Hardware Product Purchase Agreement with Hewlett-Packard Company, dated April 30, 2010

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Additional Ordering and Shipping Terms

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Engineering Process and Design Changes

o

Quality and Compensation

o

Service and Support Requirements

o

Discontinuance of Product and HP’s Manufacturing Rights

o

Assurance of Supply and Flexibility Agreement

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Eligible Purchasers

o

Product Customization

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Third Party and Open Source Software Components

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Additional Supplier Obligations

1.

Ordering.  Each sale and purchase of Product under this Agreement will be initiated by an Order.  Acknowledgement (or rejection) must be received within two Business Days or the Order will be deemed an Accepted Order.  Additional or contradictory terms in the Acknowledgement are void.  Other than Product specified in an Accepted Order, nothing in this Agreement, including but not limited to forecasts, obligates HP to purchase any minimum quantity of Product if Supplier is unable to meet the Delivery Date, any quantity of corresponding Product may be purchased from other sources, and applied toward purchase obligations for Accepted Orders. Any Order or Acknowledgment issued during the Term will remain in full force and effect arid governed by this Agreement, even if the Agreement expires or terminates prior to Delivery.

2.

Payment.  Unless otherwise changed in a Module, HP and HP Eligible Purchasers will issue payment [ * ] (“Payment Issue Date”), Early payment discount (if any) will be calculated from the Payment Issue Date.  Payment will be in U.S. currency unless otherwise stated.  Product and prices for Product may be set forth in (1) the Product Description, Product Specifications and Pricing Module, or (2) in a written notification (email) or an electronic Request For Quote process that identifies (i) the Product, (ii) the pricing for Product and (iii) this Agreement.  HP may require Supplier to submit invoices electronically at Supplier’s sole expense.  HP may utilize a third party, at HP’s Sole discretion, to facilitate HP’s order and invoicing processes that may entail disclosure of information about the purchasing relationship between HP and the Supplier.  For orders containing more than one unit, supplier will be able to bill at the shipment of each unit unless requirement is for the total solution to be delivered at the same time.  If this total order is greater than $1 Million, and must be delivered to HP as a solution, HP and supplier will review payment terms and negotiate as necessary.

3.

Taxes.  Prices are exclusive of sales and use tax, VAT, GST and other similar taxes.  Such taxes, if applicable, shall be added separately to Supplier’s invoice, and HP will remit such taxes to Supplier.  Supplier will not invoice or otherwise attempt to collect from HP any taxes with respect to which HP has provided Supplier with (i) a valid resale or exemption certificate, (ii) evidence of direct payment authority, or (iii) other evidence, reasonably acceptable to Supplier, that such taxes do not apply.  HP will not be responsible for any taxes measured by Supplier’s net income, taxes measured by Supplier’s costs in providing the Product or Services, or taxes imposed through withholding.  For the avoidance of doubt, any such taxes incurred as a cost by Supplier are included in the price.  If HP is required by law to withhold and remit tax relating to a purchase under this Agreement, HP shall be entitled to reduce its payment by the amount of such tax.

4.

Product and Compliance Warranties, Remedies and Related Terms.

 

4.1

Product Warranties.  Supplier represents and warrants that at Product will: (a) be manufactured, processed, and assembled by Supplier or Suppliers authorized Subcontractors; (b) conform to Product Specifications; (c) be new; contain first-quality components, raw materials and parts; (d) be free from defects in design, material and workmanship; (e) be free and clear of all liens, encumbrances, restrictions, and (f) other claims against title or ownership.  Additionally, Suppliers’ representations and warranties in any Modules attached to this Agreement apply in accordance with their terms.  Such Modules may include, without limitation, the following, Service and Support Requirements, Quality and Compensation, and Engineering Process or Design Changes.  Except for the Product Intellectual Property Warranties set forth in Section 5 below, which survive indefinitely, all other warranties specified in this paragraph survive Delivery, inspection, acceptance or payment by HP and will be in effect for the longer of (1) 12 months following acceptance or (2) the warranty period stated in a Module to this Agreement.  The foregoing warranties will not apply to any Product to the extent such Product does not function properly as a result of improper installation.  repair, alteration, modification, misuse, abuse, negligence or accident, unless caused by Supplier or Supplier’s Subcontractors.

 

4.2.

Product Warranty Remedies.  If Supplier breaches any warranty HP may return the affected Products to Supplier at Supplier’s expense for correction, replacement, or refund, as HP may direct, in addition to other remedies available to HP. Additionally, remedies in any Module attached to this Agreement apply.  Any Product corrected or furnished in replacement will be warranted for the remainder of the warranty period of the Product replaced.

 

4.3.

Supplier Compliance Warranties.  Supplier represents and warrants that it and its authorized Subcontractors will comply with all Applicable Law and regulations in performance of this Agreement, including but not limited to (a) laws and regulations governing freedom of association, labor and employment, employee health and safety, protection of the environment, and ethical practices, and (b) all applicable national and international transportation requirements including, where applicable, regulations regarding chemicals and hazardous materials, dangerous goods, or fumigation and aeration.  Additionally, Supplier represents and warrants that it will comply with the following HP requirements located at haps://h20168.www2.hp.com/supplierhandtiook/FMF87804.odt Trade and Logistics; Personal Data Use and Protection, if applicable; Confidential Information; Governmental Compliance; and Social and Environmental Responsibility.

 

4.4.

Product Safety.  If Supplier becomes aware that any Product under this Agreement involves a risk of injury (or death) to persons, or risk of damage to property, Supplier will, within twenty-four (24) hours, provide written notice to HP which includes a written description of the nature and extent of such risk, including a description of any precautions which should be taken to minimize risk.  If the Engineering Process or Design Changes Module is attached to this Agreement, Supplier will also follow the procedures set forth in that Module.

 

4.5.

Product Recalls.  Unless otherwise specified in a Module attached to this Agreement, HP may perform a recall of Product, or of HP Product containing Product, (a) if Supplier breaches its warranties: or (b) to prevent or remedy any health or safety risk arising from such Product.  Supplier will reimburse HP’s losses, liabilities, costs, including, but not limited to, notification costs, return costs, cost of field recall, freight, labor cost, and rework incurred in effecting any product recall.  Supplier is not liable for recall costs to the extent the cause of recall is due solely to compliance with HP Specifications.

5.

Product Intellectual Property Warranties and Remedies.

 

5.1.

IP Warranties.  Supplier represents and warrants that (1) to the best of Supplier’s knowledge the Product and use thereof does not infringe or misappropriate any third-party Intellectual Property Rights, that Supplier is unaware of any such claim of infringement, and that Supplier will not knowingly add new functionality to Product that infringes; (ii) HP does not and will not need to procure any rights or licenses to any third party’s Intellectual Property Rights to exploit the Product; (iii) the Software does not contain any virus or harmful code, will not activate, alter or erase without control of a person operating the computer equipment on which the Software resides, and does not contain functionality that restricts access or use (other than a license key); (iv) Supplier will pass through to HP the benefits of all transferable warranties applicable to any third party software acquired by HP from Supplier; (v) Supplier complies with and will continue to comply with all licenses (including, without limitation, all open source licenses) associated with any Software component included in the Product; and (vi) there are no patent markings on any part of the external housing of the Product. If Supplier breaches any of these Intellectual Property warranties, then in addition to HP’s remedies specified in this Agreement, HP may immediately cancel any unfilled Accepted Orders without liability.

 

5.2

Remedies for Infringing Product.  If a Product is alleged to infringe a third party’s Intellectual Property Rights and its use, manufacture, sale, combination, or importation is enjoined, Supplier will, at its sole expense and option: procure for HP the right to continue using or combining the Product, as the case may be; replace the Product with a non-infringing product of equivalent function, form and performance; or modify the Product to be non-infringing, without materially detracting from function, form or performance.

6.

Services and Support Warranty.  In addition to the warranties applicable to Product, Supplier represents and warrants that all Services will be provided in a professional and workmanlike manner by experienced personnel with suitable expertise in the subject matter.  Supplier will comply with the obligations stated in the Service and Support Requirements Module if attached to this Agreement.  Unless otherwise specified in the Services and Support Requirements Module, Supplier’s obligations to provide Services and Support Requirements will continue throughout the Term and for five (5) years after the last Delivery of Product even if (I) the subject Product is discontinued, (ii) this Agreement is terminated or expires, or (iii) HP notifies Supplier that HP is ending its purchases for a Product.

7.

Licenses.

 

7.1.

Licenses to Software.  Supplier hereby grants to HP, a nonexclusive, worldwide, irrevocable, perpetual, fully paid-up license to use, reproduce, and distribute Software with Product or HP Products.  The rights granted herein include the right to use and distribute updates to such Software directly with the Product or indirectly (without the Product) to end users of the Product.  If any Software is licensed from a third party or subject to a third party license (including, without limitation, open source software), Supplier will identify each software component and identify the corresponding third party license in a Module to this Agreement entitled ‘Third Party and/or Open Source Software Components”.  If any Software is subject to a license that requires distribution of source code (e.g., the GNU General Public License (“GPL’), the GNU Lesser General Public License (“LGPL”)), Supplier will provide HP the required source code.  The rights granted in this section will extend to Eligible Purchasers, HP Subsidiaries, Affiliates, third party channels of distribution and contractors performing services pertaining to the Product or HP Product.

 

7.2.

Licenses to Product Documentation.  Supplier hereby grants HP a non-exclusive, perpetual, irrevocable, worldwide, fully paid-up license to use, reproduce, distribute and prepare derivative works (in HP’s name) all Documentation and other information, other than Confidential Information, furnished by Supplier under this Agreement for purposes of distribution with, or in connection with the sale or support of, HP Product.  HP may reproduce such Documentation without Supplier’s logo or other identification of source, subject to affixing Supplier’s copyright notices to all copies of Documentation.  The rights granted in this section will extend to Eligible Purchasers, HP Subsidiaries, Affiliates, third party channels of distribution and contractors performing services pertaining to the Product or HP Product.

8.

Defense and Indemnity.

 

8.1.

Supplier’s Obligations.  Supplier will defend, indemnify and hold harmless HP, HP Subsidiaries and Affiliates, Eligible Purchasers and each of their respective customers (including without limitation end users, distributors and resellers), officers, directors, employees, agents and representatives (“Indemnitees”) from and against any and all claims, demands, causes of action, lawsuits or liabilities (collectively “Claims”) arising out of or related to (i) (a) any negligent act, omission, willful misconduct, or breach of Agreement by Supplier, its Subcontractors, employees, or agents, or (b) tangible property loss, personal injury or death caused by Supplier, its Subcontractors, employees, or agents or by any Product, or (ii) the unauthorized use, misappropriation or infringement of any third party’s Intellectual Property Rights by (a) any Product; (b) any combination of the Product with an HP Product where the Product has no substantial non-infringing use, (c) any Software, (d) any Documentation, (e) a Supplier Mark, (f) anything provided as part of Supplier’s Support, or (g) use of any of (ii)(a) through (f). Supplier will pay all claims, losses and damages, liabilities, judgments, awards, costs and expenses including reasonable attorneys’ fees, expert witness fees and bonds incurred by Indemnitees as a result of the Claim, and will pay any award in connection with, arising from or with respect to any such Claim, including any settlement.

 

8.2.

HP’s Duty to Notify and Tender Claims To Supplier.  HP will give Supplier prompt notice of any Claim.  HP will provide Supplier the authority, information, and assistance (at Supplier’s expense) reasonably necessary to defend.  Supplier will control defense.  HP and any other Indemnitee may, in its or their discretion, participate in the defense of such Claim at their own expense.  However, if Supplier does not diligently pursue resolution of such Claim, then HP may, without in any way limiting its other rights and remedies, defend the Claim and collect its costs of doing so from Supplier.  Any settlement or compromise Supplier desires to enter into will be subject to HP’s prior approval and will include a full and complete release of any and all claims that the third party claimant may have against Indemnitees.

9.

Limitation of Liability.  NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF DATA, PROFITS OR REVENUE, COST OF CAPITAL OR DOWNTIME COSTS), ARISING OUT OF THIS AGREEMENT REGARDLESS OF WHETHER SUCH DAMAGES ARE BASED IN TORT, WARRANTY, CONTRACT OR ANY OTHER LEGAL THEORY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, UNLESS SUCH DAMAGES ARE EXPRESSLY PROVIDED ELSEWHERE IN THIS AGREEMENT.  NOTHING IN THIS SECTION EXCLUDES, DISCLAIMS, LIMITS OR OTHERWISE AFFECTS EITHER PARTY’S LIABILITY FOR PERSONAL INJURY, DEATH, PHYSICAL DAMAGE TO PROPERTY, OR BREACH OF ITS CONFIDENTIAL INFORMATION OBLIGATIONS OR SUPPLIER’S LIABILITY FOR BREACH OF ITS PERSONAL DATA USE AND PROTECTION OBLIGATIONS OR SUPPLIER’S DEFENSE AND INDEMNITY OBLIGATIONS

10.

Access to Information Systems.  Supplier may be granted access to HP’s information systems in the manner and to the extent determined by HP. HP may require Supplier’s employees, Subcontractors or agents to sign individual agreements to access HP’s information systems.  Unauthorized use of HP information systems is expressly prohibited.  Access is subject to current HP business control and information protection policies, standards and guidelines.

11.

HP Property.  HP may loan to Supplier HP Property solely for use in Supplier’s manufacturing, testing or adapting Product or to provide Services and Support.  All HP Property will be identified as the sole property of HP.  HP Property may not be transferred, assigned, loaned or otherwise encumbered by Supplier in any way.  HP Property may be loaned to third parties for fulfillment of Supplier’s obligations hereunder only upon HP’s prior written consent.  If such consent is provided, Supplier assumes all responsibility and liability for the HP Property while in the possession of such third parties.  Supplier will return, at its expense, HP Property in good condition, reasonable wear and tear excepted, upon HP’s request or upon termination or expiration of this Agreement.  Prior to HP Property being loaned to Supplier, Supplier will execute HP’s loan agreement

12.

Business Continuity.  Supplier will have a current BRP and will make such BRP available to HP upon request.  Supplier is responsible for maintaining its operations and all facilities, including without limitation factories, hubs, warehouses, and storage facilities in accordance with its BRP and safety, security, and fire protection industry standards.  A Production Failure constitutes a Default entitling HP to terminate this Agreement.  Alternatively, at H P’s option and request, upon the occurrence of a Production Failure Supplier will: (a) implement its BRP, (b) furnish HP, at HP’s expense, resources, tools, personnel and other materials necessary to assure continued production and delivery of Products; (c) assist HP in transitioning, within two (2) business days, all tools, components, loaned equipment, technical manufacturing information, work-in-progress, inventory or other materials necessary for the manufacture and production of Products to an alternative manufacturing facility of HP’s choice, and (d) redirect and rebalance all inbound components and materials to such alternative facility.

13.

Notices.  All notices required to be given under this Agreement will be in writing and will be sent to the respective addresses set forth in the Notices Module, or such other address as each Party may designate by notice given in accordance with this Section, except for HP’s email notifications to Supplier for content changes at HP’s website references stated in this Agreement.  HP reserves all rights, from and after the Effective Date of this Agreement, to revise, withdraw or otherwise modify (“Change”) the contents of any website referenced in this Agreement Supplier will be required to comply with all such Changes within ten Business Days after transmittal of email notice thereof.  If Supplier does not accept such Change, Supplier will provide written Notice of non-acceptance.  HP must receive Notice of non-acceptance within nine Business Days after HP has provided Supplier notice of such Change, or Supplier will be deemed to have accepted such Change.

14.

Force Majeure.  Neither Party will be liable for any delay in performance because of a Delaying Cause.  Each Party will give prompt notice of the Delaying Cause to the other, along with its best estimate of the Delaying Cause’s duration.  An affected Party will exercise reasonable diligence to overcome the Delaying Cause and to mitigate its effects.  HP may terminate without liability any Accepted Orders after notice from Supplier of a Delaying Cause without loss of eligibility for, or entitlement, to pricing hereunder.  The Parties will resume performance once the Delaying Cause ceases; however if a Delaying Cause delays Supplier’s performance for a cumulative period of fourteen (14) calendar days or more, HP may terminate this Agreement and/or any Order without liability by notice to Supplier.  Notwithstanding anything to the contrary in this Agreement, no Delaying Cause will excuse timely performance of any of the following obligations: Confidential Information, Product Intellectual Property Warranties, and Defense and Indemnity.

15.

Termination.  Either Party may terminate this Agreement upon Default by the other Party as stated in Section 16 (Default).  In addition, HP may terminate this Agreement without cause or liability upon ninety (90) days prior written notice.  HP will accept delivery of, and pay for, Accepted Orders entered prior to termination, unless canceled as set forth in this Agreement.  HP will purchase all packaging, dies and other goods bearing HP Marks and other tangible property specially purchased by Supplier, with HP’s prior written approval, to enable Supplier’s performance under this Agreement which Supplier cannot otherwise use In its business; provided that Supplier will mitigate to the maximum extent feasible.  Unless otherwise provided in a Module to this Agreement, in no event will HP be liable for non-recurring engineering costs and expenses incurred by Supplier in developing or producing Product.

16.

Default.  A Party will be in Default if: (a) any representation or warranty made by such Party in this Agreement is false in any material respect; (b) it breaches any provision in this Agreement and fails to cure such breach within thirty (30) days after receipt of Notice; however, such cure period will not be available if the breach is not capable of being cured; (c) it is the subject of a proceeding, whether voluntary or involuntary, in bankruptcy, reorganization, or insolvency, or other similar law of any jurisdiction, or (d) a receiver, trustee, or an assignee for the benefit of creditors is appointed. In addition to any other remedies available to it, the Party not in default may terminate this Agreement or any Accepted Order upon written notice to the other Party.

17.

Miscellaneous.

17.1

No Publicity.  Supplier will not publicize or disclose the terms or existence of this Agreement, nor will Supplier use the name(s), trademark(s), or trade name(s) of HP, HP Subsidiaries or HP Affiliates, except as follows: (i) with the prior written consent of HP; or (ii) as authorized by law.

17.2

Independent Contractors.  The relationship established under this Agreement is that of independent contractors, and neither Party is a partner, employee, agent or joint venturer of or with the other.  Nothing in this Agreement precludes HP from independently developing, manufacturing, selling or supporting products similar to Product.

17.3

Assignment.  Neither Party may assign or transfer this Agreement or any right, license, privilege or obligation provided herein or in any Accepted Order without the other Party’s prior written consent, and any attempted assignment or transfer without consent is void.  Any merger, consolidation, reorganization, transfer of all, substantially all, or a material portion of the assets of a Party, or other change in control or ownership, even if any of these events occur by operation of law, will be considered an assignment for purposes of this Agreement.  This Agreement will inure to the benefit of and will be binding on the permitted successors and assigns of the Parties.

17.4

No Waiver.  A Party’s failure to exercise or delay in exercising any of its rights under this Agreement will not constitute a waiver, forfeiture, or modification of such rights.  A Party’s waiver of any right under this Agreement will not constitute a waiver of any other right under this Agreement or of the same right on another occasion.  Any waiver must be in writing and signed by the waiving Party.

17.5

No Third Party Beneficiary.  This Agreement does not create any third party beneficiaries.

17.6

Severability.  If any provision in this Agreement is held invalid or unenforceable by a body of competent jurisdiction, such provision will be construed, limited or, if necessary, severed only to the extent necessary to eliminate such invalidity or unenforceability.  The Parties will negotiate a valid, enforceable substitute provision that most nearly effects the Parties’ original intent in entering into this Agreement or provide an equitable adjustment in the event no such provision can be added.  All other provisions of this Agreement will remain in full force and effect.

17.7

Counterparts.  This Agreement may be executed in any number of counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument binding on all the signatories thereto.

17.8

Authority of Signatory.  If this Agreement is signed by an agent or representative of a Party, such agent or representative Individually warrants and represents that he or she is authorized to execute this Agreement on behalf of, and bind, such Party.

17.9

Survival.  The following provisions survive expiration or termination of this Agreement or any Accepted Order: Product and Compliance Warranties, Remedies and Related Terms: Product Intellectual Property Warranties and Remedies; Services and Support Warranty; Licenses: Defense and Indemnity; Limitation of Liability; Miscellaneous; Definitions and any Modules to the extent so indicated in such Module.

17.10

Governing Law.  This Agreement will be governed by and Interpreted in accordance with the laws of the state of New York without regard to its conflict of laws provisions.  The Parties exclude application of the 1980 United Nations Convention on Contracts for the International Sale of Goods.

1.

Blanket Purchase Orders.  In addition to Orders, HP or Eligible Purchasers may issue a blanket purchase order.  Blanket purchase orders do not represent a commitment by HP or the Eligible Purchaser to buy any, or all, of the Product indicated.  Blanket purchase orders will include the quantity and part number of the Product.  A blanket purchase order will be used for fulfillment purposes until the earlier of the expiration of such blanket purchase order or depletion of the quantity or dollar limit for the Products under such blanket purchase order.

2.

Forecasts.  HP may provide a rolling forecast of projected Orders.  Forecasts are estimates only and do not constitute a commitment by HP to purchase any such quantity.  HP may revise any forecasts in its discretion.  Upon receipt of HP’s forecast, Supplier will, within five (5) Business Days, either confirm to HP that Supplier can support the forecast or not

3.

Inventory Requirements.  HP may request Supplier to deliver Product either through a non-Supplier Managed Inventory (“Non-SMI”) process or to use an SMI process.

4.

Order Changes.  HP and Eligible Purchaser may, without charge, postpone, decrease or increase any Accepted Order by notice to Supplier; provided that any increase in quantity or any rescheduling to an earlier Delivery Date is subject to Suppliers Acknowledgment.  At any time prior to shipment, HP and Eligible Purchaser may postpone any Accepted Order; provided that postponement of a non-cancelable Order for longer than sixty (60) days is subject to Supplier’s consent.  At any time prior to shipment, HP and Eligible Purchaser may decrease any Accepted Order; provided that quantities under a non-cancelable order may not be decreased, and non-cancelable Orders may not be canceled, to the extent Supplier has commenced production or acquired special components or dedicated raw materials for production. Accepted Orders for Product may be canceled at any time poor to Suppliers commencement of production.

5.

Reports.  Within thirty (30) days after close of each HP fiscal quarter, Supplier will provide HP a report which details purchases of Product by HP and all Eligible Purchasers by item, quantity and purchase location, showing total quantities shipped, total dollars invoiced, returns, percent of on-time and on-quality orders and such other information as HP and Supplier may mutually determine is appropriate.  Reports will be sent to HP’s and Eligible Purchaser’s respective Purchaser locations and a report detailing HP’s and Eligible Purchaser’s total purchases will be sent to HP’s primary contact set forth in the Agreement.

1.

Supplier Proposed Changes.  Except as set forth in this Module, Supplier will not make or incorporate in Product any of the following changes (each an “Engineering Change” and collectively, “Engineering Changes”):  Process and raw material changes, including chemical and raw material formulations, component and material sourcing and quality statistical controls; design changes; geographical relocation of manufacturing, test, upgrade or repair process; and/or process step discontinuances affecting electrical performance, mechanical form, fit, function or performance, environmental compatibility, chemical characteristics, software compatibility or the life, reliability or quality of Product.

2.

Notice of Proposed Change.  Supplier will notify HP in writing of any proposed Engineering Change, to product that is deemed a complete design, and will provide evaluation samples and/or other appropriate information as HP may reasonably request at least ninety (90) days prior to the first proposed shipment of any Product involving an Engineering Change; provided that Supplier may not provide Product involving an Engineering Change to HP for production usage until HP has notified Supplier, in writing, that it has completed its qualification testing.

 

2.1.

If any Engineering Change affects price, component obsolescence, quality performance or delivery schedules of Product, an impact proposal prepared by Supplier will be presented to HP for approval prior to Supplier initiating any change.

 

2.2.

If, as a result of such an Engineering Change, HP would be unable to utilize Product due to a failure under HP’s qualifications, Supplier will continue to provide Product without the Engineering Change until Supplier and HP resolve any qualification issues.

 

2.3.

If a resolution mutually recognized as such by both Parties is not achieved within a reasonable time, Supplier may, subject to the Discontinuance of Product and HP’s Manufacturing Rights Module, if attached to this Agreement, discontinue supply of Product without the Engineering Change, whereupon HP may cancel all Accepted Orders for Product without cost or liability or terminate this Agreement upon written notice to Supplier.

3.

HP Proposed Changes.  HP may change HP supplied drawings or designs or the Specification at any time prior to manufacture, effective upon notice to Supplier.  If any such change affects price, component obsolescence, quality performance or delivery schedules of Product, an impact proposal prepared by Supplier will be presented to HP for approval prior to Supplier initiating any change.  Supplier must make written claim for any adjustment related to such change within ninety (90) days from the date HP approves Supplier’s impact proposal or such claim will be waived.

4.

Safety Standard Changes.  Supplier will provide HP oral notice, to be followed by written notice, or email notice within twenty-four (24) hours of Supplier having knowledge of the need for any upgrade, substitution or other change required to make Product meet applicable safety standards.  HP, in its discretion, may require that all affected Product be reworked or returned to Supplier for upgrade to current revisions or be upgraded by Supplier or HP in the field.

1.

Purpose of this Exhibit.  Supplier’s obligations under Product and Compliance Warranties, Remedies and Related Terms of the Standard Terms to provide defect-free, conforming products to HP are primary and material obligations of Supplier, and are not in any way changed by this Module.  The purpose of this Module is to set forth HP requirements for compensation and additional corrective actions by Supplier if Product fails to conform to the Product and Compliance Warranties, Remedies and Related Terms of the Standard Terms.  The rights, remedies and obligations set forth in this Module are in addition to, and are intended to supplement rights, remedies and obligations specified elsewhere in the Agreement.

 

1.1.

Quality System.  Supplier is required to successfully pass HP’s supplier qualification audits prior to the sale of any Product under this Agreement.  In addition, Supplier will maintain a quality system that ensures compliance with this Agreement and meets at least one of the following: (1) current certification to the applicable ISO 9000 series of standards for the Products; (2) maintains a quality management system and manual that complies with the applicable ISO 9000 quality systems series of standards; or (3) is currently executing a plan to achieve ISO 9000 certification within eight (8) months from the Effective Date of this Agreement.

 

1.2.

Documentation.  Supplier upon written request will provide to HP copies of Suppliers quality system documentation and supporting test documentation.  The Parties will create and maintain a combined team to provide oversight of Suppliers quality systems to ensure Supplier’s compliance with this Agreement.

 

1.3.

HP’s Right to Inspect Facilities.  With reasonable advance notice and in compliance with Supplier’s security and safety requirements, HP and/or its designated representative may inspect Supplier’s production and repair facilities (including but not limited to Product, raw materials, equipment associated manufacturing processes, test and inspection data, reliability data, failure analysis data, corrective action data, and training data) to ensure compliance with this Agreement.  Supplier will inform its Subcontractors and suppliers of HP’s right to inspect their facilities and will use reasonable efforts to secure such rights at no charge to HP. Supplier will provide quality-related reports and such other reports and information as HP may reasonably request.

 

1.4.

Supplier Retina.  HP periodically reviews its suppliers through the (HPSS (Hewlett-Packard Supplier Scorecard)Supplier will participate in the review process.

2.

Epidemic Failure.  For a period of three (3) years after Delivery, Supplier represents and warrants all Products against Epidemic Failure.

 

2.1.

“Epidemic Failure” means [ * ]

 

2.2.

Any failure of Product to conform to Product and Compliance Remedies and Related Terms of the Standard Terms constitutes an occurrence for purposes of calculating Epidemic Failure.

 

2.3.

If HP determines that an Epidemic Failure may occur, HP may require Supplier to provide additional engineering and technical services and take other appropriate action at Supplier’s expense to prevent any such occurrence and mitigate foreseeable consequences.

 

2.4.

Epidemic Failure Process.  If HP or Supplier determines there has been an Epidemic Failure, notice shall immediately be provided to the other party.  Supplier will provide HP a preliminary root cause analysis and proposed Corrective Action Plan within seven (7) Business Days after receiving notice, or sending notice, as applicable.  HP will make available such information and assistance as may reasonably be required for Supplier to conduct its root cause analysis and propose a Corrective Action Plan.  HP may in its discretion concurrently prepare its own root cause analysis.  Supplier will make available such information and assistance as may reasonably be required for HP to conduct its root cause analysis.  If Supplier fails to provide a preliminary root cause analysis within 7 days of receiving notice, then Supplier must accept any root cause analysis and Corrective Action Plan offered by HP.

 

2.5.

Epidemic Failure Remedies.  After review of all root cause analyses and the applicable Corrective Action Plan, HP may determine, in its sole discretion, that the Epidemic Failure necessitates any individual action, or combination of, the following actions at Supplier’s sole expense including, but not limited to, notification costs, return costs, cost of field recall, freight, labor cost, and rework incurred in effecting any of the following actions:

 

2.5.1.

Customer based recall;

 

2.5.2.

Retrofit;

 

2.5.3.

Product recall; and/or

 

2.5.4.

Implementation of a program that extends the in-warranty repair period for end users with regard to components that are identified in the root cause analysis for a period of time deemed to be sufficient in HP’s sole discretion to provide adequate customer satisfaction.

 

2.6.

HP may return affected Product to Supplier for correction, or HP may repair, rework or replace affected Product in the field either by itself or with help from HP’s Authorized Service Providers at such Authorized Service Providers’ location.  Supplier will provide credit, reshipment of corrected affected Product and/or replacement as indicated by HP. Within thirty (30) days after completion of all recalls or retrofits, Supplier will reimburse one hundred percent (100%) HP’s actual out-of-pocket losses, liabilities, costs and expenses reasonably incurred in responding to the Epidemic Failure, including, but not limited to, costs associated with conducting root cause analyses, costs of any improvement or switch-over program, expenses of third parties and notification costs and return costs, cost of field recall, freight, labor cost, and rework; provided that HP will use commercially reasonable efforts to mitigate to the maximum extent feasible.

3.

Field Failure Metrics, Targets and Limits.  To ensure that HP quality requirements are met, Supplier agrees to take all reasonable steps to comply with the applicable Failure Rate Metrics, Targets and Limits set forth in Table 1 of this Module.  HP may revise the Targets and Limits set forth in Table 1 annually.  Additionally, field failure metrics, targets, and limits may be addressed in the form of AFR, ARR, or CCFR in the Request For Quote documents and/or the cost and platform agreements associated with each Request for Quote.  To the extent that a Request for Quote and/or cost/platform agreements provide guidance about AFR/ARR/CCFR targets or limits, or provide guidance about how to calculate AFR/ARR/CFR, those documents will take precedence over the rates, targets, and limits provided in Table 1 below and the compensation amounts set forth in Table 2 of this Module.  Calculation will not include any aftermarket options installed by any party other than the supplier.

4.

Engineering and Technical Services.  Supplier shall provide engineering and technical services on a continuous basis in order to maintain Failure rates within the agreed upon Field Failure Metric Limits.

5.

Corrective Action Plan and Compensation to HP.

 

5.1.

Corrective Action Plan.  Whenever the Field Failure Metric Targets or Limits are exceeded, Supplier will develop and take all actions necessary to implement a Corrective Action Plan as set forth in this Module and as may be more fully detailed in the applicable commodity quality plan, if any.

6.

Definitions.

1.

Scope.  This Module provides additional terms applicable to Supplier’s provision of tangible Products used for support (“Spares”) as well as Supplier’s provision of Services used for support.  These Spares and Services will be referred to together as “Support Services”.

2.

Precedence.  This Module will take precedence over other terms in the Agreement addressing Support Services but will not otherwise modify the Agreement.

3.

Service Support Life.  Supplier will support Products sold to HP by providing Support Services for such Products while the Product is being manufactured and for five years after manufacturing ends (“Service Support Life”).  Supplier acknowledges its responsibility to build additional Spares and to repair Spares throughout a Product’s entire Service Support Life.

4.

Pricing.  While a Product is being manufactured, the price for Spares will be the current manufacturing price of the particular assembly / component / etc. plus an agreed upon pricing adder for packaging and kitting requirements.  Repair pricing, for repairable Spares, will be provided before Product delivery begins, or earlier if requested by HP.  Pricing will be reviewed every 90 days, or upon written request by either party and (i) during Product manufacturing, pricing changes for Spares and repairs will be based on changes in the Product price and (ii) after manufacturing ends, pricing for Spares and repairs will not increase without pre-approval by HP.  Price increase request will not be unreasonably denied.

5.

Regional Requirements.  Support Services will conform to the following requirements:

6.

Warranties.

 

a)

Supplier warrants Support Services will conform to the requirements set forth in Attachment 1 to this Module which attachment is titled “Quality and Technical Requirements”.

 

b)

All Spares purchased by HP, whether newly manufacturer or repaired, will be provided with the warranties, warranty periods and warranty remedies defined in the Agreement applicable to Products.

7.

Freight and Logistic Cost Responsibility.  When a Field Return is covered by Supplier’s warranty, Supplier will reimburse HP for HP’s freight and logistics costs associated with the service event.  HP is responsible for shipping expenses associated with product that has no fault found.

 

a)

HP freight and logistics costs reimbursed will include (i) freight costs to ship Spares/Field Returns to and from HP and its customer, (ii) freight costs to ship Spares/Field Returns to and from HP and Supplier, (iii) handling, inspection, test and distribution costs related to shipping and receiving Spares/Field Returns, and (iv) insurance, taxes, duties, fees, free trade zone expenses, and similar costs.  HP reserves the right to issue a debit memo for reimbursement owed.

 

b)

In each region, HP will provide Supplier with a reasonable estimate of such HP costs.  HP and Supplier will agree upon such cost and Supplier will credit HP for each in warranty event.

8.

Forecasts.  When a new Spare part number is created, HP will provide an initial forecast.  HP may provide periodic forecasts afterwards, but is not obligated to do so.  HP is not obligated to provide other forecasts.  Any forecast provided by HP is for the convenience of Supplier, is non-binding, and does not create an obligation to purchase.  There shall be no minimum order quantity for Spares or repairs.

9.

Components.  Supplier is solely responsible for providing all materials.  Supplier acknowledges it is responsible for maintaining a supply of all materials required for provision of Support Services and, if required, to make last time buy of materials, including any Buy-Sell Parts or any other HP-provided materials to Supplier, based on the Service Support Life of the Product.  HP is not obligated to continue to provide Buy-Sell Parts or any other HP-provided materials in lieu of a last time buy.

10.

Excess and Obsolescence.  HP will have no obligation to purchase any of Supplier’s inventory or any minimum quantity of Spares or repairs.  Without limiting the foregoing, HP will not have any obligation to pay for or reimburse Supplier for any inventory revaluation costs, inventory holding costs, purchase price variances, or costs Supplier incurs related to excess/obsolete inventory.

11.

Third Party Services.  HP may use an HP authorized third party to provide services related to support.  Supplier will work with such HP designated third party.

12.

Supplier Management Program.  Supplier agrees to meet with HP, as requested up to four times per year, to review Supplier’s performance, establish performance metrics to drive continuous improvements, and discuss other areas of mutual concern.

13.

Additional Support Services.  If additional or different Services are requested by HP, Supplier will use commercially reasonable efforts to promptly negotiate details of such requirements.  Such additional or different Services will be governed by the Agreement.

14.

Survival.  This Module survives expiration or termination of the Agreement and HP may continue to purchase Support Services under the terms of the Agreement for the Service Support Life.

1.

Last Time Buy Rights.  Once Supplier has sold Product under this Agreement, Supplier shall not discontinue the manufacture or supply of such Product for a period of three (3) years, unless approved by HP, after the dale of first Delivery to HP (“Assurance of Supply Period.  After the expiration of the Assurance of Supply Period for a particular Product, if Supplier elects to discontinue the manufacture or supply of the Product (a “Discontinued Product”), Supplier shall give HP twelve months advance written notice that such manufacture or supply will be discontinued (“Notice Period”).  During this twelve month Notice Period, HP and Eligible Purchasers may issue Last Time Buy Orders for the Discontinued Product.  The Delivery dates for Last Time Buy Orders may extend past the Notice Period.  Also during this twelve month Notice Period, HP may elect to exercise its manufacturing rights specified herein by written notice to Supplier.

2.

HP’s Right to Manufacture.

2.1

Supplier hereby grants to HP, under Supplier’s Intellectual Property Rights and Technical Information, a perpetual, nonexclusive, worldwide, royalty-free, fully paid-up license to use, modify, reproduce, import, manufacture, distribute, offer for sale and sell Discontinued Product, all with right to sublicense, without payments to Supplier of any royalties or other charges.  Supplier will assign to HP any license rights it may have with third parties for Software Documentation or any intellectual property used in the manufacture of the Product.  HP agrees that it will not exercise the rights granted in this Section 2.1 until HP provides Notice, in accordance with the Notices Module, of its election to exercise such rights during the Notice Period.

2.2

Within seven days after HP has notified Supplier of HP’s election to exercise its manufacturing rights for a Discontinued Product, Supplier will provide to HR (a) all Technical Information relating to the Product; (b) the names and addresses of Supplier’s sources for parts not manufactured by Supplier, including the appropriate part numbers for commercially available equivalents of electronic parts, and Supplier will use reasonable efforts to enable HP to purchase all such Parts directly from Supplier’s vendors; and (c) all parts catalogues, schematics, design specifications, blueprints, material lists, engineering change orders, and other servicing documentation deemed necessary by HP to manufacture, service and support the Product.

3.

Survival.  This Module survives expiration or termination of this Agreement as necessary to meet the time periods stated herein.

4.

Definitions.

1.

Supplier shall provide an assurance of supply ("AoS") update for all key and critical components in the format as specified in Section 1e of this Module or as otherwise approved by HP ("Assurance of Supply Update").

 

a.

Assurance of Supply Updates will be delivered to the HP designated Recipient for Notices as identified in the Notices Module of the Agreement.

 

b.

An Assurance of Supply Update will be provided:

 

i.

As part of any Supplier response to an HP Request for Quote ("RFQ"); and

 

ii.

At least 4 weeks prior to any First Article Inspection; and

 

iii.

Monthly by the first Monday of each calendar month, or as otherwise agreed upon by HP.

 

c.

Upon receipt of the Assurance of Supply Update, Supplier and HP will designate a mutually agreed "risk rating" for each component.  Supplier will identify opportunities and take appropriate actions to reduce the AoS risk rating for components.  For any components that are mutually designated as high risk, Supplier will develop an AoS proposal for HP's review and approval within 30 days.  Such AoS proposal is intended to improve assurance of supply for high risk components.  If the Supplier proposal constitutes a Manufacturing Change, as defined in Section 2 of this Module, such proposed changes will be subject to Section 2 and Section 3 of this Module.

 

d.

Suppliers assurance of supply performance will be assessed as part of HP's formal supplier performance review process and will be considered in future business award decisions.

 

e.

Assurance of Supply Update Form.  See Attachment 1 to this Module.

 

f.

Supplier Risk Calendar.  Supplier shall develop and keep current a calendar that identifies the dates impacted by all known Manufacturing Changes, as defined in Section 2 of this Module, over a twelve (12) month period ("Risk Calendar").  An updated Risk Calendar will be provided by Supplier on a monthly basis or as otherwise agreed upon by HP.

 

g.

Assurance of Supply Meetings.  Both parties will meet on a monthly basis to review and analyze: (a) HP forecast processes, methods, and accuracy, (b) Supplier inventory buffer performance, processes, and methods, (c) the AoS update form, (d) key AoS initiatives/projects of both parties, (e) key supply chain performance metrics and results of both parties, (f) Supplier employee turnover rates related to manufacturing, warehousing, and logistics operations, and (g) the Supplier Risk Calendar.

2.

Supplier Proposed Manufacturing Changes.  Except as set forth in this Module, Supplier shall not make, initiate, or incorporate in Product any of the following changes (each a “Manufacturing Change” and collectively, “Manufacturing Changes”):

 

a.

Changes to business processes, methods, or information systems that support procurement, manufacturing, logistics, warehouse management, materials management (e.g. MRP / ERP), and quality management;

 

b.

Geographical relocation of Product’s sub-assembly, component manufacturing, test, upgrade, or repair processes;

 

c.

Supplier or Sub-supplier transitions, to include any assignment as defined in Section 15.3 (“Assignment”) of the Agreement, or changes in sourcing strategy, name(s), location(s), logistics strategy, logistics providers, or other service providers;

 

d.

Events that may impact supply, including but not limited to, cycle counts of inventory, factory and warehouse shutdowns, changes in allocation of capacity to HP or Eligible Purchasers, or changes in lead times for any Product, Spare, sub-assembly, part or component.

3.

Notice of Proposed Manufacturing Change.  Except in the case of an Urgent Manufacturing Change (as defined below), at least ninety (90) days prior to the first proposed shipment of any Product involving a Manufacturing Change, Supplier shall notify HP in writing of any proposed Manufacturing Change and shall provide appropriate information as HP may reasonably request.  Supplier shall not provide Product to HP or Eligible Purchasers involving a Manufacturing Change until HP has notified Supplier, in writing, that HP has completed its formal review and acceptance of such Manufacturing Change.

 

a.

With regard to any Product, Spare, sub-assembly, part, or component, if such Supplier proposed Manufacturing Change affects:

 

i.

Supplier cost or price;

 

ii.

Obsolescence;

 

iii.

Quality performance;

 

iv.

Lead times; or

 

v.

Shipment/delivery commitments,

 

b.

Supplier’s MCR form shall include the following elements, at a minimum: i) the reason(s) for Supplier proposed change, detailed description of the proposed change, iii) identification of all impacted Products, Spares, sub-assemblies, parts, and components, iv) detailed description of any impact on cost, price, obsolescence, quality performance, lead times, shipment/delivery commitments, and business continuity strategies or plans v) an implementation timeline with key milestones, vi) appropriate inventory buffer plan(s), and vii) appropriate contingency plan(s).

 

c.

All Supplier MCR forms will be presented to HP for approval, prior to Supplier initiating the proposed Manufacturing Change in whole or in part.  All agreed inventory buffers shall be available and positioned per the HP approved MCR, prior to Supplier initiating the proposed Manufacturing Change in whole or part.  Any deviation from the HP approved MCR (including missed or delayed key milestones, schedule changes, scope changes, and impact changes), will require Supplier to submit a revised MCR form for HP re-approval.

 

d.

If HP decides not to approve the Supplier proposed Manufacturing Change, any related MCR, or any subsequent revision of an MCR, Supplier shall continue to provide the Product or Spare without the Manufacturing Change until Supplier and HP resolve any issues.

 

e.

If a mutually agreed resolution to the Supplier proposed Manufacturing Change, any related MCR, or any subsequent revision of an MCR is not achieved within a reasonable time and prior to any impact on Supplier’s performance to the Flexibility Agreement of this Module (see below) for the current Product or Spare, HP may, subject to Section 6 of the Agreement (Services and Support Warranty), the Services and Support Requirements Module, if attached to this Agreement, and the Discontinuance of Product and HP’s Manufacturing Rights Module, if attached to this Agreement, discontinue Supplier’s supply of the current Product or Spare, including cancellation of all Accepted Orders and planned hub replenishments for such current Product or Spare without cost or liability.  HP’s entire liability will be limited to all Products and Spares for which HP has received and accepted delivery.

 

f.

If any HP approved Manufacturing Change(s) impacts Supplier strategies or plans for responding to or recovery from potential disasters that could disrupt operations or delay supply, Supplier shall update its business continuity plan within 7 days of implementing such Manufacturing Change(s).

4.

Urgent Manufacturing Changes.  Supplier will provide HP with oral, followed by written notice, within twenty-four (24) hours of having knowledge of the need to implement any Manufacturing Change in less than 90 days in order to avoid or mitigate a potential: i) disruption in operations, ii) delay in supply of Products or Services, or iii) impact to performance against the Flexibility Agreement (each an “Urgent Change).  Both parties agree that Urgent Changes require immediate action.  In the case of an Urgent Change, Supplier will prepare and submit an MCR form, which meets the requirements described in this Exhibit, within forty-eight (48) hours following notice to HP.  Within forty-eight (48) hours after receiving the MCR, HP will complete its review and provide its formal approval or rejection of such Urgent Change.

5.

[ * ]

6.

Assurance of Supply Recognition.  HP values suppliers that consistently demonstrate exceptional assurance of supply performance and a commitment to continuous AoS improvement.  Suppliers who, in HP’s opinion, diligently adhere to the AoS update processes described in Section 1 of this Module and the Manufacturing Change processes described in Section 3 of this Module, and meet or exceed the requirements in the Flexibility Agreement for the 12 month period of HP’s fiscal year, will be nominated for HP’s annual Assurance of Supply Award.

1.

Liability period.  Maximum HP liability period will be 12 weeks based on HP’s then current Forecast requirement and upside flexibility requirements as defined in the table below in section 3.

2.

HP Liability.  Within HP’s liability period, HP’s liability is limited to:

 

a.

Finished goods inventory positioned to support the agreement;

 

b.

Maximum 20 days Work in Process (WIP);

 

c.

HP unique material purchased by Supplier within industry standard lead time to support HP forecast requirements.  Supplier will submit and maintain a list of HP unique materials per the AoS Update;

 

d.

Long lead time components, as identified in the AoS Update, or critical materials purchased with HP’s prior written consent, if exceeding the above guidelines; and

 

e.

HP’s share of materials that are not unique to the Product (“Common Materials”) that can not be cancelled or consumed in other products within 6 months.  If, after this six month period, Supplier identifies an opportunity to consume any portion of this material within the next 3 months, Supplier will deduct this amount from HP’s liability.  HP’s share is defined as HP’s requirement in proportion to Supplier’s overall production requirement.

3.

Supplier Flexibility.  Supplier shall develop and implement internal processes to provide HP maximum flexibility and shall use reasonable efforts to maintain supply as set forth in the table below.  HP’s maximum percentage increase is not cumulative.

4.

Manufacturing Lead-Time.  Upon design being finalized, supplier shall maintain the necessary processes and material to maintain a four (4) week lead-time from receiving a purchase order from HP, for a POD, to shipment

Attachment 1 to Module I

Assurance of Supply Update Form

Rev Date: 12Nov07

Risk

Number of PN’s

HP Products

HP Part Numbers

High

Med

Low

Undetermined

Total

0

1.

Those legal entities identified at Section 5 and 6 of this Module (“Eligible Purchasers”) may purchase under this Agreement. “HP Eligible Purchasers” means those HP Subsidiaries or Affiliates listed in Section 5 of this Module.

2.

Supplier may require, as a condition of Eligible Purchaser’s purchase that: (a) such Eligible Purchaser be subject to Supplier’s normal credit standards and approval procedures (except for any HP Eligible Purchaser will not be subject to any credit approval procedure), (b) the Eligible Purchaser state that such purchase is made under this Agreement, and (c) such purchase is for production of, or is otherwise related to, HP Products. Such confirmation may be in a form reasonably acceptable to Supplier.

3.

If an HP Eligible Purchaser purchases under this Agreement, then all of Supplier’s representations, warranties and obligations in this Agreement run to the HP Eligible Purchaser and such HP Eligible Purchaser may make claims and exercise rights under this Agreement against Supplier as though the HP Eligible Purchaser had signed this Agreement.

4.

If an Eligible Purchaser purchases under this Agreement: (a) all of Supplier’s representation, warranties and obligations stated in this Agreement run to HP as though HP had made the purchase, (b) HP has no financial responsibility to Supplier for purchases by a ,Non-HP, eligible Purchaser and (c) Supplier and non-HP Eligible Purchasers will negotiate and agree upon their own payment terms and will not be bound by the provisions set forth in Section 2 (Payment”) of the Standard Terms.

5.

List of HP Eligible Purchasers.

1.

1.1

Product Development.  HP is requesting that Supplier assist with the development of a Customized Product.  HP will provide to Supplier HP Specifications that describe the design considerations of the Customized Product.  HP may request Supplier to assist with the creation or modification of the HP Specifications and any manufacturing requirements for such Customized Product.  All such development and assistance will be in accordance with a Statement of Work (SOW’) attached to this Module and this Agreement.  Each SOW is incorporated into this Agreement.  Supplier will use all commercially reasonable efforts to perform its obligations under the attached SOW, this Module and this Agreement, to complete development of the Customized Product.

1.2

Product Assembly.  Supplier will manufacture and/or assemble the Customized Product for HP in compliance with the warranties and other applicable provisions in the Agreement and any additional terms set forth in the SOW.

1.3

Inspection.  HP engineers and technicians may visit Supplier’s facilities upon reasonable notice to inspect and advise on the design, manufacture and testing of Customized Products and to audit compliance with the SOW, HP Specifications, and this Agreement.

2.

Intellectual Property.  To the extent of any conflict between the Agreement and this Section 2, this Section 2 will control.

2.1

Pre-Existing Intellectual Property.  Each Party will maintain all right, title, and interest, including all intellectual Property Rights, in and to its own Pre-Existing Intellectual Property irrespective of any disclosure of such Pre-Existing Intellectual Property to the other Party, and subject to the licenses granted herein.

2.2

Development Work.  Subject to Supplier rights in any Pre-Existing Intellectual Property, HP will own and Supplier assigns and agrees to assign to HP, and will cause each Subcontractor to assign to HP, all right, title and interest in Development Work.  To the extent permitted by law, Supplier waives any moral rights, such as the right to be named as author, to modify, to prevent mutilation, and to prevent commercial exploitation, whether arising under the Berne Convention or otherwise.  All such Development Work will be deemed HP Confidential Information under this Agreement.  All works of authorship included in the Development Work will bear the following copyright notice:  © Copyright 2009 Hewlett-Packard Development Company, L.P.

2.3

Inventions.  Supplier will inform HP promptly of any new Intellectual Property created in Supplier’s development of a Customized Product.  During and after this Agreement, Supplier will assist HP, at HP’s expense, to secure, maintain and defend HP’s Intellectual Property Rights in such Intellectual Property.  To the extent reasonably requested by HP, and at HP’s expense, Supplier will execute, and will ensure that each Subcontractor executes, any additional documents reasonably necessary to perfect, on a world-wide basis, HP’s Intellectual Property Rights in such Intellectual Property.  Supplier will not, without prior written authorization from HP, enter into any agreement with any third party relating to the disclosure, exploitation or transfer of such Intellectual Property.

2.4

Third Party Intellectual Property.  Neither Supplier nor any Subcontractor will use any Third Party Intellectual Property in connection with the Customized Product unless Supplier or Subcontractor has the right to use such Third Party Intellectual Property for HP’s benefit, and can grant the licenses to HP as specified in this Agreement.  If Supplier or any Subcontractor uses any Third Party Intellectual Property in connection with the Customized Product, then prior to performance under this Agreement Supplier will: (I) obtain all licenses to such Third Party Intellectual Property that are necessary for Supplier to comply with this Agreement, (ii) identify in the SOW the Third Party Intellectual Property and the specific elements of the Customized Product that contain such Intellectual Property, and (iii) identify in the SOW the corresponding third party license(s).

2.5

License to Certain Intellectual Property.  If Supplier uses any Third Party Intellectual Property and/or Supplier Pre-Existing Intellectual Property in connection with a Customized Product, Supplier grants and agrees to grant to HP a non-exclusive, irrevocable, perpetual, world-wide, royalty-free license to make, have made, use, sell, offer for sale and import such Customized Product, and to reproduce, display, distribute through multiple tiers of distribution, prepare derivative works of and disclose such Third Party Intellectual Property and Supplier Pre-Existing Intellectual Property in connection with the sale, distribution, import and support of such Customized Product.

3.

Limitations.  As to the Customized Product, Suppliers Defense and Indemnity obligations stated in the Agreement will not apply to the limited extent that a claim of patent infringement is caused solely and directly by either (i) Supplier’s compliance with HP’s Specifications, provided that all implementations of the HP Specification require an infringing use of the patent at issue, or (ii) modification to the Customized Product made by HP after final delivery of the Customized Product, provided that such claim would not have arisen but for such modification.  Notwithstanding the foregoing, this limitation will not apply if either (i) Supplier had actual knowledge of the patent(s) that gave rise to the infringement claim before delivery of the allegedly infringing Customized Product, or (ii) the infringement claim arises from a Standard Component specified in HP’s Specifications.  For clarity, the foregoing limitation will only apply to patent infringement claims and to no other type of infringement claim.

4.

Applicability of Agreement Terms.  Unless otherwise specified in this Module, all terms of this Agreement applicable to Product are applicable to Customized Product.

5.

Survival.  The following provisions of this Module survive expiration or termination of this Agreement or any Accepted Order: Definitions, Intellectual Property, Limitations, and Survival.

6.

Definitions.

1.

Supplier hereby identifies each software component and corresponding third party license pursuant to Section 7.1 of the Standard Terms.

2.

If any Software is subject to a license which requires the distribution of source code (e.g., but not limited to, the GNU General Public License (“GPL”), the GNU Lesser Public General License (“LGPL”), Supplier will provide HP with all such source code.

1.

This Agreement will be managed by a management sponsor from both HP and Supplier.

2.

These sponsors will conduct quarterly reviews concerning status of this Agreement

3.

Each sponsor will act as an escalation path for issues arising under this Agreement with the objective of timely resolution.

4.

The individuals identified in this Module may be re-designated at any time by their respective employers with notice to the other party.

 

Commodity Manager

[ * ]; 11445 Compaq Center Drive West, Houston, Tx, 77070 [ * ]

[ * ]

Commodity Manager

[ * ]

Procurement Manager

[ * ]; 11445 Compaq Center Drive West, Houston, Tx, 77070. [ * ]

[ * ]

Procurement Manager

[ * ]

Procurement Engineer

[ * ]; 11445 Compaq Center Drive West, Houston, Tx, 77070. [ * ]

[ * ]

Procurement Engineer

[ * ]

Supplier Account Manager

 

 

Upper Management Executive

[ * ]

Upper Management Executive

[ * ]; 114-45 Compaq Center Drive West, Houston, Tx 77070 [ * ] [ * ]

Worldwide Planner

[ * ]; 11445 Compaq Center Drive West, Houston, Tx, 77070

[ * ] [ * ]

Worldwide Planner

[ * ]

Product Safety Representative

[ * ]

Product Safety Rep

[ * ]

1.

Non-Conforming Product.  All Non-Conforming Product may be returned to Supplier as set forth in this Module.  Additionally, an entire lot of Product may be returned if a statistically significant sampling, as specified by HP, of that lot contains Non-Conforming Product. “Non-Conforming Product” means any Product which at any time during the applicable warranty period does not comply with the Product Specifications or otherwise does not comply with the requirements of an Accepted Order or this Agreement.

2.

Return Materials Authorization.  All returned Product will be accompanied by a Return Materials Authorization (“RMA”).  Supplier will provide an RMA within two (2) Business Days of HP’s or Eligible Purchaser’s request.  Product may be returned without an RMA if Supplier unreasonably refuses or fails to provide an RMA.

3.

Correction of Non-Conforming Product.  At HP’s election, at Supplier’s sole expense, Supplier will (a) repair or rework Non-Conforming Product within a reasonable time specified by HP, (b) replace same with conforming Product and ship with expedited shipping to arrive within two Business Days, (c) promptly issue credit therefore, or (d) promptly refund the purchase price if paid.

4.

Return Charges.  All Product returned to Supplier pursuant to this Module, and all replacement Product shipped by Supplier, will be at Supplier’s risk and expense.

5.

Duty to Remove HP Identifiers.  Unless otherwise authorized by HP in writing, (i) Supplier will remove all HP part numbers, HP packaging, HP Intellectual Property (including HP Marks), any color or design scheme or code, and other customization for HP (collectively “HP Identifiers”) prior to selling, transferring, distributing, scrapping or otherwise conveying any Product to others besides HP or Eligible Purchasers, and (ii) Supplier will not represent that any Product is built for HP or to HP Specifications.

1.

Minimum Insurance Coverage.  During the Term and at all times that Supplier performs services for HP, Supplier shall maintain in full force and effect, at Supplier’s own expense, the following minimum insurance coverage.  Minimum insurance limits may be obtained through any combination of primary and excess or umbrella liability insurance limits.

 

A.

Workers’ Compensation or Social Scheme and Employers Liability Insurance: Workers’ Compensation shall be as required by any applicable law or regulation having jurisdiction over Supplier’s employees.  If the jurisdiction has a Social Scheme, Supplier agrees to be in full compliance with laws thereof.  The Employers Liability Insurance limit shall be the local currency equivalent of $1,000,000 USD.  Where permitted by law, such policies shall contain waivers of the insurer’s right of subrogation against HP, its subsidiaries, officers, directors and employees.

 

B.

General Liability Insurance (Public or Civil Liability): Supplier shall carry General Liability insurance covering liability arising from: Premises; Operations; Independent Contractors; Products and Completed Operations; Contractual Liability.  Policy limits shall be local currency equivalent of: $10,000,000 USD per Occurrence (Combined Single Limit) and $20,000,000 USD General Aggregate.  HP, its subsidiaries, officers, directors and employees shall be named as Additional Insureds under the policy.  It is agreed the insurance afforded such Additional Insureds shall apply as primary insurance and that any other insurance carried by HP shall be excess only and shall not contribute with this insurance.  If “claims made” policies are provided, Supplier shall maintain such policies at the above stated minimums, for at least three years after the expiration of the Term.

 

C.

Automobile Liability Insurance.  If the Supplier will be driving onto HP or HP customer sites, then the Supplier shall carry Automobile Liability Insurance to cover bodily injury and property damage, arising from owned, hired, and non-owned vehicles with a combined single limit of liability for each accident of not less than the local currency equivalent of $1,000,000 USD.

2.

Certificate of Insurance.  Upon request, Supplier shall furnish Certificates of Insurance acceptable to HP. Supplier is responsible for notifying HP 30 days prior to any reduction or cancelation of coverage.  All insurance policies will be written by a company authorized to do business in the territory and jurisdiction where the project is located.  In no event will the coverage or limits of any insurance maintained by Supplier herein or the lack of availability of any other insurance, limit or diminish in any way Supplier’s obligations or liability to HP under this Agreement.  Any acceptance of insurance certificates by HP shall not limit or relieve Supplier of the duties and responsibilities assumed by it under this Agreement.

3.

Deductibles and Self-Insured Retentions.  All deductibles and/or self-insured retentions (if any), including those related to defense costs, are the sole responsibility of Supplier.