<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 17, 1997
REGISTRATION NO. 333-15837
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
ATL PRODUCTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3572 95-3824281
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
------------------------
1515 SOUTH MANCHESTER AVENUE
ANAHEIM, CALIFORNIA 92802-2907
(714) 780-7200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
KEVIN C. DALY, PH.D.
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ATL PRODUCTS, INC.
1515 SOUTH MANCHESTER AVENUE
ANAHEIM, CALIFORNIA 92802-2907
(714) 780-7200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
PATRICK ARRINGTON, ESQ. JEFFREY D. SAPER, ESQ.
ELLEN S. BANCROFT, ESQ. HOWARD S. ZEPRUN, ESQ.
SUSAN N. CAYLEY, ESQ. KAIVAN M. SHAKIB, ESQ.
NEEL GROVER, ESQ. MATTHEW MACKENZIE, ESQ.
BROBECK, PHLEGER & HARRISON LLP WILSON SONSINI GOODRICH & ROSATI
4675 MACARTHUR COURT, SUITE 1000 PROFESSIONAL CORPORATION
NEWPORT BEACH, CALIFORNIA 92660 650 PAGE MILL ROAD
(714) 752-7535 PALO ALTO, CALIFORNIA 94304-1050
(415) 493-9300
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
------------------------
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable in connection with the sale and
distribution of the securities being registered. All amounts are estimated
except the Securities and Exchange Commission registration fee. All of the
expenses below will be paid by the Registrant.
<TABLE>
<CAPTION>
ITEM AMOUNT
---- --------
<S> <C>
Registration fee............................... $ 6,891
NASD filing fee................................ 2,774
Nasdaq National Market listing (entry) fee..... *
Blue Sky fees and expenses..................... *
Printing and engraving expenses................ *
Legal fees and expenses........................ *
Accounting fees and expenses................... *
Transfer Agent and Registrar fees.............. *
Directors and officers insurance............... *
Miscellaneous.................................. *
--------
Total................................ $575,000
========
</TABLE>
- ---------------
* To be provided by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Section 145 of the Delaware General Corporation Law the Registrant
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933. The Registrant's Bylaws (Exhibit 3.3 hereto) provides that the
Registrant shall indemnify its directors and officers to the fullest extent
permitted by Delaware law. The Bylaws require the Registrant, subject to certain
limitations, to advance litigation expenses in the case of stockholder
derivative actions or other actions, against an undertaking by the directors and
officers to repay such advances if it is ultimately determined that the
directors or officers are not entitled to indemnification. The Bylaws further
provide that rights conferred under such Bylaws shall not be deemed to be
exclusive of any other right such persons may have or acquire under any
agreement, vote of stockholders or disinterested directors, or otherwise. The
Registrant believes that indemnification under its Bylaws covers at least
negligence and gross negligence.
In addition, the Registrant's Certificate of Incorporation (the
"Certificate") (Exhibit 3.1 hereto) provides that the Registrant shall indemnify
its directors and officers if such persons acted (i) in good faith, (ii) in a
manner reasonably believed to be in or not opposed to the best interests of the
Registrant, and (iii) with respect to any criminal action or proceeding, with
reasonable cause to believe such conduct was lawful. The Certificate also
provides that, pursuant to Delaware law, its directors shall not be liable for
monetary damages for breach of the directors' fiduciary duty of care to the
Registrant and its stockholders. This provision in the Certificate does not
eliminate the duty of care, and in appropriate circumstances equitable remedies
such as injunctive or other forms of non-monetary relief will remain available
under Delaware law. In addition, each director will continue to be subject to
liability for breach of the director's duty of loyalty to the Registrant for
acts or omissions not in good faith or involving intentional misconduct, for
knowing violations of law, for actions leading to improper personal benefit to
the director, and for payment of dividends or approval of stock repurchases or
redemptions that are unlawful under Delaware law. The provision also does not
affect a director's responsibilities under any other law, such as the federal
securities laws or state or federal environmental laws. The Certificate further
provides that the Registrant be authorized
II-1
<PAGE> 3
to indemnify its directors and officers to the fullest extent permitted by law
through the Bylaws, agreement, vote of stockholders or disinterested directors,
or otherwise.
The Registrant intends to obtain directors' and officers' liability
insurance in connection with this Offering.
In addition, the Registrant has entered or, concurrently with this
Offering, will enter, into agreements to indemnify its directors and certain of
its officers in addition to the indemnification provided for in the Certificate
and Bylaws. These agreements will, among other things, indemnify the
Registrant's directors and certain of its officers for certain expenses
(including attorneys fees), judgments, fines and settlement amounts incurred by
such person in any action or proceeding, including any action by or in the right
of the Registrant, on account of services by that person as a director or
officer of the Registrant or as a director or officer of any subsidiary of the
Registrant, or as a director or officer of any other company or enterprise that
the person provides services to at the request of the Registrant.
The Underwriting Agreement (Exhibit 1.1 hereto) provides for
indemnification by the Underwriters of the Registrant, its officers and
directors and by the Registrant of the Underwriter, for certain liabilities
arising under the Securities Act or otherwise.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since December 1996, the Registrant has sold and issued the following
unregistered securities:
1. In December 1996, the Registrant granted nonstatutory stock options
to certain employees of the Registrant under its 1996 Stock Incentive Plan
covering an aggregate of 879,000 shares of the Registrant's Class B Common
Stock, at a weighted average exercise price of $5.00 per share. These
options vest over a three year period commencing two years following the
date of grant. All of such options were issued in consideration for
employment services rendered to the Registrant. None of the optionees paid
any cash consideration for these options. The sale and issue of these
securities was deemed to be exempt from registration under the Securities
Act by virtue of Rule 701 promulgated thereunder in that they were offered
and sold either pursuant to a written compensatory benefit plan or pursuant
to written contract relating to compensation, as provided by Rule 701.
2. In December 1996, the Registrant effected a reincorporation in
Delaware which included a recapitalization in which two classes of Common
Stock were authorized, and each share of the Registrant's no par Common
Stock was exchanged for 8,005 shares of Common Stock, par value $.0001 per
share. Such issuance was exempt from registration under Section 2(3) of the
Securities Act on the basis that such transaction did not involve a "sale"
of securities.
There were no underwriters, brokers or finders employed in connection with
any of the transactions set forth above.
II-2
<PAGE> 4
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
The following Exhibits are attached hereto and incorporated herein by
reference.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement.
3.1 Certificate of Incorporation of the Registrant as filed with the Delaware Secretary
of State on December 19, 1996.**
3.2 Certificate of Merger of the Registrant as filed with the Delaware Secretary of
State on December 19, 1996.**
3.3 Bylaws of the Registrant.**
4.1 Specimen certificate representing shares of Common Stock of the Registrant.*
4.2 1996 Stock Incentive Plan.**
4.3 Form of Notice of Grant of Stock Option and related Stock Option Agreement under
1996 Stock Incentive Plan.
5.1 Form of Opinion of Brobeck, Phleger & Harrison LLP.
10.1 Form of Indemnification Agreement.**
10.2 Real Property lease, dated October 9, 1996, by and between Thomas M. Zapara and
Violet J. Zapara, Trustees of the Zapara Family Trust U/D/T dated December 7, 1995
and Registrant, a wholly owned subsidiary of Odetics, Inc.*
10.3 Form of Separation and Distribution Agreement between the Registrant and Odetics.**
10.4 Form of Tax Allocation Agreement between the Registrant and Odetics.**
10.5 Form of Services Agreement between the Registrant and Odetics.**
10.6 Form of Value Added Reseller Agreement.**
10.7 Form of International Value Added Reseller Agreement.**
10.8 Technical Support Agreement dated May 6, 1996, between Technology Service Solutions
and Odetics, Incorporated, as amended May 7, 1996.+
10.9 Tape Library OEM Purchase Agreement dated August 28, 1996, between Quantum
Corporation and Registrant.+
10.10 Veritas Software License Agreement, dated November 8, 1996, between Veritas Software
Corporation and Registrant.+
10.11 Agreement dated December 18, 1995, between Hewlett-Packard GmbH Local Products
Organization and Registrant.+
10.12 Basic Order Agreement dated April 15, 1993, between Digital Equipment Corporation
and Odetics, Inc. and Registrant, as amended January 11, 1994, March 25, 1994,
October 19, 1994, October 27, 1994 and January 12, 1995.+
10.13 Basic Ordering Agreement dated September 14, 1995 between EMC(2) Corporation and
Registrant.+
10.14 Form of Promissory Note between the Registrant and Odetics.
10.15 Form of Odetics Associate Agreement.
11.1 Statement Regarding Computation of Earnings Per Share.**
23.1 Consent of Independent Auditors.**
23.2 Consent of Brobeck, Phleger & Harrison LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (contained on Page II-5).
27.1 Financial Data Schedules.**
</TABLE>
- ---------------
* to be filed by amendment
** previously filed
+ Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
II-3
<PAGE> 5
+ Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
(b) Financial Statement Schedules
<TABLE>
<CAPTION>
SCHEDULE
- ------------
<S> <C>
Schedule II Valuation and Qualifying Accounts
</TABLE>
Schedules not listed above have been omitted because the information
required to be set forth therein is not applicable or is shown in the financial
statements or notes thereto.
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes to provide the Underwriters at the closing
specified in the Underwriting Agreements certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted as to directors, officers and controlling persons of
the Registrant pursuant to the provisions described in Item 14, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus as filed as
part of the registration statement in reliance upon Rule 430A and contained
in the form of prospectus filed by the Registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of the registration statement as of the time it was declared
effective;
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes to provide the underwriters at
the closing as specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Anaheim, State of California, on the 17th day of
January, 1997.
ATL PRODUCTS, INC.
By: /s/ KEVIN C. DALY, Ph.D.
--------------------------------------
Kevin C. Daly, Ph.D.
Chief Executive Officer, President
and Chairman of the Board
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Kevin C. Daly, Ph.D. and Gregory A. Miner,
and each of them, his true and lawful attorney-in-fact and agent, each with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments to this
Registration Statement, or any related registration statement filed pursuant to
Rule 462(f) under the Securities Exchange Act of 1934, as amended, with exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby, ratifying and
confirming all that each of said attorneys-in-fact and agents, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1933, this
Amendment No. 1 to the Registration Statement on Form S-1 has been signed by the
following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------- --------------------------------- ------------------
<S> <C> <C>
/s/ KEVIN C. DALY, Ph.D. Chief Executive Officer, January 17, 1997
- --------------------------------- President and Chairman of the
Kevin C. Daly, Ph.D. Board (principle executive officer)
/s/ JOEL SLUTZKY Director January 17, 1997
- ---------------------------------
Joel Slutzky
/s/ CRANDALL GUDMUNDSON Director January 17, 1997
- --------------------------------
Crandall Gudmundson
/s/ GREGORY A. MINER Chief Financial Officer January 17, 1997
- -------------------------------- (principal financial and accounting
Gregory A. Miner officer)
</TABLE>
II-5
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ --------------------------------------------------------------------------- ------------
<S> <C> <C>
1.1 Form of Underwriting Agreement.............................................
3.1 Certificate of Incorporation of the Registrant as filed with the Delaware
Secretary of State on December 19, 1996**..................................
3.2 Certificate of Merger of the Registrant as filed with the Delaware
Secretary of State on December 19, 1996**..................................
3.3 Bylaws of the Registrant**.................................................
4.1 Specimen certificate representing shares of Common Stock of the
Registrant*................................................................
4.2 1996 Stock Incentive Plan**................................................
4.3 Form of Notice of Grant of Stock Option and related Stock Option Agreement
under 1996 Stock Incentive Plan............................................
5.1 Form of Opinion of Brobeck, Phleger & Harrison LLP.........................
10.1 Form of Indemnification Agreement**........................................
10.2 Real Property lease, dated October 9, 1996, by and between Thomas M. Zapara
and Violet J. Zapara, Trustees of the Zapara Family Trust U/D/T dated
December 7, 1995 and Registrant, a wholly owned subsidiary of Odetics,
Inc*.......................................................................
10.3 Form of Separation and Distribution Agreement between the Registrant and
Odetics**..................................................................
10.4 Form of Tax Allocation Agreement between the Registrant and Odetics**......
10.5 Form of Services Agreement between the Registrant and Odetics**............
10.6 Form of Value Added Reseller Agreement**...................................
10.7 Form of International Value Added Reseller Agreement**.....................
10.8 Technical Support Agreement dated May 6, 1996, between Technology Service
Solutions and Odetics, Incorporated, as amended May 7, 1996+...............
10.9 Tape Library OEM Purchase Agreement dated August 28, 1996, between Quantum
Corporation and Registrant+................................................
10.10 Veritas Software License Agreement, dated November 8, 1996, between Veritas
Software Corporation and Registrant+.......................................
10.11 Agreement dated December 18, 1995, between Hewlett-Packard GmbH Local
Products Organization and Registrant+......................................
10.12 Basic Order Agreement dated April 15, 1993, between Digital Equipment
Corporation and Odetics, Inc. and Registrant, as amended January 11, 1994,
March 25, 1994, October 19, 1994, October 27, 1994 and January 12, 1995+...
10.13 Basic Ordering Agreement dated September 14, 1995 between EMC(2)
Corporation and Registrant+................................................
10.14 Form of Promissory Note between the Registrant and Odetics.................
10.15 Form of Odetics Associate Agreement........................................
11.1 Statement Regarding Computation of Earnings Per Share**....................
23.1 Consent of Independent Auditors**..........................................
23.2 Consent of Brobeck, Phleger & Harrison LLP (contained in Exhibit 5.1)......
24.1 Power of Attorney (contained on Page II-5).................................
27.1 Financial Data Schedules**.................................................
</TABLE>
- ---------------
* to be filed by amendment
** previously filed
+ Confidential treatment is being sought with respect to certain portions of
this agreement. Such portions have been omitted from this filing and have
been filed separately with the Securities and Exchange Commission.
<PAGE> 1
EXHIBIT 1.1
[1,650,000] Shares
ATL Products, Inc.
Class A Common Stock
UNDERWRITING AGREEMENT
----------------------
, 1997
--------------
MONTGOMERY SECURITIES
CRUTTENDEN ROTH INCORPORATED
As Representatives of the several Underwriters
600 Montgomery Street
San Francisco, California 94111
Ladies and Gentlemen:
SECTION 1
INTRODUCTORY
------------
ATL Products, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell [1,650,000] shares of its authorized but unissued Class A
Common Stock, par value $.0001 per share (the "Class A Common Stock"), to the
several underwriters named in Schedule A annexed hereto (the "Underwriters"),
for whom you are acting as Representatives. Said aggregate of [1,650,000]
shares are herein called the "Firm Common Shares." In addition, the Company
proposes to grant to the Underwriters an option to purchase up to [245,000]
additional shares of Class A Common Stock (the "Optional Common Shares"), as
provided in Section 5 hereof. The Firm Common Shares and, to the extent such
option is exercised, the Optional Common Shares are hereinafter collectively
referred to as the "Common Shares." The shares of Class A Common Stock and
Class B Common Stock, par value $.0001 per share (the "Class B Common Stock"),
of the Company are hereinafter referred to as the "Common Stock."
You have advised the Company that the Underwriters propose to make a
public offering of their respective portions of the Common Shares on the
effective date of the registration statement hereinafter referred to, or as
soon thereafter as in your judgment is advisable.
The Company and the Parent hereby confirm their respective agreements
with respect to the purchase of the Common Shares by the Underwriters as
follows:
<PAGE> 2
SECTION 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
---------------------------------------------
AND THE PARENT
--------------
The Company and the Parent, jointly and severally, represent and
warrant to the several Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-[.]) with
respect to the Common Shares has been prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"),
and the rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, and has been filed with
the Commission. The Company has prepared and has filed or proposes to file
prior to the effective date of such registration statement an amendment or
amendments to such registration statement, which amendment or amendments have
been or will be similarly prepared. There have been delivered to you two
signed copies of such registration statement and amendments, together with two
copies of each exhibit filed therewith. Conformed copies of such registration
statement and amendments (but without exhibits) and of the related preliminary
prospectus have been delivered to you in such reasonable quantities as you have
requested for each of the Underwriters. The Company will next file with the
Commission one of the following: (i) prior to effectiveness of such
registration statement, a further amendment thereto, including the form of
final prospectus, or (ii) a final prospectus in accordance with Rules 430A and
424(b) of the Rules and Regulations. As filed, such amendment and form of
final prospectus, or such final prospectus, shall include all Rule 430A
Information and, except to the extent that you shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to you
prior to the date and time that this Agreement was executed and delivered by
the parties hereto, or, to the extent not completed at such date and time,
shall contain only such specific additional information and other changes
(beyond that contained in the latest preliminary prospectus) as the Company
shall have previously advised you in writing would be included or made therein.
The term "Registration Statement" as used in this Agreement shall mean
such registration statement at the time such registration statement becomes
effective and, in the event any post-effective amendment thereto becomes
effective prior to the First Closing Date (as hereinafter defined), shall also
mean such registration statement as so amended; provided, however, that such
term shall also include (i) all Rule 430A Information deemed to be included in
such registration statement at the time such registration statement becomes
effective as provided by Rule 430A of the Rules and Regulations and (ii) a
registration statement, if any, filed pursuant to Rule 462(b) of the Rules and
Regulations relating to the Common Shares. The term "Preliminary Prospectus"
shall mean any preliminary prospectus referred to in the preceding paragraph
and any preliminary prospectus included in the Registration Statement at the
time it becomes effective that omits Rule 430A Information. The term
"Prospectus" as used in this Agreement shall mean the prospectus relating to
the Common Shares in the form in which it is first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or, if no filing pursuant
to Rule 424(b) of the Rules and Regulations is required, shall mean the form of
final prospectus included in the Registration Statement at the time such
registration statement becomes effective. The term "Rule 430A Information"
means information with respect to the Common Shares and the offering thereof
permitted to be omitted from the Registration Statement when it becomes
effective pursuant to Rule 430A of the Rules and Regulations.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements of the
Act and the Rules and Regulations and, as of its date, has not included any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and at the time the Registration
Statement becomes effective, and at all times subsequent thereto up to and
including each Closing Date hereinafter mentioned, the Registration Statement
and the Prospectus, and any amendments or supplements thereto, will contain all
material statements and information required to be included therein by the Act
and the Rules and Regulations and will in all material respects conform to the
requirements of the Act and the Rules and Regulations, and neither the
Registration Statement nor the Prospectus, nor any amendment or supplement
thereto, will include any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, no representation or
warranty contained in this subsection 2(b) shall be applicable to information
contained in or omitted from any Preliminary Prospectus, the Registration
Statement, the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of any Underwriter specifically for use in the preparation thereof.
-2-
<PAGE> 3
(c) The Company does not own or control, directly or indirectly,
any corporation, association or other entity, other than the Company's wholly
owned subsidiar(ies), . [ ] (collectively, the "Subsidiaries"). The
Company and each Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation, with full power and authority (corporate and other) to own and
lease its properties and conduct its business as described in the Prospectus;
the Company and each Subsidiary is in possession of and operating in compliance
with all authorizations, licenses, permits, consents, certificates and orders
material to the conduct of its business, all of which are valid and in full
force and effect; the Company and each Subsidiary is duly qualified to do
business and in good standing as a foreign corporation in each jurisdiction in
which the ownership or leasing of properties or the conduct of its business
requires such qualification, except for jurisdictions in which the failure to
so qualify would not have a material adverse effect upon the Company and the
Subsidiaries taken as a whole; and no proceeding has been instituted in any
such jurisdiction, revoking, limiting or curtailing, or seeking to revoke,
limit or curtail, such power and authority or qualification. The Company owns
all outstanding shares of capital stock of each Subsidiary, free and clear of
any claim, lien or encumbrance of any kind.
(d) The Company has an authorized and outstanding capital stock as
set forth under the heading "Capitalization" in the Prospectus; the issued and
outstanding shares of Common Stock have been, and the issued and outstanding
shares of Common Stock immediately prior to Closing will be duly authorized and
validly issued, fully paid and nonassessable, issued in compliance with all
federal and state securities laws, not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities,
and in conformance with the description thereof contained in the Prospectus.
Prior to the Offering, all outstanding shares of Common Stock of the Company
are owned by the Parent. Except as disclosed in the Prospectus and the
financial statements of the Company, and the related notes thereto, included in
the Prospectus, the Company has, and immediately prior to the Closing will
have, no outstanding options to purchase, or any preemptive rights or other
rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, convertible securities or
obligations. The description of the Company's stock option, stock bonus and
other stock plans or arrangements, and the options or other rights granted
thereunder, set forth in the Prospectus accurately and fairly presents the
information required to be shown with respect to such plans, arrangements,
options and rights.
(e) The Common Shares to be sold by the Company have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable, and will conform to the description thereof contained in or
incorporated by reference in the Prospectus. No preemptive rights or other
rights to subscribe for or purchase exist with respect to the issuance and sale
of the Common Shares by the Company pursuant to this Agreement. No stockholder
of the Company has any right which has not been waived to require the Company
to register the sale of any shares owned by such stockholder under the Act in
the public offering contemplated by this Agreement. No further approval or
authority of the stockholder or the Board of Directors of the Company will be
required for the issuance and sale of the Common Shares to be sold by the
Company as contemplated herein.
(f) The Class A Common Stock has been approved for quotation on
the Nasdaq National Market, subject to official notice of issuance.
(g) The Company and the Parent each has full legal right, power
and authority to enter into this Agreement and to perform the transactions
contemplated hereby. This Agreement has been duly authorized, executed and
delivered by the Company and the Parent and constitutes a valid and binding
obligation of each of the Company and the Parent, enforceable in accordance
with its terms. The making and performance of this Agreement by the Company
and the Parent and the consummation of the transactions herein contemplated
will not violate any provisions of the certificate of incorporation or bylaws,
or other organizational documents, of the Company or the Parent, and will not
conflict with, result in the breach or violation of, or constitute, either by
itself or upon notice or the passage of time or both, a default under any
agreement, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which the Company or the Parent is a party or by
which the Company or the Parent or any of their respective properties may be
bound or affected, any statute or any authorization, judgment, decree, order,
rule or regulation of any court or any regulatory body, administrative agency
or other governmental body applicable to the Company or the Parent or any of
their respective properties. No consent, approval, authorization or other
order of any court, regulatory body, administrative agency or other
governmental body is required for the execution and delivery of this Agreement
or the consummation of the transactions contemplated by this Agreement, except
for compliance with the Act, the
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<PAGE> 4
Blue Sky laws applicable to the public offering of the Common Shares by the
several Underwriters and the clearance of such offering with the National
Association of Securities Dealers, Inc. (the "NASD").
(h) Ernst & Young LLP, who have expressed their opinion with
respect to the financial statements and schedules filed with the Commission as
a part of the Registration Statement and included in the Prospectus and in the
Registration Statement, are independent accountants to the Company as required
by the Act and the Rules and Regulations.
(i) The financial statements and schedules of the Company, and the
related notes thereto, included in the Registration Statement and the
Prospectus present fairly the financial position of the Company as of the
respective dates of such financial statements and schedules, and the results of
operations and changes in financial position of the Company for the respective
periods covered thereby. Such statements, schedules and related notes have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis as certified by the independent accountants named
in subsection 2(h). No other financial statements or schedules are required to
be included in the Registration Statement or incorporated by reference therein.
The selected financial data set forth in the Prospectus under the captions
"Capitalization" and "Selected Consolidated Financial Data" fairly present the
information set forth therein on the basis stated in the Registration
Statement. The Company has no long-term or short-term indebtedness other than
the promissory note in the amount of $[.] million payable to the Parent and
trade payables in the ordinary course of business.
(j) The Company maintains a system of internal accounting control
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management's general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences. The representations and warranties given by the Company and/or
its officers to independent public accountants for the purpose of supporting
the letters referred to in Section 8(c)(vi) are true and correct.
(k) Neither the Company nor any Subsidiary is (i) in violation or
default of any provision of its certificate of incorporation or bylaws, or
other organizational documents, or (ii) in breach of or default with respect to
any provision of any agreement, judgment, decree, order, mortgage, deed of
trust, lease, franchise, license, indenture, permit or other instrument to
which it is a party or by which it or any of its properties are bound, except
where a breach or default with respect to clause (ii) would not have a material
adverse effect on the condition (financial or otherwise), business or results
of operations of the Company and the Subsidiary taken as a whole; and there
does not exist any state of facts which constitutes an event of default on the
part of the Company or any Subsidiary as defined in such documents or which,
with notice or lapse of time or both, would constitute such an event of
default.
(l) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement or by the Rules and Regulations which have not been
accurately and completely described or filed as required. The contracts so
described in the Prospectus are in full force and effect on the date hereof;
and neither the Company nor any of its Subsidiaries nor, to the best knowledge
of the Company or the Parent (as the case may be), any other party is in breach
of or default under any of such contracts, except where a breach or default
would not have a material adverse effect on the condition (financial or
otherwise), business or results of operations of the Company and the Subsidiary
taken as a whole.
(m) Except as disclosed in the Prospectus, there are no legal or
governmental actions, suits or proceedings (including those related to
environmental or discrimination matters) pending, or to the best knowledge of
the Company or the Parent (as the case may be), threatened, as to which the
Company or any Subsidiary taken as a whole is or may be a party or of which
property owned or leased by the Company or any Subsidiary is or may be the
subject, which actions, suits or proceedings could reasonably be expected to,
individually or in the aggregate, prevent or adversely affect the transactions
contemplated by this Agreement or result in a material adverse change in the
condition (financial or otherwise), properties, business or results of
operations of the Company and the Subsidiary taken as a whole; and no labor
disturbance by the employees of the Company or any Subsidiary exists or is
imminent which could reasonably be expected to affect materially and adversely
such condition, properties, business or results of operations. Neither the
Company nor any Subsidiary is a party or subject to the provisions of
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<PAGE> 5
any material injunction, judgment, decree or order of any court, regulatory
body, administrative agency or other governmental body.
(n) The Company and its Subsidiaries have good and marketable
title to all the properties and assets reflected as owned in the financial
statements hereinabove described (or elsewhere in the Prospectus), subject to
no lien, mortgage, pledge, charge or encumbrance of any kind except (i) those,
if any, reflected in such financial statements (or elsewhere in the
Prospectus), or (ii) those which are not material in amount and do not
adversely affect the use made and proposed to be made of such property by the
Company or its Subsidiary, as the case may be. The Company and each Subsidiary
holds its leased properties under valid and binding leases, with such
exceptions as are not materially significant in relation to the business of the
Company and the Subsidiaries, taken as a whole. Except as disclosed in the
Prospectus, the Company and each Subsidiary owns or leases all such properties
as are necessary to its operations as now conducted or as proposed to be
conducted.
(o) The Company and each Subsidiary is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA") and with all requirements
prescribed by any and all statutes, orders, government rules and regulations
including the Internal Revenue Code of 1986, as amended, currently in effect
with respect to employee benefit plans; no "reportable event" (as defined in
ERISA) nor any event described in Sections 4062, 4063 or 4041(c) of ERISA has
occurred for which the Company would have any liability; neither the Company
nor any Subsidiary has incurred and does not expect to incur material liability
under (i) Title IV of ERISA other than premium payments to the Pension Benefit
Guaranty Corporation arising in the ordinary course or (ii) Section 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations and
published interpretations thereunder (the "Code"); and each "pension plan" for
which the Company or any Subsidiary would have any material liability that is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter from the Internal Revenue Service and nothing
has occurred, whether by action or by failure to act, which would cause the
loss of such determination letter. Neither the Company nor any Subsidiary has
incurred any material liability or penalty under Sections 4975 through 4980 of
the Code or under Title I of ERISA. All contributions, premiums or other
payments (including all employer contributions and employee salary reduction
contributions) which are due have been paid to each "pension plan" and all
contributions, premiums or other payments for any period ending on or before
the Closing Date which are not yet due have been paid to each such "pension
plan" or accrued in accordance with the past custom and practice of the
Company. No suit, action or other litigation (excluding claims for benefits
incurred in the ordinary course of any plan activities) has been brought, or to
the knowledge of the Company or the Parent is threatened, against or with
respect to any employee benefit plan of the Company or any Subsidiary. All
"pension plans" and other employee-related plans of the Company and each
Subsidiary are fully funded.
(p) Since the respective dates as of which information is given in
the Registration Statement and Prospectus: (i) neither the Company nor any
Subsidiary has incurred any material liabilities or obligations, indirect,
direct or contingent, or entered into any material verbal or written agreement
or other transaction in any such case which is not in the ordinary course of
business; (ii) neither the Company nor any Subsidiary has sustained any
material loss or interference with its business or properties from fire, flood,
windstorm, accident or other calamity, whether or not covered by insurance;
(iii) except as specifically contemplated by the Prospectus, the Company has
not paid or declared any dividends or other distributions with respect to its
capital stock; (iv) neither the Company nor any Subsidiary is in default in the
payment of principal or interest on any outstanding debt obligations; (v) there
has not been any change in the capital stock or indebtedness material to the
Company and the Subsidiaries taken as a whole (other than in the ordinary
course of business); and (vi) there has not been any material adverse change in
the condition (financial or otherwise), business, properties or results of
operations of the Company or any Subsidiary.
(q) The Company has sufficient trademarks, trade names, patent
rights, mask works, copyrights, licenses, approvals and governmental
authorizations to conduct its business as now conducted; and, except as
disclosed in the Prospectus, neither the Company nor the Parent has any
knowledge of any material infringement by the Company or any Subsidiary of any
trademark, trade name rights, patent rights, mask works, copyrights, licenses,
trade secret or other similar rights of others, and there is no claim being
made against the Company or any Subsidiary regarding trademark, trade name,
patent, mask work, copyright, license, trade secret or other infringement which
could have a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company and the Subsidiaries, taken as
a whole.
-5-
<PAGE> 6
(r) The Company and each Subsidiary is conducting business in
compliance with all applicable laws, rules and regulations of the jurisdictions
in which it is conducting business, including, without limitation, all
applicable local, state and federal environmental laws and regulations; except
where failure to be so in compliance would not materially adversely affect the
condition (financial or otherwise), business or results of operations of the
Company and the Subsidiaries, taken as a whole.
(s) All necessary federal, state and foreign income and franchise
tax returns have been filed by the Company and each Subsidiary, except where
the failure to file would not have a material adverse effect on the condition
(financial or otherwise), business or results of operations of the Company and
the Subsidiaries, taken as a whole, and all such tax returns are complete and
correct in all material respects, and all taxes shown as due thereon have been
paid. Neither the Company nor the Parent has any knowledge of any tax
deficiency which has been or might be asserted or threatened against the
Company or any Subsidiary which could reasonably be expected to materially and
adversely affect the business, operations or properties of the Company and the
Subsidiaries taken as a whole.
(t) The Company is not, and upon the closing of the offering
contemplated hereby will not be, an "investment company" or a company
"controlled by" an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
(u) Neither the Company nor the Parent has distributed and will
not distribute prior to the First Closing Date any offering material in
connection with the offering and sale of the Common Shares other than the
Preliminary Prospectus, the Prospectus and the Registration Statement.
(v) The Company and Subsidiaries maintain insurance of the types
and in the amounts generally deemed adequate for its business, including, but
not limited to, insurance covering real and personal property owned or leased
by the Company or Subsidiaries against theft, damage, destruction, acts of
vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(w) Neither the Company, the Parent nor, to the best knowledge of
the Company and the Parent, any of their respective employees or agents has at
any time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or any jurisdiction thereof.
(x) Neither the Company nor the Parent has taken, and neither will
take, directly or indirectly, any action designed to or that might be
reasonably expected to cause or result in stabilization or manipulation of the
price of the Class A Common Stock to facilitate the sale or resale of the
Common Shares.
(y) The Company and the Parent have caused each of its respective
executive officers and directors as set forth in the Prospectus to furnish to
the Representatives an agreement in the form attached hereto, pursuant to which
each such party has agreed that during the period of 180 days after the first
date that any of the Common Shares are released by you for sale to the public,
without the prior written consent of Montgomery Securities, which consent may
be withheld at the sole discretion of Montgomery Securities, such party will
not directly or indirectly offer, sell, contract to sell or otherwise dispose
of any shares of the Company's Common Stock or securities convertible into or
exchangeable for, or any rights to purchase or acquire, the Company's Common
Stock (including without limitation, Common Stock of the Company which may be
deemed to be beneficially owned in accordance with the rules and regulations of
the Commission); provided, however, that bona fide gift transactions may be
permitted if the donee agrees in writing, prior to the consummation of the
gift, to be bound by the provisions applicable to the share in the hands of the
donor.
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<PAGE> 7
SECTION 3
REPRESENTATIONS, WARRANTIES AND COVENANTS
-----------------------------------------
OF THE PARENT
-------------
The Parent represents and warrants to, and agrees with, the several
Underwriters that:
(a) To date, the Parent has filed any and all filings required by
the Act, the Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), and the Rules and Regulations and such filings have conformed in all
material respects to the requirements of the Act, the Exchange Act and the
Rules and Regulations, as the case may be, and have not included any untrue
statement or a material fact or omitted to state a material fact necessary to
make the statements therein not misleading in light of the circumstances under
which they were made.
(b) The Parent agrees with the Underwriters not to offer to sell,
sell or contract to sell or otherwise dispose of any shares of Common Stock or
securities convertible into or exchangeable for any shares of Common Stock,
for a period of 180 days after the first date that any of the Common Shares are
released by you for sale to the public, without the prior written consent of
Montgomery Securities, which consent may be withheld at the sole discretion of
Montgomery Securities.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE UNDERWRITERS
--------------------------------------------------
The Representatives, on behalf of several Underwriters, represent and
warrant to the Company and to the Parent that the information set forth (i) on
the cover page of the Prospectus with respect to price, underwriting discounts
and commissions and terms of offering and (ii) under "Underwriting" in the
Prospectus was furnished to the Company by and on behalf of the Underwriters
for use in connection with the preparation of the Registration Statement and
the Prospectus and is correct in all material respects. The Representatives
represent and warrant that, except as expressly provided herein, they have been
authorized by each of the other Underwriters as the Representatives to enter
into this Agreement on its behalf and to act for it in the manner herein
provided.
SECTION 5
PURCHASE, SALE AND DELIVERY OF COMMON SHARES
--------------------------------------------
On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to the Underwriters [1,650,000] Firm Common
Shares and the Underwriters agree, severally and not jointly, to purchase from
the Company the number of Firm Common Shares described below. The purchase
price per share to be paid by the several Underwriters to the Company shall be
$[.] per share.
The obligation of each Underwriter to the Company shall be to purchase
from the Company that number of full shares which (as nearly as practicable, as
determined by you) bears to [1,650,000] the same proportion as the number of
shares set forth opposite the name of such Underwriter in Schedule A hereto
bears to the total number of Firm Common Shares.
Delivery of certificates for the Firm Common Shares to be purchased by
the Underwriters and payment therefor shall be made at the offices of
Montgomery Securities, 600 Montgomery Street, San Francisco, California (or
such other place as may be agreed upon by the Company and the Underwriters) at
such time and date, not later than the third (or, if the Firm Common Shares are
priced as contemplated by Rule 15c6-1(c) of the Exchange Act, after 4:30 p.m.
Washington, D.C. time, the fourth) full business day following the first date
that any of the Common Shares are released by you for sale to the public, as
you shall designate by at least 48 hours prior notice to the Company (or at
such other time and date, not later than one week after such third or fourth,
as the case may be, full business day as may be agreed upon by the Company and
the Representatives) (the "First Closing Date"); provided, however, that if the
Prospectus is at any time prior to the First Closing Date recirculated to the
public,
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<PAGE> 8
the First Closing Date shall occur upon the later of the third or fourth, as
the case may be, full business day following the first date that any of the
Common Shares are released by you for sale to the public or the date that is 48
hours after the date that the Prospectus has been so recirculated.
Delivery of certificates for the Firm Common Shares shall be made by
or on behalf of the Company to you, for the respective accounts of the
Underwriters with respect to the Firm Common Shares to be sold by the Company
against payment by you, for the accounts of the several Underwriters, of the
purchase price therefor by wire transfer of federal funds to an account
designated in writing by the Company. The certificates for the Firm Common
Shares shall be registered in such names and denominations as you shall have
requested at least two full business days prior to the First Closing Date, and
shall be made available for checking and packaging on the business day
preceding the First Closing Date at a location in New York, New York, as may be
designated by you. Time shall be of the essence, and delivery at the time and
place specified in this Agreement is a further condition to the obligations of
the Underwriters.
In addition, on the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Company hereby grants an option to the several Underwriters to
purchase up to [245,000] Optional Common Shares; in each case at the purchase
price per share to be paid for the Firm Common Shares, for use solely in
covering any over-allotments made by you for the account of the Underwriters in
the sale and distribution of the Firm Common Shares. The options granted
hereunder may be exercised at any time (but not more than once) within 30 days
after the first date that any of the Common Shares are released by you for sale
to the public, upon notice by you to the Company setting forth the aggregate
number of Optional Common Shares as to which the Underwriters are exercising
the option, the names and denominations in which the certificates for such
shares are to be registered and the time and place at which such certificates
will be delivered. Such time of delivery (which may not be earlier than the
First Closing Date), being herein referred to as the "Second Closing Date,"
shall be determined by you, but if at any time other than the First Closing
Date shall not be earlier than three full business days after delivery of such
notice of exercise. The number of Optional Common Shares to be purchased by
each Underwriter shall be determined by multiplying the aggregate number of
Optional Common Shares to be sold by the Company pursuant to such notice of
exercise by a fraction, the numerator of which is the number of Firm Common
Shares to be purchased by such Underwriter as set forth opposite its name in
Schedule A and the denominator of which is [1,650,000] (subject to such
adjustments to eliminate any fractional share purchases as you in your
discretion may make). Certificates for the Optional Common Shares will be made
available for checking and packaging on the business day preceding the Second
Closing Date at a location in New York, New York, as may be designated by you.
The manner of payment for and delivery of the Optional Common Shares shall be
the same as for the Firm Common Shares purchased from the Company as specified
in the two preceding paragraphs. At any time before lapse of the options, you
may cancel both such options by giving written notice of such cancellation to
the Company. If the options are canceled or expire unexercised in whole or in
part, the Company will deregister under the Act the number of Optional Common
Shares as to which the options has not been exercised.
You have advised the Company that each Underwriter has authorized you
to accept delivery of its Common Shares, to make payment and to receipt
therefor. You may (but shall not be obligated to) make payment for any Common
Shares to be purchased by any Underwriter whose funds shall not have been
received by you by the First Closing Date or the Second Closing Date, as the
case may be, for the account of such Underwriter, but any such payment shall
not relieve such Underwriter from any of its obligations under this Agreement.
Subject to the terms and conditions hereof, the Underwriters propose
to make a public offering of their respective portions of the Common Shares as
soon after the effective date of the Registration Statement as in the judgment
of the Underwriters is advisable and at the public offering price set forth on
the cover page of and on the terms set forth in the Prospectus.
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<PAGE> 9
SECTION 6
COVENANTS OF THE COMPANY AND THE PARENT
---------------------------------------
The Company and the Parent each covenants and agrees that:
(a) The Company and the Parent will each use its best efforts to
cause the Registration Statement and any amendment thereof, if not effective at
the time and date that this Agreement is executed and delivered by the parties
hereto, to become effective. If the Registration Statement has become or
becomes effective pursuant to Rule 430A of the Rules and Regulations, or the
filing of the Prospectus is otherwise required under Rule 424(b) of the Rules
and Regulations, the Company will file the Prospectus, properly completed,
pursuant to the applicable paragraph of Rule 424(b) of the Rules and
Regulations within the time period prescribed and will provide evidence
satisfactory to you of such timely filing. The Company will promptly advise
you in writing (i) of the receipt of any comments of the Commission, (ii) of
any request of the Commission for amendment of or supplement to the
Registration Statement (either before or after it becomes effective), any
Preliminary Prospectus or the Prospectus or for additional information, (iii)
when the Registration Statement shall have become effective and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of the institution of any proceedings for that
purpose. If the Commission shall enter any such stop order at any time, the
Company will use its best efforts to obtain the lifting of such order at the
earliest possible moment. The Company will not file any amendment or
supplement to the Registration Statement (either before or after it becomes
effective), any Preliminary Prospectus or the Prospectus of which you have not
been furnished with a copy a reasonable time prior to such filing or to which
you reasonably object or which is not in compliance with the Act and the Rules
and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon your request, a registration statement pursuant to Rule 462(b) of
the Rules and Regulations related to the Common Shares and any amendments or
supplements to the Registration Statement or the Prospectus which in your
judgment may be necessary or advisable to enable the several Underwriters to
continue the distribution of the Common Shares and will use its best efforts to
cause the same to become effective as promptly as possible. The Company will
fully and completely comply with the provisions of Rule 430A of the Rules and
Regulations with respect to information omitted from the Registration Statement
in reliance upon such Rule.
(c) The Company will immediately notify you in writing if, at any
time prior to the earliest of (i) the Second Closing Date on which all
remaining Optional Common Shares are purchased, (ii) the cancellation of the
options to purchase the Optional Common Shares as provided herein and (iii) the
expiration of the options to purchase the Optional Common Shares as provided
herein, any representation or warranty of the Company set forth herein shall
not be true and accurate in all material respects or, without limiting the
foregoing, if there shall have been any material adverse change, or a
development involving a material adverse change, in the condition (financial or
otherwise), properties, business or results of operations of the Company.
(d) If at any time within the nine-month period referred to in
Section 10(a)(3) of the Act during which a prospectus relating to the Common
Shares is required to be delivered under the Act any event occurs, as a result
of which the Prospectus, including any amendments or supplements, would include
an untrue statement of a material fact, or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or if it is necessary at any time to amend the Prospectus,
including any amendments or supplements, to comply with the Act or the Rules
and Regulations, the Company will promptly advise you thereof and will promptly
prepare and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment or
supplement which will effect such compliance and will use its best efforts to
cause the same to become effective as soon as possible; and, in case any
Underwriter is required to deliver a prospectus after such nine-month period,
the Company upon request, but at the expense of such Underwriter, will promptly
prepare such amendment or amendments to the Registration Statement and such
Prospectus or Prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act.
(e) As soon as practicable, but not later than 45 days after the
end of the first quarter ending after one year following the "effective date of
the Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of Section
11(a) of the Act.
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<PAGE> 10
(f) During such period as a prospectus is required by law to be
delivered in connection with sales by an Underwriter or dealer, the Company, at
its expense, but only for the nine-month period referred to in Section 10(a)
(3) of the Act, will furnish to you or mail to your order copies of the
Registration Statement, the Prospectus, the Preliminary Prospectus and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as you may request, for the purposes
contemplated by the Act.
(g) The Company shall cooperate with you and your counsel in order
to qualify or register the Common Shares for sale under (or obtain exemptions
from the application of) the Blue Sky laws of such jurisdictions as you
designate, will comply with such laws and will continue such qualifications,
registrations and exemptions in effect so long as reasonably required for the
distribution of the Common Shares. The Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any such jurisdiction where it is not presently qualified or where
it would be subject to taxation as a foreign corporation. The Company will
advise you promptly of the suspension of the qualification or registration of
(or any such exemption relating to) the Common Shares for offering, sale or
trading in any jurisdiction or any initiation or threat of any proceeding for
any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company, with your cooperation,
will use its best efforts to obtain the withdrawal thereof.
(h) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon the request of the Representatives, to
each of the other Underwriters: (i) as soon as practicable after the end of
each fiscal year, copies of the Annual Report of the Company containing the
balance sheet of the Company as of the close of such fiscal year and statements
of income, stockholder's equity and cash flows for the year then ended and the
opinion thereon of the Company's independent public accountants; (ii) as soon
as practicable after the filing thereof, copies of each proxy statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q, Report on Form 8-K or other
report filed by the Company with the Commission, the NASD or any securities
exchange; and (iii) as soon as available, copies of any report or communication
of the Company mailed generally to holders of its Common Stock.
(i) During the period of 180 days after the first date that any of
the Common Shares are released by you for sale to the public, the Company will
not, without the prior written consent of Montgomery Securities (which consent
may be withheld at the sole discretion of Montgomery Securities), issue, offer,
sell, grant options to purchase or otherwise dispose of any of the Company's
equity securities or any other securities convertible into or exchangeable with
its Common Stock or other equity security, other than pursuant to the Company's
stock plans disclosed in the Prospectus or in connection with the Company's
acquisition of complementary technologies or businesses.
(j) The Company will apply the net proceeds of the sale of the
Common Shares sold by it substantially in accordance with its statements under
the caption "Use of Proceeds" in the Prospectus.
(k) The Company will use its best efforts to qualify or register
its Class A Common Stock for sale in non-issuer transactions under (or obtain
exemptions from the application of) the Blue Sky laws of the State of
California (and thereby permit market making transactions and secondary trading
in the Company's Class A Common Stock in California), will comply with such
Blue Sky laws and will continue such qualifications, registrations and
exemptions in effect for a period of five years after the date hereof.
(l) The Company will maintain a transfer agent and registrar for
its Class A Common Stock.
You, on behalf of the Underwriters, may, in your sole discretion,
waive in writing the performance by the Company of any one or more of the
foregoing covenants or extend the time for their performance.
SECTION 7
PAYMENT OF EXPENSES
-------------------
Whether or not the transactions contemplated hereunder are consummated
or this Agreement becomes effective or is terminated, the Company and, unless
otherwise paid by the Company, the Parent agree to pay in such proportions as
they may
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<PAGE> 11
agree upon among themselves all costs, fees and expenses incurred in connection
with the performance of their obligations hereunder and in connection with the
transactions contemplated hereby, including without limiting the generality of
the foregoing, (i) all expenses incident to the issuance and delivery of the
Common Shares (including all printing and engraving costs), (ii) all fees and
expenses of the registrar and transfer agent of the Class A Common Stock, (iii)
all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Common Shares to the Underwriters, (iv) all fees and
expenses of the Company's counsel and the Company's independent accountants,
(v) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement, each
Preliminary Prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein, any
registration statement filed pursuant to Rule 462(b) of the Rules and
Regulations related to the Common Shares, this Agreement, the Agreement Among
Underwriters, the Selected Dealers Agreement, the Underwriters' Questionnaire,
the Underwriters' Power of Attorney and the Blue Sky memorandum, (vi) all
filing fees, attorneys' fees and expenses incurred by the Company or the
Underwriters in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Common Shares for offer and sale under state Blue Sky and foreign securities
laws, (vii) all filing fees of the National Association of Securities Dealers,
Inc. and (viii) all other fees, costs and expenses referred to in Item 13 of
the Registration Statement. The Underwriters may deem the Company to be the
primary obligor with respect to all costs, fees and expenses to be paid by the
Company and by the Parent. Except as provided in this Section 7, Section 9 and
Section 11 hereof, the Underwriters shall pay all of their own expenses,
including the fees and disbursements of their counsel (excluding those relating
to qualification, registration or exemption under state Blue Sky and foreign
securities laws and the Blue Sky memorandum referred to above). This Section 7
shall not affect any agreements relating to the payment of expenses between the
Company and the Parent.
The Company and the Parent will pay (directly or by reimbursement) all
fees and expenses incident to the performance of their obligations under this
Agreement which are not otherwise specifically provided for herein, including
but not limited to any fees and expenses of counsel for the Parent.
SECTION 8
CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS
-------------------------------------------------
The obligations of the several Underwriters to purchase and pay for
the Firm Common Shares on the First Closing Date and the Optional Common Shares
on the Second Closing Date shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Parent herein
set forth as of the date hereof and as of the First Closing Date or the Second
Closing Date, as the case may be, to the accuracy of the statements of Company
officers and the Parent made pursuant to the provisions hereof, to the
performance by the Company and the Parent of their respective obligations
hereunder, and to the following additional conditions:
(a) The Registration Statement shall have become effective not
later than 5:00 p.m.(or, in the case of a registration statement filed pursuant
to Rule 462(b) of the Rules and Regulations relating to the Common Shares, not
later than 10:00 p.m.), Washington, D.C. Time, on the date of this Agreement,
or at such later time as shall have been consented to by you; if the filing of
the Prospectus, or any supplement thereto, is required pursuant to Rule 424(b)
of the Rules and Regulations, the Prospectus shall have been filed in the
manner and within the time period required by Rule 424(b) of the Rules and
Regulations; and prior to such Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending or,
to the knowledge of the Company, the Parent or you, shall be contemplated by
the Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement, or otherwise, shall have been
complied with to your satisfaction.
(b) You shall be satisfied that since the respective dates as of
which information is given in the Registration Statement and Prospectus, (i)
except as disclosed in the Prospectus, there shall not have been any change in
the capital stock or any material change in the indebtedness (other than in the
ordinary course of business) of the Company, (ii) except as set forth or
contemplated by the Registration Statement or the Prospectus, no material
verbal or written agreement or other transaction shall have been entered into
by the Company, which is not in the ordinary course of business, (iii) no loss
or damage (whether or not insured) to the property of the Company shall have
been sustained which materially and adversely affects the condition
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<PAGE> 12
(financial or otherwise), business or results of operations of the Company,
(iv) no legal or governmental action, suit or proceeding affecting the Company
which is material to the Company or which affects or could reasonably be
expected to affect the transactions contemplated by this Agreement shall have
been instituted or threatened and (v) there shall not have been any material
change in the condition (financial or otherwise), business, management or
results of operations of the Company which makes it impractical or inadvisable
in the reasonable judgments of the Representatives to proceed with the public
offering or purchase the Common Shares as contemplated hereby.
(c) There shall have been furnished to you on each Closing Date,
in form and substance satisfactory to you, except as otherwise expressly
provided below:
(i) An opinion of Brobeck, Phleger & Harrison,
counsel for the Company and the Parent, addressed to the Underwriters
and dated the First Closing Date or the Second Closing Date, as the
case may be, in the form attached as Exhibit I hereto.
(ii) Such opinion or opinions of Wilson Sonsini
Goodrich & Rosati, P.C., counsel for the Underwriters dated the First
Closing Date or the Second Closing Date, as the case may be, with
respect to the incorporation of the Company, the sufficiency of all
corporate proceedings and other legal matters relating to this
Agreement, the validity of the Common Shares, the Registration
Statement and the Prospectus and other related matters as you may
reasonably require, and the Company and the Parent shall have
furnished to such counsel such documents and shall have exhibited to
them such papers and records as they may reasonably request for the
purpose of enabling them to pass upon such matters. In connection
with such opinions, such counsel may rely on representations or
certificates of officers of the Company and governmental officials.
(iii) A certificate of the Company executed by the
Chairman of the Board or President and the chief financial or
accounting officer of the Company, dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
(1) The representations and warranties
of the Company set forth in Section 2 of this Agreement are
true and correct as of the date of this Agreement and as of
the First Closing Date or the Second Closing Date, as the case
may be, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied on or prior to such Closing Date;
(2) The Commission has not issued any
order preventing or suspending the use of the Prospectus or
any Preliminary Prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and to the best of the knowledge of the respective
signers, no proceedings for that purpose have been instituted
or are pending or contemplated under the Act;
(3) Each of the respective signers of
the certificate has carefully examined the Registration
Statement and the Prospectus; in his or her opinion and to the
best of his or her knowledge, the Registration Statement and
the Prospectus and any amendments or supplements thereto
contain all statements required to be stated therein regarding
the Company; and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto includes
any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading;
(4) Since the initial date on which the
Registration Statement was filed, no agreement, written or
oral, transaction or event has occurred which should have been
set forth in an amendment to the Registration Statement or in
a supplement to or amendment of any prospectus which has not
been disclosed in such a supplement or amendment;
(5) Since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, and except as disclosed in the Prospectus,
there has not been any material adverse change or a
development involving a material adverse change in the
condition (financial or otherwise),
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<PAGE> 13
business, properties, results of operations or management of
the Company; and there has been no legal or governmental
action, suit or proceeding is pending or, to such person's
knowledge, threatened against the Company which is material to
the Company, whether or not arising from transactions in the
ordinary course of business, or which could reasonably be
expected to adversely affect the transactions contemplated by
this Agreement; since such dates the Company has not entered
into any verbal or written agreement or other transaction
which is not in the ordinary course of business or incurred
any material liability or obligation, direct, contingent or
indirect which is not in the ordinary course of business, made
any change in its capital stock, made any material change in
its short-term debt or funded debt or repurchased or otherwise
acquired any of the Company's capital stock; and the Company
has not declared or paid any dividend, or made any other
distribution, upon its outstanding capital stock payable to
stockholders of record on a date prior to the First Closing
Date or Second Closing Date; and
(6) Since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, the Company has not sustained a material loss
or damage by strike, fire, flood, windstorm, accident or other
calamity (whether or not insured).
(iv) A certificate of the Parent executed
by the Chairman of the Board or President and the chief financial or
accounting officer of the Parent, dated the First Closing Date or the
Second Closing Date, as the case may be, to the effect that:
(1) The representations and warranties
of the Parent set forth in Section 2 of this Agreement are
true and correct as of the date of this Agreement and as of
the First Closing Date or the Second Closing Date, as the case
may be, and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied on or prior to such Closing Date;
(2) The Commission has not issued any
order preventing or suspending the use of the Prospectus or
any Preliminary Prospectus filed as a part of the Registration
Statement or any amendment thereto; no stop order suspending
the effectiveness of the Registration Statement has been
issued; and to the best of the knowledge of the respective
signers, no proceedings for that purpose have been instituted
or are pending or contemplated under the Act;
(3) Each of the respective signers of
the certificate has carefully examined the Registration
Statement and the Prospectus; in his or her opinion and to the
best of his or her knowledge, the Registration Statement and
the Prospectus and any amendments or supplements thereto
contain all statements required to be stated therein regarding
the Company; and neither the Registration Statement nor the
Prospectus nor any amendment or supplement thereto includes
any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading;
(4) Since the initial date on which the
Registration Statement was filed, no agreement, written or
oral, transaction or event has occurred which should have been
set forth in an amendment to the Registration Statement or in
a supplement to or amendment of any prospectus which has not
been disclosed in such a supplement or amendment;
(5) Since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, and except as disclosed in the Prospectus,
there has not been any material adverse change or a
development involving a material adverse change in the
condition (financial or otherwise), business, properties,
results of operations or management of the Company; and there
has been no legal or governmental action, suit or proceeding
is pending or, to such person's knowledge, threatened against
the Company which is material to the Company, whether or not
arising from transactions in the ordinary course of business,
or which could reasonably be expected to adversely affect the
transactions contemplated by this Agreement; since such dates
the Company has not entered into any verbal or written
agreement or other transaction which is not in the ordinary
course of business or incurred any material liability or
obligation, direct, contingent or indirect which is not in the
ordinary course of business, made any change in its capital
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<PAGE> 14
stock, made any material change in its short-term debt or
funded debt or repurchased or otherwise acquired any of the
Company's capital stock; and the Company has not declared or
paid any dividend, or made any other distribution, upon its
outstanding capital stock payable to stockholders of record on
a date prior to the First Closing Date or Second Closing Date;
and
(6) Since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, the Company has not sustained a material loss
or damage by strike, fire, flood, windstorm, accident or other
calamity (whether or not insured).
(v) On the date before this Agreement is executed
and also on the First Closing Date and the Second Closing Date, a
letter addressed to you from Ernst & Young LLP, independent
accountants, the first one to be dated the day before the date of this
Agreement, the second one to be dated the First Closing Date and the
third one (in the event of a Second Closing) to be dated the Second
Closing Date, in form and substance satisfactory to you.
(vi) On or before the First Closing Date, letters
from the Parent and each director and executive officer of the
Company, in form and substance satisfactory to you, confirming that
for a period of 180 days after the first date that any of the Common
Shares are released by you for sale to the public, such person or
entity will not directly or indirectly sell or offer to sell or
otherwise dispose of any shares of Common Stock or any right to
acquire any such shares without the prior written consent of
Montgomery Securities, which consent may be withheld at the sole
discretion of Montgomery Securities.
All such opinions, certificates, letters and documents shall be in
compliance with the provisions hereof only if they are satisfactory to you and
to Wilson Sonsini Goodrich & Rosati, P.C., counsel for the Underwriters. The
Company and Parent shall furnish you with such manually signed or conformed
copies of such opinions, certificates, letters and documents as you request.
Any certificate signed by any officer of the Company or Parent (as the case may
be) and delivered to the Underwriters or to counsel for the Underwriters shall
be deemed to be a representation and warranty by the Company or Parent (as the
case may be) to the Underwriters as to the statements made therein.
If any condition to the Underwriters' obligations hereunder to be
satisfied prior to or at the First Closing Date is not so satisfied, this
Agreement at your election will terminate upon notification by you to the
Company and the Parent without liability on the part of any Underwriter or the
Company or the Parent except for the expenses to be paid or reimbursed by the
Company and by the Parent pursuant to Sections 7 and 9 hereof and except to the
extent provided in Section 11 hereof.
SECTION 9
REIMBURSEMENT OF UNDERWRITERS' EXPENSES
---------------------------------------
Notwithstanding any other provisions hereof, if this Agreement shall
be terminated by you pursuant to Section 8, or if the sale to the Underwriters
of the Common Shares at the First Closing is not consummated because of any
refusal, inability or failure on the part of the Company or the Parent to
perform any agreement herein or to comply with any provision hereof, the
Company agrees to reimburse you and the other Underwriters upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by you and them
in connection with the proposed purchase and the sale of the Common Shares,
including but not limited to fees and disbursements of counsel, printing
expenses, travel expenses, postage, telegraph charges and telephone charges
relating directly to the offering contemplated by the Prospectus. Any such
termination shall be without liability of any party to any other party except
that the provisions of this Section, Section 7 and Section 11 shall at all
times be effective and shall apply.
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<PAGE> 15
SECTION 10
EFFECTIVENESS OF REGISTRATION STATEMENT
---------------------------------------
You, the Company and the Parent will use your, its and their best
efforts to cause the Registration Statement to become effective, to prevent the
issuance of any stop order suspending the effectiveness of the Registration
Statement and, if such stop order be issued, to obtain as soon as possible the
lifting thereof.
SECTION 11
INDEMNIFICATION
---------------
(a) The Company and the Parent, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of the Act against any losses,
claims, damages, liabilities or expenses, joint or several, to which such
Underwriter or such controlling person may become subject, under the Act, the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or other
federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state in any of
them a material fact required to be stated therein or necessary to make the
statements in any of them not misleading, or arise out of or are based in whole
or in part on any inaccuracy in the representations and warranties of the
Company or the Parent contained herein or any failure of the Company or the
Parent to perform their respective obligations hereunder or under law; and will
reimburse each Underwriter and each such controlling person for any legal and
other expenses as such expenses are reasonably incurred by such Underwriter or
such controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that (i) neither the Company nor the Parent will be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 4 hereof and (ii) with
respect to any untrue statement or omission or alleged untrue statement or
omission made in any Preliminary Prospectus, the indemnity agreement contained
in this subsection (a) shall not inure to the benefit of any Underwriter from
whom the person asserting any such loss, claim, damage or liability purchased
Common Shares to the extent that any such loss, claim, damage or liability of
such Underwriter results from the fact that a copy of the Prospectus was not
sent or given to such person at or prior to the written confirmation of the
sale of such Shares to such person as required by the Act, provided the untrue
statement or omission concerned has been corrected in the Prospectus, unless
such failure is the result of noncompliance by the Company with Section 6(e)
hereof. The Company and the Parent may agree, as among themselves and without
limiting the rights of the Underwriters under this Agreement, as to their
respective amounts of such liability for which they each shall be responsible.
In addition to their other obligations, under this Section 11(a), the Company
and the Parent agree that, as an interim measure during the pendency of any
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission, or
any inaccuracy in the representations and warranties of the Company or the
Parent herein or failure to perform their obligations hereunder, all as
described in this Section 11(a), they will reimburse each Underwriter on a
monthly basis for all reasonable legal or other expenses incurred in connection
with investigating or defending any such claim, action, investigation, inquiry
or other proceeding, notwithstanding the absence of a judicial determination as
to the propriety and enforceability of the Company's or the Parent's obligation
to reimburse each Underwriter for such expenses and the possibility that such
payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, each Underwriter shall promptly return it to the
Company and the Parent together with interest, compounded daily, determined on
the basis of the prime rate (or other commercial lending rate for borrowers of
the highest credit standing) announced from time to time by Bank of America
NT&SA, San Francisco, California (the "Prime Rate"). Any such interim
reimbursement payments which are not made to an Underwriter within 30 days of a
request for reimbursement, shall bear interest at the Prime Rate from the date
of such request. This indemnity agreement will be in addition to any liability
which the Company or the Parent may otherwise have.
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<PAGE> 16
(b) Each Underwriter will severally indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement, the Parent and each person, if any, who controls the
Company or the Parent within the meaning of the Act ("controlling person"),
against any losses, claims, damages, liabilities or expenses to which the
Company, or any such director, officer, the Parent or controlling person may
become subject, under the Act, the Exchange Act, or other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Underwriter), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated below)
arise out of or are based upon any untrue or alleged untrue statement of any
material fact contained in the Registration Statement, any Preliminary
Prospectus, the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, any Preliminary Prospectus,
the Prospectus, or any amendment or supplement thereto, in reliance upon and in
conformity with the information furnished to the Company pursuant to Section 4
hereof; and will reimburse the Company, or any such director, officer, the
Parent or controlling person for any legal and other expense reasonably
incurred by the Company, or any such director, officer, the Parent or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that no Underwriter shall be required to contribute
any amount in excess of the amount of the total underwriting commissions
received by such Underwriter in connection with the Common Shares underwritten
by it and distributed to the public. In addition to its other obligations
under this Section 11(b), each Underwriter severally agrees that, as an interim
measure during the pendency of any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 11(b) which relates to
information furnished to the Company pursuant to Section 4 hereof, it will
reimburse the Company (and, to the extent applicable, each officer, director,
the Parent or controlling person) on a quarterly basis for all reasonable legal
or other expenses incurred in connection with investigating or defending any
such claim, action, investigation, inquiry or other proceeding, notwithstanding
the absence of a judicial determination as to the propriety and enforceability
of the Underwriters' obligation to reimburse the Company (and, to the extent
applicable, each officer, director, the Parent or controlling person) for such
expenses and the possibility that such payments might later be held to have
been improper by a court of competent jurisdiction. To the extent that any
such interim reimbursement payment is so held to have been improper, the
Company (and, to the extent applicable, each officer, director, the Parent or
controlling person) shall promptly return it to the Underwriters together with
interest, compounded daily, determined on the basis of the Prime Rate. Any
such interim reimbursement payments which are not made to the Company within 30
days of a request for reimbursement, shall bear interest at the Prime Rate from
the date of such request. This indemnity agreement will be in addition to any
liability which such Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
for contribution or otherwise than under the indemnity agreement contained in
this Section or to the extent it is not prejudiced as a proximate result of
such failure. In case any such action is brought against any indemnified party
and such indemnified party seeks or intends to seek indemnity from an
indemnifying party, the indemnifying party will be entitled to participate in,
and, to the extent that it may wish, jointly with all other indemnifying
parties similarly notified, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party
and the indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the indemnifying
party, the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed such counsel in
connection with the assumption of legal defenses in accordance with the proviso
to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Representatives in the case of paragraph (a),
representing the
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<PAGE> 17
indemnified parties who are parties to such action) or (ii) the indemnifying
party shall not have employed counsel reasonably satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of the action, in each of which cases the fees and
expenses of counsel shall be at the expense of the indemnifying party.
(d) If the indemnification provided for in this Section 11 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) in respect of any losses, claims, damages, liabilities or
expenses referred to herein, then each applicable indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of any losses, claims, damages, liabilities or expenses referred to herein (i)
in such proportion as is appropriate to reflect the relative benefits received
by the Company, the Parent and the Underwriters from the offering of the Common
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault
of the Company, the Parent and the Underwriters in connection with the
statements or omissions or inaccuracies in the representations and warranties
herein which resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The respective
relative benefits received by the Company, the Parent and the Underwriters
shall be deemed to be in the same proportion, in the case of the Company and
the Parent as the total price paid to the Company and to the Parent,
respectively, for the Common Shares sold by them to the Underwriters (plus, in
the case of Parent, the amount of proceeds received by the Company which are
paid to the Parent for repayment of indebtedness) (net of underwriting
commissions but before deducting expenses), and in the case of the Underwriters
as the underwriting commissions received by them bears to the total of such
amounts paid to the Company and to the Parent and received by the Underwriters
as underwriting commissions. The relative fault of the Company, the Parent and
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company, the Parent or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
subparagraph (c) of this Section 11, any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim. The provisions set forth in subparagraph (c) of this
Section 11 with respect to notice of commencement of any action shall apply if
a claim for contribution is to be made under this subparagraph (d); provided,
however, that no additional notice shall be required with respect to any action
for which notice has been given under subparagraph (c) for purposes of
indemnification. The Company, the Parent and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 11
were determined solely by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. Notwithstanding the provisions of this
Section 11, no Underwriter shall be required to contribute any amount in excess
of the amount of the total underwriting commissions received by such
Underwriter in connection with the Common Shares underwritten by it and
distributed to the public. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to
this Section 11 are several in proportion to their respective underwriting
commitments and not joint.
(e) It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in Sections 11(a) and 11(b)
hereof, including the amounts of any requested reimbursement payments and the
method of determining such amounts, shall be settled by arbitration conducted
under the provisions of the Constitution and Rules of the Board of Governors of
the New York Stock Exchange, Inc. or pursuant to the Code of Arbitration
Procedure of the NASD. Any such arbitration must be commenced by service of a
written demand for arbitration or written notice of intention to arbitrate,
therein electing the arbitration tribunal. In the event the party demanding
arbitration does not make such designation of an arbitration tribunal in such
demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in Sections 11(a) and 11(b)
hereof and would not resolve the ultimate propriety or enforceability of the
obligation to reimburse expenses which is created by the provisions of such
Sections 11(a) and 11(b) hereof.
-17-
<PAGE> 18
SECTION 12
DEFAULT OF UNDERWRITERS
-----------------------
It shall be a condition to this Agreement and the obligation of the
Company and the Parent to sell and deliver the Common Shares hereunder, and of
each Underwriter to purchase the Common Shares in the manner as described
herein, that, except as hereinafter in this paragraph provided, each of the
Underwriters shall purchase and pay for all the Common Shares agreed to be
purchased by such Underwriter hereunder upon tender to the Underwriters of all
such shares in accordance with the terms hereof. If any Underwriter or
Underwriters default in their obligations to purchase Common Shares hereunder
on either the First or Second Closing Date and the aggregate number of Common
Shares which such defaulting Underwriter or Underwriters agreed but failed to
purchase on such Closing Date does not exceed 10% of the total number of Common
Shares which the Underwriters are obligated to purchase on such Closing Date,
the non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Common Shares which
such defaulting Underwriters agreed but failed to purchase on such Closing
Date. If any Underwriter or Underwriters so default and the aggregate number
of Common Shares with respect to which such default occurs is more than the
above percentage and arrangements satisfactory to the Underwriters and the
Company for the purchase of such Common Shares by other persons ore not made
within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Company or the
Parent except for the expenses to be paid by the Company and the Parent
pursuant to Section 7 hereof and except to the extent provided in Section 11
hereof.
In the event that Common Shares to which a default relates are to be
purchased by the non-defaulting Underwriters or by another party or parties,
the Underwriters or the Company shall have the right to postpone the First or
Second Closing Date, as the case may be, for not more than five business days
in order that the necessary changes in the Registration Statement, Prospectus
and any other documents, as well as any other arrangements, may be effected.
As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section. Nothing herein will relieve
a defaulting Underwriter from liability for its default.
SECTION 13
EFFECTIVE DATE
--------------
This Agreement shall become effective immediately as to Sections 7, 9,
11, 14 and 15 and, as to all other provisions, (i) if, at the time of execution
of this Agreement, the Registration Statement has not become effective, at 2:00
P.M., California time, on the first full business day following the
effectiveness of the Registration Statement, or (ii) if, at the time of
execution of this Agreement, the Registration Statement has been declared
effective, at 2:00 P.M., California time, on the first full business day
following the date of execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time after the Registration
Statement becomes effective as you may determine on and by notice to the
Company or by release of any of the Common Shares for sale to the public. For
the purposes of this Section 13, the Common Shares shall be deemed to have been
so released upon the release for publication of any newspaper advertisement
relating to the Common Shares or upon the release by you of telegrams (i)
advising Underwriters that the Common Shares are released for public offering,
or (ii) offering the Common Shares for sale to securities dealers, whichever
may occur first.
-18-
<PAGE> 19
SECTION 14
TERMINATION
-----------
Without limiting the right to terminate this Agreement pursuant to any
other provision hereof:
(a) This Agreement may be terminated by the Company by notice to
you and the Parent or by you by notice to the Company and the Parent at any
time prior to the time this Agreement shall become effective as to all its
provisions, and any such termination shall be without liability on the part of
the Company or the Parent to any Underwriter (except for the expenses to be
paid or reimbursed by the Company and the Parent pursuant to Sections 7 and 9
hereof and except to the extent provided in Section 11 hereof) or of any
Underwriter to the Company or the Parent (except to the extent provided in
Section 11 hereof).
(b) This Agreement may also be terminated by you prior to the
First Closing Date by notice to the Company (i) if additional material
governmental restrictions, not in force and effect on the date hereof, shall
have been imposed upon trading in securities generally or minimum or maximum
prices shall have been generally established on the New York Stock Exchange or
on the American Stock Exchange or in the over the counter market by the NASD,
or trading in securities generally shall have been suspended on either such
Exchange or in the over the counter market by the NASD, or a general banking
moratorium shall have been established by federal, New York or California
authorities, (ii) if an outbreak of major hostilities or other national or
international calamity or any substantial change in political, financial or
economic conditions shall have occurred or shall have accelerated or escalated
to such an extent, as, in the judgment of the Underwriters, to affect adversely
the marketability of the Common Shares, (iii) if any adverse event shall have
occurred or shall exist which makes untrue or incorrect in any material respect
any statement or information contained in the Registration Statement or
Prospectus or which is not reflected in the Registration Statement or
Prospectus but should be reflected therein in order to make the statements or
information contained therein not misleading in any material respect, or (iv)
if there shall be any action, suit or proceeding pending or threatened, or
there shall have been any development or prospective development involving
particularly the business or properties or securities of the Company or the
transactions contemplated by this Agreement, which, in the reasonable judgment
of the Underwriters, may materially and adversely affect the Company's business
or earnings and makes it impracticable or inadvisable to offer or sell the
Common Shares. Any termination pursuant to this subsection (b) shall be without
liability on the part of any Underwriter to the Company or the Parent or on the
part of the Company or the Parent to any Underwriter (except for expenses to be
paid or reimbursed by the Company and the Parent pursuant to Sections 7 and 9
hereof and except to the extent provided in Section 11 hereof).
(c) This Agreement shall also terminate at 5:00 P.M., California
Time, on the tenth full business day after the Registration Statement shall
have become effective if the initial public offering price of the Common Shares
shall not then as yet have been determined as provided in Section 5 hereof.
Any termination pursuant to this subsection (c) shall be without liability on
the part of any Underwriter to the Company or the Parent or on the part of the
Company or the Parent to any Underwriter (except for expenses to be paid or
reimbursed by the Company and the Parent pursuant to Sections 7 and 9 hereof
and except to the extent provided in Section 11 hereof).
SECTION 15
REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY
---------------------------------------------------
The respective indemnities, agreements, representations, warranties
and other statements of the Company, of its officers, of the Parent and of the
several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or the Company or any of its or their partners,
officers or directors or any controlling person, or the Parent, as the case may
be, and will survive delivery of and payment for the Common Shares sold
hereunder and any termination of this Agreement.
-19-
<PAGE> 20
SECTION 16
NOTICES
-------
All communications hereunder shall be in writing and, if sent to the
Underwriters shall be mailed, delivered or telegraphed and confirmed to you at
600 Montgomery Street, San Francisco, California 94111, Attention: Patrick
Arrington, with a copy to Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill
Road, Palo Alto, California 94304, Attention: Howard S. Zeprun, Esq.; and if
sent to (i) the Company shall be mailed, delivered or telegraphed and confirmed
to the Company at 1515 South Manchester Avenue, Anaheim, California 92802-2907,
Attention: Kevin Daly or (ii) the Parent shall be mailed, delivered or
telegraphed and confirmed to the Parent at 1515 South Manchester Avenue,
Anaheim, California 92802-2907, Attention: Joel Slutzky, in either instance
with a copy to Pat Arrington, Brobeck Phleger & Harrison LLP, 4675 MacArthur
Court, Suite 1000, Newport Beach, California 92660-1846. The Company, the
Parent or you may change the address for receipt of communications hereunder by
giving notice to the others.
SECTION 17
SUCCESSORS
----------
This Agreement will inure to the benefit of and be binding upon the
parties hereto, including any substitute Underwriters pursuant to Section 12
hereof, and to the benefit of the officers and directors and controlling
persons referred to in Section 11, and in each case their respective
successors, personal representatives and assigns, and no other person will have
any right or obligation hereunder. No such assignment shall relieve any party
of its obligations hereunder. The term "successors" shall not include any
purchaser of the Common Shares as such from any of the Underwriters merely by
reason of such purchase.
SECTION 18
PARTIAL UNENFORCEABILITY
------------------------
The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability of
any other Section, paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
SECTION 19
APPLICABLE LAW
--------------
This Agreement shall be governed by and construed in accordance with
the internal laws (and not the laws pertaining to conflicts of laws) of the
State of California.
SECTION 20
GENERAL
-------
This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof. This Agreement may be executed in several counterparts, each one of
which shall be an original, and all of which shall constitute one and the same
document.
-20-
<PAGE> 21
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be
amended or modified, and the observance of any term of this Agreement may be
waived, only by a writing signed by the Company, the Parent and you.
-21-
<PAGE> 22
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof, whereupon
it will become a binding agreement among the Company, the Parent and the
several Underwriters including you, all in accordance with its terms.
Very truly yours,
ATL PRODUCTS, INC.
By:
----------------------------------
Title:
------------------------------
ODETICS, INC.
By:
----------------------------------
Title:
-----------------------------
The foregoing Underwriting Agreement is
hereby confirmed and accepted by us in
San Francisco, California as of the date
first above written.
MONTGOMERY SECURITIES
CRUTTENDEN ROTH INCORPORATED
BY: MONTGOMERY SECURITIES
By:
------------------------------------
Title:
---------------------------------
-22-
<PAGE> 23
SCHEDULE A
<TABLE>
<CAPTION>
Number of Firm
Common Shares
Name of Underwriter to be Purchased
------------------------------------------------ -----------------------------
<S> <C>
Montgomery Securities . . . . . . . . . . . . .
-----------
TOTAL . . . . . . . . . . . [1,650,000]
===========
</TABLE>
B-1
<PAGE> 24
EXHIBIT I
FORM OF OPINION OF BROBECK, PHLEGER & HARRISON
B-2
<PAGE> 1
EXHIBIT 4.3
ATL PRODUCTS, INC.
NOTICE OF GRANT OF STOCK OPTION
Notice is hereby given of the following option grant (the "Option") to
purchase shares of the Class B Common Stock of ATL Products, Inc., (the
"Corporation"):
Optionee: 1~
Grant Date: _________________, 1996
Vesting Commencement Date: _________________, 1996
Exercise Price: $ 2~ per share
Number of Option Shares: 3~ shares
Expiration Date: __________________, 2006
Type of Option: ______________ Incentive Stock Option
______________ Non-Statutory Stock Option
Exercise Schedule: The Option shall become exercisable with respect to
one third of the Option Shares upon Optionee's completion of one (1)
year of Service measured from the Vesting Commencement Date and shall
become exercisable for the balance of the Option Shares in twenty-four
(24) successive equal monthly installments upon Optionee's completion
of each additional month of Service over the twenty-four (24) month
period measured from the first anniversary of the Vesting Commencement
Date. In no event shall the Option become exercisable for any
additional Option Shares after Optionee's cessation of Service.
Limitation on Exercise: In no event may the Option be exercised in
whole or in part at any time prior to the distribution by Odetics-Inc.
of its holdings of the Corporation's Common Stock to the Odetics
shareholders in a spin-off transaction under Internal Revenue Code
Section 355.
Optionee understands and agrees that the Option is granted subject to
and in accordance with the terms of the ATL Products, Inc., 1996 Stock Incentive
Plan (the "Plan"). Optionee further agrees to be bound by the terms of the Plan
and the terms of the Option as set forth in the Stock Option Agreement and any
Addenda to such Stock Option Agreement attached hereto as Exhibit A. Optionee
also acknowledges receipt of a copy of the Plan in the form of attached Exhibit
B.
<PAGE> 2
At Will Status. Nothing in this Notice or in the attached Stock Option
Agreement or in the Plan shall confer upon Optionee any right to continue in
Service for any period of specific duration or interfere with or otherwise
restrict in any way the rights of the Corporation (or any Parent or Subsidiary
employing or retaining Optionee) or of Optionee, which rights are hereby
expressly reserved by each, to terminate Optionee's Service at any time for any
reason, with or without cause.
Definitions. All capitalized terms in this Notice shall have the
meaning assigned to them in this Notice or in the attached Stock Option
Agreement.
DATED: ________________, 1996
ATL PRODUCTS, INC.
By:_____________________________
Title:__________________________
________________________________
1~, OPTIONEE
Address:________________________
________________________________
ATTACHMENTS
EXHIBIT A - STOCK OPTION AGREEMENT AND ADDENDA
EXHIBIT B - 1996 STOCK INCENTIVE PLAN
2.
<PAGE> 3
EXHIBIT A
STOCK OPTION AGREEMENT
<PAGE> 4
ATL PRODUCTS, INC.
STOCK OPTION AGREEMENT
RECITALS
A. The Board has adopted the Plan for the purpose of retaining the
services of selected Employees, non-employee members of the Board or of the
board of directors of any Parent or Subsidiary and consultants and other
independent advisors who provide services to the Corporation (or any Parent or
Subsidiary).
B. Optionee is to render valuable services to the Corporation (or a
Parent or Subsidiary), and this Agreement is executed pursuant to, and is
intended to carry out the purposes of, the Plan in connection with the
Corporation's grant of an option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee, as of
the Grant Date, an option to purchase up to the number of Option Shares
specified in the Grant Notice. The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.
2. OPTION TERM. This option shall have a maximum term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. During Optionee's lifetime, this option
shall be exercisable only by Optionee and shall not be assignable or
transferable other than by will or by the laws of descent and distribution
following Optionee's death.
4. DATES OF EXERCISE. This option shall become exercisable for the
Option Shares in one or more installments as specified in the Grant Notice. As
the option becomes exercisable for such installments, those installments shall
accumulate and the option shall remain exercisable for the accumulated
installments until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.
5. CESSATION OF SERVICE. The option term specified in Paragraph 2
shall terminate (and this option shall cease to be outstanding) prior to the
Expiration Date should any of the following provisions become applicable:
<PAGE> 5
(a) Should Optionee cease to remain in Service for any reason
(other than death or Disability) while this option is outstanding, then
Optionee shall have a period of three (3) months (commencing with the
date of such cessation of Service) during which to exercise this
option, but in no event shall this option be exercisable at any time
after the Expiration Date.
(b) If Optionee dies while this option is outstanding, then
the personal representative of Optionee's estate or the person or
persons to whom the option is transferred pursuant to Optionee's will
or in accordance with the laws of descent and distribution shall have
the right to exercise this option. Such right shall lapse, and this
option shall cease to be outstanding, upon the earlier of (i) the
expiration of the twelve (12)- month period measured from the date of
Optionee's death or (ii) the Expiration Date.
(c) Should Optionee cease Service by reason of Disability
while this option is outstanding, then Optionee shall have a period of
twelve (12) months (commencing with the date of such cessation of
Service) during which to exercise this option. In no event shall this
option be exercisable at any time after the Expiration Date.
Note: Exercise of this option on a date later than
three (3) months following cessation of Service due to
Disability will result in loss of favorable Incentive Option
treatment, unless such Disability constitutes Permanent
Disability. In the event that Incentive Option treatment is
not available, this option will be taxed as a Non-Statutory
Option upon exercise.
(d) During the limited period of post-Service exercisability,
this option may not be exercised in the aggregate for more than the
number of vested Option Shares for which the option is exercisable at
the time of Optionee's cessation of Service. Upon the expiration of
such limited exercise period or (if earlier) upon the Expiration Date,
this option shall terminate and cease to be outstanding for any vested
Option Shares for which the option has not been exercised. However,
this option shall, immediately upon Optionee's cessation of Service for
any reason, terminate and cease to be outstanding with respect to any
Option Shares in which Optionee is not otherwise at that time vested or
for which this option is not otherwise at that time exercisable.
6. SPECIAL ACCELERATION OF OPTION.
(a) This option, to the extent outstanding at the time of a
Corporate Transaction but not otherwise fully exercisable, shall
automatically accelerate so that this option shall, immediately prior
to the effective date of the Corporate Transaction, become
2.
<PAGE> 6
exercisable for all of the Option Shares at the time subject to this option and
may be exercised for any or all of those Option Shares as fully-vested shares of
Common Stock. No such acceleration of this option, however, shall occur if and
to the extent: (i) this option is, in connection with the Corporate Transaction,
either to be assumed by the successor corporation (or parent thereof) or to be
replaced with a comparable option to purchase shares of the capital stock of the
successor corporation (or parent thereof) or (ii) this option is to be replaced
with a cash incentive program of the successor corporation which preserves the
spread existing on the unvested Option Shares at the time of the Corporate
Transaction (the excess of the Fair Market Value of those Option Shares over the
aggregate Exercise Price payable for such shares) and provides for subsequent
pay-out in accordance with the same option exercise/vesting schedule set forth
in the Grant Notice. The determination of option comparability under clause (i)
shall be made by the Plan Administrator, and such determination shall be final,
binding and conclusive.
(b) Immediately following the Corporate Transaction, this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor corporation (or parent thereof) in connection with the Corporate
Transaction.
(c) If this option is assumed in connection with a Corporate
Transaction, then this option shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class of securities which
would have been issuable to Optionee in consummation of such Corporate
Transaction had the option been exercised immediately prior to such Corporate
Transaction, and appropriate adjustments shall also be made to the Exercise
Price, provided the aggregate Exercise Price shall remain the same.
(d) This option may also be subject to acceleration in whole or in
part in accordance with the terms of any special Addendum attached to this
Agreement.
(e) This Agreement shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
7. ADJUSTMENT IN OPTION SHARES. Should any change be made to the Class
B Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the total number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
3.
<PAGE> 7
8. STOCKHOLDER RIGHTS. The holder of this option shall not have any
stockholder rights with respect to the Option Shares until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.
9. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to all or any part
of the Option Shares for which this option is at the time exercisable, Optionee
(or any other person or persons exercising the option) must take the following
actions:
(i) Execute and deliver to the Corporation a Notice of
Exercise for the Option Shares for which the option is exercised.
(ii) Pay the aggregate Exercise Price for the purchased shares
in one or more of the following forms:
(A) cash or check made payable to the Corporation; or
(B) a promissory note payable to the
Corporation, but only to the extent authorized by the Plan
Administrator in accordance with Paragraph 13; or
(C) shares of Common Stock or Class B Common Stock held by
Optionee (or any other person or persons exercising the option) for the
requisite period necessary to avoid a charge to the Corporation's
earnings for financial reporting purposes and valued at Fair Market
Value on the Exercise Date; or.
Should the Class B Common Stock be registered under Section 12(g) of
the 1934 Act at the time the option is exercised, then the Exercise Price
for any vested Option Shares purchased under the option may also be paid
through a special sale and remittance procedure pursuant to which Optionee
(or any other person or persons exercising the option) shall concurrently
provide irrevocable written instructions (I) to a Corporation- designated
brokerage firm to effect the immediate sale of the purchased shares and
remit to the Corporation, out of the sale proceeds available on the
settlement date, sufficient funds to cover the aggregate Exercise Price
payable for the purchased shares plus all applicable Federal, state and
local income and employment taxes required to be withheld by the Corporation
by reason of such exercise and (II) to the Corporation to deliver the
certificates for the purchased shares directly to such brokerage firm in
order to complete the sale transaction.
4.
<PAGE> 8
Except to the extent the sale and remittance procedure is
utilized in connection with the option exercise, payment of the
Exercise Price must accompany the Notice of Exercise delivered to the
Corporation in connection with the option exercise.
(iii) Furnish to the Corporation appropriate
documentation that the person or persons exercising the option (if
other than Optionee) have the right to exercise this option.
(iv) Make appropriate arrangements with the
Corporation (or Parent or Subsidiary employing or retaining Optionee)
for the satisfaction of all Federal, state and local income and
employment tax withholding requirements applicable to the option
exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares,
with the appropriate legends affixed thereto.
(c) In no event may this option be exercised for
fractional shares.
10. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of the
Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market, if applicable) on which the Class B Common Stock may be listed
for trading at the time of such exercise and issuance.
(b) The inability of the Corporation to obtain approval
from any regulatory body having authority deemed by the Corporation to be
necessary to the lawful issuance and sale of any Class B Common Stock pursuant
to this option shall relieve the Corporation of any liability with respect to
the non-issuance or sale of the Class B Common Stock as to which such approval
shall not have been obtained. The Corporation, however, shall use its best
efforts to obtain all such approvals.
11. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraphs 3 and 6, the provisions of this Agreement shall inure to
the benefit of, and be binding upon, the Corporation and its successors and
assigns and Optionee, Optionee's assigns and the legal representatives, heirs
and legatees of Optionee's estate.
12. NOTICES. Any notice required to be given or delivered to
the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered
5.
<PAGE> 9
to Optionee shall be in writing and addressed to Optionee at the address
indicated below Optionee's signature line on the Grant Notice. All notices shall
be deemed effective upon personal delivery or upon deposit in the U.S. mail,
postage prepaid and properly addressed to the party to be notified.
13. FINANCING. The Plan Administrator may, in its absolute discretion
and without any obligation to do so, permit Optionee to pay the Exercise Price
for the purchased Option Shares by delivering a full-recourse promissory note
payable to the Corporation. The terms of any such promissory note (including the
interest rate, the requirements for collateral and the terms of repayment) shall
be established by the Plan Administrator in its sole discretion.
14. CONSTRUCTION. This Agreement and the option evidenced hereby are
made and granted pursuant to the Plan and are in all respects limited by and
subject to the terms of the Plan. All decisions of the Plan Administrator with
respect to any question or issue arising under the Plan or this Agreement shall
be conclusive and binding on all persons having an interest in this option.
15. EXCESS SHARES. If the Option Shares covered by this Agreement
exceed, as of the Grant Date, the number of shares of Class B Common Stock which
may without stockholder approval be issued under the Plan, then this option
shall be void with respect to those excess shares, unless stockholder approval
of an amendment sufficiently increasing the number of shares of Class B Common
Stock issuable under the Plan is obtained in accordance with the provisions of
the Plan.
16. GOVERNING LAW. The interpretation, performance and enforcement of
this Agreement shall be governed by the laws of the State of California without
resort to that State's conflict-of-laws rules.
17. ADDITIONAL TERMS APPLICABLE TO AN INCENTIVE OPTION. In the event
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:
(a) This option shall cease to qualify for favorable tax treatment
as an Incentive Option if (and to the extent) this option is exercised
for one or more Option Shares: (A) more than three (3) months after the
date Optionee ceases to be an Employee for any reason other than death
or Permanent Disability or (B) more than twelve (12) months after the
date Optionee ceases to be an Employee by reason of Permanent
Disability.
(b) No installment under this option shall qualify for favorable
tax treatment as an Incentive Option if (and to the extent) the
aggregate Fair Market Value (determined at the Grant Date) of the Class
B Common Stock for which such installment first becomes exercisable
hereunder
6.
<PAGE> 10
would, when added to the aggregate value (determined as of the
respective date or dates of grant) of the Class B Common Stock or other
securities for which this option or any other Incentive Options granted
to Optionee prior to the Grant Date (whether under the Plan or any
other option plan of the Corporation or any Parent or Subsidiary) first
become exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should such One Hundred
Thousand Dollar ($100,000) limitation be exceeded in any calendar year,
this option shall nevertheless become exercisable for the excess shares
in such calendar year as a Non-Statutory Option.
(c) Should the exercisability of this option be accelerated
upon a Corporate Transaction, then this option shall qualify for
favorable tax treatment as an Incentive Option only to the extent the
aggregate Fair Market Value (determined at the Grant Date) of the Class
B Common Stock for which this option first becomes exercisable in the
calendar year in which the Corporate Transaction occurs does not, when
added to the aggregate value (determined as of the respective date or
dates of grant) of the Class B Common Stock or other securities for
which this option or one or more other Incentive Options granted to
Optionee prior to the Grant Date (whether under the Plan or any other
option plan of the Corporation or any Parent or Subsidiary) first
become exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should the applicable One
Hundred Thousand Dollar ($100,000) limitation be exceeded in the
calendar year of such Corporate Transaction, the option may
nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.
(d) Should Optionee hold, in addition to this option, one or
more other options to purchase Class B Common Stock which become
exercisable for the first time in the same calendar year as this
option, then the foregoing limitations on the exercisability of such
options as Incentive Options shall be applied on the basis of the order
in which such options are granted.
18. LEAVE OF ABSENCE. The following provisions shall apply upon
the Optionee's commencement of an authorized leave of absence:
(a) The exercise schedule in effect under the Grant Notice
shall be frozen as of the first day of the authorized leave, and this
option shall not become exercisable for any additional installments of
the Option Shares during the period Optionee remains on such leave.
(b) Should Optionee resume active Employee status within sixty
(60) days after the start date of the authorized leave, Optionee shall,
for
7.
<PAGE> 11
purposes of the exercise schedule set forth in the Grant Notice,
receive Service credit for the entire period of such leave. If Optionee
does not resume active Employee status within such sixty (60)-day
period, then no Service credit shall be given for the period of such
leave.
(c) If the option is designated as an Incentive Option in the
Grant Notice, then the following additional provision shall apply:
(i) If the leave of absence continues for more than
ninety (90) days, then this option shall automatically convert to a
Non-Statutory Option under the Federal tax laws at the end of such
ninety (90)-day period, unless the Optionee's reemployment rights are
guaranteed by statute or by written agreement. Following any such
conversion of the option, all subsequent exercises of such option,
whether effected before or after Optionee's return to active Employee
status, shall result in an immediate taxable event, and the Corporation
shall be required to collect from Optionee the Federal, state and local
income and employment withholding taxes applicable to such exercise.
(ii) In no event shall this option become exercisable for
any additional Option Shares or otherwise remain outstanding if
Optionee does not resume Employee status prior to the Expiration Date
of the option term.
8.
<PAGE> 12
EXHIBIT I
NOTICE OF EXERCISE
I hereby notify ATL Products, Inc., (the "Corporation") that I elect to
purchase shares of the Corporation's Class B Common Stock (the "Purchased
Shares") at the option exercise price of $____________ per share (the "Exercise
Price") pursuant to that certain option (the "Option") granted to me under the
Corporation's 1996 Stock Incentive Plan on __________________, 199__ .
Concurrently with the delivery of this Exercise Notice to the
Corporation, I shall hereby pay to the Corporation the Exercise Price for the
Purchased Shares in accordance with the provisions of my agreement with the
Corporation (or other documents) evidencing the Option and shall deliver
whatever additional documents may be required by such agreement as a condition
for exercise.
____________________, 199__
Date
_____________________________________
Optionee
Address:_____________________________
_____________________________________
Print name in exact manner
it is to appear on the
stock certificate: _____________________________________
Address to which certificate
is to be sent, if different
from address above: _____________________________________
_____________________________________
Social Security Number: _____________________________________
Employee Number: _____________________________________
<PAGE> 13
APPENDIX
The following definitions shall be in effect under the Agreement:
A. AGREEMENT shall mean this Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. CLASS B COMMON STOCK shall mean the Corporation's Class B common
stock.
E. COMMON STOCK shall mean the Corporation's common stock.
F. CORPORATE TRANSACTION shall mean either of the following
stockholder-approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation
or dissolution of the Corporation.
G. CORPORATION shall mean ATL Products, Inc., a Delaware corporation,
and any successor corporation which assumes the Plan and the outstanding options
thereunder, including the option evidenced by this Agreement.
H. DISABILITY shall mean the inability of Optionee to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment and shall be determined by the Plan Administrator on the basis
of such medical evidence as the Plan Administrator deems warranted under the
circumstances. Disability shall be deemed to constitute PERMANENT DISABILITY in
the event that such Disability is expected to result in death or has lasted or
can be expected to last for a continuous period of twelve (12) months or more.
I. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
A-1.
<PAGE> 14
J. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.
K. EXERCISE PRICE shall mean the exercise price per share as specified
in the Grant Notice.
L. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
M. FAIR MARKET VALUE per share of Class B Common Stock or Common Stock
on any relevant date shall be determined in accordance with the following
provisions:
(i) If the Class B Common Stock or Common Stock is at the
time traded on the Nasdaq National Market, then the Fair Market Value
shall be the closing selling price per share of Class B Common Stock or
Common Stock on the date in question, as the price is reported by the
National Association of Securities Dealers on the Nasdaq National
Market or any successor system. If there is no closing selling price
for the Class B Common Stock or Common Stock on the date in question,
then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
(ii) If the Class B Common Stock or Common Stock is at the
time listed on any Stock Exchange, then the Fair Market Value shall be
the closing selling price per share of Class B Common Stock or Common
Stock on the date in question on the Stock Exchange determined by the
Plan Administrator to be the primary market for the Class B Common
Stock or Common Stock, as such price is officially quoted in the
composite tape of transactions on such exchange. If there is no closing
selling price for the Class B Common Stock or Common Stock on the date
in question, then the Fair Market Value shall be the closing selling
price on the last preceding date for which such quotation exists.
(iii) If the Fair Market Value of Class B Common Stock or
Common Stock is not determinable pursuant to subparagraph (i) or (ii)
of this provision, then the Fair Market Value shall be determined by
the Plan Administrator, after taking into account such factors as it
shall deem appropriate.
N. GRANT DATE shall mean the date of grant of the option as specified
in the Grant Notice.
A-2.
<PAGE> 15
O. GRANT NOTICE shall mean the Notice of Grant of Stock Option
accompanying the Agreement, pursuant to which Optionee has been informed of the
basic terms of the option evidenced hereby.
P. INCENTIVE OPTION shall mean an option which satisfies the
requirements of Code Section 422.
Q. 1934 ACT shall mean the Securities Exchange Act of 1934, as
amended.
R. NON-STATUTORY OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
S. NOTICE OF EXERCISE shall mean the notice of exercise in the form
attached hereto as Exhibit I.
T. OPTION SHARES shall mean the number of shares of Class B Common
Stock subject to the option as specified in the Grant Notice.
U. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
V. PARENT shall mean any corporation (other than the Corporation) in
an unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
W. PLAN shall mean the Corporation's 1996 Stock Incentive Plan.
X. PLAN ADMINISTRATOR shall mean either the Board or a committee of
the Board acting in its administrative capacity under the Plan.
Y. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
Z. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.
AA. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
A-3.
<PAGE> 16
ADDENDUM
TO
STOCK OPTION AGREEMENT
The following provisions are hereby incorporated into, and are hereby
made a part of, that certain Stock Option Agreement (the "Option Agreement") by
and between ATL Products, Inc. (the "Corporation") and ("Optionee")
evidencing the stock option (the "Option") granted on to Optionee under
the terms of the Corporation's 1996 Stock Incentive Plan, and such provisions
shall be effective immediately. All capitalized terms in this Addendum, to the
extent not otherwise defined herein, shall have the meanings assigned to them in
the Option Agreement.
INVOLUNTARY TERMINATION FOLLOWING
CORPORATE TRANSACTION/CHANGE IN CONTROL
1. To the extent the Option is, in connection with a Corporate
Transaction, to be assumed or replaced with a comparable option in accordance
with Paragraph 6 of the Option Agreement, the Option shall not accelerate upon
the occurrence of that Corporate Transaction, and the Option shall accordingly
continue, over Optionee's period of Service after the Corporate Transaction, to
become exercisable for the Option Shares in one or more installments in
accordance with the provisions of the Option Agreement. However, immediately
upon an Involuntary Termination of Optionee's Service within twelve (12) months
following such Corporate Transaction, the Option (or any replacement grant), to
the extent outstanding at the time but not otherwise fully exercisable, shall
automatically accelerate so that the Option shall become immediately exercisable
for all the Option Shares at the time subject to the Option and may be exercised
for any or all of those Option Shares as fully vested shares.
2. The Option shall not accelerate upon the occurrence of a Change in
Control, and the Option shall, over Optionee's period of Service following such
Change in Control, continue to become exercisable for the Option Shares in one
or more installments in accordance with the provisions of the Option Agreement.
However, immediately upon an Involuntary Termination of Optionee's Service
within twelve (12) months following the Change in Control, the Option, to the
extent outstanding at the time but not otherwise fully exercisable, shall
automatically accelerate so that the Option shall become immediately exercisable
for all the Option Shares at the time subject to the Option and may be exercised
for any or all of those Option Shares as fully vested shares.
3. The Option as accelerated under Paragraph 1 or 2 above shall remain
so exercisable until the earlier of (i) the Expiration Date or (ii) the
expiration of the one (1)-year period measured from the date of such Involuntary
Termination.
<PAGE> 17
4. For purposes of this Addendum the following definitions shall be in
effect:
An INVOLUNTARY TERMINATION shall mean the termination of Optionee's
Service by reason of:
(i) Optionee's involuntary dismissal or discharge by the
Corporation for reasons other than Misconduct, or
(ii) Optionee's voluntary resignation following (A) a change in
Optionee's position with the Corporation (or Parent or Subsidiary employing
Optionee) which materially reduces Optionee's level of responsibility, (B) a
reduction in Optionee's level of compensation (including base salary, fringe
benefits and target bonus under in any corporate- performance based bonus or
incentive programs) by more than fifteen percent (15%) or (C) a relocation
of Optionee's place of employment by more than fifty (50) miles, provided
and only if such change, reduction or relocation is effected by the
Corporation without Optionee's consent, and
A CHANGE IN CONTROL shall be deemed to occur in the event of a change
in ownership or control of the Corporation effected through either of the
following transactions:
(A) the acquisition, directly or indirectly, by any person or
related group of persons (other than the Corporation or a person that
directly or indirectly controls, or is controlled by, or is under common
control with, the Corporation) of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of
securities possessing more than fifty percent (50%) of the total combined
voting power of the Corporation's outstanding securities pursuant to a
tender or exchange offer made directly to the Corporation's stockholders, or
(B) a change in the composition of the Board over a period of
thirty-six (36) consecutive months or less such that a majority of the Board
members ceases, by reason of one or more contested elections for Board
membership, to be comprised of individuals who either (i) have been Board
members continuously since the beginning of such period or (ii) have been
elected or nominated for election as Board members during such period by at
least a majority of the Board members described in clause (i) who were still
in office at the time such election or nomination was approved by the Board.
2.
<PAGE> 18
MISCONDUCT shall mean the Optionee's commission of any act of
fraud, embezzlement or dishonesty or any other intentional misconduct by
Optionee adversely affecting the business or affairs of the Corporation (or any
Parent or Subsidiary) in a material manner.
5. The provisions of Paragraph 1 of this Addendum shall govern
the period for which the Option is to remain exercisable following the
Involuntary Termination of Optionee's Service within twelve (12) months after
the Corporate Transaction or Change in Control and shall supersede any
provisions to the contrary in Paragraph 5 of the Option Agreement.
IN WITNESS WHEREOF, ATL Products, Inc. has caused this
Addendum to be executed by its duly-authorized officer as of the Effective Date
specified below.
ATL PRODUCTS, INC.
BY:________________________________
TITLE:_____________________________
EFFECTIVE DATE:____________________, 199__
3.
<PAGE> 19
EXHIBIT B
1996 STOCK INCENTIVE PLAN
FILED AS EXHIBIT 4.2
<PAGE> 1
EXHIBIT 5.1
BROBECK, PHLEGER & HARRISON LLP 4675
MacArthur Court, Suite 1000 Newport
Beach, California 92660
January 17, 1997
ATL Products, Inc.
1515 South Manchester Avenue
Anaheim, California 92802-2907
Re: Registration Statement on Form S-1 (Registration No. 333-18537)
Ladies and Gentlemen:
We have examined the Registration Statement on Form S-1 (Registration
No. 333-18537) filed by ATL Products, Inc. (the "Company") with the Securities
and Exchange Commission on December 23, 1996 (the "Registration Statement"),
in connection with the registration under the Securities Act of 1933, as
amended, of up to 1,895,000 shares of Class A Common Stock, $.0001 par value
(the "Shares"). As your counsel in connection with this transaction, we have
examined the proceedings taken and are familiar with the proceedings proposed
to be taken by you in connection with the sale and issuance of the Shares.
It is our opinion that, upon conclusion of the proceedings being taken
or contemplated by us to be taken prior to the issuance of the Shares, and upon
completion of the proceedings being taken in order to permit the transactions
to be carried out in accordance with the securities laws of the various states
where required, the Shares, when issued and sold in the manner described in the
Registration Statement, will be legally issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to all references to our firm included in the
Registration Statement, the Prospectus constituting a part thereof and any
further amendments thereto. Subject to the foregoing sentence, this opinion is
given as of the date hereof solely for your benefit and may not be relied upon,
circulated, quoted or otherwise referred to for any purpose without our prior
written consent.
Very truly yours,
/s/ BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 10.8
CONFIDENTIAL TREATMENT REQUESTED.
CONFIDENTIAL PORTION HAS BEEN
FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
TECHNICAL SUPPORT AGREEMENT
BETWEEN
TECHNOLOGY SERVICE SOLUTIONS
AND
ODETICS, INCORPORATED
<PAGE> 2
TECHNICAL SUPPORT AGREEMENT
- --------------------------------------------------------------------------------
Maintenance and Related Services
This Technical Support Agreement (Agreement) is between Technology Service
Solutions (herein after referred to as "TSS"), a general partnership under the
laws of the State of New York, with its principal office at:
Valley Forge Office Center
580 East Swedesford Road
Wayne, PA 19087
and Odetics, Incorporated (herein after referred to as "The Company"),
incorporated under the laws of the State of Delaware having an office at:
1585 S. Manchester Ave.
Anaheim, CA 92802
TSS and The Company mutually agree to the following:
This Agreement sets forth the terms and conditions under which TSS will provide
maintenance and related services to The Company. TSS will provide such services
to The Company based on transaction documents issued by The Company and accepted
by TSS hereunder.
THIS AGREEMENT DOES NOT OBLIGATE EITHER PARTY TO PURCHASE ANY SERVICES, BUT ONLY
ESTABLISHES THE TERMS AND CONDITIONS FOR SUCH TRANSACTIONS. THERE IS NO
REPRESENTATION, WARRANTY, OR COMMITMENT TO DO ANY PARTICULAR AMOUNT OF BUSINESS
HEREUNDER.
PRIOR TO COMMENCEMENT OF SERVICES UNDER THIS AGREEMENT, A COMPLETED STATEMENT OF
WORK MUST BE SIGNED BY BOTH PARTIES. SUBSEQUENT TO THE SIGNING OF SUCH STATEMENT
OF WORK, THE OBLIGATION OF TSS TO PROVIDE SERVICES AND RECEIVE PAYMENT FROM THE
COMPANY SHALL BE BASED UPON THE ACCEPTANCE OF A TRANSACTION DOCUMENT BY TSS.
1.0 SCOPE OF WORK
TSS will provide installation, warranty service, maintenance, and other related
services for end-users of eligible computer hardware and software products
specified in Attachments to this Agreement.
Services provided will be described in each Statement of Work issued hereunder.
TSS reserves the right to use its selected subcontractors to provide these
services.
2.0 DEFINITIONS
The term ATTACHMENT shall mean a document containing additional information
regarding the business relationship, as well as additional terms and conditions.
For example, an Attachment may be a Statement of Work, a price schedule, or an
eligible machine listing.
The term STATEMENT OF WORK shall mean s signed document subject to the terms and
conditions of this Agreement that specifically describes the responsibilities,
obligations and any unique requirements of the services provided.
The term TRANSACTION DOCUMENT shall mean a document that contains specific
information regarding The Company's requested services to be provided to its
customers hereunder. Examples of such information include type of service,
customer name and address, machine serial number and manufacturer name, and
effective date.
The term PRODUCTS shall mean those eligible products listed in an Attachment,
and installed in the United States and Puerto Rico.
The term DELIVERABLES shall mean parts and additional items and materials that
may be necessary for TSS to fulfill its obligations under this Agreement.
The terms END-USER and CUSTOMER shall mean the user of the eligible products
under this Agreement.
<PAGE> 3
The term PARTS shall mean replacement parts necessary for TSS to perform
services during the term of this Agreement, or any extensions thereof.
3.0 TERM, TERMINATION, AND CANCELLATION
The term of this Agreement shall be for one year from the date of its execution
by both parties. This Agreement may be further extended by a written agreement
of extension signed by both TSS and The Company.
Any conditions of this Agreement which, by their nature extend beyond its
termination or cancellation, remain in effect until fulfilled and apply to
respective successors and assignees.
TSS or The Company may terminate this Agreement, with or without cause, at any
time upon at least ninety days prior written notice.
TSS or The Company may cancel this Agreement for a material breach by the other
party of its obligations hereunder if that breach is not cured within thirty
days after receiving written notice thereof.
4.0 CHARGES
The charges for services provided by TSS are listed in an Attachment. TSS may
increase or decrease charges by providing ninety days written notice. Such
charges will become effective on the first day of the applicable invoice period
on or after the effective date specified in the notice.
5.0 PAYMENT TERMS
Unless otherwise specified in an Attachment, payment for services provided by
TSS shall be net thirty days from receipt of an acceptable TSS invoice.
Payment will be made to the TSS address specified on the invoice.
6.0 TAXES
TSS will invoice all taxes applicable to the services provided.
7.0 WARRANTY
TSS warrants that it will perform all services in a skillful, competent, and
workmanlike manner and in accordance with its description in an Attachment or a
Statement of Work. Misuse, accident, unsuitable operating environment,
modification, failure caused by a product for which TSS is not responsible, or
operation outside of manufacturer's specifications may void this warranty. TSS
does not warrant uninterrupted service or error-free operation.
THIS WARRANTY REPLACES ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
BUT NOT LIMITED TO THE IMPLIED WARRANTIES
OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
8.0 CONFIDENTIAL INFORMATION
The Company understands that TSS does not wish to receive from The Company or
any of its affiliates or authorized channels, any information which may be
considered confidential or proprietary. The Company represents and warrants that
no information will be provided that is confidential or proprietary to The
Company or any of its affiliates or authorized channels or any third party, and
TSS will not be obligated to retain in confidence or in any way restrict the use
by TSS of any information received. In the event it becomes necessary to provide
or exchange information that is deemed confidential or proprietary to The
Company or TSS, such provision or exchange shall not take place prior to
execution of a written confidentiality agreement.
9.0 PUBLIC DISCLOSURE
The parties agree not to disclose the terms and conditions of this Agreement
without the express written consent of the other party, except as may be
required by law or governmental rule or regulation, or to establish either
party's rights under this Agreement; provided, however, that if one party seeks
to disclose for reasons not requiring the other party's consent, that party will
limit the disclosure to the extent required, will allow the other party to
review the information disclosed and will apply where available, for
confidentiality, protective orders and the like. Any review under this paragraph
will not be construed to make the reviewing party responsible for the content of
any disclosure.
<PAGE> 4
10.0 RELATIONSHIP OF THE PARTIES
Neither party is the other's legal representative or agent for any purpose, and
has no authority to, and shall not make any warranties or representations or
create any obligations for the other party.
11.0 AMENDMENT
This Agreement may be amended, modified, or altered only in a writing duly
executed by both parties to this Agreement.
12.0 ADVERTISING AND USE OF TRADEMARK AND SERVICE MARK
The Company agrees not to advertise the fact that TSS is providing services
without the express written consent of TSS. Each party agrees not to use any
trademark or service mark of the other party without its written consent, and
nothing contained herein is intended to, or shall be construed to grant any
license or right regarding any such trademark or service mark.
13.0 INDEMNIFICATION
Each party agrees to indemnify and hold the other party harmless from any and
all claims, suits, actions, liabilities, and costs of any kind, including
without limitation, reasonable attorney fees and all cost of litigation arising
out of or pertaining to its negligent act or omission, or failure to perform any
of its obligations hereunder.
14.0 LIMITATION OF LIABILITY
Each party's liability for actual damages from any cause whatsoever, except as
otherwise stated in this section, will be limited to $100,000. This limitation
will apply, regardless of the form of action, whether in contract or tort,
including negligence. This limitation will not apply to claims by either party
for bodily injury or damage to real property or tangible personal property for
which the other party is legally liable.
IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY LOST PROFITS, LOST SAVINGS,
INCIDENTAL DAMAGES, OR CONSEQUENTIAL DAMAGES, EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
15.0 FORCE MAJEURE
Neither party will be considered in default or liable for any delay or failure
to perform any of its obligations under this Agreement if such delay or failure
arises directly or indirectly out of an act of God, acts of the public enemy,
freight embargoes, strikes, quarantine restrictions, unusually severe weather
conditions, insurrection, riot, and other such causes beyond the control of the
party, provided the affected party notifies the other party.
16.0 ORDER OF PRECEDENCE
In the event of a conflict, the order of precedence shall be the terms and
conditions of 1) the body of this Agreement, 2) its signed and unsigned
Attachments, and 3) any transaction documents accepted by TSS hereunder.
17.0 SEVERABILITY
In the event that any term or condition contained herein is held to be invalid
or unenforceable, the remaining terms and conditions shall be unaffected and
shall continue to inure to the benefit of and to be binding upon the parties
hereto.
18.0 SUCCESSORS
The terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the parties and their respective successors and legal
representatives.
19.0 LIMITATION ON ACTIONS
No action, regardless of form, arising out of or related to the transactions
covered by this Agreement may be brought by one party against the other party
more than two years after the cause of action arose.
20.0 ASSIGNMENT AND DELEGATION
Except as otherwise provided for in this Agreement, neither party shall assign
any of its rights under this Agreement, or delegate any of its duties hereunder
without the prior written consent of the other party. Any attempted assignment
or delegation without such consent is void.
<PAGE> 5
21.0 COMPLIANCE WITH GOVERNMENTAL LEGAL REQUIREMENTS
The parties agree to comply and do all reasonable things necessary to comply
with all federal, state, and local laws, regulations, and ordinances relative to
this Agreement.
22.0 WAIVER
Failure by either party to insist in any instance upon strict conformance by the
other to any term or condition herein or failure by either party to act in the
event of a breach shall not be construed as a consent to or waiver of any
subsequent breach of the same or of any other term or condition contained
herein.
23.0 NON-EXCLUSIVE AGREEMENT
Nothing in this Agreement will prohibit either party from performing like or
similar services for any other person or entity.
24.0 THIRD PARTY BENEFICIARY
This Agreement is intended to benefit TSS and The Company and no other parties.
It is the express intent of The Company and TSS that this Agreement is not a
third-party beneficiary contract.
25.0 GOVERNING LAW AND FORUM
This Agreement shall be governed by the laws of the State of New York. Both
parties expressly waive their right to a trial by jury for any action resulting
from this Agreement.
26.0 STATEMENT OF NONRECOURSE
Technology Service Solutions is a New York general partnership and all of its
obligations arising out of this Agreement are expressly nonrecourse to each
partner and its beneficial owners.
27.0 COMPLETE AGREEMENT
This Agreement, its Attachments, and any transaction documents accepted by TSS
hereunder constitute the entire agreement and understanding between the parties
with respect to the services, and no oral or written representations, terms,
conditions, or agreements, other that those set forth in this Agreement, its
Attachments, and any transaction documents, have been relied upon or shall be
binding upon the parties or imputed to them.
28.0 Authorization
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized representatives.
Accepted and Agreed to:
Technology Service Solutions Odetics, Incorporated
By: /s/ Alan R. Andrus By: /s/ Carlos E. Valerio
---------------------------------- -------------------------------
Authorized Signature Authorized Signature
Name: Alan R. Andrus Name: Carlos E. Valerio
-------------------------------- -----------------------------
(type or print) (type or print)
Title: Sr. Vice President Title: Operations Manager
------------------------------- ----------------------------
Date: May 13, 1996 Date: May 9, 1996
-------------------------------- ----------------------------
<PAGE> 6
AMENDMENT TO THE TECHNICAL SUPPORT AGREEMENT
BETWEEN TECHNOLOGY SERVICE SOLUTIONS AND ODETICS, INCORPORATED
The following modifications are added to the subject Agreement notwithstanding
anything to the contrary therein:
1. SECTION 8.0 CONFIDENTIAL INFORMATION
Delete this Section in its entirety and replace with:
"TSS agrees that information marked with The Company's restrictive
legend or that which is not marked and is disclosed orally and certain
information provided by The Company to TSS, including end-user name,
address, type of equipment, and terms and conditions upon which The
Company provides services to such customers is considered by The
Company to be Confidential Information. Confidential Information that
is not marked with a restrictive legend or is disclosed orally shall be
identified as confidential at the time of disclosure and The Company
shall provide TSS a written confirmation within thirty business days.
TSS will use the same care and discretion to avoid disclosure,
publication, or dissemination of such information as it uses with its
own similar information that it does not wish to disclose, publish, or
disseminate. TSS agrees that it shall not (i) use any such information
for its own business purposes; and (ii) disclose any such information
to any third party, except that such information may be provided only
to those contractors that have a need to know to provide support in
fulfillment of TSS' obligations under this Agreement and have agreed in
writing to be bound by the terms and conditions of this section. TSS
agrees that Confidential Information shall be used only for purposes of
providing services to The Company, as provided in this Agreement."
"TSS agrees (i) not to reproduce the Confidential Information except as
required for completion of the items defined in any Statement of Work,
work order, or transaction document; and (ii) upon the request of The
Company, to return or destroy the Confidential Information at the
conclusion of the work done under the Statement of Work, work order, or
transaction document."
"TSS shall have no obligation to The Company with respect to
Confidential Information of The Company that (i) is public through no
breach of TSS; (ii) is independently developed by TSS; (iii) is known
to TSS prior to its receipt from The Company hereunder, and not subject
to confidentiality obligation; (iv) is rightfully received from a third
party; or (v) is required to be disclosed by law."
2. SECTION 25.0 GOVERNING LAW AND FORUM
Delete the first sentence of this Section in its entirety and replace
with:
"This Agreement shall be governed by the laws of the State of
California."
<PAGE> 7
In witness whereof, the parties hereto have caused this Amendment to be signed
by their duly authorized representatives.
Accepted and Agreed to:
Technology Service Solutions Odetics, Incorporated
By: /s/ Alan R. Andrus By: /s/ Carlos E. Valerio
-------------------------------- ----------------------------
Authorized Signature Authorized Signature
Name: Alan R. Andrus Name: Carlos E. Valerio
------------------------------ --------------------------
(type or print) (type or print)
Title: Sr. Vice President Title: Operations Manager
----------------------------- -------------------------
Dated: May 7, 1996
<PAGE> 8
TECHNICAL SUPPORT AGREEMENT
BETWEEN
ODETICS, INCORPORATED AND
TECHNOLOGY SERVICE SOLUTIONS
ATTACHMENT A - STATEMENT OF WORK (SOW)
1.0 GENERAL INFORMATION
1.1 PURPOSE
The purpose of this Statement of Work (SOW) is to fully describe the scope of
work set forth in Section 1.0 of the Technical Support Agreement between
Odetics, Incorporated (Odetics) and Technology Service Solutions (TSS) executed
on May 8 and 13, 1996, respectively. This SOW is governed by the terms and
conditions of said Technical Support Agreement. It also sets forth the work
related responsibilities of both parties, in connection with Technology Service
Solutions providing services to Odetics, Incorporated and its customers.
1.2 SCOPE
TSS will provide labor only annual maintenance service and labor only per
incident service for Odetics Tape Library products. These product services and
charges are specified in Section 7.5.
The type of services specifically required by individual relationships under
custom proposals may vary. When applicable, separate Agreements and Attachments
will be used to set forth the terms and conditions and charges. Implementation
for such requirements will occur 30 days from notification by Odetics as
mutually agreed to by TSS and Odetics. Pricing for these tasks must be submitted
separately and developed on an individual basis.
Odetics will receive all VAR or end-user calls for service and retain
responsibility for call administration and critical end-user management and
escalation.
TSS will perform services on behalf of Odetics on products listed in Exhibit A,
"Eligible Products List". The "Eligible Products List" will be revised from time
to time by mutual agreement of the parties as Odetics engages TSS to perform
service on additional products.
Should items not identified by Odetics for service be diagnosed as the cause of
system failure, the CSR will contact Odetics to get approval for continued work.
Should the VAR or end-user request additional work be performed for which the
CSR was not dispatched, the CSR will contact Odetics. If approved, Odetics will
open a new call using the standard call placement methodology. CSRs will not
perform additional work without prior approval.
1.3 PROJECT IMPLEMENTATION AND MANAGEMENT
TSS will provide Odetics with an Implementation Project Manager to ensure all
startup activities are implemented in accordance with this Statement Of Work.
The Implementation Project Manager will ensure customer familiarization with
services, work with Odetics to integrate daily operating procedures, establish
processes for call handling, tracking, and financial reporting, establish the
operational systems to support those
<PAGE> 9
processes, and transition the account to a Central Site Manager. If required,
the Project Manager will be re-engaged whenever new processes require
implementation.
TSS will assign a Central Site Manager to Odetics to serve as a single point of
contact over the life of the contract after implementation is completed. The
Central Site Manager will direct TSS support for Odetics, monitor and ensure
service levels are achieved, ensure timely and accurate reporting to Odetics,
and resolve any problems that may occur.
1.4 TECHNICAL SUPPORT
Odetics will maintain a support desk with the necessary expertise, capabilities,
and resources to dispatch TSS. Odetics support desk personnel will be available
seven days per week, 24 hours per day.
Odetics will supply TSS all training required to maintain the products covered
under this SOW. All diagnostic programs and/or procedures required for TSS to
service the specified equipment will be supplied by Odetics.
All technical support will be provided by Odetics. Odetics will provide all
technical assistance required to support the products specified in this SOW.
This support will include remote assistance via telephone and, if required,
on-site assistance. Average hold time for telephone assistance from Odetics will
not exceed 10 minutes.
Electronic Customer Communications Option (ECCO) - TSS shall, at its own
expense, include in its Maintenance Service to Odetics, the ECCO Capability
which will provide for direct dispatch between Odetics and TSS. TSS shall be
responsible for the operation and maintenance of ECCO. It is understood by
Odetics that it does not acquire any right, title, or interest in the ECCO
Capability which remains the exclusive property of TSS or its affiliates.
Odetics will be responsible for providing the equipment required for ECCO at its
site.
Odetics end-users who attempt to place service calls directly with TSS will be
instructed to contact Odetics.
The TSS electronic customer interface system will maintain ninety days of
history on-line at the local database. Information available in ECCO will be
limited to that which is available within ECCO's design capabilities.
Odetics will be able to access ECCO data on a daily basis to ascertain call
status.
Voice will be used as a backup in the event that ECCO is not available.
1.5 SAFETY
TSS agrees to service the products listed in Exhibit A. If TSS determines that
products may not meet TSS safety or serviceability standards, it will
immediately suspend service and notify Odetics of the problem. TSS will not
resume service until corrective action has been taken and the problem has passed
TSS safety and serviceability standards.
Odetics agrees that all equipment serviced under this Agreement has received
certification from Underwriters Laboratory (UL) or an equivalent and will be
individually identified as such with the appropriate labeling.
<PAGE> 10
1.6 EQUIPMENT ACCESS
Odetics agrees to inform the end-users of the eligible products that, to obtain
service, the end-user must provide TSS with full, free, and safe access to the
equipment.
1.7 RIGHTS TO MATERIALS
Odetics hereby grants to TSS the right to use pre-existing training information
provided to TSS to develop and produce training materials and documentation to
be used by TSS in which TSS retains all rights, title, and interest.
1.8 FIELD SERVICE SUPPORT
All technical support, including problem determination will be provided by
Odetics. This support will include, when necessary, product engineers and
technical specialists. On-site assistance will be provided by Odetics when
necessary.
2.0 MAINTENANCE PLAN
2.1 MAINTENANCE STRATEGY- ODETICS HELP DESK
The service strategy for Odetics accounts requires Odetics to perform
entitlement and problem determination on service calls and to dispatch a TSS
Service Representative (CSR) using the standard call placement methodology.
2.2 SERVICE CALL FLOW
TSS will provide service to the Odetics accounts using the call flows depicted
in Exhibit B. These call flows may change over time.
When the end-user experiences a problem it will call Odetics at 1-800-284-5101.
Odetics will screen all calls to:
- Verify service entitlement
- Obtain problem information and log pertinent end-user information
- Perform problem determination
Odetics will provide TSS with the following information at the time of dispatch:
- TSS Contract Number
- Call Billing/Type Code
- Odetics Work Order Number
- Odetics End-User Phone Number with Account ID
- End-User Name
- Contact Person
- Address
- Zip Code
- Contact Phone Number
- Platform Type (Exhibit C)
- Manufacturer and Model Number
- Serial Number
- Problem Description or Definition.
- Failing Part Description
Installation and hardware service calls will be routed directly to the
appropriately trained CSR based on CSR training and availability.
<PAGE> 11
Once the CSR has been dispatched, the CSR receiving the call will:
- Acknowledge the call
- Obtain the part, if required, through the normal parts process or via
Odetics
- Call the end-user within one hour to schedule service
- Update ECCO with Estimated Time of Arrival (ETA)
Once on-site, the CSR will:
- Verify machine serial number matches the serial number provided
- Replace part(s) and/or repair machine as required - Call Odetics
Technical Support if technical assistance is required
- Record all time using the Odetics Work Order number and TSS Problem
Number
At conclusion of the call, the CSR will:
- Complete Quality Service Activity Reporting (QSAR) record with contract
number and service code (01 for maintenance and 44 for all other
services)
- Return the removed part, via the normal Used Part Return (UPR) method.
The failed part will be returned to Odetics and the CSR will record the
waybill number within the QSAR.
- Close the call
- Download NOVRAM and transmit the download to Odetics.
In the event that additional service is requested by the end-user while the CSR
is on-site, the CSR will contact the Odetics Help Desk and a new call will be
opened via ECCO.
2.3 DOCUMENTATION
If TSS is required to obtain necessary documentation for servicing the eligible
products, Odetics will assume reproduction costs.
3.0 EDUCATION/TRAINING
3.1 SKILLS
TSS will dispatch appropriately trained CSRs at the time of service call
placement
3.2 TRAINING
Odetics will schedule and make available to TSS CSRs, training classes for the
products covered in this Statement of Work. CSRs assigned primary and backup
coverage for Odetics products will attend classes providing "hands on" training.
Odetics will make such video training available as required. The training class
will be offered to TSS at no charge. Odetics will reimburse TSS for the per
diem, and hotel expenses for the TSS employees attending the Odetics training
classes.
4.0 PARTS SUPPORT
4.1 PARTS STRATEGY
TSS will maintain on consignment, within the TSS distribution network, an
inventory of high usage parts, as identified by Odetics, for the products
identified in Exhibit A. The parts kits provided by Odetics will contain parts
to sufficiently support repair for, on average, 85% of all maintenance calls.
Parts will be assigned a TSS part number. A UPR
<PAGE> 12
identification will be assigned to those parts that will be returned to the
network for disposal or repair.
Low usage parts not included in the standard inventory will be obtained, as
required, to meet required response/repair times and will be shipped by Odetics
to a site designated by the CSR for next business day service.
4.2 MAINTENANCE PARTS LOGISTICS
TSS will provide maintenance parts distribution and logistics support to Odetics
through existing network structure to meet the immediate and next day
maintenance parts distribution requirements of Odetics.
Odetics is responsible for providing replenishment maintenance parts to the
distribution network as requested by the administrators of the network.
4.3 SERVICES AND SUPPORT DESCRIPTIONS
TSS will provide Odetics with maintenance parts distribution using the existing
parts distribution network which provides same day and next day delivery
service. TSS will provide warehousing, inventory control, inventory management,
transportation, and data management. TSS will ensure that Odetics parts are
strategically stocked within the distribution network to the service delivery
requirements set forth by Odetics and stated in this Statement of Work. This
includes redistribution of excess inventory for emergency needs.
4.4 DISTRIBUTION NETWORK SUPPORT STRUCTURE AND SERVICES
TSS will use the existing distribution network to fulfill Odetics maintenance
parts requirements, where applicable. TSS and Odetics will jointly develop the
maintenance parts support strategy required for Odetics. In the event that parts
are unavailable in the TSS network to fulfill Odetics requirements, TSS will
refer these orders to Odetics for fulfillment at Odetics expense. All of Odetics
inventories outside the TSS distribution network are the physical and financial
responsibility of Odetics.
4.5 DISTRIBUTION SUPPORT SYSTEMS AND REPORTS
System generated reports containing Odetics inventory on consignment to TSS will
be created and distributed to Odetics on a weekly basis for select reports, and
on a monthly basis for other reports.
These reports will include inventory receipts, inventory disbursements, monthly
inventory status, and reconciliation for those Odetics parts consigned to TSS
and within the distribution network.
4.6 TRANSPORTATION EXPENSES
Inbound transportation expense to TSS from Odetics or Odetics maintenance parts
suppliers is the responsibility of Odetics, and Odetics will assume the risk of
loss or damage. Used part return transportation expense to Odetics or to Odetics
repair sources is the responsibility of Odetics and Odetics will assume the risk
of loss or damage.
4.7 INVENTORY
TSS will manage or have managed, maintenance parts on consignment from Odetics
and maintain accurate inventory records. This inventory is paid for and owned by
Odetics and
<PAGE> 13
is made available on a consignment basis. TSS is not liable for any sales/use
tax reporting, insurance reporting, or personal property tax reporting. Odetics
shall maintain comprehensive insurance covering the inventory from risk of loss.
TSS will maintain the inventory and activity records for all Odetics parts on
consignment to TSS. Full and complete access for audit/inspection of the Odetics
inventory records under TSS control will be made available during normal
business hours upon three business days prior written notice to TSS.
Odetics will label all parts with a TSS part number prior to shipment to the
distribution network or directly to TSS CSRs. TSS part numbers will be assigned
by TSS and made available to Odetics. Odetics will ship parts to TSS packaged to
TSS specifications. TSS will not be responsible for any packaging materials or
labor for the repackaging of Odetics parts.
Odetics will send an advanced shipping notice of part number, quantity, order
number, and shipping destination to TSS at the time of shipment from Odetics or
the Odetics supplier. TSS will utilize this information to pre-load its
receiving system to reduce cycle time and hand key errors.
New defective or damaged parts will be reported to Odetics immediately upon
detection. These parts will be returned to Odetics and Odetics agrees to accept
all costs associated with their return. Odetics will have financial
responsibility for all risk of loss, damage, or defect. Odetics will be
responsible for replacing the new defective or damaged parts immediately.
TSS shall perform an incoming inspection of each shipment of Odetics parts to
verify that content and piece quantity as stated on the packing list is
accurate. Such inspection shall in no way obligate TSS or its representatives
for responsibility for subsequent discovery of defect, loss, or damage to parts.
In the event of a shortage, TSS will notify Odetics immediately and request the
part shortage be shipped to TSS immediately.
TSS shall manage the Odetics parts inventory within the TSS network in
accordance with the "then current" TSS standard inventory practices. TSS will
perform a yearly count of all Odetics parts in the TSS network and reconcile
inventory variances accordingly. TSS will achieve an annual Odetics inventory
accuracy of 95.0% in dollar value. Any annual Odetics inventory variance below
95.0% will be reimbursed by TSS at the lower of PAR's base manufacturing cost or
market rates.
Odetics will include a pre-paid FedEx mailer (Economy) for each part that is to
be returned to a Odetics repair location. Transportation cost is the
responsibility of Odetics. The TSS CSR will drop the used part at a FedEx
shipping point within seven working days from completion of the repair activity.
Once the part is returned to FedEx and the shipping way bill is noted in the
comments section of the QSAR, TSS will hold no liability for the parts. TSS will
assist Odetics with identifying Odetics parts and quantities that are obsolete
or surplus. The decisions and approvals for scrap will be made by Odetics in
writing. The establishment of all reserves relating to obsolescence and surplus
is the responsibility of Odetics. Expense associated with scrap is the
responsibility of Odetics.
Upon termination of this Agreement, TSS will provide a final report listing all
parts inventory and Odetics stock available to Odetics. All costs incurred by
TSS in preparing the Odetics inventory for shipment, and the transportation
costs to move the Odetics inventory from the TSS network to a location specified
by Odetics, will be the financial responsibility of Odetics. Odetics will assume
all risk of damage or loss after supplied with proof of shipment from TSS,
including waybill numbers.
<PAGE> 14
The costs of shipment of spare parts to inventory and from service call
locations (end-user sites) will be assumed by Odetics.
5.0 ADMINISTRATIVE SUPPORT
5.1 MACHINE TYPES AND MODELS
All ATL equipment types will be assigned a TSS machine type number consistent
with the protocols required for TSS databases.
5.2 PARTS NUMBERS
TSS Part Numbers will be developed and assigned to product part numbers
consistent with the protocols for TSS databases.
5.3 DISPATCH
Odetics will perform entitlement and problem determination for Service prior to
contacting TSS.
Calls for service from VARs or end-users will be received by Odetics at
1-800-284-5101. The end-user will be requested to provide information identified
in Section 2.2.
If an end-user should call TSS directly, the TSS representative will advise the
end-user to contact Odetics at 1-800-284-5101 for assistance.
5.4 ACTIVITY REPORTING
TSS CSRs will use QSAR for service activity reporting. When recording QSAR
entries for Odetics, the CSR will use appropriate TSS platform types, machine
types, models and serial numbers, and service code as well as the TSS Contract
Number.
TSS CSRs will use service codes 01 for maintenance service and 44 for all other
services.
If the call has been properly placed via Odetics, the machine type and the
correct machine serial number will be in the dispatch record and will
automatically fill these fields when the CSR records the service activity.
6.0 SERVICE SUPPORT
6.1 TSS ON-SITE SUPPORT
TSS will provide a trained CSR to perform remedial maintenance who will be
responsible for using the following recommended call flow:
Contact the end-user indicated in the call record within one hour to
schedule activity
Provide ETA information via ECCO
Provide on-site 7 x 24 hour service or installations as scheduled
Obtain parts via the identified process
Utilize technical support when necessary
<PAGE> 15
Update call with appropriate call coding including identifying the problem
resolved
Close resolved problems via portable terminal or via voice to the dispatch
system on a timely basis
6.2 ODETICS TECHNICAL SUPPORT RESPONSIBILITIES
Odetics will:
Provide entitlement assessment and problem determination
Provide product and customer information as identified in Section 2.2
Dispatch the call using ECCO with all necessary call information
Provide current inventory information on end-user accounts
7.0 SERVICES
7.1 SERVICE AGREEMENT
This Agreement is for labor only annual maintenance service and labor only per
incident service. The Principle Period of Maintenance (PPM) is as defined in
Section 7.5.
7.2 CUSTOMER SERVICE RESPONSE TIME
TSS shall provide telephone response to end-user maintenance calls for hardware
service within one hour of being dispatched by Odetics. Service response times
are as defined in Section 7.5.
7.3 INVOICES
TSS will provide invoice charges based on specific contract requirements or on a
monthly basis for all service incidents completed. The invoices will include the
following information:
1. Odetics Work Order Number
2. TSS Service Call Number
3. End-User Name
4. End-User Location
5. Date Call Received
6. Date Call Closed
7. Total labor hours or the per incident or fixed fee rate
8. Total charge per call
9. Total charges on the invoice.
The parties agree that when applicable, a blanket purchase order will be issued
for administration and billing purposes only and will not modify or add to the
terms and conditions of the Agreement. Any terms and conditions on the reverse
side of such purchase order will not apply.
<PAGE> 16
7.4 REPORTS
TSS will provide current and historic call information using ECCO. Current call
progress can be displayed at any time during a service incident. The status of a
selected call or all calls will be indicated at the time the request is made
through ECCO.
Historic call status will provide information tailored to parameters set up to
track desired objectives and information. ECCO 1.5 Users Guide describes current
and historic data available to Odetics.
7.5 PRICING
FIXED-PRICE AGREEMENTS:
Labor Only Annual Maintenance:
Annual Maintenance Pricing, Labor Only (including PMs):
<TABLE>
<CAPTION>
==========================================================================================
7x24x4 7x9x4 5x9x4 5x9BD
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* ACL2640 [ ] [ ] [ ] [ ]
(2PMs/Year)
------------------------------------------------------------------------------------------
Billing Code LLA1 LLA3 LKA1 LFA1
------------------------------------------------------------------------------------------
* ACL4/52 [ ] [ ] [ ] [ ]
1PM/Year
------------------------------------------------------------------------------------------
Billing Code LLA2 LLA4 LKA2 LFA2
==========================================================================================
</TABLE>
Annual Maintenance Pricing Labor Only (excluding PMs):
<TABLE>
<CAPTION>
==========================================================================================
7x24x4 7x9x4 5x9x4 5x9NBD
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* ACL2640 [ ] [ ] [ ] [ ]
------------------------------------------------------------------------------------------
Billing Code LLA1 LLA3 LKA1 LFA1
------------------------------------------------------------------------------------------
* ACL4/42 [ ] [ ] [ ] [ ]
------------------------------------------------------------------------------------------
Billing Code LLA2 LLA4 LKA2 LFA2
==========================================================================================
</TABLE>
Per Incident Pricing, Labor Only:
<TABLE>
<CAPTION>
==========================================================================================
7x24x4 7x9x4 5x9x4 5x9NBD
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* ACL2640 [ ] [ ] [ ] [ ]
------------------------------------------------------------------------------------------
Billing Code LLAA LLAC LKAA LFAA
------------------------------------------------------------------------------------------
* ACL4/52 [ ] [ ] [ ] [ ]
------------------------------------------------------------------------------------------
Billing Code LLAB LLAD LKAB LFAB
==========================================================================================
</TABLE>
*CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 17
Price Conditions
- Service to include labor only hardware support of the products
listed for locations within the United States.
- Fees include labor, travel, and consigned parts inventory
management.
- Fees include the cost of sending TSS technicians to the
Odetics provided on-site training course for areas with a
quantity of Odetics products that dictate a trained
technician; Odetics must proved course, materials, and tuition
at no cost to TSS.
- PMs will be provided at the time of a remedial maintenance
call only when purchased as a part of the contract
maintenance.
* - Pricing is based upon the contract volume reaching a minimum
of [ ] months of the signature date of this SOW. If volumes do
not reach the specified level, the contract is subject to
cancellation.
* - Pricing is based upon manufacturer suggested MTBF; [ ]
- Odetics to provide video training sets for field disbursement.
- Odetics to provide telephone technical support on a 7x24
basis.
- Prices are valid for complete product line maintenance
support.
7.6 AUTHORIZATION
Accepted and Agreed to:
TECHNOLOGY SERVICE SOLUTIONS ODETICS, INCORPORATED
By: /s/Alan R. Andrus By: /s/Jack Johnson
---------------------------- -----------------------------------
Authorized Signature Authorized Signature
Name: Alan R. Andrus Name: Jack Johnson
-------------------------- ---------------------------------
(type or print) (type or print)
Title: Sr. VP Title: Vice President, General Manage
------------------------- --------------------------------
Dated: 9/17/96 Date: 12 Sept 96
------------------------- ---------------------------------
*CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 18
EXHIBIT A
ELIGIBLE PRODUCTS LIST
Manufacturer product lines currently eligible for service under this Agreement
are as follow:
<TABLE>
<CAPTION>
=============================================================
Machine Type Description
-------------------------------------------------------------
<S> <C>
ACL2640 ATL Products Automated Tape Library
-------------------------------------------------------------
ACL4/52 ATL Products Automated Tape Library
=============================================================
</TABLE>
<PAGE> 19
EXHIBIT B
CALL FLOW
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
End-User
Requests
Service
No Hardware Yes
Future?
No TSS Odetics Does Problem
Involvement Determination and, if
with Call Possible, identifies
Failing Part
Odetics Places
Service Call with
TSS using
ECCO
TSS CSR
Acknowledges Call,
Calls Customer and
Updates ECCO with
ETA
TSS Escalation CRS On-Site
Procedures No per Service Yes
Invoked Offering
Requirement
Additional No Call Complete Yes
No Parts within 4
Required? Hours
Yes
Support Level Additional
Escalated Parts Supplied Parts Returned
by Odetics via Established
Process
Establish Parts
Arrival Time and
Reschedule with
Customer
Call Closed
(Via ECCO)
</TABLE>
<PAGE> 20
EXHIBIT C
ODETICS PLATFORM TYPE MATRIX
Service calls will be placed using platform types to identify the correct level
of service required. The following table represents the platform types to be
used on the Odetics account. This list is subject to change as the project
progresses.
<TABLE>
<CAPTION>
================================================================================
Platform Type Description CSR Training
- --------------------------------------------------------------------------------
<S> <C> <C>
2XTP Tape Library Appropriate customer
supplied training. Laptop
required for service.
- --------------------------------------------------------------------------------
2XTP Tape Library Appropriate customer
supplied training. Laptop
required for service.
================================================================================
</TABLE>
<PAGE> 21
EXHIBIT D
ODETICS ESCALATION PROCEDURES
Escalation By TSS to Odetics:
<TABLE>
<CAPTION>
================================================================================
Contact Title Phone
- --------------------------------------------------------------------------------
<S> <C> <C>
Carlos Valerio Operations Manager 714-780-7902
================================================================================
</TABLE>
Escalation By Odetics to TSS:
<TABLE>
<CAPTION>
================================================================================
Contact Title Phone
- --------------------------------------------------------------------------------
<S> <C>
TSS Duty Manager Duty Manager 800-TSS-FIXX
- --------------------------------------------------------------------------------
Gary Nelson Implementation 510-567-9939
Project Manager
- --------------------------------------------------------------------------------
Lou Federico Account Manager 817-962-7064
================================================================================
</TABLE>
<PAGE> 1
EXHIBIT 10.9
Agreement No. 550
CONFIDENTIAL TREATMENT REQUESTED.
CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.
QUANTUM(R)
TAPE LIBRARY OEM
PURCHASE AGREEMENT
This Tape Library OEM Purchase Agreement ("Agreement") is entered into in
Milpitas, California, as of August 28, 1996, between QUANTUM CORPORATION, a
Delaware corporation with principal offices at 500 McCarthy Blvd., Milpitas, CA
95035 U.S.A. ("Quantum"), and ATL PRODUCTS, INC., a California corporation with
offices at 1515 South Manchester Avenue, Anaheim, CA 92802 ("Buyer" or "ATL").
WHEREAS, Quantum develops and manufactures tape drive Products as described in
Exhibit A, (hereinafter known as "Products"); and
WHEREAS, Quantum desires to offer said Products for sale to Buyer on a non
exclusive basis; and
WHEREAS, Buyer has recognized capabilities in the Automated Tape Library market
and desires to have the right to purchase such Products for incorporation into
Buyer's product.
THE FOLLOWING TERMS AND CONDITIONS SHALL APPLY TO ALL PURCHASES BY BUYER FROM
QUANTUM.
1. TAPE LIBRARY OEM PRODUCT
During the term of this Agreement, Quantum agrees to sell and Buyer
agrees to buy the types of Products listed in the Tape Library OEM
Product Exhibit A ("Exhibit A") attached hereto (the "Product" or
"Products"). Quantum will notify Buyer of any updates to the list of
Products in Exhibit A with thirty (30) days prior written notice and
new products may be added from time to time by mutual agreement of the
parties in writing.
2. PURCHASE ORDERS
(a) Buyer will initiate purchases under this Agreement by
submitting written purchase orders (the "Order[s]") to Quantum
any time from the effective date of this Agreement until
ninety (90) days before the termination date of the Agreement.
All Orders submitted by Buyer will state the requested
delivery dates which will be at least ninety (90) days after
submittal of the Order. No Order will be binding on Quantum
until accepted (in whole or in part) by Quantum. The scheduled
delivery date of a given Order will be as specified by Quantum
in writing within five (5) business days.
(b) The Order shall contain the following minimum information
relative to purchases made under this Agreement: description
of materials purchased, Quantum part number,
PAGE 1
COMPANY CONFIDENTIAL
<PAGE> 2
Agreement No. 550
quantity purchased, shipping instructions, delivery schedule,
destination, and confirmation of price. Each Order will make
specific reference to this Agreement and thereby incorporate
the terms of this Agreement. No terms or conditions in any
Order will in any way supersede, modify or supplement this
Agreement.
3. RESCHEDULING AND CANCELLATION
(a) The following schedule shall apply for rescheduling and
cancellation:
<TABLE>
<CAPTION>
========================================================
# OF DAYS MAXIMUM
NOTICE MAXIMUM CANCELLATION
PRIOR TO RESCHEDULE CHARGE AT QUANTUM'S
SCHEDULED DELIVERY DECREASE AMOUNT DISCRETION
--------------------------------------------------------
<S> <C> <C>
0 - 60 0% 100%
61 - 90 50% 50%
91 + days 100% 0%
========================================================
</TABLE>
Standard configurations may use the following flexibility table:
<TABLE>
<CAPTION>
========================================================
# OF DAYS MAXIMUM
NOTICE MAXIMUM CANCELLATION
PRIOR TO RESCHEDULE CHARGE AT QUANTUM'S
SCHEDULED DELIVERY DECREASE AMOUNT DISCRETION
--------------------------------------------------------
<S> <C> <C>
0 - 30 0% 100%
31 - 45 50% 50%
46 + days 100% 0%
========================================================
</TABLE>
(b) Purchase Forecasts. On a monthly basis, Buyer shall issue a
revolving twelve (12) month non-binding forecast in a
mutually agreed format so that Quantum will have an
understanding of BUYER's anticipated monthly requirements.
Every three (3) months Buyer and Quantum shall review all
shipments made by Quantum against the total anticipated
purchase commitment.
BUYER'S NON-BINDING FORECAST IS FOR INFORMATION ONLY AND DOES
NOT CREATE ANY LIABILITY BETWEEN THE PARTIES NOR DOES IT
GUARANTEE BUYER WILL ISSUE ORDERS AGAINST THE FORECAST.
QUANTUM'S ONLY OBLIGATION TO MANUFACTURE AND SHIP PRODUCT
WILL BE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND
PURSUANT TO A PURCHASE ORDER ISSUED BY BUYER AND ACCEPTED BY
QUANTUM.
(c) Upside Support. Quantum agrees to use reasonable efforts to
accommodate any request to accelerate delivery of Upside
quantities. With respect to any request for
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COMPANY CONFIDENTIAL
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Agreement No. 550
quantities in excess of Upside, the parties agree to negotiate
in good faith the delivery dates and additional costs to
Buyer, if any, related thereto.
(d) Allocation. If it becomes necessary for Quantum to allocate
production capacity, Buyer Forecast and Purchase Orders will
be reviewed and reasonable efforts will be undertaken to treat
Buyer consistently with similarly situated customers.
4. PACKING, SHIPPING, AND TITLE
The method of packaging will be in accordance with Quantum's standard
practices. Shipments will be to Buyer's address set forth above or, if
different, to the address specified in the Order. Product will be
shipped in accordance with Quantum's standard procedures and will be Ex
Works Quantum's designated facility. Buyer will be responsible for all
shipping expenses, insurance, duties and similar charges which, if paid
by Quantum, will appear as additional items on Quantum's invoice to
Buyer. Title to the Product and risk of loss will pass to Buyer upon
Quantum's delivery to Buyer's carrier.
5. INSPECTION AND ACCEPTANCE
Buyer will have thirty (30) days after delivery to inspect and test
each Product to assure conformance to Quantum's applicable Product
Specification(s) attached hereto by reference. If any Products are
deemed defective by Buyer in any material way, Buyer shall, within such
thirty (30) day period, notify Quantum, obtain a customer return order
number from Quantum and return such defective Product to Quantum in the
same condition as delivered and in the same or equivalent shipping
container, with a description of said defect. If Quantum confirms the
defect, Quantum shall, at its option, rework or replace and re-deliver
the returned Product to Buyer. Shipment of Product to one of Buyer's
customers or failure to return Product within said thirty (30) day
period shall constitute acceptance of the Product.
6. SOURCE INSPECTION
Upon two (2) business days written request to Quantum, and at Quantum's
sole discretion, Buyer may conduct an inspection of Quantum's
facilities during normal business hours. Such inspections shall be to
inspect and review the work, including the Products being purchased
pursuant to this Agreement. Should the presence of Buyer delay any
shipment of Product, Quantum shall not be held liable for a delayed
ship date. The Parties agree that source inspection shall not
constitute acceptance of the Product by Buyer and that acceptance by
Buyer shall be the process outlined in the Section titled Inspection
and Acceptance.
7. QUALITY ASSURANCE
Quantum shall maintain an effective quality/manufacturing control
system and ensure that the entire process of design, manufacture and
repair, including packaging and shipping, is maintained under
continuous control and improvement. The purpose of the quality control
system will be to verify all requirements of the Product Specifications
and Test Specifications are satisfied.
Buyer performs out-of-box quality audits on all Products received. In
the event any failure occurs in these audits, upon Buyer's specific
request, Quantum shall analyze the root cause and
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COMPANY CONFIDENTIAL
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Agreement No. 550
take appropriate corrective actions including providing Buyer with a
root cause analysis of the failure (within seventy-two (72) hours of
receipt of the failing part) and implementing corrective actions to
prevent recurrence of the failure. Such corrective actions shall be
implemented within thirty (30) days of Quantum's receipt of the failed
Product.
Quantum shall generate Failure Analysis Reports of each failure and
maintain records of the corrective actions and an evaluation of its
effectiveness. Such records shall be provided to Buyer upon Buyer's
request.
8. CHANGES
Quantum shall give thirty (30) days prior written notice to Buyer of
any changes to the Products prior to implementation that affect form,
fit or function or could affect both forward and backward
compatibility. Buyer shall give written notice to Quantum of its
approval or disapproval of the change in writing within thirty (30)
days of the date Buyer receives such written notice. If written notice
is not received by Quantum from Buyer within thirty (30) days either
approving or disapproving the change, Quantum shall consider the change
acceptable.
If it is determined by Buyer or Quantum that a Mandatory Change is
required to make the Product conform to the Product Specification,
Quantum shall make the changes at no charge to Buyer in all units that
are not yet delivered to Buyer. In the event such changes are required
to make previously delivered Product conform to the Product
Specification, they shall be supplied in the form of a Mandatory Field
Change Kit at no charge to Buyer in accordance with the procedure set
forth in Exhibit D. Quantum shall pay Buyer's expenses to install the
Mandatory Field Change Kit.
Time is of the essence for Buyer to incorporate a change. In the event
that Buyer requests a sample of a change, Quantum will use reasonable
efforts to provide such sample to Buyer so that Buyer can approve the
change within the thirty (30) day approval period. Any extension to the
approval period shall be by written mutual agreement.
Quantum may from time to time make compatible changes or modifications
to the Product (i) that do not affect form, fit, or function, and (ii)
that are compatible and interchangeable with and shall not require the
retrofit of Product previously delivered. If Quantum makes such
modification, Quantum shall give prior written notice (ECN) to Buyer
upon delivering to Buyer any Product containing such modification. Such
written notice shall describe the changes and update any documentation.
9. PRICES, DISCOUNTS, AND TAXES
(a) The purchase price for each Product sold hereunder shall be
the prices set forth on the attached Exhibit A.
(b) Product prices are exclusive of all taxes. With the exception
of taxes measured by Quantum's income, Buyer shall be
responsible for all federal, state or local sales, use,
property, export, excise and other similar taxes that may be
levied as a result of the sale or delivery of any Product sold
under this Agreement. Such taxes will appear as a separate
item on Buyer's invoice unless Quantum receives a valid tax
exemption certificate from Buyer prior to shipment.
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COMPANY CONFIDENTIAL
<PAGE> 5
Agreement No. 550
10. PAYMENT
Subject to approval of Buyer's credit by Quantum, payment terms are net
(thirty) 30 days. All payments will be in U.S. dollars. Overdue
payments will be subject to a service charge of one and one-half
percent (1 1/2%) per month or the maximum rate permitted by applicable
law, which ever is lower.
11. TAPE LIBRARY OEM CERTIFICATION
Buyer certifies that it is purchasing the Product under this Agreement
as a Tape Library OEM, that the Product will be incorporated by Buyer
as a part of another system or subsystem which Buyer assembles together
with such Product under its own name for sale or lease in the regular
course of its business. Such system or subsystem shall include hardware
and/or software other than the Product and shall, by an objective
examination of such factors as cost, pricing, and Product features,
represent approximately a thirty percent (30%) enhancement and
transformation of the Product. Product intended for other purposes
shall not be purchased under this Agreement. Buyer will sell only to
resellers and will not sell to end-users of the Product. Buyer will
furnish to Quantum an Exhibit B - Business Plan ("Exhibit B") which
defines Buyer's product. Buyer will furnish further evidence of
compliance with this paragraph and Exhibit B upon Quantum's reasonable
request. Notwithstanding Section 13 below, failure of Buyer to comply
with this Section 11, will be cause for immediate termination of this
Agreement by Quantum.
12. BUSINESS REVIEWS
Buyer and Quantum shall conduct quarterly Product reviews to keep Buyer
informed with regard to the progress of the development of New
Product(s) and enhancement(s). Buyer and Quantum shall, each at their
own expense, meet on a quarterly basis to review pricing, review
performance and business transacted, and to resolve those issues that
may have arisen since the last business review meeting.
13. TERM AND TERMINATION
This Agreement will be effective on the date of its execution by
Quantum, and will continue for three (3) years unless terminated by
either party in accordance with the termination provisions herein.
After the initial term, this Agreement will continue in effect until
terminated in accordance with this Section 13. The parties may at any
time after the initial term, negotiate a replacement long-term
agreement. Either party may terminate this Agreement, for convenience,
with ninety (90) days prior written notice. Quantum may terminate this
Agreement upon the insolvency, bankruptcy or voluntary dissolution or
assignment for the benefit of creditors of or by Buyer. In addition, in
the case of a default, the non-defaulting party may terminate this
Agreement upon the failure of a defaulting party to cure a default in
the performance of any provision hereof within thirty (30) days after
written notice thereof by the non-defaulting party. The provisions of
Sections 11, 13, 14, 15, 17, 18, and 19 hereof shall survive the
termination of this Agreement for any reason.
In the event Quantum terminates this Agreement for convenience, ATL may
continue to place Orders for Product for ninety (90) days after the
termination date. All such Orders will ship according to Quantum's
then-current standard terms and conditions.
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COMPANY CONFIDENTIAL
<PAGE> 6
Agreement No. 550
14. TRAINING
Quantum, at its option, may provide Product training for a limited
number of Buyer's employees. The training curriculum, Iogistics, fees,
and schedule will be defined by Quantum and may include participants
other than Buyer's personnel. Buyer will bear associated expenses of
its employees, including, without limitation, travel, food and lodging.
15. LIMITED WARRANTY
(a) For the period specified in Exhibit A from the date of
original shipment of Product from Quantum to Buyer, Quantum
will make available its standard limited warranty. This
warranty is extended only to the original Buyer (a Buyer that
purchases Product directly from Quantum) and is not
transferable. The liability of Quantum hereunder is limited,
at Quantum's option, to replacing or repairing any defective
Product in accordance with Quantum's standard procedures or
refunding the Purchase Price of such Product. Quantum will
retain title to any unrepairable defective parts. In-Warranty
Product returned to Quantum for repair during the warranty
period which is confirmed not to be defective is defined as No
Trouble Found ("NTF") and a fee covering the handling and
testing will apply.
(b) Quantum will issue a Return Materials Authorization ("RMA")
within three (3) days of any request for same by Buyer when
required in connection with any return under this Agreement.
Repair warranty is ninety (90) days or remainder of original
Product Warranty, whichever is longer.
(c) Out of warranty repairs will be at Quantum's then standard
rates and procedures.
(d) The above warranties are contingent upon proper use in the
application for which the Product was intended and does not
cover Product which: (1) has been modified without Quantum's
approval, (2) has been subjected to unusual physical or
electrical stress, including damage caused by handling or
shipping in unapproved containers, (3) has had its integrity
disturbed in any way (examples of such disturbance include
without limitation, the removal or cracking of any protective
cover or seal), or (4) has had the serial number label removed
or damaged to the extent that warranty status of such Product
cannot be determined. Quantum shall make the final
determination as to the existence and cause of any alleged
defect.
(e) Freight is prepaid each direction for both in-warranty and
out-of-warranty returns. Use of unqualified, unapproved
shipping boxes may result in shipping damage for which Quantum
assumes no liability and it may void the Product warranty.
(f) THE FOREGOING WARRANTIES ARE EXCLUSIVE, AND NO OTHER
WARRANTIES, WHETHER WRITTEN, ORAL, EXPRESSED, IMPLIED OR
STATUTORY, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE SHALL APPLY.
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COMPANY CONFIDENTIAL
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Agreement No. 550
16. PRODUCT SUPPORT/END OF LIFE
If, during the Purchase Period or Extended Purchase Period, if any,
Quantum discontinues producing Products, Quantum shall provide Buyer
with six (6) months prior written notice of such discontinuance.
Upon expiration or termination of this Agreement, Quantum or its
authorized agents shall repair Products for two (2) years after the
date of the last Product manufactured.
17. LIMITATIONS OF LIABILITY
(a) QUANTUM'S LIABILITY FOR ANY CLAIM, HOWEVER CAUSED AND ON ANY
THEORY OF LIABILITY ARISING OUT OF THIS AGREEMENT, SHALL IN NO
EVENT EXCEED THE PRICE OF THE PRODUCT FURNISHED HEREUNDER
GIVING RISE TO SUCH LIABILITY. NOTWITHSTANDING THE FOREGOING,
QUANTUM'S LIABILITY ARISING FROM ENGINEERING CHANGES MADE TO
THE PRODUCT IS LIMITED TO QUANTUM'S COST OF MODIFICATION AT
THE QUANTUM DESIGNATED SERVICE CENTER AND FREIGHT CHARGES.
(b) IN NO EVENT SHALL QUANTUM BE LIABLE TO BUYER, BUYER'S
CUSTOMERS OR ANY OTHER PERSON OR ENTITY FOR LOSS OF PROFITS,
LOSS OF DATA, COST OF PROCUREMENT OF SUBSTITUTE GOODS OR
SERVICES, OR FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL,
INDIRECT OR PUNITIVE DAMAGES OF ANY NATURE, HOWEVER CAUSED AND
ON ANY THEORY OF LIABILITY ARISING OUT OF THIS AGREEMENT, AND
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY.
18. INDEMNIFICATION
(a) Quantum will defend or settle any patent infringement cases at
its expense for any action brought against Buyer or its
customers based upon the claim that the Product constitutes
direct infringement of any duly issued United States patent,
copyright, or trademark. Quantum agrees to pay all damages and
costs finally awarded against Buyer or its customers
attributable to such claim provided Quantum has sole control
of any such action or settlement negotiations and provided
Buyer notifies Quantum promptly in writing of such claim, and
gives Quantum authority, information and such assistance as
necessary to settle or defend such claim.
(b) If the Product becomes, or in the opinion of Quantum may
become, subject to claim of infringement of any United States
patent, Quantum may, at its option: (i) procure for Buyer and
its customers the right to use the Product under any such
patent; (ii) suitably replace or modify the Product, or part
thereof; or (iii) remove the Product, or part thereof, and
refund the aggregate payments paid therefore by Buyer, less a
reasonable sum for use and damage. Quantum shall not be liable
for any costs or expenses incurred without its prior written
authorization.
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Agreement No. 550
(c) Quantum assumes no liability hereunder for any (i)
infringement of patent claims covering completed systems,
assembly, circuit, combination, configuration, method or
process in which any of the Product(s) may be used; (ii)
compliance with Buyer's specifications; (iii) modification of
the Product, or any part thereof, after delivery by Quantum;
or (iv) use of the Product in a manner for which it is not
designed.
(d) THE FOREGOING STATES THE SOLE AND EXCLUSIVE LIABILITY OF
QUANTUM FOR ANY INFRINGEMENT OF A PATENT, COPYRIGHT, TRADEMARK
OR OTHER INTELLECTUAL PROPERTY RIGHT.
19. CONFIDENTIAL INFORMATION
All proprietary information which is specifically designated as such,
which is disclosed by either party to the other, in any form in
connection with this Agreement, shall be kept confidential by the
recipient. Any such proprietary information shall be protected by the
recipient from disclosure to others with at least the same degree of
care as that which is accorded to its own proprietary information but
in no event with less than reasonable care. Without limiting the
foregoing, Buyer expressly agrees that any know-how, designs,
engineering details and other data pertaining to any Product or portion
thereof, shall, without further need for designation, be deemed
proprietary and confidential information of Quantum under this Section
19. The foregoing shall not apply to information which is generally
known and available in the public domain through no fault of the
recipient.
20. TRADEMARKS AND TRADE NAMES
(a) Usage of Quantum Marks. Any and all uses by Buyer of the
Marks must be in accordance with Quantum's policies and
guidelines for use of its Marks as set forth in Exhibit A.
Quantum may alter or replace its Marks or may revise its
policies and guidelines related thereto by sending Buyer
amendments to Exhibit A. Such policies and guidelines shall
become effective, and shall be adhered to by Buyer within (90)
days of Buyer's receipt thereof. Buyer may continue to utilize
and distribute product and marketing material in inventory
and/or in process at the time of the receipt of an amendment
to Exhibit A that renders such product or marketing material
nonconforming with the amended Exhibit A, provided that Buyer
remains in compliance with the other terms of this Agreement
and provided that Buyer shall use best commercially reasonable
efforts to conform any such product or marketing material to
the Quantum trademark policies and guidelines then in effect.
(b) Trademark License. Seller hereby grants Buyer, during the term
of this Agreement, a non exclusive, worldwide license to use
the Quantum Marks (hereinafter, the "Marks") set forth more
particularly in Exhibit A on products sold by Buyer that
include Product and on packaging and marketing materials for
such products in the manner set forth herein.
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COMPANY CONFIDENTIAL
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Agreement No. 550
(c) Quality Control. From time to time, as reasonably requested by
Quantum, Buyer shall provide Quantum with samples, or access
to samples, as appropriate, of the products of Buyer, and any
associated packaging and marketing materials, bearing the
Marks. Buyer shall not use the Marks in a manner or on
products of quality that detracts from the goodwill associated
with the Marks and shall conform to Quantum's reasonable
directions regarding the use of the Marks.
(d) No contest. Buyer hereby recognizes Quantum's exclusive
worldwide ownership of the Marks and the renown of such Marks.
Buyer will not take any action inconsistent with such
ownership and further acknowledges that any goodwill
established by its use of the Marks shall inure to the sole
benefit of Quantum. Upon Quantum's request, and at Quantum's
expense, Buyer shall provide Quantum with reasonable support
in policing the use of the Marks and Protecting such Marks.
LICENSED MARKS:
DLT(TM)
DLTtape(TM)
USE OF MARKS:
Specify: Form, appearance, placement, etc. of marks on
Products and use in advertising materials.
21. EXPORT
Buyer will not export, directly or indirectly, any Product or related
information without first obtaining all required licenses and approvals
from the appropriate government agencies.
22. GENERAL
(a) This Agreement shall be governed by and interpreted under the
laws of the State of California without reference to conflict
of laws principle. All disputes arising out of this Agreement
shall be subject to the exclusive jurisdiction of the federal
and state courts within Santa Clara County, California and the
parties agree and submit to the personal and exclusive
jurisdiction and venue of those courts. Quantum shall not be
liable for any loss, damage or penalty resulting from delays
or failures in performance resulting from acts of God,
supplier delay or other causes beyond Quantum's reasonable
control. Buyer shall not assign or sublicense this Agreement
nor any right or license hereunder without the prior written
consent of Quantum, and in any event any assignment permitted
hereunder shall be subject to the written consent of the
assignee to all the terms and provisions of this Agreement. No
modification to this Agreement, nor any waiver of any rights,
shall be effective unless assented to in writing by the party
to be charged. The waiver of any breach or default shall not
constitute a waiver of any other right hereunder or any
subsequent breach or default. The prevailing party in any
legal action hereunder shall be entitled to reimbursement of
its expenses including, without limitation, reasonable
attorney's fees. Any required notices hereunder shall be given
in writing at the address of each party set forth herein, or
to such other address as either party may substitute by
written notice to the other in the manner contemplated herein,
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COMPANY CONFIDENTIAL
<PAGE> 10
Agreement No. 550
and shall be deemed served when delivered, or if delivery is
not accomplished by reason or some fault of the addressee,
when tendered. This Agreement constitutes the entire and
exclusive Agreement between the parties hereto with respect to
the subject matter hereof.
(b) Rights and Remedies. All rights and remedies conferred by this
Agreement, or by law, are cumulative and may be exercised
singly or concurrently. If any provision of this Agreement is
held invalid by any law or regulation of any government or by
any court, such invalidity shall not affect the enforceability
of any other provisions hereof.
(c) Independent Contractors. The relationship of Quantum and
Buyer established by this Agreement is that of independent
contractors, and nothing contained in this Agreement shall be
construed to (i) give either party the power to direct and
control the day-to-day activities of the other, (ii)
constitute the parties as partners, joint venturers, co-owners
or otherwise as participants in a joint or common undertaking,
or (iii) allow Buyer to create or assume any obligation on
behalf of Quantum for any purpose whatsoever. All financial
obligations associated with Buyer's business are the sole
responsibility of the Buyer. All sales and other agreements
between Buyer and its customer are Buyer's exclusive
responsibility and shall have no effect on Buyer's obligations
under this Agreement. Buyer shall be solely responsible, and
shall indemnify and hold Quantum free and harmless from, any
and all claims, damages or lawsuits (including Quantum's
attorneys fees) arising out of the acts of Buyer, its
employees or its agents.
(d) Sale Conveys No Right to Manufacture or Copy. The Products are
offered for sale and are sold by Quantum subject in every case
to the condition that such sale does not convey any license,
expressly or by implication, to manufacture, duplicate or
otherwise copy or reproduce any of the Products. Buyer shall
take appropriate steps with its customers, as Quantum may
request, to inform them of and assure compliance with the
restrictions contained in this subsection.
(e) Notices. All Notices should be addressed to:
ATL Products, Inc. Quantum Corporation
1515 South Manchester Avenue 500 McCarthy Blvd
Anaheim, CA 92802 Milpitas, CA 95035
Attn: Richard Speyer Attn: Manager, Corporate
(714) 780-7706 Telephone Contracts
(714) 780-7799 Facsimile (408) 324-7459
(408) 232-6581
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<PAGE> 11
Agreement No. 550
By signing below, Buyer and Quantum mutually acknowledge that it has read,
understands, and agrees to be bound by the terms and conditions of this
Agreement and that the person signing is duly authorized to do so.
QUANTUM CORPORATION ATL PRODUCTS, INC.
Signed: /s/ William Roach Signed: /s/ Kevin C. Daly
---------------------------- ----------------------------
By: William Roach By: Kevin C. Daly
Title: Executive Vice President, Title: President,
Worldwide Sales ATL Products, Inc.
Date: August 28, 1996 Date: Aug. 1, 1996
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COMPANY CONFIDENTIAL
<PAGE> 12
Agreement No. 550
EXHIBIT A
TAPE LIBRARY OEM PRODUCT
* TO BE COMPLETED BY QUANTUM *
<TABLE>
<CAPTION>
---------------------------------------------------------------------
PRODUCT QUANTUM PRODUCT UNIT PRICE WARRANTY OUT-OF-
PART SPECIFICATION PERIOD WARRANTY
NUMBER PRICING
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
* TH5XA-HG [ ] [ ]
---------------------------------------------------------------------
* TH5XD-HG [ ] [ ]
---------------------------------------------------------------------
* TH3XD-HG [ ] [ ]
---------------------------------------------------------------------
* TH6XA-HG [ ] [ ]
---------------------------------------------------------------------
* TH6XB-HG [ ] [ ]
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
---------------------------------------------------------------------
</TABLE>
LICENSED MARKS:
DLT(TM)
DLTtape(TM)
USE OF MARKS:
Specify: Form, appearance, placement, etc. of marks on Products and use in
advertising materiaIs.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION.
PAGE 12
COMPANY CONFIDENTIAL
<PAGE> 13
Agreement No. 550
EXHIBIT B
BUSINESS PLAN
The objective of the Business Plan is to clearly define and establish the manner
in which Buyer shall remarket Quantum Products. Quantum recognizes the Tape
Library OEM authorization category as the following.
TAPE LIBRARY OEM Must provide integration of Quantum Product into
proprietary hardware substorage solution.
Provides consulting, requirements analysis,
configuration support, and all presales activities.
Responsible for distributing. customizing, and
support substorage hardware.
Must provide all maintenance, updates, training, and
post sales support.
The charge for the Added Value must be approximately
at least 30% above the list price of the Quantum
Products.
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COMPANY CONFIDENTIAL
<PAGE> 14
Agreement No. 550
EXHIBIT B
BUSINESS PLAN
* TO BE COMPLETED BY ATL *
I. PROFILE
1. Company Name: ATL Products, Inc.
-------------------------------------------------------------
2. Headquarter Address: 1515 S. Manchester Avenue, Anaheim, CA 92802
------------------------------------------------------
Phone: (714) 774-6900
--------------------------------------------------------------------
FAX: (714) 780-7799
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3. Key Contacts--
Primary Contact Richard Speyer Phone (714) 780-7706
----------------------------- -----------------
President or CEO Kevin C. Daly Phone (714) 780-7700
---------------------------- -----------------
Vice President Sales/Marketing Chet Baffa Phone (714) 780-7702
-------------- -----------------
Vice President Engineering Steve Morihiro Phone (714) 780-7711
------------------ -----------------
Purchasing Cheri Clothier Phone (714) 780-7767
---------------------------------- -----------------
FAX (714) 780-7799
----------------
FAX (714) 780-7799
----------------
FAX (714) 780-7799
----------------
FAX (714) 780-7799
----------------
FAX (714) 780-7799
----------------
Years Established -- Years in computer business -- Privately Held Company?
[ ] Yes [X] No. 1989
4. If less than 3 years old, write the former company name and address
(if applicable):
--------------------------------------------------------------------------
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Is Company a division/subsidiary/parent company* [X] Yes [ ] No (If yes,
please describe the relationship):
Wholly-Owned Subsidiary of Odetics, Inc.
--------------------------------------------------------------------------
5.
a.) Annual Sales Revenue of company's last fiscal year:
$ See attached annual report. Revenue % of Hardware 100%
---------------------------- ----------------------
Software 0% Service
------------------------ ---------------------------------
Breakdown% of Sales: End user 0% VARs/VADs 100%
----------- ----------------------
Distribution
--------------------------------------------------------------
Top Volume Distributors Do not sell through Distributors.
---------------------------------------------------
Gross margins expected in selling Confidential Quantum products, by type
------------
of customer.
VARs/VADs Distribution End User
----------- ------------ ------------------
b.) Total current number of employees per fimetion:
Engineering 29 Manufacturing 43 Sales 8
----------- ------------------ ------------
Sales Support Marketing 9 Other (Specify) 7
----------- ------------------ --------------
6. Describe Company's primary business (if necessary, use a separate piece of
paper): Designs and manufactures Automated Tape Libraries
--------------------------------------------------------------------------
--------------------------------------------------------------------------
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7. Please list the product names Company supports on Quantum Products (attach
a list of your trademarks if applicable):
---------------------------------
---------------------------------
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COMPANY CONFIDENTIAL
<PAGE> 15
Agreement No. 550
EXHIBIT B
BUSINESS PLAN
II. PRODUCT MARKET
1. Added Value (include product name if appropriate)
Describe how Company's added value in this authorization category adds
value to Quantum Product. (Please use separate sheets if more space is
needed.)
ATL manufactures libraries in which all includes Quantum's DLT tape
drives.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
2. Describe the industry(ies) and specific application use within each
industry in which Company intends to market its product(s):
Across the marketplace for backup.
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
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3. Describe which system hardware and operating systems are compatible with
Company's products:
Open and proprietary systems.
--------------------------------------------------------------------------
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--------------------------------------------------------------------------
4. Party Products
Indicate the name, source, and purpose of any third party (non-Quantum)
hardware and/or software acquired by Company, or which Company has
acquired rights to remarket.
None.
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COMPANY CONFIDENTIAL
<PAGE> 16
Agreement No. 550
EXHIBIT B
BUSINESS PLAN
III. SALES COVERAGE
1. Geographic Scope
List the geographies in which Company intends to remarket, also include
Company's planned method of sales and the number of people in the listed
geographies.
2. Supply annual forecast information in both orders and product mix broken
down by quarter. (As new Quantum Products are added, these will be
appended to the annual agreement).
Quarter 1 Revenue DLT(TM)2000XT
------- -------
Revenue DLT(TM)4000
------- -------
Revenue DLT(TM)7000
------- -------
Revenue DLT(TM)7000XP
------- -------
Revenue Media
------- -------
Quarter 2 Revenue DLT(TM)2000XT
------- -------
Revenue DLT(TM)4000
------- -------
Revenue DLT(TM)7000
------- -------
Revenue DLT(TM)7000XP
------- -------
Revenue Media
------- -------
Quarter 3 Revenue DLT(TM)2000XT
------- -------
Revenue DLT(TM)4000
------- -------
Revenue DLT(TM)7000
------- -------
Revenue DLT(TM)7000XP
------- -------
Revenue Media
------- -------
Quarter 4 Revenue DLT(TM)2000XT
------- -------
Revenue DLT(TM)4000
------- -------
Revenue DLT(TM)7000
------- -------
Revenue DLT(TM)7000XP
------- -------
Revenue Media
------- -------
PAGE 16
COMPANY CONFIDENTIAL
<PAGE> 17
Agreement No. 550
EXHIBIT B
BUSINESS PLAN
IV. SUPPORT/SERVICES
1. Services and support
a. How does Company plan to provide post sales services? Include how Company
provides annual service agreements, call/screen handling, the type of
support and service (maintenance, disaster recovery, documentation,
consulting, training, installation, updates, warranty) and service data
base.
ATL Service.
--------------------------------------------------------------------------
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--------------------------------------------------------------------------
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b. Please identify company's service contract.
VARs contract through ATL Service or ATL will provide service.
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PAGE 17
COMPANY CONFIDENTIAL
<PAGE> 1
EXHIBIT 10.10
CONFIDENTIAL TREATMENT REQUESTED. CONFIDENTIAL PORTION
HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
VERITAS SOFTWARE
LICENSE AGREEMENT FOR SOFTWARE PROGRAM SOURCES
VERITAS Software Corporation ("VERITAS"), a corporation with its principal
office at 1600 Plymouth Street, Mountain View, CA 94043 hereby grants, and ATL
Products, Inc. ("ATL") a corporation with principal office at 1515 S.
Manchester Avenue, Anaheim, CA 92802, hereby accepts, a temporary,
non-transferable and non-exclusive license to use such of the Software Program
Source referred to as "VERITAS Source." In consideration for VERITAS Source,
ATL hereby grants, and VERITAS hereby accepts, a temporary, non-transferable
and non-exclusive license to use such of the Software Program Source referred
to as "ATL Source". Such license grants are all in accordance with the
following terms and conditions:
1. SOFTWARE PROGRAM SOURCE:
1.1 "Source" as used herein shall mean program code in machine or
human readable form, including but not limited to, listings,
flow charts, logic diagrams, programming notes, notebooks,
binaries/object code, source code and any related
documentation furnished therewith.
1.2 "VERITAS Source" as used herein shall mean the Source
developed and owned by VERITAS as set forth below:
VERITAS' Sequoia Communications Framework Source as it exists
on the execution date of the License Agreement for Software
Program Sources ("License Agreement") noted below.
* VERITAS' Next Generation Sequoia Communications Framework
Source that uses [ ].
1.3 "ATL Source" as used herein shall mean the Source developed
and owned by ATL as set forth below:
* ATL's [ ].
2. TERM: The term for each Source License shall commence upon the
execution date of this License Agreement noted below and shall
continue unless terminated in accordance with the terms of Section 11.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
1
<PAGE> 2
3. LICENSE: ATL shall have the right to use VERITAS Source (or any
portion thereof) strictly for the Purpose described below in Section
4(a), and for no other purpose. VERITAS shall have the right to use
ATL Source (or any portion thereof) for the Purpose described below in
Section 4(b), and for no other purpose.
Both parties shall be entitled to make one (1) copy of the other
party's Source; said copies may be used only for archive purposes.
All copyright notices, proprietary notices and other legends must be
reproduced on any such copy.
4. PURPOSE/RIGHT TO USE:
(a) ATL shall have a non-transferable and non-exclusive license to
use VERITAS Source for the sole purpose of creating utilities
for VERITAS VxML product, including rights to:
(i) copy, have copies made and install on computer
systems for internal use purposes;
* (ii) [ ];
* (iii) [ ].
(b) VERITAS shall have non-transferable and non-exclusive license
to use ATL Source solely as an interface for VERITAS VxML
product. VERITAS' license to use ATL Source shall include
rights to:
(i) copy, have copies made and install on computer
systems for internal use purposes;
* (ii) [ ];
* (iii) [ ].
* (c) [ ].
* [ ]
* [ ]
* - [ ]
* - [ ]
* - [ ]
* - [ ]
* - [ ]
* - [ ]
* - [ ]
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
2
<PAGE> 3
VERITAS will continue to receive a royalty free JMAPI GUI/Base
Monitor from ATL as defined above on an ongoing basis.
VERITAS will continue to receive ATL Source for ongoing
development and porting to new hardware including non-ATL DLT
hardware with release 2.0.
* 5. LICENSE FEES: [ ].
* 6. SUPPORT: [ ].
7. TITLE:
(a) VERITAS shall retain title to the VERITAS Source (in any
form). VERITAS Source shall remain the personal property of
VERITAS and shall not become part of other personal property
or real property by reason of annexation or otherwise. ATL
agrees not to loan, transfer, encumber, sell, or otherwise
dispose of the VERITAS Source without VERITAS' prior express
written permission; any such attempted disposal shall be void.
Furthermore the entire right, title, and interest to all
intellectual property that VERITAS is providing to ATL
pursuant to this License Agreement and the VERITAS Source,
tangible or intangible, including that which might be or might
become protectable by patent, copyright, trade secret,
trademark or any other legal theory, shall remain exclusively
with VERITAS.
(b) ATL shall retain title to the ATL Source (in any form). ATL
Source shall remain the personal property of ATL and shall not
become part of other personal property or real property by
reason of annexation or otherwise. VERITAS agrees not to
loan, transfer, encumber, sell, or otherwise dispose of the
ATL Source without ATL's prior express written permission; any
such attempted disposal shall be void. Furthermore the entire
right, title, and interest to all intellectual property that
ATL is providing to VERITAS pursuant to this License Agreement
and the ATL Source, tangible or intangible, including that
which might be or might become protectable by patent,
copyright, trade secret, trademark or any other legal theory,
shall remain exclusively with ATL.
8. DERIVATIVE WORKS:
(a) ATL shall retain right and title to any derivative works
permitted by this Agreement and based on VERITAS Source; such
right and title does not extend to any portion of the VERITAS
Source incorporated in such permitted derivative work.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
3
<PAGE> 4
(b) VERITAS shall retain right and title to any derivative works
permitted by this Agreement and based on ATL Source; such
right and title does not extend to any portion of the ATL
Source incorporated in such permitted derivative work.
9. NONDISCLOSURE: The Source being supplied pursuant to this License
Agreement is a trade secret of the supplying party and is of a highly
confidential and proprietary nature. ATL agrees not to disclose,
provide or otherwise make available VERITAS Source (or portion
thereof) and VERITAS agrees not to disclose, provide or otherwise make
available ATL Source in any form to any person other than its own
employees who have a need to know pursuant to Section 4 above without
the prior written approval of the other party. ATL shall, through
instruction or agreement, require each of its authorized employees to
maintain VERITAS Source and VERITAS shall, through instruction or
agreement, require each of its authorized employees to maintain ATL
Source in confidence as provided in this License Agreement; said
instruction or agreement shall not relieve ATL of its overall
responsibility for protecting the VERITAS Source or VERITAS of its
overall responsibility for protecting ATL Source.
10. WARRANTY: VERITAS SOURCE IS FURNISHED TO ATL AND ATL SOURCE IS
FURNISHED TO VERITAS ON AN "AS-IS" BASIS. BOTH PARTIES DISCLAIM ALL
WARRANTIES WITH REGARD TO THE SOURCE LICENSED HEREUNDER, INCLUDING ALL
WARRANTIES OF INFRINGEMENT, MERCHANTABILITY AND FITNESS FOR ANY
PARTICULAR PURPOSE.
12. LIMITATION OF LIABILITY: NEITHER PARTY SHALL HAVE ANY LIABILITY FOR
ANY DAMAGES INCLUDING, BUT NOT LIMITED TO DIRECT, SPECIAL, INDIRECT,
CONSEQUENTIAL AND TORT DAMAGES, ARISING OUT OF, OR IN CONNECTION WITH,
THE USE OF THE SOURCE OR BREACH OF THIS LICENSE AGREEMENT.
13. TERMINATION: In the event either party neglects or fails to perform
or observe any of its obligations under this License Agreement,
including but not limited to, failure to make any payments as and when
due, or if any assignment shall be make for the benefit of its
creditors, or if either party admits an inability to pay its debts as
they mature, or a proceeding is instituted under any provision of any
Bankruptcy Act by or against either party, then the other party may
terminate this License Agreement and all Licenses granted hereunder
upon thirty (30) days written notice.
Either party may terminate this License Agreement and all Licenses
granted hereunder without cause upon six (6) months prior written
notice to the other party.
Within ten (10) days of the expiration or termination (for any reason)
of this License Agreement, ATL shall certify in writing that the
original, or portions thereof, and all copies (in any form) of the
VERITAS Source have been returned or destroyed; and VERITAS shall
certify in writing that the original, or portions thereof, and all
copies (in any form) of the ATL Source have been returned or
destroyed.
4
<PAGE> 5
14. SURVIVAL: The obligations of both parties contained in Sections 7 and
9 shall survive the expiration or termination (for any reason) of this
License Agreement.
15. ASSIGNMENT: This License Agreement and the Licenses granted
hereunder, may not be assigned, sublicensed, or otherwise transferred
by either party without the prior express written approval of the
other party.
16. GENERAL:
16.1 Failure of either party on any occasion to enforce any
provision of this License will not prevent enforcement on any
other occasion.
16.2 All of the rights and remedies of either party, (whether in
contract, tort or equity) shall be cumulative and may be
exercised singularly or concurrently.
16.3 This License Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of
California.
16.4 This License Agreement shall be binding upon and inure to the
benefit of each of the parties, their successors and assigns.
16.5 Except for "Essential Provisions," if any provision of this
License is held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining
provisions will not in any way be affected or impaired
thereby. "Essential Provisions" are defined as Paragraphs 3,
7 and 9.
IN WITNESS WHEREOF, the parties have caused their duly authorized
representatives to execute the License Agreement as of the 8th day of November
1996.
VERITAS SOFTWARE CORPORATION ATL PRODUCTS, INC.
By: By:
------------------------- ----------------------------------
Name: Name:
----------------------- --------------------------------
Title: Title:
---------------------- -------------------------------
5
<PAGE> 1
1
CONFIDENTIAL TREATMENT REQUESTED. EXHIBIT 10.11
CONFIDENTIAL PORTION HAS BEEN FILED
SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION
AGREEMENT
This Agreement including all Schedules is entered on December 18th, 1995 by and
between
ATL PRODUCTS, INC.
a corporation organized under the laws of the State of California with its
principal place of business at
1515 SOUTH MANCHESTER AVENUE
ANAHEIM, CALIFORNIA 92802
USA
- hereinafter known as "ATL" -
and
HEWLETT-PACKARD GMBH
LOCAL PRODUCTS ORGANIZATION (LPO)
a corporation organized under the laws of Germany with its principal place of
business at
HERRENBERGER STRASSE 130
71034 BOEBLINGEN
GERMANY
- hereinafter known as "HP" -
on the sale of Hardware-Products
<PAGE> 2
2
DEFINITION OF TERMS
The products specified in Schedule 1 (HARDWARE) are understood by the parties to
mean all Products.
The parties understand SUPPORT as meaning remedying defects in the HARDWARE and
adjusting it to suit amended operating systems. This term does not
cover amendments (FURTHER DEVELOPMENTS) leading to a fundamental
extension of the function of the Product and thus to a new version
thereof.
The parties understand FURTHER DEVELOPMENTS as meaning all amendments,
alterations and extensions to the HARDWARE which are not covered by the
SUPPORT of the HARDWARE.
The parties understand VALUE ADDED PRODUCTS as the combination of the Library
with Storage Management Software.
<PAGE> 3
3
RELATIONSHIP
ATL develops and manufactures Automated Tape Libraries as listed in Schedule 1,
(hereinafter known as "Products") and desires to offer said Products for sale to
HP. HP has recognized capabilities in adding value to these Products and re-
selling them to Dealers, Distributors and Customers and desires to have the
right to purchase such Products from ATL.
To this end, and subject to all the terms and conditions of this Agreement, ATL
agrees to use reasonable efforts to sell to HP on a non-exclusive basis and HP
agrees to purchase from ATL the Products listed in Schedule 1.
<PAGE> 4
4
1. SUBJECT-MATTER OF THE AGREEMENT
ATL undertakes to supply HP with HARDWARE as specified in Schedule 1
(hereinafter referred to as "Products") throughout the duration of this
Agreement subject to the terms hereof. HP shall distribute these
Products via dealers, distributors or to customers.
2. DISTRIBUTION RIGHTS
2.1 ATL grants to HP the non-exclusive right to distribute the contractual
Products set forth in Schedule 1 and any future Products which may be
added to Schedule 1 by mutual agreement. This shall include the right
to translate, reproduce, disseminate, hire, lease, present, publish or
print ATL-sales literature in any format or language, at HPs expense,
but HP is under no obligation to do so. ATL shall not be responsible or
liable for the accuracy of any such literature execept such literature
in original form from ATL.
2.2 HP shall be entitled to transfer to HP's authorized dealers and
distributors a non-exclusive and non-transferable right to distribute
the contractual Products provided that the dealers and distributors are
located and selling VALUE ADDED PRODUCT in Germany and Switzerland.
Approved Resellers will be certified by written mutual Agreement.
2.3 HP shall be entitled to distribute the Products as "Distributed by
Hewlett-Packard under Product-No. "AOD ....".
2.4 HP shall buy the Products specified in Schedule 1 as OEM Products
which can be sold with the HP logo.
3. CHARACTERISTICS OF THE PRODUCTS, PRODUCT AMENDMENTS, TESTING AND
ACCEPTANCE OF THE PRODUCTS
3.1 The technical properties, capabilities and specifications of the
contractual Products are described in Schedule 1 hereof.
ATL is obliged to supply HP with all new Products specified in Schedule
1 as soon as such Products are available for distribution in accordance
with HPs purchase order, the ATL committed ship date(s) and subject to
the terms of this Agreement.
Similarly, ATL undertakes immediately to provide HP with all new
Product enhancement information, including information on updates,
extensions, amendments and new developments that may become
commercially available to all ATL customers with respect to the
Products indicated hereinabove specified in Schedule 1.
3.2 Products developed by ATL subsequent to the execution of this Agreement
that ATL makes commercially available to all of ATL's customers shall
be added to this Agreement by mutual Agreement.
<PAGE> 5
5
3.3 Prior to delivery, ATL shall conduct an acceptance test at ATLs plant,
or ATL authorized service provider, on each Product, FRU or Repair
shipped. A complete record of inspeetion and tests performed on each
Product, FRU or Repair shall be kept by ATL, or ATLs authorized service
provider, for twelve (12) months from date of shipment. Upon HPs
request and at HPs expense if any, ATL shall provide HP with a
dublicate copy of such inspection and tests within fifteen (15)
business days of such a request,
3.4 HP may also conduct its own testing at its own facilities, at HPs own
expense, to confirm the Product, meets the Product specification or
applicable acceptance criteria for a FRU or Repair. Products, FRUs and
Repairs shall be deemed accepted by HP unless written notice, of
acceptance test failure is provided to ATL within thirty (30) days
after shipment of the Product, FRU or Repair is shipped.
4. ORDERS / DELIVERY
4.1 ATL shall supply HP with the contractual Products in accordance with
the LPO Delivery Standard set forth in Schedule 2.
4.2 HP may cancel an order in its entirety or in part or alter the delivery
date. In the event HP (1) cancels all or any part of any order; (2)
fails to meet any obligation hereunder, causing cancellation or
rescheduling of any order or portion thereof; (3) requests a
rescheduling of scheduled Products and the request is accepted by ATL;
or (4) requests a configuration change causing rescheduling of
scheduled Products, and the request is accepted by ATL; HP agrees to
pay ATL the following cancellation/reschedule charges:
<TABLE>
<CAPTION>
Cancellation or Reschedule Cancellation or Reschedule
Notice is received (% of Product Price)
<S> <C> <C>
* [ ] [ ]
* [ ] [ ]
* [ ] [ ]
</TABLE>
* Product may be rescheduled one time for up to [ ] prior written
notice.
5. PAYMENT
5.1 All payments required by this Agreement are stated and shall be made in
United States Dollars. Payments shall be sent to ATL at the return
address printed on the ATL's invoice and shall be deemed made only upon
receipt by ATL at that address.
5.2 Amounts owed to HP due to rejections of Product, or discrepancies on
paid invoices shall be fully credited against future invoices payable
by HP.
* CONFIDENTIAL TREATMENT RQUESTED FOR REDACTED PORTION.
<PAGE> 6
6
5.3 HP shall not have the right at any time to set off any amount owed from
ATL to HP or its subsidiaries or affiliates against any amount payable
by HP pursuant to this Agreement and/ or any Purchase Order issued
hereunder.
5.4 The prices of the Products are stipulated in Schedule 3.
Payments are payable within 30 days of the date of the invoice; however
not earlier than the receipt date of the Product.
5.5 Sales tax at the prevailing statutory rate is payable on all invoice
amounts subject to sales tax. The amount of sales tax due must be
indicated in ATL's invoice.
5.6 ATL reserves the right to change pricing for new orders upon 60 days
written notice to HP
6. WARRANTY/LIABILITY
6.1 For the time periods set forth hereafter, and as qualified in this
Agreement, ATL gives he following limited warranty that, all Products,
FRUs or Repairs shall be free from defects in material, workmanship,
and design, shall conform to applicable specifications, drawings,
samples, descriptions and specificetions set forth in Schedule 1
referred to in this Agreement shall comply with the latest approved
technical guidelines, as well as with the pertinent safety
recommendations (CE, VDI) and laws shall be free of all liens and
encumbrances and shall not infringe or any third party's Intellectual
Property interest.
6.2 The time periods for this limited warranty are as follows: (i) Products
and first time shipped or new FRUs - for twelve (12) months from date
of shipment by ATL; (ii) for exchanged or replaced FRUs and (ii)
Repairs- for either (a) six (6) months from the later of the date of
shipment or date of repair or (b) the balance of the term of the
original warranty for Products or FRU repaired or replaced, whichever
is sooner. If the repair or replacement has not been shipped within 30
calendar days plus 5 (five) calendar days HP shall be entitled to
rescind the FRU or the demand reduction of the price.
6.3 During the term of this limited warranty, ATL shall, within thirty (30)
days after receipt of defective Products or FRUs, at its option, either
repair or replace any defective Products or FRUs subject to this
limited warranty at no additional charge to HP. Replacement Products or
FRUs shall be fumished on an exchange basis, and may be either repaired
or new.
This limited warranty does not apply to products, FRUs or repairs which
have been damaged or rendered defective: (i) as a result of accident,
misuse or abuse; (ii) by the use of parts not approved or manufactured
or sold by ATL, or mot conforming to ATL's specifications; (iii) by
modification without the written permission of ATL; or (iv) as a result
of service by anyone other than ATL, an authorized ATL servicing
center, or an certified ATL service provider to perform such work.
6.4 Any damage claims of HP against ATL as well as the persons it employs
in performing its legal obligations and ATL legal representatives -
irrespective of their legal cause - in
<PAGE> 7
7
particular for defects of the contractual Products, impossibility or
delay of delivery for reasons within ATL control, breach of this
Agreement or of obligations prior to the conclusion of this Agreement
as well as for tort shall be excluded. This does not apply if and
inasmuch as in cases of willful action, gross negligence, the lack of
warrented qualities or breach of contractual obligations which are of
major importance for the contractual purpose such liability is
compulsory.
Compensation for financial demages, e.g. loss of production, loss of
profits, shall be limited to the demage which is typical for the
Agreement and foreseeable by ATL.
Any claims under the Product Liability Act shall remain unaffected by
the provisions in the preceding paras. (1) and (2).
7. QUALITY ASSURANCE
7.1 ATL shall maintain a quality management system conforming to intent of
IS09000 (see also Schedule 5) and shall produce and inspect contractual
products described in Schedule 1 hereunder with the rules of such
qualitiy management system. ATL shall confirm at once that these
requirements are compatible with the quality management system.
7.2 ATL shall perform a sample inspection of each lot of each part number
received at ATL prior to the part going to production. ATL shall
maintain records of such inspection.
This sample inspection shall include production or testing tools, and
other goods received from suppliers for production or quality
assurances of the Products hereunder.
7.3 ATL shall keep records of implementation of the aforementioned quality
assurance measures, in particular regarding measurements and inspection
results, and store such records, as well as any samples of the
contractual Products, in an orderly fashion. ATL shall allow HP to view
the records to the necessary extent and shall provide copies of the
records and any samples with 10 days advance written notice.
7.4 ATL shall enable HP to verify implementation of the aforementioned
quality assurance measeures at reasonable intervals. To this end ATL
shall grant HP a reasonable degree of access to ATL's place of business
after prior agreement of a time, and shall provide a qualified employee
for support during such access. Viewing of manufacturing processes
requiring secrecy and other business secrets may be refused.
7.5 Before changing manufacturing processes, materials, or supplied parts
for the contractual products, changes of manufacturing locations, and
also before changing processes or facilities for inspection of the
contractual Products or other quality assurance measures, ATL shall
notify HP sufficiently in advance so that HP can examine whether such
changes might have negative effects. This notification is not required
if ATL (at ATL's sole discretion) can consider such effects to be ruled
out after careful examination.
<PAGE> 8
8
7.6 If ATL detects an increase in the difference between actual
characteristics from target characteristice (drops in quality), he
shall inform HP at once of this and of planned corrective measure.
7.7 By marking the contractual Products or, if this is impossible or
impractal, by other suitable measures, ATL shall assure that ATL can
immediately determine what other contractual Products might be affected
in case a defect occurs in the contractual Products. ATL shall inform
HP of his ATL marking system or other measures in such a way as to
enable HP to make its own determinations to the necessary extent.
8. SUPPORT/COOPERATION
8.1 ATL shall conduct internal HP training sessions for HP employees
without any additional charge. During the course of this training, the
HP employees will receive instruction on the Products. ATL shall
provide the necessary knowledge regarding the installation, use and
distribution of the Products during this training and also knowledge on
first-level support. The parties shall reach mutual agreement on the
number of days of training, on the dates and location thereof.
8.2 ATL shall provide HP with a telephone support service for the
distribution of the Products during normal business hours. Each party
hereto shall nominate respective contact persons within 2 weeks of the
execution of this Agreement. Furthermore, ATL shall provide HP
customers with the same technical support as ATL gives its own
customers.
8.3 At HP's request, ATL shall effect the implementation, (installation of
the Products and integration, test run, training of ATLs Products only,
which does not include Storage Management Software or other peripheral
items that may be added to the Product of the operating staff and
users) and the acceptance procedure for the Products on HP's customer's
premises on behalf of HP. Remuneration shall be effected in accordance
with ATL's pricelist generally prevailing.
8.4 In addition, in order to guarantee smooth cooperation, both parties
hereto shall nominate contact persons within 14 days of the execution
of this Agreement, who are responsible for marketing and technical
customer service. These individuals shall meet regularly to agree and
coordinate all of the necessary activities.
9. PRODUCT CHANGE, SUPPORT AND NEW PRODUCTS
9.1 ATL shall give written notice to HP, in the form of notification of
engineering change, of any changes to the Products prior to
implementation that affect fit, form or function. HP shall give written
notice to ATL of its approval or disapproval of the change in writing
within thirty (30) days of the date ATL gives such notice. If written
notice is not received, ATL shall consider the change acceptable.
9.2 ATL may from time to time make compatible changes or modification to
the Products that do not effect fit, form, or function, and that are
compatible and interchangeable with
<PAGE> 9
9
and shall not require the retrofit of Products previously delievered.
If ATL makes such modification, ATL shall give notice to HP at least 30
days before ATL begins delivering to HP any Product containing such
modification, describing the changes and updating the parts list.
9.3 ATL shall provide HP with technical support by telephone twenty four
(24) hours a day three hundred sixty five (365) days a year. HP may
request on site technical support and ATL shall dispatch the next
available Service Engineer provided HP pays ATL's standard rate for the
Service Engineer's time, portal to portal, and all out of pocket
expenses including transportation within thirty (30) days after the
date of ATLs invoice of such services.
9.4 HP shall be responsible for offering maintenance on the Products it
sells, or otherwise provides, to end users.
HP shall maintain records regarding maintenance performed on the
Product. Upon mutual agreement, HP shall provide ATL, at no charge, a
duplicate copy of all maintenance reeords. These records shall be used
by ATL for the purpose of understanding Product performance.
9.5 If, during the purchase period or extended purchase period, if any, ATL
discontinues producing or making available any Products, FRUs or
Repairs, ATL shall provide HP with six (6) months prior written notice
of such discontinuation and shall use reasonable efforts to permit HP
to buy as much Products and FRUs as HP reasonably believes it shall
need.
9.6 Upon expiration or termination of this Agreement, ATL shall sell and
repair FRUs for five (5) years after the date of the last Product
manufactured or for as long as the Products and FRUs are made available
to any of ATL's other customers, wichever is later. Prices shall be at
ATL's then current prices delivery is subject to availability.
10. EXCHANGE OF PRODUCTS
10.1 ATL shall keep the requisite amount of spare parts available throughout
the term of this Agreement and for a period of up to 5 years following
delivery of the last Product manufactured.
10.2 Sections 2, 3, 4, 6, 7, 8 and 11 shall apply analogously to spare
parts.
11. INTELLECTUALL PROPERTY RIGHTS
11.1 ATL shall own the entire right, title and interest in and to all
intellectual property rights relating to the design of the Product that
are or have been designed and developed exclusively by ATL. ATL
warrants that it is the sole owner of rights in each of the Products
and associated documentation described herein, including all portions
thereof, and that such ownership is free of any and all liens,
encumbrances, restrictions, settlements, judgements or
<PAGE> 10
10
adverse claims. ATL warrants that it has full power and authority to
grant HP the rights granted herein including the right to use,
distribute each Product and associated documentation. ATL warrants that
the Products do not violate or infringe any patent, copyright, trade
secret of any third party and that ATL is not aware of any facts upon
which such a claim for infringement could be based.
11.2 ATL shall indemnify, defend and hold harmless HP from and against any
and all, expenses and damages without limitation reasonable attorneys
fees, with respect to any claim against HP alleging that material in
the form sold by ATL, or any part thereof, infringes any patent,
copyright, trademark, mask work, or violates a trade secret of a third
Party. ATLs obligation pursuant to this Section 11 are conditions: HP
shall give notice to ATL promptly in writing of such a claim and ATL
shall have the authority to assume sole defense thereof through its own
counsel and to compromise or settle any suits so far as this may be
done without prejudice to the right of the HP to continue to use the
materail, so purchased. If an injunction against HP's or HP's end
users, sale, lease, license, or other distribution of the material or
any part thereof results from such a claim (or if HP reasonably
believes such injunction is likely), ATL may in order of precedence:
(1) procure the right to continue the use of the same for the HP; or
(2) replace the same with non-infringing product, or (3) modify said
material so as to be non-infringing; or, if none of the foregoing
(1),(2), or (3) are deemed reasonable feasible, (4) take back the
infringing material and refund the purchase price less a depreciation
deduction equal to twenty percent (20%) of the purchase price for each
year since the date of shipment.
11.3 This section states the entire liability of ATL for Intellectual
Property Infringement. The indemnification provisions of this Section
shall not apply to any infringement arising out of the use in systems
if the cause of such infringement to be the system itself or components
of the system not supplied by ATL; or for purposes not contemplated by
this Agreement.
11.4 HP shall defend indemnify, defend and hold harmless ATL from and
against any and all costs, expenses and damages, including without
limitation reasonable attorneys fees, with respect to any claim
alleging that HP's end product which incorporates ATL's material (but
not ATL's Material alone) infringes any patent, trademark, copyright,
mask work or violates any trade secret of a third party, provided that
ATL promptly notifies the HP in writing and provides information and
reasonable assistence (at HP's expense), and that HP is permitted to
direct the defense of the suite or proceeding. Section 11.2 and 11.3
shall apply analogously.
11.5 HP shall be entitled to use the program classification which ATL uses
for the Products either alone or together with the HP Logo.
Furthermore, following Agreement with ATL, HP shall be entitled to
chose another program classification if the name of the Product should
be otherwise protected.
<PAGE> 11
11
12. CONFIDENTIALITY
12.1 Except as required by law and with prior written notice, each party
agrees not to disclose information which the other party desires to be
treated as confidential to any person(s) excepted employees or
subcontractors who necessarily must have such information to perform
this Agreement. Such confidential information must be clearly
designated in writing as confidential. Each party will protect the
confidential nature of such information by using the same degree of
care as it takes to preserve and safeguard its own confidential
information. Such obligations of confidentiality will survive the term
of this Agreement and for two (2) years after its termination or
expiration.
12.2 Neither party will be required to treat as confidential any information
which is publicly available, independently developed by the other party
or rightfully obtained from third parties.
13. TERM AND TERMINATION OF THE AGREEMENT
13.1 This Agreement shall become effective on December 20th, 1995 and shall
run for an initial term of one year. It shall be automatically renewed
by a further period of one year unless one of the parties hereto has
given written notice of termination three months prior to the
expiration hereof at the latest.
13.2 The extraordinary termination of this Agreement is also possible if the
parties will not agree about the Support-Agreement for the Products
within 3 months after signing this Agreement. Either Party may
terminate this Agreement for cause if the other Party fails to comply
with any material covenant or provision of this Agreement, and does not
cure such failure within thirty (30) days after written notice is given
to such Party. Provided, however, that if such curable failure cannot
be cured within 30 days, this Agreement may not be terminated if the
now-complying party begins to cure such failure within 30 days and
thereafter diligently seeks to complete such cure.
Either Party may terminate this Agreement if a significant change in
ownership occurs and if the other Party reasonable deems the change to
be a material and adverse to its interests.
13.3 In addition to the statutory rights of withdrawal, HP shall be entitled
to a contractual right of withdrawal, ifATL does not meet its
obligations under Section 11.2 (Intellectual Property Rights) within a
reasonable time frame.
13.4 In case of Liability hereof, the rights and obligations of the
provisions contained in Sections (Warranty/Liability), 9 (Product
Change, Support and New Products), 10 (Exchange of the Products), 11
(Intellectual Property Rights) and 12 (Confidentiality) as well as the
rights to continue to use the Products third parties have already been
allowed to utilize and HP's requisite distribution rights for the
SUPPORT of this installed base of the Products specified in Schedule 1
shall remain in full force and effect.
<PAGE> 12
12
14. MISCELLANEOUS
14.1 No verbal ancillary agreements have been concluded in addition to this
Agreement. In order to be valid, alterations and amendments hereto must
be confirmed in writing by authorized officers of HP and ATL and
require an express reference to the fact that they constitute an
alteration or amendment to this Agreement. This written form
requirement may only be waived in writing.
14.2 This Agreement shall not restrict either HP nor any other corporation
within the Hewlett-Packard corporate group from developing or acquiring
any similar or competitive products in any way whatsoever.
14.3 The parties hereto undertake to replace any invalid or unequivocal
provision contained herein by a valid or unequivocal provision
constituting the closest possible equivalent to the economic purpose of
this provision. This shall not affect the validity of the remaining
provision.
14.4 This Agreement is the complete and entire understanding between the
Parties on this subject matter and supersedes all prior agreement,
proposals, representations, statements, or understandings,wether
written or oral on this subject between them. The provision of this
Agreement may be amended or waived only by a writing executed by the
autorized representatives of the parties hereto.
14.5 In the event that either Party to this Agreement shall, on any
occasion, fail to perform any provision of this Agreement, and the
other Party does not enforce that provision, the failure to enforce
shall not prevent enforcement of the provision on any othe occasion.
14.6 Each Party, including its servants, agents, and employees, are
independent contractors and not an agent or employee of the other.
Without limiting the generality of the foregoing, neither Party is
authorized to represent or make any commitments on behalf of the other,
and both Parties expressly disclaim any liability therefore.
14.7 The headings of the sections in this Agreement are included for
convenience only and are not to be used in construing or interpreting
this Agreement.
14.8 ATL reserves the right to fulfill the requirements of any purchase
order placed pursuant to this Agreement and invoice for such orders
through an affiliate company of ATL.
14.9 In the event of any dispute or litigation between the Parties with
respect to this Agreement, the prevailing Party shall be entitled to
recover its resonable attorneys fees and costs in addition to any other
relief to which it is found entitled.
14.10 The Parties shall attempt in good faith to resolve any controversy or
claim arising out of or relating to this Agreement promptly by
negotiations between executives of the Parties.
<PAGE> 13
13
If a controversy or claim should arise one Party shall give written
notice to the other Party of such controversy or claim (the Invoking
Partys), the Parties shall use needed, at mutually convenient times and
places, between negotiators for the Parties at the following successive
management levels, each of which shall have a period of allotted time
as specified below in which to attempt to resolve the dispute:
<TABLE>
<S> <C> <C> <C>
Level ATL HP Allotted Time
First Contract Manager Business Manager 10 Business Days
Second Division VP Division VP 10 Business Days
Third Corporate Officer Corporate Officer 30 Days
</TABLE>
The allotted time for the first level negotiator shall begin on the
effective date of the Invoking Party's Notice.
If a resolution is not achieved by negotiators at any given management
level at the end of their allotted time, then the allotted time for the
negotiators at the next managment level, if any, shall begin
immediately.
14.11 Any notice given under this Agreement shall be written. Written Notice
shall be sent by certified mail, postage prepaid, return receipt
requested, or by any other overnight delivery service that delivers to
the sender. Any facsimile notice must be followed within three (3) days
by Written Notice. All Written Notices shall be effective when first
received by HP at its address first set forth above, and by ATL at the
following addresses:
<TABLE>
<S> <C>
ATL Products, Inc. Hewlett - Packard GmbH
1515 South Manchester Avenue Local Product Organisation
Anaheim, California, 92802 Herrenberger Stra(beta)e 130
Attention: Richard Speyer 71034 Boblingen
Attention: Armin Maurer
</TABLE>
14.12 Neither Party shall be liable for failure to perform any of its
obligations under this Agreement during any period in which such Party
cannot perform due to fire, food, earthquake, or other natural
disaster, war, embargo, riot, or the intervention of any goverment
authority, provided that the Party so delayed immediately notifies the
other Party of such delay.
14.13 The Products purchased by HP from ATL are manufatured for standard
commercial use and are not intended to be sold for use in critical
safety system, nuclear facilities or for use in life support
appliances, devices or systems. The following Schedules are attached
and incorporated into this Agreement by this reference as if fully set
forth herein. Schedules may be added or revised from time to time by
mutual Agreement. Any Schedule that is added or revised shall be signed
by both, ATL and HP, and shall supersede the previous version:
<PAGE> 14
14
- Schedule 1 Hardware Products
- Schedule 2 LPO Delivery Standard
- Schedule 3 Price
- Schedule 4 Warranty/Support/Further Development
- Schedule 5 Quality Management
- Schedule 6 Product Marketing and Sales
Place: Anaheim, CA, USA Boeblingen
-----------------------------
Date: Jan 16, 1996 Date: 22/12/95
----------------------------- ----------------------
For ATL: For HP:
/s/Kevin Daly /s/Diethard Eschenlohr
- ---------------------------------- ---------------------------
Name Diethard Eschenlohr
President
- ---------------------------------- ---------------------------
Function LPO Manager
ATL Products, Inc.
<PAGE> 15
15
SCHEDULE 1
SPECIFICATION OF THE HARDWARE
At the moment: ATL 4/52 DLT LIBRARY
Enclosure consisting of 2 pages (Datasheet)
Other products may be added from time to time by mutual agreement.
<PAGE> 16
16
SCHEDULE 2
LPO DELIVERY STANDARD
1. Scope
Any delivery of goods and performance of services shall be governed solely by
the above Agreement and this Delivery Standard. Any terms and conditions other
than or contrary to the terms and conditions specified herein shall be valid
only if expressively marked as a "counteroffer" and if accepted by both
Hewlett-Packard GmbH and ATL in writing; this clause can only be waived in the
form of a written agreement signed by both Parties. HP reserves the right to
reject the goods and services at ATL's expense if material terms and conditions
of this standard are not adhered to.
2. PURCHASE ORDERS / DELIVERY DATES / COST OF DELIVERY
2.1 PURCHASE ORDERS
Purchase orders by HP shall be issued on purchase order forms, specifying
quantity, order number, delivery date, HP product number and product
description, ATL model number, shipping and ship to instructions and unit price.
ATL shall confirm receipt of the purchase order within three (3) days following
receipt of the purchase order form.
Any orders placed orally, via telephone or via telex facsimile shall require
written confirmation by HP, e.g. through an order marked "For confirmation
only". Atl shall undertake to ensure that such confirmation does not result in
duplicate deliveries. HP shall be entitled to return any duplicate deliveries at
ATL's expense and risk.
2.2 DELIVERY DATES
All delivery dates shall be binding. If ordered products are not supplied by the
agreed date, plus 5 days and HP is charged by the customer, HP shall be entitled
by default to claim delay damages amounting to 3% of the order - notwithstanding
claims for further compensation for delayed delivery and the right to rescind
the contract, unless the delays is due to reasons attributable to HP.
Deliveries shall be made on time at forwarder location in the U.K.
ATL undertakes to promptly notify HP of any circumstances that may have a
detrimental effect on the agreed delivery of the order.
LPO Delivery Standard
<PAGE> 17
17
2.3 COST OF DELIVERY
Unless otherwise agreed, all Products are shipped and sold FCA, U.K. (Incoterms
1990)
3. DELIVERY
3.1 INCOMING GOODS LOCATION
Unless otherwise specified by HP, deliveries shall be made to the on the
Purchase Order remarked incoming goods location. ATL shall make all arrangements
for shipment with the forwarder stated on HP's purchase order. ATL shall pay all
shipping and transportation charges directly to the forwarder. ATL reserves the
right to select the means and method of shipment in the event HP does not inform
ATL of the arrangements for shipment within twenty four hours after ATL has
informed HP that the Product is ready to shipment.
3.2 DELIVERY QUANTITY
The quantity actually delivered and relevant for invoicing shall be governed by
the quantity and quality of the Products as determined and verified by incoming
inspection at the specified delivery address.
3.3 PASSING OF RISKS
All Products are sold and shipped FCA, U.K., in accordance with Incoterms 1990.
3.4 DELIVERY PERIOD
For purchase orders received by ATL during the first six (6) months, delivery
for up to five (5) units per month shall be within twenty-five (25) working
days. After the first six months the delivery period for up to 5 (five) units
shall be 40 (fourty) working days. Subsequent quantities and deliveries shall be
mutually agreed. Delivery period is the time difference between when ATL
receives the purchase order from HP and when the Product is ready for pick up by
HP or HP's forwarder in the U.K.
At the beginning of each calendar month, HP shall issue a rolling three (3)
month non-binding forecast.
HP's non-binding forecast is for information only and does not create any
liability between the parties.
ATL shall promptly notify the responsible HP purchasing agent of any delays in
delivery.
4. INSTALMENT DELIVERIES
Instalment deliveries shall be permissible only if agreed by the responsible HP
purchasing agent and shall be marked as such on the delivery note.
<PAGE> 18
18
5. DELIVERY NOTE
The delivery note shall provide the following information:
- - Atl's name and address
- - delivery note number
- - correct delivery address (see above)
- - delivery note item number
- - description
- - delivery quantity
- - unit of measurement
- - HP product number
- - HP order number
- - HP reference order number
Product deliveries without a delivery note shall not be accepted. The delivery
note shall be supplied at the same time as the products. The delivery note shall
not be contained in the cargo unit or inside of a package! The delivery note
shall be either prominently displayed in an easily removable envelope attached
to the outside of the cargo unit or handed to the responsible Incoming Goods
agent at delivery time.
6. INVOICING
The invoice shall provide the following information:
- - HP order number
- - HP product number
- - HP reference order number
- - Atl number
- - description
- - price (list price; discounts and sales/value-added tax are to be
specified separately)
Unless otherwise agreed upon, invoices shall be addressed to:
HEWLETT-PACKARD GMBH
LIEFERANTENBUCHHALTUNG
BUILDING 1
HERRENBERGERSTR. 110
71034 BOBLINGEN
GERMANY
This address should always be specified in order to avoid delays in payment.
7. LABELING OF ITEMS
The designations of items specified in the delivery note and in the invoice
shall be the same as the designations of items (HP order items) in the HP order
form.
<PAGE> 19
19
8. PACKAGING SPECIFICATION
Each delivered product shall be clearly marked with the applicable HP product
number plus HP order number in both human-readable and barcode form (Standard
3/9 with barcode identifier). A single separately packaged product shall be
delivered for each HP product number; i.e., multiple HP product numbers shall
not be supplied in a single package. The delivered products shall be marked such
that they can be identified without opening or removing protective packaging.
9. PACKAGING MATERIALS
As a matter of principle, packaging shall be limited to a degree sufficient for
safe storage, transportation and handling and compliant to insurance
stipulations. In accordance with applicable legal regulations (particularly
packaging-related legislation such as Germany's VerpackVO), the accumulation of
non-recyclable packaging waste is to be prevented by using recyclable and
appropriately marked packaging materials.
10. PROVISION OF PRODUCTS, MATERIALS AND OTHER ITEMS
not applicable.
11. DIRECT DELIVERIES
HP reserves the right to have HP customers supplied directly by ATL or through a
shipping agent specified by HP.
11.1 FOR DIRECT DELIVERIES, THE FOLLOWING CHANGES APPLY TO AFOREMENTIONED ITEMS:
RE 2.1 PURCHASE ORDERS:
Purchase orders by HP shall be issued on purchase order forms, specifying HP
order number, customer's order number, desired delivery date, quantity, HP
product number, product description, delivery address, and (if applicable) an HP
shipment commission number.
RE 5. DELIVERY NOTE:
ATL undertakes to forward a copy of the delivery note to HP as proof of delivery
at the time of product dispatch (via fax!), The delivery note shall bear the
following notice: "Versand im Auftrag der Hewlett-Packard GmbH".
RE 8. PACKAGING SPECIFICATIONS:
Each delivery shall be handled on an individual order basis, i.e. each order
shall be delivered in separate packaging.
<PAGE> 20
20
11.2 DATA CONFIDENTIALITY
Any customer data provided by HP shall be used by ATL solely for order
processing. ATL undertakes to use such data for the assigned purpose in strict
compliance with BDSG (Data Confidentiality Code), to treat such data as strictly
confidential, not to disclose such information to third parties under any
circumstances, and not to use such data for any purpose other than order
processing.
11.3 DEFECTIVE PRODUCTS / WRONG DELIVERY
If requested by HP, ATL shall remove any defective products or wrong deliveries
from the HP customer site.
11.4 MISCELLANEOUS
In all other aspects, direct deliveries shall be subject to the stipulations set
forth in Items 1 through 10.
<PAGE> 21
21
SCHEDULE 3
PRICES
Enclosure consisiting of 1 page.
<PAGE> 22
22
Schedule 3 -- Unit Pricing
<TABLE>
<CAPTION>
BASE DISTRIBUTION
MODEL NUMBER DESCRIPTION PRICE PRICE
<S> <C> <C> <C>
* ACL4/52 B4000 HPG Automated Tape Library with 52 [ ] [ ]
cartridge capacity and:
* 4 DLT 4000 Tape Drives
* 21 DLT Compact IV Data
Cartridges
* 1 DLT Compact Cleaning Cartridge
* ACL2/52 B4000 HPG Automated Tape Library with 52 [ ] [ ]
cartridge capacity and:
* 2 DLT 4000 Tape Drives
* 14 DLT Compact IV Data
Cartridges
* 1 DLT Compact Cleaning Cartridge
* ACL2/28 B4000 HPG Automated Tape Library with 28 [ ] [ ]
cartridge capacity and:
* 2 DLT 4000 Tape Drives
* 7 DLT Compact IV Data Cartridges
* 1 DLT Compact Cleaning Cartridge
</TABLE>
Prices are in United States dollars, FCA Odetics UK office.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION.
<PAGE> 23
23
SCHEDULE 4
SUPPORT, FAILUREFIXING AND FUNCTIONALITY
I. Failurefixing
1. Any failure in the PRODUCTS shall be recorded and verified by HP.
Following verification, HP shall forward the failure report to ATL.
Failure shall be categorized as follows:
A. Serious failure
Failure that result in system crashes (hangs or halts), loss of data,
destruction of data, corruption of data or cases of unreasonable handling
effort for which no "workaround is available (i.e. there is no method
accepted by HP or by the customer for either avoiding the failure or using
the PRODUCTS).
B. Medium failure
Failure as specified under A above, but for which a "workaround" is
available for failure avoidance.
C. Minor failure
Any failure not included in categories A and B above.
2. Any serious failure in the PRODUCTS shall be fixed by ATL.
ATL grants to undertake the following steps immediately:
- to inform senior system specialists in order to have them work on a
problem solution without any delay.
- to inform ATL's management and all world-wide support organizations
that a failure of category A occured and that failure fixing began.
- to report to HP the status of the failure fixing process regularly but
every 48 hours minimum.
- to provide a solution to HP by delivering a failerfixing version of
the PRODUCTS at no charge.
- If ATL is unable to readily reproduce and fix the failure in ATL's own
computer system, ATL shall - at the request of HP or the HP-Customer -
analyze and fix the failure at the customer site.
<PAGE> 24
24
3. ATL guarantees with any medium failure to undertake all its best efforts to
fix the failure or provide a workaround solution within a reasonable period
of time taking into consideration the economic aspects of both parties.
4. Any other failure shall be fixed within the scope of PRODUCTS maintenance
as soon as possible.
5. ATL shall update the documentation in accordance with the failure fix.
6. ATL shall ensure that any serious and medium failure shall be fixed for
both the current and the previous operating system release.
7. ATL will maintain a telephone number with a designated knowledgeable
contact to HP to call during normal business hours to report problems and
receive assistance.
II. Functionality
ATL guarantees that the Product shall function on HP series 700 and 800 computer
systems using the operating system release current at any one time and its
predecessor version. ATL shall guarantee the functionality on new operating
system releases within a maximum period of 6 (six) weeks following the shipment
release of the operating system. ATL shall provide HP-equipment at ATL's site to
ensure the functionality/Compatibility of the Products.
<PAGE> 25
EXHIBIT 5 Quality Management - Preliminary Version
LPO - Continuous Improvement (TQRDCE)
1. OBJECTIVE AND SCOPE
The basic strategy for establishing and maintaining long-term working
relationship is through the establishment and monitoring of mutual performance
expectations and measurements. These performance metrics, constructive feedback
and prompt and corrective actions by the supplier are fundamental to achieving
continuous process improvements.
Following this idea HP and "........" agree to work together to achieve
technology, quality, responsiveness, delivery, cost and environment (TQRDCE)
performance goals outlined in 2. Both parties shall review every 3 - 6 month the
progress made on the stated TQRDCE objectives.
If the supplier fails to meet these agreed objectives, HP so inform, detailing
shortcommings and recommendations for corrective actions noted. If the supplier
is unable to remedy the problem, FIP reserves the right to terminate this
agreement.
1.1 Technology
HP expects from their suppliers, that they take up a leading position in
product-specification/poduct-development regarding technology. In addition HP
expects that the supplier meets new development schedules and that new solutions
are proactively communicated to HP.
1.2 Quality
HP expects from their suppliers to be provided with defect-free products
achieved through superior design, process control and continuous process
improvements. If requested, HP shall be provided with proof of quality.
1.3 Responsiveness
HP expects from their suppliers a consistent and effective service and support,
quick response to all enquiries, verifying failures and notifying problems
(after receipt by the supplier) as soon as detected, timely acknowledgement of
Purchase-Orders-if agreed- and a high flexibility to Purchase-Order changes
(additions, cancellations,...).
1.4 Delivery
The supplier agrees to a firm lead-time regardless of kind of product. This
lead-time includes the transit time. It is a firm commitment to deliver by the
supplier and determined in the LPO
LPO Continuous Improvement (TQRDCE)
Vers. 1.0
<PAGE> 26
DELIVERY STANDARD. In addition Delivery requirements comprise on-time delivery,
which means the receipt of the goods at the ship-to-location within a window of
five (5) days early and zero days late in regard to the desired due date, and a
timely notification of (potential) delays. If, in the event of late delivery,
expedited transportation is necessary to meet HP customer open orders, the
supplier agrees to pay the full overcosts. Other agreements made in the LPO
DELIVERY STANDARD are likewise part of this performance goal.
1.5 Cost
HP expects from their supplier agrees to be provided with products at the lowest
prices consistent with its expectations in the areas of technology, quality,
responsiveness, delivery and environment. In addition HP expects suppliers to
pursue proactively cost and price reductions thoroughly and effectively.
1.6 Environment
HP expects the suppliers to be aware of their environmental impact and their
responsibility shown e.g. in a practised strategy to protect environment or in
an implementation plan with this as an objective. Any materials that are sold to
HP or are used in/for products sold to HP shall be free of harmfull substances.
The products shall be designed for reuse and/or recycling and shall have a %
reuse/recycled content. Likewise packaging shall be minimized.
2. TQRDCE PERFORMANCE GOALS
2.1 Technology:
2.2 Quality:
2.3 Responsiveness: *reply to inquiries, reminders within 2 working days
*100% flexibility to changes of purchase orders
2.4 Delivery: *order-acknowledgement within 3 wd after receipt to
fax +49 7031 *notification of (potential) delay +
announcement of a new date of delivery
immediately
*100% on time delivery
*partial delivery only if requested
*communication of process changes/problems within
2 wd
2.5 Cost:
2.6 Environment:
LPO Continuous Improvement (TQRDCE)
Vers. 1.0
<PAGE> 27
SCHEDULE 6 - PRODUCT MARKETING AND SALES
Product Marketing and Sales
MARKETING -- ATL has jointly developed DLT Automated Tape Libraries with Digital
Equipment Corporation, Shrewsbury, Massachusetts. These DLT Automated Tape
Library are more commonly known as ATL's DLT series of Products and Digital's TL
8XX series of products.
ATL and Digital have mutually agreed that in order to develop and penetrate the
market for the DLT Automated Tape Libraries efficiently, ATL has the sole and
exclusive sales and marketing rights to sell the ATL series of DLT Automated
Tape Libraries for applications outside the proprietary Digital Computer
installed bate worldwide and Digital has the sole and exclusive sales and
marketing rights for the Digital series of products on the Digital installed
based worldwide.
SALES - HP hereby represents, warrantrs and agrees that:
a. It is not HP's strategic objective to sell ATL's DLT series of Value
Added Products for installation to the proprietary Digital Computer
installed base. However, HP retains the right to sell Value Added
Product(s) for heterogeneous client server networks that may include
Digital computers.
b. HP shall purchase DLT Automated Tape Libraries in support of the
proprietary Digital Computer installed base from Digital Equipment
Corporation, Storage Products Business Unit, Shrewsbury Massachusetts.
c. HP shall add value to Products by adding mutually agreed Storage
Management Software.
d. HP shall only re-market and sell Value Added Products to End Users or
ATL authorized Resellers or Distributors in accordance with this
Agreement.
e. HP shall not re-market or sell Product to any entity without adding
Storage Management Software.
f. HP shall provide service or assure that a third party Maintenance
Contract is in place for each Value Added Product sold.
g. HP shall only sell Products with the Storage Management Software as
listed below:
<TABLE>
<CAPTION>
Storage Management Manufacturer ATL's Model Number(s)
------------------ ------------ ---------------------
Software
--------
<S> <C> <C>
OMINBACK HP ACL4/52
OMNISERVE HP ACL4/52
LAGATO LAAGATO ACL4/52
</TABLE>
Other Storage Management Software may be added from time to time by
Mutual Agreement
h. HP shall only sell the Products in g. above in the following geography:
GERMANY
SWITZERLAND
<PAGE> 1
EXHIBIT 10.12
CONFIDENTIAL TREATMENT REQUESTED.
CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
BASIC ORDER AGREEMENT
#13844
DIGITAL EQUIPMENT CORPORATION
("Buyer")
AND
ODETICS, INC.
("Seller")
FOR
AUTOMATED HALF INCH TAPE LIBRARIES
(Material, Spares, and Repairs)
PURCHASE PERIOD: April 15, 1993 - August 30, 1998
- --------------------------------------------------------------------------------
(C) DIGITAL EQUIPMENT CORPORATION 1993
This Is An Unpublished Work Which Contains Confidential And Secret Information
Which Is Protected Under The Copyright Laws. The Existence Of The Copyright
Notice Is Not To Be Construed As An Admission Or Presumption That Publication
Has Occurred. Unauthorized Copying Is Strictly Prohibited. All Rights Reserved.
- --------------------------------------------------------------------------------
<PAGE> 2
INDEX
SECTION PAGE
SECTION I BASIC ORDER AGREEMENT .................................... 3
SECTION II PURCHASE ORDERS .......................................... 4
SECTION III PURCHASE PERIOD .......................................... 5
SECTION IV PRICING .................................................. 5
SECTION V MATERIAL FORECAST/CAPACITY PLANNING ...................... 7
SECTION VI DELIVERY/LEADTIME/FLEXIBILITY ............................ 8
SECTION VII QUALITY, INSPECTION, AND ACCEPTANCE....................... 11
SECTION VIII PAYMENT .................................................. 12
SECTION IX WARRANTY ................................................. 12
SECTION X CONFIDENTIAL INFORMATION AND ADVERTISING.................. 13
SECTION XI INTELLECTUAL PROPERTY INDEMNITY .......................... 14
SECTION XII CHANGES .................................................. 14
SECTION XIII TERM OF AVAILABILITY ..................................... 16
SECTION XIV U.S. CUSTOMS, MARKING, AND DUTY DRAWBACK.................. 17
SECTION XV FORCE MAJEURE ............................................ 18
SECTION XVI COMPLIANCE WITH LAWS ..................................... 18
SECTION XVII TERMINTION FOR CAUSE ..................................... 19
SECTION XVIII DOCUMENTATION, TRAINING & TECHNICAL
SUPPORT ............................................... 20
SECTION XIX RIGHTS AND ASSISTANCE TO REPAIR .......................... 20
SECTION XX SIMILAR PRODUCTS ......................................... 21
SECTION XXI BUSINESS REVIEWS ......................................... 21
SECTION XXII NO IMPLIED LICENSE ....................................... 21
SECTION XXIII NOTICES .................................................. 21
SECTION XXIV LIMITATION OF LIABILITY .................................. 22
SECTION XXV CONSIGNED MATERIAL ....................................... 22
SECTION XXVI GENERAL .................................................. 23
EXHIBIT A Material (Product) Specification
B1 Material Pricing
B2 Spares/Repairs Pricing
B3 Worldwide Ordering and Selling Locations
B4 Seller's Cumulative LEADTIME and Unique
Raw Material
C Qualification and Quality Requirements
D Documentation, Training, and Technical Support
E Manufacturing License and
Technical Assistance Agreement
F Non-Disclosure Agreement
Hold Harmless, Indemnity Agreement,
Evidence of Insurance
G Bailment Agreement
H End of Life Requirements
I Return Authorization Procedure for Material,
Spares, and Repairs
J Packaging Requirements
K EEO Certification
L Clean Air and Water Certification
M Glossary of Terms
<PAGE> 3
3
SECTION I BASIC ORDER AGREEMENT
A. This Basic Order Agreement and all attachments (called the "Agreement")
is entered into and effective the 15th day of April, 1993 and is made
between Digital Equipment Corporation and those subsidiaries of Digital
Equipment Corporation which are named on and have signed the signature
page of this Agreement (collectively referred to as "Buyer") and
Odetics, Inc. and those subsidiaries of Odetics, Inc. which are named
on and have signed the signature page of this Agreement (collectively
referred to as "Seller"). The Terms and Conditions herein exclusively
govern the purchase and sale of the Material, Spare Parts, Repair
Parts, Accessories, and Unique Raw Material more fully described in
Exhibit B, Material/Spares Pricing, and in applicable specifications,
attached hereto and incorporated herein by reference ("Material,
Spares, and Repairs").
B. This Agreement does not specify a quantity of Material, Spares, and
Repairs to be procured by Buyer, NOR DOES THIS AGREEMENT OBLIGATE BUYER
TO PURCHASE ANY MATERIAL, SPARES, and REPAIRS. All such quantities
shall be specified on Buyer's Purchase Orders as defined in Clause A of
Section II, Purchase Orders, issued under the provisions of this
Agreement and incorporated herein by reference.
C. If any term of this Agreement conflicts with any term of an issued
Purchase Order, this Agreement shall take precedence. If a conflict
occurs within this Agreement, the order of precedence shall be the
Agreement, followed by the Exhibits, and finally the Attachments.
D. Notwithstanding the requirement in Section XXIV, GENERAL, for two
signatures to amend this Agreement, by mutual agreement of the parties,
Buyer may add products of Seller to the list of Material, Spares, and
Repairs available for purchase hereunder by adding such products on a
Purchase Order which is accepted by Seller. Such added products shall
be deemed "Material, Spares, and Repairs as defined herein as though
listed in Exhibits B1 and B2 at the time of execution of this
Agreement. The price for which such added products shall be available
for purchase under this Agreement shall be as stated on such accepted
Purchase Order, subject to the provisions of this Agreement. The Buyer
shall subsequently memorialize the addition to this Agreement of the
added products in an amendment pursuant to Section XXVI, GENERAL.
E. Other than the EXCEPTION: contained in this paragraph, Seller grants
Buyer all necessary rights and licenses for Buyer to market, promote,
resell, distribute, and service
<PAGE> 4
4
the Material and including without limitation, rights and licenses
under any applicable patents, copyrights, trademarks, trade secrets,
mask works, and other intellectual property rights. Buyer shall have
the right to use Seller's name or trademarks in connections with any
distribution of the Material under this Agreement.
EXCEPTION: Buyer shall not sell ACL5480 Material that attaches directly
to AS400 product or future derivatives of AS400 product.
F. Terms are defined in this Agreement and further defined in Exhibit M
Glossary of Terms.
SECTION II PURCHASE ORDERS
A. The term "Purchase Order" shall mean Buyer's written Purchase Order
form and any documents incorporated therein by reference.
B. Buyer shall order Material, Spares, and Repairs by issuing facsimile or
telephonic orders or Purchase Orders. Buyer shall issue confirming
written Purchase Orders within ten (10) days after issuing such
facsimile or telephonic orders. Each Purchase Order shall specify items
such as: item description, quantity, delivery schedule, destination,
total price of the Purchase Order. Each Purchase Order issued under
this Agreement shall be made part of, and be incorporated into, this
Agreement. Seller shall have five (5) days after receipt to reject the
Purchase Order. By not rejecting the Purchase Order within five (5)
days, Seller shall have accepted the Purchase Order.
Buyer may, at its option, order Spares or Repairs on a priority one
("P-l") basis by issuing facsimile, electronic mail, or telephonic
orders for P-1 orders only, or by issuing its Purchase Order form
(collectively referred to as "P-1 Purchase Orders").
Seller shall confirm and acknowledge P-1 Purchase Orders placed via
facsimile or telephonic within four (4) hours of receipt of such
Purchase Orders. Seller shall be obligated to comply with all P-1
Purchase Orders issued in accordance with this Agreement. Accordingly,
any failure of Seller to acknowledge any such P-1 Purchase Orders shall
not be deemed a rejection of such order.
Acceptance by Seller is limited to the provisions of the Agreement and
the Purchase Order. No additional or different provisions proposed by
Seller shall apply. In addition, the parties agree that this Agreement
and issued
<PAGE> 5
5
Purchase Orders constitute a Contract for the Sale of Goods and satisfy
all statutory and legal formalities of a contract.
C. By mutual agreement only, If Buyer's Purchase Order specifies export
after passage of title, Seller shall furnish Buyer with all necessary
Export/Import documentation. If Buyer's Purchase Order specifies export
before passage of title, Seller shall prepare all export/import
documentation and furnish a copy to Buyer. Export/Import documentation
shall be in accordance with the INCOTERMS then in force.
D. If Seller has more than one (1) geographic location which could supply
Spares and/or Repairs, Seller shall make such Spares and/or Repairs
available to Buyer from Seller's closest location to Buyer's ship to
location. Any of Buyer's locations outside the United States may place
orders with Seller's specified United States and/or foreign facilities
for such Spares and Repairs.
E. Seller shall provide Buyer with a listing of all Seller's Domestic and
Foreign sales and repairs locations with complete addresses, phone
numbers, and contacts on Exhibit B3 Worldwide Ordering and Selling
Locations.
Pursuant to the terms of Section XXIII NOTICES, this exhibit may be
revised by mutual agreement of the parties without the need to amend
the Agreement provided Buyer issues a revised Exhibit B3 in writing
showing the date of revision.
F. [This space reserved for future drop ship language and electronic POs.]
SECTION III PURCHASE PERIOD
A. The period during which Buyer may issue Purchase Orders for Material,
Spares, Repairs under this Agreement (Purchase Period) shall last five
(5) years, beginning on April 1, 1993, and expiring on August 30, 1998.
B. The Purchase Period may be mutually extended by the parties for up to
two (2) additional consecutive twelve (12) month periods. For any
extension(s) requested by Buyer, no less than ninety (90) days written
notice shall be given Seller prior to the end of the then current
Purchase Period.
C. The period during which Buyer may issue Purchase Orders for Spares and
Repairs under this Agreement extends for seven (7) years (Spares
Purchase Period) and shall begin at the end of the the Material
Purchase Period or at such a time
<PAGE> 6
6
that the parties have agreed to execute an End of Life Plan
(hereinafter "EOL Plan") a sample of which is contained in Exhibit H,
End of Life Requirements. The Spares Purchase Period may be extended
upon prior mutual written agreement of the parties.
SECTION IV PRICING
A. Except for engineering prototypes, the prices for Material are set
forth in Exhibit B1 Material Pricing and Exhibit B2 Spares/Repairs
Pricing and shall remain fixed for the period set forth therein
(Pricing Period). Ninety (90) days prior to the end of the then current
Pricing Period, Buyer and Seller shall meet to review the pricing and
Material, Spares, and Repairs for the next Pricing Period. If Buyer and
Seller reach agreement, a new Exhibit B shall be generated for the next
Pricing Period and shall be added by amendment to this Agreement. If
Buyer and Seller fail to reach agreement on pricing for the next
Pricing Period, this Agreement may be terminated at the end of the then
current Pricing Period. Buyer's sole liability to Seller for such
termination shall be to pay Seller any unpaid balance due for
conforming Material:
1. Delivered against Buyer's Purchase Order(s) before receipt of
Buyer's termination notice; or
2. Ordered by Buyer and scheduled for delivery within the
LEADTIME provisions specified in SECTION VI of this Agreement.
3. Unique Raw Materials specified in Exhibit B4, Seller's
Cumulative LEADTIME and any Accessories ordered.
B. Prices include all charges such as packaging, packing, customs duties
imposed before passage of title, and all taxes except sales, use, and
other such taxes imposed upon the sale or transfer of Material, Spares,
and Repairs for which Buyer is solely responsible under applicable law
and for which Buyer is properly invoiced by Seller.
C. Seller represents that prices established herein, to be paid Buyer,
shall not exceed the prices charged to any other customer of Seller for
materials which are the same or substantially similar to the Material,
Spares, and Repairs taking into account the quantities and the Terms
and Conditions of this Agreement, and Seller shall forthwith refund any
excess amounts paid by Buyer.
D. Prices for engineering prototypes (hereinafter "Prototypes") apply to
Magnum Material only and include the cost of
<PAGE> 7
7
Seller's maintaining Prototypes to the current engineering revision
level up to the point of First Revenue Shipment (hereinafter "FRS"),
which shall be deemed to have occurred when Buyer's engineer releases
Material to manufacturing at revision level AO1. Price shall not
* exceed [ ] fully configured with PTM, IOD, and MUC installed.
By mutual agreement only, upgrading shall occur by Seller upgrading
Prototypes at Buyer's facilities, or by Seller providing upgrade "kits"
to Buyer for Buyer to upgrade Prototypes, or Prototypes shall be
shipped to a facility of Seller's choice for upgrade or replacement.
Seller shall pay all cost of shipping and handling, whichever method
best satisfies the upgrading of Buyer's Prototypes.
Buyer shall notify Seller in writing when the qualification of Material
has reached a point where Seller can begin shipping FRS quality
Material. At this point, Seller shall upgrade or at Seller's option
replace all Prototypes to the AO1 revision level at which point, no
further upgrades shall be required.
E. Prices for Accessories are contained in Exhibit B1 and are firm for a
period of twelve (12) months beginning January 1, 1994 and are based
upon the additional conditions contained herein. Prices shall be
reviewed once per year. Seller shall provide a written notice of intent
to change prices no later than October 1, 1994, and once per year
thereafter. All price changes shall be mutually agreed upon. Once
agreed upon, the current Exhibit B1 shall be replaced with a new
Exhibit B1 along with a new calendar date placed in the lower right
corner of the Exhibit.
By implementing a new Exhibit B1, the parties agree that an Amendment
to the contract is not required to execute approved changes to
Accessories Pricing.
Prices for Accessories are calculated using one of the following
methods for each item of Accessories.
1. If Buyer consigns Accessories, the Price for Accessories shall
not exceed the cost of the actual value added service of
* packaging and/or installing the Accessories plus a [ ] as
quoted by Seller and mutually agreed by the parties.
2. If Seller purchases Accessories from one of Buyer's qualified
suppliers, Seller shall not charge Buyer more
- -------------------
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION.
<PAGE> 8
8
* than [ ] for value added service of packaging and/or
installing the Accessories as quoted by Seller and mutually
agreed by the parties.
It is understood by the parties that Seller is not responsible
for the qualification or quality of Accessories provided under
subparagraphs 1 and 2 above, except to perform normal incoming
inspection.
3. If Seller purchases Accessories from one of Seller's qualified
suppliers, then Seller shall provide Buyer a written quotation
* and charge Buyer a price mutually agreed by the parties. [ ].
Buyer may, from time to time, change its requirements for Accessories
and modify the Accessories Bill of Materials currently contained in
Exhibit B1. In the event a change occurs to Buyer's Accessories
requirements during the year causing Buyer's Material price to change,
Seller shall promptly notify Buyer in writing within ninety (90) days.
A new Exhibit B1 shall be submitted along with the mutually agreed upon
price for the new Accessories item.
Accessories contained in Exhibit B1, Part I are included in the total
price for Buyer's Material and cannot be purchased by Buyer separately.
Accessories contained in Part II of the Exhibit can be purchased
separately and shall be packaged in individual cartons. Purchases
contained in Exhibit B1, Part II do not require a forecast by Buyer.
SECTION V MATERIAL FORECAST/CAPACITY PLANNING
A. Buyer has implemented significant cost/quality improvement programs
within its manufacturing environment. Several of these programs fall
under the general umbrella term called "Just In Time, Total Quality
Control" ("JIT/TQC"), Six Sigma and ISO 9000. These programs are
outlined in Exhibit C, Qualification and Quality Requirements. It is
Buyer's intention to extend these programs to the Seller's
manufacturing location(s) during the period of this Agreement. Upon
mutual agreement of the parties to the implementation of these
programs, Seller agrees to provide quarterly progress reports to Buyer.
Minimum continuous improvement criteria, such as but not limited to
delivery flexibility and total quality requirements, have been
incorporated into this Agreement. When implemented and mutually agreed
upon, a cost/quality program, shall contain
- --------------------
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 9
9
the details to the continuous improvement criteria and their schedule.
B. After initial FRS of Magnum Material, Buyer shall use its best efforts
to maintain an order status of approximately ninety (90) days worth of
Magnum Material. In addition, Buyer shall, for information purposes
only and for the convenience of Seller, provide Seller a rolling
Material forecast issued approximately every thirty (30) days, which
when combined with the on order Material will equal approximately
twelve (12) months visibility into Buyer's Material requirements.
For ACL580 Material, Buyer shall use its best efforts to provide Seller
a twelve (12) month rolling forecast plus place approximately thirty
(30) days of ACL5480 Material on Purchase Orders subject to the
provisions contained in Section VI, Clause A.
C. For capacity planning purposes only, Seller warrants to Buyer the
Maximum Capacity (100% load) to produce Buyer's Material as outlined
below. Subject to the terms and conditions of this Agreement, Seller
represents it has the following Material delivery capacity or the
ability to ramp to this capacity within six (6) months when the need to
do so is indicated by the latest six (6) months of Buyer's rolling
twelve (12) month forecast. The following capacity may be modified upon
the prior mutual written agreement of the parties.
<TABLE>
<CAPTION>
---------------------------------------------------------------------
MANUFACTURING CAPACITY CY93 CY94 CY95 CY96
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Theoretical Maximum 1200 2500 3000 3000
Seller's RAMP 800 1500 2500 2500
Buyer's Magnum RAMP 100 500 600 350
---------------------------------------------------------------------
</TABLE>
D. SELLER AGREES THAT BUYER IS IN NO WAY OBLIGATED TO PURCHASE HEREUNDER
OR TO COMMIT TO ANY OF THE ABOVE CAPACITY AND THAT SUCH INFORMATION IS
PROVIDED SOLELY TO ENSURE THAT SELLER HAS THE CAPACITY TO COMPLY WITH
ANY PURCHASE ORDER BUYER MAY ISSUE HEREUNDER. SELLER AGREES THAT BUYER
IS NOT RESPONSIBLE FOR ANY COSTS OR EXPENSES THAT SELLER MAY INCUR
INCLUDING BUT NOT LIMITED TO THE PROVIDING, MAINTAINING, OR DISPOSITION
OF ANY CAPACITY INDICATED ABOVE OR ANY CHANGES THERETO. SELLER AGREES
THAT IN NO EVENT SHALL BUYER BE LIABLE FOR ANY RETROACTIVE PRICE
INCREASES ("BILLBACK") BASED ON BUYER' S FAILURE TO ACHIEVE ANY
ESTIMATED VOLUME FORECASTS PROVIDED BY BUYER TO SELLER.
<PAGE> 10
10
SECTION VI DELIVERY/LEADTIME/FLEXIBILITY
A.1. Beginning with the initial FRS of Magnum Material and for a period of
six (6) months only, Seller shall use its best efforts to meet the
delivery, Leadtime (herein "LEADTIME"), and flexibility terms contained
in this Section after which time, Seller shall comply to all terms
contained herein.
Buyer's Purchase Orders shall state Seller's committed delivery dates
for Material, Spares, and Repairs. TIME AND RATE OF DELIVERY ARE OF THE
ESSENCE OF ALL PURCHASES MADE UNDER THIS AGREEMENT.
2. LEADTIME is defined as the minimum period between Buyer's
issuance of a Purchase Order and the scheduled delivery date.
Initial LEADTIME is defined as the minimum LEADTIME required
for Seller to deliver Material when there is no quantity of
Material previously placed on Buyer's Purchase Orders and
there is no forecast for Material. Ongoing LEADTIME is the
LEADTIME to deliver Material when there is Material currently
scheduled for delivery on Buyer's Purchase Orders, and there
is Material forecasted.
For Magnum Material, Initial LEADTIME shall be no less than
ninety (90) days unless mutually agreed to by the parties.
Ongoing LEADTIME shall be less than ninety (90) days and is
based upon the total quantity of Material placed on Buyer's
Purchase Orders. Unless mutually agreed by the parties, the
maximum quantity of Material Buyer may order during the
Ongoing LEADTIME period is a percentage of the total quantity
of Material currently on order as referenced in Clause G. of
this Section VI.
3. Configuration of Material: It is Buyer's intent to install an
"on-line" customer order system at Seller's facility. Based
upon the quantity of Magnum Material on order during any
thirty (30) day period, Seller agrees to configure Magnum
Material to meet the specific customer requirements and
deliver the Magnum Material within five (5) days from its
receipt of customer order. This is based upon the
configuration order transmitted via the on-line system.
Configuration of Buyer's ACL5480 Material shall occur in
twenty-one (21) calendar days or less from the date the
configuration Purchase Order is issued. Once issued, orders
for ACL5480 Material are firm, and can not be canceled or
rescheduled unless mutually agreed by the parties.
<PAGE> 11
11
4. LEADTIME for Spares and Repairs is defined in Exhibit B2.
B. All deliveries shall be Free Carrier (hereinafter "FCA") Anaheim, CA
per Incoterms 1993. Buyer shall select the carrier and shall pay
transportation charges on a "freight collect" basis.
C. If Seller delivers Material, Spares, and Repairs more than one (1) day
in advance of the scheduled delivery date, Buyer may either return such
Material, Spares, and Repairs at Seller's expense for subsequent
delivery on the original delivery date or retain such Material, Spares,
and Repairs and postpone payment until it would have been due if Seller
had delivered Material, Spares, and Repairs as scheduled. Without
limiting any of Buyer's rights and remedies in equity or at law, if
Seller is more than one (1) day late in meeting the scheduled delivery
date, Buyer may require that Seller ship the Material, Spares, and
Repairs via premium means bearing the incremental premium shipping
charges or Buyer may cancel the order for such Material, Spares, and
Repairs without liability to the Buyer.
D. Seller shall deliver the exact quantity of Material, Spares, and
Repairs scheduled. If Seller delivers less than the scheduled
requirement, Seller shall correct the shortage within a two (2) day
period. If Seller fails to correct such shortage within this period,
without limiting any of Buyer's rights and remedies in equity or at
law, Buyer may cancel and/or return all or part of the order without
cost or liability. If Seller delivers more than the quantity ordered,
Buyer may return any excess Material, Spares, and Repairs at Seller's
expense.
E. Buyer may require that shipments of Material, Spares, and/or Repairs
under this Agreement be shipped by Seller to various destinations. The
Purchase Order shall clearly specify the "SHIP TO" location for each
order placed with Seller.
F. Buyer shall measure Seller's performance against commitments for the
purpose of establishing Seller's rate of timely delivery and LEADTIME
improvement against Buyer's requirements. Timely delivery shall mean
delivery of scheduled quantities no more than one (1) day early, or one
(1) day late.
G. Buyer may, without cost or liability, increase, decrease, or cancel the
quantity of Magnum Material ordered under this Agreement in accordance
with the following schedule.
<PAGE> 12
12
If Material is rescheduled, the same Material may be rescheduled a
second time providing the maximum reschedule period does not exceed six
(6) months from the originally scheduled delivery date. Material
rescheduled cannot subsequently be canceled.
<TABLE>
<CAPTION>
---------------------------------------------------------------
Period Percentage
In Days In Out Cancel
---------------------------------------------------------------
<S> <C> <C> <C>
* 00 - 14 [ ] [ ] [ ]
* 15 - 21 [ ] [ ] [ ]
* 22 - 30 [ ] [ ] [ ]
* 31 - 60 [ ] [ ] [ ]
* 61 - 90 [ ] [ ] [ ]
* 91 - 120 [ ] [ ] [ ]
---------------------------------------------------------------
</TABLE>
H. P-1 Purchase Orders
1. Seller shall accept and process Purchase Order(s) for P-1
requirements twenty four (24) hours a day, three hundred
sixty-five (365) calendar days a year. All P-1 purchase orders
shall be delivered to Buyer's designated carrier or freight
agent within twenty-four (24) hours of authorization.
2. Invoice(s) for P-1 Purchase Order(s) must be accompanied by a
copy of the waybill(s) for the shipment(s).
3. For Spares and Repairs only, if Buyer places a P-1 Purchase
Order because Seller has failed to meet any requirement of
this Agreement or of Buyer's Purchase Order(s) as they relate
to the required delivery date or quantity of conforming
Spares, and Repairs to be delivered, Seller shall pay all
transportation charges for such order.
I. A copy of Seller's packing list shall accompany all Material, Spares,
and Repairs shipments and shall indicate Buyer's Purchase Order Number,
Part Number, and Serial Number.
J. Seller shall notify Buyer and Agent, where applicable, of availability
of Material, Spares, and Repairs at least twenty-four (24) hours prior
to delivery to the designated place of delivery, as specified on
Buyer's Purchase Order.
- -------------------
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 13
13
SECTION VII QUALITY, INSPECTION, AND ACCEPTANCE
A. Prior to delivery, Seller shall insure that all Material, Spares, and
Repairs are in accordance with the provisions of this Agreement,
including but not limited to Exhibit A, Material (Product)
Specification, and Exhibit C. Buyer's Quality Specification, Exhibit C,
and Buyer's Packaging Requirements, Exhibit J, and all other quality
requirements specified in the Purchase Specifications for Material,
Spares, and Repairs purchased under this Agreement, are incorporated
herein by reference.
B. Seller authorizes and agrees to assist Buyer in performing source
inspection and quality assurance reviews at Seller's manufacturing
facilities, but this shall in no way relieve Seller of its obligation
to deliver conforming Material, Spares, and Repairs nor waive Buyer's
right of inspection; nor does said right of inspection waive any rights
under the warranty provisions.
C. During the Inspection Period of ninety (90) days after Buyer's receipt
of the shipment of Material or Spares, and Repairs. Buyer shall return
Material, Spares, and Repairs which fails to pass inspection per
Acceptance Quality Level (AQL) criteria defined in Exhibit C for, at
Buyer's option, credit, or repair/replacement within five (5) days of
Buyer's notice to Seller of nonconformance. Seller shall designate
carrier and pickup of rejected Material, Spares, and Repairs and the
pickup shall occur within five (5) days of notice, or Buyer may select
a carrier and return rejected Material, Spares, and Repairs COD, and
risk of loss shall pass to Seller for rejected Material, Spares, and
Repairs FCA Buyer's dock.
D. In the event that Buyer supplies any outgoing test station(s) for
Seller's use, the terms of supplying such test station(s) are set forth
in the Bailment Agreement, Exhibit G and in Section XXV, Consigned
Material, hereto.
SECTION VIII PAYMENT
A. Buyer shall issue payment net thirty (30) calendar days after the later
of the scheduled delivery date and receipt of a correct packing list,
correct invoice, and conforming Material, Spares, and Repairs.
B. Amounts owed to Buyer due to rejections of Material, Spares, and
Repairs or discrepancies on paid invoices shall be at Buyer's option,
fully credited against future invoices payable by Buyer, or paid by
Seller within thirty (30)
<PAGE> 14
14
calendar days from Seller's receipt of a debit memo or other written
request for payment from Buyer.
C. Seller and Buyer agree that Buyer may at its sole discretion utilize
for its own purpose or assign to third-parties all content credits for
the value, in whole or in part, of purchases made pursuant to this
Agreement. Such utilization or assignment of offset credits may be in
furtherance of fulfilling international offset obligations to any
government. Seller agrees to make available the maximum offset credits,
by the laws of the government in question and for which Buyer is
entitled, including those assignable to either party.
SECTION IX WARRANTY
A. Beginning with the effective date of this Agreement and for purchases
under this Agreement only, Seller warrants ACL5480 Material for
twenty-four (24) months from the date of delivery of Material to Buyer
or Buyer's customer. Seller warrants Buyer's Magnum II Material for
thirty (30) months and shall extend ACL5480 Material to thirty (30)
months beginning with ACL5480 Material scheduled for delivery after
Buyer's Magnum II Material has achieved First Revenue Shipment
(hereinafter "FRS").
Seller warrants Spares, Repairs, Accessories, and Unique Raw Material
as defined in Exhibit B2 and purchased under this Agreement for twelve
(12) months from the date of delivery to Buyer or Buyer's customer
except in the case where Seller is replacing Spares, Repairs,
Accessories, or Unique Raw Materials which have failed during the
Material warranty period. In which case the warranty period is the
amount of original warranty remaining on Buyer's Material. Purchases of
Expendables, also defined in Exhibit B2, shall carry no warranty unless
they are found to be defective as part of Buyer's original Material
warranty in which case they shall contain whatever Material warranty
remains.
Seller warrants that all Material, Spares, Repairs, Accessories, and
Unique Raw Materials shall be free from defects in material,
workmanship, and design, shall conform to applicable specifications,
drawings, samples, and descriptions referred to in this Agreement, and
shall be suitable for the purpose for which intended. Seller warrants
it has the right to convey the Material, Spares, Repairs, Accessories,
and Unique Raw Materials that the Material, Spares, Repairs,
Accessories, and Unique Raw Materials are free of all liens and
encumbrances, and do not infringe on any intellectual property
interest.
<PAGE> 15
15
These warranties shall survive any inspection, delivery, payment, and
termination of this Agreement, and shall run to Buyer, its customers,
successors, and assigns. Seller agrees to provide the traceability of
remaining warranty by serializing all Spares/Repairs, which are Field
Replaceable Units (hereinafter "FRU") as contained in Exhibit B2.
Buyer shall have the right to enforce these warranties on behalf of any
of its customers.
B. Seller shall correct defects in Material, Spares, and Repairs at its
facility. Seller shall repair or replace all defective Material,
Spares, and Repairs within thirty (30) days unless, at Buyer's option
within five (5) business days from date of receipt of such Material,
Spares, and Repairs in which case, Buyer shall pay a warranty surcharge
as contained in Exhibit B2. Seller shall bear all warranty costs such
as labor, material, inspection, and shipping to and from Buyer's
facilities. If Buyer incurs any such costs, it may either recover them
directly from Seller or deduct them from any amounts due Seller.
C. In addition to the above remedies, by mutual agreement, Seller at its
expense, shall provide technical assistance and any parts necessary to
repair Material, Spares, and Repairs still under warranty, at Buyer's
facility. Seller shall provide this within forty eight (48) hours after
it receives Buyer's request for on-site support.
D. Limitation of Warranty: This warranty is limited in the event that
Buyer's Material, Spares, Repairs, Accessories, and/or Unique Raw
Materials are damaged or become defective:
1. As a result of accident or if not used for the purpose for
which it was intended.
2. By the use of parts, exclusive of software products, which are
not manufactured or sold by Seller under this Agreement.
3. By being modified without the written consent of the parties
of this Agreement.
4. As a result of service by a third party not mutually agreed to
by Buyer and Seller.
SECTION X CONFIDENTIAL INFORMATION AND ADVERTISING
A. Seller shall maintain as confidential and shall not disclose to any
person outside its employ, nor use for purposes other than performance
of this Agreement, any specifications,
<PAGE> 16
16
drawings, blueprints, data, business information, or other confidential
information which Seller learns by virtue of this Agreement, except as
required by law, and after written notice to Buyer. Upon termination of
this Agreement, Seller shall promptly return to Buyer all confidential
material and all copies.
B. Without Buyer's prior written consent, Seller shall not in any manner
disclose, advertise, or publish the existence or terms of transactions
under this Agreement.
C. Buyer may reproduce and use Seller's manuals, schematics, and
merchandising literature provided by Seller under this Agreement.
D. The obligations of the Non-Disclosure Agreement most recently entered
into by the parties is hereby merged into this Agreement.
SECTION XI INTELLECTUAL PROPERTY INDEMNITY
Seller shall defend, at its expense, any claim against Buyer alleging
that Material, Spares, and Repairs, or any part thereof infringes any
patent, copyright, trademark, trade secret, mask work, or other
intellectual property interest in any country and shall pay all costs
and damages awarded, if Seller is notified promptly in writing of such
a claim. If an injunction against Buyer's or Buyer's customer's use,
sale, lease, license, or other distribution of the Material, Spares,
Repairs, or any part thereof results from such a claim (or if Buyer
reasonably believes such an injunction is likely), Seller shall, at its
expense, (and in addition to the Seller's other obligations, hereunder)
and as Buyer requests, obtain for Buyer and/or Buyer's customers the
right to continue using, selling, leasing, licensing, or otherwise
distributing the Material, Spares, and Repairs, or replace or modify it
so it becomes noninfringing but functionally equivalent. The provisions
of this Section shall not apply to any claim for infringement resulting
solely from Seller's compliance with Buyer's detailed written design
specifications, where provided.
SECTION XII CHANGES
A. Buyer must be advised in writing of ANY and ALL product or process
changes prior to implementation. Seller shall make no changes during
the Purchase Period for Material, Spares, and Repairs which affect
design, form, fit, function, appearance, reliability, place and process
manufacture, or packing and packaging specified by this Agreement
without Buyer's prior written approval. Buyer shall review Seller's
<PAGE> 17
17
written request for such changes within forty (40) days of Buyer's
receipt of such request and whatever documentation Buyer reasonably
requires to evaluate such request, which shall include all maintenance
related information and samples which incorporate the proposed
change(s). Buyer agrees to use reasonable efforts to issue to Seller,
Buyer's final acceptance or rejection of Seller's proposed change
within an additional forty (40) day period.
It is Buyer's intention to review and make disposition on all request
for changes in as timely a manner as possible. For significant changes,
Buyer may require the total number of days as mentioned in the above
paragraph to accomplish an accurate disposition. For non-significant
changes, Buyer may require only thirty (30) days in total. For minor
process changes, Buyer shall use its best efforts to approve changes
within three (3) business days. It is the sole responsibility of Buyer
to determine the significance of any request for change. For minor
process changes only, Seller may implement the change prior to Buyer's
approval. However, any changes rejected by Buyer may result in Seller's
returning the process to its original state and bearing all costs of
such rejected change request.
B. As a part of Seller's internal engineering process, prior to release of
any change, Seller shall demonstrate to Buyer's satisfaction that the
change has not affected the operation and functional performance of the
Material, Spares, and Repairs listed in Exhibit A, hereto.
C. For all changes approved by Buyer, Seller shall furnish to Buyer all
necessary documentation to enable installation and implementation of
the changes and make available for purchase by Buyer hereunder, parts
in kit form and at reasonable prices for nonmandatory changes.
D. Any significant change in manufacturing process or place of manufacture
must be certified per the procedure set forth in Exhibit C, hereto, and
prior to Buyer's written acceptance thereof. If Seller proposed to
transfer the manufacture of Material, Spares, and Repairs to another
manufacturing or repair facility, or to another manufacturing line from
a currently operating and qualified manufacturing line, Seller shall
notify Buyer of the intent in writing forty (40) days prior to the
proposed commencement of any such plan. Seller's notice shall include a
transfer plan acceptable to Buyer and shall include as a minimum a
detailed schedule for the technical qualification, managerial
responsibility, and program support for the Material, Spares, and
Repairs. The plan shall include the formation of a manufacturing team
made up of representatives of both Buyer and Seller which
<PAGE> 18
18
shall monitor and report Buyer's conformance to the schedule and
implementation of the transition plan. Buyer shall use reasonable
efforts to review and approve the plan in a timely manner, but Seller
shall not commence to implement the plan until ten (10) days after
Buyer's approval.
Seller shall continue utilizing the previously approved manufacturing
or repair line to meet Buyer's Purchase Order requirements until Seller
proves the product produced in the new line or facility meets the
requirements of Exhibits A and C, hereto, as well as proving to be
reliable to delivery and program completion of the transition plan and
after satisfactory demonstration of qualification and reliability of
delivery performance, Buyer shall supply in writing notice of the
approval status of the new facility or line.
E. If Seller fails to comply with Clauses A through D of this Section,
then Seller shall bear all of Buyer's costs to correct all changes
affecting Material, Spares, and Repairs.
F. A "Mandatory" Change as used herein shall be defined as: Any change
required to insure that the Material, Spares, and Repairs (i) meet the
applicable Product Purchase Specification(s), (ii) are safe, and (iii)
comply with applicable laws.
1. After receiving written approval from Buyer, Seller shall
start implementation of Mandatory Changes to the Material,
Spares, and Repairs per mutually agreed upon schedule(s) and
shall not ship said Material, Spares, and Repairs until
brought into conformance unless authorized in writing by Buyer
to do otherwise.
2.a. For Mandatory Change(s), Seller shall supply Buyer at no
charge all parts for all affected Material, Spares, and
Repairs including spare parts shipped in kit form and shall
reimburse Buyer's actual installation cost per occurrence.
Such costs shall be waived if Seller has complied with the
requirement of Clause F.3., following. Buyer shall return to
Seller upon Seller's request any "Field Change Order" (FCO)
replaced material with a discounted purchase price greater
than One Hundred ($100) dollars.
b. For Mandatory Change(s) as a result of a change to the
applicable specification initiated by Buyer after initial FRS,
the parties shall mutually agree on a price for replacement
Materials, Buyer bearing the cost of labor to implement the
change.
<PAGE> 19
19
3. "Kits" shall be defined as "Field Change Order" (FCO) material
and shall be delivered to Buyer per the following schedule:
Twenty percent (20%) of total required Kits within ten (10)
days of availability of required material and the remaining
eighty percent (80%) of the Kits within forty (40) days.
Seller shall ship FCO Kits pursuant to Buyer's Purchase Orders
or Purchase Order releases which may be provided to Seller by
phone.
G. Change Notices: Any notice given under this Section shall be initially
transmitted by means agreed to between the parties to addressees
specified in SECTION XXIII, NOTICES herein.
SECTION XIII TERM OF AVAILABILITY
A. In consideration for Buyer's purchase of any Material, Spares, and
Repairs hereunder, Seller grants to Buyer the option to purchase
Material, Spares, and Repairs at the last revision level purchased
under this Agreement for the period of seven (7) years after the
expiration date of this Agreement or any extension thereof or for as
long as said Material, Spares, and Repairs are made available to any of
Seller's other customers, whichever is the later.
B. Thereafter, Seller may discontinue availability of Material, Spares,
and Repairs and by giving Buyer twelve (12) months prior written
notice, provided that, at Buyer's option, Seller shall:
1. Grant to Buyer a royalty-free, nonexclusive, worldwide license
to make, have made, use, sell, or otherwise dispose of said
material, and furnish Buyer all necessary documentation,
specifications, drawings, and other data, including its
sources for raw material necessary to make such Material,
Spares, and Repairs; and in the case of Spares only;
2. Grant to Buyer the right to repair or have repaired Spares.
Seller shall provide Buyer, at Buyer's request, a list of
components and the list of Seller approved suppliers for those
components. The components that are not available to Buyer
from sources other than Seller are to be listed and unit
prices identified with quantity discounts, if any. Those parts
having generic industry identification (not proprietary to
Seller) and available to Buyer shall be cross referenced to
generic part numbers. Seller further agrees to provide Buyer
with the available test specifications and test procedures and
drawings
<PAGE> 20
20
required for testing the finished Spares and Repairs along
with a full description, manufacturer's model numbers, etc. of
the test equipment involved/required to perform such tests.
3. Sell Buyer sufficient quantities of Material, Spares, and
Repairs Buyer deems necessary.
4. Implement the EOL Plan set forth in Exhibit H hereto.
C. The parties agree that the terms of this Agreement shall apply to the
purchase of Material, Spares, and Repairs set forth in Clause A above,
and the terms of Exhibit E, Manufacturing License and Technical
Assistance Agreement shall apply to the license set forth in Clause B
above. However, in no event shall the purchase price for Material,
Spares or any other charges related to Buyer's exercise of its rights
in Clause B above, exceed the prices then charged to Seller's other
customers for like terms, quantities, etc. of Material, Spares, and
Repairs.
SECTION XIV U.S. CUSTOMS, MARKING, AND DUTY DRAWBACK
A. Country of Origin
1. "Country of Origin" Marking: The Seller shall mark, in
English, all Material, Spares, and Repairs with the Country of
Origin (manufacture), in compliance with Section 304 of the
United States Tariff Act. Both the Material, Spares, Repairs
and its container must be conspicuously marked with the
Country of Origin. If the Material, Spares, and Repairs itself
cannot be marked legibly due to size, then its immediate
container must be marked.
2. For each delivery against purchases made under this Agreement,
Seller shall furnish Buyer with a signed certificate stating
Country of Origin (manufacture) by quantity and part number
(Buyer's and Seller's).
B. Duty Drawback
1. For each purchase under this Agreement, and for each item of
Material, Spares, Repairs delivered hereunder for which U.S.
Customs import duties have been paid upon importation, or for
Materials that contain parts for which import duties have been
paid, Seller shall furnish Buyer with a signed "MANUFACTURING
DRAWBACK ENTRY and/or CERTIFICATE" (U.S. Customs Form #CF331
or its successor). Seller warrants that information contained
in such Form #CF331 shall be accurate and
<PAGE> 21
21
shall comply with United States Duty Drawback and Customs laws
and regulations. Seller shall indemnify and hold Buyer
harmless from and against any claims, costs, or damages
resulting from or arising out of Buyer's reliance on such
information and/or Form #CF331.
2. Seller shall provide such required Form(s) #CF331, and/or
information, at the end of each fiscal quarter, unless
otherwise agreed in writing by both parties.
3. Buyer reserves its first right to claim Duty Drawback on all
purchases made under this Agreement.
SECTION XV FORCE MAJEURE
Neither party shall be liable for failure to perform any of its
obligations under this Agreement during any period in which such party
cannot perform due to fire, flood, or other natural disaster, war,
embargo, riot, or the intervention of any government authority,
provided that the party so delayed immediately notifies the other party
of such delay. If Seller's performance is delayed for these reasons for
a cumulative period of twenty (20) days or more, Buyer may terminate
this Agreement and/or any Purchase Order hereunder by giving Seller
written notice, which termination shall become effective upon receipt
of such notice. If Buyer terminates, its sole liability under this
Agreement or any Purchase Orders issued hereunder shall be to pay any
balance due for conforming Material (1) delivered by Seller before
receipt of Buyer's termination notice; and (2) ordered by Buyer for
delivery and actually delivered within fifteen (15) days after receipt
of Buyer's termination notice.
In such event, and only in the event the parties cannot agree on an
alternative remedy, Seller hereby grants to Buyer, a royalty-free,
nonexclusive worldwide license under the terms of Exhibit E.
SECTION XVI COMPLIANCE WITH LAWS
A. All Material, Spares, and Repairs supplied and work performed under
this Agreement shall comply with all applicable United States and
foreign laws and regulations including, but not limited to, emission
and safety standards, the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.), the Fair Labor Standards Act of 1938 (29 U.S.C.
Sections 201-219), the Toxic Substance Control Act of 1976 (15 U.S.C.
Section 2601), all laws restraining the use of convict labor, and
Worker's Compensation Laws. Upon request, Seller agrees to certify
compliance with any
<PAGE> 22
22
applicable law or regulations. Seller's failure to comply with any of
the requirements of this Section may result in a material breach of
this Agreement.
B. The following statutes and Executive Orders (Ex. Or's) together with
regulations issued thereunder are made a part of this Agreement if
applicable: Ex. Or. 11246, Equal Employment Opportunity; Ex. Or. 11625,
as Amended, and Ex. Or. 12138, Small and Small Disadvantaged Business
Concerns; Section 503 of the Rehabilitation Act of 1973 as Amended (29
U.S.C. Section 793); and Section 402 of the Vietnam Era Veterans
Readjustment Assistance Act of 1974, as Amended (38 U.S.C. Section
2012). A copy of the Affirmative Action clauses required under each of
these statutes or Ex. Or's is attached as an Exhibit to this Agreement
and incorporated herein by reference.
C. The provisions of the Clean Air Act (42 U.S.C. Sections 7401 et seq.)
and the Clean Water Act (33 U.S.C. Sections 1251 et seq.) are made a
part of this Agreement. A copy of the Certification required under
these statutes is attached as an Exhibit to this Agreement and
incorporated herein by reference.
Seller agrees to comply with the United States Federal requirements
contained at Title 40, Code of Federal Regulations, Part 82 -
"Protection of Stratospheric Ozone; Labeling". Moreover, Seller shall
not supply to Buyer any product or part that contains or has been
manufactured using a Class I ozone depleting substance, as that term is
defined in the regulations unless Seller has provided prior written
notice to Buyer.
D. The provisions of any applicable State "Right-to-Know" laws and
regulations are made a part of this Agreement. A copy of the applicable
Material Safety Data Sheets as required under such laws and regulations
shall be provided by Seller upon delivery of Material, Spares, and
Repairs and updated as necessary.
E. This Agreement is subject to all applicable United States laws and
regulations relating to exports and to all administrative acts of the
U.S. Government pursuant to such laws and regulations.
All Material, Spares, and Repairs supplied and work performed under
this Agreement shall comply with all applicable laws and regulations.
Without limiting the foregoing, Seller shall comply with the
Occupational Safety and Health Act ("OSHA") 29 C.F.R. Sections 1910,
1200(b), and (g)(8); the Toxic Substance Control Act ("TSCA") 15
<PAGE> 23
23
U.S.C. Section 2612(a); and laws restraining the use of convict labor:
18 U.S.C. Sections 1761 and 1762. Seller's failure to comply with any
of the requirements of this Section may result in a material breach of
this Agreement.
F. The 1980 United Nations Convention on contracts for the international
sale of goods shall not apply to this Agreement or any order issued
under this Agreement.
SECTION XVII TERMINATION FOR CAUSE
A. The occurrence of any of the following constitutes a breach and is
cause for termination of this Agreement and or/its Purchase Orders.
1. Seller fails to deliver Material, Spares, and Repairs on time
for a period of ninety (90) consecutive days after the initial
startup phase of the Magnum Program as referenced in Delivery/
LEADTIME/Flexibility section of this Agreement.
2. Material, Spares, and Repairs do not conform to the applicable
descriptions or specifications.
3. Seller fails to perform any material provision of this
Agreement.
4. Either party assigns this Agreement or any obligation or right
hereunder. (The word "assign" to include, without limitation,
a transfer of major interest in Buyer or Seller.)
5. Either party merges with a third-party (not a parent or
subsidiary company), without the prior written mutual consent
of the parties.
6. Either party becomes insolvent or makes an assignment for the
benefit of creditors, or a receiver or similar officer is
appointed to take charge of all or part of Seller's assets.
B. Seller must cure any of the above breaches except late delivery
pursuant to Clause A, paragraph 1 above, for which there shall be no
cure period and notify Buyer of such cure within thirty (30) days from
receipt of a notice to cure from Buyer. If Seller fails to so cure,
Buyer may terminate this Agreement and/or any Purchase Orders under it
by giving Seller written notice. Buyer shall have no liability except
for payment of any balance due for conforming Material, Spares, and
Repairs delivered before the date of Buyer's notice to cure. Buyer may
at its option, without regard to
<PAGE> 24
24
Seller's ability to cure, terminate this Agreement for cause in the
event of Seller's second or subsequent material breach of any
provision(s) of this Agreement.
C. If this Agreement is terminated, Buyer's liability shall be for payment
of any balance due for conforming Material, Spares, Repairs ordered by
Buyer and delivered before the date of notice to cure, all Material,
Spares, Repairs scheduled for delivery within the minimum LEADTIME
provisions of this Agreement, and for the Unique Raw Materials
referenced in Exhibit B4.
If this Agreement is terminated for cause by Buyer, Seller hereby
grants to Buyer a perpetual, irrevocable, royalty-free, non-exclusive,
worldwide license to make, have made, use, sell, or otherwise make and
distribute Material, Spares, Repairs, in accordance with Exhibit E,
which license shall vest in Buyer on the date this Agreement is
executed by the parties.
SECTION XVIII DOCUMENTATION, TRAINING AND TECHNICAL SUPPORT
During the Purchase Period, Seller shall supply to Buyer the
documentation, training and technical support as listed in Exhibit D
(Documentation, Training, and Technical Support).
Seller hereby grants to Buyer for internal use only, the right to
reproduce, in whole or in part, all documentation and training material
provided to Buyer in order for Buyer to effectively service Seller's
products.
SECTION XIX RIGHTS AND ASSISTANCE TO REPAIR
In the event Seller is unable to fulfill its Repairs obligations under
this Agreement or if Buyer wishes to make its own Repairs or Spares for
use outside the United States where Seller does not have a Repair
facility, by mutual agreement only, Seller grants to Buyer the right to
repair or have repaired Spares. Seller shall provide Buyer, at Buyer's
request, a list of components and the list of Seller approved suppliers
for those components. The components that are not available to Buyer
from sources other than Seller are to be listed and unit prices
identified with quantity discounts, if any. Those parts having generic
industry identification (not proprietary to Seller) and available to
Buyer shall be cross referenced to generic part numbers. Seller further
agrees to provide Buyer with the available test specifications and test
procedures and drawings required for testing the finished Material,
Spares, and Repairs along with a full description, manufacturer's
<PAGE> 25
25
model numbers, etc. of the test equipment involved/required to perform
such tests.
All requested information shall be provided to the Buyer by Seller
within ninety (90) days from such written requests by Buyer.
SECTION XX SIMILAR PRODUCTS
Seller understands that Buyer designs, develops, and acquires hardware
and software for use with its own computer system products and that
existing or planned hardware and software independently developed or
acquired by Buyer may contain ideas and concepts similar or identical
to those contained in the Seller's product. Seller agrees that entering
this Agreement shall not preclude Buyer in any way from using such
ideas and concepts to develop or acquire similar hardware and software
for any purpose, without obligation to the Seller, provided Buyer does
not copy for such use, in whole or in part, the Seller's product.
SECTION XXI BUSINESS REVIEWS
Buyer and Seller shall, each at their own expense, meet periodically to
review performance and business transacted, and to identify and resolve
those issues which have arisen since the last business review meeting.
SECTION XXII NO IMPLIED LICENSE
The parties understand that, except as may be otherwise expressly
stated herein, neither the Terms and Conditions of this Agreement, nor
the acts of either party arising out of this Agreement or related to
Buyer's purchase, use, sale, or other distribution of Material, Spares,
or Repairs may be considered in any way as a grant of any license
whatsoever under any of Buyer's present or future patents, copyrights,
trademarks, trade secrets, or other proprietary rights, nor is any such
license granted by implication, estoppel, or otherwise.
SECTION XXIII NOTICES
Any notice given under this Agreement shall be written or sent by
facsimile. Written notice shall be sent by registered mail or certified
mail, postage prepaid, return receipt requested, or by any other
overnight delivery service which delivers to the noticed destination
and provides proof of delivery to the sender. Any facsimile notice must
be followed within three (3) days by written
<PAGE> 26
26
notice. All notices shall be effective when first received at the
following addresses:
If to Seller: If to Buyer:
ATL PRODUCTS INC. DIGITAL EQUIPMENT CORPORATION
240 East Palais Road 334 South Street
Anaheim, California 92805 Shrewsbury, Massachusetts
01545
ATTENTION: ATTENTION:
Richard Speyer Harvey Perlman or designated
Acquisition Contracts Manager
SECTION XXIV LIMITATION OF LIABILITY
Except as otherwise provided in this Agreement against third-party
claims, neither party shall be liable to the other for special,
indirect, incidental, or consequential damages. The foregoing
limitation shall not limit Seller's liability for any costs, expenses,
and damages arising out of parties unauthorized disclosure of
confidential information; or any indemnification (including
intellectual property indemnity) granted by Seller in connection with
this Agreement.
SECTION XXV CONSIGNED MATERIAL
A. Buyer shall consign to Seller at no charge certain materials
(hereinafter "Consigned Material") which Seller requires in order to
fulfill its configuration obligations under this Agreement. Consigned
Material is specifically referenced in Exhibit B1, Part III and may
include, but is not limited to, 1/2 inch cartridge tape drives; Digital
Linear Tape (herein "DLT") Drives, tape cartridges and cleaning
cartridges; Controllers, Adapters, chassis, cable assemblies, etc. The
parties shall mutually agree on, and Seller agrees to manage, adequate
quantities of Consigned Materials required for Seller to fulfill its
delivery of Material obligations under this Agreement.
If Buyer is unable to deliver the mutually agreed upon quantity of
Consigned Materials, Seller's liability for on-time delivery shall not
apply if Seller promptly notifies Buyer in writing that a shortage of
Consigned Material required for Seller to fulfill a configuration order
within the LEADTIME provisions of this Agreement is eminent.
Buyer shall use its Shipping and Billing Authorization (hereinafter
"SBA") form when issuing Consigned Material.
<PAGE> 27
27
Buyer retains title to all Consigned Materials located at Seller's
facilities. Seller shall insure Consigned Material at no additional
charge to Buyer for its replacement value against all risks of physical
loss to the same or greater degree Seller insures its own equipment.
Seller shall keep all Consigned Material separate and identifiable from
Seller's other materials and equipment and shall use Consigned Material
solely for the purposes of configuring Buyer's Material.
From time to time, but not more than four (4) times per year, Seller
may be required to perform physical inventory or cycle counts of
Consigned Material and provide Buyer with written inventory reports.
Upon Buyer's notice, Seller shall return all Consigned Material within
thirty (30) days at Buyer's expense.
B. Buyer may also consign at no charge to Seller, certain capital
equipment (hardware and/or software) and training which Seller requires
in order to perform certain integration and test procedures as part of
Seller's configuration of Material and in order to meet the
qualification requirements contained in Exhibit C1. This equipment
shall be listed in Exhibit G, Bailment Agreement. The general terms
contained in this Section XXV apply to consigned capital equipment as
well.
C. Buyer may also consign certain Spares or Repairs for repair as
referenced in Exhibit B2. The general terms of this Section XXV apply
to Spares and Repairs as well.
SECTION XXVI GENERAL
A. This Agreement is the complete and entire understanding between the
parties on this subject matter and supersedes all prior agreements,
proposals, representations, statements, or understandings whether
written or oral on this subject between them. The provisions of this
Agreement may be amended or waived only by a writing executed by the
authorized representatives of the parties hereto.
B. In the event that either party to this Agreement shall on any occasion,
fail to perform any provision of this Agreement, and the other party
does not enforce that provision, the failure to enforce shall not
prevent enforcement of the provision on any other occasion.
C. Seller, including its servants, agents, and employees, is an
independent contractor and not an agent or employee of Buyer. Without
limiting the generality of the foregoing, Seller is not authorized to
represent or make any
<PAGE> 28
28
commitments on behalf of Buyer, and Buyer expressly disclaims any
liability therefore.
D. Supplemental terms are included in Exhibit A through Exhibit M and are
incorporated.herein by reference.
E. All rights and remedies conferred by this Agreement, by any other
instrument, or by law are cumulative and may be exercised singularly or
concurrently. If any provision of this Agreement is held invalid by any
law or regulation of any government or by any court, such invalidity
shall not effect the enforceability of any other provisions hereof.
This Agreement and any Purchase Orders issued hereunder shall be
governed by and interpreted in accordance with the laws of the
Commonwealth of Massachusetts.
<PAGE> 29
29
IN WITNESS WHEREOF, the authorized representatives of the parties have executed
this Agreement under seal as of the date(s) set forth below.
ODETICS, Inc. DIGITAL EQUIPMENT CORPORATION
(Seller) (Buyer)
By /s/ J. Slutzky By /s/ William D. Lowe
--------------------------------- ---------------------------------
William D. Lowe
Group Manager, Storage
10/8/93 10/29/93
- ------------------------------------ ------------------------------------
(Date) (Date)
By /s/ Kevin Daly By /s/ William D. Luisi
--------------------------------- ---------------------------------
Kevin Daly William D. Luisi
President, ATL Products Acquisition Manager, Storage
October 8, 1993 10/20/93
- ------------------------------------ ------------------------------------
(Date) (Date)
<PAGE> 30
EXHIBIT A
MATERIAL (Product) SPECIFICATION
TO
BASIC ORDER AGREEMENT
BETWEEN
DIGITAL EQUIPMENT CORPORATION
("Buyer")
AND
ODETICS, INC.
("Seller")
(C) DIGITAL EQUIPMENT CORPORATION 1993
This Is An Unpublished Work Which Contains Confidential And Secret Information
Which Is Protected Under The Copyright Laws. The Existence Of The Copyright
Notice Is Not To Be Construed As An Admission Or Presumption That Publication
Has Occurred. Unauthorized Copying Is Strictly Prohibited. All Rights
Reserved.
<PAGE> 31
* [ ]
* CONFIDENTIAL TREATMENT REQUESTED FOR ENTIRE EXHIBIT AS EXHIBIT SOLELY
CONTAINS MATERIAL PRODUCT SPECIFICATIONS
<PAGE> 32
EXHIBIT B1
MATERIAL PRICING
TO
BASIC ORDER AGREEMENT
BETWEEN
DIGITAL EQUIPMENT CORPORATION
("BUYER")
AND
ODETICS, INC.
("SELLER")
(C) DIGITAL EQUIPMENT CORPORATION 1993
THIS IS AN UNPUBLISHED WORK WHICH CONTAINS CONFIDENTIAL AND SECRET INFORMATION
WHICH IS PROTECTED UNDER THE COPYRIGHT LAWS. THE EXISTENCE OF THE COPYRIGHT
NOTICE IS NOT TO BE CONSTRUED AS AN ADMISSION OR PRESUMPTION THAT PUBLICATION
HAS OCCURRED. UNAUTHORIZED COPYING IS STRICTLY PROHIBITED. ALL RIGHTS RESERVED.
REVISED DATE 9/24/93
<PAGE> 33
EXHIBIT B1
MATERIAL PRICING
PART I - MAGNUM II
Pricing Period: 4/15/93-6/30/95 Key: "C" Consigned
Shipping Terms: FCA Anaheim, CA "N/C" No Charge
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Item Description Notes Price Quantity
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MATERIAL:
--------
* 1. Base Unit TL820-AA 1,2 [ ] (1) (1) (1) (1)
* 2. Multi-Unit Controller 2,3,5 [ ] (1)
* 3. Pass Through Mechanism 2,3 [ ] (1) (1) (1) (1)
* 4. Import/Output Device 2,6 [ ] (1)
* 5. Tape Drive Support Kit 2 [ ] (1) (1) (3)
* 6. Drive Integration 2,4 [ ] (1) (1) (3)
* 7. TZ87-DY Tape Drives 9 [ ] (3) (3) (9)
- -------------------------------------------------------------------------------------------------------------------------
ACCESSORIES:
-----------
8. SCSI Cables: 7 TBD
* a. 6204267-01 10 [ ] (1) (1)
* b. 6204266-01 11 [ ] (1) (1)
* c. 6204265-01 12 [ ] (2) (2)
* 9. SCSI Terminator 7,13 [ ] (1) (2) TBD
12-41738-01
10. Accessory Kit: 7,8 TBD
* a. Operators Manual 1 [ ] (1)
* b. Facilities Planning 1 [ ] (1)
* c. TK85K-07 Cartridge 15,7 [ ] (7)
* d. TK85K-HC Cleaner 15,7 [ ] (1)
* e. DLT User Manual 14 [ ] (1)
* f. AC Power Cord 1 [ ] (1) (1) (1)
* g. Barcode Labels (1000) [ ] (1)
TL82X-BB
* h. Multi-Unit Attach Kit 1 [ ] (1) (1)
* i. Diagnostic Manual [ ] (1)
- -------------------------------------------------------------------------------------------------------------------------
* TOTAL PRICE [ ] [ ] [ ] [ ]
TL820-AB TL820-AC TL820-AD All Drives
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 34
PART II
Magnum II Customer Orderable Upgrades
Customer/Digital Field Service Orderable Accessories (ACL5480/Magnum II)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION NOTES PRICE QUANTITY
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
UPGRADES:
--------
* 1. Multi-Unit Controller 2,3 [ ] (1)
* 2. Import/Outport Device 2,6 [ ] (1) (1)
* 3. Tape Drive Support Kit 2 [ ] (1)
* 4. Conversion Manual [ ] (1) (1)
5. SCSI Cables:
* a. 6204267-01 10 [ ] (1)
* b. 6204266-01 11 [ ] (1)
* c. 6204265-01 12 [ ] (2)
6. SCSI Terminator
* 12-41738-01 [ ] (2)
* 7. TZ87-AW Tape Drive 9 [ ] (3)
* 8. Operators Manual [ ] (1)
* 9. Facilities Planning [ ] (1)
* 10. PTM Cover [ ] (1)
- -------------------------------------------------------------------------------------------------------------------------
* TOTAL PRICE [ ] [ ] [ ]
TL82X-UC TX82X-UB TL82X-AA
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Item Description Notes Price Customer Field Service
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ACCESSORIES:
-----------
* 11. Alignment Tool [ ] X
a. 6208110-03 ACL5480
b. 6208150-01 Magnum II
* 12. Software Diagnostic Kit [ ] X
* 13. Field Service Manual [ ] X
* 14. Cartridge Bin Pack [ ] X X
a. 6203100-01 ACL5480
b. 6203300-01 Magnum II
* 15. Software Diagnostics Manual [ ] X
* 16. IOD Guide [ ] X
* 17. Operators Manual [ ] X
* 18. Facilities Planning [ ] X
* 19. Extra Cartridge Sets [ ] X X
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 35
PART III - MAGNUM II
Consignment Material
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------
CONSIGNED
--------------------------------------------------------------------------
ITEM DESCRIPTION NOTES YES/NO
<S> <C> <C> <C>
1. TZ87-AW Tape Drive 9 Yes
2. TK85K-07 Cartridge 15 Yes
3. TK85K-HC Head Cleaner 15 Yes
4. SCSI Cable (3) 10,16 No
5. SCSI Cable (2) 11,16 No
6. SCSI Cable (5) 12,16 No
7. SCSI Terminator
12-41738-01 13 No
- --------------------------------------------------------------------------
</TABLE>
<PAGE> 36
NOTES
(1) Prices for base units include (24) bin packs and the costs for all
packaging, packing, crating, shipping labels, power cords, multi- unit
attachment kit, and labor to install all SCSI cables and terminators
as referenced in Exhibit A.
(2) Prices are firm for the pricing period.
(3) Prices are the same for either Magnum or ACL5480 Material, whether
installed at Seller's factory or sold as a customer orderable option
with installation kit for ACL5480 Material only.
(4) Prices include labor to install (3) DLT tape drives, system
integration and test. For the All Drive library option, prices are
based upon the multiple of (3) drives.
(5) Prices for Magnum Material include labor and materials to install MUC,
one (1) SCSI cable, one (1) SCSI terminator, loop's back cable, RS232
cable, and bulkhead.
(6) Prices include installation kit. For Magnum II, IOD is left hinge
mount only. Prices are the same for either Magnum or ACL5480
Material.
(7) Prices are firm for a period of one (1) year and are based upon the
terms contained in Section IV, Paragraph E, of the Agreement.
Accessories ar distinguished as follows.
a. Consigned material shall have the letter "C" in the price
column. There are either no charges for labor to install
consigned material or labor charges are included in Material
prices.
b. If Seller in supplying a Buyer qualified Accessory, Buyer's
part number shall be referenced.
c. If Seller is supplying a Seller qualified Accessory, Seller's
part number shall be referenced.
Where an N/C "No Charge" is shown, prices for Accessory is included in
the Material prices.
(8) Materials contained in the Accessory kit varies by Library option and
shall be included with each Library shipped.
(9) Includes User Manuals, one (1) per library.
(10) Refer to T Tran's BOM Reference #3.
(11) Refer to T Tran's BOM Reference #2.
(12) Refer to T Tran's BOM Reference #5.
<PAGE> 37
NOTES (continued)
(13) Refer to T Tran's BOM Reference #0.
(14) TZ87-DY User Manual consigned with Part I, Item #6.
(15) It is Buyer's goal to authorize Seller to acquire DLT data cartridges
and cleaners directly from Buyer's OEM supplier no later than the FRS
of Magnum II. Until such time, Buyer will consign this material.
(16) Seller is currently acquiring SCSI cables from Seller's qualified
supplier. It is Buyer's goal to qualify these cables with a Digital
qualified supplier. Once qualified, Digital part numbers will be
inserted in the Description column.
<PAGE> 38
PART IV - ACL5480
Material Pricing
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Item Description Notes Price Quantity
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MATERIAL:
--------
* 1. Base Unit 1,2 [ ] 1 1 1 1 1 1 1
* 2. Multi-Unit [ ] 1 1 1 1
3. Controller
* Pass Through [ ] 2 1 1 1 1
4. Mechanism
* Import/Outport [ ] 1 1
5. Device
* STK Bar Code [ ]
* 6. Reader 4 [ ] 1
Cabinet
Interconnect
- ---------------------------------------------------------------------------------------------------------------------------------
* TOTAL PRICE [ ] [ ] [ ] [ ] [ ] [ ] [ ]
Digital Part Number 30-41590-01 30-41591-01 30-41591-02 30-41591-03
Digital Option Number 5 TL3XA-AA TL3XB-AA TL3XB-BA TL3XB-CA
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Item Description Notes Price Quantity
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MATERIAL:
--------
* 1. Base Unit 1,2 [ ] 1 1 1 1 1 1
* 2. Multi-Unit [ ] 1 1 1
3. Controller
* Pass Through [ ] 1 1 1 1
4. Mechanism 1 1
* Import/Outport [ ]
* 5. Device [ ] 1 1 1 1 1 1
STK Bar Code Reader
* 6. Cabinet 4 [ ]
Interconnect
- ---------------------------------------------------------------------------------------------------------------------------------
* TOTAL PRICE [ ] [ ] [ ] [ ] [ ] [ ]
Digital Part Number
Digital Option Number
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See NOTES next page.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 39
PART V - ACL5480
Upgrades/Accessories Pricing
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Item Description Notes Price Quantity
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
UPGRADES:
--------
* 1. Multi Unit Controller [ ] 1 1
2. Pass Through
* Mechanism [ ] 1 1
* 3. Import/Outport Device [ ] 1 1 1
* 4. STK Bar Code Reader [ ] 1
* 5. Cabinet Interconnect 4 [ ]
- ----------------------------------------------------------------------------------------------------------------------
TOTAL PRICE [ ] [ ] [ ] [ ] [ ]
Digital Part Number 30-41588-01 30-41588-02
Digital Option Number TL3XU-AA TL3XU-BA
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Item Description Notes Price Customer Field
Service
- ----------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
ACCESSORIES:
-----------
1. Add-On Binpacks
* P/N TBD [ ] X X
2. Cartridge Set
* P/N TBD 3 [ ] X X
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1 Includes 3 of 9 Bar Code Reader and depending on tape drive custom
mounting kits.
2. Mounting Kit type must be determined at time of order placement.
3. Cartridge Set is 280 Data and 8 Cleaning Cartridges with sequentially
number 3 of 9 bar code labels.
4. Cabinet Interconnect is required when connecting 2 units together.
5. Columns with no Digital part number are future libraries options.
Quantities with Digital part and option numbers are other possible
configurations.
*CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 40
EXHIBIT B2
SPARES AND REPAIRS PRICING
TO
BASIC ORDER AGREEMENT
BETWEEN
DIGITAL EQUIPMENT CORPORATION
("BUYER")
AND
ODETICS, INC.
("SELLER")
(C) DIGITAL EQUIPMENT CORPORATION 1993
THIS IS AN UNPUBLISHED WORK WHICH CONTAINS CONFIDENTIAL AND SECRET INFORMATION
WHICH IS PROTECTED UNDER THE COPYRIGHT LAWS. THE EXISTENCE OF THE COPYRIGHT
NOTICE IS NOT TO BE CONSTRUED AS AN ADMISSION OR PRESUMPTION THAT PUBLICATION
HAS OCCURRED. UNAUTHORIZED COPYING IS STRICTLY PROHIBITED. ALL RIGHTS RESERVED.
<PAGE> 41
EXHIBIT B2
SPARES AND REPAIRS PRICING
This Exhibit sets forth the additional conditions under which Seller
shall provide Spares and Repairs to Buyer.
1. Buyer may purchase Spares on a forty-five (45) day, five (5) business
day, P-1 twenty-four (24) hour, or Next Flight Out (Hereinafter "NFO")
LEADTIME basis; and in the case of Repairs, on a thirty (30) day or
five (5) business day LEADTIME basis, both Spares and Repairs offered
at the discounts from list prices stipulated herein through the
ordering centers listed in Exhibit B3. Seller may replace Spares
returned under warranty with either new, refurbished to like-new, or
repaired Spares.
The terms for P-1 Purchase Orders are defined in the Agreement and for
the purposes of this exhibit also refer equally to twenty-four (24)
hour drop ship Purchase Orders. Seller agrees to acknowledge P-1
Orders within 4 hours of receipt of order, 24 hours per day, 365 days
per year. Seller agrees to deliver Spares within 24 hours of
acknowledgment to the FCA point.
NFO Purchase Orders also require the same acknowledgment and delivery
terms except Seller is required to take extraordinary measures to
insure the Spares are delivered to the designated air carrier whose
flight departure and arrival assures the earliest delivery of Spares
to Buyer's designated delivery point.
Except in the case of NFO Purchase Orders, Delivery shall be FCA
Origin at Seller's Services address located in Exhibit B3. NFO
Purchases shall be FCA LAX or Orange County, however, by mutual
agreement, Seller shall arrange all transportation and bill Buyer
separately for transportation charges emanating from the airport to
the delivery point.
* 2. [ ].
Discounts off of list price for the remaining Spares LEADTIMEs and
Repairs are as follows:
<TABLE>
<CAPTION>
Discount % Of List
<S> <C> <C> <C> <C>
* Spares 5 business days - [ ] [ ]
* Spares P-1 24 hours - [ ] [ ]
* Spares NFO - [ ] [ ]
* Repairs 30 day LEADTIME - [ ] [ ]
* Repairs 5 day Exchange - [ ] [ ]
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 42
3. Trunk Spares kits are the mutually agreed upon list of Spares which
Buyer shall order in support of installed libraries. The quantity of
kits ordered will be based upon the geographical distribution and
quantity of installed libraries. The parties may mutually agree to
amend the Trunk Spares list as Buyer deems necessary to support
Buyer's customer. It is understood by the parties that the Trunk
Spare Kit contains only those Spares and Expendables most likely to
require maintenance or field replacement.
4. The Spares Price List shall be updated quarterly by Seller. The list
shall contain at a minimum Buyer/Seller's Part Number, Description,
List Price, a key designating whether the part is common to ACL5480
and Magnum II or unique. A key for ordering Trunk Spares, as well as
a designation of the Spare as either a FRU or an Expendable, and in
the case of FRU's whether it is repairable. In addition list the MTBF
and/or field failure rate.
5. Buyer understands the discounted prices contained in the Exhibit have
been determined based on Buyer's purchase of Material in accordance
with the provisions of Section XXVI, GENERAL, herein. Buyer agrees
that all Spares and Repairs purchased from Seller at these prices
shall be used by Buyer only for performing warranty service or
maintenance in respect to the Material purchased under the terms of
this Agreement.
6. In the event Buyer returns Spares or Repairs during the Material
warranty period and after investigation by Seller, the Spare or Repair
* was found not to be defective (NTF), Seller may collect from Buyer [ ]
for each NTF returned as a service and handling charge and not as a
penalty. Seller shall not begin charging for NTFs until six (6) months
following Buyer's FRS of Magnum Material.
Seller shall promptly notify Buyer of any NTF occurrence so the
parties can arrive at a mutually agreed upon remedy. If after
reaching a remedy, Seller continues to experience NTF's; Seller may
request from Buyer an emergency Business Review once the percentage of
NTF's exceeds by more than 10% of the total of the same part number
being returned over a period of ninety (90) days or ten (10) NTF's
whichever occurs first.
The same terms shall apply for Consigned Materials which Seller
returns to Buyer and Buyer determines is NTF. These terms shall also
apply to materials received by either party and are considered Dead on
Arrival "DOA" as defined in Exhibit M. If either Buyer or Seller
experiences a DOA which can be confirmed by the other party as being
defective, the party which has returned the material as a DOA may
collect the handling charge from the other party.
7. Warranty Management, Credits, Surcharges:
Material returned to Seller shall be in accordance with the provisions
of Exhibit I. Seller shall maintain an accurate accounting of all
Material, Spares, and Repairs returned by Buyer during the original
warranty period. For each item of Material, Spare or Repair returned
under warranty shall be replaced with its replacement equivalent at no
charge. Material rejected by Buyer may at Buyer's option be returned
for credit only.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 43
* All Spares in excess of [ ] based upon the forty-five (45) day
LEADTIME price and Repairs based upon the thirty (30) day LEADTIME
price shipped to Buyer shall contain an easily identified serial
number which Seller warrants contains a traceable ship date to effect
warranty credit management.
Buyer shall identify the returns by serial number along with the
defect code or any other field failure report Buyer may have. Seller
shall determine whether the return is either in or out of warranty and
credit Buyer appropriately.
Buyer shall not return any Spare with a value less than $100 based
upon the forty-five (45) day LEADTIME price regardless of its warranty
status including the drive belt which shall not be returned regardless
of its value.
In the event Buyer requires Seller to repair or replace a Spare or
Repair under warranty within five (5) business days, BUYER SHALL PAY A
FIVE (5) PERCENT SURCHARGE BASED UPON THE FORTY-FIVE (45) DAY LEADTIME
PRICE CONTAINED IN THIS EXHIBIT FOR EACH ITEM.
8. Reports:
Seller agrees to provide the following reports for Buyer's internal
use along with the quarterly Spare/Repairs Price List update:
A. A listing of each item of Material by serial number delivered
to Buyer or Buyer's customer and the number of months
remaining in warranty.
B. A list of Spares and Repairs shipped to date by part number
with total quantity and value.
C. A detailed listing of each major FRU shipped by serial number
and warranty remaining.
D. A report detailing the total Spares and Repairs returned to
Seller with a defect analysis comparing failure rates.
E. An exception report detailing NTF's, DOA's, and other
erroneous events.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 44
Odetics Data Management
27-Aug-93
Spare Parts Price List - Digital
SAMPLE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
Odetics Digital List Part
P/N P/N Description Unit Price Category
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
* 1 6203810-1000 Drive Motor Power Supply [ ] Magnum II
* 2 Stepper Motor PWA [ ] Magnum II
* 3 Stepper Motor Assy [ ] Magnum II
* 4 IEC 320 [ ] Magnum II
* 5 11 Pack (X3) [ ] Magnum II
* 6 DLT Extension Axis Assy [ ] Magnum II
* 7 Aztec Logic Power Supply [ ] 5480/Mag II
* 8 Single Motor Power Supply [ ] 5480/Mag II
* 9 Front Door Switch [ ] 5480/Mag II
* 10 Rear Door Switch [ ] 5480/Mag II
* 11 Barcode Scanner [ ] 5480/Mag II
* 12 Carousel Home/Face Sensor [ ] 5480/Mag II
* 13 Fan [ ] 5480/Mag II
* 14 Carousel Drive Belt [ ] 5480/Mag II
* 15 Extension Drive Belt [ ] 5480/Mag II
* 16 Vertical Drive Belt [ ] 5480/Mag II
* 17 Robotics Controller PWA [ ] 5480/Mag II
* 18 Actuator PWA [ ] 5480/Mag II
* 19 Double Encoder Carousel [ ] 5480/Mag II
* 20 Marway Distribution [ ] 5480/Mag II
* 21 Brushed Vertical Motor [ ] 5480/Mag II
* 22 Umbilical Cable Assy [ ] 5480/Mag II
* 23 Control Panel PWA [ ] 5480/Mag II
* 24 Light Curtain Emitter [ ] 5480/Mag II
* 25 Light Curtail Detector PWA [ ] 5480/Mag II
* 26 Plastic Binpack [ ] 5480
* 27 Extension Axis Assy [ ] 5480
28
29
30
- ------------------------------------------------------------------------------------------------
<CAPTION>
- --------------------------------------------------------------
Trunk Part MTBF
Spare Type Hours
- --------------------------------------------------------------
<S> <C> <C> <C>
* 1 N FRU-Repairable 6,900
* 2 Y Expendable 2,600
* 3 Y FRU-Non-repairable 35,111
* 4 N Expendable
* 5 N FRU-Non-repairable
* 6 N FRU-Non-repairable
* 7 N FRU-Non-repairable
* 8 N FRU-Non-repairable
* 9 Y FRU-Non-repairable
* 10 Y FRU-Non-repairable
* 11 Y FRU-Repairable
* 12 Y FRU-Repairable
* 13 Y FRU-Repairable
* 14 Y Expendable
* 15 Y Expendable
* 16 Y FRU-Repairable
* 17 N FRU-Repairable
* 18 N FRU-Non-repairable
* 19 N FRU-Non-repairable
* 20 N FRU-Repairable
* 21 N Expendable
* 22 N Expendable
* 23 Y Expendable
* 24 Y FRU-Repairable
* 25 Y FRU-Non-repairable
* 26 Y Expendable
* 27 Y FRU-Repairable
28
29
30
- --------------------------------------------------------------
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 45
Digital Equipment Corporation
334 South Street
Shrewsbury, Massachusetts 01545-4195
508.841.3111
January 11, 1994
DIGITAL
Mr. Richard Speyer
Odetics
Data Management Systems Division
1515 South Manchester Avenue
Anaheim, CA 92802
Dear Mr. Speyer:
Persuant to the terms of Basic Order Agreement #13844, Section 23 Notices,
Section 26 General and specifically Section 4 Pricing paragraph E, the
following items have been changed in Exhibits B1 and B3.
Exhibit B1 Material Pricing:
9. In Part I remove Line #4 Import/Outport Device from part
* #TL820-AB and change the cost from [ ] to [ ].
10. Add TL82X-AA Import/Outport Device to Part II as a customer
orderable upgrade.
11. Change part number TZ87-DY to TZ87-AW.
12. Add part number TL82X-BB to Item #9G Barcode Labels (1000).
13. Add Note 7 to item #8 SCSI Terminator.
14. Add revision date January 10, 1994 to lower right hand corner
of the cover page.
Exhibit B3 Worldwide Ordering & Selling Locations:
1. Add Buyer's address: 9 Northeast Blvd, Salem, NH 03079.
2. Differentiate between the Magnum Material and the ACL5480
Material with key's M1 denoting Magnum Material and M2
denoting ACL5480 Material.
3. Change revisions date from 7/93 to January 10, 1994.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 46
Digital Equipment Corporation
Mr. Richard Speyer
January 11, 1994
Page 2
IN WITNESS WHEREOF, the authorized representatives of the parties have executed
these changes under seal as of the date(s) set forth below.
ODETICS, INC. DIGITAL EQUIPMENT CORPORATION
(Seller) (Buyer)
By /s/ Richard Speyer By /s/ Harvey Perlman
------------------------ ---------------------------------
Richard Speyer Harvey Perlman
Acquisition Manager
Date 20 Jan 94 Date January 12, 1994
---------------------- -------------------------------
<PAGE> 47
EXHIBIT B1
MATERIAL PRICING
TO
BASIC ORDER AGREEMENT
BETWEEN
DIGITAL EQUIPMENT CORPORATION
("BUYER")
AND
ODETICS, INC.
("SELLER")
(C) DIGITAL EQUIPMENT CORPORATION 1993
THIS IS AN UNPUBLISHED WORK WHICH CONTAINS CONFIDENTIAL AND SECRET INFORMATION
WHICH IS PROTECTED UNDER THE COPYRIGHT LAWS. THE EXISTENCE OF THE COPYRIGHT
NOTICE IS NOT TO BE CONSTRUED AS AN ADMISSION OR PRESUMPTION THAT PUBLICATION
HAS OCCURRED. UNAUTHORIZED COPYING IS STRICTLY PROHIBITED. ALL RIGHTS RESERVED.
REVISED DATE 1/10/94
<PAGE> 48
EXHIBIT B1
MATERIAL PRICING
PART I - MAGNUM II
Pricing Period: 4/15/93 - 6/30/95 Key: "C" Consigned
Shipping Terms: FCA Anaheim, CA "N/C" No Charge
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION NOTES PRICE Quantity
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
MATERIAL:
--------
* 1. Base Unit TL820-AA 1,2 [ ] (1) (1) (1) (1)
* 2. Multi-Unit Controller 2,3,5 [ ] (1)
* 3. Pass Through Mechanism 2,3 [ ] (1) (1) (1) (1)
* 4. Tape Drive Support Kit 2 [ ] (1) (1) (3)
* 5. Drive Integration 2,4 [ ] (1) (1) (3)
* 6. TZ87-AW Tape Drives 9 [ ] (3) (3) (9)
- ------------------------------------------------------------------------------------------------------------------
ACCESSORIES:
-----------
7. SCSI Cables: 7 TBD
* a. 6204267-01 10 [ ] (1) (1)
* b. 6204266-01 11 [ ] (1) (1)
* c. 6204265-01 12 [ ] (2) (2)
* 8. SCSI Terminator 7,13 [ ] (1) (2) TBD
12-41738-01
9. Accessory Kit: 7,8 TBD
* a. Operators Manual 1 [ ] (1)
* b. Facilities Planning 1 [ ] (1)
* c. TK85K-07 Cartridge 15,7 [ ] (7)
* d. TK85K-HC Cleaner 15,7 [ ] (1)
* e. DLT User Manual 14 [ ] (1)
* f. AC Power Cord 1 [ ] (1) (1) (1)
* g. Barcode Labels (1000) [ ]
TL82X-BB
* h. Multi-Unit Attach Kit 1 [ ] (1) (1) (1)
- ------------------------------------------------------------------------------------------------------------------
* TOTAL PRICE [ ] [ ] [ ] [ ]
TL820-AB TL820-AC TL820-AD All Drive
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 49
PART II
Magnum II Customer Orderable Upgrades
Customer/Digital Field Service Orderable Accessories (ACL5480/Magnum II)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION NOTES PRICE Quantity
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
UPGRADES:
--------
* 1. Multi-Unit Controller 2,3 [ ] (1)
* 2. Import/Outport Device 2,6 [ ] (1) (1)
* 3. Tape Drive Support Kit 2 [ ] (1)
* 4. Conversion Manual [ ] (1) (1)
5. SCSI Cables:
* a. 6204267-01 10 [ ] (1)
* b. 6204266-01 11 [ ] (1)
* c. 6204265-01 12 [ ] (2)
* 6. SCSI Terminator
* 12-41738-01 [ ] (2)
* 7. TZ87-DY Tape Drive 9 [ ] (3)
* 8. Operators Manual [ ] (1)
* 9. Facilities Planning [ ] (1)
* 10. PTM Cover [ ] (1)
- ------------------------------------------------------------------------------------------------------------
TOTAL PRICE [ ] [ ] [ ]
TL82X-UC TL82X-UB TL82X-AA
- ------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION NOTES PRICE CUSTOMER FIELD SERVICE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ACCESSORIES:
-----------
* 11. Alignment Tool [ ] X
a. 6208110-03 ACL5480
b. 6208150-01 Magnum II
* 12. Software Diagnostic Kit [ ] X
* 13. Field Service Manual [ ] X
* 14. Cartridge Bin Pack [ ] X X
a. 6203100-01 ACL5480
b. 6203300-01 Magnum II
* 15. Software Diagnostics Manual [ ] X
* 16. IOD Guide [ ] X
* 17. Operators Manual [ ] X
* 18. Facilities Planning [ ] X
* 19. Extra Cartridge Sets [ ] X X
- ------------------------------------------------------------------------------------------------------------
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 50
PART III - MAGNUM II
Consignment Material
<TABLE>
<CAPTION>
- ------------------------------------------------------------------
ITEM DESCRIPTION NOTES CONSIGNED
YES/NO
- ------------------------------------------------------------------
<S> <C> <C> <C>
1. TZ87-AW Tape Drive 9 Yes
2. TK85K-07 Cartridge 15 Yes
3. TK85K-HC Head Cleaner 15 Yes
4. SCSI Cable (3) 10,16 No
5. SCSI Cable (2) 11,16 No
6. SCSI Cable (5) 12,16 No
7. SCSI Terminator
12-41738-01 13 No
- ------------------------------------------------------------------
</TABLE>
<PAGE> 51
NOTES
(1) Prices for base units include (24) bin packs and the costs for all
packaging, packing, crating, shipping labels, power cords, multi-unit
attachment kit, and labor to install all SCSI cables and terminators
as referenced in Exhibit A.
(2) Prices are firm for the pricing period.
(3) Prices are the same for either Magnum or ACL5480 Material, whether
installed at Seller's factory or sold as a customer orderable option
with installation kit for ACL5480 Material only.
(4) Prices include labor to install (3)DLT tape drives, system integration
and test. For the All Drive library option, prices are based upon the
multiple of (3) drives.
(5) Prices for Magnum Material include labor and materials to install MUC,
one (1) SCSI cable, one (1) SCSI terminator, loop's back cable, RS232
cable, and bulkhead.
(6) Prices include installation kit. For Magnum II, IOD is left hinge
mount only. Prices are the same for either Magnum or ACL5480
Material.
(7) Prices are firm for a period of one (1) year and are based upon the
terms contained in Section IV, Paragraph E, of the Agreement.
Accessories are distinguished as follows.
a. Consigned material shall have the letter "C" in the price column.
There are either no charges for labor to install consigned material
or labor charges are included in Material prices.
b. If Seller in supplying a Buyer qualified Accessory, Buyer's part
number shall be referenced.
c. If Seller is supplying a Seller qualified Accessory, Seller's part
number shall be referenced.
Where an N/C "No Charge" is shown, prices for Accessory is included in
the Material prices.
(8) Materials contained in the Accessory kit varies by Library option and
shall be included with each Library shipped.
(9) Includes User Manuals, one (1) per library.
(10) Refer to T Tran's BOM Reference #3.
(11) Refer to T Tran's BOM Reference #2.
<PAGE> 52
NOTES (continued)
(12) Refer to T Tran's BOM Reference #5.
(13) Refer to T Tran's BOM Reference #0.
(14) TZ87-AW User Manual consigned with Part I, Item #6.
(15) It is Buyer's goal to authorize Seller to acquire DLT data cartridges
and cleaners directly from Buyer's OEM supplier no later than the FRS
of Magnum II. Until such time, Buyer will consign this material.
(16) Seller is currently acquiring SCSI cables from Seller's qualified
supplier. It is Buyer's goal to qualify these cables with a Digital
qualified supplier. Once qualified, Digital part numbers will be
inserted in the Description column.
<PAGE> 53
PART IV - ACL 5480
Material Pricing
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION NOTES PRICE QUANTITY
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MATERIAL:
--------
* 1. Base Unit 1,2 [ ] 1 1 1 1 1 1 1
* 2. Multi-Unit Controller [ ] 1 1 1 1
* 3. Pass Through Mechanism [ ] 2 1 1 1 1
* 4. Inport/Outport Device [ ] 1 1
* 5. STK Bar Code Reader [ ]
* 6. Cabinet Interconnect 4 [ ] 1
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL PRICE [ ] [ ] [ ] [ ] [ ] [ ] [ ]
DIGITAL PART NUMBER 30-41590-01 30-41591-01 30-41591-02 30-41591-03
DIGITAL OPTION NUMBER 5 TL3XA-AA TL3XB-AA TL3XB-BA TL3XB-CA
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION NOTES PRICE QUANTITY
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MATERIAL:
--------
* 1. Base Unit 1,2 [ ] 1 1 1 1 1 1
* 2. Multi-Unit Controller [ ] 1 1 1
* 3. Pass Through Mechanism [ ] 1 1 1 1
* 4. Inport/Outport Device [ ] 1 1
* 5. STK Bar Code Reader [ ] 1 1 1 1 1 1
* 6. Cabinet Interconnect 4 [ ]
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL PRICE [ ] [ ] [ ] [ ] [ ] [ ]
Digital Part Number
Digital Option Number
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See NOTES next page.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 54
PART V - ACL5480
Upgrades / Accessories Pricing
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION NOTES PRICE QUANTITY
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
UPGRADES:
--------
* 1. Multi Unit Controller [ ] 1 1
* 2. Pass Through Mechanism [ ] 1 1
* 3. Inport/Outport Device [ ] 1 1 1
* 4. STK Bar Code Reader [ ] 1
* 5. Cabinet Interconnect 4 [ ]
- --------------------------------------------------------------------------------------------------------------------------
TOTAL PRICE [ ] [ ] [ ] [ ] [ ]
Digital Part Number 30-41588-01 30-41588-02
Digital Option Number TL3XU-AA TL3XU-BA
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
ITEM DESCRIPTION NOTES PRICE CUSTOMER FIELD
SERVICE
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ACCESSORIES:
-----------
* 1. Add-On Binpacks
P/N TBD [ ] X X
2. Cartridge Set
* P/N TBD 3 [ ] X X
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1. Includes 3 of 9 Bar Code Reader and depending on tape drive custom
mounting kits.
2. Mounting Kit type must be determined at time of order placement.
3. Cartridge Set is 280 Data and 8 Cleaning Cartridges with sequentially
number 3 of 9 bar code labels.
4. Cabinet Interconnect is required when connecting 2 units together.
5. Columns with no Digital part number are future libraries options.
Quantities without Digital part and option numbers are other possible
configurations.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 55
Digital Equipment Corporation
334 South Street
Shrewsbury, Massachusetts 01545-4195
508.841.3111
DIGITAL
March 25, 1994
Mr. Richard Speyer
Odetics
Data Management Systems Division
1515 South Manchester Avenue
Anaheim, CA 92802
Dear Mr. Speyer,
Pursuant to the terms of Basic Order Agreement #13844, Section 23 Notices,
Section 26 General and specifically Section 4, Pricing paragraph E, the
following items have been changed in Exhibit B1.
Exhibit B1 Material Pricing:
Add to Accessories Section, Item #9 the following parts:
i. Diagnostic Manual QTY: 1
j. Diagnostic Diskett (3.5") QTY: 1
k. RS-232 cable QTY: 1
As agreed, all three items will be added at no charge.
IN WITNESS WHEREOF, the authorized representatives of the parties have executed
these changes under seal as of the date(s) set forth below.
ODETICS, INC. DIGITAL EQUIPMENT CORPORATION
(Seller) (Buyer)
By: /s/ Richard Speyer By: /s/ Paula Swanson
------------------ -------------------------
Richard Speyer Paula Swanson
Contract Manager Purchasing Manager
Date 5 Apr 94 Date March 25, 1994
<PAGE> 56
ATL Products
an Odetics Company
October 19, 1994
In reply refer to: RS10194-418
Digital Equipment Corporation
334 South Street, SHR3-2/Y1
Shrewsbury, Massachusetts 01545-4112
Attention: Paula Swanson
Reference: BOA 13844
Subject: Amendment 3
Dear Paula:
Enclosed for your review and approval are two original Amendment 3s to the
referenced Agreement. Please execute both copies, return one to the
undersigned and retain one for your files.
Should you have any comments or questions regarding the enclosed, please do not
hesitate to call.
Sincerely,
/s/ Richard Speyer
Richard Speyer
Contracts Manager
ATL Products, Inc.
RS/co-s
Enclosure
cc:ATL DMS Digital
K. Daly J. Johnson 40 Old Boston Road
S. Guzowski C. Valerio Stow, Massachusetts 01775-1215
E. Harrison J. Wiseman Attention: Dennis King
D. Petit OG01-1/G13
240 East Palais Road
Anaheim, California 92805-6238
Phone (714) 774-6900
Fax (714) 774-5909
<PAGE> 57
Amendment 3
to
Basic Order Agreement 13844
Between
Odetics Inc., and Digital Equipment Corporation
Pursuant to the terms of Basic Order Agreement #13844, Section 23 Notices,
Section 23 General and specifically Exhibit B2 Spares and Repairs Pricing and
in Exhibit B4 Seller's Cumulative Leadtime and Unique Loose Piece Material, the
following items have been changed:
Exhibit B2.
A) Change the sample Spares Parts List dated August 27, 1993 to the TL820 End
User FRU Price List dated October 19, 1994.
Exhibit B4.
A) Page 2, Definitions/Clarifications, Item 4, change part number 6201680-01
PWA, Carriage QSP1 to part number 6201310-01 Extension Axis.
B) Change Unique Raw Material List dated 9/24/93 to Unique Raw Material List
dated 10/19/94 Should you have any further questions, please contact the
undersigned.
IN WITNESS WHEREOF, the authorized representatives of the parties have executed
these changes under seal as of the date(s) set forth below.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Odetics, Inc. Digital Equipment Corporation
(Seller) (Buyer)
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Signature /s/ Richard Speyer
Printed Name Richard Speyer Paula Swanson
Title Contracts Manager Purchasing Manager
Date 19 Oct 94
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 58
ATL Products Unique Raw Material
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Minimum Maximum
Estimated Estimated Leadtime Leadtime
Qty Per Per Unit Minimum Maximum Qty of Qty of
P/N Desc Unit Price Value Value Units Units
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
* 1 0395035 Fuse 2 [ ] [ ] [ ] 10 15
* 2 0395036 Fuse 2 [ ] [ ] [ ] 10 15
* 3 0395038 Fuse 2 [ ] [ ] [ ] 10 15
* 4 0395058 Fuse 2 [ ] [ ] [ ] 10 15
* 5 0395059 Fuse 2 [ ] [ ] [ ] 10 15
* 6 0395060 Fuse 2 [ ] [ ] [ ] 10 15
* 7 0395063 Fuse 2 [ ] [ ] [ ] 10 15
* 8 0395064 Fuse 2 [ ] [ ] [ ] 10 15
* 9 0395094 Fuse 2 [ ] [ ] [ ] 10 15
* 10 0395096 Fuse 2 [ ] [ ] [ ] 10 15
* 11 0395098 Fuse 2 [ ] [ ] [ ] 10 15
* 12 0395104 Fuse 2 [ ] [ ] [ ] 10 15
* 13 0395105 Fuse 2 [ ] [ ] [ ] 10 15
* 14 0405055 TAPE DRIVE 3 [ ]
* 15 0415497 SCSI TERM. 1 [ ] [ ] [ ] 25 38
* 16 0425012 Cable Assy 1 [ ] [ ] [ ] 25 38
* 17 0525002 Clean Tape 1 [ ] [ ] [ ] 10 15
* 18 0525003 7 Pack 1 [ ] [ ] [ ] 10 15
* 19 0615044 Nut 2 [ ] [ ] [ ] 10 15
* 20 0725029 Lubricant 1 [ ] [ ] [ ] 10 15
* 21 0725067 Tri Flow 1 [ ] [ ] [ ] 10 15
* 22 0795048 CART LABELS 1 [ ] [ ] [ ] 10 15
* 23 0805000 MANUAL 1 [ ]
* 24 0995088 Bag 1 [ ] [ ] [ ] 10 15
* 25 6203082-01 Cover 1 [ ] [ ] [ ] 10 15
* 26 6203222-01 Label 1 [ ] [ ] [ ] 10 15
* 27 6203350-01 Rear Panel Assy 1 [ ] [ ] [ ] 25 38
* 28 6203935-01 Panel, Logo 1 [ ] [ ] [ ] 10 15
* 29 6204266-01 CABLE ASSY 1 [ ] [ ] [ ] 10 15
* 30 6204267-01 CABLE ASSY 1 [ ] [ ] [ ] 10 15
* 31 6207120-01 MANUAL 1 [ ] [ ] [ ] 10 15
* 32 6207121-01 MANUAL 1 [ ] [ ] [ ] 10 15
* 33 6207123-01 MANUAL 1 [ ] [ ] [ ] 10 15
* 34 6207129-01 Unpack Inst. 1 [ ] [ ] [ ] 10 15
* 35 6207131-01 Label 1 [ ] [ ] [ ] 10 15
* 36 6207907-03 Label 2 [ ] [ ] [ ] 10 15
* 37 6208178-01 SUP MANL 1 [ ] [ ] [ ] 10 15
* 38 6209315-01 Panel, Logo 1 [ ] [ ] [ ] 10 15
* Total [ ] [ ]
C = Consigned to ATL by Digital
PRICES PER THE BOA
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
10/19/94 Company Confidential
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 59
ATL Products TL 820 End User FRU Price List
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Repairable,
Non
End User Repairable,
Digital P/N ATL P/N Description Unit Price Expendable
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
* 1 0345051 Stepper Motor Assembly [ ] NR
* 2 0355032 Power Supply, Switching [ ] R
* 3 0355033 Power Supply [ ] R
* 4 0355034 Power Supply [ ] NR
* 5 0365042 Switch Panel [ ] E
* 6 0405024 Optical Sensor [ ] E
* 7 0405042 Scanner [ ] R
* 8 0405055 TZ87 Drive [ ]
* 9 0475009 Fan [ ] E
* 10 0495031 Power Strip [ ] E
* 11 0645072 Timing Belt [ ] E
* 12 0645083 Belt [ ] E
* 13 6201310-01 Extension Axis [ ] R
* 14 6201650-01 Control Panel PCBA [ ] R
* 15 6201710-01 Door Interface PCBA [ ] E
* 16 6203170-01 Carousel Motor Assembly [ ] R
* 17 6203235-01 IEC Power Dist. [ ] R
* 18 6203300-01 DLT Binpack [ ] E
* 19 6203620-01 Light Curtain Detector, PCBA [ ] NR
* 20 6203650-01 RS 232 PCBA [ ] R
* 21 6204059-01 Switch Assembly, Door [ ] E
* 22 6204210-01 Robotics Controller PCBA [ ] R
* 23 6204220-01 Actuator Driver, PCBA [ ] R
* 24 6204230-02 Stepper Motor Drive PCBA [ ] R
* 25 6204254-01 Umbilical Cable [ ] E
* 26 6204280-01 Light Curtain PCBA [ ] NR
* 27 6205015-01 PTM Tray Assembly [ ] R
* 28 6205735-01 IOD Assembly [ ] R
* 29 6209071-03 Differential, MUC Assembly [ ] R
* 30 6209322-01 Vertical Motor Assembly [ ] NR
* TOTAL [ ]
- -----------------------------------------------------------------------------------------------------
<CAPTION>
- -------------------------------------------------------
Sparing MTBF MSBF
Level (Hours) (Swaps)
- -------------------------------------------------------
<S> <C> <C> <C>
* 1 240,000,000
* 2 690,000
* 3 12,000,000
* 4 1,700,000
* 5 40,000,000
* 6 100,000,000
* 7 1,200,000
* 8
* 9 500,000
* 10 18,000,000
* 11 1,000,000,000
* 12 1,000,000,000
* 13 640,000 750,000
* 14 5,800,000
* 15 46,000,000
* 16 240,000,000
* 17 6,000,000
* 18 Very High
* 19 12,000,000
* 20 8,000,000
* 21 110,000,000
* 22 310,000
* 23 870,000
* 24 1,600,000
* 25 1,000,000,000
* 26 12,000,000
* 27 2,700,000 160,000,000
* 28 2,700,000 210,000,000
* 29 330,000
* 30 240,000,000
* TOTAL
- -------------------------------------------------------
</TABLE>
+ To the extent the PTM, IOD and MUC are options as well as FRUs, the price was
* established in conjunction with the TL820. The BOA price to Digital is [ ].
These prices are not entitled to any leadtime discounts and must be purchased
in accordance with the terms of the BOA regarding forecasting and purchase
orders.
October 19, 1994 Company Confidential
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 60
ATL PRODUCTS
AN ODETICS COMPANY
October 25, 1994
In reply refer to: RS10254-428
Digital Equipment Corporation
334 South Street, SHR3-2/Y1
Shrewsbury, Massachusetts 01545-4112
Attention: Paula Swanson
Reference: BOA 13844
Subject: Amendment 4
Dear Paula:
Enclosed for your review and approval are two original Amendment 4s to the
referenced Agreement. Per your request, I have changed 9c to be the "Unit
Price" rather than the "Total Price". If you are in agreement with this
Amendment, please sign and return one copy to the undersigned.
Should you have any comments or questions regarding the enclosed, please do not
hesitate to call.
Sincerely,
\s\ Richard Speyer
Richard Speyer
Contracts Manager
ATL Products, Inc.
RS/co-s
Enclosure
cc: ATL DMS Digital
K. Daly J. Johnson 40 Old Boston Road
S. Guzowski C. Valerio Stow, Massachusetts 01775-1215
E. Harrison J. Wiseman Attention: Dennis King
D. Petit OG01-1/G13
M. Spowart
J. Woolcott
240 East Palais Road
Anaheim, California 92805-6238
Phone (714) 774-6900
Fax (714) 774-5909
<PAGE> 61
AMENDMENT 4
TO
BASIC ORDER AGREEMENT 13844
BETWEEN
ODETICS INC., AND DIGITAL EQUIPMENT CORPORATION
- -------------------------------------------------------------------------------
Pursuant to the terms of Basic Order Agreement #13844, Section 23 Notices,
Section 23 General and specifically Exhibit B1 Material Pricing, the following
items have been changed by mutual agreement:
EXHIBIT B1.
* Item 9c should be changed from consigned to a purchase price of [ ] (X7).
* Item 9d should be changed from consigned to a purchase price of [ ] (X1).
* The total price for a TL820-AB should be changed from [ ] to [ ]
IN WITNESS WHEREOF, the authorized representatives of the parties have executed
these changes under seal as of the date(s) set forth below.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Odetics, Inc. Digital Equipment Corporation
(Seller) (Buyer)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Signature /s/ Richard Speyer /s/ Paula Swanson
Printed Name Richard Speyer Paula Swanson
Title Contracts Manager Purchasing Manager
Date 24 OCT 94 27 - Oct. 94
- ---------------------------------------------------------------------------------------------------
</TABLE>
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
<PAGE> 62
ATL PRODUCTS
AN ODETICS COMPANY
January 12, 1995
In reply refer to: RS01125-010
Digital Equipment Corporation
334 South Street, SHR3-2/Y1
Shrewsbury, Massachusetts 01545-4112
Attention: Paula Swanson
Reference: BOA 13844
Subject: Amendment Number 5
Dear Paula:
Enclosed for your review and approval are two original Amendment 5s to the
referenced Agreement. Please execute both copies. Return one copy to the
undersigned and retain one for your files.
Should you have any questions or comments regarding the enclosed, please do not
hesitate to contact me.
Sincerely,
/s/ Richard Speyer
Richard Speyer
Contracts Manager
ATL Products, Inc.
RS/co-s
Enclosure
cc: K. Daly
S. Guzowski
E. Harrison
D. Petit
M. Spowart
J. Woolcott
J. Johnson - DMS
C. Valerio - DMS
J. Wiseman - DMS
240 East Palais Road
Anaheim, California 92805-6238
Phone (714) 774-6900
Fax (714) 774-5909
<PAGE> 63
AMENDMENT 5
TO
BASIC ORDER AGREEMENT 13844
BETWEEN
ODETICS INC., AND DIGITAL EQUIPMENT CORPORATION
________________________________________________________________________________
Pursuant to the terms of Basic Order Agreement #13844, Section 23 Notices,
Section 23 General and specifically Section I E, Basic Order Agreement, has
changed by mutual agreement to read as follows:
"Seller grants Buyer all necessary rights and licenses for Buyer to market,
promote, resell, distribute and service the Material and including without
limitation, rights and licenses under any applicable patents, copyrights,
trademarks, trade secrets, mask works, and other intellectual property rights.
Buyer shall have the right to use Seller's name or trademark in connections
with any distribution of the Material under this Agreement".
IN WITNESS WHEREOF, the authorized representatives of the parties have executed
these changes under seal as of the date(s) set forth below.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Odetics, Inc. Digital Equipment Corporation
(Seller) (Buyer)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Signature /s/ Richard Speyer
Printed Name Richard Speyer Paula Swanson
Title Contracts Manager Purchasing Manager
Date 12 JAN 94
- ---------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 10.13
CONFIDENTIAL TREATMENT REQUESTED
CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION
BASIC ORDERING AGREEMENT
BETWEEN
EMC(2) CORPORATION
AND
ATL PRODUCTS, INC.
FOR
AUTOMATED TAPE LIBRARIES
SEPTEMBER 14, 1995
(C) ATL Products, Inc. 1995
This is an unpublished work that contains confidential and proprietary
information that may be protected under the Copyright Laws. The existence of the
Copyright Notice is not to be construed as an admission or presumption that
publication has occurred. Unauthorized copying of this document is strictly
prohibited.
All rights reserved.
This document is subject to change by ATL without notice until executed by both
Parties.
1. DLT and Compact Tape are registered trademarks of Quantum Corporation.
................................................................................
Company Confidential
<PAGE> 2
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
TABLE OF CONTENTS
Section Page
1. Period of Performance .............................................. 2
2. Product Purchasing, Marketing and Sales ............................ 2
3. New Products ....................................................... 2
4. Purchase Orders .................................................... 2
5. Purchase Forecasts ................................................. 3
6. Pricing ............................................................ 3
7. Shipment, Risk of Loss and Title ................................... 3
8. Exporting .......................................................... 3
9. Testing and Acceptance ............................................. 4
10. Payment ........................................................... 4
11. Limited Warranty .................................................. 4
12. Confidential Information .......................................... 5
13. Intellectual Property Rights and Indemnity ........................ 5
14. Force Majeure ..................................................... 6
15. Termination ....................................................... 6
16. Notices ........................................................... 7
17. Assignment ........................................................ 7
18. Rights and Remedies ............................................... 7
19. Applicable Law .................................................... 7
20. Insurance ......................................................... 7
21. Disputes/Arbitration .............................................. 7
22. Changes ........................................................... 8
23. Documentation ..................................................... 9
24. Technical Support ................................................. 9
25. Training .......................................................... 9
26. Maintenance ....................................................... 9
27. Business Reviews .................................................. 9
28. Survival .......................................................... 9
29. General ........................................................... 10
Exhibit A1 -- ACL2640 Product Specification ........................... 11
Exhibit A2 -- ACL4/52 Product Specification ........................... 12
Exhibit A3 -- ACL5480 Product Specification ........................... 13
Exhibit B -- Products and Accessories ................................. 14
Exhibit B1 -- ACL2640 Pricing and Leadtime ............................ 15
Exhibit B2 -- ACL4/52 Pricing and Leadtime ............................ 16
Exhibit B3 -- ACL5480 Pricing and Leadtime ............................ 17
Exhibit B4 -- Accessory Pricing and Leadtime .......................... 18
Exhibit C -- FRU's and Repairs ........................................ 19
Exhibit C1 -- ACL2640 FRUs and Repair Pricing and Leadtimes ........... 20
Exhibit C2 -- ACL4/52 FRUs and Repair Pricing and Leadtimes ........... 21
Exhibit C3 -- ACL5480 FRUs and Repairs Pricing and Leadtimes .......... 22
Exhibit D -- Installation, Training, and Time and Material Pricing .... 23
Exhibit E -- Mandatory Change Procedure ............................... 25
Exhibit F -- Non-disclosure Agreement ................................. 26
September 14, 1995 Company Confidential i of 38
<PAGE> 3
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
TABLE OF CONTENTS
Section Page
Exhibit G -- Maintenance Agreement .................................... 27
Exhibit H -- Packaging Specification .................................. 28
Exhibit I -- Testing and Acceptance ................................... 29
Exhibit J -- Worldwide Selling and Purchasing Locations ............... 30
Exhibit K -- Payment Locations ........................................ 31
Exhibit L -- Notices .................................................. 32
Exhibit M -- Definitions .............................................. 33
Exhibit N -- RMA Process .............................................. 35
September 14, 1995 Company Confidential ii of 38
<PAGE> 4
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
This Agreement including all Exhibits is entered on the last date of execution
(the "Agreement Date") by and between ATL Products, Inc., a corporation
organized under the laws of the State of California with its principal place of
business at 1515 South Manchester Avenue, Anaheim, California 92802 (hereinafter
known as "ATL") and EMC(2) Corporation a corporation organized under the laws of
the Commonwealth of Massachusetts with its principal place of business at 171
South Street Hopkinton, MA 01748 (herein after known as "EMC").
This Agreement and Exhibits shall also be binding for those Subsidiaries and/or
Divisions as well as named Service Providers of ATL and EMC listed in Exhibit J.
This Agreement consists of Terms and Conditions and Exhibits. The Terms and
Conditions describe the policies and the Exhibits define the processes
pertaining to the Parities responsibilities.
The following Exhibits are attached and incorporated into this Agreement by this
reference as if fully set forth herein. Exhibits may be added or revised from
time to time by mutual agreement. Any Exhibit that is added or revised shall be
signed by both ATL and EMC and shall supersede the previous version.
EXHIBIT TITLE
A1 ACL2640 Product Specification
A2 ACL4/52 Product Specification
A3 ACL5480 Product Specification
B Product and Accessories
B1 ACL2640 Pricing and Leadtime
B2 ACL4/52 Pricing and Leadtime
B3 ACL5480 Pricing and Leadtime
B4 Accessory Pricing and Leadtime
C FRU's and Repairs
C1 ACL2640 FRU and Repair Pricing and Leadtime
C2 ACL4/52 FRU and Repair Pricing and Leadtime
C3 ACL5480 FRU and Repair Pricing and Leadtime
D Installation, Training, and Time and Material Pricing
E Mandatory Change Procedure
F Non-disclosure Agreement
G Maintenance Agreement
H Packaging Specification
I Quality Specification
J Worldwide Selling and Purchasing Locations
K Payment Locations
L Notices
M Definitions
N RMA Process
WHEREAS, ATL develops and manufactures Data Processing Peripheral Products as
described in Exhibit A, (hereinafter known as "Products"): and
WHEREAS, ATL desires to offer said Products for sale to EMC on a non exclusive
basis; and
WHEREAS, EMC has recognized capabilities in the distribution of these Products
to industry and desires to have the right to purchase such Products on a non
exclusive basis from ATL for resale to End Users; and
September 14, 1995 Company Confidential 1 of 38
<PAGE> 5
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
WHEREAS, ATL also offers FRUs and Repairs as described in Exhibits C and D, and
EMC desires to have the right to purchase such FRUs and Repairs on a non
exclusive basis in order to service the End User who purchases Products from
EMC.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
Parties agree as follows:
1. PERIOD OF PERFORMANCE
The period during which EMC may issue Purchase Orders for the Products and
Services, (collectively "Material") under this Agreement (Purchase Period) shall
be one (1) year, from the Agreement date. The Purchase Period shall be
automatically extended (Extended Purchase Period) for one (1) year periods
unless notified in writing by either Party no less than sixty (60) days prior to
the end of the current Purchase Period. If, during the Purchase Period or
Extended Purchase Period, if any, ATL discontinues producing or making available
any Products, FRUs or Repairs, ATL shall provide EMC with six (6) months prior
written notice of such discontinuation and shall use reasonable efforts to
permit EMC to buy as much Products and FRUs as EMC reasonably believes it shall
need.
Upon expiration or termination of this Agreement, ATL shall sell and repair FRUs
for five (5) years after the date of the last Product manufactured or for as
long as the Products and FRUs are made available to any of ATL's other
customers, whichever is later. Prices shall be at ATL's then current prices;
delivery is subject to availability.
2. PRODUCT PURCHASING, MARKETING AND SALES
PURCHASING -- Subject to the terms and conditions of this Agreement ATL grants
to EMC the non-exclusive right to purchase Material at the price and on the
terms set forth in Exhibits B, C, and D, as applicable, which may be changed
during the Extended Purchase Period as set forth hereinafter in the Section
titled Pricing.
MARKETING -- ATL has jointly developed DLT Automated Tape Libraries with Digital
Equipment Corporation, Shrewsbury, Massachusetts. These DLT Automated Tape
Libraries are more commonly known as ATL's DLT series of Products and Digital's
TL 8XX series of products.
ATL and Digital have mutually agreed that in order to develop and penetrate the
market for the DLT Automated Tape Libraries efficiently, ATL has the sole and
exclusive sales and marketing rights to sell the ATL series of DLT Automated
Tape Libraries for applications outside the proprietary Digital Computer
installed base worldwide and Digital has the sole and exclusive sales and
marketing rights for the Digital series of products on the Digital installed
based worldwide.
SALES -- EMC hereby represents, warrants and agrees that:
a. It is not EMC's strategic objective to sell ATL's DLT series of Products
for installation to the proprietary Digital Computer installed base. However,
EMC retains the right to sell Products for heterogeneous client server
networks that may include Digital computers.
b. EMC shall purchase DLT Automated Tape Libraries in support of the
proprietary Digital Computer installed base from Digital Equipment
Corporation, Storage Products Business Unit, Shrewsbury Massachusetts.
c. EMC shall not re-market or sell Product to any entity without adding
Storage Management Software.
3. NEW PRODUCTS
From time to time EMC may request and/or ATL will quote New Products for
purchase and re-sale by EMC. New Products shall be added by mutual agreement in
the form of a written modification to all applicable Exhibits . Unless otherwise
agreed to, New Products shall be covered by the terms and conditions of this
Agreement.
4. PURCHASE ORDERS
September 14, 1995 Company Confidential 2 of 38
<PAGE> 6
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
PURCHASE ORDER -. EMC shall order Material by issuing written Purchase Orders by
facsimile or delivery/postal service during normal business hours.. Each
Purchase Order, at minimum, shall specify the model number, item description,
quantity, delivery schedule, destination, carrier, and total price.
PRIORITY PURCHASE ORDER. - EMC may, issue written Priority Purchase Orders for
FRU's and Repairs by facsimile on a twenty-four (24) hour a day three hundred
sixty-five (365) days a year basis. Priority Purchase Orders shall be ready for
pickup by EMC's selected carrier within twenty-four (24) hours of order
placement and acceptance by ATL. Each Priority Purchase Order shall be
identified as a Priority Purchase Order and, at minimum, shall specify the part
number, item description, quantity, delivery date, destination, carrier, and
total price.
EMC shall place all Purchase Orders at the appropriate ATL facility as listed in
Exhibit J.
All of the terms and conditions of this Agreement and its Exhibits shall be
deemed incorporated into each Purchase Order as if fully set forth therein. If
any term of this Agreement conflicts with any term of an issued Purchase Order,
this Agreement shall take precedence.
For each Purchase Order, EMC shall provide ATL with any information that is
necessary for ATL to fulfill the order and to comply with all labeling, marking
and other applicable legal requirements for the territory in which the Material
is sold.
5. PURCHASE FORECASTS
On a monthly basis, EMC shall issue a revolving twelve (12) month non binding
forecast so that ATL will have an understanding of EMC's anticipated monthly
requirements. Every three (3) months EMC and ATL shall review all shipments made
by ATL against the total anticipated purchase commitment.
EMC'S NON BINDING FORECAST IS FOR INFORMATION ONLY AND DOES NOT CREATE ANY
LIABILITY BETWEEN THE PARTIES NOR DOES IT GUARANTEE EMC WILL ISSUE PURCHASE
ORDERS AGAINST THE FORECAST OR ATL WILL MANUFACTURE AND SHIP PRODUCT OR FRUS IN
ACCORDANCE WITH THE FORECAST. ATL'S ONLY OBLIGATION TO MANUFACTURE AND SHIP
PRODUCT AND FRUS WILL BE IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND
PURSUANT TO A PURCHASE ORDER ISSUED BY EMC AND ACCEPTED BY ATL.
6. PRICING
Prices include all charges such as packaging, packing, customs duties imposed
before shipment, and all taxes except sales, use, and other such taxes imposed
upon the sale or transfer of Material for which EMC is solely responsible under
applicable law and for which EMC is properly invoiced by ATL.
Prices for Material are in Exhibits B, C and D.
The prices shall remain valid for all Material shipped during the Purchase
Period. The prices for Material are subject to change by notice given to EMC
upon renewal for the Extended Purchase Period, if any. Notwithstanding, the
prices may be increased or decrease upon mutual agreement.
7. SHIPMENT, RISK OF LOSS AND TITLE
ATL shall make all arrangements for shipment with the carrier stated on EMC's
purchase order. EMC shall pay all shipping and transportation charges directly
to the carrier. In the event such charges have been prepaid by ATL, EMC shall
reimburse ATL pursuant to ATL's invoice for such charges. ATL reserves the right
to select the means
September 14, 1995 Company Confidential 3 of 38
<PAGE> 7
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
and method of shipment in the event EMC does not inform ATL of the arrangements
for shipment within twenty-four hours after ATL has informed EMC that the
Products, FRUs or Repairs are ready for shipment.
All Products, FRUs and Repairs are sold and shipped Ex Works (in accordance with
Incoterms 1990) unless otherwise mutually agreed.
Products, FRUs and Repairs shall be packaged for shipment in accordance with
Exhibit H.
8. EXPORTING
ATL and EMC shall comply with all applicable laws and regulations of the United
States and any other country involved with the Product, FRU or Repair
transaction concerning export, import and reexport of goods. If EMC's Purchase
Order specifies export after passage of title, ATL shall provide EMC with all
the documentation reasonably necessary to enable EMC to obtain licenses, if
required, for exporting the Products, FRUs or Repairs..
Fulfillment of any Purchase Order accepted by ATL, for shipment to a
destination outside the United States, may be dependent upon the grant of
appropriate licenses, permits and similar items required for shipments of the
Products FRUs or Repairs from the country of export. EMC shall be obligated to
take delivery of such Products, FRUs or Repairs, in the United States, even if
the licenses, permits or other items required for export are not furnished to
EMC at the time the Products, FRUs or Repairs are ready to ship.
In the event of a shipment to other than to a USA address, EMC, at its own
expense, shall furnish EMC's freight forwarder with detailed documentation and
instructions and all necessary export licenses, customs declarations and
certificates in properly executed form required for successful shipment of the
Products, FRUs or Repairs from the United States and entry into foreign
territories.
9. TESTING AND ACCEPTANCE
ATL shall test and EMC shall inspect and accept Products, FRUs and Repairs in
accordance with Exhibit I.
10. PAYMENT
All payments required by this Agreement are stated and shall be made in United
States dollars. Payments shall be sent to ATL at the return address stated in
Exhibit K, and shall be deemed made only upon receipt by ATL at that address.
EMC shall deliver payment to ATL net thirty (30) calendar days from transfer of
title (in accordance with Incoterms 1990 - Ex Works, unless otherwise mutually
agreed)
Amounts owed to EMC due to rejections of Material, or discrepancies on paid
invoices shall be fully credited against future invoices payable by EMC.
Notwithstanding, ATL and EMC shall mutually agree on a pay-back schedule in the
event EMC does not have any Material on order.
11. LIMITED WARRANTY
For the time periods set forth hereafter, and as qualified in this Agreement,
ATL gives the following limited warranty: that, at the time of shipment, all
Products, FRUs or Repairs (i) shall be free from defects in material,
workmanship, and design, shall conform to applicable specifications, drawings,
samples, and descriptions referred to in this Agreement, (ii) shall be free of
all liens and encumbrances and (iii) shall not infringe on any third party's
Intellectual Property interest..
September 14, 1995 Company Confidential 4 of 38
<PAGE> 8
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
The time periods for this limited warranty are as follows: (i) Products and
first time shipped or new FRU's) - for twelve (12) months from date of shipment
by ATL; (ii) for exchanged or replaced FRU's and (ii) Repairs - for either (a)
three (3) months from the later of the date of shipment or date of repair or (b)
the balance of the term of the original warranty for Products or FRU repaired or
replaced, whichever is sooner.
During the term of this limited Warranty, ATL shall, within thirty (30) days
after receipt of defective Products or FRUs, at its option, either repair or
replace any defective Products or FRUs subject to this limited warranty at no
additional charge to EMC. Replacement Products or FRUs shall be furnished on an
exchange basis, and may be either repaired or new.
Claims made pursuant to this limited warranty must conform to the following
requirements:
a) Products, FRUs or Repairs that are returned shall follow the procedure
defined in Exhibit N and must have a RMA Number issued by ATL, an authorized
ATL service center or d Service Provider listed in Exhibit J. Any item
returned shall be at EMC's expense and in a container affording protection
from damage during shipping in accordance with Exhibit H. Responsibility for
loss or damage to Products, FRUs or Repairs in transit shall be on EMC.
b) Service must be performed by ATL, an authorized ATL service center or
Service Provider. Any Service Provider trained and certified by ATL shall be
considered authorized to perform such work.
c) Products, FRU's and Repairs shall be returned to EMC by ATL, freight
prepaid. Responsibility for loss or damage to Products, FRU's or Repairs in
transit shall be on ATL.
d) EMC shall provide labor for all warranty claims, at no charge to ATL, for
removal of defective Product, FRU, or Repair and for the installation of
Repairs or replacements.
THIS LIMITED WARRANTY DOES NOT APPLY TO PRODUCTS, FRUS OR REPAIRS WHICH HAVE
BEEN DAMAGED OR RENDERED DEFECTIVE: (i) AS A RESULT OF ACCIDENT, MISUSE OR
ABUSE; (ii) BY THE USE OF PARTS NOT APPROVED OR MANUFACTURED OR SOLD BY ATL, OR
NOT CONFORMING TO ATL'S SPECIFICATIONS; (iii) BY MODIFICATION WITHOUT THE
WRITTEN PERMISSION OF ATL; OR (iv) AS A RESULT OF SERVICE BY ANYONE OTHER THAN
ATL, AN AUTHORIZED ATL SERVICING CENTER, OR AN CERTIFIED ATL SERVICE PROVIDER TO
PERFORM SUCH WORK.
EXCEPT AS EXPRESSLY SET FORTH ABOVE, ATL MAKES NO OTHER REPRESENTATIONS,
PROMISES, GUARANTEES OR WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE,
INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE, AND ATL EXPRESSLY DISCLAIMS ALL WARRANTIES NOT
EXPRESSLY STATED HEREIN. IN THE EVENT THE PRODUCT, FRU OR REPAIR IS NOT FREE
FROM DEFECTS AS WARRANTED ABOVE, EMC'S SOLE REMEDY SHALL BE REPAIR OR
REPLACEMENT AS PROVIDED ABOVE, UNLESS OTHERWISE MUTUALLY AGREED TO. UNDER NO
CIRCUMSTANCES SHALL ATL BE LIABLE TO EMC, OR TO ANY END USER, FOR ANY INJURIES,
DAMAGE TO OR REPLACEMENT OF PRODUCT OR PROPERTY, COSTS FOR RECOVERING,
REPROGRAMMING, OR REPRODUCING ANY PROGRAM OR DATA USED WITH THE PRODUCT, OR ANY
SPECIAL, INDIRECT, INCIDENTAL, ECONOMIC OR CONSEQUENTIAL DAMAGES OR CLAIMS FOR
LOSS OF BUSINESS OR LOSS OF PROFITS WHATSOEVER, EVEN IF ATL WAS ADVISED OF THE
POSSIBILITY OF SUCH LOSS OR DAMAGE.
The limited warranty and remedies set forth herein are exclusive and in lieu of
all other representations and warranties, oral or written, express or implied.
No dealer, distributor, agent or employee of ATL is authorized to make any
modification or addition to this warranty.
September 14, 1995 Company Confidential 5 of 38
<PAGE> 9
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
12. CONFIDENTIAL INFORMATION
Both ATL and EMC shall conform to the terms and conditions of Exhibit F,
Non-disclosure Agreement between the companies.
THIS AGREEMENT (INCLUDING PRICE LISTS AND OTHER EXHIBITS, AND ALL TRANSACTIONS
HEREUNDER) ARE UNDERSTOOD TO BE CONFIDENTIAL INFORMATION NOT TO BE DISCLOSED OR
USED BY EMC EXCEPT AS PROVIDED HEREIN.
13. INTELLECTUAL PROPERTY RIGHTS AND INDEMNITY
ATL shall own the entire right, title and interest in and to all intellectual
property rights relating to the design of the Product that are or have been
designed and developed exclusively by ATL, except for Intellectual Property
Rights which are or have been developed by an independent source and acquired by
ATL for incorporation into the Product.
ATL shall indemnify, defend and hold harmless EMC from and against any and all,
expenses and damages without limitation reasonable attorneys fees, with respect
to, any claim against EMC alleging that Product or FRU in the form sold by ATL,
or any part thereof, infringes any United States patent, copyright, trademark,
mask work, or violates a trade secret of a third Party. ATL's obligation
pursuant to this Section 21 are conditional on and subject to EMC's compliance
with each of the following conditions: (i) EMC shall give notice to ATL promptly
in writing of such a claim and (ii) ATL shall have the authority to assume sole
defense thereof through its own counsel and to compromise or settle any suits so
far as this may be done without prejudice to the right of EMC to continue to use
the Product, so purchased. If an injunction against EMC's or End User's use,
sale, lease, license, or other distribution of the Material or any part thereof
results from such a claim (or if EMC reasonably believes such an injunction is
likely), ATL may in order of precedence: (1) procure the right to continue the
use of the same for EMC; or (2) replace the same with a similarly functioning
and priced non-infringing product, or (3) modify said Product so as to be
non-infringing; or, if none of the foregoing (1), (2), or (3) are deemed
reasonably feasible, (4) take back the infringing Product or FRU and refund the
purchase price less a depreciation deduction equal to twenty percent (20%) of
the purchase price for each year since the date of shipment.
This section states the entire liability of ATL for Intellectual Property
infringement. The indemnification provisions of this Section shall not apply to
any infringement arising out of the use (i) in systems if the sole cause of such
infringement to be the system itself or components of the system not supplied by
ATL; or) (ii) for purposes not contemplated by this Agreement. Indirect and
consequential damages that may occur as a result of any such infringement, or
claim of infringement, are expressly negated, and the liability of ATL shall be
limited to its agreements herein.
EMC shall defend indemnify, defend and hold harmless ATL from and against any
and all costs, expenses and damages, including without limitation reasonable
attorneys' fees, with respect to any claim alleging that EMC's end product which
incorporates ATL's Product (but not ATL's Product alone) infringes any patent,
trademark, copyright, mask work or violates any trade secret of a third party,
provided that ATL promptly notifies EMC in writing and provides information and
reasonable assistance (at EMC's expense), and that EMC is permitted to direct
the defense of the suit or proceeding.
14. FORCE MAJEURE
Neither Party shall be liable for failure to perform any of its obligations
under this Agreement during any period in which such Party cannot perform due to
fire, flood, earthquake, or other natural disaster, war, embargo, riot, or the
intervention of any government authority, provided that the Party so delayed
immediately notifies the other Party of such delay.
September 14, 1995 Company Confidential 6 of 38
<PAGE> 10
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
15. TERMINATION
Either Party may terminate this Agreement for cause if:
a) The other Party fails to comply with any material covenant or provision
of this Agreement, and does not cure such failure within thirty (30) days
after written notice is given to such Party; provided that if such curable
failure cannot reasonably be cured within thirty (30) days, this Agreement
may not be terminated if the noncomplying Party begins to cure such failure
within thirty (30) days and thereafter diligently seeks to complete such
cure;
Notwithstanding, (1) ATL may terminate this Agreement in the event EMC does
not make payment, without cause, in accordance with the terms of this
Agreement more than two (2) times in a consecutive three (3) month period
and does not cure such failure within ten (10) days after written notice is
given to EMC; or if ATL's or EMC's performance is delayed for Force Majeure
reasons defined elsewhere herein for a cumulative period of sixty (60) days
or more in any twelve (12) month period, the performing Party may terminate
this Agreement by giving the other Party written notice, which termination
shall become effective upon receipt of such notice. If EMC terminates, its
sole liability under this Agreement or any Purchase Orders issued hereunder
shall be to pay any balance due for conforming Material shipped by ATL
before receipt of EMC's termination notice
b) the other Party files a voluntary petition in bankruptcy or under any
similar law, or makes an assignment for the benefit of its creditors; or
c) an involuntary petition in bankruptcy or under any similar insolvency
law is filed against the other Party; or a receiver is appointed for, or a
levy or attachment is made against, substantially all of the other Party's
assets, and such involuntary petition is not dismissed or such receivership
or levy or attachment is not discharged within thirty (30) days after the
filing or appointment thereof.
A Party intending to terminate this Agreement on the grounds set forth in
subparagraphs to a, b or c above must do so reasonably promptly after the right
to terminate occurs.
Either Party may terminate this Agreement if a fifty-one (51%) percent change in
ownership occurs and if the other Party reasonably deems the change to be a
material and adverse to its interests provided that ninety (90) days' prior
written notice is given to the other Party and all Material scheduled to be
shipped shall be accepted and paid for by EMC.
In the event this Agreement is terminated for cause by ATL or EMC elects not to
continue to support the Products, EMC shall provide ATL, at no cost, (i) a list
of all customers who EMC has sold Products to and (ii) all customers who EMC is
providing service for. EMC shall provide this list to ATL for the sole purpose
of ATL having the ability to assure that Maintenance will continue to be
performed on the Products.
In the event this Agreement is terminated, all unpaid invoices shall become due
and payable in accordance with this Agreement
16. NOTICES
Any notice given under this Agreement shall be written. Written Notice shall be
sent by certified mail, postage prepaid, return receipt requested, or by any
other overnight delivery service that delivers to the noticed destination, and
provides proof of delivery to the sender Written Notice shall be sent to the
appropriate company official in accordance with Exhibit L. Any facsimile notice
must be followed within three (3) days by written Notice. All Notices shall be
effective when first received by the receiving party.
September 14, 1995 Company Confidential 7 of 38
<PAGE> 11
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
17. ASSIGNMENT
This Agreement shall be binding and inure to the benefit of the Parties hereto
and their respective successors and assigns. Neither Party shall assign,
subcontract, transfer, encumber or hypothecate directly or indirectly this
Agreement or any rights herein to the benefit of any third party without the
express written consent of the other Party that may be withheld at the sole
discretion of the consenting Party. The rights of this Agreement shall not inure
to the benefit of any third party.
18. RIGHTS AND REMEDIES
All rights and remedies conferred by this Agreement, by any other instrument, or
by law are cumulative and may be exercised singly or concurrently. If any
provision of this Agreement is held invalid by any law or regulation of any
government or by any court, such invalidity shall not effect the enforceability
of any other provisions hereof.
19. APPLICABLE LAW
This Agreement shall be governed by and construed under the laws of the
Commonwealth of Massachusetts.
20. INSURANCE
EMC shall maintain, at EMC's expense, commercial general liability insurance,
which shall include EMC's Endorsement specifically naming ATL as an additional
insured. This policy at minimum must insure against EMC's liabilities arising
under or during the term of this Agreement for at least $1 million with a
maximum deductible of $200,000.
21. DISPUTES/ARBITRATION
The Parties shall attempt in good faith to resolve any controversy or claim
arising out of or relating to this Agreement promptly by negotiations between
executives of the Parties.
If a controversy or claim should arise one Party shall give notice to the other
Party of such controversy or claim (the "Invoking Party's"), the Parties shall
use their best efforts to arrange personal meetings or telephone conferences as
needed, at mutually convenient times and places, between negotiators for the
Parties at the following successive management levels, each of which shall have
a period of allotted time as specified below in which to attempt to resolve the
dispute:
<TABLE>
<CAPTION>
LEVEL ATL EMC ALLOTTED TIME
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
FIRST Contract Manager Contract Manager 10 Business Days
- -------------------------------------------------------------------------------------
SECOND Division VP Group Manager 10 Business Days
- -------------------------------------------------------------------------------------
THIRD General Manager General Manager 30 Days
</TABLE>
The allotted time for the first level negotiator shall begin on the effective
date of the Invoking Party's Notice.
If a resolution is not achieved by negotiators at any given management level at
the end of their allotted time, then the allotted time for the negotiators at
the next management level, if any, shall begin immediately.
If resolution is not achieved by negotiators at the final management level
within the allotted time then the Parties agree the matter shall be submitted to
arbitration conducted in the County of Orange, California by the Judicial
Arbitration and Mediation Service, Inc. Arbitration shall be conducted by and in
accordance with the rules of the American Arbitration Association ("AAA"). There
shall be three arbitrators, EMC shall select one, ATL shall select one and one
shall be selected by mutual agreement of EMC and ATL.
September 14, 1995 Company Confidential 8 of 38
<PAGE> 12
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
The arbitrator's decision shall be rendered within thirty (30) days following
submission of the matter at issue, but the failure to comply with this provision
shall in no way invalidate any decision or award as may be rendered more than
thirty (30) days after submission. Upon the rendering of the decision or award,
the prevailing party shall be entitled to reasonable costs and attorneys' fees.
judgment upon any award may be entered in any court having jurisdiction or
application may be made to such court for judicial acceptance of the award and
an order of enforcement. By agreeing to arbitration, neither EMC or ATL is
waving any of the benefits of the statue of limitations or any equitable defense
it may have.
22. CHANGES
ATL shall give written Notice to EMC, in the form of Notification of Engineering
Change, of any changes to the Products prior to implementation that affect fit,
form or function. EMC shall give written notice to ATL of its approval or
disapproval of the change in writing within thirty (30) days of the date ATL
gives such notice. If written Notice is not received, ATL shall consider the
change acceptable.
If it is mutually agreed that the change is a Mandatory Change required to make
the Product conform to the Product Specification, at the time of original
shipment from ATL, ATL shall make the changes at no charge to EMC in all units
that are not yet delivered to EMC. In the event such changes are required to
make previously delivered Product conform to the Product Specification, they
shall be supplied in the form of a Mandatory Field Change Kit at no charge to
EMC in accordance with the procedure set forth Exhibit E. If necessary, ATL and
EMC shall negotiate in good faith a price that ATL shall pay EMC for EMC to
install the Mandatory Field Change Kit
In the event EMC has a reason to believe that any Product contains a Defect, EMC
shall promptly give ATL written Notice of all relevant details with respect to
such potential Defect. If, after joint investigation, it is mutually agreed that
such defect requires a Mandatory Change, then ATL shall provide EMC, at no
charge, repaired or replacement FRUs from the Lot subject to the defect.
Time is of the essence for ATL to incorporate a change. In the event that EMC
requests a sample of a change, ATL will use reasonable efforts to provide such
change to EMC so that EMC can approve the change within the thirty (30) day
approval period. Any extension to the approval period shall be by written mutual
agreement.
ATL may from time to time make compatible changes or modifications to the
Product (i) that do not effect fit, form, or function, and (ii) that are
compatible and interchangeable with and shall not require the retrofit of
Product previously delivered. If ATL makes such modification, ATL shall give
Notice to EMC at least 30 days before ATL it begins delivering to EMC any
Product containing such modification, describing the changes and updating the
parts list.
23. DOCUMENTATION
ATL shall provide one (1) each of the following manuals with each Product
(excludes FRUs and Repairs) purchased.
a) Operators Manual
b) Tape Drive Manual (DLT libraries only)
c) Facilities Planning and Installation Guide
d) Diagnostic Software User Manual
EMC shall have the right to reproduce the Operators Manual, Facilities Planning
and Installation Guide, and Diagnostic Software User Guide.
24. TECHNICAL SUPPORT
September 14, 1995 Company Confidential 9 of 38
<PAGE> 13
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
ATL shall provide EMC with technical support by telephone twenty four (24) hours
a day three hundred sixty five (365) days a year. EMC may request on site
technical support and ATL shall dispatch the next available Service Engineer
provided EMC pays ATL's standard rate (as listed in Exhibit D) for the Service
Engineer's time, portal to portal, and all out of pocket expenses including
transportation within thirty (30) days after the date of ATL's invoice of such
services.
25. TRAINING
ATL shall provide one (1) training class for up to four (4) students for each
Product model, listed in Exhibit A, free of charge. EMC may purchase additional
training classes at a per student rate (as listed in Exhibit D). The class shall
be held at ATL's facility at a mutually agreed upon time.
26. MAINTENANCE
EMC shall be responsible for offering maintenance on the Products it sells, or
otherwise provides, to End Users unless EMC purchases maintenance from ATL
pursuant to Exhibit G.
When EMC performs maintenance, EMC shall maintain records regarding maintenance
performed on the Product. Upon mutual agreement, EMC shall provide ATL, at no
charge, a duplicate copy of all maintenance records. These records shall be used
by ATL for the purpose of understanding Product performance.
27. BUSINESS REVIEWS
EMC and ATL shall, each at their own expense, meet on a quarterly basis to
review performance and business transacted, and to have and resolve those issues
that may have arisen since the last business review meeting.
28. SURVIVAL
The provisions of this Agreement including without limitation "Product
Purchasing, Marketing and Sales" Warranty," "Confidential Information,"
"Intellectual Property Rights and Indemnity," "Force Majeure," "Assignment,"
"Rights and Remedies," "Applicable Law," "Disputes/Arbitration" and "General,"
shall survive termination or expiration of this Agreement.
29. GENERAL
A) This Agreement is the complete and entire understanding between the Parties
on this subject matter and supersedes all prior agreements, proposals,
representations, statements, or understandings whether written or oral on this
subject between them. The provisions of this Agreement may be amended or waived
only by a writing executed by the authorized representatives of the Parties
hereto.
B) In the event that either Party to this Agreement shall, on any occasion, fail
to perform any provision of this Agreement, and the other Party does not enforce
that provision, the failure to enforce shall not prevent enforcement of the
provision on any other occasion.
C) As used in this Agreement, except where otherwise noted, the term "days"
shall mean calendar days.
D) Each Party, including its servants, agents, and employees, is an independent
contractor and not an agent or employee of the other. Without limiting the
generality of the foregoing, neither Party is authorized to represent or make
any commitments on behalf of the other, and both Parties expressly disclaim any
liability therefore.
E) The headings of the sections in this Agreement are included for convenience
only and are not to be used in construing or interpreting this Agreement.
September 14, 1995 Company Confidential 10 of 38
<PAGE> 14
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
F) The Products and FRUs purchased by EMC from ATL are manufactured for standard
commercial use and are not intended to be sold for use in critical safety
systems, nuclear facilities or for use in life support appliances, devices or
systems.
G) ATL reserves the right to fulfill the requirements of any purchase order
placed pursuant to this Agreement and invoice for such orders through an
affiliate company of ATL.
H) In the event of any dispute, litigation or arbitration between the Parties
with respect to this Agreement, the prevailing Party shall be entitled to
recover its reasonable attorneys' fees and costs in addition to any other relief
to which it is found entitled.
IN WITNESS WHEREOF, the authorized representatives of the Parties have executed
this Agreement under seal as of the dates set forth below.
- --------------------------------------------------------------------------------
ATL PRODUCTS, INC. EMC
- --------------------------------------------------------------------------------
Signature
/s/ Richard Speyer /s/ Steven L. Smith
- --------------------------------------------------------------------------------
Printed Name
Richard Speyer Steven L. Smith
- --------------------------------------------------------------------------------
Title
Contract Mgr Peripherals Business Manager
- --------------------------------------------------------------------------------
Date
Sep 20, 95 9/20/95
- --------------------------------------------------------------------------------
September 14, 1995 Company Confidential 11 of 38
<PAGE> 15
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT A1 -- ACL2640 PRODUCT SPECIFICATION
ACL2640 and companion products ACL6/176 and ACL9/88
The ACL2640 Product Specification document number is 6207928 Revision B. It is
included in this agreement by reference only.
September 14, 1995 Company Confidential 12 of 38
<PAGE> 16
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT A2 -- ACL4/52 PRODUCT SPECIFICATION
The ACL4/52 Product Specification document number is 6211260 Revision A. It is
included in this agreement by reference only.
September 14, 1995 Company Confidential 13 of 38
<PAGE> 17
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT A3 -- ACL5480 PRODUCT SPECIFICATION
The ACL2640 Product Specification document number is 6207901 Revision B. It is
included in this agreement by reference only.
September 14, 1995 Company Confidential 14 of 38
<PAGE> 18
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT B -- PRODUCTS AND ACCESSORIES
LEADTIMES
EMC may purchase Products and Accessories in accordance with the respective
Product or Accessory Leadtime.
Delivery leadtimes shall start after ATL gives EMC written notice of acceptance
of EMC's purchase order. ATL shall accept or decline in writing and by facsimile
all Purchase Orders, within five (5) business days after receipt
No Purchase Order shall (i) be unreasonably declined or (ii) deemed accepted by
ATL until ATL gives written notice to EMC of acceptance.
ATL agrees to reduce ongoing leadtime from less than ninety (90) days for each
Product that EMC wants a shorter leadtime, provided that EMC maintains on-going
monthly scheduled open purchase order status of ninety (90) to
one-hundred-twenty (120) days worth of Product.
FLEXIBILITY
In addition, EMC's Product forecast when combined with the on order Product will
equal approximately twelve (12) months visibility into EMC's Product
requirements. Each purchase order or forecast is subject to increases, decreases
or cancellation of units as defined below:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DAYS OF NOTICE PERCENT OF CHANGE BASED ON
- --------------------------------------------------------------------------------
<S> <C> <C>
*[ ] [ ]
- --------------------------------------------------------------------------------
*[ ] [ ] of average number of units shipped over
the previous 12 weeks
- --------------------------------------------------------------------------------
*[ ] [ ] of average number of units shipped over
the previous 12 weeks
- --------------------------------------------------------------------------------
*[ ] [ ]
- --------------------------------------------------------------------------------
*[ ]
</TABLE>
SHIPMENT
All Products and Accessories are sold and shipped Ex Works unless otherwise
mutually agreed.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
September 14, 1995 Company Confidential 15 of 38
<PAGE> 19
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT B1 -- ACL2640 PRICING AND LEADTIME
ACL2640 Base Units with DLT 4000 Drives
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Model Number Description Leadtime Unit Price
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
*ACL2640 - B4000 ATL w/3 DLT 4000 Tape Drives 60 - 90 days [ ]
- --------------------------------------------------------------------------------------------
*ACL6/176 - B4000 ATL w/6 DLT 4000 Tape Drives 60 -90 days [ ]
- --------------------------------------------------------------------------------------------
*ACL3/176 - B4000 ATL w/3 DLT 4000 Tape Drives 60 -90 days [ ]
- --------------------------------------------------------------------------------------------
*ACL9/88 - B4000 ATL w/9 DLT 4000 Tape Drives 60 -90 days [ ]
- --------------------------------------------------------------------------------------------
*ACL6/88 -B4000 ATL w/6 DLT 4000 Tape Drives 60 -90 days [ ]
- --------------------------------------------------------------------------------------------
*ACL3/88-B4000 ATL w/3 DLT 4000 Tape Drives 60 -90 days [ ]
- --------------------------------------------------------------------------------------------
ACL2640 Expansion Units with DLT4000 Drives
- --------------------------------------------------------------------------------------------
*ACL2640 - E4000 ATL w/3 DLT 4000 Tape Drives 60 - 90 days [ ]
- --------------------------------------------------------------------------------------------
*ACL6/176 - E4000 ATL w/6 DLT 4000 Tape Drives 60 -90 days [ ]
- --------------------------------------------------------------------------------------------
*ACL3/176 - E4000 ATL w/3 DLT 4000 Tape Drives 60 -90 days [ ]
- --------------------------------------------------------------------------------------------
*ACL9/88 - E4000 ATL w/9 DLT 4000 Tape Drives 60 -90 days [ ]
- --------------------------------------------------------------------------------------------
*ACL6/88-E4000 ATL w/6 DLT 4000 Tape Drives 60 -90 days [ ]
- --------------------------------------------------------------------------------------------
*ACL3/88-E4000 ATL w/3 DLT 4000 Tape Drives 60 -90 days [ ]
- --------------------------------------------------------------------------------------------
</TABLE>
The above model numbers reflect libraries with the OEM version DLT tape drive.
If SGI configured drives are required, add an "S" after the last character in
the model number i.e., ACL4/52 B4000 S.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
September 14, 1995 Company Confidential 16 of 38
<PAGE> 20
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT B2 -- ACL4/52 PRICING AND LEADTIME
ACL4/52 Base Unit
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Model Number Description Leadtime Unit Price
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
*ACL4/52 B4000 ATL w/4 DLT 4000 Tape Drives 60 -90 days [ ]
- -------------------------------------------------------------------------------------------
*ACL2/28 B4000 ATL w/2 DLT 4000 Tape Drives 60 -90 days [ ]
- -------------------------------------------------------------------------------------------
</TABLE>
The above model numbers reflect libraries with the OEM version DLT tape drive.
If SGI configured drives are required, add an "S" after the last character in
the model number i.e., ACL4/52 B4000 S.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
September 14, 1995 Company Confidential 17 of 38
<PAGE> 21
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT B3 -- ACL5480 PRICING AND LEADTIME
ACL5480 Base Unit
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Model Number Description Leadtime Unit Price
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ACL5480 B2000 ATL with Differential MUC, IOD and PTM -- To be
configured for 2 drives determined
ACL5480 B3000 ATL with Differential MUC, IOD and PTM -- To be
configured for 3 drives determined
- --------------------------------------------------------------------------------------------
</TABLE>
September 14, 1995 Company Confidential 18 of 38
<PAGE> 22
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT B4 -- ACCESSORY PRICING AND LEADTIME
Accessory Pricing
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Model Number Description Leadtime Unit Price
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
*ACL2640 AK ACL2640 Alignment Tool Kit 45- 60 days [ ]
*DLT DC III DLT Compact III Data Cartridges (set of 21) (DLT 30 -45 days [ ]
2000 only)
*DLT DC IV DLT Compact IV Data Cartridges (set of 21) (DLT 30 -45 days [ ]
2000 or 4000)
*DLT CC DLT Cleaning Cartridges (set of 7) 30 - 45 days [ ]
*DLT BCL - 264 3 of 9 Bar Code Data Labels (set of 264) 30 days [ ]
*DLT BCL - 99 3 of 9 Bar Code Data Labels (set of 99) 30 days [ ]
*DLT BCL - 33 3 of 9 Bar Code Cleaning Labels (set of 33) 30 days [ ]
- -----------------------------------------------------------------------------------------------------
</TABLE>
Accessory pricing is subject to change by ATL with thirty (30) days advance
written notice to EMC.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
September 14, 1995 Company Confidential 19 of 38
<PAGE> 23
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT C -- FRU'S AND REPAIRS
FRU AND REPAIR ACCEPTANCE AND LEADTIMES
EMC may purchase (i) FRU's with either sixty (60) day leadtime or Priority
twenty-four hour leadtime and (ii) Repairs with six (6) to thirty (30) day
leadtime.
Delivery leadtimes for (i) FRUs shall start after ATL gives EMC written notice
of acceptance of EMC's purchase order and (ii) after receipt of defective FRU
for Repairs. ATL shall accept or decline in writing and by facsimile all (i)
Purchase Orders, within five (5) business days after receipt and (ii) Priority
Purchase Orders within twelve (12) hours after receipt
No Purchase Order shall (i) be unreasonably declined or (ii) deemed accepted by
ATL until ATL gives written notice to EMC of acceptance.
EXPENDABLE AND NON REPAIRABLE FRU'S
EMC need not return any FRU for repair that has a value less than $200 based on
the sixty (60) day leadtime price regardless of its warranty status. These FRUs
shall be considered Expendable Parts. Non Repairable FRU's shall be returned.
RETURNED MATERIAL AUTHORIZATION
FRUs returned to ATL for repair shall follow the procedure defined in Exhibit N
and must have a Return Authorization Number (RMA) issued by ATL, an authorized
ATL service center or Service Provider listed in Exhibit J. Any item returned
shall be at EMC's expense and in a container affording protection from damage
during shipping. Responsibility for loss or damage to FRUs in transit shall be
on EMC.
ATL may replace (on an exchange basis) FRU's returned for either warranty or
non-warranty repair with either new, refurbished like new, or repaired FRU's.
SHIPMENT
All FRUs and Repairs are sold and shipped Ex Works. Notwithstanding, in the
event of a FRU Priority Purchase Order for delivery to an international
destination, EMC may request that ATL sell and ship it FCA.
September 14, 1995 Company Confidential 20 of 38
<PAGE> 24
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT C1 -- ACL2640 FRUS AND REPAIR PRICING AND LEADTIMES
<TABLE>
<CAPTION>
Priority Order Out of Warranty
24 Hour 6- 30 Day
60 Day Leadtime Leadtime FRU Leadtime Repair
Part Number Description FRU Price Price Price +
Type
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
*0345051 Stepper Motor Assembly [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*0355032 Power Supply, Switching [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*0355033 Power Supply [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*0355034 Power Supply [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*0365042 Switch Panel [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*0405024 Optical Sensor [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*0405042 Scanner [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6203296-17 TLZ 2000 Drive [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*0475009 Fan [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*0495031 Power Strip [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*0645072 Timing Belt [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*0645083 Belt [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*6201310-02 Extension Axis [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6201650-01 Control Panel PCBA [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6201710-01 Door Interface PCBA [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*6203170-01 Carousel Motor Assembly [ ] [ ] [ ] NR
- ---------------------------------------------------------------------------------------------------------
*6203240-01 IEC Power Dist. [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6203300-01 DLT Binpack [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*6203620-01 Light Curtain Det. PCBA [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*6203650-01 RS 232 PCBA [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6204059-01 Switch Assembly, Door [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*6204210-02 Robotics Controller PCBA [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6204220-01 Actuator Driver, PCBA [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6204230-02 Stepper Motor Drive PCBA [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6204254-01 Umbilical Cable [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*6204280-01 Light Curtain PCBA [ ] [ ] [ ] E
- ---------------------------------------------------------------------------------------------------------
*6205015-01 PTM Tray Assembly [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6205800-01 IOD Assembly [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6209071-03 Differential. MUC Assy [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6209322-01 Vertical Motor Assembly [ ] [ ] [ ] NR
- ---------------------------------------------------------------------------------------------------------
</TABLE>
ACL6/176 and ACL9/88
The following FRU's are used on the ACL6/176 and ACL9/88. They replace Part
Number 0355033 & 6204230-02
<TABLE>
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
*0355039 Power Supply [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
*6204370-01 Stepper Motor Driver [ ] [ ] [ ] R
- ---------------------------------------------------------------------------------------------------------
</TABLE>
+ Type
E = Expendable FRU
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
September 14, 1995 Company Confidential 21 of 38
<PAGE> 25
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
R = Repairable FRU
NR = Non-reparable FRU
All pricing is per FRU or per Repair
................................................................................
September 14, 1995 Company Confidential 22 of 38
<PAGE> 26
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT C2 -- ACL4/52 FRUS AND REPAIR PRICING AND LEADTIMES
<TABLE>
<CAPTION>
Out of Warranty
Priority Order 6-30 Day
60 Day Leadtime 24 Hour Leadtime Repair
Part Number Description FRU Price Leadtime Price + Type
- ---------- ----------- FRU Price
<S> <C> <C> <C> <C> <C>
*0355036 Power Supply [ ] [ ] [ ] R
*0355038 Power Supply [ ] [ ] [ ] R
*0645083 Belt [ ] [ ] [ ] E
*0815032 Drive Stepper Assy [ ] [ ] [ ] NR
*6203296-21 TLZ 2000 Drive [ ] [ ] [ ] R
*6210440-01 Key Pad I/O Controller [ ] [ ] [ ] R
*6210450-01 Actuator Driver PWA [ ] [ ] [ ] R
*6210460-01 Tape Interface PWA [ ] [ ] [ ] R
*6210470-01 Robotic Controller PWA [ ] [ ] [ ] R
*6210480-01 X-Axis Interconnect PWA [ ] [ ] [ ] R
*6210510-01 Y-Axis Motor Assy [ ] [ ] [ ] NR
*6210511-01 X-Axis Motor Assy [ ] [ ] [ ] NR
*6210512-01 Solenoid Assy [ ] [ ] [ ] E
*6210515-01 X-Axis Sensor Assy [ ] [ ] [ ] E
*6210516-01 Door Switch Assy [ ] [ ] [ ] E
*6210518-01 Y-Umbilical Cable [ ] [ ] [ ] E
*6210520-01 X-Umbilical Cable [ ] [ ] [ ] E
*6210537-01 Fan Assy [ ] [ ] [ ] E
*6210720-01 Extension Axis Assy [ ] [ ] [ ] R
</TABLE>
+ Type
E = Expendable FRU
R = Repairable FRU
NR = Non-reparable FRU
All pricing is per FRU or per Repair
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
................................................................................
September 14, 1995 Company Confidential 23 of 38
<PAGE> 27
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT C3 -- ACL5480 FRUS AND REPAIRS PRICING AND LEADTIMES
<TABLE>
<CAPTION>
Out of Warranty
Priority Order 6-30 Day
60 Day Leadtime 24 Hour Leadtime Repair
Part Number Description FRU Price Leadtime Price + Type
- ----------- ----------- FRU Price
<S> <C> <C> <C> <C> <C>
*0315006 Vertical Drive Motor Amp [ ] [ ] [ ] R
*0355023 Motor Power Supply [ ] [ ] [ ] R
*0365042 Switch, Rear Door Interlock [ ] [ ] [ ] E
*0405016 Scan Head [ ] [ ] [ ] R
*0405021 3 of 9 Barcode Decoder [ ] [ ] [ ] R
*0405024 Carousel Home/Face Sensor [ ] [ ] [ ] E
*0475009 Fan [ ] [ ] [ ] E
*0645072 Carousel Drive Belt [ ] [ ] [ ] E
*0645079 Extension Drive Belt [ ] [ ] [ ] E
*0645083 Vertical Drive Belt [ ] [ ] [ ] E
*6100827-01 Carousel Drive Motor [ ] [ ] [ ] NR
*6100841-11 Interconnect PWA [ ] [ ] [ ] R
*6100883-01 Shunt Regulator [ ] [ ] [ ] R
*6101228-01 Interface PWA [ ] [ ] [ ] R
*6101256-01 Bin Pack Emitter PWA [ ] [ ] [ ] R
*6101446-01 Umbilical Cable Assy [ ] [ ] [ ] E
*6201647-01 Vertical Drive Motor [ ] [ ] [ ] NR
*6201650-01 Control Panel PWA [ ] [ ] [ ] R
*6201660-01 Door Interconnect PCBA [ ] [ ] [ ] R
*6203013-03 Power Distribution Assembly [ ] [ ] [ ] R
*6203100-01 Binpack [ ] [ ] [ ] E
*6203330-02 Logic Power Supply [ ] [ ] [ ] R
*6203500-01 MPU PWA [ ] [ ] [ ] R
*6203600-01 Temperature Sensor PWA [ ] [ ] [ ] R
*6203610-01 Light Curtain Emitter PWA [ ] [ ] [ ] E
*6203620-01 Light Curtain Detector PWA [ ] [ ] [ ] E
*6203630-01 Carousel QSPI PWA [ ] [ ] [ ] R
*6204059-01 Front Door Lock Switch [ ] [ ] [ ] E
*6209220-01 Extension Axis Assembly [ ] [ ] [ ] R
</TABLE>
+ Type
E = Expendable FRU
R = Repairable FRU
NR = Non-reparable FRU
All pricing is per FRU or per Repair
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
................................................................................
September 14, 1995 Company Confidential 24 of 38
<PAGE> 28
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT D -- INSTALLATION, TRAINING AND TIME AND MATERIAL PRICING
<TABLE>
<CAPTION>
INSTALLATION
MODEL UNIT PRICE
<S> <C> <C>
* ACL2640, ACL6/176, ACL9/88 [ ]
* ACL4/52 [ ]
* ACL5480 (without drives) [ ]
</TABLE>
Installation is available 8:00 AM to 5:00 PM (local time) on normal business
days. Seven (7) days advance notice is required.
Installation pricing is based on the pre-installation preparation; including
ensuring power and all relevant signal cables are installed prior to service
personnel arriving to install the Product and the installation of the Storage
Management Software is performed by EMC.
Equipment located beyond 100 miles from an authorized service center is subject
to a 10% zone charge; a 15% zone charge will apply for any site beyond 200
miles.
TRAINING
ATL offers training classes on the ATL mid-range and small libraries. These
classes are designed to provide local field engineers the ability to install,
operate, diagnose, and repair the libraries. These classes are also a good
introduction to the product for those in software, product development and sales
position. Each student attending a training class will receive a Field Service
Manual and the Diagnostic Software (on a 3 1/2 inch diskette).
Training classes are conducted at the ATL training facility in Anaheim,
California. Class size is limited to a maximum of 6 students to insure that each
student receives the necessary training. Training is also available at the
customers facility. Pricing and availability will be quoted on a per requirement
basis.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
................................................................................
September 14, 1995 Company Confidential 25 of 38
<PAGE> 29
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT D -- INSTALLATION, TRAINING AND TIME AND MATERIAL PRICING
<TABLE>
<CAPTION>
Training Pricing (Anaheim)
MODEL PER STUDENT PRICE DURATION
<S> <C> <C>
*Mid-range Libraries [ ] 2 days
*Small Libraries [ ] 1 day
</TABLE>
Reservations for training class may be made by contacting the "Training
Coordinator" at ATL. Seven (7) days advance notice shall be given to the other
party in the event either party must cancel.
TIME AND MATERIAL SUPPORT
ATL offers Time and Material Support on an "as needed" basis. Request for Time
and Material Support is available on normal business days 8:00 AM to 4:00 PM.
ATL shall dispatch the next available Field Service Consultant on best effort
basis.
*Time and Material Support shall be billed at [ ] (with a two (2) hour minimum)
plus expenses and material, if applicable. Chargeable time shall include
travel time to and from the customer; expenses shall include any out of
pocket expenses; material charges shall be at Suggested End User Price less any
applicable discounts.
* CONFIDENTIAL TREATMENT REQUESTED FOR REDACTED PORTION
................................................................................
September 14, 1995 Company Confidential 26 of 38
<PAGE> 30
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT E -- MANDATORY CHANGE PROCEDURE
1. EMC shall issue a charge purchase order for all Mandatory Field Change
Kits desired by EMC within one hundred fifty (150) days of receipt of the
written Notice.
2. ATL shall ship the Mandatory Field Change kit according to the schedule
below and issue an invoice to EMC for all kits ordered and shipped. ATL shall
credit EMC's account for all parts replaced by the Mandatory Field Change Kit
that are returned to ATL.
3. Unless ATL and EMC agree upon another delivery schedule, ATL shall use
reasonable efforts to ship the Mandatory Field Change Kits according to the
following schedule:
<TABLE>
<CAPTION>
Days After Receipt of Order Percent of Kits
<S> <C> <C>
60 10%
90 50%
120 Balance
</TABLE>
In addition, ATL shall, at ATL's option, either:
1. To the extent necessary to meet EMC's requirements for field replacement
and inventory renewal, exchange the FRU or Product from the Lot subject to
the defect for new FRUs or Product; or
2. Repair all Defects returned to ATL at ATL's cost; or
3. Accept return of the FRU or Product with the Defect and grant EMC credit
against future purchases for such FRU or Product, as the case may be, less a
depreciation deduction equal to twenty percent (20%) of the purchase price
for each year since the date of shipment
................................................................................
September 14, 1995 Company Confidential 27 of 38
<PAGE> 31
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT F -- NON-DISCLOSURE AGREEMENT
................................................................................
September 14, 1995 Company Confidential 28 of 38
<PAGE> 32
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT G -- MAINTENANCE AGREEMENT
................................................................................
September 14, 1995 Company Confidential 29 of 38
<PAGE> 33
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT H -- PACKAGING SPECIFICATION
The ACL2640 Packaging Specification document number is 6207141-03 Version 3.0.
It is included in this agreement by reference only.
The ACL4/52 Packaging Specification document number is 6211221-02 Version 2.0.
It is included in this agreement by reference only.
The ACL5480 Packaging Specification document is dated April 2, 1993. It is
included in this agreement by reference only.
................................................................................
September 14, 1995 Company Confidential 30 of 38
<PAGE> 34
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT I -- TESTING AND ACCEPTANCE
Prior to delivery, ATL shall conduct an acceptance test at ATL's plant, or ATL
authorized service provider, on each Product, FRU or Repair shipped. A complete
record of inspection and tests performed on each Product, FRU or Repair shall be
kept by ATL, or ATL's authorized service provider, for twelve (12) months from
date of shipment. Upon EMC's request and at EMC's expense if any, ATL shall
provide EMC with a duplicate copy of such inspection and tests within fifteen
(15) business days of such a request.
EMC may also conduct its own testing at its own facilities, at EMC's own
expense, to confirm the Product, meets the Product Specification or applicable
acceptance criteria for a FRU or Repair. Products, FRUs and Repairs shall be
deemed accepted by EMC unless written notice of acceptance test failure is
provided to ATL within thirty (30) days after shipment of the Product, FRU or
Repair is shipped.
Products drop shipped directly to the End User shall be considered accepted upon
shipment to the carrier.
................................................................................
September 14, 1995 Company Confidential 31 of 38
<PAGE> 35
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT J -- WORLDWIDE SELLING AND PURCHASING LOCATIONS
<TABLE>
<CAPTION>
PRODUCTS, ACCESSORIES, FRUS. REPAIRS, INSTALLATION AND TRAINING
SELLING LOCATIONS PURCHASING LOCATIONS
<S> <C> <C>
ATL Products, Inc. EMC
1515 South Manchester Avenue 171 South Street
Anaheim, California 92802 Hopkinton, MA 01748
Attention: Order Desk
714-774-6900 -- Telephone
714-774-5909
TELEPHONE TECHNICAL SUPPORT
Odetics Customer Service EMC
1515 South Manchester Avenue 171 South Street
Anaheim, California 92802 Hopkinton, MA 01748
Attention: Customer Service Desk
800-284-5101 -- Telephone (U.S. only)
714-774-6497 -- Telephone
</TABLE>
................................................................................
September 14, 1995 Company Confidential 32 of 38
<PAGE> 36
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT K-- PAYMENT LOCATIONS
<TABLE>
<CAPTION>
PAYMENT LOCATIONS
<S> <C>
ATL Products, Inc. EMC Corporation
1515 South Manchester Avenue 171 South Street
Anaheim, California 92802 Hopkinton MA 01748
Attention: Accounts Receivable Attention: Accounts Payable
714-774-6900 -- Telephone 508-435-1000
714-774-5909 -- Facsimile
</TABLE>
................................................................................
September 14, 1995 Company Confidential 33 of 38
<PAGE> 37
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT L-- NOTICES
Notices to ATL:
All Notices should be addressed to:
ATL Products, Inc.
1515 South Manchester Avenue
Anaheim, CA 92802
Attention: Richard Speyer
Kevin Daly
714-774-6900 Telephone
714-774-5909 -- Facsimile
Notices to EMC:
All Notices for business issues
EMC
171 South Street
Hopkinton, MA 01748
Attention: Peripherals Business Manager -- Steve Smith
General Council
All Notices for Engineering issues
EMC
171 South Street
Hopkinton, MA 01748
Attention: Peripherals Business Manager -- Steve Smith
................................................................................
September 14, 1995 Company Confidential 34 of 38
<PAGE> 38
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT M -- DEFINITIONS
<TABLE>
<CAPTION>
WORD DEFINITION
---- ----------
<S> <C>
"Accessory" or Those items in Exhibit B4
"Accessories"
"Defect" A Defect means the failure of Units of the same
type at a rate that results in a calculated Mean
Time Between Failure ("MTBF") for a Lot of such
Product that is less than seventy-five (75%) of
the applicable MTBF rate set forth in the Product
Specification for such Product. The Lot of
Product will consist of:
1. The minimum set of the most recently
delivered Units of such Product that is
sufficient to determine, at an eighty (80%)
percent statistical confidence level, that the
MTBF of such Product achieves at least fifty
(50%) of the specified MTBF;
2. The minimum set of units delivered in the
same time frame as any suspect Units that seem
to manifest an anomalous field failure rate
that is sufficient to determine, at an eighty
(80%) percent statistical confidence level,
that the MTBF of such Product achieves at
least fifty (50%) of the specified MTBF; or
For purposes of measuring failure rates, this
Agreement shall take into account only failures
that
1. occur within a twelve (12) month period
after delivery;
2. are due to faulty design, workmanship
and/or the use of defective materials by
ATL's manufacturing organization or supplies
in connection with the design or fabrication
of such Product or FRU; and
3. are not caused by EMC's or a third party's
a) modification to the Product or FRU
b) Shipment, handling, storage, operation, use
or maintenance of such Product or FRU in a
manner or environment or with parts, accessories,
supplies or expendable parts not conforming to
the documentation or specifications provided
pursuant to this Agreement.
"Divisions" A wholly owned company of a Parent Company
"End User" An entity that buys or leases Product and
Services from EMC for the entity's own use.
"Expendable Parts" FRUs that have a value of $200 or less based on
a 60 day leadtime.
"Ex Works" Shipping terms per Incoterms
"FCA" Shipping terms per Incoterms
"FRU" or "Field Those items listed in Exhibit C.
Replaceable Unit"
</TABLE>
................................................................................
September 14, 1995 Company Confidential 35 of 38
<PAGE> 39
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
<TABLE>
<S> <C>
"Lot" A Lot shall mean a quantity of parts used in
manufacturing the Product or used as FRUs for the
Product, which have a characteristic that
distinguishes them from other similar parts or
FRUs, such as (by way of an example and not a
limitation):
1. All of a certain component used in parts
or FRUs were purchased from one (1) supplier
during a limited consecutive period;
2. all units tested during a specific period
of time in which test equipment was
malfunctioning.
"Majority Owned A company in which the Parent Company owns
Companies" fifty-one (51%) percent or more
"Mandatory Change" Mandatory Change shall mean a mutually
agreed to change that is required to the Product
due to a manufacturing or design defect,
excluding tape drive, that is responsible for
causing the Product not to conform to its
specification.
"Mandatory Field A kit containing FRUs or parts.
Change Kit"
"Material" Products and Services
"NEC" or "Notification A document describing a mandatory, optional or
of Engineering Change" compatible change to the Product.
"New Products" A product that is designed and developed by ATL
that is generally available to all ATL customers.
"Notices" A written document
"Parent Company" Odetics or EMC
"Parties" Both ATL and EMC.
"Party" ATL or EMC
"Product" The Products listed in Exhibit A.
"Purchase Order" EMC's written Purchase Order form
"Priority Purchase A Purchase Order that requires shipment within
Order" 24 hours
"RMA" Return Material Authorization
"Repairs " FRUs that can be repaired to meet original
specification.
"Services" Those items listed in Exhibits C and D
"Service Provider" A company authorized by ATL to perform
maintenance, repairs and service on ATL's
Products and FRUs.
"Subsidiary" A company in which the Parent Company owns
fifty-one (51%) percent or more
"Unit" A Unit shall mean a single item of Product,
including options and features, or a single FRU.
</TABLE>
................................................................................
September 14, 1995 Company Confidential 36 of 38
<PAGE> 40
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT N --RMA PROCESS
<TABLE>
<CAPTION>
OUT OF WARRANTY REPAIR
RESPONSIBILITY ACTION/PROCESS
<S> <C>
EMC 1. Advise ATL via facsimile:
A)Parent unit model number and serial
number; and
B)FRU serial number and part
number; and
C)Reason for return
ATL 1. Issue RMA number via facsimile
EMC 1. Issue Purchase Order in the amount
of the desired repair leadtime
required via facsimile
2. Return FRU to ATL in accordance with
the BOA shipping terms
ATL 1. Acknowledge Purchase Order via
facsimile
2. Repair and return FRU to EMC in
accordance with the BOA shipping
terms
</TABLE>
<TABLE>
<CAPTION>
IN WARRANTY REPAIR
RESPONSIBILITY ACTION/PROCESS
<S> <C>
EMC 1. Advise ATL via facsimile:
A)Parent unit model number and serial
number; and
B)FRU serial number and part number;
and
C)Reason for return
ATL 1. Issue RMA number via facsimile
2. Verify warranty status
EMC 1. Issue no charge Purchase Order via
facsimile
2. Return FRU to ATL in accordance with
the BOA shipping terms
ATL 1. Acknowledge Purchase Order via
facsimile
2. Repair and return FRU to EMC in
accordance with the BOA warranty and
shipping terms
</TABLE>
................................................................................
September 14, 1995 Company Confidential 37 of 38
<PAGE> 41
<PAGE>
Basic Ordering Agreement
Between
ATL Products, Inc. and EMC(2) Corporation
EXHIBIT N --RMA PROCESS
<TABLE>
<CAPTION>
IN WARRANTY REPAIRS PRIOR TO ACCEPTANCE
RESPONSIBILITY ACTION/PROCESS
<S> <C>
EMC 1. Advise ATL via facsimile:
A)Parent unit model number and serial
number; and
B)FRU serial number and part number;
and
C) Issue a debit memo for credit
only for the price of the Product
or FRU
D)Reason for return
ATL 1. Issue RMA number via facsimile
2. Verify warranty status
EMC 1. Issue no charge Purchase Order via
facsimile
2. Return FRU to ATL in accordance with
the BOA shipping terms
ATL 1. Acknowledge Purchase Order via
facsimile
2. Repair and return FRU to EMC in
accordance with the BOA warranty and
shipping terms
3. Invoice for item returned.
</TABLE>
................................................................................
September 14, 1995 Company Confidential 38 of 38
<PAGE> 1
EXHIBIT 10.14
PROMISSORY NOTE
$__________ ________ __, 1997
Anaheim, California
FOR VALUE RECEIVED, ATL Products, Inc., a Delaware corporation (the
"Borrower"), promises to pay to the order of Odetics, Inc., a Delaware
corporation (the "Lender"), at Anaheim, California, or at such other place as
the holder of this Note may from time to time designate in writing, the
principal amount of _____________________________ dollars ($_________), with
interest on the principal amount from the date of disbursement of the principal
amount at the rate per annum set forth in this Note, to be paid as set forth in
this Note.
The principal amount of this Note shall bear interest at the rate
per annum equal to Lender's cost of borrowing from the lesser of either of
Lender's primary banks, or Lender's principal bank, as the case may be during
the term of the Note, but shall not exceed the maximum rate of interest
permitted by applicable law.
The Borrower shall pay the principal amount of this Note and
interest in sixteen (16) equal quarterly installments at the end of each
calendar quarter commencing June 30, 1997 and continuing until all principal and
interest have been fully paid. Each payment of principal shall be accompanied by
a payment equal to all interest accrued on the outstanding principal amount of
the Note.
The Borrower shall have the right to prepay the principal sum of
this Note, or any part thereof or interest thereon, at any time without penalty
or prepayment charge.
Both principal and interest shall be paid by Borrower in lawful
money of the United States of America in cash or in the form of a cashier's or
certified check.
If the Borrower shall default in the timely making of any payment of
principal and/or interest due hereunder and if the same remains unpaid for
fifteen (15) days following receipt by Borrower of written notice of such
default the Lender may declare the entire remaining indebtedness owing
hereunder, including any accrued interest, to become immediately due and
payable.
Notwithstanding anything to the contrary in this Note, the total
liability of the Borrower for payments in the nature of interest shall not
exceed the limits applicable to this Note, if
<PAGE> 2
any, imposed by the usury laws, if any, of the United States of America or the
State of California. If any payment in the nature of interest made by the
Borrower or received by the holder of this Note is determined to be in excess of
any limit applicable to this Note imposed by such usury laws, then the amount of
such excess shall constitute and be considered a payment of principal, not
interest, and such amount shall be applied to reduce the principal sum so that
the total liability of the Borrower for payments in the nature of interest does
not exceed the applicable limits, if any, imposed by such usury laws. In the
event and to the extent such excess amount of interest exceeds the outstanding
unpaid principal balance hereunder, any such excess amount shall be immediately
returned to Borrower by Lender.
No delay or omission on the part of the Lender hereof in exercising
any right hereunder shall operate as a waiver of such right or of any other
right under this Note.
Neither this Note nor any term hereof may be waived, amended,
discharged, modified, changed, or terminated orally, nor shall any waiver of any
provision hereof be effective except by an instrument in writing signed by
Borrower and the Lender thereof.
Whenever used herein, the words "Borrower" and "Lender" shall be
deemed to include their respective heirs, personal representatives, successors
and assigns.
All notices to be given under this Note shall be deemed served upon
receipt by the addressee or, if mailed, upon the expiration of seventy-two (72)
hours after deposit in the United States Postal Service, certified mail, postage
prepaid, addressed to the address of Borrower or Lender as hereinafter set
forth:
Borrower's Address: 2801 Kelvin Avenue
Irvine, California 92715
Attention: Chief Executive Officer
Lender's Address: 1515 South Manchester Avenue
Anaheim, California 92802-2907
Attention: Chief Executive Officer
This Note may from time to time be extended or renewed, with or
without notice to Borrower or any guarantor hereon and any related right may be
waived, exchanged, surrendered or otherwise dealt with, all without affecting
the liability of Borrower or any guarantor hereon.
There are no oral agreements between the Lender and the Borrower
relating to this Note. If any provision of this Note is held to be invalid or
unenforceable, it shall not affect the validity and enforceability of the other
provisions of this Note. This Note has been executed and delivered in the State
of
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<PAGE> 3
California and is to be governed by and construed according to the laws thereof.
IN WITNESS WHEREOF, the Borrower has executed this Note as of the
date first hereinabove written.
ATL Products, Inc.
By:______________________________
Kevin C. Daly
Chief Executive Officer
3
<PAGE> 1
EXHIBIT 10.15
ODETICS ASSOCIATE AGREEMENT
In consideration, of my employment or continued employment as an at-will
associate of Odetics, Inc., its subsidiaries and affiliated companies, (the
employer of associate is hereinafter called "Odetics"), and other good and
valuable consideration specified herein I,___________, herein called "Associate"
understand and agree as follows:
1. ODETICS AND CUSTOMER PROPERTY
All documents or things coming into my possession, custody or control by
virtue of my employment, except those documents directed to me as an Associate
for my personal use and identified in writing by Odetics as being for my
personal use, are the property of either Odetics or its Customers (Customers
shall mean ally persons or entities for whom Odetics performs services or from
whom Odetics or Associate obtains information), as the case may be, and all such
property be delivered to Odetics upon either its request or at the termination
of my employment.
2. PROTECTION OF ODETICS' CONFIDENTIAL INFORMATION
If for any reason, I have access to any information technical or
otherwise, which is confidential or proprietary to Odetics or its Customers, I
will hold such information in trust and will not, except as required by my
duties as an Associate of Odetics, use or disclose or authorize anyone else to
use or disclose, any of such information either during my employment or
thereafter for so long as such information does not legally become public
knowledge. Anything possessed by me which discloses or embodies such information
will be delivered to Odetics either upon its request or at the termination of my
employment.
As used herein, confidential or proprietary information of Odetics shall
be broadly defined and shall include, but be not limited to, all information
concerning software programs and software code, whether in hard copy or on
electronic media, documents, memoranda, photographs, schematic drawings,
photoplots, wire lists, product specifications, manuals, customer lists, sales
figures, cost information, concept information, information on Odetics
personnel, know-how, business and marketing plans, strategies, promotional
information, advertising campaigns, credit policies, billing rates, production
and construction information, vendor information, financial information
regarding the business or products of Odetics, methods of operations of Odetics
and all other information that has or could have commercial value or other
utility in the businesses in which Odetics or its Customers are then engaged or
in which they contemplate engaging, excluding any such items which have been
publicly disclosed by Odetics.
1
<PAGE> 2
If any such confidential or proprietary information is embodied in a
tangible form, I will not remove it, or cause its transmission from, the place
of business where I am employed or the place of its authorized use without the
express written consent of an Officer of Odetics.
I am aware that careless handling of classified information and/or the
unauthorized disclosure of such information or information relating to national
defense is punishable under the Federal Espionage and National Security Laws and
Regulations, including but not limited to Title 18 USC. Sections 793 to 799,
Sections 2151 through 2157, Executive Orders 10104, 12065 and 10865 and the
National Security Act of 1947 and any amendments or supersedure of the above.
I acknowledge that I am aware that the unauthorized disclosure of
confidential information of Odetics or its Customers may be highly prejudicial
to their interests, an invasion of privacy, and an improper disclosure of trade
secrets. I recognize that the unauthorized taking of any Odetics' trade secrets
is a crime under California Penal Code Section 499(c). I further recognize that
such unauthorized taking of Odetics' trade secrets could also result in civil
liability under California Uniform Trade Secrets Act (Civil Code "3426-3426.11),
and that willful misappropriation may result in an award against me for triple
the amount of Odetics' damages and Odetics' attorneys' fees in collecting such
damages.
3. NON-COMPETITION DURING EMPLOYMENT
Except with the express prior written consent of an authorized Officer of
Odetics, during the period of my employment: (1) I will devote my full energies,
interest, abilities, and productivity time to the performance of my duties with
Odetics and shall not, without Odetics' prior written consent, render to others,
services of any kind for compensation, or engage in any other business activity
that would materially interfere with the performance of my duties with Odetics,
including but not limited to, working as an employee, independent contractor,
partner, or agent of another company, or using Odetics' property and/or
information to assist a direct competitor of Odetics; (2) I will not directly or
indirectly, whether as a sole proprietor, partner, employee, creditor,
shareholder, or otherwise, promote, participate, or engage in any activity or
other business competitive with Odetics; (3) I will not induce any other
associate of or consultant to Odetics to engage in any such employment or
activity; and (4) I will not solicit any Customers or potential Customers of
Odetics for services similar to those performed by Odetics even though not
directly competitive with such services.
4. INVENTION
I will promptly make full written disclosure to, and hold in trust for the
sole right and benefit of, Odetics all inventions, discoveries, developments,
ideas, designs, improvements, formulas, processes, techniques, know-how and
data, whether or not patentable or registerable under the copyright or similar
statutes (hereinafter
2
<PAGE> 3
called "inventions") that I make, suggest, conceive, devise or first actually
reduce to practice, solely or jointly with others, during my period of
employment with Odetics, and which at the time of disclosure to Odetics or at
the time of making, suggesting, conceiving, devising or first actually reducing
to practice:
(1) results from or is related to any assignments given to or assumed
by me, or
(2) utilizes the time, equipment, supplies, facilities or trade secret
information of Odetics, or
(3) pertains to any actual or anticipated work, product, research,
business activity of Odetics or any logical extension thereof.
I agree that all such inventions belong to and are the sole property of
Odetics and shall be the inventions of Odetics subject to this Agreement.
Upon request by Odetics, I will further disclose (by a full and clear
description sufficient to enable a person skilled in the art to make and use the
invention) such inventions in confidence, for review by Odetics of such issues
as may arise.
I will assign and do hereby assign to Odetics my entire right, title and
interest (domestic and foreign and including all rights under the International
Convention for the Protection of Industrial Property) in all such inventions,
subject to the requirements of law, and without further compensation or award of
any kind to me from Odetics, the Government or any third party.
Odetics will consider each disclosure submitted by me. The election of
whether or not to file a patent application or such disclosure and the manner of
preparation and prosecution of any patent application(s) filed in the United
States of America or in foreign countries shall be wholly within the discretion
of Odetics, and at its expense. If it elects to file patent applications
thereon, Odetics agrees to pay all expenses in connection with the preparation
and prosecution of such patent application(s) which it may decide to file in the
United States of America or in foreign countries.
In connection with any such invention, I will at any time, either during or
after said period of employment, at the request and expense of Odetics, but
without further consideration to me above and beyond my previously agreed
salary, assist Odetics in obtaining, maintaining and enforcing patents on such
inventions in any and all countries and will execute, acknowledge and deliver
any lawful document or paper which in the opinion of Odetics' counsel is
necessary or helpful from Odetics' standpoint, including, without limitation,
any patent application, assignment, license, or any paper in connection with any
contractual obligation, litigation, or controversy pertaining to any such
invention or any patent issuing thereon.
3
<PAGE> 4
In the event Odetics is unable to secure my signature on any document
necessary to apply for, prosecute, obtain, or enforce any patent, copyright, or
other right or protection relating to any invention, I hereby irrevocably
designate and appoint Odetics and each of its duly authorized Officers and
agents as my agent and attorney-in-fact, to act for and in my behalf and stead
to execute and file any such document and to do all other lawfully permitted
acts to further the prosecution, issuance, and enforcement of patents,
copyrights, or other rights or protections with the same force and effect as if
executed and delivered by me. This power of attorney shall be deemed an agency
coupled with an interest and shall not be revoked by my subsequent death or
incapacity.
If I petition Odetics in writing to release any of my rights to any
inventions or improvements which by this agreement are assigned to Odetics,
Odetics will promptly consider and act on such petition but is not obligated to
release any of its rights.
I understand that, with respect to work which is subject to any contractual
obligation of Odetics to a third party, including but not limited to the United
States or any of its agencies, title to certain inventions, patents, copyrights
or licenses therein shall be determined as provided by contract or by Federal
law or regulation.
Subject to the precedence, if any, of federal law as set forth in the
preceding paragraph, this paragraph shall not apply to any invention that
qualifies fully under the provisions of Section 2870, California Labor Code.
Following are my rights and obligations under the Labor Code, State of
California Div. 3, Chapter 2, Article 3.5:
"2870: (a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer's
equipment, supplies, facility, or trade secret information except for those
inventions that either: (1) Relate at the time of conception or reduction to
practice of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or (2) Result from any work
performed by the employee for the employer.
(b) To the extent a provision in an employment agreement
purports to require an employee to assign an invention otherwise excluded from
being required to be assigned under subdivision (a), the provision is against
the public policy of this state and is unenforceable.
2871: No employer shall require a provision made void and unenforceable by
Section 2870 as a condition of employment or continued employment. Nothing in
this article shall be construed to forfeit or restrict the right of an employer
to provide in contracts of employment for disclosure, provided that any such
disclosures be received in confidence, of all of the employee's inventions made
solely or jointly with others during the term of his or her
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<PAGE> 5
employment, a review process by the employer to determine such issues as may
arise, and for full title to certain patents and inventions to be in the United
States, as required by contracts between the employer and the United States or
any of its agencies.
2872: If any employment agreement entered into after January 1, 1980,
contains a provision requiring the employee to assign or offer to assign any of
his or her rights in any invention to his or her employer, the employer must
also, at the time the agreement is made, provide a written notification to the
employee that the agreement does not apply to any invention which qualifies
fully under the provisions of Section 2870. In any suit or action arising
thereunder, the burden of proof shall be on the employee claiming the benefits
of his provisions.@
5. OBLIGATIONS AFTER TERMINATION OF EMPLOYMENT
For a period of two (2) years following termination of my employment with
Odetics, for whatever cause or without cause, I will not solicit from any
employee of Odetics, any trade secrets and/or confidential information or
knowledge relating to the business of Odetics, including but not limited to any
of the information listed in Paragraph 2 of this Agreement. I also will not
solicit or induce any employee of Odetics to terminate his or her employment
with Odetics through the use of any confidential information and/or trade
secrets including but not limited to any information listed in Paragraph 2 of
this Agreement. I also will not solicit or induce any customer of Odetics to
terminate its business relationship with Odetics through the use of any
confidential information and/or trade secrets including but not limited to any
information listed in Paragraph 2 of this Agreement.
6. ATTORNEY'S FEES
The prevailing party shall be entitled to attorney's fees and in relation
to any action taken by Odetics, to enforce the terms of this Agreement.
7. NOT AN EMPLOYEE CONTRACT
I acknowledge that this Agreement is not to be construed contract of
employment between myself and Odetics, and Odetics terminate my at-will
employment at any time and for any reason.
8. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement and understanding between
the parties and supersedes any prior confidentiality agreements, oral employment
agreements, or implied employment agreements. This Agreement may not be modified
or amended except by a writing signed by myself and an authorized Officer of
Odetics.
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<PAGE> 6
9. SEVERABILITY
If any provision of this Agreement is found to be legally unenforceable,
the remaining provisions shall nevertheless be binding and enforceable.
10. CALIFORNIA LAW
This Agreement shall be governed by the laws of the State of California.
11. INJUNCTIVE BELIEF
Because my breach of this Agreement may cause Odetics irreparable harm for
which money is inadequate compensation, I agree that Odetics will be entitled to
injunctive relief to enforce this Agreement, in addition to damages and other
available remedies.
12. UNDERSTANDING
I acknowledge and agree that the protections set forth in this Agreement
are a material condition to my employment with and compensation by Odetics.
Dated:_______________________________________, 19_______.
_________________________________________________________
(Printed Name of Authorized Agent of Employer)
By:______________________________________________________
(Signature of Authorized Agent of Employer)
_________________________________________________________
(Signature of Associate)
6
