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EXHIBIT 10.12
Lite On OEM REVISEDv4
OEM TERMS AND CONDITIONS
This Agreement is entered into as of this 1st day of September, 1999,
("Effective Date") by and between NETGEAR, Inc., a Delaware corporation having
its principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇ ("NETGEAR"), and Lite-On Communications Corporation
("Supplier") having its principal place of business at 2F-1, ▇▇. ▇, ▇▇▇▇▇▇▇▇▇▇
▇(▇▇).▇▇▇▇, Science - Based Industrial Park, Hsinchu, Taiwan, R.O.C.
1. PURCHASE OF PRODUCTS: NETGEAR may purchase and license the products
("Products") listed in Attachment 1 private-labeled for NETGEAR, and, if
applicable customized in accordance with Attachment 2, for internal use and
demonstration purposes and for resale, directly and indirectly, by placing
written orders under this Agreement. Resale, as used in the foregoing sentence,
shall also include the right to supply appropriate licenses to use required
software to the end customer. Supplier agrees to sell the private-labeled and/or
customized Products exclusively to NETGEAR and to any of the NETGEAR affiliates,
subsidiaries or agents identified by NETGEAR under the terms of this Agreement.
Supplier agrees not to sell the Products directly to any third party or agent or
former agent of NETGEAR for any purpose other than resale on NETGEAR's behalf.
The foregoing notwithstanding, Supplier may utilize its underlying technology to
create similar products for itself or third parties as long as it does not
incorporate into those products technology developed or modifications created
for and paid by NETGEAR under this Agreement. Under no circumstances may an
agent of NETGEAR make any alteration to the terms of this Agreement without
NETGEAR's prior written consent. Any additional customization of the Products
will be in accordance with the terms set forth in an Attachment to this
Agreement.
2. PRODUCT PRICES: Product prices shall be in accordance with Attachment
1, as such Attachment may be amended by the parties from time to time to add new
products, and may or may not include cost of shipping, which will be specified
in accordance with the terms of sale as set forth in point 7 of this document
titled "Terms of Sale". R. All prices are exclusive of any taxes. Prices will be
paid in U.S. dollars based on the "Established Exchange Rate" which shall be the
exchange rate listed in the Wall Street Journal Western Addition on the
Effective Date of this Agreement or on an adjusted exchange rate as follows: at
such time as the exchange rate fluctuates by more than 10% from the prevailing
Established Exchange Rate, that higher or lower exchange rate shall become the
Established Exchange Rate. Supplier shall not increase the Product price(s)
during the term of the Agreement or any renewals without the prior written
consent of NETGEAR. Notwithstanding the above, in the event Supplier sells a
product which is commercially equivalent to the Products to any other buyer at a
price less than the price paid by NETGEAR (as adjusted to include applicable
discounts),
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Supplier shall promptly notify NETGEAR and either (a) offer such prices and
terms to NETGEAR or (b) where such lower prices are due to other terms and
conditions in Supplier's agreement with such other party, offer such prices to
NETGEAR in conjunction with such other terms and conditions. In addition, in
the event Supplier provides warranties or upgrades in a manner more favorable
than that offered to NETGEAR, any such warranty or upgrade terms shall be deemed
incorporated into this Agreement.
3. ORDERS FOR PRODUCTS: Each order for Products shall be governed by the
terms of this Agreement. Conflicting or additional terms provided in any order
or acknowledgment of an order shall be of no effect unless specifically accepted
in writing by an authorized representative of the parties. Each order shall
specify (a) description and part number of Products, (b) purchase price; (c)
quantity; (d) delivery schedule; and (e) "ship-to" and "invoice-to" addresses.
The purchase price set forth in any order may differ from the product prices set
forth in Attachment 1 provided that such price change has been specifically
accepted in writing by an authorized representative of the parties.
Within 3 business days after the receipt of each Purchase Order, Supplier
shall notify NETGEAR and NETGEAR's authorized agent (if any) by written or
electronic transmission of its acceptance, including the scheduled shipping
date(s) ("Scheduled Shipping Date"), provided that such Scheduled Shipping Date
will be assigned as close as reasonably practicable to the requested shipping
date(s). Failure to notify NETGEAR and NETGEAR's authorized agent (if any)
within the foregoing period shall be deemed an acceptance of the Purchase Order
by Supplier and the shipment specified in NETGEAR's Purchase Order shall be used
as the Scheduled Shipping Date. In the event that the Scheduled Shipping Date is
different than the requested shipping date in NETGEAR's Purchase Order, and that
difference will result in NETGEAR being unable to meet commitments to its
customers, then Supplier agrees to work in good faith with NETGEAR to arrive at
a mutually acceptable revised date which shall become the Scheduled Shipping
Date.
4. TIME FOR DELIVERY: Supplier will deliver Products in the quantities
ordered (up to 100% of the quantities forecasted) by NETGEAR within 60 days of
the date the order is received by Supplier (unless a later shipment date is
specified in the order or a longer lead time is set out in Attachment 1),
provided that the terms of the order comply with the requirements specified
above. The parties acknowledge that time is of the essence of this Agreement. In
the event that Supplier fails to deliver Products within the time period
described in this subsection, NETGEAR shall be entitled to a credit against the
corresponding order in the amount calculated from the table below applied
against the quantity of Products that was not shipped within the specified time
period.
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1 to 15 days from delivery date specified in NETGEAR's order No discount
16 to 29 days from delivery date specified in NETGEAR's order 3%
30 or more days from delivery date specified in NETGEAR's order 7%
NETGEAR may choose to cancel any order that remains unfulfilled by
Supplier after 30 days from Shipping Date agreed to by the parties in orders
accepted by Supplier without penalty. Products which are delivered but which do
not conform with the specifications (Non-Conformance) described in Attachment 2,
where the Non-Conformance is not cured within fifteen (15) days notice from
NETGEAR, shall be deemed to have not been delivered for purposes of this section
provided that NETGEAR shall have provided such notice within fifteen (15) days
following receipt of the Products.
Supplier's obligations under this section shall be subject to the
provisions of the Section entitled "Failure and Delay", except that failure or
delay of Supplier's suppliers to deliver component parts shall not be deemed to
be excusable delay in Supplier's performance under this Agreement.
In order to meet the anticipated delivery schedules, it may be necessary
for Supplier to maintain an inventory of certain parts for the NETGEAR Products
which are unusable in other Supplier products and which are long-lead time parts
or which must be procured in quantity to receive beneficial pricing. The parties
will agree in writing from time to time as to a list of such parts. At the time
of termination or expiration of this Agreement, NETGEAR agrees to accept
delivery of Supplier's entire inventory of such agreed parts, up to a total
equal to the last 3 months forecast and to reimburse Supplier for its actual
purchase price for such parts.
5. CANCELLATION OR POSTPONEMENT OF ORDERS. NETGEAR may cancel or reduce
the quantity of any order without liability 60 days or more in advance of the
ship date specified in NETGEAR's order. NETGEAR may cancel, or reduce the
quantity of any order from 30 to 59 days in advance of the ship date specified
in NETGEAR's order by paying Supplier a cancellation charge equal to 5% of the
purchase price of the Products canceled or deferred. Unless otherwise agreed to
between the parties, NETGEAR may not cancel any order within 30 days of the
Scheduled Ship Date. The foregoing notwithstanding, NETGEAR may postpone the
delivery of any portion of an order for up to a total of 90 days without any
liability by delivering written notice to Supplier 30 days or more in advance of
the Scheduled Shipping Date in NETGEAR's order. An order which has been
previously postponed in accordance with this provision may not be postponed
again and is not cancellable.
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6. FORECASTS: NETGEAR agrees to provide Supplier with a non-binding
monthly 90 day rolling forecasts for its projected orders for Products. The
provision of such forecast shall in no way bind NETGEAR to actually place orders
for any such quantities nor otherwise expose NETGEAR to liability.
7. TERMS OF SALE: Purchase orders issued by NETGEAR or NETGEAR's
authorized agent will specify the terms of each sale. Title to the Products
(but not any Product software) shall pass to NETGEAR upon shipment of Products
based upon the terms of sale contained in the purchase orders issued by NETGEAR
or NETGEAR's authorized agent. Payment for the Products shall be due net 45
days of invoice date, which shall not precede the date of shipment of the
Products. If payment is to be made by wire transfer, Supplier must provide the
following information: bank name and location of branch, account name/number and
Swift number.
8. INVOICING AND TAXES: NETGEAR shall pay all applicable sales and use
taxes based on the purchase of the Products, other than income and franchise
taxes based on Supplier's income or provide Supplier with a certificate of
exemption acceptable to the appropriate taxing authority.
9. PRODUCT DOCUMENTATION: Supplier will provide a complete set of the
applicable technical publications and illustrations and user documentation which
Supplier ships with the corresponding Supplier products to NETGEAR in a mutually
agreed electronic format. NETGEAR may modify such publications and may translate
such publications into foreign languages and will deliver master copies of
hardware documentation to Supplier for printing, packing and shipping with the
Products at least 60 days prior to the first Scheduled Shipping Date for any
Product. NETGEAR may also create additional usage/reference manuals (such as
hardware installation and verification guides, and end user warranty cards)
which will also be delivered to Supplier for printing, packing and shipping with
the Products. Upon discontinuation of any Product by NETGEAR or termination or
expiration of this Agreement, NETGEAR shall accept shipment of Product
documentation that was prepared by Supplier to meet NETGEAR's forecasted
quantity for the particular Product discontinued or for all Products if the
entire Agreement is terminated or expires. NETGEAR shall have no obligation to
accept delivery of nor pay for documentation that exceeds the quantity that
would be required to meet NETGEAR's forecasted Product shipment requirements.
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10. PRIVATE LABELING: All Products delivered by Supplier will bear the
logos, trade names and trademarks of NETGEAR as specified by NETGEAR. NETGEAR
will provide engineering drawings, camera-ready artwork film, and all other
materials and instructions necessary to manufacture product labels and shipping
boxes without supplemental documentation. No Supplier logos, trademarks and
trade names will be externally visible on installed Products. NETGEAR agrees not
to affix any labels containing Supplier logos, trademarks or trade names to the
Products. Preprinted boxes with NETGEAR logos will be provided by Supplier and
used for packaging the Products. These individual product boxes must be placed
within larger protective shipping boxes for transit from Supplier to NETGEAR.
Upon discontinuation of any Product by NETGEAR, change by NETGEAR of its
packaging specifications for any Product or termination or expiration of this
Agreement, NETGEAR shall accept shipment of discontinued Product packaging
materials that bear the NETGEAR logo or other unique identifying markings,
including, but not limited to, preprinted boxes, name plates, belly labels or
cases that were prepared by Supplier to meet NETGEAR's forecasted quantity for
the particular Product discontinued or for which the packaging has been modified
or for all Products if the entire Agreement is terminated or expires. NETGEAR
shall have no obligation to accept delivery of nor pay for packaging that
exceeds the quantity that would be required to meet NETGEAR's forcasted Product
shipment requirements.
11. SOFTWARE LICENSE: If the Products include software, Supplier will, at
NETGEAR's request, either provide software on media ready for shipment or master
copies of any software associated with the Products and will grant NETGEAR the
right to use, and to reproduce if necessary, and to sublicense all software
associated with the Products, including all updates, "bug fixes" and
enhancements created over time for such software, and associated documentation,
for perpetual worldwide use solely in connection with Products. The terms of
such sublicense shall conform generally to the provisions of NETGEAR standard
form software license for its commercial products. The foregoing licenses may be
exercised by NETGEAR without further charge beyond the prices for the Products
described elsewhere in this Agreement.
12. ACCEPTANCE; QUALITY ASSURANCE: The parties acknowledge the
requirement that the Products be supplied with as close to a "zero defect rate"
as is practically possible. The Products should be subjected to on-going
reliability testing, including operating a rolling 10 units for 60 days to
provide "infant mortality" data. The Products are subject to final inspection
and acceptance at NETGEAR's facility within 30 days after delivery, to confirm
that the Products conform to all criteria, specifications and warranties
described in this Agreement. Supplier will provide NETGEAR with a complete set
of top-level assembly drawings of the Products, which NETGEAR may use in
incoming inspection and Supplier shall provide NETGEAR with a report of "first
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pass yields". If one or more Products in a shipment fails to successfully pass
the acceptance tests, NETGEAR shall deliver a deficiency report to Supplier
promptly before the end of the acceptance period. Supplier shall, in response to
such report immediately accept the return of and repair or replace the
non-conforming Products so that they successfully pass all acceptance tests, all
at Supplier's sole expense and the full lot shall be subject to re-inspection.
Payment prior to acceptance shall not constitute acceptance, NETGEAR may conduct
and observe tests and inspections at Supplier plant if NETGEAR notifies Supplier
24 hours in advance. In the event that NETGEAR does not notify Supplier in
writing of deficiencies in the Products within 30 days of receipt thereof, the
Products shall be deemed accepted.
Supplier will follow good manufacturing practices (equivalent to IPC
Class II for electrical assembly) utilizing materials, techniques, and
procedures which conform to industry standards. Supplier will comply with the
requirements of ISO 9000, BABT and CE ▇▇▇▇ standards. Supplier will make
available to NETGEAR, upon request, information regarding Supplier's quality
assurance procedures. The parties shall negotiate in good faith and mutually
agree upon an ongoing program during the term of this Agreement to monitor and
assure the quality of the Products provided by Supplier (the "Quality Assurance
Program"). Such Quality Assurance Program will include, but not be limited to,
criteria and procedures for ongoing audit of Supplier's manufacturing process, a
definition of test procedures for confirmation of compliance with applicable
quality and other specifications, definition of minimum quality specification
acceptance levels, and an escalation procedure for resolving quality-related
problems. Upon mutual agreement by the parties in writing as to the content of
such Quality Assurance Program, the Quality Assurance Program shall without
further action by the parties be deemed incorporated herein as an Attachment to
this Agreement. At such time as defined in the Quality Assurance Program,
Supplier will be authorized to provide Products on a "ship-to-stock" basis.
13. WARRANTIES: Supplier warrants that the Products delivered under this
Agreement will be free from all liens, encumbrances and restrictions, other than
the restrictions relating to the software. Supplier warrants that each Product
(including hardware and software) delivered to NETGEAR will be free from defects
in material and workmanship for the period of time set forth in Attachment 1
(the "Warranty Period") and shall perform in accordance with the Product
specifications.
The parties acknowledge that by its nature, software is not error-free or
free from interruption in operation because of "bugs" or defects. Supplier shall
promptly and diligently correct any bug or software error in the Products
software which it discovers or is reported to Supplier during the Warranty
Period, and will, within a reasonable time, provide NETGEAR with a suitable
patch, fix or work-around so that it continues to operate in accordance with the
respective specifications, and, NETGEAR may deliver these to all valid
licensees.
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If a defect or non-conformance is discovered during the Warranty Period,
NETGEAR will promptly notify Supplier of any non-conforming material to obtain a
Return Material's Authorization number ("RMA"). Upon NETGEAR's receipt of the
RMA, NETGEAR will cause the return of the non-conforming Products to Supplier at
Supplier's expense. Upon its receipt, Supplier will promptly either repair or
replace it, at Supplier's option and cost. Properly repaired or replaced
Products will promptly be delivered to NETGEAR at Supplier's cost, and the
Warranty Period therefor will continue for 90 days following delivery or the
balance of the Warranty Period, whichever is longer.
Supplier further warrants that the Products conform to the following Year
2000 compliance definition: The Products' applications, systems, software and
hardware, including related supporting data and files, will function correctly
when dealing with dates/times, and date/time related data in the following
manner; (i) the Products will accurately process date/time data (including
calculating, comparing, and sequencing) from, into, and between the 20th and
21st centuries, and the years 1999 and 2000 and leap year calculations, (ii)
when used in combination with information technology products from other
vendors, the Products will accurately process date/time data with the other
vendor's information technology products, and (iii) the Products will neither
contain nor create any logical or mathematical inconsistency, will not
malfunction, and will not cease to function when processing date/time data.
Supplier will promptly repair or replace affected Products if non-conformance to
this Year 2000 compliance definition is discovered during use or testing of the
Products and reported to Supplier by NETGEAR.
These remedies are in addition to any others which may be provided by
this Agreement or by law. THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE IMPLIED WARRANTIES OF
MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE.
14. INDEMNIFICATION: Supplier will defend at its own expense any action
brought against NETGEAR, to the extent that it is based on a claim by a third
party (i) that any of the Products infringes a patent or copyright, or contains
misappropriated trade secrets, or (ii) which is based upon the use, operation or
performance of Products, and will pay any costs and damages finally awarded
against NETGEAR in any such action which are attributable to any such claims.
Supplier's obligations under the preceding sentence are subject to the
conditions that: (i) NETGEAR promptly notifies Supplier in writing of any such
claim, and (ii) Supplier will have sole control of such defense and all
negotiations for any settlement or compromise, although NETGEAR may participate
in the same at its expense. Supplier will have no liability to NETGEAR under
this Section with respect to any claim of infringement to the extent that it is
based upon (i) the combination of the Products with any machine, device,
firmware or
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software not furnished by Supplier, or (ii) any product not developed, sold or
licensed by Supplier, or (iii) any modification of the Products by a party other
than Supplier or (iv) compliance with the specifications supplied and required
by NETGEAR.
15. END-OF-LIFE PURCHASES: In the event of termination or expiration of
this Agreement, NETGEAR will be entitled to place a non-cancelable order for a
"life cycle purchase" of the Products at least 15 days prior to the effective
date of such termination or expiration, for delivery within 180 days after the
effective date of Agreement termination or expiration.
16. AVAILABILITY OF PRODUCT AND SPARES: Supplier will make spare,
replacement, and maintenance parts necessary to enable NETGEAR to support the
Products available for a period of at least five years after the last delivery
of Products to NETGEAR, at prices that are at least as low as the prices being
charged to Supplier's other customers for like quantities of corresponding
Supplier products and under at least as favorable terms and conditions.
17. REQUIRED CHANGES: Supplier reserves the right to make engineering
changes to the Products at any time, which do not adversely impact the operation
of the Products, which are necessary to comply with specifications, changed
safety standards and governmental regulations and to make the product
non-infringing with respect to any patent, copyright or other proprietary
interest or for the purpose of improving the quality, reliability or
manufacturability of the products. Supplier will notify NETGEAR of all planned
engineering change orders or emergency deviations which impact form, fit,
function, safety or environmental compliance, or software compatibility of the
products. If the proposed change requires any rework of the previously shipped
Products units for safety or regulatory compliance purposes or because the
Products infringe a third party intellectual property right then Supplier will
perform the modification on any units returned to Supplier at no charge. For
each significant change, Supplier will maintain documentation including the date
of the change and serial number of the first product incorporating the change.
18. TERM AND TERMINATION: This Agreement shall begin on the date of
execution by both parties and continue for one year, with automatic one year
renewals, unless terminated by either party in accordance with this section.
After the initial one-year term, this Agreement may be terminated by either
party by providing 90 days written notice.
Either party may terminate this Agreement and/or cancel any or all orders
for undelivered Products upon written notice to the other party if such other
party fails to
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correct any failure to fulfill any of its obligations under this Agreement
within thirty (30) days after receipt of notice specifying such failure. Either
party may terminate this Agreement immediately should the other party cease
conducting business in the normal course, become insolvent or bankrupt, make a
general assignment for the benefit of creditors, become generally unable to pay
its debts as they become due, suffer or permit the appointment of a receiver for
its business or assets, become subject to any levy, seizure, attachment or
execution against the Products, or become subject to any proceeding under any
statute of any governing authority relating to insolvency or the protection of
rights of creditors.
If NETGEAR terminates due to default by Supplier all outstanding purchase
orders shall be filled by Supplier unless NETGEAR notifies Supplier in its
default notice of its desire to cancel any or all such orders, in which event
such purchase orders shall be cancelled without charge to NETGEAR. Any terms of
this Agreement which by their nature extend beyond its termination, including
Sections 14,18,19, 20 and 24, shall remain in effect until fulfilled and apply
to respective successors and assigns. Termination of this Agreement will not
effect the rights of end-users to use the Products.
Neither Supplier nor NETGEAR shall, by reason of the expiration or
termination of this Agreement, be liable to the other for compensation,
reimbursement or damages on account of any loss of prospective profits or
anticipated sales or on account of expenditures, investments, leases, or
commitments made in connection with this Agreement or the anticipation of
extended performance thereunder.
19. LIMITATION OF LIABILITY. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR
(1) THE COST OF SUBSTITUTE PROCUREMENT, SPECIAL, INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, OR (2) ANY DAMAGES RESULTING FROM INACCURATE OR LOST DATA
OR LOSS OF USE OR PROFITS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR
THE USE OR PERFORMANCE OF PRODUCTS, EXCEPT AS EXPRESSLY PROVIDED IN THIS
AGREEMENT. In addition and except for Supplier's liability arising under Section
14, in no event will Supplier's total liability to NETGEAR for any warranty or
other claim based on the failure of a Product to perform in accordance with the
Product Specification exceed the sum paid to Supplier by NETGEAR for such
failing Products sold through this Agreement.
20. CONFIDENTIALITY: The parties anticipate that each may disclose to the
other in connection with this Agreement, certain of its proprietary or
confidential information. The party receiving the same will (i) maintain it in
confidence and will not disclose it to others than its employees, or as
otherwise permitted under this Agreement (ii) use at least the same degree of
care to maintain its secrecy as it uses in maintaining the secrecy of its own
proprietary, confidential and trade secret information, (iii) always use at
least
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a reasonable degree of care in maintaining its secrecy, and (iv) use it only for
the purpose of performing its obligations under this Agreement. Neither party
will have any obligation concerning that part of the other's information which
(i) was known to it before its receipt from the other party, (ii) is lawfully
obtained from a third party under no obligation of confidentiality, (iii) is or
becomes publicly available other than as a result of an act or failure to act of
the receiving party, (iv) or is independently developed by a party without use
of the other's confidential information. Except as permitted by this Agreement,
neither party will disclose any part of such information to anyone except those
of its employees or contractors having a need to know the same in order to
accomplish the purposes of this Agreement and who have, before receiving access
to the information, acknowledged its confidential, proprietary and trade secret
nature and have agreed to be bound by the terms of this Section.
The existence and terms of this Agreement shall be considered
confidential and shall not be disclosed to any third party without the prior
written consent of the other party except as required by a party to fulfill its
obligations under this Agreement or by law or accounting practices.
21. PRODUCT SUPPORT: NETGEAR shall provide Level 1 support (support
necessary to process initial calls from an end-user) and Level 2 support
(support required for problem determination and solution). Supplier shall
provide Level 3 support which includes Product design changes based on Product
form, fit or function and assist NETGEAR when a problem cannot be resolved at
Level 1 or 2. Additional technical support can be made available under terms and
conditions to be defined and negotiated mutually.
22. TRAINING: Supplier will provide, at no charge, one standard technical
training class at Supplier facilities and training materials for the Products to
selected NETGEAR technical support personnel and such other training as is
mutually agreed upon.
23. TECHNOLOGY UPGRADES: During the term of this Agreement, Supplier will
provide NETGEAR with upgrades to the Products, including all new features or
enhancements within 30 days of when they are incorporated in the Supplier
product or offered as upgrades by Supplier. If such upgrades or enhancements are
provided to other customers at no additional charge, there will be no increase
in the unit price for products under this Agreement. If Supplier charges its
other customers for such upgrades, Supplier will only be required to provide
such upgrades to NETGEAR upon agreement with NETGEAR regarding a revised unit
price.
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24. GENERAL PROVISIONS
24.1 FAILURE AND DELAY. Neither party will be liable for its failure or
delay in performance of its obligations under this Agreement due to strikes,
wars, revolutions, fires, floods, explosions, earthquakes, government
regulations, or other causes beyond its control. In the event of a threatened
default or default as a result of any of the above causes, the defaulting party
shall exercise its best efforts to avoid and cure such default. In the event
such an event prevents performance thereunder for a period in excess of sixty
(60) days, then the non-defaulting party may elect to terminate this Agreement
and/or cancel or suspend any purchase orders hereunder by a written notice to
the defaulting party.
24.2 ASSIGNMENT. This Agreement and all rights and obligations hereunder,
excepting the right to receive payment, are personal to the parties hereto and
may not be assigned in whole or in part by either party without the prior
written consent of the other; provided, however, that either party may assign
this Agreement in conjunction with the merger, reorganization, or the sale of
all or substantially all of its assets to which this Agreement pertains.
Furthermore, NETGEAR may assign this Agreement without the prior written consent
of Supplier to any affiliate of NETGEAR. Supplier shall be given a courtesy
notice of any such assignment, but in no way does a courtesy notice limit or
constitute denial of NETGEAR's right to assign this Agreement to any affiliate
of NETGEAR.
24.3 WAIVER, AMENDMENT OR MODIFICATION. Any waiver, amendment or
modification of any right, remedy or other term under this Agreement will not be
effective unless in writing and signed by the party against whom enforcement is
sought.
24.4 RELATIONSHIP OF THE PARTIES. The parties are each independent
contractors. No agency relationship between NETGEAR and Supplier is created by
this Agreement. Except as expressly provided in this Agreement, neither party
will have any right or authority to act on behalf of the other and neither party
will represent that it has such right or authority.
24.5 ENTIRE AGREEMENT; GOVERNING LAW. This Agreement, including its
attachments and exhibits, constitutes the entire agreement between parties with
respect to its subject matter and supersedes all prior discussions,
understandings and agreements with respect to the subject matter and shall take
precedence over any conflicting terms in a purchase order and over any terms in
Supplier's order acknowledgment form. This Agreement shall be construed and the
respective rights of the parties hereto determined according to the laws of the
State of California, without giving effect to the principles of conflict of laws
thereof.
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24.6 NOTICES. All notices, waivers and consents in connection with this
Agreement shall be in writing and shall be deemed given when delivered by hand
or received by certified mail, postage prepaid, return receipt requested, or
sent by telex or facsimile transmission (confirming the same by mail), or sent
by registered mail service, return receipt requested. All notices or
communications between NETGEAR and Supplier pertaining to this Agreement shall
be addressed as follows
If to NETGEAR : `
NETGEAR, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(fax):
Attn.: ▇▇▇▇ ▇▇▇▇▇
If to Lite-On:
Lite-On Communications, Inc.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
FAX: (▇▇▇)-▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇
Phone: (▇▇▇)-▇▇▇-▇▇▇▇ ▇ ▇▇▇
Email: ▇▇▇@▇▇▇▇▇▇▇.▇▇▇
24.7 COUNTERPARTS: This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives.
NETGEAR, Inc. Lite-On Communications, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇ By: /s/ ▇▇▇▇ ▇▇▇
---------------------------------- ------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇ Name: ▇▇▇▇ ▇▇▇ 8-26-99
-------------------------------- ----------------------------
Title: V.P. Title: President
------------------------------- ---------------------------
12
13
Lite On Attachment 1 080399
ATTACHMENT 1
LIST OF PRODUCTS, PRICES AND LEAD TIMES
Product pricing shall be determined based on competitive market
requirements and is premised on the need of NETGEAR to set the end user prices
of the Products at least 15% below the prices charged comparable customers by
market leaders in the US (for US versions), Japan (for Japanese versions) and
Europe (for European versions). Market leaders are the top 2 market share
holders in the respective markets. The end user price is calculated as 2.16
times of the transfer cost of the Products from Supplier to NETGEAR. Prices
listed are unit prices based upon ex-factory shipment terms, effective July
01,1999. Prices are subject to change as agreed by both parties.
PRODUCT NAME P/N PRICE LEAD TIME WARRANTY PERIOD
------------ --- ----- --------- ---------------
10 pack 10/100 PCI FA31010 $103.00 60 day 5 year Limited
adapter card Warranty
50 pack 10/100 PCI FA31050 $522.50 60 day 5 year Limited
adapter card Warranty
10/100 PCI adapter card FA310CFR $12.08 60 day 5 year Limited
with cable in French Warranty
language packaging
10/100 PCI adapter card FA310CGR $12.08 60 day 5 year Limited
with cable in German Warranty
language packaging
10/100 PCI adapter card in FA310JP $11.50 60 day 5 year Limited
Japanese language Warranty
packaging
10/100 PCI adapter card FA310TX $11.30 60 day 5 year Limited
Warranty
10/100 PCI adapter card FA310TXC $11.80 60 day 5 year Limited
with cable Warranty
10/100 PCI adapter in FA310TXGR $11.50 60 day 5 year Limited
German language Warranty
packaging
9-Port Dual Speed Hub DS309AU $112.02 60 day 5 year Limited
with Australian power Warranty
cord
9-Port Dual Speed Hub DS309GE $112.02 60 day 5 year Limited
with General European Warranty
power cord
9-Port Dual Speed Hub DS309JP $112.02 60 day 5 year Limited
with Japan power cord Warranty
9-Port Dual Speed Hub DS309NA $112.02 60 day 5 year Limited
with North American Warranty
power cord
9-Port Dual Speed Hub DS309UK $112.02 60 day 5 year Limited
with United Kingdom Warranty
power cord
USB Ethernet adapter EA101C $23.30 60 day 5 year Limited
Warranty
5-Port Fast Ethernet 10/100 PS105 $51.68 60 day 5 year Limited
Switch Warranty
14
Lite On Attachment 1 080399
15
Lite On Attachment 2 with Exhibits 080399
ATTACHMENT 2
CUSTOMIZATION OF PRODUCTS
1. DEVELOPMENT EFFORT. Supplier will provide certain services and/or
technology for the development, test and manufacture of a custom version of each
of the Supplier Products in return for payment of Non-Recurring Engineering cost
so that each operates with the respective features, functions and specifications
all as described in Exhibit A (the "Development Effort"). NETGEAR shall assist
Supplier in the Development Effort by providing full technical details of the
requirements for modifying the Products and reviewing the design, as well as
assisting in testing of the customized Products and other assistance as may be
specifically described in the Exhibit A.
2. PROTOTYPES, TESTING AND ACCEPTANCE BY NETGEAR. As the Development Effort
proceeds, Supplier shall conduct the prototype testing as described in Exhibit
A. Upon completion of the Development Effort, Supplier and NETGEAR shall
perform quality control and acceptance tests (the "Acceptance Tests") and
Supplier shall demonstrate that the customized Products operate and perform in
accordance with respective Specifications. If a customized Product fails to
satisfactorily complete the Acceptance Tests, Supplier shall promptly and
diligently correct any defects and complete any uncompleted portion of the
Development Effort so that the customized Product satisfactorily operates and
performs in accordance with specifications.
3. SAFEGUARD OF THIRD PARTY SOFTWARE AND RELATED INFORMATION. The parties
acknowledge that the customized Products may incorporate software technology to
be licensed from certain third parties (collectively the "Third Party
Software"). Supplier agrees that all information delivered by NETGEAR with
respect to the Third Party Software shall be used by Supplier only for the
purpose contemplated by this Agreement, and shall safeguard and treat such
information in the manner required by Section 20 of the Agreement. In addition,
NETGEAR may deliver to Supplier certain software source code which Supplier
shall use only for the purposes referenced in Exhibit A, and shall safeguard
and treat such information in the manner required by Section 20 of the
Agreement. Supplier acknowledges and agrees that it will procure from the
providers of the Third Party Software all license rights necessary to enable
Supplier to incorporate the Third Party Software technology within the
customized Products and to grant to NETGEAR the rights to distribute such
technology as part of the customized Products as contemplated by this Agreement
for no additional cost.
4. OWNERSHIP IN TECHNOLOGY. Except for the rights granted expressly in this
Agreement, (i) Supplier, or its licensors, will own all right, title and
interest in its underlying design and technology incorporated into the Products
and associated documentation, including, but not limited to, all copyright,
patent, trade secret and other intellectual property rights, (ii) NETGEAR or
its licensors, will own all right, title and interest in all software source
and object code provided by NETGEAR, and all associated documentation,
including, but not limited to, all copyright, patent, trade secret and other
intellectual property rights. NETGEAR will own all right, title and interest in
the Customization of the products (which is paid for by NETGEAR in the form of
Non Recurring Engineering charge) including but not limited to the layout of
any custom designed circuit boards or components created specifically for
NETGEAR as a result of modifying the underlying technology to create the
Products. NETGEAR will own all right, title and interest in any modifications,
enhancements or additional software or documentation developed by NETGEAR
without assistance by Supplier, or by a third party acting on NETGEAR behalf
without assistance by Supplier, will be the exclusive property of NETGEAR.
Nothing in this Section will preclude either party from independent development
of any technology without use of the other party's confidential or proprietary
information.
5. LIMITATIONS ON USE OF TECHNOLOGY, TOOLING, TRADEDRESS, TRADEMARKS. NETGEAR
and Supplier agree, except as otherwise expressly and unambiguously authorized
hereunder, (a) not to make any copies or duplicates of any software provided by
the other party pursuant to this Agreement, (b) not to create or attempt to
create, by reverse engineering or otherwise, the source code or internal
structure or design of any software or hardware or any part thereof or any
other works based thereon from the object code or from the confidential
information or hardware made available in connection with this Agreement, and
(c) not to remove any product identification or notices of any proprietary or
copyright restriction from hardware or software or any support material
provided by the other party pursuant to this Agreement. The parties intend that
NETGEAR will be entitled to reproduce and/or distribute the software to the
extent specifically set forth in this Agreement. Any tooling procured for use
in manufacture of the customized products will be used exclusively for the
benefit of NETGEAR. Supplier shall
16
Lite On Attachment 2 with Exhibits080399
use the tradedress and trademarks of NETGEAR exclusively on products
manufactured for NETGEAR. Supplier shall not manufacture any product with a
tradedress similar to that of NETGEAR which could cause confusion in the
marketplace.
6. INDEMNIFICATION BY NETGEAR. NETGEAR will defend at its own expense any
action brought against Supplier, to the extent that it is based on a claim by a
third party (i) that any NETGEAR products or documentation infringes a patent or
copyright, or contains misappropriated trade secrets, or (ii) which is based
upon the use, operation or performance of NETGEAR products, or (iii) which is
based upon any specification provided by NETGEAR to Supplier for development of
customized Products and will pay any costs and damages finally awarded against
Supplier in any such action which are attributable to any such claims. NETGEAR's
obligations under the preceding sentence are subject to the conditions that: (i)
Supplier promptly notifies NETGEAR in writing of any such claim, and (ii)
NETGEAR will have sole control of such defense and all negotiations for any
settlement or compromise, although Supplier may participate in the same at its
expense. NETGEAR will have no liability to Supplier under this Section with
respect to any claim of infringement to the extent that it is based upon (i) the
combination of any NETGEAR products with any machine, device, firmware or
software not furnished by NETGEAR, or (ii) any product not sold or licensed by
NETGEAR, or (iii) any modification of any NETGEAR product by a party other than
NETGEAR.
17
Lite On Attachment 2 with Exhibits080399
EXHIBIT A TO ATTACHMENT 2
STATEMENT OF WORK AND NRE
STATEMENT OF WORK AND NRE ASSOCIATED WITH LITE-ON
FA310TX PCI FAST ETHERNET ADAPTER CARD
NETGEAR WILL PAY FOR THE FOLLOWING NRE CHARGES AS FOLLOWS:
Charges related to FCC, C-tick, VCCI, and CE regulatory agency approval.
THE MODEL FA310TX ADAPTER CARD WILL SUPPORT THE FOLLOWING FEATURES:
HARDWARE FEATURES:
System interface conforming to PCI specification version 2.1
PCI bus mastering capability
IEEE 802.3u 100Base-TX Fast Ethernet conformity
IEEE 802.3I 10Base-T conformity
SOFTWARE FEATURES:
DRIVERS FOR THE FOLLOWING OPERATING SYSTEMS:
MICROSOFT
Windows for Workgroups 3.11, Windows NT 3.51, 4.0, Windows 95, Windows 98,
Windows 2000
NOVELL NETWARE
16-bit DOS client, 32-bit DOS client, NetWare server 3.12, 3.2, 4.1x, 5.0
UNIX
SCO OpenDesktop, SCO OpenServer, SCO Unixware, Linux
OTHERS
NDIS 2.0 for DOS, NDIS 2.0 for OS/2, Packet driver
SOFTWARE CERTIFICATION
Novell NetWare tested and approved
Compatible with Windows 95, Windows 98, Windows NT
WARRANTY
5 year limited warranty
OPERATING TEMPERATURE
The operating temperature for Model FA310TX adapter card will operate between
0 and approximately 55 degrees Celsius.
18
Lite On Attachment 2 with Exhibits080399
NECESSARY APPROVALS
----------------------------------------------------------------------------------
EMC North America FCC Class B
European Union EN55022 Class B
Japan VCCI-2
Australia C-tick
----------------------------------------------------------------------------------
ELECTROMAGNETIC SUSCEPTIBILITY CE ▇▇▇▇
----------------------------------------------------------------------------------
ELECTROSTATIC DISCHARGE (ESD) IEC 801-2, Level 2/3/4
----------------------------------------------------------------------------------
RADIATED MAGNETIC FIELD IEC 801-3, Level 2
----------------------------------------------------------------------------------
ELECTRICAL FAST TRANSIENT (EFT) IEC 801-4, Level 2
----------------------------------------------------------------------------------
PACKAGING SPECIFICATION
The following items will be required for the complete packaging of the NETGEAR:
==================================================================================
ITEM COMMENTS
----------------------------------------------------------------------------------
Box and packing material The Box cover will have the graphics supplied by
NETGEAR. Packaging materials to meet industry
standards and protect product during shipment.
Box is to be shrink-wrapped.
----------------------------------------------------------------------------------
Master to be approved by NETGEAR
----------------------------------------------------------------------------------
Quick Installation Manual Master to be supplied by NETGEAR
----------------------------------------------------------------------------------
User's Manual Master to be supplied by NETGEAR
==================================================================================
19
Lite On Attachment 2 with Exhibits080399
EXHIBIT B TO ATTACHMENT 2
STATEMENT OF WORK AND NRE
STATEMENT OF WORK AND NRE ASSOCIATED WITH LITE-ON
DS309 9 PORT DUAL SPEED HUB
NETGEAR WILL PAY FOR THE FOLLOWING NRE CHARGES AS FOLLOWS:
Charges related to FCC, C-tick, VCCI, CE, TUV & UL regulatory agency approval.
THE MODEL DS309 DUAL SPEED HUB WILL SUPPORT THE FOLLOWING FEATURES:
HARDWARE FEATURES:
1.0 GENERAL DESCRIPTION
This document describes the specification for the DS309, which is a 10 and
100Mbs dual speed hub.
Eight of the ports are half duplex, and dual speed, capable of automatically
sensing the link partner speed. The ninth port is a switched port that can be
used to provide a switched up-link to another device, for example a hub. This
port operates in half duplex mode only. This provides a cascade option, removing
the dependence on class (1) or (2) products. This port also has an up-link push
button to allow ease of connect through either cross over or straight through
cable.
The DS309 has an internal power supply and has no cooling fan.
2.0 FEATURES
- Complies with IEEE802.3, IEEE802.3u.
- 8 10/100Mbs Auto Sensing repeater ports.
- 1 half duplex switch port, with up-link push button.
- Internal power supply with no fan.
- Internal l0Mbps to 100Mbps bridging function
- l Vista LED RJ45 per port with built in LED's to indicate IOM and 100M Link
and Rx.
- 1 LED per port to indicate 100Mbs Link and Rx
- 1 LED per port to indicate 10Mbs Link and Rx - 4 LED's to indicate 10Mbs
utilization.
- 4 LED's to indicate 100Mbs utilization.
- 1 LED to indicate Collision for 10Mbs repeater.
- 1 LED to indicate Collision for 100Mbs repeater.
- 1 LED to indicate Collision for 10Mbs switched port.
- 1 LED to indicate Collision for 100Mbs switched port.
- 1 Power LED.
- 300 Series desktop mechanical appearance.
20
Lite On Attachment 2 with Exhibits080399
3.0 SPECIFICATION
Standards IEEE802.3, IEEE802.3u.
Primary IC's F3 FD6608S x2
LUCENT LU3X54 x2
TI XTNETE2101 x1
SSRAM (64kX32) x2
Connectors RJ-45 x 4 x2
RJ45 x 1 x1
Push ▇▇▇▇▇▇ ▇▇
Indicators Power LED x1
100M x9
l0M x9
10 utilization x4
100 utilization x4
100 Col xl
10 Col x1
100 Switched Col xl
10 Switched port Col xl
Power 100VAC/60Hz to 240V AC/50Hz
0.35A Max
SOFTWARE FEATURES:
Not Applicable
WARRANTY
5 year limited warranty
OPERATING TEMPERATURE
The operating temperature for Model DS309 Dual Speed Hub will operate between 0
- 40 degrees Celsius.
NECESSARY APPROVALS
--------------------------------------------------------------------------------
EMC North America FCC Class B
European Union EN55022 Class B
Japan VCCI-2
Australia C-tick
--------------------------------------------------------------------------------
ELECTROMAGNETIC SUSCEPTIBILITY CE ▇▇▇▇
--------------------------------------------------------------------------------
ELECTROSTATIC DISCHARGE (ESD) IEC 801-2, Level 2/3/4
--------------------------------------------------------------------------------
RADIATED MAGNETIC FIELD IEC 801-3, Level 2
--------------------------------------------------------------------------------
ELECTRICAL FAST TRANSIENT(EFT) IEC 801-4, Level 2
--------------------------------------------------------------------------------
SAFETY UL & TUV
--------------------------------------------------------------------------------
21
Lite On Attachment 2 with Exhibits080399
PACKAGING SPECIFICATION
The following items will be required for the complete packaging of the NETGEAR:
--------------------------------------------------------------------------------
ITEM COMMENTS
--------------------------------------------------------------------------------
Box and packing material The Box cover will have the graphics supplied by
NETGEAR. Packaging materials to meet industry
standards and protect product during shipment.
Box is to be shrink-wrapped.
Master to be approved by NETGEAR
--------------------------------------------------------------------------------
Quick Installation Manual Master to be supplied by NETGEAR
--------------------------------------------------------------------------------
User's Manual Master to be supplied by NETGEAR
--------------------------------------------------------------------------------
22
Lite On Attachment 2 with Exhibits080399
EXHIBIT D TO ATTACHMENT 2
STATEMENT OF WORK AND NRE
STATEMENT OF WORK AND NRE ASSOCIATED WITH LITE-ON
July 13, 1999
MODEL FS105 5 PORT FAST ETHERNET 10/100 SWITCH
NETGEAR WILL PAY FOR THE FOLLOWING NRE CHARGES AS FOLLOWS:
Charges related to FCC, C-tick, CE, TUV & UL regulatory agency approval.
THE MODEL FS105 FAST ETHERNET 10/100 SWITCH WILL SUPPORT THE FOLLOWING FEATURES:
HARDWARE FEATURES:
1.0 GENERAL DESCRIPTION
This will be a 5Port 10/100 Mbps Switch with 5 Vista RJ45's and it will be in a
100 Series case similar to DS104. It will have limited features: No Flow
control, No Backpressure.
It will be shipped with a Linear Power cube supply
like the DS104.
Initially we will target a DS104 size case so we can re-use the
packaging of DS104.
2.0 FEATURES
- Complies with IEEE802.3, IEEE802.3u.
- 5 10/100Mbs Auto Sensing switch ports.
- 1 up-link push button.
- Linear Power cube 7.5V 1.0A.
- No FAN.
- 1 K MAC Addresses.
- 1 Vista LED RJ45 per port with built in LED's to indicate 100M Link/RX (GREEN)
and l0M Link/Rx(GREEN).
- 1 LED per port to indicate FDX (GREEN).
- 1 LED per port to indicate Collision (YELLOW).
- 1 Power LED.
- 100 Series mechanical appearance.
- FCC Class B.
3.0 SPECIFICATION
Standards IEEE802.3, IEEE802.3u.
Primary IC's AL965 x2
Q84225 x1
Q80225 x1
SSRAM (64kX32) x1
Connectors RJ-45 x 4 x1
RJ45 x 1 x1
Push Button xl
Indicators Power LED x1
Power 7.5V Linear Adapter, 1.0A
23
Lite On Attachment 2 with Exhibits080399
EXHIBIT C TO ATTACHMENT 2
STATEMENT OF WORK AND NRE
STATEMENT OF WORK AND NRE ASSOCIATED WITH LITE-ON
EA101C USB ETHERNET ADAPTER
NETGEAR WILL PAY FOR THE FOLLOWING NRE CHARGES AS FOLLOWS:
Charges related to FCC, C-tick, VCCI, and CE regulatory agency approval.
THE MODEL EA 101 ADAPTER CARD WILL SUPPORT THE FOLLOWING FEATURES:
HARDWARE FEATURES:
System interface conforming to USB specification version 1.1
IEEE 802.3I 10Base-T conformity
SOFTWARE FEATURES:
DRIVERS FOR MICROSOFT WINDOWS 98
SOFTWARE CERTIFICATION
Compatible with Windows 98
WARRANTY
5 year limited warranty
OPERATING TEMPERATURE
The operating temperature for Model EA101 adapter will operate between 0 - 55
degrees Celsius.
NECESSARY APPROVALS
--------------------------------------------------------------------------------
EMC North America FCC Class B
European Union EN55022 Class B
Japan VCCI-2
Australia C-Tick
--------------------------------------------------------------------------------
ELECTROMAGNETIC SUSCEPTIBILITY CE ▇▇▇▇
--------------------------------------------------------------------------------
ELECTROSTATIC DISCHARGE (ESD) IEC 801-2, Level 2/3/4
--------------------------------------------------------------------------------
RADIATED MAGNETIC FIELD IEC 801-3, Level 2
--------------------------------------------------------------------------------
ELECTRICAL FAST TRANSIENT (EFT) IEC 801-4, Level 2
--------------------------------------------------------------------------------
PACKAGING SPECIFICATION
The following items will be required for the complete packaging of the NETGEAR
--------------------------------------------------------------------------------
ITEM COMMENTS
--------------------------------------------------------------------------------
Box and packing material The Box cover will have the graphics supplied by
NETGEAR. Packaging materials to meet industry
standards and protect product during shipment.
Box is to be shrink-wrapped.
--------------------------------------------------------------------------------
Master to be approved by NETGEAR
--------------------------------------------------------------------------------
Quick Installation Manual Master to be supplied by NETGEAR
--------------------------------------------------------------------------------
User's Manual Master to be supplied by NETGEAR
--------------------------------------------------------------------------------