EXHIBIT 10.50
HITACHI GLOBAL PROCUREMENT AGREEMENT
This Hitachi Global Procurement Agreement ("Agreement") made and entered into as
of January 28th, 2000 by and between Network Computing Devices, Inc., a Delaware
corporation, having its principal place of business at 350 North Bernardo Avenue
Mountain View, California 94043 U.S.A. ("NCD"), and Hitachi, Ltd, a corporation
of Japan, through its PC Division, having a principal place of business at 6,
Kanda-Surugadai 4-chome, Chiyoda-ku, Tokyo, 101 Japan ("Hitachi").
WITNESSETH:
WHEREAS, Hitachi is a global computer company which develops, manufactures, and
markets certain computer products and other products related thereto;
WHEREAS, NCD is a manufacturer and distributor of thin client terminals and
related software products, which includes but is not limited to NCD's ThinSTAR
Windows-based Terminal; and
WHEREAS, Hitachi wishes to procure from NCD and NCD wishes to sell a Hitachi
logo version of its ThinSTAR Windows-based Terminals and related software
products to Hitachi .
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties agree as follows:
1 DEFINITIONS
1.1 "Desktop Software" shall mean ThinSTAR Management System (TMS)
software developed by NCD for the management of the Products.
1.2 "Documentation" shall mean all information necessary to install,
diagnose and repair, and maintain the Product, such as user,
operator, service and systems administrator manuals; technical
bulletins, engineering change orders, software Updates, and
bulletin board access, web site access; and other relevant
materials.
1.3 "Fixes" shall mean bug fixes, critical patches, modified
documentation or other changes intended to correct
feature/function deficiencies in the Software. NCD hereby grants
to Hitachi a non-exclusive, royalty free worldwide license to
distribute new Fixes to its customers, including distribution
through the World Wide Web if available.
1.4 "Hitachi" shall mean Hitachi, Ltd., and include its subsidiaries
and affiliates in which 50% or more of the stock is directly or
indirectly controlled by Hitachi, Ltd.
1.5 "Product(s)" shall mean the Hitachi logo version of NCD's ThinSTAR
Windows-based Terminals ("Hardware") and related Software.
Product(s) as more fully set forth in Exhibit A attached hereto.
Exhibit A may be revised from time to time by mutual agreement of
the parties to include and add new Products to the list of Exhibit
A
1.6 "Purchase Specifications" shall mean the specifications set forth
on Exhibit A attached hereto. Exhibit A may be revised from time
to time by mutual agreement of the parties to modify the
specifications.
1.7 "ROM Software" shall mean the operating system software for
ThinSTAR Windows-based Terminals in object code form residing in
the hardware's flash memory. In addition, NCD will deliver the
operating system software on a CD to be used by Hitachi for
recovery purposes only.
1.8 "Software" shall refer to the Desktop Software and the ROM
Software collectively.
1.9 "Update" shall mean a release made generally available from NCD
that provides a fix to the Software and typically does not contain
new functionality. Hitachi will not knowingly provide the new
Updates to its Customers who have not licensed the corresponding
Product. Such Updates will be identified through a change in the
number to the right of the second decimal (e.g. X.YZ), where Z is
the Update number.
1.10 "Upgrade" shall mean a change to the Software that provides minor
functionality enhancements or improvements that may also address
customer identified problems. Hitachi will not knowingly provide
the new Upgrade to its Customers who have not licensed the
corresponding Product. Such Upgrades will be identified through a
change in the number to the right of the first decimal (e.g. X.YZ)
where Y is the Software Upgrade.
1.11 "Version Release" shall mean a release that changes Software
functionality. Such releases will be reflected through a change in
the digit to the left of the decimal point (e.g. X.YZ) where X is
the Version Release number. Hitachi will not knowingly provide the
new version to its Customers who have not licensed the
corresponding Product.
2 PURCHASE AND SALE
During the term of this Agreement, NCD shall manufacture and supply the
Products for Hitachi and Hitachi agrees to purchase such Products from NCD
in accordance
with the terms and conditions of this Agreement. Hitachi is entitled to
distribute and market the Products worldwide subject to the terms of this
Agreement.
3 ORDERING PROCEDURE
3.1 Hitachi shall place orders by written purchase order ("Order"),
subject to NCD's acceptance by fax. Orders must be in minimum
quantities as specified in Exhibit A hereto. Orders may be placed
by fax or mail addressed to NCD at the following address:
Network Computing Devices, Inc.
350 N. Bernardo Avenue
Mountain View, California 94043
USA
Attn: Sales Order Administration
Fax No. 650-694-4541
Orders are pursuant to the terms and conditions stated in this
SECTION 3 and SECTION 5 below, using Hitachi 's standard purchase
order form which shall indicate:
(i) Order Numbers;
(ii) Description (including product specification number)
and Quantity of Products to be ordered; Requested
delivery dates;
(iii) Destination; and
(iv) Unit Prices and Total Price of the Products to be
ordered.
3.2 NCD shall accept or reject the Order placed by Hitachi by signing
and faxing to Hitachi a copy of the Order within FIVE (5) BUSINESS
DAYS after its receipt of the Order. If NCD fails to deliver the
written notice of rejection of the Order to Hitachi within THE
SAID FIVE (5) BUSINESS DAY period, such Order shall be deemed as
accepted by NCD on the last day of SUCH FIVE (5) BUSINESS DAY
PERIOD.
3.3 NCD shall use its best effort to accept Orders placed by Hitachi.
However, if NCD has reason not to accept an Order, the parties
shall, in good faith, discuss and seek a solution.
3.4 Lead Time: Average lead time for Orders shall be four (4) weeks,
however the lead time for the first Order shall be six (6) weeks.
Lead Time starts when an order is accepted by NCD and runs until
the delivery of the Products so ordered according to the delivery
terms in section 6 of this Agreement.
3.5 Orders will be governed solely by the terms and conditions of this
Agreement, and any term or condition set forth in an Order,
preprinted or otherwise, which is not expressly allowed by this
Agreement or which is in addition to or conflicts with the terms
and conditions of this Agreement, shall have no force and effect.
4 CANCELLATION
4.1 Unless expressly provided in this Agreement or otherwise agreed
upon by the parties, the Orders placed by Hitachi and accepted by
NCD may not be
canceled by NCD.
4.2 Notwithstanding the above, if NCD fails to deliver the Products
within thirty (30) days after the delivery date specified in the
relevant Order, Hitachi shall be entitled to cancel the Order.
4.3 Hitachi shall have the right, without any liability or penalty, to
notify NCD to delay the ship date of any shipment for a period not
to exceed NINETY (90) DAYS from the ship date set forth in Orders
provided that written notice is given to NCD not later than
FIFTEEN (15) DAYS prior to the delivery date set forth in Orders.
4.4 Hitachi shall have the right, without liability or penalty, to
cancel any Order or any part thereof provided that notice of
cancellation is given to NCD not less than TWENTY FIVE (25) DAYS
prior to the delivery date set forth in Orders.
5 FORECAST AND ORDERING FLEXIBILITY
On or about the 10th business day of each month, Hitachi shall provide
NCD with a rolling SIX (6) MONTH forecast for Products to be delivered by
NCD to Hitachi each month covering the SIX (6) MONTH period following the
month on which SUCH forecast is provided. SUCH MONTHLY FORECAST SHALL BE
NON-BINDING AND SHALL NOT BE DEEMED AS A FIRM ORDER UNLESS THE RELEVANT
ORDERS HAVE BEEN PLACED BY HITACHI AND ACCEPTED BY NCD IN ACCORDANCE WITH
SECTION 3 OF THIS AGREEMENT. Hitachi, however, will use its best efforts
to forecast accurately.
6 SHIPPING, DELIVERY AND PAYMENT
6.1 All Products shall be delivered by NCD to Hitachi on or before,
but not more than FIVE (5) DAYS prior to, the delivery date set
forth in the relevant Order.
6.2 All shipments of the Products shall be FOB point of origin in
accordance with INCOTERMS 1990, unless otherwise agreed upon
between the parties, and title and risk of loss shall pass from
NCD to Hitachi simultaneously with the passing of risk of loss
pursuant to INCOTERMS 1990: INCOTERMS FOB Air Shipment FCA
6.3 Unless otherwise agreed to by the parties, NCD shall ship
quantities as specified on the relevant Order. All Products shall
be shipped in accordance with instructions made from time to time
by Hitachi and in a manner which follows good international
commercial practice and is adequate to insure safe arrival.
6.4 NCD shall attach to all shipments a packaging list clearly
stating:
(i) Hitachi 's Order Number;
(ii) Quantity shipped;
(iii) Airway Bill and other documents needed by Hitachi to
substantiate payment due to NCD or freight carrier;
and
(iv) Any other information as designated by Hitachi from
time to time; provided that any additional cost to
provide such information shall be borne by Hitachi.
6.5 All marking required by applicable law shall be applied to the
Products by NCD.
7 ACCEPTANCE PROCEDURE
7.1 Within ten (10) business days from the date of the receipt of the
Products, Hitachi shall perform an Appearance Inspection and
Diagnostic Program and Functionality Test of the Products in
accordance with the Purchase Specifications, and shall notify NCD
of the results of such test. In the event that no notification is
made within the above mentioned period, the Products delivered by
NCD shall be deemed to be accepted by Hitachi on the last day of
such period.
7.2 In case Hitachi finds any quantitative discrepancies of the
Products during the acceptance test period mentioned above,
Hitachi shall notify NCD of such finding in writing. In case of
quantity shortage, NCD shall, at its expense, deliver the Products
to fill the shortage to Hitachi within TEN (10) BUSINESS DAYS
after Hitachi 's notification. In case of quantity surplus,
Hitachi shall, at NCD's expense, promptly return the surplus
Products to NCD if so requested by NCD.
7.3 In case Hitachi notifies NCD that qualitative failures or defects
of the delivered Products are found, NCD shall take all necessary
countermeasures and deliver new and non-defective Products to
Hitachi as required in Section 13 herein.
7.4 Hitachi shall have sixty (60) days from the date on which NCD
delivers Software, to examine and test the Software to determine
that such version of the Software, when loaded, will execute as
part of the Product in accordance with the Purchase Specifications
8 LICENSE
8.1 All rights not specifically granted to Hitachi under this
Agreement are reserved by NCD. Except as specifically set forth
herein, Hitachi has no rights to any Software source code. The
Software is the proprietary, trade secret and copyrighted property
of NCD or its suppliers, including Citrix Systems, Inc. and
Microsoft Corporation.
Subject to the conditions in this Agreement, NCD grants to Hitachi
a non-exclusive, non-transferable license to copy the Desktop
Software and the backup ROM Software pursuant to the terms herein
and distribute with each unit of Hardware (i) one (1) copy of the
pre-flashed ROM Software; (ii) one (1) copy of the Desktop
Software in object code form, including without limitation a copy
of the localized Hitachi version, on external CD-ROM media; and
(iii) one (1) copy of the Products' end user Documentation. All
ownership and title to the
Software is retained by NCD or its licensors. Hitachi agrees
that (i) it will use the Software only as authorized in this
Agreement by NCD; and (ii) it will not copy or modify the
Software, except as otherwise provided herein; and (iii) that
it will not decompile, disassemble, translate or reverse
engineer the Software; and (iv) Hitachi will retain all
proprietary and copyright notices of NCD and its suppliers in
and on the Software and related documents. This license will
automatically terminate upon Hitachi 's material breach of any
of the provisions of this Section 8.1 with or without notice
from NCD; provided, that the end-user's right to use the
Software shall not be affected by such termination. Upon
termination, Hitachi must immediately return all Software
retained by Hitachi, in whatever form, to NCD. In the event of
a breach of this SECTION 8, NCD or its licensors shall be
entitled to injunctive relief, in addition to any other
remedies available, it being acknowledged that legal remedies
are inadequate. Hitachi's obligations concerning the Software
will survive any termination of this license.
8.2 Hitachi shall only distribute the Products pursuant to the
then-current, applicable, NCD end user license. If a Software
product is sublicensed by or on behalf of a unit or agency of the
United States Government, it must be provided to the U.S.
Government with a RESTRICTED RIGHTS legend as to its use,
duplication or disclosure under applicable government regulations
pertaining to trade secrets and commercial computer software
developed at private expense. Hitachi agrees that it will not
export or re-export any Software product to any country, person,
entity or end-user contrary to USA export restrictions.
8.3 Hitachi acknowledges that NCD's suppliers, including Microsoft
Corporation, are intended beneficiaries of this Agreement and all
end user agreements and, as such, are entitled to enforce the
provisions of this Agreement and end user agreements insofar as
they concern supplier's respective rights.
8.4 NCD further grants Hitachi a non-exclusive, non-transferable
license to distribute Updates, Upgrades, Fixes or Version Releases
to the ROM Software and the Desktop Software (or modified Desktop
software) as received from NCD on external media (e.g., CD-ROM) or
electronically as a replacement to the ROM Software and Desktop
Software originally distributed with the Hardware, respectively
(collectively "Replacement or Upgrade Software").
8.5 The cost of Microsoft or other third party owned Replacement or
Upgrade Software for ROM Software shall be in accordance with
Microsoft's or the third party's standard licensing practices. If
Microsoft or the third party licenses the Replacement or Upgrade
Software to NCD at no charge, NCD agrees to relicense the
Replacement or Upgrade Software to Hitachi at no charge. If
Microsoft or the third party provides NCD with an upgrade or new
version of the Replacement or Upgrade Software which is royalty
bearing, NCD will offer Hitachi such upgrade or new version of the
Replacement or Upgrade Software. If Hitachi elects to license the
upgrade or new version of the Replacement or Upgrade Software,
Hitachi agrees to pay NCD any additional royalties associated with
the cost of such Replacement or Upgrade Software.
8.6 The cost of an NCD owned Replacement or Upgrade Software shall be
in accordance with NCD's standard licensing practices. If NCD
licenses the Replacement or Upgrade Software to distributors,
resellers and end users at no charge, NCD agrees to relicense the
Replacement or Upgrade Software to Hitachi at no charge. If NCD
provides an upgrade or new version of the Replacement or Upgrade
Software which is royalty bearing, NCD will offer Hitachi such
upgrade or new version of the Replacement or Upgrade Software. If
Hitachi elects to license the upgrade or new version of the
Replacement or Upgrade Software, Hitachi agrees to pay NCD any
additional royalties associated with the cost of such Replacement
or Upgrade Software.
9 LOCALIZATION
9.1 Hitachi agrees to localize portions of the initial version of the
Desktop Software (TMS) into Japanese in exchange for a
non-exclusive, non-transferable, royalty free license to
distribute the localized version of the Desktop Software with the
Product. Localization and pricing of any Version Release, Updates,
Upgrades or Bug Fix of the Desktop Software shall be as discussed
and agreed upon by the parties at the appropriate time.
9.2 NCD grants to Hitachi a non-exclusive, non-transferable license to
such portions of the source code of the Desktop Software necessary
to modify such software for the purpose of localization into the
Japanese language. All ownership and title to the Desktop Software
and all modification made by Hitachi shall reside with NCD.
Hitachi agrees that (i) it will use the source code only as
authorized in this Agreement; and (ii) that it will not decompile,
disassemble, translate or reverse engineer the Desktop Software,
except as specifically authorized in this Agreement; and (iii)
that it will faithfully reproduce all proprietary and copyright
notices of NCD in and on the Desktop Software and related
documents. In the event of a breach of this SECTION 9, NCD shall
be entitled to immediately terminate this Agreement (provided,
that the end-user's right to use the Software shall not be
affected by such termination) and seek injunctive relief, in
addition to any other remedies available, it being acknowledged
that legal remedies are inadequate. Hitachi's obligations
concerning the Desktop Software will survive any termination of
this license.
9.3 Hitachi will produce two (2) localized versions of the Desktop
Software, one (1) for the Hitachi logo product and one (1) to be
used for distribution with NCD's standard ThinSTAR product.
Hitachi may modify the Desktop Software to be distributed with the
Hitachi logo Product by turning off certain features, however it
may not add or remove features without the prior written consent
of NCD.
9.4 Hitachi shall submit the localized Desktop Software to NCD for
review and approval prior to its first distribution of the
localized Desktop Software. NCD's approval will not be
unreasonably delayed nor withheld.
9.5 Hitachi warrants to NCD that the localization will be performed in
a diligent,
workmanlike manner and any items delivered to NCD and/or the
customer will generally conform to the technical specifications
for such deliverable.
10 INSPECTION OF NCD'S FACILITY
In addition to Hitachi 's right to perform acceptance test in accordance
with SECTION 7 above, Hitachi is entitled to inspect NCD's facility
and/or perform acceptance tests at any time if Hitachi deems necessary.
11 PRICING
11.1 The prices of the Products, spare parts, and repair parts shall be
set forth in Exhibit A attached hereto. Such prices set forth in
Exhibit A shall be quoted in the United States Dollars on an FOB
point of origin basis. (The term of FOB used herein shall be
interpreted in accordance with the provisions of INCOTERMS 1990,
as amended. Hitachi may, from time to time, request changes in the
price of the Products, spare parts and repair parts. Upon such
request both parties shall discuss in good faith to determine new
price. Exhibit A shall be amended to reflect the agreed new price.
11.2 It is understood that the prices set forth in Exhibit A are based
on a general expectation of market conditions for the Products. On
a quarterly basis or at any time during the term of this
Agreement, if Hitachi believes that the market conditions are such
that the prices as provided herein have become inconsistent with
this expectation, then Hitachi may provide written notice to NCD
to this effect, whereupon Hitachi and NCD will negotiate in good
faith with respect to a possible reduction in the prices.
12 PAYMENT
12.1 Hitachi will make all payments due NCD in U.S. dollars. The
Procurement and Technical Service Division of Hitachi America,
Ltd. (HAL) shall act as a disbursement agent of Hitachi in
accordance with the terms and conditions of this Agreement. NCD
shall issue its invoices to HAL, and HAL shall make payments to
NCD in accordance with this Agreement. Invoices shall be delivered
or addressed to:
Hitachi America, Ltd.
Procurement and Technical Service Division
2000 Sierra Point Parkway, MS:670
Brisbane, CA 94005-1819
Telephone: 415-244-7400
Facsimile: 415-244-7935
12.2 All Products will be invoiced upon shipment. Payment is due in
United States Dollars, on or before the last business day of the
month following shipment.
12.3 Payments made by Hitachi to NCD shall be remitted by check to
NCD's address above or wire transfer into NCD's bank account
designated below.
Bank Name : Union Bank Of California
Bank Address: 400 University Avenue Palo Alto, CA, 94310
Account:Number: #64889-3649
Account Name: Network Computing Devices, Inc.
Phone Number:
Hitachi shall bear all taxes imposed on Hitachi in Japan with
respect to the payment under this Agreement, except for income tax
imposed on NCD under applicable Japanese Laws. If so required by
applicable law Hitachi shall deduct the amount of income taxes
levied by the Government of Japan from payments to be made by
Hitachi to NCD pursuant to this Agreement, and shall promptly make
payment of the such taxed amount to the appropriate tax
authorities of the Government of Japan and shall transmit to NCD
official tax receipts or other evidence issued by said appropriate
tax authorities in respect to such taxes deducted and paid by
Hitachi.
13 WARRANTY
13.1 NCD represents and warrants to Hitachi, and/or its customers that
it has all rights or has obtained all rights to manufacture and
distribute the Product and to make this Agreement, and that the
Product as manufactured by NCD, to the best of its knowledge does
not infringe any patent, trademark, copyright, trade secret, or
any other proprietary rights of any third party or parties.
13.2 NCD shall warrant and guarantee that the Hardware shall conform to
the relevant Purchase Specifications and that such Hardware shall
be free from defects in design, material and workmanship in
ordinary care, use and maintenance for the period of ninety (90)
days after the date of shipment. Hitachi may purchase extended
warranties offered by NCD as set forth in Exhibit A hereto.
In the event of a Hardware warranty claim Hitachi will contact
NCD. Once NCD determines that the Hardware is defective and under
warranty pursuant to the above-mentioned warranty, NCD shall issue
a return material authorization number ("RMA") to Hitachi. Hitachi
shall then return the defective Hardware to NCD's Mountain View,
California facility, and request that NCD perform, at its option,
any of the following remedial works therefor, at NCD's cost.
Within TEN (10) BUSINESS DAYS after NCD's receipt of the Hardware,
NCD will:
i) repair the defective portion of the Product;
ii) replace the defective portion of the Product;
iii).replace the defective Product with a new one; or
iv) subject to Hitachi 's prior consent, reimburse costs of
repair works incurred by Hitachi in case NCD requests Hitachi
to perform such
remedial works by itself.
Shipping costs from Hitachi to NCD shall be borne by Hitachi for
Product returned to NCD under this warranty and shipping costs
from NCD to Hitachi shall be borne by NCD for Product repaired or
replaced under this warranty by NCD. For all such returned Product
NCD shall be the importer of record. Hitachi may select its
carrier of choice, however NCD will require that product be
cleared through customs using an NCD specified agent
13.3 NCD will pass through to Hitachi and its resellers the warranties
accompanying all Software as embodied in the shrink-wrap agreement
for all Products purchased under this Agreement. The term of such
warranty shall be the greater of ninety (90) days after delivery
to the end user or the date specified in the shrink-wrap agreement
and subject to the terms of this Agreement.
NCD warrants that the Desktop Software and NCD manufactured
software will function in accordance with its published
specifications. Hitachi's exclusive remedy and NCD's sole
obligation with respect to any Software failing to meet the
limited warranty as described herein shall be as follows:
If Hitachi has a Software warranty claim, Hitachi will contact
NCD. Once NCD determines that the Software is under warranty and
the Software is not complying to its published specifications and
documentation, and NCD can duplicate the error, NCD will use all
reasonable commercial efforts to fix, circumvent or replace the
Software in a manner to be reasonably determined by NCD.
In the event of defective media Hitachi will contact NCD. Once NCD
determines that the Software media is defective and under warranty
pursuant to the above-mentioned warranty, NCD shall issue a return
material authorization number ("RMA") to Hitachi. Hitachi shall
then return the defective Software media to NCD's Mountain View,
California facility. NCD shall replace the defective Software
media and return the new Software media to Hitachi, at NCD's
costs, including transportation costs.
NCD does not warrant that any item of Software is error-free or
that its use will be uninterrupted. NCD shall not be obligated to
remedy any Software defect, which cannot be adequately repeated.
13.4 Hitachi may make any representations or warranties in addition to
the representations and warranties found in this Agreement;
provided that Hitachi shall bear sole responsibility for
fulfillment of such representations or warranties.
NCD shall further warrant that the Software media will be free
from defects
in materials for a period of ninety (90) days after the date of
shipment of the relevant Software .
13.5 Any out of box failures or DOA Products found to be defective
within THIRTY (30) DAYS after the date of shipment, or identified
as failing on initial power up should be replaced via expedited
delivery by NCD. For any Products returned and replaced under this
Section 13.5 NCD shall bear all shipping and handling expenses.
13.6 These warranties shall not apply to defects which have been caused
by accident, disaster, electrical power or failure, or other
causes, or to Products which have been tampered with or defaced or
which have been subjected to unintended or abnormal conditions of
operation, improper application or installation.
14 REPAIR SERVICE AFTER WARRANTY PERIOD
14.1 If the Products are found to be defective after the above-
mentioned warranty period, Hitachi may request NCD to repair the
defective Product at NCD's then current standard price for repair
service.
14.2 Transportation costs incurred by NCD in connection with repair
service to be performed pursuant to this SECTION 14 shall be
reimbursed by Hitachi to NCD.
14.3 Repair costs subsequent to the warranty period are listed in
Exhibit A attached hereto.
14.4 NCD shall retain sufficient quantity of any spare parts or
materials necessary for the repair of the Products as provided
herein, at least for five (5) years after the discontinuance of
the relevant Products.
15 DISCONTINUANCE OF PRODUCT
In case NCD intends to discontinue the supply of certain Products during
the term of this Agreement, NCD shall endeavor to give Hitachi 180 days
prior written notice, in any case NCD shall give written notice of at
least NINETY (90) DAYS ("Last Buy Notice") prior to the intended date of
discontinuance. Hitachi may, at least THIRTY (30) DAYS prior to the
intended date of discontinuance informed by Last Buy Notice, place a
non-cancelable Order ("Last Buy Order") to cover its future requirements,
and NCD shall accept such Last Buy Order. The quantity and delivery
schedule of the Products ordered by such Last Buy Order shall be mutually
agreed between the parties. In no event will the quantity of the Last Buy
Order exceed the total of Hitachi 's last twelve (12) months of purchases
of Product.
16 ENGINEERING CHANGE
Engineering changes involving form, fit or function of the Products may
be made only by revising the Purchase Specifications of the relevant
Products by mutual consents of the parties in writing. Changes made in
the course of normal maintenance shall not be subject to this Section 16.
17 LIMITATION OF LIABILITY
17.1 THE WARRANTIES AND REMEDIES EXPRESSLY PROVIDED IN THIS AGREEMENT,
INCLUDING BUT NOT LIMITED TO SECTION 13, ARE NCD'S ONLY WARRANTIES
AND REMEDIES AND ARE IN LIEU OF ALL OTHER EXPRESS OR IMPLIED
WARRANTIES, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, WHICH WARRANTIES ARE
SPECIFICALLY DISCLAIMED AND EXCLUDED.
17.2 NCD AND ITS SUPPLIERS SHALL, IN NO EVENT, BE LIABLE FOR ANY
INCIDENTAL, CONSEQUENTIAL, INDIRECT, PUNITIVE OR SPECIAL DAMAGES
(INCLUDING BUT NOT LIMITED TO LOST PROFITS, REVENUE, GOODWILL OR
LOSS OF USE OR DATA) OR ANY COSTS OF SUBSTITUTE PRODUCT ARISING
OUT OF, OR RELATED TO THE PRODUCTS, EVEN IF NCD HAD BEEN ADVISED,
KNOWN OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES OR
COSTS.
17.3 EXCEPT FOR NCD'S INDEMNITY OBLIGATION HEREUNDER AND BREACH OF
CONFIDENTIALITY OBLIGATION, IN NO EVENT SHALL EITHER PARTY BE
LIABLE FOR ANY CONSEQUENTIAL, SPECIAL, INCIDENTAL, PUNITIVE OR
INDIRECT DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT.
18 INDEMNITY
18.1 NCD shall at its expense, indemnify, hold harmless, and defend,
Hitachi, Hitachi 's subsidiaries and their respective customers,
from and against any action, claim, liability or damage arising
out of, in connection with or relating to any claim that the
Products provided hereunder infringe or misappropriate any patent,
copyright, trade secret, trademark or other intellectual property
rights. NCD shall pay all damages, costs and expenses (including
reasonable attorneys' fees) incurred by Hitachi, Hitachi 's
subsidiaries and their respective customers, provided that Hitachi
(i) notifies NCD promptly in writing of the claim, (ii) provides
NCD with reasonable information and assistance at NCD's expense
for the defense or settlement of the claim, and (iii) grants NCD
reasonable control of the defense or settlement of the claim;
provided that such defense or settlement shall be made through
attorneys reasonably acceptable to Hitachi.
18.2 In the event that Products, are held to constitute an infringement
or their use is enjoined, NCD shall at its own expense, either (i)
procure for Hitachi , Hitachi 's subsidiaries and their respective
customers the royalty-free right to continue distributing or using
such Products, (ii) replace such Products to Hitachi 's reasonable
satisfaction with non-infringing products of equivalent quality
and performance, (iii) modify such Products so that they become
non-infringing and of equivalent quality and performance.
18.3 Notwithstanding the foregoing, NCD shall have no liability to
Hitachi to the extent an infringement or other claim to the extent
it is based on (i) the use of Products in combination with
equipment, devices or software other than those intended to be
used with the Products, (ii) the modification of Products by other
than NCD or its agents, or by Hitachi in accordance with the
instruction by NCD, (iii) NCD's compliance with Hitachi 's
specific suggestion or instruction; provided in each case such
infringement would not have occurred but for the occurrence of the
events in (i) to (iii) respectively.
19 CONFIDENTIALITY
19.1 All confidential information, disclosed by a party ("Disclosing
Party"), which shall be clearly marked as "Confidential" at the
time of disclosure, will be safeguarded and kept confidential by
the other party ("Receiving Party") during the term of this
Agreement and for three (3) years thereafter. The Disclosing
Party's confidential information shall be safeguarded by the
Receiving Party to the same extent that it safeguards its
confidential materials of similar importance; provided, however,
that the Receiving Party uses at least reasonable care.
19.2 Notwithstanding the foregoing, Hitachi may disclose NCD's
confidential information to Hitachi 's subcontractors and/or
Hitachi subsidiaries to the extent necessary for their activities
contemplated under this Agreement; provided, however, that Hitachi
shall impose the confidentiality obligations substantially similar
to those provided for in this SECTION 19 on such subcontractors
and Hitachi subsidiaries.
19.3 The foregoing confidentiality obligations mentioned above shall
not apply to:
i) information which now or hereafter, through no act or
failure to act on the part of the Receiving Party, is or
becomes generally known or available;
ii) information which is furnished to a third party by the
Disclosing Party without confidentiality obligations;
iii) information which is furnished to the Receiving Party by a
third party without confidentiality obligations,
iv) information which is independently developed by the
Receiving Party, or
v) disclosure as required by law or requested by any
governmental agency.
20 TERM AND TERMINATION
20.1 This Agreement shall become effective as of the date first above
written and continue in full force and effect FOR FIVE (5) YEARS.
Such term shall be automatically renewed for each one (1) year
period unless either party delivers a written notice to the other
party WITHIN ONE HUNDRED-TWENTY (120) DAYS prior to the expiration
of the applicable term indicating such party's intention not to
renew this Agreement.
20.2 Either party may terminate this Agreement immediately upon written
notice to the other party, if at any time any one of the following
events occurs:
i) the other party files voluntary petition in bankruptcy
(other than solely for reconstruction;
ii) the other party is adjudicated as bankrupt;
iii) the other party makes an assignment for the benefit of its
creditors; iv) a competent court assumes jurisdiction of
the assets of the other party under a bankruptcy or
reorganization act;
v) a trustee or receiver is appointed by a court for all or
substantially all the assets of the other party;
vi) transfer to, or acquisition by, a third party of a
substantial portion of the business or assets of the other
party, if after careful consideration such transfer or
acquisition is deemed to be detrimental to such party; or
vii) any substantial change in the ownership or majority control
of the other party including merger which is, after careful
consideration, deemed to be detrimental to such party,
unless such other party or such other party's shareholders,
has a majority control of the resulting entity or such
change in control is the result of a venture capital
financing or a public offering of such other party's stock.
20.3 Either party may terminate this Agreement upon material breach of
the other party if such material breach is not cured within thirty
(30) days after the notice by terminating party. Such notice shall
describe the breach.
20.4 Upon termination or expiration of this Agreement, Hitachi shall at
NCD's direction either (i) destroy all units of Software in its
possession; or (ii) promptly return to NCD all copies of Software,
all copies of confidential or proprietary information relating to
the Products, all advertising materials and all other items
furnished by NCD, other than Products purchased or then-currently
licensed for authorized use by Hitachi . Upon NCD's request,
Hitachi agrees to provide written notice to NCD and/or its
supplier Microsoft Corporation certifying that it has fulfilled
the requirement of SECTION 22 below. Such certification shall be
signed by an officer or director of Hitachi.
21. PRODUCT CHANGES
NCD shall not change, modify, improve or enhance the Product unless such
change, modification, improvement or enhancement is agreed by Hitachi and
reflected to the Purchase Specification of the relevant Products.
22. SUPPORT AND MAINTENANCE
22.1 To the extent available now, and during the life of this
Agreement, at the request of Hitachi, NCD shall provide the
following, collectively referred to as "Technical Information," at
no charge to Hitachi:
Problem history database -- A regularly updated problem history
database that includes a description of all changes, enhancements,
or problem fixes provided by NCD. NCD will provide this database
in a format agreed to by both parties.
Documentation will be in an electronic format suitable for both
reproduction and for publishing on Hitachi's Corporate Intranet,
and will be updated by new documentation from time-to-time as it
becomes available at no cost to Hitachi, to the extent such
Documentation is not subject to any third party encumbrances.
Documentation currently available will be provided to Hitachi as
soon as practicable, but not more than thirty (30) days following
the signing of this Agreement. New documentation will be provided
to Hitachi within thirty (30) days following its general release
by NCD.
22.2 To the extent such Documentation is not subject to any third party
encumbrances, Hitachi shall have the right to copy, modify and use
the Documentation provided by NCD for the purpose of providing
desired manuals, training or support materials, or the like
concerning the Product, provided that any NCD copyrights therein
are appropriately safeguarded. Such manuals, training or support
materials shall be used solely to support the Products.
22.3 Hitachi shall attempt to resolve Customer problems independently
using the information provided by NCD. If a greater level of
technical expertise is required, Hitachi will engage NCD in
resolving the Customer's problem. Hitachi will remain the
interface to the customer throughout the problem resolution
process. Hitachi will assign the problem a unique reference
number. NCD will use the same reference number when communicating
with Hitachi. Hitachi will provide NCD with all information
relevant to the problem, including, if applicable, the method used
by Hitachi to duplicate the problem on its own systems. Hitachi
will convey such information to supplier by whatever means both
parties agree are most expedient. NCD shall make available via
telephone, individuals sufficiently skilled to assist Hitachi in
problem resolution. If mutually determined as necessary by both
parties, NCD's technical
representative will be available to provide on-site support at
Customer's location.
22.4 Hitachi will provide Levels 1 and 2 support. NCD will provide
Level 3 support on an as-required basis.
Level 1 -- Call acceptance and ownership until resolution. Gather
problem information and determine criticality. Search knowledge
base and deliver known solutions to customer. Dispatch Hitachi
Customer Engineer as appropriate. Escalate to Level 2 as required.
Level 2 -- Respond to Level 1 escalations with a higher level of
expertise in a specific technology area. Develop and gain customer
agreement for problem isolation, solution creation and solution
implementation plan. Provide an existing fix, work-around
solution, or escalate to NCD for assistance. Co-ordinate NCD's
performance.
Level 3 -- Assign resources as reasonably required to resolve
problem. Work with Hitachi Level 2 support to co-ordinate the
development and delivery of problem solutions. NCD shall not be
liable for any Software error caused by any of the following
events: (i) defects or errors resulting from any attachments,
modifications, enhancements of the Software made by any person
other than NCD, unless otherwise approved in writing by NCD; (ii)
incorrect use of the Software or operator error; (iii) any
modification of the Software if such modification would result in
a departure from the Specifications.
22.5 NCD's point(s) of contact for Technical Support will be provided
to Hitachi as soon as practicable, but not more than thirty (30)
days following the signing of this Agreement.
22.6 NCD's Technical Support as described in this Section 3 shall be
available to Hitachi (i) for all current Version Releases,
Upgrades and Updates and (ii) for the immediately two previous
Version Releases, including all respective Upgrades and Updates.
22.7 If requested, NCD will provide Hitachi with a report which details
NCD's performance relative to the response and resolution
guidelines specified in this Section 22. As a minimum, the report
will include a complete list of problems escalated to Level 3, the
time and date each call was received, a brief description of each
problem, problem status, and if resolved, the date and time of
closure.
23 NOTICE
Any notice or report pursuant to this Agreement shall be in writing and
in English and shall be deemed given if delivered personally, or five (5)
business days after mailing if sent by registered air mail (or
internationally recognized express mail such
as DHL), postage paid, addressed to the other party at the address set
forth below or at such other address as designated by the party by
written notice, or upon receipt if sent by confirmed telex or facsimile.
For NCD:
Network Computing Devices, Inc.
350 N. Bernardo Avenue
Mountain View, CA 94043
Attn.: General Counsel
For Hitachi :
Hitachi, Ltd. PC Division
810 Shimoimaizumi
Ebina-shi, Kanagawa-ken, 243-0435
Attn.: Purchasing Manager
Either party may change its address for the purpose of this Agreement by
giving the other party written notice of its new address.
24 NO WAIVER
The failure of either party to enforce at any time any provision of this
Agreement will not be construed to be a waiver of any such provision and
will not affect the validity of this Agreement or any part thereof or the
right of either party to enforce such provision. No waiver of any breach
hereof will be construed to be a waiver of any other breach.
25 PUBLICATION
Neither party shall issue any press release or other announcement of this
Agreement without the other party's prior written consent, which shall
not be unreasonably withheld. The parties agree to cooperate on the
preparation and issuance of appropriate announcements.
26 SURVIVAL
No termination or expiration of this Agreement shall release any party
from any liability which at such time has already accrued to the other
party, or in any way affect the survival of any right, duty or obligation
of any party originated during the term of this Agreement which is
contemplated to be performed as of the date of or after such termination
or expiration including but not limited to Sections 8, 13, 17, 18, 19, 20
AND 32 of this Agreement .
27 INDEPENDENT CONTRACTOR
NCD and Hitachi are independent contractors in the performance of this
Agreement, each acting for its own account and at its own risk. Neither
party is an agent or representative of the other party, and neither party
hereto has the authority, nor shall represent itself as having the
authority, to make commitments or incur obligations on behalf of the
other party.
28 FORCE MAJEURE
In any event that any force majeure, including but not limited to
disasters, fire, war, civil commotion, strikes, governmental regulations
or other occurrences beyond the reasonable control of either party, shall
occur and make it impracticable for either party to perform its
obligations set forth in this Agreement, the provisions of this Agreement
related thereto shall be suspended, but only as long as and so far as the
impediment exists. In the case of such suspension, the parties hereto
shall use their best efforts to overcome the cause and effect of such
suspension.
29 NON-ASSIGNMENT
Neither this Agreement nor any of the rights and obligations created
herein may be assigned, delegated, pledged or otherwise encumbered or
disposed of, in whole or in part, by either party to a third party
without prior written consent of the other party. Any attempt to do so
without the other's consent shall be null and void.
30 ENTIRE AGREEMENT
This Agreement, including Exhibits attached hereto, shall constitute the
entire agreement between the parties with respect to the subject matter
hereof and supersede all prior proposals, negotiations, agreements,
representations and other communications, written or oral, expressed or
implied, between the parties with respect to the subject matter hereof.
No modification, renewal, extension or waiver of this Agreement or any of
its provisions shall be binding unless made in writing by duly authorized
representatives of both parties.
31 SEVERABILITY
If any term, provision, covenant or condition of this Agreement or the
application thereof is held by a court of competent jurisdiction to be
invalid, void, unenforceable, or contrary to law, then the validity of
the remaining provisions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired, or invalidated. In such
instance, the parties shall use their best efforts to replace the
invalid, void or unenforceable provision(s), or provisions being contrary
to law, with legally valid or enforceable provisions approximating to the
extent possible the original intent of the parties hereto.
32 GOVERNING LAW
This Agreement shall be, in all respects, governed by and construed in
accordance with the laws of California, U.S.A. , excluding its conflict
of law rules. The parties agree that the United Nations Convention on
Contracts for the International Sale of Goods shall be applicable to the
transactions contemplated by this Agreement. Each party agrees to resolve
any dispute, controversy or claim arising out of or related to this
Agreement, or the interpretation, breach, termination or validity of this
Agreement through an arbitration proceeding. Any arbitration shall be
conducted in English, and if the defending party is NCD, in San
Francisco, in accordance with the then current UNCITRAL Arbitration
Rules, and if the defending party is Hitachi , in Tokyo, in accordance
with the then current Commercial Arbitration Rule of the Japan Commercial
Arbitration Association. The award rendered by the arbitrator(s) shall
include costs of the arbitration, reasonable attorneys' fees and
reasonable costs for experts and other witnesses. Judgment on the award
may be entered in any court having jurisdiction. In no event shall the
arbitrator(s) be empowered to grant an award for consequential, special,
incidental, punitive or indirect damages arising out of or in connection
with this Agreement pursuant to Section 17 above.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written by their duly
authorized representatives.
HITACHI , LTD. NETWORK COMPUTING DEVICES, INC.
/s/ /s/
- ---------------------------------- ---------------------------------------
Signature Signature
Hiroshi Hirosawa / Dept. Manager John DeSantis, Sr. V.P. Sales & Marketing
- --------------------------------- -------------------------------------------
Typed Name and Title Typed Name and Title
Date: Jan 28 `00 Date: Jan 30, 2000
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