipping date stated in the purchase orders
assumes timely receipt of the Tera supplied materials; the applicable Build
Package and necessary drawings and artwork or data bases, all of which must be
complete and in sufficient detail to permit Unisys to begin production, and may
not be changed except by written agreement signed by an authorized
representative of each party.
There may be occasions when Tera needs to issue Purchase Orders with less than
the standard lead times. Unisys requires additional compensation to accomplish
these needs. Pricing for "Accelerated Lead Time" (six work days) and "Premium
Lead Time" (six calendar days) are included in EXHIBIT A.
7.6 RESCHEDULING OF PURCHASE ORDERS
Unless otherwise agreed between the parties, Tera may reschedule delivery of any
products on a Purchase Order with Unisys within the following guidelines with no
additional charge:
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0-21 calendar days from scheduled ship date: No changes
22-60 calendar days from scheduled ship date: pushout up to 30 calendar days
Tera shall not push out any orders beyond the originally scheduled calendar
quarter unless mutually agreed to by both parties. Only one reschedule per
purchase order is allowed. Any efforts to reschedule Products inside the twenty
one (21) calendar day minimum lead time are subject to mutual agreement of the
parties and Accelerated Lead Time or Premium Lead Time charges in EXHIBIT A will
apply.
7.7 CANCELLATION
Unless otherwise agreed between the parties, Tera may cancel delivery of any
Firm Commitments of Products to Unisys within the following guidelines:
Number of calendar days from Cancellation charge
scheduled shipment at expressed as a
time of receipt of notice percentage of Unit Price
------------------------- ------------------------
0-21 calendar days 100%
22-45 calendar days 50%
Over 45 calendar days 0%, Mutually agreed upon
unique or long lead materials only
Tera shall pay for any supplier cancellation charges, supplier restocking
charges, and for any special materials made obsolete by the cancellation.
7.8 SOURCE INSPECTION, ACCEPTANCE, AND REJECTION
Tera reserves the right to inspect all Prototype assembly work in process and
perform source inspection of all completed Production Product, and accept or
reject such Product which is not strictly in conformance with all of the
requirements of this Agreement.
7.9 REJECTION
In the regular course of its business, Tera may reject, refuse acceptance or
revoke acceptance ("rejection" herein) of any or all of the Products or any
tender thereof which are not strictly in conformance with all of the
requirements of this Agreement. Tera shall notify Unisys of such rejection in
writing. All repair, replacement and other correction shall be accomplished via
a Returned Material Authorization number issued by Unisys within a (2) business
day period following notification of such rejection. Any Product shall be
repaired or replaced within ten (10) business days from date of issuance of
Returned Goods Authorization number, provided all required Tera supplied
materials are available. Repairs or replacements shall be accompanied by a
written notification specifying that such items are repaired or are
replacements. Any Products repaired or furnished in replacement shall be subject
to all the provisions of this Agreement to the same extent as Products initially
furnished.
8. PRICE, PAYMENT, AND MATERIAL HANDLING.
8.1 PRICE SCHEDULE - Assembly and test only
Pricing for assembly and test shall be as shown in Exhibit A hereof.
8.2 PAYMENT TERMS
Tera shall issue payment within net thirty (30) calendar days after the receipt
of Billable Product. Unisys shall not issue any invoice prior to the scheduled
or actual delivery date, whichever is later.
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AGREEMENT NO. ATO 980901
Payment will be made after shipment of Product and receipt of correct invoice.
Unisys shall promptly repay to Tera any amounts paid in excess of amounts due
Unisys.
8.3 MATERIAL SUPPLY RESPONSIBILITY
8.3.1 Tera Provided Material
Tera shall provide to Unisys on a consigned basis, ASIC dice in wafer form and
interposers as listed in Exhibit A to this Agreement. Unisys and Tera, jointly
acknowledge the objective to achieve Product Certification. Unisys shall not be
liable for damage to components or materials resulting from malfunction, failure
or inability to meet specified performance requirements; or for failure of any
testing program to screen any defective components or materials.
Tera shall provide the following items required for testing the Product: Test
sockets, Test Load Boards, Test cooling fixtures, Wafer chuck, Test Programs for
the ASICs, Root Controllers, test programs and Support items. (See Exhibit D for
details.)
The status of the Tera owned material shall be addressed during the Quarterly
Business Review.
Unisys shall not be responsible for delays, loss, or destruction of parts or
materials where unavoidable or beyond its control, but shall notify Tera of any
such loss or destruction. If any such case occurs, Unisys shall be excused from
performance without liability to Tera except for return of payment to Tera for
which Tera has not received consideration.
8.3.2 Unisys Provided Material
Unisys shall procure the required materials in response to Tera Purchase Orders
or three month firm forecast for packaged and tested Product and Tera Purchase
Orders covering safety stock: In the event of a schedule change or cancellation,
Tera will be financially responsible for Product and raw materials authorized by
such releases.
Tera liability shall include materials for up to three (3) months of forecasted
demand, authorized safety stock, minimum buys imposed by suppliers, and any
cancellation charges on open material Purchase Orders. Tera approval is required
for any materials purchased in excess of three (3) month forecasted demand plus
safety stock.
The above materials are considered to be the special materials referred to in
section 7.7.
8.4 QUARTERLY BUSINESS REVIEWS
Tera and Unisys agree to conduct Quarterly Business Review meetings throughout
the term of this Agreement. Each party shall ensure the participation of the
appropriate technical and management personnel at the Quarterly Business Review
meetings. The Outline for the Quarterly Business Review meeting Agenda is
included in Exhibit C hereof. The final Agenda for each meeting and tentative
list of attendees shall be mutually agreed upon no later than two (2) weeks
prior to each scheduled meeting.
8.5 SUBCONTRACT MANAGEMENT
Unisys is responsible for the management of its
subcontractors/suppliers/vendors. Unisys shall ensure that each lower tier
subcontract contains all applicable specifications, special requirements, and
clauses needed to comply with the requirements of this Agreement. Any technical,
schedule, or cost problems encountered by Unisys or its subcontractors shall be
promptly reported to Tera.
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AGREEMENT NO. ATO 980901
8.6 DISCLOSURE TO SUBCONTRACTORS
Notwithstanding the limitations of Section 11 Unisys is authorized to disclose
to bona fide subcontractors such information as may be necessary to permit them
to perform their contracts with Unisys, provided that such subcontractors agree
to maintain such information in confidence and to protect such information from
disclosure to others to the same extent required of Unisys under Section 11.
8.7 APPROVED SOURCES
Unisys shall procure materials from Tera's documented approved sources of
supply. Any proposed substitutions shall constitute a deviation and require the
completion of a deviation authorization, accepted by Tera, before making such
substitution.
Unisys shall use its own specifications and sources of supply for any materials
required for the assembly of "Product" not specified by Tera.
8.8 TAXES
The Unit Price excludes all taxes upon sale of Products which Unisys is required
to pay or collect from Tera. Unisys shall separately state on all invoices any
taxes imposed by federal, state, or local governments applicable to furnishing
the Products or Services. If purchase orders claim exemption for taxes upon the
sale, and Unisys accordingly does not collect such taxes from Tera, Tera agrees
to indemnify Unisys against liability for payment of such taxes. Tera shall
furnish an appropriate exemption certificate as requested by Unisys. Tera shall
pay or reimburse Unisys for the gross amount of any present or future sales,
use, excise, value-added, or other tax applicable to the furnishing of any
Products or Services hereunder, excepting, however, any taxes based on Unisys
income. In the alternative, Tera shall provide Unisys with tax exemption
evidence acceptable to the taxing authorities.
8.9 DISCREPANT MATERIAL/ QUALITY ASSURANCE SYSTEM
Unisys agrees to maintain a Discrepant Material and Quality Control System that
meets the requirements of ISO9001.
8.10 SERIALIZATION/TRACKING PLAN
Unisys agrees to maintain an ASIC serialization/lot tracking plan that will
support identification of each packaged component. Each device will be marked
with its lot number and the sequential serial number within that lot.
9. WARRANTIES AND INDEMNITIES
9.1 PATENT INDEMNITY
Unisys assumes no responsibility for patent infringement or copyright
infringement of the TERA BGA package concept or any unique assembly process it
mandates. Unisys agrees to indemnify and hold harmless Tera, its subsidiaries,
third parties and end users, from any liability, damage or expense including but
not limited to legal expenses, arising out of a claim of U.S. patent
infringement, copyright infringement or misappropriation of trade secrets based
solely upon the use or sale of Products; provided such indemnification shall be
limited to the Unisys Assembly processes covering heat spreader attach, die
attach, wirebonding, encapsulation and marking. Unisys agrees to defend or
settle at Unisys expense, all suits or proceedings arising out of the foregoing,
provided that Tera shall give Unisys prompt written notice of all suits or
threats of suit against Tera, its Subsidiaries, Third Parties and
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AGREEMENT NO. ATO 980901
End Users. In any event, Tera at its own expense, shall have the right to
participate in the defense of any such action through Tera's own counsel. If any
Unisys assembly process as defined above is held to be an infringement or
misappropriation for which Tera is indemnified by Unisys, and its use is
enjoined, Unisys shall:
a) procure for Tera and its customers the right to utilize the Product
granted herein, or
b) replace or modify it so it becomes non-infringing (without
compromising Tera's intended use of said Products), or
c) if neither of the foregoing is feasible, remove said Goods and refund
the purchase price and the transportation and installation cost thereof less
depreciation.
Unisys will not be liable if the infringing item has been modified by any of the
parties indemnified hereunder and such modification is the cause of any such
infringement or misappropriation, or if the infringement is due to the
combination of the Product with product not sold or licensed by Unisys
hereunder.
9.2 BUYER INDEMNITY
Tera agrees to indemnify and hold harmless Unisys and its subsidiaries from any
liability, damage or expense including but not limited to legal expenses,
arising out of a claim based upon representations, acts of negligence of Tera,
its subsidiaries or third parties in connection with the promotion, sale or
licensing of Product to end users or a claim of any end user made directly
against Unisys or its subsidiaries based on promotion, sale or licensing of the
Product to end users by Tera, its subsidiaries or third parties. Tera agrees to
defend or settle, at Tera's expense, all suits or proceedings arising out of any
of the foregoing; provided that Unisys shall give Tera prompt written notice of
all suits or threats of suit against Unisys and its Subsidiaries. In any event,
Unisys, at its own expense, shall have the right to participate in the defense
of any such action through its own counsel.
The obligations of Tera under this Section 9.2 shall be limited to the extent
the claim indemnified against is not a result of any violation by Unisys of its
obligations under this Agreement, or is not a result of any act of negligence of
Unisys.
9.3 WARRANTIES
Unisys warrants to Tera that for a period of twelve (12) months after shipment
to Tera the Product shall: (a) conform in all respects to all of the
requirements and Specifications in this Agreement; and (b) be free from all
defects in workmanship. Because the use to which these Products may be put and
the manner of storage, handling, next level assembly and rework are beyond
control of Unisys, this warranty is limited to defects that can be proven to be
present at the time of shipment or delivery of the Products to the carrier.
9.4 WARRANTY EXCLUSIONS
Unisys shall have no obligation under this Section 9 to repair or replace
Products when the defects result from accident, disaster, neglect, abuse,
misuse, transportation, alteration, improper storage, or improperly performed
repairs or activities once Product has been consigned to carrier and is out of
the control of Unisys.
Warranties granted hereunder are given to and enforceable only by Tera. No
warranties shall be assignable or transferable to subsequent purchasers or
lessors.
9.5 DISCLAIMER
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AGREEMENT NO. ATO 980901
THE WARRANTIES OF THIS SECTION 9 ARE EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES, WHETHER WRITTEN, ORAL, STATUTORY, EXPRESS, OR IMPLIED, AND UNISYS
DISCLAIMS ALL WARRANTIES OF MERCHANTABILTY AND FITNESS FOR A PARTICULAR PURPOSE,
AND ALL WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE.
9.6 REMEDY LIMITATION
The remedies provided in this Section 9 are Tera's sole remedies for any failure
of Unisys to comply with its warranty obligations.
9.7 SUPPORT UNDER WARRANTY
During the warranty period, Tera shall contact Unisys to request repair or
replacement under warranty for Product failure due to a defect in workmanship,
or the Manufacturing Process defects. Unisys shall promptly repair or replace
such component at no cost to Tera within a reasonable time period. Unisys will
bear all shipping costs, and risk of loss of material in transit in both
directions.
9.8 SELLER RECALLS
Unisys will bear all shipping costs and risk of loss of material in transit in
both directions for return of all recalls if Unisys notifies Tera of a recall
due to material, manufacturing, or Assembly issues. Replacement will be at
Unisys expense or, if unable to replace, Tera will be credited for the full
amount of the unit price as shown in Exhibit A hereof.
10. LIMITATION OF LIABILITY.
10.1 SELLER LIABILITY LIMITATION
IN NO EVENT WILL UNISYS BE LIABLE FOR (A) ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO LOSS OF USE, REVENUES,
PROFITS OR SAVINGS ARISING OUT OF, RESULTING FROM, OR IN ANY WAY CONNECTED WITH
THE PERFORMANCE OR BREACH OF THIS AGREEMENT, EVEN IF UNISYS KNEW OR SHOULD HAVE
KNOWN, OF THE POSSIBILITY OF SUCH DAMAGES OR (B) CLAIMS, DEMANDS OR ACTIONS
AGAINST TERA BY ANY PERSON, EXCEPT AS PROVIDED IN THIS PARAGRAPH. EXCEPT FOR
UNISYS OBLIGATIONS UNDER THIS PARAGRAPH, UNISYS LIABILITY FOR ANY AND ALL
CAUSES, WHETHER BASED ON NEGLIGENCE, BREACH OF CONTRACT, WARRANTY OR OTHER LEGAL
THEORY, SHALL NOT EXCEED THE ACTUAL AMOUNT PAID BY TERA FOR THE SPECIFIC
PRODUCTS OR SERVICES GIVING RISE TO THE CLAIM. TERA ACKNOWLEDGES AND AGREES THAT
THE PURCHASE PRICE FOR THE PRODUCTS AND SERVICES REFLECTS THE ALLOCATION OF
RISKS AND THE LIMITATIONS OF UNISYS LIABILITY HEREUNDER.
10.2 TERA LIABILITY LIMITATION
IN NO EVENT WILL TERA BE LIABLE FOR (A) ANY SPECIAL, INDIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES INCLUDING BUT NOT LIMITED TO LOSS OF USE, REVENUES,
PROFITS OR SAVINGS ARISING OUT OF, RESULTING FROM, OR IN ANY WAY CONNECTED WITH
THE PERFORMANCE OR BREACH OF THIS AGREEMENT, EVEN IF TERA KNEW OR SHOULD HAVE
KNOWN OF THE POSSIBILITY OF SUCH DAMAGES OR (B) CLAIMS, DEMANDS OR ACTIONS
AGAINST UNISYS BY ANY PERSON, EXCEPT AS PROVIDED IN THIS PARAGRAPH.
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10.3 MEDICAL USE EXCLUSION
It is agreed that the Products or the services shall not be used or intended for
use in life support devices or systems where malfunction or failure of the
Product can reasonably be expected to result in death or personal injury. Life
support devices or systems are those which: a) are intended for surgical implant
into the body; b) support or sustain life and whose failure to perform, when
properly used in accordance with instruction for use, can reasonably be expected
to result in significant injury to a user. If it is later determined that a
Product or service performed hereunder is used or is to be used in a life
support device or system, Tera hereby expressly agrees to do so at its own risk
and further agrees to indemnify Unisys for any and all damages that may be
incurred due to or resulting from use of the component in a life support device
or system.
10.4 GOVERNMENT CONTRACT CLAUSE
It is agreed that the Products and Services which are to be provided by Unisys
must meet all the terms and conditions that are expressly recited in this
Agreement only; additional terms required for government contracting shall be
the responsibility of Tera.
11. PROPRIETARY INFORMATION AND INTELLECTUAL PROPERTY RIGHTS
11.1 PROPRIETARY INFORMATION MARKING
Whenever used in this Agreement, the term "Proprietary Information" will mean
information (written, visual, or oral), or samples of, concerning the disclosing
party's current or future products, business plans, financial information,
marketing plans or customer lists, including but not limited to data, knowledge,
know-how, designs, programs formulas, compilations, and methods, and media
embodying same, or other information which is clearly marked as confidential or
proprietary. Notwithstanding the foregoing, the term "Proprietary Information"
will not include any information which (a) was known by the receiving party
prior to receiving the same directly or indirectly from or in connection with
the disclosing party, and without any restriction as to use or disclosure, (b)
is independently developed by the receiving party without use of the Proprietary
Information, (c) is at any time rightfully received from a third party which has
the right and transmits it to the receiving party without any obligation of
confidentiality, or (d) is or becomes a part of the public domain through no
fault or action of the receiving party. Neither party will remove, obscure or
alter any notice of confidentiality, patent, copyright, trade secret or other
proprietary right without the other party's prior written authorization.
11.2 RIGHTS IN PROPRIETARY INFORMATION
Tera and Unisys acknowledge that any Proprietary Information received from the
other party is valuable trade secret, confidential and proprietary information
of the disclosing party. Title, or the right to possess proprietary information,
as between the parties shall, except as otherwise provided herein, remain with
the party which furnishes it to the other party. No rights are granted by either
party to the other with respect to Proprietary Information, except as expressly
stated herein. Neither party shall use, disclose or copy any Proprietary
Information of the other party except for the purposes of and to the extent
necessary for performance under this Agreement, except as expressly stated
herein.
11.3 DUTY OF CARE
Each party shall exercise the degree of care, in no case less than reasonable
care, sufficient to preclude disclosure of the other party's Proprietary
Information to any third party, unless authorized by the disclosing party, and
shall permit disclosure only to its personnel who are involved with the
Agreement and have agreed in writing to be bound by the confidentiality
provisions of this Agreement. The access and use restrictions imposed by each
party under this Section 11 will be at least as stringent as those applied to
the receiving party's most valuable confidential and proprietary information.
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AGREEMENT NO. ATO 980901
11.4 DURATION OF OBLIGATION
For a period of five (5) years from the date of disclosure of the Proprietary
Information, each party shall have the obligations stated in this Section 11
regarding Proprietary Information both during and after the expiration,
termination or cancellation of this Agreement, and shall be released from such
obligations only as Proprietary Information is:
(a) at any time in the public domain other than by breach of this
Agreement on the part of the receiving party; or
(b) at any time rightfully received from a third party which has the
right and transmits it to the receiving party without any obligation
of confidentiality; or
(c) independently developed by personnel of the receiving party who have
not had access to Proprietary Information of the other party; or
(d) rightfully known to the receiving party without any limitation on use
or disclosure prior to receipt thereof from the furnishing party, as
substantiated by tangible evidence antedating disclosure by the
furnishing party to the receiving party.
11.5 JUDICIALLY ORDERED DISCLOSURE
Neither party is restricted from disclosing Proprietary Information of the other
party pursuant to a judicial or governmental order, but any such disclosure
shall be made only to the extent so ordered and provided only that the party
receiving an order: (1) notifies the other party in a timely manner so that it
may intervene in response to such order, or (2) if timely notice cannot be given
then seeks to obtain a protective order from the court or government for such
information.
11.6 DISPOSITION OF PROPRIETARY INFORMATION
Each party shall promptly return or destroy and certify destruction of all
Proprietary Information furnished by the other party along with all copies
thereof in its possession including copies stored in any computer memory or
storage medium upon demand of the disclosing party or upon the expiration,
termination, or cancellation of this Agreement, whichever first occurs.
12. TRADEMARKS, TRADE NAMES AND PUBLICITY.
12.1 LICENSING LIMITATION
Nothing contained in this Agreement shall be construed as licensing either party
to use any trademark or trade name owned by or used by the other party without
the prior written consent of the other party.
12.2 PUBLICITY LIMITATION
Tera or Unisys shall not, except as may be required by law or federal
regulation, or except with the prior written permission of the other party,
publicly advertise the Agreement or disclose its contents.
13. TERMINATION AND CANCELLATION
13.1 CANCELLATION FOR CAUSE
In the event of a material breach of this Agreement by either party, the other
party may, upon not less than sixty (60) calendar days' prior written notice to
the party in breach, terminate this Agreement unless the breach is cured prior
to the end of the notice period. If a material breach is not cured within sixty
(60) calendar days after the notice of default, the other party may pursue its
remedies as follows. Neither party shall exercise these rights without having
first attempted to resolve any dispute in accordance with the provisions of the
Progressive Dispute Negotiation Procedures set forth in Section 14.11.
(a) If Unisys is in material breach of its obligations under Section 9.
WARRANTIES AND INDEMNITIES, Tera's sole and exclusive remedies shall
be as set forth therein.
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AGREEMENT NO. ATO 980901
(b) If Tera is in material breach Unisys may terminate this Agreement and
(1) require Tera to take delivery of and to pay for all finished
Products scheduled for shipment at the time of Tera's default; (2)
discontinue all work-in-process unless Tera requests completion and
delivery and provides assurances of payment therefor acceptable to
Unisys; (3) recover from Tera all costs incurred by Unisys for raw
materials and labor for unfinished Products ordered by Tera, to the
extent that Unisys is unable to return such raw materials for credit,
or apply such raw materials and labor to the completion of Products
for purchase by Tera or other Unisys customers; (4) recover from Tera
all amounts due, but unpaid, for Products previously shipped to Tera
and, (5) pursue any and all other remedies at law to which Unisys may
be entitled.
Should any provision of this Agreement be finally determined to contravene any
applicable law or governmental regulation, such provision shall be automatically
terminated and performance thereof by both parties shall be waived to the extent
of such contravention. Should such provision be considered by either party to be
an essential element of this Agreement, the parties hereto agree to negotiate a
new, applicable provision in good faith.
13.2 TERMINATION
Either party may terminate this Agreement for convenience at any time, providing
six (6) months advance, written notice. Tera will have the right within such
notice period to place a "last time buy" purchase order in reasonable
quantities, with volume and delivery to be mutually agreed upon.
13.3 OUTSTANDING PURCHASE ORDERS AND MATERIAL DISPOSITION
Notwithstanding anything in this Agreement to the contrary, Tera, at its option,
may require Unisys to fulfill the terms of any purchase order that has been
accepted by Unisys as of the date of any cancellation, expiration, or
termination of this Agreement. All completed work, raw materials, parts,
work-in-progress, capital tooling, maintenance parts, and consumable supplies in
Unisys possession, which are owned by Tera shall be returned, or disposed of as
directed by Tera in writing. Unisys shall return all proprietary and
confidential tapes, documentation, and any and all related design material which
are owned by Tera to Tera.
13.4 INTELLECTUAL PROPERTY RIGHTS
Should Unisys request termination of this Agreement, Unisys grants to Tera a
royalty-free, non-exclusive, non-transferable, worldwide perpetual license under
Unisys intellectual property rights, to use and license others to use, Unisys
tooling, parts, Manufacturing Processes, drawings, libraries, and technical data
as listed in Exhibits B and D hereof, to permit Tera's establishment of a viable
alternative source. In the event this Agreement is terminated under Unisys
initiative, Unisys shall provide reasonable assistance to Tera in locating and
developing a compatible alternate source for Product. Such assistance shall be
limited to:
1. Identification of prospective sources
2. Surveys of prospective sources,
3. Technical assistance to establish the process at the
prospective source, All costs in providing this assistance shall be borne by
Tera. Pending the availability of such alternate source, Unisys shall strive to
provide an uninterrupted supply of Product to Tera. Tera shall use this royalty
free, non-exclusive license for its sole use in Tera's Products. Unisys shall,
upon direction of Tera, protect and preserve property encompassed in this
paragraph in the possession
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AGREEMENT NO. ATO 980901
of Unisys. Payment for completed Products delivered to and accepted by Tera
shall be in an amount consistent with prices specified herein.
In the event of the commencement of a case against Unisys under the U.S.
bankruptcy laws, whether voluntary or involuntary, Tera may elect to retain its
rights under this Agreement pursuant to 11 U.S.C. # 365(n). In this regard, the
designs, Manufacturing Processes, drawings libraries, and technical data
licensed to Tera under Section 12.1(c) shall be deemed to be "intellectual
property" within the meaning of 11 U.S.C. # 101. Unisys obligations under this
Agreement shall be binding on Unisys successors including any trustee or debtor
in possession that may succeed to Unisys rights under this Agreement.
14. MISCELLANEOUS
14.1 INSURANCE
Unisys agrees to carry at all times, a minimum level of insurance of the
following kinds listed as items 1, 2, and 3 below and Tera agrees to provide
while present on Unisys premises, a minimum level of insurance of the following
kinds listed as items 1 and 2 below:
1. Workers Compensation Statutory limits in each state in
which Unisys is required to provide
Worker's Compensation coverage.
2. Employer's Liability $500,000
3. Blanket General Liability $5,000,000 combined single unit
including completed products and
services and combined single unit
(umbrella).
Blanket General Liability shall be reviewed annually to assure appropriate
amount of coverage is maintained to protect Tera owned property and materials. A
proof of insurance certificate shall be mailed to Tera at the time this
Agreement is executed.
14.2 CHANGES
Current specifications are listed in Exhibit B hereof. Any change in the (a)
Product technical requirements and descriptions, specifications, statement of
work, drawings or designs: (b) shipment or packing methods; (c) place of
delivery; (d) amount of Tera furnished material or property; or (e) Product
production methods and processes which may affect form, fit, function,
interchange ability, reliability, or safety of the Products, shall require the
prior mutual, written consent of Tera and Unisys, which consent shall not be
unreasonably withheld. If any such changes causes an increase or decrease in the
cost of or the time required for performance of this Agreement, an equitable
adjustment in the prices and schedules of this Agreement shall be made to
reflect such increase or decrease and this Agreement shall be modified in
writing accordingly. Unless otherwise agreed to in writing, any claim by Unisys
or Tera for adjustment must be delivered to the other party in writing within
forty five (45) calendar days after such change and the change shall be put into
effect within fifteen (15) days thereafter.
14.3 RESPONSIBILITY FOR PROPERTY
Unless otherwise specified, Unisys assumes responsibility for any theft, loss,
or damage, other than ordinary wear and tear, for tooling, materials, parts,
data, and any other property of Tera's, upon its delivery to Unisys or its
manufacture or acquisition by Unisys on Tera's behalf. Property owned by
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AGREEMENT NO. ATO 980901
Tera and provided to Unisys for Unisys use in relation to the manufacture and
delivery of Products will be identified in Exhibit "D", hereto. Tera Property is
an agenda item for the quarterly reviews and Exhibit D will be updated to
reflect any changes agreed upon at such reviews. Unisys agrees to address this
property during the Quarterly Reviews at Tera's option. All tooling, fixturing,
and equipment paid for directly, or indirectly through Non Recurring Engineering
Charges are the property of Tera.
Unisys will on Tera's request affix suitable labels that indicate Tera's
ownership of tooling, fixtures, equipment, materials, parts, data, and any other
property of Tera's covered by this Section, and such property. Unisys will on
request execute and deliver to Tera for filing in any relevant jurisdiction one
or more UCC-1 Financing Statements, indicating Tera's ownership of such property
and its consignment or bailment to Unisys pursuant to this Agreement.
Upon Tera's request, Unisys shall promptly return such property to Tera in the
condition received by Unisys, ordinary wear and tear accepted. Unisys agrees
that it is obligated to return such property to Tera, notwithstanding any
pending dispute between the parties, including but not limited to disputes
related to the quality or quantity of Products delivered and disputes related to
amounts owed by one party to the other.
14.4 EXPORT REGULATIONS
Tera acknowledges that if the Products purchased hereunder are to be exported,
they may be subject to the US Commerce Department or State Department Export
Regulations, and Tera accepts full responsibility for and agrees to fully comply
with such regulations, including obtaining export licenses and re-export
permission, and agrees to hold Unisys harmless from all claims, damages, fines,
or charges that may arise due to Unisys failure to so comply.
14.5 INDEPENDENT CONTRACTOR
In providing Products or Services hereunder, Unisys is acting as an independent
contractor and not as an agent of Tera. Neither party has the authority
hereunder to assume or create any obligation or responsibility, express or
implied, on behalf of, or in the name of the other party hereto, in any way
whatsoever.
14.6 ACCESS TO SAN DIEGO MANUFACTURING FACILITY
Unisys shall provide reasonable access to the manufacturing and test areas and
Manufacturing Processes designated for manufacture of Products for designated
Tera employees during normal working hours and upon reasonable notice to Unisys.
Such designated Tera employees may audit and inspect the properties of Tera in
Unisys possession. Tera agrees to observe Unisys work site and security rules
and maintain insurance coverage as indicated is section 14.1 while present on
Unisys premises.
14.7 NON INTERFERENCE
Each Party agrees not to hire, or seek to hire any employee of the other during
the Term of this Agreement or for a period of six (6) months after termination
hereof without prior written consent and approval of both parties.
14.8 GOVERNING LAW
This Agreement shall be governed by the laws of the State of Washington except
with respect to conflict of laws and constitutes the complete agreement between
the parties. Each party will comply with all applicable federal, state, and
local laws, regulations and ordinances including, but not limited to, the
regulations of the U.S. Government relating to export and re-export of software
and technical data. The parties agree to comply with the letter and spirit of
all laws, ordinances, codes, rules, regulations, license and permit provisions,
guidelines, and directives of any other, state or federal governmental authority
having appropriate jurisdiction over environmental protection.
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AGREEMENT NO. ATO 980901
14.9 ASSIGNMENT
A party's rights under this Agreement may not be assigned in whole or in part by
operation of law or otherwise without the other party's prior express written
consent, and any attempted assignment of any rights, duties or obligations
hereunder without such consent shall be void; provided, however, that if Unisys
sells substantially all of its assets required to complete its obligations under
this Agreement, Tera shall, at its sole discretion, have the option to (a)
terminate this Agreement, or to (b) require the Purchaser of such assets of
Unisys to assume all of Unisys obligation under this Agreement, or to exercise
"Last Time Buy" rights provided under Section 13.2 (TERMINATION) in addition to
the rights indicated in (a) and (b) in this paragraph.
14.10 FORCE MAJEURE
Neither party shall be liable or be in breach of this agreement if the
performance of this Agreement or of any obligation hereunder (except payment of
monies due) is prevented, restricted or interfered with by any act or condition
beyond the reasonable control of the party affected thereby, including without
limitation: fire or other casualty or accident; strikes or labor disputes; war
or other violence; unavailability of or delays in procuring materials,
utilities, or supplies; or any law, order, proclamation, regulation, ordinance,
demand or requirement of any governmental or intergovernmental agency or body.
The party so affected shall be excused from such performance to the extent of
such prevention, restriction or interference and shall promptly give notice of
such prevention, restriction, or interference to the other party. If such Force
Majeure prevents or delays the performance of Unisys hereunder, Tera may, at its
option, either (a) delete from this Agreement any quantities of the products it
otherwise should have purchased from Unisys but for such Force Majeure event and
shall receive credit, or (b) may extend the Agreement for a period of time equal
to the period of Force Majeure of Unisys.
14.11 PROGRESSIVE DISPUTE NEGOTIATION PROCEDURES
This section will govern any dispute between the parties arising from or related
to the subject matter of this Agreement that is not resolved by agreement
between the respective personnel of the parties for day to day administration
and performance of the Agreement. Prior to filing of any suit with respect to
such a dispute (other than a suit seeking injunctive relief with respect to
intellectual property rights), the party believing itself aggrieved (the
"Invoking Party") will call for progressive management involvement in the
dispute negotiation by written notice to the other party. Such a notice will be
without prejudice to the Invoking Party's right to any other remedy permitted by
this Agreement.
The parties will use their best efforts to arrange personal meetings or
telephone conferences, as needed, at mutually convenient times and places
between negotiators for the parties at the following successive management
levels, each of which will have a period of allotted time, as specified below,
in which to attempt to resolve the dispute.
Level TERA UNISYS Allotted Time
----- ---- ------ -------------
First Director Director 10 business days
Manufacturing Manufacturing
Second Division VP Division VP 20 business days
Third Designated Designated 30 business days
Corporate Corporate
Officer Officer
No resolution of disputes involving intellectual property or patents will be
undertaken without first consulting and obtaining the consent of the
Intellectual Property/legal counsel of both parties. The allotted time for the
first level negotiators will begin on the effective date of the Invoking Party's
written notice.
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AGREEMENT NO. ATO 980901
If resolution is not achieved by negotiators at any given management level at
the end of their allotted time, then the allotted time for the negotiators at
the next management level, if any, will begin immediately. If resolution is not
achieved by negotiators at the final level within the allotted time, the parties
agree within forty-five (45) calendar days to select a form of alternative
dispute resolution (ADR) from informal non binding arbitration, private judging,
mini-trial, summary jury trial, moderated settlement conference, mediation or
other, and negotiate and ADR agreement for an ADR process. The ADR agreement
shall at least include provisions governing the ADR procedure, rules, discovery,
timing and cost allocations. In no event will such ADR process result in the
imposition of any element of punitive damages in the event of any awards.
If the ADR agreement is not agreed to by the parties within the time as set
forth in this Section 14.11 hereof, then either party may bring suit to resolve
the dispute in a court of competent jurisdiction. In the event of any material
breach between the parties hereto relating to this Agreement or the breach of
this Agreement, the prevailing party in any resulting litigation shall be
entitled to recover from the other party thereto the costs and expenses,
including reasonable attorneys fees, incurred in taking or defending such
action, including on any appeal.
14.12 AGENCY PRODUCT SUBMISSIONS
If Tera seeks regulatory or safety agency approval for Product, Unisys shall
cooperate and fully support Tera. Such cooperation primarily shall consist of
providing design and test data to support the submission.
14.13 HEADINGS
The Section headings are provided for ease of reference and do not form a part
of the Agreement, and shall not be used in interpretation or governing the
meaning of the Agreement.
14.14 INQUIRIES
If any governmental agency contacts Unisys to inquire about or investigate any
product manufactured by Unisys or Tera, Unisys shall use its best efforts to
give notice thereof to Tera within 24 hours of receipt of such contact.
14.15 NON WAIVER
These terms and conditions set forth the entire understanding between the
parties with reference to the subject matter hereof. The failure of either party
to enforce at any time any of the provision hereof shall not constitute a waiver
of such provision or a waiver of the right to enforce any or all provision at
another time. Any modification to this Agreement shall be by mutual agreement,
shall be in writing, and attached as an addendum to this Agreement.
14.16 NOTICES
Any notice given under this agreement shall be written or sent by facsimile.
Written notice shall be sent registered or certified mail, postage prepaid,
return receipt requested, or by any other overnight delivery service which
delivers to the noticed destination, and provides proof of delivery to sender.
Any facsimile notice must be followed within three (3) business days by written
notice. All notices shall be effective when first received at the following
addresses:
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AGREEMENT NO. ATO 980901
If to Tera: If to Unisys:
Tera Computer Company Unisys Corporation
2815 Eastlake Ave. E. 10850 Via Frontera
Seattle, WA 98102 San Diego, CA 92127
Attn.: Kathy Rowe Attn.: John Morgen
Dave Kirkwood
In WITNESS WHEREOF, The authorized representatives of the parties have executed
this agreement under seal as of the date(s) set forth below.
DISCLAIMER OF WARRANTIES AND LIMITATIONS OF LIABILITY ARE INCLUDED HEREIN.
TERA COMPUTER COMPANY UNISYS CORPORATION
By: /s/ Katherine L. Rowe By: /s/ David L. Kirkwood
Printed: Kathy Rowe Printed: Dave Kirkwood
Title: Vice President - Manufacturing Title: Vice President and General
Manager ATO and Supplier
Quality
Date: October 16, 1998 Date: October 19, 1998
By: /s/ John Morgen
Printed John Morgen
Title: Director of Manufacturing
Date: October 16, 1998
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AGREEMENT NO. ATO 980901
EXHIBIT A
ASSEMBLY AND TEST
Prices shown in this Exhibit apply to Bin 1 and Bin 2 parts. Tera will not
be charged for those parts which do not complete the process due to a Unisys
cause.
Volume price breaks are for a single part number.
LEAD TIMES
Standard Lead Time shall be twenty one (21) calendar days from sorted and
diced die issued into the line to shipment of the finished Product.
Accelerated Lead Time shall be six (6) work days from sorted and diced die
issued into the line to shipment of the finished Product.
Premium Lead Time shall be six (6) calendar days including weekends from
sorted and diced die issued into the line to shipment of the finished
Product.
PRICING
Unit Pricing is per part, regardless of part number, and includes wafer
sorting and dicing.
The Unit price for lot sizes from 1 through 19 parts shall be $ *
The Unit price for lot sizes from 20 through 99 parts shall be $ *
The Unit price for lot sizes from 100 parts and up shall be $ *
SETUP COSTS
The Small Lot Setup Charge Adder shall be $ * A small lot consists of 1
The Medium Lot Setup Charge shall be $ * A Medium Lot consists of 6
through 9 parts of a single part number.
The Large Lot Setup Charge shall be $ * A Large Lot consists of 10 or
more parts of a single part number.
EXPEDITE CHARGES
The charge for Accelerated Lead Time Processing shall be two times the sum
of unit prices and the lot Setup charges.
The charge for Premium Lead Time Processing shall be two times the sum of
unit prices and the lot Setup charges plus $ * per lot.
ROOT CONTROLLER TESTING
Charge for Root Controller Testing shall be $ * per hour.
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AGREEMENT NO. ATO 980901
EXHIBIT A
SONOSCAN TESTING
Sonoscan services requested by Tera shall be billed at cost. Tera shall be
responsible for all shipping charges.
AXIOM RETURNS
Charge for testing Returns from Axiom shall be $ * per device with a
minimum charge of $ * per lot of the same part type. Parts must be of
testable quality as received. Rework, if required, will be billed at cost.
Such rework requires Tera approval.
WAFER CARCASSES
Wafer carcasses will be stored in nitrogen.
* Confidential treatment requested.
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AGREEMENT NO. ATO 980901
EXHIBIT B
SPECIFICATIONS FOR TERA SERVICE AGREEMENT
Table 1 lists the materials defined and specified per this agreement. Unisys
and/or Tera specification numbers are listed where available. Any Form, Fit, or
Function changes to the items listed that affect existing inventory or assembly
processes shall be subject to the conditions stated in Section 6.
TABLE 1
Material Unisys Specification # Tera Specification #
-------- ---------------------- --------------------
ASIC
Vitesse No Unisys Part number All KB and KE options
Triquint Scan Controller
Interposers
Large cavity ES000322-00 Rev B 20000410
Small cavity ES000323-00 Rev A 20000200
Heatspreader ES000417-00 Rev A
Lamination adhesive preforms
Large cavity ES001020-01 Rev B
Small cavity ES000223-00 Rev A
Lamination conductive adhesive, & ES000309-00 Rev A
large cavity die attach
Small cavity die attach adhesive ES000422-00 Rev A
Gold wire
Gold ball bond ES000153-01 Rev E
Gold wedge bond ES000153-02 Rev E
Encapsulants
Stress coat ES000425-00 Rev B
Hard cap ES000152-00 Rev C
Solder balls ES000062-01 Rev C
Solder flux EX000430-00 Rev B
Table 2 lists the processes defined and specified per this agreement. Unisys
and/or Tera specification numbers are listed where available. Any Form, Fit, or
Function changes to the items listed that affect existing inventory or assembly
processes shall be subject to the conditions stated in Section 6.
TABLE 2
Process Unisys Eng. Specification #
------- ---------------------------
Wafer inspection 2823 4151
Wafer probe per part number rev, see Exhibit A
Die prep ES000320-00 Rev C
Marking ES001056-00
Interposer Clean & Bake ES000182-00 Rev F
Heatspreader Lamination ES000182-00 Rev F
Small Cavity Die Attach ASSY-077 Rev A
Large Cavity Die Attach ASSY-067 Rev A
Wirebond ES000321-00 Rev B
Pre-seal test per part number rev, see Exhibit A
Encapsulation 1 ES000435-00 Rev B
Encapsulation 2 ES000186-00 Rev E
Solder Ball Attach ES000225-00 Rev F
Final Test per part number rev, see Exhibit A
Root Controller per part number rev, see Exhibit A
Carrier ins/pack 2832 4374
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AGREEMENT NO. ATO 980901
EXHIBIT C
AGENDA FOR QUARTERLY BUSINESS REVIEW MEETING
FORECAST
- - - - provide a unit volume forecast by Part Number by month for at least the
subsequent six months.
DELIVERY
- - - - report delivery performance addressing timeliness and volume of shipments.
- - - - report status of current backlog.
LEAD TIME
- - - - report on required changes to lead time.
PRICING
- - - - reach agreement on pricing to be used for subsequent quarter.
INVENTORY
- - - - report current inventory levels consigned Die, consigned Packages, Finished
Goods, and Unisys supplied materials.
QUALITY
- - - - Unisys report on outgoing defect levels.
- - - - Tera report on incoming defect levels.
QUALITY IMPROVEMENT PROGRAM
- - - - Unisys report on status of Quality Improvement Program.
- - - - Tera identification of desired quality improvements.
ASSEMBLY
- - - - Unisys report on any assembly issues.
CORRECTIVE ACTIONS
- - - - Unisys report on status of corrective action requests submitted by Tera.
COST REDUCTION PROGRAM
- - - - Unisys report on status of Cost Reduction Program.
- - - - Tera report on opportunities for implementing cost reductions.
TERA PROPERTY
- - - - review property status.
- - - - determine requirements for repair, upgrades.
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AGREEMENT NO. ATO 980901
EXHIBIT D
TERA PROPERTY
The following tooling, fixtures, equipment, and software are furnished by Tera
to facilitate the assembly and test of the Tera ASICs (quantities in
parentheses):
WAFER TEST
Custom wafer chuck top (1)
Probe Cards
350KE (3)
350KB (2)
SC3/4 (2)
Opticals (26)
NOTE: Unisys to maintain and control
TEST PROGRAMS
Test Programs for each option, used for wafer sort, pre-seal & final
test (26)
NOTE: Tera to maintain and control
ASIC ASSEMBLY
Lamination tooling
Vacuum, 16-up (1)
Spring force, single up (10)
Die attach package positioner (to be acquired as volumes increase)
Wirebond workholders (3)
K & S 1484 (1)
Hughes 2460 for downbonding (1)
Delvotec for future wirebonding of SC3/4 (1)
Encapsulation dispense fixture (3)
Solder ball plate (1)
Solder ball flux transfer plate (1)
NOTE: Unisys to maintain and control
ASIC ITS 9000 TEST
preseal pogo pin fixtures (2)
1 additional pogo pin fixture needed for the SC3/SC4 load board
Load Boards (used for preseal and post seal)
350KB (2)
350KE (2)
Scan Controller (2)
Postseal testing
Ice pad
Fuzzbutton sockets
Note: The above two items are consumable and require replenishment
at Tera's expense
ROOT CONTROLLER
Tera designed root controller tester (1)
Test fixtures
350KB (1)
350KE (1)
NES Lab Chiller (1)
Operating System
Test programs (25)
Note: Tera is responsible for maintaining the root controller equipment, test
fixtures, operating system and test programs.