EXHIBIT 10.12
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
GOODS AGREEMENT
STATEMENT OF WORK
This Statement of Work # 4998RL1061 ("SOW") adopts and incorporates by reference
the terms and conditions of Goods Agreement # 4998RL1060 ("GA") between Ramp
Networks ("Supplier") and IBM Corporation ("Buyer"). Transactions performed
under this SOW will be conducted in accordance with and be subject to the terms
and conditions of this SOW, and the balance of this Agreement. This SOW is not
a WA. Unless otherwise stated herein or in writing from Buyer's procurement
personnel, the only WA hereunder will be written or electronic purchase orders.
All WAs issued for Products during the term of this SOW (regardless of whether
the WAs reference this Agreement or not) are incorporated herein by reference.
Unless otherwise qualified, all references to days in this SOW will mean
calendar days.
1.0 PRODUCT DESCRIPTION AND REQUIREMENTS
1.1 General Description. The Product, an internet gateway router product
targeted toward the home/home office environment, will be shipped as an option
to the IBM Home Director Connection Center. The Product will: (i) support
internet connections over an integrated V.90 modem and/or externally attached
modem (V.90 or ISDN); (ii) provide simultaneous access on the LAN side to the
internet and file and printer sharing via a 4 port Ethernet hub; and (iii)
incorporate a DHCP server for automatic IP address assignment. Product part
numbers are set forth in Attachment A. The primary intended uses of the Product
are for incorporation into Buyer's product offerings, resale as a stand-alone
product, and/or for field support to Buyer's products. The Products are further
described by the specifications, certifications and other requirements
referenced in this SOW, in addition to all specifications, catalogs, and other
documentation published by Supplier. All such specifications, certifications,
and other documents are incorporated herein by reference, and Supplier
acknowledges receipt of each of them.
1.2 Product Specifications.
- ---------------------------------------------------------------------------------------------------------------------
Buyer Engineering Description
Specification # Change Level #
(if applicable) (if applicable)
- ---------------------------------------------------------------------------------------------------------------------
Attachment A, entitled "Product Specifications," to this SWO*
- ---------------------------------------------------------------------------------------------------------------------
[* * *] General Quality Requirements for IBM/RTP Suppliers
- ---------------------------------------------------------------------------------------------------------------------
[* * *] Supplier Quality Requirements (Feature Cards) dated February 16, 1998
- ---------------------------------------------------------------------------------------------------------------------
[* * *] IBM Packaging Engineering Specifications, FRU (Field Replaceable Unit)
Packaging Requirements (February 1994)
- ---------------------------------------------------------------------------------------------------------------------
[* * *] Automatic Identification for Packaging, Distribution and Manufacturing
(1997-08)
- ---------------------------------------------------------------------------------------------------------------------
[* * *] IBM PCCo Packaged Product Bar Code Guidelines
- ---------------------------------------------------------------------------------------------------------------------
Bar Code Label Implementation Guide for IBM Suppliers (May 2, 1994), Release
3.1.
- ---------------------------------------------------------------------------------------------------------------------
[* * *] Label, IBM FRU
- ---------------------------------------------------------------------------------------------------------------------
[* * *] Label, Standard Bar Code Specification
- ---------------------------------------------------------------------------------------------------------------------
[* * *] Buyer's "Supplier Packaging and Materials Handling Specification"
- ---------------------------------------------------------------------------------------------------------------------
Supplier's published specifications, catalogs, and other documentation
- ---------------------------------------------------------------------------------------------------------------------
Note: * Attachment A is intended to indicate additions or changes being requested by Buyer to [* * *].
- ----
- ---------------------------------------------------------------------------------------------------------------------
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
1.3 Required Product Certifications. Supplier has secured, and shall maintain
during the term of this SOW, all certifications required for Buyer to sell the
Products in the United States and Canada, including, without limitation, all ISO
requirements, as well as those certifications described below.
Certification Title Certification Description
- -------------------------------------------------------------------------------------------------------------------
CE mark, commercial Electromagnetic Emissions
- -------------------------------------------------------------------------------------------------------------------
FCC Part 15 Class B Electromagnetic Emissions
- -------------------------------------------------------------------------------------------------------------------
EN 55 022 (CSSPR), Class B Electromagnetic Emissions
- -------------------------------------------------------------------------------------------------------------------
VCCI Class B ITE Electromagnetic Emissions
- -------------------------------------------------------------------------------------------------------------------
CE mark, commercial Safety Agency Approval (Power Adapter)
- -------------------------------------------------------------------------------------------------------------------
UL listed (UL 1950) Safety Agency Approval (Power Adapter)
- -------------------------------------------------------------------------------------------------------------------
CSA certified (CSA 22.2 #950) Safety Agency Approval (Power Adapter)
- -------------------------------------------------------------------------------------------------------------------
TUV licensed (EN 60 950) Safety Agency Approval (Power Adapter)
- -------------------------------------------------------------------------------------------------------------------
T-Mark Safety Agency Approval (Power Adapter)
- -------------------------------------------------------------------------------------------------------------------
FCC Part 68 Modem Certification
- -------------------------------------------------------------------------------------------------------------------
1.4 FAA Certification. Supplier certifies that all Products and their packages
do not contain explosives, hazardous materials, incendiaries and/or destructive
devices.
1.5 COO Product Certification. Supplier certifies that the Products purchased
hereunder have the following country(ies) of origin. If there are any changes
to this information, Supplier will notify Buyer by providing a new country of
origin certification signed by an authorized Supplier representative before
shipping any Products other than those with the country of origin listed below
for such Product. Supplier acknowledges that Buyer will rely upon this
certification, and timely updates to it, in making representations to Buyer's
customers and to comply with various laws and regulations. If any part number
listed has more than one country of origin, Supplier certifies that each country
of origin is listed below, and Supplier agrees to deliver to Buyer, by March
1,1999, instructions regarding how Buyer can distinguish each country of origin
for part numbers with more than one country of origin.
Buyer Assigned Part Product Description Country of Origin and Is Product Marked with
Number Complete Street an Industry Standard
Address Barcode (y/n)
- ------------------------------------------------------------------------------------------------------------------------
[* * *] [* * *] [* * *] Y
- ------------------------------------------------------------------------------------------------------------------------
[* * *] [* * *] [* * *] Y
- ------------------------------------------------------------------------------------------------------------------------
[* * *] [* * *] [* * *] Y
- ------------------------------------------------------------------------------------------------------------------------
[* * *] [* * *] [* * *] Y
- ------------------------------------------------------------------------------------------------------------------------
[* * *] [* * *] [* * *] Y
- ------------------------------------------------------------------------------------------------------------------------
[* * *] [* * *] [* * *] Y
- ------------------------------------------------------------------------------------------------------------------------
[* * *] [* * *] [* * *] Y
- ------------------------------------------------------------------------------------------------------------------------
[* * *] [* * *] [* * *] Y
- ------------------------------------------------------------------------------------------------------------------------
1.6 Compatibility Requirements. The Products will be compatible with the IBM
Home Director Connection Center and its integrated 4 port Ethernet hub, Buyer's
system units, peripherals and including, but not limited to those operating
systems, applications, games and internet service providers ("ISPs") identified
in Attachment A. Supplier agrees to enhance, correct, and test Products to
ensure such compatibility. Supplier shall provide compatibility text reports to
Buyer, when requested by Buyer.
1.7 Product Field Support: In addition to the Product warranties, Supplier will
provide the following services in support of the Product during the warranty
period:
-2-
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
(1) support Buyer on all end user telephone calls regarding the Product. Buyer
shall be the primary interface with the end user in all situations and no
end user may contact Supplier directly.
(2) support Buyer regarding the determination of whether there is a defect
(patent or latent), error or other problem ("Defects") with the Product,
including without limitation, failure analysis of the affected Product in
the filed or that have been returned to Buyer or Supplier; and
(3) isolate and promptly correct all Defects with the Products, and provide
such corrections to Buyer in accordance with the parameters set forth below
(these parameters are "time of the essence"):
(a) for Defects that result in an emergency condition that causes critical
impact to Buyer's schedule or that makes performance or continued
performance of any feature or function impossible or impractical
("Severity Level 1 Defect" or "SLI Defect"), Supplier will use bests
efforts to provide corrections within twenty-four (24) hours of the
earlier of Supplier discovering the SL1 Defect or being informed of the
SL1 Defect;
(b) for Defects that significantly affects Buyer's schedule or that make
the performance or continued performance of any feature or function
difficult and that cannot easily be circumvented or avoided on a
temporary basis by the end user ("Severity Level 2 Defect" or "SL2
Defect"), Supplier will use best efforts to provide corrections within
5 days of the earlier of Supplier discovering the SL2 Defect or being
informed of the SL2 Defect;
(c) for Defects that are not critical in that performance can be continued
without difficulty or loss of data by easy circumvention or avoidance
by the end user ("Severity Level 3 Defect" or "SL3 Defect"), Supplier
will use best efforts to provide corrections within 15 days of the
earlier of Supplier discovering the SL3 Defect or being informed of the
SL3 Defect; and
(d) for Defects that are minor which can be easily avoided or circumvented
by the end user ("Severity Level 4 Defect" or "SL4 Defect"), Supplier
will use best efforts to provide corrections within 45 days of the
earlier of Supplier discovering the SL4 Defect or being Informed of the
SL4 Defect.
(4) In all cases, Supplier shall provide failure analysis results, including
definition of root cause and corrective actions taken.
(5) Supplier shall provide a[* * * ] Buyer Personnel, [* * *], at a location
and date to be identified by Buyer and agreed upon by Supplier, whose
agreement shall not be unreasonably withheld, in support of the Products
and each updated version thereof.
1.8 Product Software and Documentation. Product code (object code only) and
documentation Include: the Easy Start CD, and firmware contained in the Product
itself. The delivery of this CD and firmware will be included with the Product,
to be delivered on a mutually agreed to schedule. Schedule dates to be
determined after initial sizing and included as an addendum to this document.
Supplier will deliver a fully completed and signed certificate of originality
(in a form to be provided by Buyer) for all such code and documentation. Such
deliverables will be due to Buyer as follows:
Golden CD media delivery: February 1, 1999
Documentation delivery: February 1, 1999
Certificate of originality delivery: February 1, 1999
Supplier will promptly deliver to Buyer all updates (including, without
limitation, all error corrections and minor enhancements/revisions) to such
Product code in the same format set forth above, and that all such updates are
included in the Product definition as provided in section 5.0.
In connection with Buyer's purchase of Product, Supplier grants to Buyer, its
Affiliates, its and their successors and assigns, a worldwide, Irrevocable,
royalty-free, fully-paid-up right and license, without accounting:
(a) to use, execute, preload, reproduce copy, distribute copies of (internally
and/or externally), display and/or perform all, and/or any portion of the
deliverables and such rights and licenses shall include all rights and
licenses in and to pictorial, graphic and/or audio visual works, including
icons, screens, music, sound and/or characters, created as a result of
execution of the deliverables whether such pictorial, graphic and/or
audio/visual works are created by use of the deliverables and/or with other
programming and/or through other means;
-3-
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
(b) under any trade secret, patent application and/or patent owned and/or
licensable by Supplier to use have used, lease, sell and/or otherwise
transfer each Product either alone and/or in combination with equipment or
software or both, and/or to practice and/or have practiced any process
and/or method;
(c) to use, in connection with the marketing of Product, the Product name(s),
logos trade names, service names, trademarks, and/or service marks used by
Supplier to identify and/or promote the Products, including any portions
thereof.
(d) to sublicense all and/or any portions of the Products to end users and/or
others under similar provisions used by Buyer to sublicense Buyer products
or, at Buyer's sole discretion, under provisions provided by Supplier to
license and/or similarly transfer Products;
(e) to authorize others, to do any of the foregoing.
The above grant of rights and licenses shall be exclusive to Buyer (except for
Supplier's branded products) for the six month period following the date on
which Buyer first ships the Products to its distribution channel; thereafter,
the grant shall be nonexclusive. Further the above grant of rights and licenses
includes the royalty-free, fully-paid-up right and license to distribute the
deliverables, including any subset thereof by any means, in various media
(including without limitation hard drives, CD-ROMs, diskettes, tapes, and/or
over the Internet and/or electronic bulletin boards) either alone and/or with
Buyer and/or third party code included on the same media.
Notwithstanding any other provisions of this Agreement, Supplier shall have no
right to use the trademarks, trade names, or product names of Buyer or its
Affiliates directly or Indirectly In connection with any product, promotion or
publication without the prior written approval of Buyer.
1.9 Translations. The Product (including Product code and documentation) will
be available in the following languages in accordance with the schedule below:
Language Release Date
-------- ------------
English (U.S.A.) February 1, 1999
1.10 Product Modifications. No changes of any kind will be made by Supplier to
the Products, without Buyer's prior written consent. In proposing Product
changes, Supplier must demonstrate that the Product quality level is not
diminished. For Products of the same type and essentially equivalent in design
and function which Supplier offers to other customers as OEM products, Supplier
will notify Buyer of all changes to such OEM products, and notify Buyer of the
impact of such changes and their relationship to the Products.
1.11 Buyer Proprietary Materials. Supplier shall use Buyer proprietary
components only to build Products sold to Buyer hereunder. "Buyer proprietary
components" include, without limitation, documentation and packaging that bears
Buyer artwork, Buyer Product labels, and Buyer tamper evident seals and any
other components that Buyer expressly identifies as Buyer proprietary in any
Buyer bill of materials for the Product In Attachment A or other writing from
Buyer. Any item of packaging identified in any Product bill of materials or
other Buyer writing as an "Buyer proprietary component" shall be purchased by
Supplier directly from suppliers approved by Buyer and at the same pricing
afforded to Buyer, provided, however that Supplier shall be responsible for the
relationship with such suppliers, and Buyer shall not be liable in any manner
regarding purchases or related activity.
1.12 Tamper Evident Protection. Each Product (except for spare parts that are
clearly marked as "USED PARTS FOR SPARE PARTS OR FIELD REPLACEABLE UNITS" will
be required to have tamper evident protection to ensure that the Products are
new when received by end user customers. This tamper evident protection will be
in the form of "IBM" logo tape applied to the finished Product packaging in such
a manner that if removed or tampered with, it would be evident that the finished
Product packaging has been opened. Such tamper evident method must not be
resealable, without evidence of tampering.
Supplier agrees to treat Buyer's logo tape as confidential and will have
controls to prevent unauthorized use or dissemination (including tracking the
purchase, internal use, application, and destruction [to avoid use by others,
and to limit access to such materials to only those with a need to know to carry
out the tamper evident sealing on the
-4-
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
Products. Supplier agrees to use the Buyer logo tape in connection with new
Product, and not with any other product or with any spare part or field
replacement unit.
2.0 PART NUMBERS, PRICES AND OTHER TERMS
2.1 Product Unique Terms.
- -------------------------------------------------------------------------------------------------------------------------------
Buyer Part # Supplier Part # Unit Price and Delivery Term Payment Term* Lead Time
Current prior to
Delivery to
issue WAs**
- -------------------------------------------------------------------------------------------------------------------------------
[* * *] N/A [* * *] FOB Origin 45 days after 30 Business Day
receipt of valid
invoice
- -------------------------------------------------------------------------------------------------------------------------------
[* * *] N/A [* * *] FOB Origin 45 days after 30 Business Days
receipt of valid
invoice
- -------------------------------------------------------------------------------------------------------------------------------
[* * *] N/A [* * *] FOB Origin 45 days after 30 Business Days
receipt of valid
invoice
- -------------------------------------------------------------------------------------------------------------------------------
Note: * Supplier will not invoice Buyer, until after Product delivery.
** Any increase in the agreed to lead-time must have Buyer's prior written approval.
- -------------------------------------------------------------------------------------------------------------------------------
Product part numbers, unit Pricing, Delivery terms, lead times and other
logistics may be changed via a letter that references this SOW and that is
signed by both parties. Regardless of the FOB point, Buyer will select the
common carrier, unless Buyer notifies Supplier to the contrary. Supplier agrees
to cooperate with Buyer and common carrier to ensure the Products arrive at the
destination addressed in the WA.
2.2 Product Availability. Supplier will notify Buyer prior to Supplier's
withdrawal of any Product(s). Such withdrawal notice will not occur during the
term of this SOW.
2.3 Taxes and Duties. Supplier warrants that the Prices do not include sales
use or similar taxes applied against the finished Product sold to Buyer.
Notwithstanding the F.O.B. point, Supplier will be responsible for all legal,
regulatory and administrative requirements. Buyer will be responsible for all
associated duties and fees, associated with importation of Products into the
country where the Product is received by Buyer.
2.4 Epidemic Defect Rate and Warranty Period. The Epidemic Failure Rate
equates to any defects at or above [* * ] of Products purchased with the same
manufacturing lot code. Products shall also be considered to have an Epidemic
Failure if Buyer implements a Product recall. The warranty period for the
Products is [ * * * ] from the time of shipment to Buyer.
2.5 Common Carriers and Customer Information. Regardless of the FOB point,
Supplier will prepare all shipping labels and transfer materials (as submitted
by Buyer) to identify Buyer, not Supplier, as the party shipping Product, except
to the extent that Supplier, and not Buyer, must be identified for customs
clearances or to comply with other laws. To the extent Supplier must be
identified on the final Product packaging, Supplier will have prior written
agreements in place with each carrier (regardless whether Buyer or Supplier
controls the common carrier) that will require each carrier to remove (after
applicable customs clearances, but before delivery to any customer of Buyer),
hold in confidence, and return (or certify destruction or hold in confidence in
perpetuity until destruction is certified for cases where the carrier requires
to keep such documents for archival purposes) to Supplier all documents and
markings that reflect transaction information between Supplier and Buyer
(including without limitation, all pricing information), while retaining or
placing the appropriate transaction information between
-5-
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
Buyer and Buyer's customers. Supplier will ensure that no markings, labels of
any kind, are placed on the Products (including customer packaging), other than
as expressly specified by Buyer in writing, or as required by law, provided that
Supplier first notify and secure Buyer's written confirmation with such
requirements. Such concurrence shall not relieve Supplier's obligations
hereunder.
Notwithstanding anything to the contrary, Supplier shall hold the following
special confidential information in trust and confidence: (a) customer names,
addresses, purchase histories and requirements; (b) Buyer's order fulfillment
and related processes, including Buyer's relationship and Agreement with
Supplier; (c) Buyer's artwork, customer packaging, and other intellectual
property of Buyer; (d) Buyer's business plans, Product plans, and forecasts; and
(e) the relative success or failure of any Product or supporting process.
Supplier may use such special confidential information only for the benefit of
Buyer and only to fulfill the purpose of this SOW. Supplier may disclose such
information to Supplier's employees who have a need to know to fulfill the
purpose of this SOW, provided that Supplier has a written agreement in place
with all such employees sufficient to enable Supplier to fulfill its obligations
under this SOW. Further, Supplier may comply with valid legal process requiring
disclosure, but only to the extent required by law, and provided that Supplier
notifies Buyer prior to any such disclosure and assists Buyer in seeking a
protective order and/or limiting disclosure to the extent possible. Supplier
shall remain solely liable for the contents of such disclosures.
Supplier shall not disclose that it is developing or assembling Buyer's Products
in press releases, marketing materials, point of sale materials, customer/trade
briefings, or otherwise, without prior written approval from Buyer. Supplier
agrees that Buyer's trademarks, trade names, and goodwill are valuable assets,
and these disclosures will constitute a material breach of this Agreement which
could damage Buyer and Buyer's trademarks, trade names, and goodwill.
Supplier shall not distribute special confidential information outside of the
Supplier location that received such information, without Buyer's prior written
authorization. Supplier shall maintain adequate controls over all special
confidential information to ensure that it is held in trust and confidence for
Buyer and used only as expressly authorized by Buyer in this SOW. Supplier
shall immediately notify Buyer of any lost or unapproved disclosures of special
confidential information. Supplier shall return or destroy all special
confidential information, no later than ten days after Buyer's request.
Supplier shall allow Buyer to periodically inspect Supplier's premises during
normal working hours to verify these requirements for custody and use of special
confidential information.
2.6 Product Returns. To maintain customer satisfaction, Buyer and its
authorized service providers will replace Products that do not conform to
warranties hereunder. Buyer may return these units to Supplier any time within
the warranty period. Supplier shall inspect and test returns. For returns that
conform to Product specifications (i.e., NDF or "no defect found"), Supplier may
elect to return these Products to Buyer as FRU's, subject to Buyer approval, and
subject to marking such parts as "USED PARTS FOR SPARE PARTS OR FIELD
REPLACEABLE UNITS" and only for FRU use. For returns that do not conform to
Product specifications and have defects covered under the Product warranty,
Supplier shall provide Buyer with a credit against future WAs equal to the price
that Buyer paid. For Product returns not covered under Product warranty
including Epidemic Defect) no credit or replacement will be provided by
Supplier.
2.7 Supplier will treat all Product returns and components therein as used, and
will not redistribute them as new Products regardless of any refurbishment or
repairs they may undergo. Supplier may use Product returns as spare parts or
field replacement units sold to Buyer under this SOW, provided that Supplier
first refurbishes, tests, and confirms that these Products perform like new, and
provided that Supplier clearly labels all such spare parts "USED PARTS FOR SPARE
PARTS OR FIELD REPLACEABLE UNITS." Prior to any other redistribution or reuse of
Product returns, Supplier will remove and destroy all Product labels, packaging,
documentation, Buyer proprietary components, and other characteristics
(including, without limitation all items described in Attachment 3) that
identify it as a Buyer Product.
3.0 RESCHEDULING/CANCELLATION
-6-
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
Supplier will use reasonable efforts to comply with Buyer's requested changes to
delivery of Products specified in a WA as described in the table below, without
additional charge to Buyer.
- ------------------------------------------------------------------------------------------------------------------------
Number of Days prior to a Increase of Product Decrease (cancellation) of Reschedule of Product
WA Scheduled Delivery Date Quantity to a WA Scheduled Product Quantity to a WA Quantity to a WA Scheduled
Delivery Date (% of Order Scheduled Delivery Date (% Delivery Date (% of Order
Quantity) of Order Quantity) Quantity)
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] [* * * ] [* * * ]
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] [* * * ] [* * * ]
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] [* * * ] [* * * ]
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] [* * * ] [* * * ]
- ------------------------------------------------------------------------------------------------------------------------
4.0 COMMUNICATIONS
- ------------------
All communications between the parties will be carried out through the
designated coordinators:
All procurement, business and administrative communications between the parties
will be conducted through the following "Business Coordinators":
Buyer Supplier
Attention: Attention:
J.J. Rybovich, Zip TVCA/002/GG301 Ricardo Leite, Director, OEM Sales Ramp
IBM Corporation Networks
3039 Cornwallis Road 3180 De La Cruz Boulevard Suite 200
Research Triangle Park, NC 27709 Santa Clara, CA 95054
Phone: 919-254-1394 Phone: 408-588-2486
Fax: 919-543-4253 Fax: 408-988-6363
Technical communications between the parties will be conducted through the
following "Technical Coordinators":
Buyer Supplier
Attention: Attention:
Gregory C. Wright, Zip XJQA/306/ Sri Bathina
E121-B Ramp Networks 3
IBM Corporation 3180 De La Cruz Boulevard Suite 200
3039 Cornwallis Road Santa Clara, CA 95054
Research Triangle Park, NC 27709 Phone: 408-988-5353
Phone: 919-254-9574 Fax: 408-988-6363
Fax: 919-254-4898
All legal notices will be sent to the following addresses and will be deemed
received (a) 2 days after mailing if sent by certified mail, return receipt
requested or (b) on the date confirmation is received if sent by facsimile
transmittal, to the party set forth below.
Buyer Supplier
Attention: Attention:
J.J. Rybovich, Zip TVCA/002/GG301 Scott Gorton
IBM Corporation Ramp Networks
3039 Cornwallis Road 3180 De La Cruz Boulevard Suite 200
Research Triangle Park, NC 27709 Santa Clara, CA 95054 081
Phone: 919-254-1394 Phone: 408-988-5353
Fax: 919-543-4253 Fax: 408-988-6363
-7-
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
Each party may change its designated coordinators and/or addresses any time by a
written notification to the Business Coordinator (with a carbon copy to the
Technical Coordinator or legal notice coordinator, as applicable).
5.0 GENERAL
5.1 As part of Supplier's post-warranty service, Supplier will maintain the
capability to supply Spare Parts (i.e., the entire Product or portions of the
Product as described herein or as may be subsequently described by Buyer) during
the term of this SOW and for a period of [* * * ] thereafter. Buyer may
require additional post-warranty service requirements and such post-warranty
service shall be subject to Supplier's normal pricing.
5.2 If Supplier refers or encourages Buyer to refer to future performance
and/or future upgrade features (collectively, "Upgrades") that are not included
in the Products at the time of the referral (including, without limitation,
references in marketing materials, web pages, and Product documentation), then
Supplier agrees to offer to Buyer for inclusion under this SOW, on reasonable
terms and conditions which shall be no less favorable than the most favorable
terms and conditions to which Supplier has licensed other third parties, all
Upgrades that Supplier creates with respect to the Product. Such offer(s) shall
be made by Supplier to Buyer within a reasonable period of time but in no event
later than the earliest availability date suggested by the reference. Supplier
will Include In such Upgrades all of the performance functions and features
suggested by the reference.
6.0 COMPENSATION
Upon execution of this SOW, Buyer will issue to Supplier a WA to compensate
Supplier for its work in modifying the deliverables which Supplier shall provide
under this SOW. In consideration for Supplier's satisfactory performance in
providing such modifications, Buyer will pay to Supplier an amount not to exceed
[* * * ] which is comprised of the following price elements:
1. Standard Software Customization: ................................ [* * * ]
[* * * ]
[* * * ]
[* * * ]
2. IBM Additional Software Development:............................. [* * * ]
[* * * ]
1. [* * * ]
2. [* * * ]
3. [* * * ]
4. [* * * ]
3. Testing of New Compiled Software:................................ [* * * ]
Payment will be made by Buyer to Supplier upon receipt of acceptable invoice(s)
in accordance with Buyer's WA Number 2000930863.
7.0 SURVIVAL
The rights and obligations of sections 1.4, 1.5, 1.7, 1.8, 1.11, 2.2, 2.3, 2.4,
2.5, 4.0, 5.0 and 7.0 of this SOW will survive and continue after termination of
the Agreement or this SOW, and will remain in full force and effect and will
bind the parties and their legal representatives, successors, heirs and assigns.
For purposes of this SOW, the rights and obligations of sections 6.3 and 6.4 of
the GA will also survive and continue (in addition to those sections
-8-
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
set forth as surviving in section 14.12 of the GA) after termination of this
Agreement or this SOW and will remain in full force and effect, and will bind
the parties and their legal representatives, successors, heirs and assigns. The
rights and obligations of the entire GA and SOW, as they apply to outstanding
WAs that may not have been not canceled as part of the Agreement or SOW
termination, will survive and continue after termination of this SOW and will
bind the parties and their legal representatives, successors, heirs and assigns
until expiration or cancellation of such WAs.
ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO:
INTERNATIONAL BUSINESS MACHINES RAMP NETWORKS
CORPORATION
J. Gianatassio 1/5/99 /s/ Timothy McElwee 1/4/99
- ----------------------- ------- ----------------------- -------
Authorized Signature Date Authorized Signature Date
J. Gianatassio Timothy J. McElwee
- ----------------------------------- -----------------------------------
Printed Name
GLOBAL COMMODITY MGR Vice President, Sales
- ----------------------------------- -----------------------------------
Title Title
-9-
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
Attachment A
Product Specifications
1.1 Product Description
Internet Gateway products are proposed for homes that have the Home Director
Connection Center installed with 1 or more personal computers (PCs). Either
pre-installed or retrofitted CAT 5 UTP wiring must exist for networking support.
Products shall also support Internet connections made over V.90 modem and/or
ISDN. There are two fundamental functions that the proposed Internet Gateway
product will support:
. Create a TCP/IP-based "home intranet" which involves basic connectivity,
and higher-level protocols to automate the administration of the "home
intranet" (e.g., DHCP for automatic IP address assignment).
. Provide shared simultaneous Internet or work Intranet access for the
multiple PCs in the home (or small business), over a single modem
connection and a single ISP account.
The Internet Gateway product is designed to work in conjunction with the
Connection Center's 4 port Ethernet hub, effectively providing for a total of
seven Ethernet ports.
The Product connects to the Internet via an Integrated V.90 (56Kbps) modem
and/or an externally attached V.90 or ISDN TA, and provides network connectivity
(4 port hub support) for Ethernet over Cat5 Unshielded Twisted Pair wiring. It
is envisioned to be a self contained, stand-alone device, ideally without a
power switch. It is intended to be always on and ready for use. The package
would be small and unobtrusive, designed to fit within the Connection Center.
1.1 Key Functional Requirements
Connectivity
- ------------
. "Controlled Dial on demand" (the Product will dial the customer's
ISP and logon automatically when the user requests dial-up access). The
user will also be able to request the dial-up connection to terminate. The
connection will be established automatically whenever Internet access is
requested. Optionally the dialup connection can be switched to a manual
connect/disconnect operation.
. Inactivity time-out (the Internet Gateway terminates the ISP connection if
no activity has taken place within a programmable interval).
. ISPs Supported
--------------
America on-line
AT&T Worldnet
CompuServe
IBM Global Network
MSN
Mindspring
Netcom
Prodigy
Sprint Internet
Passport
Sprynet
. Multiple modem capability - The ability to upgrade to add
additional WAN bandwidth, either V.90 or ISDN, without replacing the base
box.
Protocols
- ---------
* [* * * ]
* [* * * ]
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
* [* * * ]
Operating Systems Supported
- ---------------------------
Product does not rely on any operating systems in order to provide internet
connectivity.
Applications and Multiplayer Games with which Product must be compatible
- ------------------------------------------------------------------------
Need for Speed III
Quake II
Madden `99
Tiger Woods `99
Police Swat II
F-I5
Usability
- ---------
. Product will not require the customer to enter any advanced configuration
parameters to get the Product up and accessing the Internet. Allowable
parameters are:
1. lSP name
2. ISP address type (static or dynamically-assigned)
3. If static, the actual IP address assigned by the ISP
4. Primary DNS server's IP address
5. Secondary DNS server's IP address
6. User ID
7. Password
. The user will be able to enter these parameters using a Web
browser on any PC in the home
. Product will have adequate help/prompts/explanations to help the
user specify the customer configurable parameters.
. Product will include an "administrative password" to prevent unauthorized
people (e.g., children or guests) from viewing or changing the
configuration information stored in the Internet Gateway. Product will
support "logon scripts"
. The Product will frequently be installed in an out-of-the-way location.
Consequently, the operation of the Product cannot require the customer to
physically push any buttons or manipulate any switches on the Product.
All configuration and operational tasks must be accomplished remotely,
via a Web browser on a PC in the home. (One possible exception to this
would be a "hard reset" button to reset the Product if it hangs.)
. Dial-in support - The Product will be upgradeable to support dial-in
access. The upgrade path will be able to be performed without going on
site.
Additional Required Features Include
- ------------------------------------
1. [* * * ]
2. [* * * ]
3. [* * * ]
4. [* * * ]
5. [* * * ]
Diagnostic Capabilities
- -----------------------
. From a Web browser on any PC in the home, the user will be able
to display HTML pages that contain information about the current status of
the Internet Gateway. Examples of the kind of status information include:
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
Whether or not the Internet Gateway is currently connected to the ISP
If currently connected, the speed of the connection (e.g., 14.4, 28.8,
56Kbps)
If currently connected, the elapsed time of the connection
If currently connected, what IP address the ISP has assigned to the
Product.
Number of bytes transferred in each direction
. From a Web browser on any PC in the home, the user will be able
to request the Internet Gateway to terminate a connection with the ISP. If
no other users have requested dial-up access the connection will terminate.
If other users have requested dial-up access the connection will remain up.
. From a Web browser on any PC in the home, the user will be able
to force the Internet Gateway to reset itself ("soft reset", must not
destroy previously entered configuration Information).
NOTE: Access to the last function should be restricted to people
who know the administrative password (see previous section).
Physical Connection of the Internet Gateway product
The Internet gateway product will require at a minimum a single
POTS line for connecting the WAN interface.
. Interface to Dedicated Processor
The Supplier will modify the DP IP addresses as follows: dedicated
processor NIC [* * *], dedicated processor modem [* * *]. The
Installer's laptop IP address will be fixed at [* * *]. Addresses
[* * *] through [* * *] will be reserved on the Product. The
Product will have an IP address of [* * *]. The DP will not be
accessible by the customer (password required).
1.2 Product Development
The Product will be purchased complete from Supplier. Buyer will maintain
control and signoff authority of all hardware and software development changes
after initial Product ship.
Supplier will develop two custom cables to be shipped with the Internet Gateway
product: (i) One cable will connect the Internet Gateway product to the
telephone Interface module in the IBM Connection Center; and (ii) one cable will
connect the Internet Gateway product to the existing Ethernet hub In the IBM
Connection Center. Cables have been defined under separate documentation sent
on or about 11/18/98.
Buyer will make the modification of the reference manual, and setup guide from
source provided by Supplier. Supplier will then receive the source from Buyer
and manufacture the components based on the Buyer source for the exclusive use
of Buyer.
. HTML pages will be customized by Supplier for Buyer. Customization will
include: (i) adding function to allow manual control over the dial-up
connection as outlined earlier in this document; and (ii) incorporating new
logo's and graphics into the HTML pages for customization of the look and
feel to meet Buyer's requirements. In addition, the HTML pages used for
configuring the box will be customized by Supplier as defined in a release
of sample HTML code by Buyer.
. Supplier will modify the existing Supplier model 200i HTML pages
to perform the following functions as illustrated in the sample code sent
on 11/10/98:
1. [* * *]
2. [* * *]
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
3. [* * *]
4. [* * *]
5. [* * *]
1.3 Warranty
Supplier will provide a [* * * ] warranty on the Product.
1.4 Publications
. Customer Support Documentation
Internet Gateway Setup - setup card based on Supplier's example. Source
provided by Supplier, modifications made by Buyer, production handled by
Supplier.
Network Setup Support - Supplier will produce a Buyer logo'd CD with all
references to Supplier Network and Web Ramp changed to IBM and Web
Connector. Buyer to provide artwork for CD label. This CD is to provide the
equivalent function of the existing Easy Start CD.
Setup instructions should also include a section on network security (how
to), to be written by Buyer.
Customer will be responsible for assigning a configuration password for the
box. The box will initially ship with the password disabled.
Product Reference Guide - Currently provided as a PDF file on CD. Buyer
Information Development will take source code provided by Supplier and
modify it to change all Supplier references to Home Director. This will
include text and graphics changes. The changes will be sent to Supplier for
production.
. Customer Guide - The customer guide will consist of a setup card,
which will be based on the Supplier setup card. The setup card will be
modified to have the IBM Home Director look and feel and include a section
on network security. No additional hardcopy documentation will be provided
to the customer.
1.5 Product Reliability
. The Product will typically be installed in an out-of-the-way
location, and will typically be left powered-on for an indefinite period of
time. The Product must be capable of operating indefinitely in a powered-
on state. There must be an easy way to reset the Product from any PC
connected to the Product (ideally, this would be via a Web browser on the
PC).
. Supplier to verify proper operation of the Product in the IBM
Connection Center. This will include an analysis of the power supply and
cooling characteristics when mounted in the Connection Center.
Manufacturing / Procurement Plans
2.1 Components
Source (all components):
------------------------
The Product, cables, CD and documentation will be obtained and/or
manufactured by the Supplier.
Lead-time (all components):
---------------------------
TBD
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
2.2 EC Release Plan / BOM
. Fulfillment - The Product will be bulk shipped from the Supplier
to a Buyer warehouse. Labeling on the individual product boxes will be per
Buyer labeling specifications for tracking purposes. No serial number
tracking will be provided.
. Packaging - Product to be shipped in plain white box. Field Replaceable
Units FRU's) to be individually packaged per Buyer specifications. Refer to
IBM Packaging Specification [* * *]. Packaging spec [* * *] applies
for manufacturing shipments, and [* * *] applies for FRU shipments. FRUs
are to be individually packaged.
Lot Size - P/N: [* * *] to be shipped TBD per pallet
Stocking - FRU parts to be stocked in Mechanicsburg and orderable
through ECLAIM
Part Numbers and Sources
Web Connect top bill part number: [* * *]
EC number: [* * *]
Contents of top bill:
- ------------------------------------------------------------------------------------------------------------------------
Orderable Component Description Qty
Part Number Part Number
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ]
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ]
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[* * * ] [* * * ] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[***] [***]
- ------------------------------------------------------------------------------------------------------------------------
[***] [***] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[***] [***] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[***] [***] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[***] [***] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[***] [***]
- ------------------------------------------------------------------------------------------------------------------------
[***] [***] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[***] [***] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[***] [***] 1.00
- ------------------------------------------------------------------------------------------------------------------------
[***] [***] 1.00
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Notes: 1) [***]
- ------------------------------------------------------------------------------------------------------------------------
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-5-
- ------------------------------------------------------------------------------------------------------------------------
2) [***]
- ------------------------------------------------------------------------------------------------------------------------
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-6-
GOODS AGREEMENT # 4998RL1060
This Agreement dated as of December 22, 1998 ("Effective Date"), between
International Business Machines Corporation ("Buyer") and Ramp Networks
("Supplier"), establishes the basis for a multinational procurement relationship
under which Buyer may purchase from Supplier the Products and Services which are
described in SOWs issued under this Agreement.
1.0 Definitions:
"Affiliates" means entities that control, are controlled by, or are under common
control with a party to this Agreement and that have signed a PA.
"Agreement" means this agreement and any relevant Statements of Work ("SOW"),
Work Authorizations ("WA"), Participation Attachments ("PA"), and other
attachments or appendices specifically referenced in this Agreement.
"Buyer" means either IBM or one of its Affiliates.
"Buyer Personnel" means agents, employees, contractors or remarketers engaged by
Buyer.
"Participation Attachment" or "PA" means an attachment to this Agreement which
evidences the signing Affiliate's intent to conduct transactions, if any, in
accordance with this Agreement.
"Prices" means the agreed upon prices and currency for Products and Services,
including all applicable taxes, as specified in the relevant SOW.
"Products" means items identified in the relevant SOW.
"Services" means the services identified in the relevant SOW.
"Statement of Work" or "SOW" means any document attached to or included in this
Agreement which describes the Products and Services, including any requirements,
specifications or schedules.
"Supplier" means either Supplier or one of its Affiliates.
"Supplier Personnel" means agents, employees or subcontractors engaged by
Supplier.
"Work Authorization" or "WA" means a purchase order or other Buyer designated
document, in either electronic or hard copy form, issued by Buyer's procurement
personnel, and is the only authorization for Supplier to perform any work under
this Agreement. A SOW is a WA only if designated as such in writing by Buyer.
2.0 Statement of Work: Supplier will provide the Products or Services as
specified the relevant SOW only when specified in a WA Supplier will begin work
only after receiving written authorization from Buyer. Buyer may request
changes to a SOW and Supplier will submit to Buyer the impact of such changes.
Changes accepted by Buyer will be specified in an amended SOW or change order
signed by both parties. Supplier will maintain the capability to supply agreed
upon Products, including parts of Products, for a period of months after
withdrawal of such Products as specified in the relevant SOW. Supplier will
notify Buyer of its intent to withdraw any Product and will continue to deliver
such withdrawn Products for the periods as specified in the relevant SOW.
3.0 Term and Termination
3.1 Term: Products and Services acquired by Buyer on or after the
Effective Date will be covered by this Agreement. This Agreement will remain in
effect until terminated.
3.2 Termination of this Agreement: Either party may terminate this
Agreement, without any cancellation charge, for a material breach of the
Agreement by the other party or if the other party becomes insolvent or file or
has filed against it a petition in bankruptcy ("Cause"), to the extent permitted
by law. Such termination will be effective at the end of a thirty (30) day
written notice period if the Cause remains uncured. Either party may terminate
this Agreement without Cause when there are no outstanding SOWs.
3.3 Termination of a SOW or WA: Buyer may terminate a SOW or a WA with or
without Cause. Upon termination, in accordance with Buyer's written direction,
Supplier will immediately: (i) cease work; (ii) prepare and submit to Buyer an
itemization of all completed and partially completed Products and Services;
(iii) deliver to Buyer Products satisfactorily completed up to the date of
termination at the agreed upon Prices in the relevant SOW; and (iv) deliver upon
request any work in process. In the event Buyer terminates without Cause, Buyer
will compensate Supplier for the actual and reasonable expenses incurred by
Supplier for work in process up to and including the date of termination,
provided Supplier uses reasonable efforts to mitigate Buyer's liability
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
-7-
under this Subsection by, among other actions, accepting the return of,
returning to its suppliers, selling to others, or otherwise using the canceled
Products (including raw materials or works in process) and provided such
expenses do not exceed the Prices.
4.0 Pricing
4.1 Pricing: Supplier will provide Products and Services to Buyer for the
Prices. The Prices for Products and Services specified in a WA and accepted by
Buyer will be the only amount due to Supplier from Buyer.
4.2 Competitive Pricing: If Supplier offers lower prices to another
customer for like or lesser quantities of Products or Services during the same
period and under similar terms and conditions as Buyer, those prices will be
made known and available to Buyer at the time of their availability to the
customer. Prices will at least be competitive with industry prices and, if not,
Supplier will use reasonable efforts to adjust its Prices so that they are
competitive.
5.0 Payments and Acceptance: Terms for payment will be specified in the
relevant SOW or WA Payment of invoices will not be deemed acceptance of Products
or Services, but rather such Products or Services will be subject to inspection,
test and rejection by Buyer until successful integration into Buyer's products,
or for a period as specified in the relevant SOW, whichever occurs first. Buyer
may, at its option, either reject Products or Services that do not comply with
the specifications and requirements for a refund plus any inspection, test and
transportation charges paid by Buyer, or require prompt correction or
replacement of such Products upon Buyer's written instructions. Buyer may
reject entire lots of Products which do not meet quality levels as specified in
the relevant SOW.
6.0 Warranties
6.1 Ongoing Warranties: Supplier makes the following ongoing
representations and warranties: (i) it has the right to enter into this
Agreement and its performance of this Agreement will not violate the terms of
any contract, obligation, law, regulation or ordinance to which it is or becomes
subject; (ii) no claim, lien, or action exists or is threatened against Supplier
that would interfere with Buyer's use or sale of the Products; (iii) Products
are free from defects in design (except for written designs provided by Buyer
unless such designs are based entirely on Supplier's specifications), material
and workmanship and will conform to the warranties, specifications and
requirements in this Agreement for the time period from the date of shipment as
specified in the relevant SOW; (iv) Products are safe for any use consistent
with and will comply with the warranties, specifications and requirements in
this Agreement; (v) Products and Services are Year 2000 ready such that they are
capable of correctly processing, providing, receiving and displaying date data,
as well as exchanging accurate date data with all products with which the
Products are intended to be used within and between the twentieth and twenty-
first centuries; (vi) Products and Services are euro-ready such that they will
correctly process, send, receive, present, store, and convert monetary data in
the euro denomination, respecting the euro currency formatting conventions
(including the euro symbol); (vii) none of the Products contain nor are any of
the Products manufactured using ozone depleting substances known as halons,
chlorofluorocarbons, methyl chloroform and carbon tetrachloride; (viii) Products
are new and do not contain used or reconditioned parts; and (ix) Products and
Services do not infringe any intellectual property right of a third party. THE
WARRANTIES AND CONDITIONS IN THIS AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES
AND CONDITIONS, EXPRESS OR IMPLIED, INCLUDING THOSE WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE.
6.2 Warranty Redemption: If Products or Services do not comply with the
warranties in this Agreement, Supplier will repair or replace Products (at the
latest revision level) or re-perform Services, or credit or refund the Price of
Products or Services, such remedy at Buyer's discretion. For such Products,
Supplier will issue to Buyer a Return Material Authorization ("RMA") within five
(5) days of Buyer's notice. If Supplier fails to repair, or replace Products or
re-perform Services in a timely manner, Buyer may do so and Supplier will
reimburse Buyer for actual and reasonable expenses. Buyer may return Products
which do not conform to the warranties in
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
this Agreement from any Buyer location to the nearest authorized Supplier
location at cost of Supplier and Supplier will, at cost of Supplier, return any
repaired or replaced Product in a timely manner.
6.3 Post Warranty Service: Supplier will offer post warranty Services as
specified in the relevant SOW or identify a third party which will provide such
Services. In the event a third party or Buyer will provide such Services,
Supplier will provide the designated party with the information required for the
performance of the Services.
6.4 Epidemic Defects: Supplier will, at Buyer's discretion, repair or
replace, or credit or refund Products which have the same or similar defect at a
rate as specified in the relevant SOW ("Epidemic Defect Rate"), or where a
safety defect is found. Supplier will commence such performance within five (5)
calendar days of Buyer's notice to Supplier of an Epidemic Defect Rate.
Supplier will reimburse Buyer for all actual and reasonable expenses incurred by
Buyer for such repair and replacement of Products, including expenses associated
with problem diagnosis, field and finished goods inventory repair or
replacement.
7.0 Delivery
7.1 Delivery Logistics: Delivery under this Agreement means delivery to
the Buyer location and delivery point as specified in the relevant SOW or WA
Buyer may cancel or reschedule the delivery date or change the delivery point as
specified in the relevant SOW. The term of sale will be specified a SOW or WA.
Buyer may issue a twelve (12) month rolling forecast for quantities of Products
that may be required. Supplier will only deliver the Products specified in a
WA. ANY PRODUCT QUANTITIES CITED IN OR PURSUANT TO THIS AGREEMENT, EXCEPT FOR
QUANTITIES CITED IN A WA AS FIRM, ARE PRELIMINARY AND NON-BINDING ONLY. BUYER
MAKES NO REPRESENTATION OR WARRANTY AS TO THE QUANTITY OF PRODUCTS THAT IT WILL
PURCHASE, IF ANY.
7.2 On-Time Delivery: The lead-time for Buyer to issue a WA prior to
delivery will be specified in a SOW. Products specified in a WA for delivery
with such lead-time will be delivered on time. Supplier will use reasonable
efforts when Buyer requests delivery with a shorter lead-time. If Supplier
cannot comply with a delivery commitment, Supplier will promptly notify Buyer of
a revised delivery date and Buyer may: (i) cancel without charge Products or
Services not yet delivered; (ii) procure such Products or Services elsewhere and
charge Supplier the cost differential; (iii) require Supplier to deliver
Products using priority freight delivery at Supplier's expense for the
incremental freight charges; and (iv) exercise all other remedies provided at
law, in equity and in this Agreement.
8.0 Intellectual Property: Supplier grants Buyer all intellectual property
rights licensable by Supplier which are necessary for Buyer to use and sell the
Products. This Agreement does not grant either party the right to use the other
party's trademarks, trade names or service marks.
9.0 Indemnification
9.1 General Indemnification: Supplier will defend, hold harmless and
indemnify, including attorney's fees, Buyer and Buyer Personnel against claims
that arise or are alleged to have arisen as a result of negligent or intentional
acts or omissions of Supplier or Supplier Personnel or breach by Supplier of any
term of this Agreement.
9.2 Intellectual Property Indemnification: Supplier will defend, or at
Buyer's option cooperate in the defense of, hold harmless and indemnify,
including attorney's fees, Buyer and Buyer Personnel from claims that Supplier's
Products or Services infringe the intellectual properly rights of a third party.
If such a claim is or is likely to be made, Supplier will, at its own expense,
exercise the first of the following remedies that is practicable: (i) obtain
for Buyer the right to continue to use and sell the Products and Services
consistent with this Agreement; (ii) modify the Products and Services so they
are non-infringing and in compliance with this Agreement; (iii) replace the
Products and Services with non-infringing ones that comply with this Agreement;
or (iv) at Buyer's
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
request, accept the cancellation of infringing Services and the return of the
infringing Products and refund any amount paid.
9.3 Exceptions to Indemnification: Supplier will have no obligation to
indemnify Buyer or Buyer Personnel for claims that Supplier's Products or
Services infringe the intellectual property rights of a third party to the
extent such claims arise as a result of: (i) Buyer's combination of Products or
Services with other products or services not foreseeable by Supplier; (ii)
Supplier's implementation of a Buyer originated design; or (iii) Buyer's
modification of the Products except for intended modifications required for use
of the Products.
10.0 Limitation of Liability: Except for liability under the Section entitled
Indemnification and the Subsection entitled Epidemic Defects, in no event will
either party be liable to the other for any lost revenues, lost profits,
incidental, indirect, consequential, special or punitive damages.
11.0 Supplier and Supplier Personnel: Supplier is an independent contractor
and this Agreement does not create an agency relationship between Buyer and
Supplier or Buyer and Supplier Personnel. Buyer assumes no liability or
responsibility for Supplier Personnel. Supplier will: (i) ensure it and
Supplier Personnel are in compliance with all laws, regulations, ordinances, and
licensing requirements; (ii) be responsible for the supervision, control,
compensation, withholdings, health and safety of Supplier Personnel; (iii)
ensure Supplier Personnel performing Services on Buyer's premises comply with
the On Premises Guidelines; and (iv) inform Buyer if a former employee of Buyer
will be assigned work under this Agreement, such assignment subject to Buyer
approval.
12.0 Electronic Commerce: Supplier will use best efforts to participate in
Electronic Data Interchange ("EDI") or other electronic commerce approach, under
which the parties will electronically transmit and receive legally binding
purchase and sale obligations ("Documents"), including electronic credit entries
transmitted by Buyer to the Supplier account specified in the relevant SOW.
Each party, at its own expense, will provide and maintain the equipment,
software, services and testing necessary for it to effectively and reliably
transmit and receive such Documents. Either party may use a third party service
provider for network services, provided the other party is given sixty (60) days
prior written notice of any changes to such services. A Document will be deemed
received upon arrival at the receiving party's mailbox or Internet address and
the receiving party will promptly send an acknowledgment of such receipt. The
receiving party will promptly notify the originating party if a Document is
received in an unintelligible form, provided that the originating party can be
identified. In the absence of such notice, the originating party's record of
the contents of such Document will prevail. Each party will authenticate
Documents using a digital signature or User ID, as specified by Buyer, and will
maintain security procedures to prevent its unauthorized use.
13.0 Recordkeeping and Audit Rights: Supplier will maintain (and provide to
Buyer upon request) relevant accounting records to support invoices under this
Agreement for three (3) years following completion or termination of the
relevant SOW. All accounting records will be maintained in accordance with
generally accepted accounting principles.
14.0 General
14.1 Amendments: This Agreement may only be amended by a writing
specifically referencing this Agreement which has been signed by authorized
representatives of the parties.
14.2 Assignment: Neither party will assign their rights or delegate or
subcontract their duties under this Agreement to third parties or affiliates
without the prior written consent of the other party, such consent not to be
withheld reasonably, except that Buyer may assign this Agreement in conjunction
with the sale of a substantial part of its business utilizing this Agreement.
Any unauthorized assignment of this Agreement is void.
14.3 Choice of Law and Forum; Waiver of Jury Trial; Limitation of Action:
This Agreement and the performance of transactions under this Agreement will be
governed by the laws of the country in which the transaction is performed,
except that the laws of the State of New York applicable to contracts executed
in and
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
performed entirely within that State will apply if any part of the transaction
is performed within the United States. The parties expressly waive any right to
a jury trial regarding disputes related to this Agreement. The United Nations'
Convention on International Sale of Goods does not apply to this Agreement.
Unless otherwise provided by local law without the possibility of contractual
waiver or limitation, any legal or other action related to a breach of this
Agreement must be commenced no later than two (2) years from the date of the
breach in a court sited within the country in which the breach occurred, or in a
court sited in the State of New York if any part of the transaction is performed
within the United States.
14.4 Communications: All communications between the parties regarding
this Agreement will be conducted through the parties' representatives as
specified in the relevant SOW. Supplier will use reasonable efforts to
participate in replenishment logistics programs presented by Buyer.
14.5 Counterparts: This Agreement may be signed in one or more
counterparts, each of which will be deemed to be an original and all of which
when taken together will constitute the same agreement. Any copy of this
Agreement made by reliable means considered an original.
14.6 Exchange of Information: Unless required otherwise by law, all
information exchanged by the parties will be considered non-confidential. If
the parties require the exchange of confidential information, such exchange will
be made under a confidentiality agreement. The parties will not publicize the
terms or conditions of this Agreement in any advertising, marketing or
promotional materials except as may be required by law, provided the party
publicizing obtains any confidentiality treatment available. Supplier will use
information regarding this Agreement only in the performance of this Agreement
14.7 Freedom of Action: This Agreement is nonexclusive and either party
may design, develop, manufacture, acquire or market competitive products or
services. Buyer will independently establish prices for resale of Products or
Services and is not obligated to announce or market any Products or Services and
does not guarantee the success of its marketing efforts, if any.
14.8 Force Majeure: Neither party will be in default or liable for any
delay or failure to comply with this Agreement due to any act beyond the control
of the affected party, excluding labor disputes, provided such party immediately
notifies the other.
14.9 Obligations of Affiliates: Affiliates will acknowledge acceptance of
the terms and conditions of this Agreement through the signing of a PA before
conducting any transaction under this Agreement.
14.10 Prior Communications and Order of Precedence: This Agreement
replaces any prior oral or written agreements or other communication between the
parties with respect to the subject matter of this Agreement, excluding any
confidential disclosure agreements. In the event of any conflict in these
documents, the order of precedence will be: (i) the quantity, payment and
delivery terms of the relevant WA; (ii) the relevant SOW; (iii) the relevant PA;
(iv) this agreement; and (v) the remaining terms of the relevant WA.
14.11 Severability: If any term in this Agreement is found by competent
judicial authority to be unenforceable in any respect, the validity of the
remainder of this Agreement will be unaffected, provided that such
unenforceability does not materially affect the parties' rights under this
Agreement.
14.12 Survival: The provisions set forth in the following Sections and
Subsections of this Agreement will survive alter termination of this Agreement
and will remain in effect until fulfilled: "Ongoing Warranties", "Warranty
Redemption" "Intellectual Property", "Indemnification", "Limitation of
Liability", "Record Keeping and Audit Rights", "Choice of Law and Forum; Waiver
of Jury Trial; Limitation of Action", "Exchange of Information", and "Prior
Communications and Order of Precedence".
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.
14.13 Waiver: An effective waiver under this Agreement must be in writing
signed by the party waiving its right. A waiver by either party of any instance
of the other party's noncompliance with any obligation or responsibility under
this Agreement will not be deemed a waiver of subsequent instances.
ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO:
By /s/ Timothy J. McElwee 1/4/99 By /s/ J. Gianatassio 1/5/99
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Authorized Signature Date Authorized Signature Date
Timothy J. McElwee J. Gianatassio
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Printed Name Printed Name
Vice President Sales/Ramp Networks [***] GLOBAL COMMODITY MGR/IBM
- --------------------------------------------- --------------------------
Title & Organization Title & Organization
*Material has been omitted pursuant to a request for confidential treatment.
Such material has been filed separately with the Securities and Exchange
Commission.