EXHIBIT 10.14
OEM Distribution Agreement
This Distribution Agreement ("Agreement") is entered into the 30th day of
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July, 1999, and amended this 20/th/ day of December, 1999, between Matsushita-
Kotobuki Electronics Industries, Ltd. having its principal place of business at
8-1 Furujin-machi, Takamatsu, Kagawa prefecture, Japan ("MKE") and Replay
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Networks, Inc., 1945 Charleston Road, Mountain View, California 94303, U.S.A.
("Replay Networks").
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RECITALS:
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Replay Networks has designed certain Products that MKE desires to resell.
Replay Networks has entered into contracts with, and may in the future enter
into other contracts with, manufacturers of the Products ("Contract
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Manufacturers"). Under such contracts, the Contract Manufacturers have agreed
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to manufacture the Products pursuant to Specifications provided by Replay
Networks and to deliver such Products. MKE desires to have the Contract
Manufacturers manufacture the Products and deliver the Products directly to MKE
and to have Replay Networks manage the Contact Manufacturers performance of the
design, production and delivery process.
AGREEMENT:
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In consideration of the foregoing and the agreements contained herein, the
parties agree as follows:
1. Definitions.
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"Confidential Information" of a party shall mean any information
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disclosed by that party to the other pursuant to this Agreement which is in
written, graphic, machine readable or other tangible form and is marked
"Confidential," "Proprietary" or in some other manner to indicate its
confidential nature. Confidential Information may also include oral information
disclosed by one party to the other pursuant to this Agreement, provided that
such information is designated as confidential at the time of disclosure and is
reduced to writing by the disclosing party within a reasonable time (not to
exceed twenty (20) days) after its oral disclosure, and such writing is marked
in a manner to indicate its confidential nature and delivered to the receiving
party.
"Content" shall mean any video, text, graphics, images,
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advertisements, promotions or other materials which are modified and/or updated
from time to time as part of the Replay Network Service, including, without
limitation, reserved channels, zones, hard drive allocation and other
configurations of any Product.
"Intellectual Property" shall mean patents, copyrights, authors'
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rights, trademarks, tradenames, know-how and trade secrets relating to the
Products or the design, specifications or manufacture of the Products, and any
modifications or improvements thereto, irrespective of whether such rights arise
under U.S., or Japan or international intellectual property, unfair competition
or trade secret laws.
"Inventory" shall mean raw materials and supplies necessary for the
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manufacture of Products pursuant to this Agreement.
"Products" shall mean the products manufactured by Contract
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Manufacturers at the direction of Replay Networks pursuant to this Agreement, as
set forth on Exhibit A attached hereto.
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"Purchase Order" shall mean a MKE Purchase Order in the form attached
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as Exhibit B.
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"Replay Software" shall mean Replay Networks' proprietary and/or
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licensed operating systems and application software that is incorporated into or
downloaded onto any Product, including any
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
improvements, modifications or enhancements thereto, but excluding hardware
driver software used to interface the Replay Software with the hardware
components of any Products.
"Specifications" shall mean the specifications for the Products as
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provided to Contract Manufacturers by Replay Networks and as accepted by MKE in
writing, and as revised from time to time upon mutual written agreement of the
parties.
2. Agreement to Manage Production. Replay Networks agrees to use diligent
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commercial efforts to perform the work (hereinafter "Work" as further defined
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below) pursuant to Purchase Orders or changes in Purchase Orders issued by MKE
and accepted by Replay Networks on behalf of its Contract Manufacturers. Work
shall mean to, on behalf of MKE, manage the design, production , delivery of
Products and other related matters by the Contract Manufacturers. All Products
will be manufactured by the Contract Manufacturers pursuant to the
Specifications. Except for any Replay Software or Content which does not affect
the functioning of the Products, Replay Networks shall not alter the design or
Specifications of any Products, nor deviate from such design or Specifications
for any purpose, including without limitation, of improving product quality or
safety, without a prior written consent of MKE.
3. MKE's subsidiary. Replay Networks acknowledges and agrees that MKE
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shall have the right to cause the obligations of MKE hereunder to be performed
by one or more of its subsidiaries, and all references herein to MKE shall
include any subsidiaries of MKE to the extent such subsidiaries perform
obligations of MKE hereunder. The performance of the obligations of MKE
hereunder by one or more of its subsidiaries shall not release MKE from
liability for the performance of its obligations hereunder.
4. Forecasting, Orders, Material Procurement
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(a) Forecast. Replay Networks shall cause the Contract Manufacturers
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to supply the quantities of the Products meeting the Specifications on the
Delivery Dates requested by MKE provided the Delivery Dates (as defined below)
conform to the Product lead-times and MKE forecasts set forth herein. Lead time
from placing Purchase Order to the delivery of the Products shall be [***]
unless otherwise agreed in the Purchase Order by the parties. On the fifteenth
(15/th/) day of each month, MKE shall provide Replay Networks with a rolling
forecast in writing of MKE's estimated aggregate purchase requirements of
Product for the subsequent [***] (the "Forecast"). Such Forecast shall be
legally binding on MKE. Replay Networks shall use its best efforts to cause the
Contract Manufacturers to supply the number of Products set forth in the
Forecast.
(b) Purchase Orders. All Purchase Orders for each calendar month
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shall be submitted on or before the fifteenth (15/th/) day of such month to
Replay Networks in writing by mail or facsimile to the address set forth on the
signature page to this Agreement. Such Purchase Orders must specify all Product
types and quantities, and must set a date of requested delivery (the "Delivery
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Date"). Replay Networks will confirm receipt of Purchase Orders by facsimile or
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e-mail. The parties agree that the terms and conditions contained in this
Agreement shall prevail over any terms and conditions of any Purchase Order,
acknowledgment form or other instrument.
(c) Acceptance or Rejection of Purchase Orders. Purchase Orders
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submitted each month pursuant to Section 4(b) will be accepted or rejected by
Replay Networks in writing by the twenty-third (23/rd/) calendar day of each
month (or the following business day in the event the 23/rd/ day is a weekend or
a holiday). Any such Purchase Orders within Forecast amount and lead times
specified in Section 4(a) that are not rejected in writing by Replay Networks by
such date shall be deemed accepted by Replay Networks effective upon receipt of
such Purchase Order.
(d) Order Forecast Variations.
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(i) Purchase Order Acceleration. Replay Networks will use
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diligent commercial efforts to manage and cause the Contract manufacturer to
perform accelerated production and delivery of Products if MKE requests
acceleration ("Purchase Order Schedule Increase"). A request for a Purchase
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Order Schedule Increase shall be submitted in writing by MKE to Replay Networks,
by mail or
[***]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
facsimile. Replay Networks will notify MKE in writing by mail or fax within
[***] business days of receipt of the request for a Purchase Order Quantity
Increase of (i) Replay Networks' capability to fill the Purchase Order Schedule
Increase and (ii) whether Replay Networks will add Expediting Charges to the
purchase price in order to meet the demands of the Purchase Order Schedule
Increase. Replay Networks' notification to MKE that it will accept a Purchase
Order Schedule Increase with no Expediting Charge will operate as an acceptance
of the Purchase Order Schedule Increase. Should Replay Networks notify MKE that
a Expediting Charge will be imposed, MKE will notify Replay Networks within
[***] business days if MKE accepts the revised terms of such Purchase Order
Schedule Increase. Agreements with respect to Purchase Order Schedule Increases
shall supercede prior Purchase Orders to the extent such prior Purchase Orders
conflict with the Purchase Order Schedule Increase. Any failure to provide
notification where required pursuant to this section 4(d)(i) shall be deemed to
operate as a rejection.
(ii) Other Schedule Alterations. For each Purchase Order or
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Forecast Product amounts, MKE shall be entitled, without penalty, to delay the
Delivery Date of Products as set forth in the table below:
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# of days before Maximum Maximum
Shipment Date on Reschedule Quantity Reschedule Period
Purchase Order or
Forecast Product
amount
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0-30 [***] [***]
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31-60 [***] [***]
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61-90 [***] [***]
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91-120 [***] [***]
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(iii) Any Purchase Order quantities rescheduled pursuant to
this section may not be subsequently rescheduled without the prior written
consent of Replay Networks. All other changes in shipment date other than as
authorized in this Section 4(d) require Replay Networks' prior written consent
and shall be subject to an inventory carrying charge of [***] per month for
finished Product, procured by the Contract Manufacturers to support the original
schedule.
5. Components; Tooling.
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(a) Replay Networks' acceptance of Purchase Orders will constitute
authorization for Replay Networks to grant Contract Manufacturers permission to
procure, using standard purchasing practices, the components, materials,
supplies and other Inventory necessary for the manufacture of Products covered
by such Purchase Orders.
(b) MKE authorizes Replay Networks to grant Contract Manufacturers
permission to purchase, in amounts beyond the amount necessary to fill accepted
Purchase Orders, the components, materials, and supplies: (i) with lead times
greater than [***] at the time the Purchase Order is placed ("Long Lead Time
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Components").
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(c) MKE shall be responsible for all Inventory and Long Lead Time
Components purchased by Replay Networks or the Contract Manufacturers pursuant
to this Section 5 under the conditions provided elsewhere in this Agreement. In
the event, however, Replay Networks cancels any Purchase Order and/or Forecast,
MKE shall not be responsible for any Inventory or Long Lead Time Components
which were ordered or procured for such Purchase Order or Forecast.
(d) MKE shall pay for or obtain and consign to Contract Manufacturer,
via Replay Networks any Product-specific tooling and other reasonably necessary
non-recurring expenses specific to the Product, as set forth in Replay Networks'
quotation.
[***]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
(e) End Of Life Component Purchase Order. Replay Networks shall
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notify MKE in writing at least [***] in advance of the End of Life ("EOL") of
any Product. MKE may submit a Purchase Order of such EOL for spare parts for
such Products on terms, conditions and pricing to be mutually agreed by the
parties. Neither Replay Networks nor any Contract Manufacturer shall have any
obligation to supply spare parts to MKE for any Product after the EOL of such
product. By the end of [***] Replay Networks will establish a service center for
Replay direct products. MKE, at its option, may enter into a separate agreement
with such service center for out-of-warranty Product repairs and EOL inventory.
(f) Training. Replay Networks shall provide a reasonable number of
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training classes for Matsushita Electric Corporation of America ("MECA")
personnel, at MECA's request, at locations in the United States mutually agreed
upon by Replay Networks and MECA. All reasonable expenses for such training
shall be mutually borne between MKE and Replay Networks.
6. MKE Requested Changes. MKE may request, at any time, in writing, that
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Replay Networks make changes to any of the following: (i) the design or
specifications of the Products, (ii) MKE's chosen method of shipment or packing,
or (iii) MKE's chosen place of delivery (collectively, "MKE Requested Changes").
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Replay Networks will evaluate MKE Requested Changes and notify MKE of whether it
accepts the MKE Requested Changes within [***] business days of Replay Networks'
receipt of MKE's request. If, in the sole judgement of Replay Networks, the MKE
Requested Change will cause an increase in the cost or delay in the delivery of
the Products, Replay Networks will notify MKE of such in writing within the same
time period. Should Replay Networks notify MKE that an increase in the cost or
delay in the delivery of the Products will occur, MKE will notify Replay
Networks within [***] business days following its receipt of such notice if MKE
accepts the revised terms of such Purchase Order.
7. Product Shipment and Inspection.
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(a) Shipments. All Products delivered pursuant to the terms of this
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Agreement shall be suitably packed for shipment in accordance with Replay
Networks' specifications, as approved in advance by MKE, marked for shipment to
MKE's destination specified in the applicable Purchase Order and delivered.
Shipment will be CIF to up to [***] warehouse locations in the continental
United States specified by Panasonic Consumer Electronics Company ("PCEC"), at
which time risk of loss and title will pass to MKE. All freight, insurance and
other shipping expenses will be paid by Replay Networks. The minimum shipment
order per location will be [***] Product units. Any special packing expenses not
included in the original price quotation for the Products will be paid by MKE.
(b) Cancellation. MKE may not cancel any part of any Purchase Order
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under this Agreement without Replay Networks' prior written consent, which
consent will not be unreasonably withheld. In the event MKE cancels any Purchase
Order, reasonable cancellation charges will be paid by MKE directly to Contract
Manufacture (Flextronics International) pursuant to the letter agreement agreed
upon by Replay Networks, MKE and Flextronics International substantially in the
same form attached as Exhibit D. If MKE pays such cancellation charges to
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Flextronics, Replay Networks shall waive any rights to claim and receive remedy
arising or in relation to such cancellation.
(c) Product Inspection and Acceptance.
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(i) MKE will inspect the Products within [***] business days
of receipt in accordance with the inspection standard mutually agreed upon by
the parties in writing. MKE may, subject to Contract Manufacturer's prior
approval, implement the outgoing inspection, in its sole discretion, at the
facility of the Contract Manufacturer, provided, however, in no case MKE shall
waive its rights to implement incoming inspection at MKE's facility. If the
Products are found to be defective in material and workmanship, fail to meet
Specifications or the acceptable quality levels ("AQL") in the attached Exhibit
C, MKE has the right to reject such Products, at Replay Networks' cost and
expense, during said period. Products not rejected during said period will be
deemed accepted.
[***]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
(ii) In the event of any rejection of Product pursuant to
Section 7(c)(i), MKE shall promptly notify Replay Networks in writing, and
provide a written failure report substantiating the basis for the rejection.
Within [***] business days after receipt of such notice and failure report,
Replay Networks shall either (a) send a Replay Networks representative to
inspect the Products at the applicable PCEC location, or (b) accept return of
rejected Products. In the event of an emergency request by MKE, Replay Networks
shall use diligent commercial efforts to shorten this [***] business day period.
(d) Documentation. Replay Networks shall be responsible for supplying
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operating instructions and registration card with each Product shipped to MKE;
provided, however, that the costs of such items do not exceed the costs of
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comparable items in the ReplayTV 3000 product being shipped by Replay Networks.
8. Payment Terms, Additional Costs and Price Changes.
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(a) Payment Terms. The price for Products to be manufactured will be
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as specified in the attached Exhibit A, as such Exhibit may be amended in
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writing by mutual agreement by the parties from time to time, and shall be
reflected in Purchase Orders issued by MKE and accepted by Replay Networks. All
prices quoted are exclusive of federal, state and local excise, sales, use and
similar taxes, and any duties, and MKE shall be responsible for all such items.
Payment for any Products, services or other costs to be paid by MKE hereunder is
due at the [***] day following the [***] the invoice has issued and delivered to
MKE (in the event such day is the holiday in U.S., then the following business
day) and shall be made in lawful U.S. currency. MKE agrees to pay [***] monthly
interest on all late payments. Furthermore, if MKE is late with payments and
fails to make such payments to Replay Networks within [***] days after receipt
of written notice from Replay Networks notifying MKE of such late payments,
Replay Networks may require prepayment or delay shipments or suspend work until
all such delinquent payments owed to Replay Networks are received. Such pre-
payment will be made to an escrow account designated by Replay Networks.
(b) Additional Costs. MKE is responsible for (i) any expediting
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charges reasonably necessary because of a change in MKE's requirements
("Expediting Charges") which charges are preapproved by MKE, (ii) any overtime
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or downtime charges incurred as a result of delays in the normal production or
interruption in the workflow process and caused by MKE's change in
Specifications or other MKE Requested Changes which charges are preapproved by
MKE.
(c) Cost Reductions. Replay Networks agrees to make every possible
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effort to reduce Products costs at Replay Networks sole responsibility. MKE will
assist Replay Networks to establish low components pricing for the Products.
(d) Purchase Volumes; Reports. During each [***] period set forth in
Exhibit A hereto, the parties will agree upon a guaranteed minimum and
target maximum number of Products MKE shall purchase from Replay, net of any
returns or cancellations, as set forth in Exhibit A. In the event that
(a) [***] (b) [***] or (c) [***] the parties agree to have further discussions
regarding the pricing for such Products and purchase volumes.
9. License Grants; Ownership Rights.
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(a) License. During the term of this Agreement, MKE grants Replay
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Networks a [***] license, with the right to sublicense to Contract
Manufacturers, to use all of MKE's Confidential Information and Intellectual
Property required to perform the Work and allow the Contract Manufacturer to
manufacture the Products pursuant to the terms of this Agreement. In addition,
MKE grants Replay Networks a [***] license, including the right to sublicense,
to use and modify any improvements, modifications or specifications for the
Products provided by MKE for the purposes of manufacture of the Products and
delivery thereof to MKE.
[***]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
(b) Replay Software License. Subject to the terms and conditions of
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this Agreement, and during term hereof, Replay Networks grants to MKE a [***]
license, to use the Replay Software contained in the Products (in object code
form only) solely in conjunction with such Products. Except for the license
granted in this Section 9(b), all right, title and interest in the Replay
Software shall remain the exclusive property of Replay Networks or its
licensors. Noting in this Agreement entitles MKE to the receipt or use of, or
access to, Replay Software source code or any right to reproduce the Replay
Software. The Products are offered for sale and are sold by Replay Networks
subject in every case to the condition that such sale does not convey any
license, expressly or by implication, to modify, improve, manufacture,
reproduce, decompile, disassemble, compile or reverse engineer the Replay
Software. MKE acknowledges and agrees that it (i) may not modify the Replay
Software, and (ii) receives no title or ownership rights to such Replay
Software.
(c) Intellectual Property Rights.
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(i) Replay Networks shall retain sole right, title and
interest in and to all Intellectual Property owned as of the date hereof and
solely developed by Replay Networks thereafter.
(ii) MKE shall retain sole right?title and interest in and to
all Intellectual Property owned as of the date hereof and solely developed by
MKE thereafter.
(iii) Replay Networks and MKE shall retain undivided and equal
right, title and interest to all Intellectual Property jointly developed by
Replay Networks and MKE hereunder. The parties do not currently contemplate any
jointly developed Intellectual Property being developed pursuant to this
Agreement.
10. Confidential Information.
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(a) Nondisclosure and Nonuse. Each party shall treat as confidential
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all Confidential Information of the other party for a period of [***] after
termination of this Agreement, shall not use such Confidential Information
except as set forth in this Agreement, and shall use reasonable efforts not to
disclose such Confidential Information to any third party, without the prior
written consent of the disclosing party. Each party shall promptly notify the
other party of any actual or suspected misuse or unauthorized disclosure of the
other party's Confidential Information.
(b) Exceptions. Notwithstanding the above, neither party shall have
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liability to the other with regard to any Confidential Information of the other
which the receiving party can prove: (i) was in the public domain at the time it
was disclosed or has entered the public domain through no fault of the receiving
party; (ii) was known to the receiving party, without restriction, at the time
of disclosure, as demonstrated by files in existence at the time of disclosure;
(iii) is disclosed with the prior written approval of the disclosing party;(iv)
is disclosed by the disclosing party to a third party without restriction on
such third party's rights to disclose or use the same, (v) is independently
developed by the receiving party, or (vi) is disclosed pursuant to the order or
requirement of a court, administrative agency, or other governmental body;
provided, however, that the receiving party shall provide prompt notice of such
court order or requirement to the disclosing party to enable the disclosing
party to seek a protective order or otherwise prevent or restrict such
disclosure.
(c) Return of Confidential Information. Upon expiration or
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termination of this Agreement, each party shall promptly return all Confidential
Information of the other party.
(d) Remedies. Any breach of the restrictions contained in this
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Section 10 is a breach of this Agreement which may cause irreparable harm to the
nonbreaching party. Any such breach shall entitle the nonbreaching party to
injunctive relief in addition to all legal remedies.
(e) Confidentiality of Agreement. Each party agrees that the
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existence and the terms and conditions of this Agreement shall be treated as
Confidential Information and shall not be
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WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
disclosed to any third party; provided, however, that each party may disclose
the terms and conditions of this Agreement:(i) as required by any court or other
governmental body; (ii) as otherwise required by law; (iii) to legal counsel of
the parties; (iv) in confidence, to accountants, banks, and financing sources
and their advisors; (v) in connection with the enforcement of this Agreement or
rights under this Agreement; or (vi) in confidence, in connection with an actual
or proposed merger, acquisition, or similar transaction.
11. Indemnity.
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(a) By Replay Networks. Except for any indemnification obligation of
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of MKE pursuant to Section 11(b) below, Replay Networks shall defend, indemnify
and hold harmless MKE from all claims, costs, damages, judgments and attorney's
fees resulting from or arising out of any third party claim alleging that the
Products infringe any valid U.S. and Japanese patents, patent rights,
trademarks, trademark rights, trade name rights, copyrights, trade secrets,
proprietary rights and processes or other intellectual property right. MKE shall
promptly notify Replay Networks in writing of the initiation of such claims. In
addition, Replay Networks shall have sole control of the defense and any
settlement of any such claim, and MKE shall provide reasonable assistance in
connection with the defense or settlement of any such claim. In the event of
infringement on third party's intellectual property rights, Replay Networks
shall, at its option, and subject to MKE's consultation: (i) procure for MKE the
right to continue the use or sale of the Products, (ii) provide Products which
do not infringe such intellectual property right or (iii) accept return of such
Products and refund the amounts paid by MKE therefore.
(b) By MKE. MKE shall defend, indemnify and hold harmless Replay
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Networks from all claims, costs, damages, judgments and attorney's fees
resulting from or arising out of any third party claim that any MKE Requested
Change, alone or in combination with any Product, infringes any valid U.S. and
Japanese patents, patent rights, trademarks, trademark rights, trade name
rights, copyrights, trade secrets, proprietary rights and processes or other
such intellectual property right. Replay Networks shall promptly notify MKE in
writing of the initiation of such claims. In addition, MKE shall have sole
control of the defense and any settlement of any such claim, and Replay Networks
shall reasonably cooperate and provide reasonable assistance in connection with
the defense or settlement of any such claim.
(c) Limitations. THE FOREGOING STATES THE ENTIRE LIABILITY AND
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OBLIGATIONS OF, AND THE EXCLUSIVE REMEDY OF, THE PARTIES, WITH RESPECT TO ANY
ALLEGED OR ACTUAL INFRINGEMENT OF PATENTS, COPYRIGHTS, TRADE SECRETS, TRADEMARKS
OR OTHER INTELLECTUAL PROPERTY RIGHTS.
(d) Product Liability. Replay Networks agrees that, if notified
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promptly in writing and given sole control of the defense and all related
settlement negotiations, it will defend MKE from any claim or action and will
hold MKE harmless for any property damage or personal injury, including death,
which arises from any alleged defect of any Products, other than for any claim
or action resulting from or arising out of any modification, enhancement, or
change in specifications of the Product specified in any written MKE design
instructions or drawings. Replay Networks shall name MKE as an additional
insured under Replay Networks' product liability policies for any Products.
12. No Other Liability. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN,
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NEITHER PARTY NOR ITS AGENT(S), REPRESENTATIVE(S) OR EMPLOYEE(S) SHALL BE LIABLE
TO THE OTHER PURSUANT TO THIS AGREEMENT FOR AMOUNTS REPRESENTING LOSS OF
REVENUES, LOSS OF PROFITS, LOSS OF BUSINESS OR INDIRECT, CONSEQUENTIAL, SPECIAL
OR PUNITIVE DAMAGES OF THE OTHER PARTY, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
EXCEPT FOR EACH PARTY'S OBLIGATIONS UNDER SECTION 11 (INDEMNITY) AND
SECTION 10 (CONFIDENTIALITY), EACH PARTY'S TOTAL LIABILITY, AND THE LIABILITY OF
ITS AGENT(S), REPRESENTATIVE(S) AND EMPLOYEE(S), FOR DAMAGES OR ALLEGED DAMAGES,
WHETHER IN CONTRACT OR TORT (INCLUDING STRICT LIABILITY AND NEGLIGENCE) WITH
RESPECT TO THIS AGREEMENT IS LIMITED TO AND SHALL NOT
EXCEED THE TOTAL AMOUNTS PAID BY MKE TO REPLAY NETWORKS UNDER THIS AGREEMENT.
13. Warranty and Disclaimer; Returns.
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(a) Warranty and Disclaimer. Replay Networks warrants that the
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Products will conform to Specifications and will be free from defects in
material and workmanship for a period of [***] from the date of sales to
end-users from PCEC subject to repair with no charge of labor costs, and
[***] from the date of sales to end-users from PCEC, subject to repair with
no charge for materials, parts and components; provided, however, that in no
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event shall Replay Networks have any warranty obligation for (i) labor costs
more than [***] after shipment to PCEC, or (ii) materials, parts and components
more than [***] after shipment to PCEC. This express limited warranty does not
apply to (a) materials consigned or supplied by MKE to Replay Networks or the
Contract Manufacturers, (b) defects resulting from MKE's contributions to the
design of the Products or from MKE Requested Changes; or (c) Product that has
been abused, damaged, altered or misused by any person or entity after the title
passes to MKE. With respect to first articles, prototypes, pre-production units,
test units or similar Products, Replay Networks makes no representations or
warranties whatsoever. Upon any failure of Product to comply with the above
warranty, Replay Network's sole obligation and MKE's sole remedy, is for Replay
Networks to have the Contract Manufacturer (or Replay Networks' designated
repair vendor), at Replay Networks' option, promptly repair or replace such
Product pursuant to the provisions of Section 13(b). EXCEPT FOR THE FOREGOING
EXPRESSLY STATED WARRANTIES, REPLAY NETWORKS MAKES NO EXPRESS OR IMPLIED
WARRANTIES RELATING TO THE PRODUCTS COVERED BY THIS AGREEMENT. REPLAY NETWORKS
EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
(b) Returns.
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Products (or subassemblies thereof) in breach of warranty to
Section 13(a) shall be returned by MKE directly to the Contract Manufacturer (or
other point of repair specified by Replay Networks), freight pre-paid, subject
to (a) MKE notifying Replay Networks of MKE's intention to return such Products
(or subassemblies thereof), (b) MKE's completion of a failure report and (c) MKE
obtaining a return material authorization number from Replay Networks to be
displayed on the shipping container. Shipment of such repaired or replaced
Products (or subassemblies thereof) shall be at Replay Networks' expense, except
that MKE shall bear all shipping costs for Products (or subassemblies thereof)
that MKE, Replay Networks and Contract Manufacturer determine after testing are
not defective and conform to Specifications.
Alternatively, MKE may to repair such defective Products itself
at Replay Networks' cost and expense. The detailed procedure, conditions, and
acceptable costs for such warranty return, repair and replacement by MKE shall
be mutually agreed upon by the parties in writing.
14. Term and Termination.
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(a) Term. This Agreement shall become effective on the date of this
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Agreement and shall continue until [***].
(b) Termination. This Agreement may be terminated at any time with or
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without cause by either party upon the giving of not less than [***] written
notice by registered mail to the other party. Either party may terminate this
Agreement at any time if the other party breaches any material term or condition
hereof and fails to cure such breach within [***] after notice of such breach in
the case of a default in any payment, or [***] after notice of such breach in
the case of any breach of any other material term or condition of this
Agreement, or if the other party shall be or becomes insolvent, or if either
party makes an assignment for the benefit of creditors, or if there are
instituted by or against either party proceedings in bankruptcy or under any
insolvency or similar law or for reorganization, receivership or dissolution.
[***]=CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
(c) Termination Liability. Neither party shall be liable in any
---------------------
manner on account of the termination or cancellation of this Agreement. The
rights of termination and cancellation as set forth herein are absolute. Both
MKE and Replay Networks are aware of the possibility of expenditures necessary
in preparing for performance hereunder and the possible losses and damages that
may occur to each in the event of termination or cancellation. Both parties
clearly understand that neither shall be liable for damages of any kind
(including but not limited to special, incidental or consequential damages) by
reason of the termination or cancellation of this Agreement except as otherwise
expressly provided herein.
(d) Obligations Upon Termination. The termination or expiration of
----------------------------
this Agreement shall in no way relieve either party from its obligations to pay
the other any sums accrued hereunder and to fulfill the performance under any
accepted Purchase Order regarding the Products in existence prior to such
termination or expiration.
(e) Survival of Certain Provisions. Notwithstanding anything to the
------------------------------
contrary in this Agreement, the following sections shall survive termination of
this Agreement: 1, 8, 9, 10, 11, 12, 13, 14 and 15.
15. Miscellaneous.
-------------
(a) Amendments and Waivers. Any term of this Agreement may be amended
----------------------
or waived only with the written consent of the parties or their respective
successors and assigns. Any amendment or waiver effected in accordance with this
Section 15(a) shall be binding upon the parties and their respective successors
and assigns.
(b) Successors and Assigns. Neither party shall have the right to
----------------------
assign or otherwise transfer its rights or obligations under this Agreement
except with the prior written consent of the other party, not to be unreasonably
withheld. Subject to the foregoing, the terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective permitted
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
(c) Governing Law; Jurisdiction. This Agreement and all acts and
---------------------------
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of California and the United States, without giving effect to
principles of conflicts of law and without regard to the United Nations
Convention on Contracts for the International Sale of Goods. Each of the parties
to this Agreement consents to the exclusive jurisdiction and venue of the courts
of the state and federal courts of Santa Clara County, California for actions
related to the subject matter of this Agreement.
(d) Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
(e) Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
(f) Notices. Any notice required or permitted by this Agreement shall
-------
be in writing and shall be deemed sufficient upon receipt, when delivered
personally or by overnight delivery service with tracking capabilities with
costs prepaid, or three (3) days after being deposited in the regular mail as
certified or registered mail (airmail if sent internationally) with postage
prepaid and return receipt requested, if such notice is addressed to the party
to be notified at such party's address or facsimile number as set forth below,
or as subsequently modified by written notice:
If to Replay Networks:
Replay Networks, Inc.
1945 Charleston Road
Mountain View, California 94303
Atten: Legal Department
Tel. 650-210-1000
Fax 650-964-4847
If to MKE:
Matsushita-Kotobuki Electronics Industries, Ltd.
8-1 Furujin-machi
Takamatsu
Kagawa prefecture
Japan
Attn: Legal Department
Tel. 81-87-851-7228
Fax. 81-87-851-1047
(g) Severability. If one or more provisions of this Agreement are
------------
held to be illegal or unenforceable under applicable law, the parties agree to
renegotiate such provision in good faith, in order to maintain the economic
position enjoyed by each party as close as possible to that under the provision
rendered unenforceable. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision within five (5)
business days, then (i) such provision shall be limited or eliminated to the
minimum extent necessary to be enforceable, (ii) the balance of the Agreement
shall be interpreted as if such provision were limited or eliminated as the case
may be and (iii) the balance of the Agreement shall be enforceable in accordance
with its terms.
(h) Entire Agreement. This Agreement is the product of both of the
----------------
parties hereto, and constitutes the entire agreement between such parties
pertaining to the subject matter hereof, and merges all prior negotiations and
drafts of the parties with regard to the transactions contemplated herein. Any
and all other written or oral agreements existing between the parties hereto
regarding such transactions are expressly canceled.
(i) Independent Contractors. The relationship of Replay Networks and
-----------------------
MKE established by this Agreement is that of independent contractors, and
nothing contained in this Agreement will be construed (i) to give either party
the power to direct and control the day-to-day activities of the other, (ii) to
constitute the parties as partners, joint ventures, co-owners or otherwise as
participants in a joint or common undertaking, or (iii) to allow either party to
create or assume any obligation on behalf of the other for any purpose
whatsoever.
(j) Force Majeure. If the performance of this Agreement or any
-------------
obligations hereunder is prevented, restricted or interfered with by reason of
fire or other casualty or accident, strikes or labor disputes, war or other
violence, any law, order, proclamation, regulation, ordinance, demand or
requirement of any government agency, or any other act or condition beyond the
reasonable control of the parties hereto, the party so affected upon giving
prompt notice to the other parties shall be excused from such performance during
such prevention, restriction or interference.
(k) Advice of Legal Counsel. Each party acknowledges and represents
-----------------------
that, in executing this Agreement, it has had the opportunity to seek advice as
to its legal rights from legal counsel and that the person signing on its behalf
has read and understood all of the terms and provisions of this Agreement. This
Agreement shall not be construed against any party by reason of the drafting or
preparation thereof.
The parties have executed this Agreement as of the date first set forth
above.
MATSUSHITA-KOTOBUKI REPLAY NETWORKS, INC.
ELECTRONIC INDUSTRIES, LTD.
By: /s/ Takao Kanamura By: /s/ Kim LeMasters
--------------------------- ---------------------------
Name: Takao Kanamura Name: Kim LeMasters
-------------------------- ---------------------------
(print) (print)
Title: Senior Management Director Title: Chief Executive Officer
-------------------------- ---------------------------
Date: December 20, 1999 Date: December 20, 1999
-------------------------- ---------------------------
Exhibit A
---------
Products and Pricing
I. First Period - Products shipped from [***] to [***]
Product Price Projected MSRP
- ------- ----- --------------
PV-HS1000 (20 GB Hard Drive) [***] [***]
PV-HS2000 (30 GB Hard Drive)* [***] [***]
Guaranteed Minimum Purchase Volume: [***] Product units**
Target Maximum Purchase Volume: [***] Product units**
* This Product will be available on [***].
**Guarantee minimum and target maximum volumes apply to all Products and any
products manufactured by MKE containing Replay Software that support the Replay
Network Service ("MKE Products").
II. Second Period - Products shipped from [***] to [***]
MKE and Replay Networks will meet prior to [***] to negotiate in good
faith the pricing and guaranteed minimum and maximum purchase volumes for each
Product or MKE Product to be sold during the second period. In determining such
pricing, the parties shall consider, for each Product or MKE Product: (a) [***],
(b) [***], and (c) [***]. The agreed upon pricing, minimum and maximum purchase
volumes for each Product or MKE Product shall be attached to this Exhibit A upon
the completion of such negotiations.
[***]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
Exhibit B
---------
Form of Purchase Order
Exhibit C
---------
Acceptable Quality Levels (AQL)
1.1. Defect Classifications
The following definitions and defect classifications shall be used when defining
a Hard Disk Recorder (hereinafter called HDR) defect:
Defect A definite HDR characteristic one or more defect.
Defective HDR A HDR containing one or more Defect.
Note: A HDR containing Defects in more than one (1)
category shall be classified as being defective in the
most severe classification.
Fitness for Use To be fit for use, a HDR must be free of Safety, Critical
and Major Defects.
Safety Defect [***] A Defect that would cause the HDR to be unsafe, in
violation of an applicable safety code or which, when
connected with another piece of equipment (e.g., video
source or monitor), would materially damage said connected
equipment.
Critical Defect [***] A Defect that would cause the HDR to be inoperative.
Major Defect [***] A Defect which reduces materially the usability of the
HDR, yields unsatisfactory results or detracts from the
appearance of the HDR and is likely to leave customer
dissatisfied.
Minor Defect [***] A Defect which does not affect fitness for use, but one
which should be noted for corrective action by the
Supplier.
2. Lot Acceptance
(a) Lot size: [***] units typical
(b) Lots rejected for Major Defects may be reconsidered for acceptance upon
notification of MKE and remedial action implemented by Replay
Networks, Inc.
[***]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
TABLE FOR INSPECTION FOR OUT-GOING PRODUCT MODEL;PV-HS1000
- ---------------------------------------------------------------------------------------------------------------------------------
ITEMS CRITERIA DECISION NOTES
----------------------
[***]
- ---------------------------------------------------------------------------------------------------------------------------------
1. PACKING A
1-1 PACKING CASE NOTICEABLE DAMAGES [***]
INCORRECT INDICATIONS [***]
1-2 PACKING SPEC
MIS-PRINTINGS [***]
OUT-OF-SPEC ISSUES [***]
MIXTURE OF ALIEN OBJECTS [***]
- ---------------------------------------------------------------------------------------------------------------------------------
2. INCLUDED ACCESSORIES A
2-1 SUPPLIED ACCESSORIES SHORTAGE, MIS-INSERTION, MIXTURE [***]
OF ALIEN OBJECTS
DIRT OR STAIN
- ---------------------------------------------------------------------------------------------------------------------------------
3. OUTER APPEARANCE A
3-1 GENERAL OUTER APPEARANCE NOTICEABLE DIRT OR STAIN, DAMAGES [***]
3-2 LABEL SHORTAGE, MIS-LOCATION [***]
MIS-PRINTING, DIRT OR STAIN [***]
- ---------------------------------------------------------------------------------------------------------------------------------
4. FUNCTION
4-1 POWER ON/OFF BUTTON NO FUNCTION [***]
4-2 REMOTE HDR FUNCTION NO FUNCTION [***]
4-3 REMOTE OTHER FUNCTION NO FUNCTION [***]
- ---------------------------------------------------------------------------------------------------------------------------------
5. LED INDICATION
5-1 POWER (G) INCORRECT INDICATION [***]
5-2 RECORDING (R) INCORRECT INDICATION [***]
5-3 NEW CONTENT INCORRECT INDICATION [***]
- ---------------------------------------------------------------------------------------------------------------------------------
6. INPUT/OUTPUT TERMINALS A
6-1 ANT/CATV IN NO VIDEO, OR NO COLOR, OR NO AUDIO [***]
TROUBLES ON VIDEO OR AUDIO [***]
(POOR, EXCESSIVE, NOISY, DISTORTED)
6-2 LINE1, LIN2, S-VIDEO NO VIDEO, OR NO COLOR, OR NO AUDIO [***]
TROUBLES ON VIDEO OR AUDIO [***]
(POOR, EXCESSIVE, NOISY, DISTORTED)
- ---------------------------------------------------------------------------------------------------------------------------------
[***] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
- ---------------------------------------------------------------------------------------------------------
7. CONTROL TERMINALS
7-1 IR BLASTER PORT NO FUNCTION (NO CONTROLLING [***]
A DBS AND CABLE BOX WITH IR
CONTROL)
7-2 SERIAL CONTROL NO FUNCTION (NO LINKING A DSS) [***]
7-3 TEL LINE NO FUNCTION (NO CONNECTING TO
THE REPLAY NETWORKS SERVICE) [***]
- ---------------------------------------------------------------------------------------------------------
A = Classification subject to mutually agreed upon specification.
[***] = CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
EXHIBIT D
---------
LETTER AGREEMENT
This Letter Agreement is entered into as of , 1999 by and among Replay
Networks Inc. ("Replay Networks"), Matsushita-Kotobuki Electronics Industries,
Ltd. ("MKE"), and Flextronics International ("Flextronics").
Replay Networks and MKE have entered into the OEM Distribution Agreement ("OEM
Agreement") in which MKE will purchase ReplayTV 3000 ("Products") manufactured
by Flextronics from Replay Networks.
Replay Networks, MKE and Flextronics desire to establish certain procedure and
conditions with respect to the cancellation of purchase orders for the Products
under the OEM Agreement.
The parties undersigned acknowledge and agree as follows:
1. MKE may not cancel any part of any purchase order of Products issued by
MKE and accepted by Replay Networks under the OEM Agreement ("Purchase
Order") without Replay Networks' prior written consent, which consent will
not be unreasonably withheld.
2. In the event MKE cancels any Purchase Order, MKE will reimburse reasonable
cancellation charges directly to Flextronics. Flectronics shall invoice
MKE such cancellation charges based on actual costs supported by
documentation, which costs will be identified by Flextronics within [***]
after said cancellation. For the purpose of this Addendum, said actual
costs are defined as the costs of materials, together with related
restocking charges, which have been procured specifically for Products and
expected to be built for MKE on any MKE Purchase Order(s) accepted by
Replay Networks, and any production related charges due to cancellation of
such Purchase Order(s). Upon determination of the cancellation charges,
MKE may accept delivery of Products under the terms of the Purchase Order
in lieu of paying such cancellation charges.
3. MKE shall promptly notify Flextronics and Replay Networks in the event of
any cancellation of any Purchase Order. MKE shall not be responsible for
any portion of such cancellation charge arising from any delay by
Flextronics in stopping or ceasing procurement of any materials, or
manufacturing of the Products, and Flextronics shall bear such costs.
Replay Networks, Inc. Matsushita-Kotobuki Electronics
Industries, Ltd.
By:____________________ By:_________________________
Title: Title:
Flextronics International
By:____________________ .
Title:
[***]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.