Document:

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                                                                   EXHIBIT 10.16

                              A D D E N D U M NO. 2

                                       TO

                   PROPERTY LEASING AGREEMENT NO. 326-61 0038

                               OF 20 DECEMBER 2000

between      ROSATA Grundstucks-Vermietungsgesellschaft mbH & Co.
             Objekt Dischingen KG, Dusseldorf

             - hereinafter referred to as "Lessor" -

and

             VARTA Geratebatterie GmbH, Hanover

             - hereinafter referred to as "Lessee" -

With effect as of 10 October 2002, VARTA AG has concluded an agreement
concerning the merger of its Consumer Battery Division (GERATEBATTERIE) with
Rayovac Corporation, Madison/Wisconsin. The agreement provides that the foreign
subsidiary companies of the Lessee were transferred to VARTA AG and to group
companies of Rayovac.

In Germany the Lessee will continue to be operated as a Joint Venture in which
ROV German Limited GmbH holds 51% and VARTA AG 49%. Prior to ROV German Limited
GmbH joining the company of the Lessee the company was consolidated into the
newly formed VARTA Handelsbatterie GmbH. After the consolidation VARTA
Handelsbatterie GmbH was renamed VARTA Geratebatterie GmbH.

Within the framework of the Loan Agreement for the financing of the Total
Investment Costs (TIC) the Lessor has agreed with its refinancing bank a right
of termination according to which the bank may terminate the loan

   -  on 30 July 2005
   -  prior to 30 July 2005, if the participation of VARTA AG in the Lessee is
      reduced to less than 47 % or if the participation of VARTA AG in the
      Lessee is terminated and/or ended for any other reason.

Upon termination the remaining sum of the loan together with any interest and
costs, in particular any compensation for premature termination, will fall due
for repayment.

Regardless of this on the said dates and/or upon the occurrence of the said
circumstances, NordLB will be entitled to demand from the Lessor the deposition
of the remaining sum of the loan as of that point in time and the pledging of
these amounts as security for the loan.

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This said, the Lessee undertakes to deposit directly with NordLB upon the
termination of the loan or on demand a special payment in cash which amounts to
not less than the remaining sum of the loan at that point in time plus statutory
Value Added Tax together with any interest and costs, in particular together
with any compensation incurred due to premature termination of the loan. This
cash deposit will accrue interest in favour of the Lessee at the interest rates
on investments which are standard at NordLB.

The Lessee, VARTA AG and Rayovac undertake herewith to immediately provide prior
information in good time to the Lessor and Norddeutsche Landesbank Girozentrale
in Hanover (refinancing bank of the Lessor) about any reduction of the
participation of VARTA AG in the Lessee or about exercising of the extraordinary
right of termination of the Joint Venture by VARTA AG to which VARTA AG will be
entitled at all times.

In separately concluded agreements the following declarations are made in
respect of this Leasing Agreement:

1. VARTA AG assumes co-liability as joint and several debtor for all obligations
   arising from the Property Leasing Agreement and the put option in respect of
   the prorated share of the Total Investment Costs of EUR 2,300,000.00 in
   connection with the new building.

2. Rayovac Corporation assumes a guarantee for the obligations of the Lessee
   arising from the Property Leasing Agreement and the put option. The legal
   effectiveness of the guarantee is to be sunstantiated by a "legal opinion"
   confirming the corporate status and the legally effective signature.

3. The assignment agreement between the Lessor and NordLB (refinancing bank) in
   respect of the future claim to the payment of the purchase price from the put
   option between Lessee and Lessor and of the rights and claims arising from
   the warranty issued by Rayovac Corporation.

The pages 1 and 2 which are attached to this Addendum no. 2 will replace the
pages 1 and 2 of the Addendum no. 1 which have applied so far.

All other provisions of the Property Leasing Agreement of 20 December 2000 and
the Addendum no. 1 of 22/29 June 2001 shall remain unaltered.

Dusseldorf,   29.4.2003
           ---------------

  /s/ Dieter Krekel and Otto Dasenbrock
------------------------------------------------
ROSATA Grundstucks-Vermietungs-
gesellschaft mbH & Co.
Objekt Dischingen KG

Ellwangen,    29.4.2003                Hanover,    29.4.03
           ----------------                    --------------------

  /s/ Andreas Rouve                      /s/ Uwe Ganzer
-----------------------------------    ---------------------------
VARTA Geratebatterie GmbH              VARTA AktiengesellschaftExhibit 10.24

 

 

 

MASTER
PURCHASE AGREEMENT

 

This Master Purchase
Agreement  (“MPA”) is made as of  May 7, 2003 
(“Effective Date”) between Cisco Systems Inc., a California corporation,
having its principal place of business at 170 West Tasman Drive, San Jose, CA
95134 on behalf of itself and its Subsidiaries (collectively, “Cisco”), and
Integrated Device Technology, Inc., a Delaware corporation having a place of
business at 2975 Stender Way, Santa Clara, California 95054, (“Supplier”).

 

This MPA has the following
attachments, which are incorporated into this MPA by this reference and made a
part hereof:

 

	
   

  	
  Exhibit A

  	
   

  	
  Product Schedule

  
	
   

  	
  Exhibit B

  	
   

  	
  Business Reviews

  
	
   

  	
  Exhibit C

  	
   

  	
  Failure Analysis
  Procedure

  
	
   

  	
  Exhibit D

  	
   

  	
  Product Change
  Notification

  
	
   

  	
  Exhibit E

  	
   

  	
  Reschedules and
  Cancellations

  
	
   

  	
  Exhibit F

  	
   

  	
  [*]

  
	
   

  	
  Exhibit G

  	
   

  	
  Cisco Authorized
  Contract Manufacturers

  
	
   

  	
  Exhibit H

  	
   

  	
  Dispute Escalation

  
	
   

  	
  Exhibit I

  	
   

  	
  Competitor List

  

 

PRELIMINARY UNDERSTANDING

 

 

A.                                   Supplier is in the business of
developing, manufacturing and selling components that are required to achieve
the desired functionality of some of Cisco’s products.

 

B.                                     Cisco desires to purchase from Supplier,
and Supplier desires to supply to Cisco, the Products (as defined herein)
pursuant to the terms and conditions herein.

 

 

NOW, THEREFORE, in
consideration of the mutual promises contained herein, the parties agree as
follows:

 

 

1.                                      DEFINITIONS

 

1.1                                 “Cisco CMs” shall mean those contract
manufacturers engaged in the manufacture of Cisco products who are identified
in Exhibit G, as it may be amended by Cisco, in its sole discretion, throughout
the Term.

 

Confidential
treatment has been requested for portions of this exhibit.  The copy filed herewith omits the
information subject to the confidentiality request.  Omissions are designated as [*]. 
A complete version of this exhibit has been filed separately with the
Securities and Exchange Commission.

 

 

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of 30

 

1.2                                 “Custom”: A
Product that is not standard and (i) is customized expressly for Cisco
product requirements, or (ii) for which Supplier has no alternative
redistribution channel.

 

1.3                                 “Delivery Date” shall mean the date
agreed to by the Parties for receipt of goods at the specified delivery
location identified in the applicable purchase order (per INCO terms 2000) for
any order for Products.

 

1.4                                 “e-Hub” shall mean Cisco’s online supply
chain management tool.

 

1.5                                 “Intellectual Property” means any and all
tangible and intangible: (i) rights associated with works of authorship
throughout the world, including but not limited to copyrights, neighboring
rights, moral rights, and maskworks, and all derivative works thereof
(ii) trademark and trade name rights and similar rights, (iii) trade
secret rights, (iv) patents, designs, algorithms and other industrial
property rights, (v) all other intellectual and industrial property rights
(of every kind and nature throughout the world and however designated) whether
arising by operation of law, contract, license, or otherwise, and (vi) all
registrations, initial applications, renewals, extensions, continuations,
divisions or reissues thereof now or hereafter in force (including any rights
in any of the foregoing).

 

1.6                                 “Lead Time” shall mean the period from
the time Supplier accepts an order for Products until delivery to Cisco or
Cisco CM as quoted by Supplier for entry into Combat. Such Lead Time however,
shall not exceed [*].  “Combat” shall
mean Cisco’s Outsource Manufacturing Business Analysis Tool.

 

1.7                                 [*]

 

1.8                                 “Products” shall mean the  products listed in each Product Schedule
attached hereto as Exhibit A, and shall include hardware products and Software,
user documentation (where applicable) and Supplier’s standard packaging. Products
shall also include progeny of or replacements for such Products.

 

1.9                                 “Product Price” shall mean the mutually
agreed to net price that Cisco and Cisco CMs shall pay for each Product as
listed in the then applicable Cisco enterprise resource planning database
(“Cisco ERP”) or other database, including, but not limited to Combat.

 

1.10                           “Product Schedule” shall mean the
schedule, one for each Product, attached hereto as Exhibit A. Product Schedules
agreed upon after the Effective Date shall be executed by the parties and
copies shall be appended hereto. The Product Schedules may be amended from time
to time in accordance with the mutual agreement of the parties.

 

1.11                           “Rolling Forecast” shall mean a
non-binding twelve (12) month forecast of Cisco’s estimated requirements for
Products for itself, Subsidiaries, and Cisco Systems International B.V. as
updated periodically.

 

1.12                           “Semi-Custom” shall mean those Products which may be
modified in part to meet Cisco’s requirements and for which there are limited
alternative distribution channels.

 

 

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1.13                           “Software” shall mean any computer code
in object code format and whether embedded in or bundled with the Products in
any manner, including as firmware, and even if provided separately on disks or
other media or by electronic transmission, together with all bug fixes,
revisions and upgrades thereto.

 

1.14                           “Specifications” shall mean the
Product-specific specifications that are set forth or referenced in the
applicable Product Schedule.

 

1.15                           “Subsidiary” shall mean a corporation,
excluding Cisco Systems International B.V., in which a party effectively owns
or controls, directly or indirectly, more than fifty percent (50%) of the
voting stock or shares.

 

1.16                           “Term” shall have the meaning set forth
in Section 18.1.

 

1.17                           “Warranty Period” shall mean the duration
of warranty as specified in each Product Schedule, commencing upon delivery of
the Product to Cisco, Cisco CMs or other authorized delivery site in compliance
with the conditions required in Section 11.2

 

2.                                      SALES AND PURCHASES OF PRODUCT

 

2.1                                 Products.   Supplier
agrees to supply and Cisco agree to purchase Supplier’s Products pursuant to
the terms and conditions of this MPA. 
Supplier hereby agrees to supply to Cisco and/or Cisco CMs the Products
listed in each Product Schedule in compliance with the Specifications and for
the exclusive purpose of incorporation into a final Cisco product.  Supplier’s use of data contained in or entry
of data into the Combat tool shall not alter the terms of this MPA.

 

2.2                                 Purchase Orders. 
Supplier agrees that it shall handle purchase orders placed by Cisco CMs
identified in Exhibit I.  Supplier shall
accept and acknowledge in writing all purchase orders from Cisco or Cisco CMs
within three (3) business days after receipt thereof, identifying a firm
shipping date in compliance with the applicable Lead Time with each such
acknowledgment.  [*]. All purchase
orders placed with Supplier by Cisco shall be subject to the terms and
conditions of this MPA without specific reference hereto in any such Cisco
purchase order.  Cisco shall not be
liable for any verbal commitments made by Cisco or Cisco CMs, although Supplier
may proceed based upon an authorized Cisco buyer/planner’s provision of a Cisco
purchase order number which shall be followed by a written or electronic
purchase order to be accepted by Supplier as called for in this Section 2.2.

 

2.3                                 Flexibility.   Supplier shall ensure that it has the
capacity to increase or decrease production of any Products from any given
volume as set in the Rolling Forecast as follows:

 

•                                          [*] if the increase or decrease is to be effected within four (4) weeks;
and

 

•                                          [*] if the increase or decrease is to be effected within eight (8) weeks.

 

Supplier
shall be capable of sustaining such flexibility percentages as measured against
a baseline to be
refreshed every four weeks. 
Additionally, such flexibility capability shall be in accordance with
goals and/or Lead Time parameters established by Supplier with Cisco CMs,
including the implementation of a supplier managed inventory program
(“SMI”).  [*].  Supplier
shall coordinate with Cisco and all applicable Cisco CMs to meet 

 

 

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any
such Rolling Forecast increase or decrease by effectively managing its
inventory at the lowest, longest lead time component or raw material level to
minimize risk throughout the supply chain while ensuring maximum flexibility
and scalability to Cisco’s demand. Supplier hereby acknowledges that neither
Cisco nor Cisco CMs shall bear any liability or responsibility for any costs
incurred by Supplier to meet such volume increase or decrease unless otherwise
provided for in this MPA.

 

2.4                                 Reschedules and Cancellations. 
Cisco CMs may cancel or reschedule purchase orders issued to Supplier in
the manner agreed upon with Supplier by each of them.  Cisco may cancel or reschedule purchase orders issued by Cisco
directly to Supplier, as set forth in Exhibit E.

 

2.5                                 Non-Cancellable/Non-Returnable Products.         No
Product shall be treated as Non-Cancellable/Non-Returnable (“NCNR”) unless so
designated in the applicable Product Schedule.   Purchase orders for any such NCNR Product may be cancelled by
either Cisco or Cisco CMs and shall be paid for in the manner and subject to
the terms as set forth in Exhibit E.

 

2.6                                 Disaster Recovery and Business Continuity Plan. Within sixty (60) days after the Effective Date, Supplier shall
submit to Cisco a formalized plan for disaster recovery and business continuity
specific to location(s) relating in any way to the manufacture and sale of
Products to Cisco contemplated by this MPA (the “Plan”). Such Plan, at a
minimum, shall identify available alternate facilities, infrastructure and
logistics, and provide for security and protective measures necessary to ensure
minimal impact to Cisco’s supply of Products from Supplier.

 

2.7                                 Benefits to
Cisco CMs.  Supplier
shall ensure that all terms relating to the Products and their purchase set
forth in the following Sections of this MPA shall be adhered to with Cisco CMs
in the course of their purchase of Products for inclusion in Cisco products.
Those terms to be afforded or adhered to with Cisco CMs shall include
Sections 2.1-2.3, 2.5, 3.1, 4.2, 5 (entirely), 7 (entirely), 8.4, 10 (entirely),
11.1, and 11.2.

 

3.                                      PRICING

 

3.1                                 Prices.  The Product Prices shall be set forth in the then applicable Cisco ERP
or other database, including, but not limited to Combat, to be updated on a
quarterly basis unless otherwise agreed by the Parties. Transportation and all sales, property,
excise and other applicable taxes (other than those based on Supplier’s net
income) shall be paid by Cisco.  No
additional fees or charges of any sort shall be charged to Cisco, unless the
subject of a written Supplier request accepted by a Cisco commodity manager in
writing. Invoices submitted to Cisco shall be paid within thirty (30) days from
the receipt of a valid invoice. If not received earlier, invoices submitted to
Cisco shall be deemed received seven days after their issuance. Supplier shall
use its best efforts to meet Cisco’s quarterly cost reduction targets, as they
are communicated to Supplier and Supplier will extend to Cisco all price
decreases achieved by Supplier.  Cisco
shall have the right to alter any percentage of Total Available Purchases
(“TAP”) if agreed upon herein, in the event that: (i) Supplier’s pricing is not
competitive; (ii) the Products do not comply with the applicable
Specifications; (iii) Supplier has failed to or is unable to meet Delivery Dates;
or (iv) Supplier is not in compliance with any other material provision hereof.
Prices stated in the Product Schedules are in U.S. dollars and do not include
applicable Taxes. “Taxes” mean any tax or other charge that Supplier is liable
to collect on behalf of any governmental authority as a result of the sale, use
or delivery of Products, including without limitation, duties, value added and
other withholding taxes. Taxes do not include taxes on Supplier’s net income.

 

 

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3.2                                 Lowest Price Warranty. 
Supplier represents and warrants to Cisco that throughout the Term of
this MPA, the Product Prices are and will be no higher than the lowest net
prices offered by Supplier [*]. Cisco shall have the right upon reasonable
notice to Supplier and reasonable justification for wanting to so, to have a
representative examine such applicable books and records of Supplier as are
necessary to verify Supplier’s compliance with this Section 3.2.  If the audit reveals that Supplier has not
complied, then Supplier shall issue, in Cisco’s discretion, a credit against
outstanding future payment obligations for the total difference between the
price paid and the lowest price. If such audit reveals that Supplier’s pricing
to Cisco for the Products has been more than five percent (5%) higher than
pricing for the Products to any of Supplier’s other customers, Supplier shall
pay the reasonable fees and expenses of such audit.  For the purpose of this section, the determination of Product
pricing shall not take into account any incentive or marketing programs that
may be offered by IDT to CM customers.

 

4.                                      FORECASTS AND PRODUCT ALLOCATION

 

4.1                                 Forecasts.  On a
periodic basis, Supplier will receive, by any means approved by Cisco including
via e-Hub, a Rolling Forecast of Cisco’ estimated needs. These forecasts are
for planning purposes only and do not constitute any commitment to purchase,
unless otherwise explicitly set forth in this MPA. No request for Products
shall be binding unless contained in a purchase order in compliance with the
requirements of this MPA and pursuant to Exhibit E.

 

4.2                                 Allocation of Products. In the event Supplier’s manufacturing
capacity for any Product is in short supply, Supplier shall deliver to Cisco an
allocation no less favorable than any of its other customers, whether internal
or external. Supplier shall provide Cisco with as much notice as reasonably
possible if it anticipates or has reason to believe that Supplier’s output of
the Product will not be sufficient to meet all of Cisco’s requirements for any
period. Supplier shall notify Cisco in writing upon reaching a product capacity
utilization of [*]. This capacity allocation right shall be in addition to any
other rights and remedies of Cisco.

 

5.                                      SHIPMENT AND DELIVERY

 

5.1                                 Delivery. Delivery shall be FCA  point of shipment. 
Delivery Dates shall be based on the Lead Time shown in each Product
Schedule.

 

5.2                                 Late Delivery. 
If Supplier is unable to deliver to a Cisco CM any Products on the
Delivery Date, Supplier shall notify the applicable Cisco CM.  If Supplier is unable to deliver Products
ordered by Cisco on the Delivery Date, Supplier shall (i) notify a Cisco
buyer/planner within twenty four (24) hours of Supplier’s knowledge of
late delivery and (ii) make reasonable commercial efforts to allow no less
than forty eight (48) hours notice of any such late delivery. In the event
that the parties cannot agree on a revised Delivery Date or the late delivery
has impacted a Cisco customer order, (i) Cisco or Cisco CMs may
cancel the affected purchase orders without penalty, or (ii) Supplier
shall accept any reschedule or change in the affected purchase order as Cisco
or Cisco CMs may require. Regardless of whether an order was placed by Cisco or
Cisco CMs, Supplier shall immediately notify Cisco and, if relevant, all
affected Cisco CMs of any known or anticipated delays that may cause a
manufacturing line to go down, or of any circumstances that may cause
disruption in deliveries.

 

5.3                                 Shipping Documents and Markings; Packing.

 

5.3.1                        Documentation. 
Shipping documentation must be complete and accurate and include all
required information including commercial invoice, packing list, all applicable
export and transportation documents and declarations.  An itemized packing list must accompany each shipment and shall
prominently identify  (i) the
purchase order number, (ii) the description, part number, revision level,
and quantity of the Products shipped, (iii) the number of shipping
containers in the delivery, (iv) the status of the shipment as complete or
partial, and (v) the waybill/bill of lading number.

 

5.3.2                        Packaging. Unless otherwise specified by Cisco or Cisco CMs,
Supplier will package and pack all goods in a manner which (i) is in
accordance with good commercial practice, (ii) is acceptable to common
carriers for shipment, (iii) follows procedures taking into 

 

 

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account the then most
current I.C.C. regulations, and (iv) is adequate to ensure undamaged
arrival of the Products at the identified destination.

 

5.3.3                        Markings.  Supplier
will mark all containers with necessary lifting, handling and shipping
information and with purchase order numbers, date of shipment, and the names of
the consignee and consignor.

 

6.                                      SUPPLIER PERFORMANCE CRITERIA

 

6.1                                 The ultimate evaluation of Supplier’s
performance hereunder for purposes of continued or additional purchases shall
be made exclusively by Cisco, in their sole discretion; provided that Cisco
will communicate a variety of criteria which may be considered in such
evaluation, including Cisco’s “Scorecard” process.  The Scorecard process is Cisco’s formal process for
identification of supplier strengths and areas for improvement. Supplier performance
will be discussed during QBRs or SBRs as shown in Exhibit B.

 

7.                                      PRODUCT INSPECTION AND QUALITY

 

7.1                                 Inspection by
Cisco.  Products shall be subject to
inspection and testing by Cisco or Cisco CMs for (i) conformance to
Product Specifications, (ii) warranty defects and (iii) any other
form of damage.

 

7.2                                 Return.  In case any Product is found not to conform
to the mutually agreed upon Specifications, or is in any way defective in
material or workmanship, or otherwise damaged (“Non-Conforming Product”), Cisco
or Cisco CMs may return the Product and will (i) promptly notify Supplier
in writing of the basis of such return and (ii) comply with the Supplier’s
Return Materials Authorization (“RMA”) process for the return of the
Non-Conforming Products, provided that such RMA process has been given in
writing to Cisco or Cisco CM. The Non-Conforming Product will be processed
according to the warranty procedure specified in Section 11 herein.  

 

7.3                                 Failure Analysis.    At
Cisco’s request, Supplier will adhere to the failure analysis procedure as set
forth in Exhibit C and provide to Cisco a failure analysis report specifying
the reason for failure of any Non-Conforming Product. [*]

8.                                      PRODUCT SPECIFICATIONS AND CHANGES

8.1                                 Specifications. Supplier agrees to supply Products that
conform to the applicable Specifications. Supplier shall not make changes to
any Specifications for any Product, or any changes to a Product or process
characteristics which could potentially result in a change to the form, fit, or
function of the Product without prior written notice given to Cisco in
accordance with the Product change notification process in Exhibit D.

 

8.2                                 Pre-Shipment Testing. 
Supplier shall follow pre-delivery test procedures as the parties may
agree upon for each Product.

8.3                                 Product Corrections. Within one (1) working day after
verifying any bug or other  problem in a Product which may result or
already has resulted in an adverse impact to Cisco’s installed customer base of
such Product, any party may submit a request to make a corrective 

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change.  The
requesting party shall provide all applicable data in support of the
request.  Within ten (10) business days
(unless such time is mutually extended) the parties shall agree upon a course
of corrective action and the time for its implementation.

 

8.4                                 Product Discontinuation. 
[*].  If Supplier intends to
discontinue the manufacture and sale of any Product (“EOL”), Supplier shall
give at least [*] written prior notice to Cisco (the “EOL Period”).  During the EOL Period, orders may be placed
orders for such Product pursuant to this MPA, but such orders may not request
delivery of such Product on a date later than [*]  after the end of the EOL Period. Supplier shall provide support
for the EOL Product pursuant to Section 10.1 of this MPA. In no event
shall Supplier accept purchase orders for such Product from any third party
after the last day of the EOL Period, without offering the same opportunity for
Product procurement to Cisco or Cisco CMs on behalf of Cisco.  Throughout the EOL Period, Supplier shall
assist Cisco in identifying alternative products or sources for the affected
Products’ functionality.

 

8.5                                 Plant Move or Closure. If Supplier intends to relocate or
close any of its manufacturing plants, it shall provide Cisco a minimum of
one hundred twenty (120) days advance written notice. If the closure
causes the Supplier to EOL a product, the term of notice shall be as stated in
Section 8.4 above. In addition, if Supplier intends to open a new manufacturing
plant, Cisco shall receive the same minimum notice as for a move or closure

 

9.                                      OWNERSHIP OF SOFTWARE; GRANT OF RIGHTS

 

9.1                                 Ownership. Supplier and its licensors shall retain title to and
ownership of the Software.

 

9.2                                 Software License. Supplier hereby grants to Cisco, Cisco
CMs and Cisco’s end-users a non-exclusive, perpetual, worldwide, royalty-free
license to use the Software and grants to Cisco and Cisco CMs the right to
authorize others to use the Software in connection with the manufacture, sale,
license, loan or distribution of Cisco’s products through resellers and
multiple tiers of distribution. Except as expressly set forth herein or as
permitted by law, Cisco shall not (i) modify, reproduce, copy, reverse
engineer, decompile or disassemble all or any portion of the Software, or
(ii) create derivative works thereof.

 

9.3                                 Upgrades. All bug fixes, revisions to and upgrades of the
Software, which Supplier makes available to any of its customers at no charge
will be made available to Cisco and Cisco CMs at no charge. All other upgrades
or Product enhancements will be offered to Cisco and Cisco CMs on mutually
agreeable terms and conditions.

 

10.0                        SUPPORT

 

10.1                           Support.  Supplier
agrees to provide reasonable technical assistance, and failure analysis
services (collectively, “Support Services”) with respect to each Product
individually, including discontinued Products ordered, delivered and paid for
by Cisco or Cisco CMs, for a period of [*] after the later of the last date of
shipment to Cisco or Cisco CMs or termination or expiration of this MPA.
Products requiring support shall be returned pursuant to Supplier’s RMA process
as agreed upon by the parties.   Support
Services shall include, but may not be limited to, the following:

 

 

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10.1.1                  Technical Support. Upon Cisco’s reasonable request, Supplier will
provide to Cisco or Cisco CMs in electronic form or other acceptable form, all
bug notes or other documentation, and defining the relevant information,
symptoms, solutions or workarounds for identified Product problems, including
accurate records of Product deficiencies. During the Term of this MPA, Supplier
will provide such support to Cisco and Cisco CMs at no charge.

 

10.1.2                  Emergency Replacement. Supplier shall utilize its reasonable efforts to
provide emergency replacement Products functionally equivalent replacement
products within [*] of receipt of Cisco’s or Cisco CMs’ request therefor. If no
replacement is available, Supplier will provide replacement Products as soon as
reasonably possible and will notify Cisco or Cisco CMs of the estimated
delivery date for such replacement.

 

11.0                        REPRESENTATION AND WARRANTIES

 

11.1                           Warranty of Title. 
Supplier warrants and represents that 
(i) it shall convey to Cisco and/or Cisco CMs good and clear title
to the Products, free and clear of all liens and encumbrances, (ii) at the
Effective Date and on the date each Product is shipped, Supplier is not aware of
any claims for infringement of Intellectual Property rights with respect to any
of the Products, and (iii) it has the full authority to enter into this
MPA, to carry out its obligations under this MPA, and (iv) its compliance
with the terms and conditions of this MPA will not violate any applicable
federal, state or local laws, regulations or ordinances or any third party
agreements in effect at the time of manufacture of a particular Product.

 

11.2                           Product Warranty. 
Supplier warrants to Cisco that, for [*] from the date of shipment  the Products whether ordered by Cisco or
Cisco CMs (i) will be new and unused, (ii) will comply in all
respects with the applicable Specifications, ULA or CSA requirements, (iii) will
be free from defects in materials design (to the extent it may cause death or
serious bodily harm), and workmanship. 
Supplier will, at its expense, repair or replace all Non-Conforming
Products with new and unused Products, and deliver the repaired or replacement
Products to a location designated by Cisco or Cisco CMs within [*] days after
receipt of Cisco’s request for replacement. 
In the event Supplier is unable to repair or replace the Product,
Supplier will refund the price paid by Cisco. 
Any Product repaired or replaced under warranty is warranted for the
period of time remaining in the original warranty for the Product, [*].
Supplier will adhere to the failure analysis procedure as set forth in Exhibit
C and provide to Cisco a failure analysis report specifying the reason for
failure of any Non-Conforming Product [*]. 
Unless Supplier reasonably demonstrates that a returned Product is not a
Non-Conforming Product, Supplier will pay the cost of shipping and insurance
for the returned and replacement Products.

 

11.3                           Epidemic 
Failure.  For the purposes of this MPA, epidemic
failure will be deemed to have occurred if [*]  a substantially similar repetitive defect
occurs in a significant number of Product indicating a common or systemic
failure (“Epidemic Failure”). An Epidemic Failure shall not include failures
due to customer misapplication, utilization of parts not approved by Supplier,
or chain failures induced by internally or externally integrated
sub-assemblies.

 

In the event of a claimed
Epidemic Failure, Supplier and Cisco will cooperate to implement the following
procedure:

 

(i)                                     The discovering party will promptly
notify the other upon discovery of the failure;

 

 

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(ii)                                  Supplier shall inform Cisco of its
preliminary plan for problem diagnosis within one (1) business day of such
notification;

 

(iii)                               Supplier and Cisco will jointly endeavor to verify the
Epidemic Failure and immediately diagnose the problem, plan an initial
work-around and effect a permanent solution. 
If necessary, Product changes will be implemented in the manner set
forth in Exhibit D; and

 

(iv)                              Supplier and Cisco will mutually agree on
a recovery plan (the “Recovery Plan”) which may address any or all of the following, as
appropriate: customer notification and replacement scheduling, field removal,
return and reinstallation, and work in process (“WIP”) and inventory
replacement, repair, or retrofitting. The Recovery Plan shall also specify
Supplier’s financial responsibility for any activities to be performed. The parties
agree to use good faith in expediting the execution of the Recovery Plan.

 

11.4                           [*].

 

12.                               SECURITY OF SUPPLY

12.1                           The parties agree that the Products to be
purchased under this MPA may be unique and unobtainable from an alternate
source, and that apart from other breaches of this MPA which may give cause to
Cisco’s right to injunctive relief and/or specific performance, Supplier’s
failure to deliver any such unique Products will cause Cisco irreparable injury
for which there is no adequate remedy at law. Supplier shall maintain an upside
flexibility within a quarter based on rolling forecast as specified in
Section 2.3 of this MPA.

 

13.                               [*]

 

 

14.                               INDEMNIFICATION

 

14.1                           Indemnification by Supplier. 
Supplier will indemnify, defend, and hold harmless each of Cisco, Cisco
CMs, Cisco resellers, distributors and other sales agents and their respective
officers, directors, employees, shareholders, agents, direct and indirect
customers, and successors and assigns (collectively the “Indemnified Parties”) from
and against all claims, suits, and actions (collectively “Claims”) brought
against the Indemnified Parties, and for all resulting damages, losses, costs
and expenses (including reasonable attorney and professional fees)
(collectively “Losses”) that result or arise from Claims, relating to:
(i) any allegation that one or more Products or their manufacture, use,
import, or sale infringe, misappropriate, or violate any  Intellectual Property rights of [*] or (ii) allege that
one or more Products,  or any part
thereof, have caused personal injury or damage to tangible property.  The Supplier will pay all amounts agreed to
in a monetary settlement of the Claims and all Losses that result or arise from
the Claims.

14.2                           Continued Use. 
If Cisco or any of Cisco CMs or any of Cisco’s customers are prevented
or are likely to be prevented from obtaining, selling, importing, or using
Products by reason of any Claims relating to actual or potential infringement,
then Supplier will, at its sole expense, use its best efforts to:  (i) obtain all rights required to
permit the manufacture and sale of such Products by Supplier, and the sale,
import, and use of the Products by Cisco, Cisco CMs and their customers; or
(b) modify or replace such Products to make them non-infringing, provided 

Page 9
of 30

 

that any replacement of
such Products is satisfactory to Cisco. 
If Supplier is unable to achieve any option above within thirty
(30) days after issuance of an injunction, then Supplier will promptly
refund to Cisco the price, and all shipping, storage, and related costs, of all
affected Products that are returned or destroyed and Supplier shall assist
Cisco in identifying alternative sources for the affected Products’ functionality.

14.3                           Limitations. 
The Supplier will pay all amounts agreed to in a monetary settlement of
the Claims and all Losses that result or arise from the Claims.  Cisco will promptly notify Supplier, in
writing, of any Claim for which Cisco believes that it is entitled to
indemnification (provided that Cisco’s failure to provide such notice will
relieve Supplier of its indemnification obligations only if and to the extent
that such failure prejudices Supplier’s ability to defend the Claim).  Cisco will permit Supplier to control, in a
manner not adverse to Cisco, the defense and settlement of any such Claim using
counsel reasonably acceptable to Cisco. 
Cisco may employ counsel, at its own expense, with respect to any such
Claim (provided that if counsel is employed due to a conflict of interest or
because Supplier does not assume control, Supplier will bear such expense).
Supplier will not enter into any settlement that affects Cisco’s rights or
interests without Cisco’s prior written approval.

14.4                           Exceptions to Supplier’s Indemnity. Supplier shall have no obligation under
Section 14.1 to the extent any claim of infringement is caused by (i) use
of the Product in combination with any other products not intended by or
understood by Supplier, if the infringement would not have occurred but for
such combination, or (ii) any alteration or modification of the Product
not provided or authorized by Supplier, if the infringement would not have
occurred but for such alteration or modification.

 

15.                               CONFIDENTIALITY

 

15.1                           MPA As Confidential Information. 
The parties shall treat the terms and conditions and the existence of
this MPA as Confidential Information (as such term is defined in the NDA
referenced below).

 

15.2                           Confidential Information. 
Upon execution hereof, the parties shall comply with the provisions of
that Non-Disclosure Agreement executed by Supplier and Cisco Systems, Inc. on September 6, 2001 (the “NDA”).  Notwithstanding any identification of
information exchanged hereunder as Confidential Information as defined in the
NDA, Supplier specifically acknowledges that in order to manage, monitor, and
resolve demand, inventory, supply and production issues directly relating to
the manufacture and fulfillment of Cisco’s products, Cisco must share a variety
of Supplier’s information and data, as well as some or all of this MPA, with
other third parties involved in the manufacture of Cisco’s products, including
the Cisco CMs.  Accordingly, Cisco must
be and Supplier acknowledges that Cisco is free to disclose to those necessary
third parties data and information provided to Cisco by Supplier on condition
that such third parties have entered into a confidentiality agreement with
Cisco which will limit the use of the information and obligate the third party
to keep Supplier’s information confidential.

16.
                            LIMITATION OF LIABILITY

 

16.1                         NOTWITHSTANDING ANYTHING TO THE CONTRARY
IN THIS MPA, [*] UNDER NO CIRCUMSTANCES WILL ANY PARTY, ITS EMPLOYEES, OFFICERS
OR DIRECTORS, AGENTS, SUCCESSORS OR ASSIGNS BE LIABLE TO ANOTHER PARTY AND ITS
EMPLOYEES, OFFICERS 

 

 

Page 10
of 30

 

OR DIRECTORS AGENTS, SUCCESSORS OR ASSIGNS UNDER ANY CONTRACT, STRICT
LIABILITY, TORT (INCLUDING NEGLIGENCE) OR OTHER LEGAL OR EQUITABLE THEORY, FOR
ANY SPECIAL, INCIDENTAL, EXEMPLARY, INDIRECT OR CONSEQUENTIAL COSTS OR DAMAGES,
INCLUDING WITHOUT LIMITATION  LOST
PROFITS, LITIGATION COSTS, LOSS OF DATA, PRODUCTION OR PROFIT, ARISING OUT OF
OR RELATING IN ANY WAY TO  THE SUBJECT
MATTER OF THIS MPA. THIS SECTION DOES NOT LIMIT EITHER PARTY’S LIABILITY FOR
BODILY INJURY OF A PERSON, DEATH, OR PHYSICAL DAMAGE TO PROPERTY.

 

17.                               INSURANCE

Supplier shall, at its own expense, at all times during the term of
this MPA and after its termination as required in Section 17.1, provide and
maintain in effect those insurance policies and minimum limits of coverage as
designated below together with any other insurance required by law in any
jurisdiction where Supplier provides Products and/or services under this MPA.  Such policies shall be issued by insurance
companies (i) authorized to do business in the jurisdiction where
Suppliers endeavors are to be performed and (ii) reasonably acceptable to
Cisco. In no way do these minimum requirements limit the liability assumed
elsewhere in this MPA, including but not limited to Supplier’s defense and
indemnity obligations.  The required
insurance shall be subject to the approval of Cisco, but any acceptance of
insurance certificates by Cisco shall not limit or relieve Supplier of the duties
and responsibilities with respect to maintaining insurance assumed by it under
this MPA.

 

17.1                           Workers’
Compensation, Social Scheme and Employer’s Liability Insurance.  Workers’ Compensation insurance
shall be provided as required by any applicable law or regulation and, in
accordance with the provisions of the laws of the nation, state, territory or
province having jurisdiction over Supplier’s employees. If any such applicable
jurisdiction has a social scheme to provide insurance or benefits to injured
workers, Supplier must be in full compliance with all laws thereof. Employer’s
Liability insurance shall be provided in amounts not less than the local
currency equivalent of US [*].

 

17.2                           General Liability Insurance.  Supplier shall carry Public Liability or
Commercial General Liability insurance covering all operations by or on behalf
of Supplier arising out of or connected with this MPA including coverage for
products liability and products/completed operations liability, claims by one
insured against another insured, and Supplier’s defense and indemnity
obligations under this MPA, with limits of not less than [*] per occurrence.  Such insurance shall also provide, by
endorsement or otherwise, for contractual liability and cross liability and
provide a Vendors Broad Form Additional Insured Endorsement. If “claims made”
policies are provided, Supplier shall maintain such policies for at least one
year after the expiration of this MPA.

 

17.3                           Automobile Liability Insurance.  Supplier shall carry Comprehensive Business
Automobile Liability insurance, including bodily injury and property damage for
all vehicles used in the performance of Supplier’s obligations under this MPA,
including but not limited to all owned, hired (or rented) and non-owned
vehicles.  The limits of liability shall
not be less than the local currency equivalent of [*] combined single limit for each incident,
or whatever is required by local law or statute, whichever is higher. If injury
to third-party passengers of such vehicles is not covered by the above
insurance, then Supplier shall also maintain separate insurance to cover injury
to such passengers.

 

 

Page 11
of 30

 

17.4                           Errors and Omissions Liability Insurance (Professional Liability).  Supplier shall carry insurance for design
and/or professional liability (errors and omissions) with limits of not less
than [*] per
occurrence or per claim and [*] aggregate annual.

 

[*].

 

17.5                           Certificates of Insurance.         Certificates
of Insurance or other formalized evidence of the coverages required above shall
be furnished by Supplier to Cisco when this MPA is signed, or within a
reasonable time thereafter, and within a reasonable time after such coverage is
renewed or replaced. If requested by Cisco, a certified copy of the actual
policy(s) with appropriate endorsement(s) shall be provided to Cisco.
Certificates shall be delivered to:

Global Risk Management

Cisco Systems, Inc.

170 W. Tasman Drive, M/S SJC-11/3

San Jose, CA  95134

 

17.6                           Cisco Can Provide Insurance. If Supplier does not
comply with the insurance requirements of this Section 17, Cisco may, at
its option, provide insurance coverage to protect Cisco and Supplier and charge
Supplier for the cost of that insurance.

 

17.7                           Waiver of Subrogation. Except where prohibited
by law, Supplier, its subcontractor(s) (regardless of tier) and their
respective insurers waive all rights of recovery or subrogation against Cisco,
its officers, directors, employees, agents, and insurers for Workers’
Compensation.

17.8                           Policies to be Primary. The policies provided
under this MPA shall provide that Supplier’s insurance will be primary to and
noncontributory with any and all other insurance maintained or otherwise
afforded to Cisco.

 

18.                               TERM AND TERMINATION

 

18.1                           Term.  Unless
terminated earlier as provided herein, this MPA shall have an initial term of
three (3) years from the Effective Date (the “Initial Term”) and shall
automatically renew for additional periods of one (1) year each (the
“Extended Term”, and together with the Initial Term, referred to herein
collectively as the “Term”) unless the appropriate written notice of
non-renewal is received as follows: (i) Supplier shall provide to Cisco
notice of any such non-renewal at least one hundred and twenty (120) days
prior to the expiration of the then applicable term; or (i) Cisco shall
provide to Supplier notice of any such non-renewal sixty (60) days prior
to the expiration of the then applicable term.

 

 

Page 12
of 30

 

18.2                           Termination For Convenience. 
Either party may terminate this MPA for no reason or any reason upon
providing to the other the notice required hereunder.  Cisco may so terminate upon sixty (60) days notice to
Supplier.  Supplier may so terminate
upon the one hundred twenty (120) days notice if approved by Cisco or such
other time period agreed upon by the parties as necessary to implement a
transition plan.

 

18.3.  Termination By Cisco.  Cisco may independently terminate this MPA
or any of the Products included herein as follows:

 

18.3.1                  Upon Supplier’s failure to comply with any of the
material provisions of this MPA which failure is not remedied during the thirty
(30) days (or other extended period as may be agreed to by the parties)
following written notice to Supplier of such failure.

 

18.3.2                  Notwithstanding Cisco’s rights in Section 18.3.1, upon
fifteen (15) days notice, if Cisco (i) determines that Supplier’s
performance under this MPA is deficient; and (ii) identifies to Supplier
those deficiency(ies); and (iii) provides to Supplier a reasonable
opportunity to correct the same give the nature of the deficiency and/or
utilize appropriate paths of escalation; and (iv) determines that such
identified deficiencies still remain.

 

18.3.3                  Upon thirty (30) days notice, if Supplier has failed to deliver
Products for a minimum of thirty (30) days due to force majeure causes as
set forth in Section 20.7.

 

18.3.4                  Immediately upon any transfer by sale, merger or other working combination of
ownership of or control over more than [*] of the voting securities or control of Supplier.

 

18.4                           Termination By Supplier. 
Supplier may terminate this MPA as follows:

 

18.4.1                  Upon Cisco’s failure to comply with any of the
material provisions of this MPA which failure is not remedied during the
sixty (60) days (or other extended period as may be agreed to by the
parties) following written notice to Cisco of such failure.

 

18.5                           Termination By Either Party. 
Either party may terminate this MPA as follows:

 

18.5.1                  Upon notice to the other party upon the occurrence of any one of the
following events: (i) a receiver is appointed for either party or its
property; (ii) either makes a general assignment for the benefit of its
creditors; (iii) either party commences, or has commenced against it,
proceedings under any bankruptcy, insolvency or debtor’s relief law, which
proceedings are not dismissed within sixty (60) days; or (iv) either party
is liquidated, dissolved or ceases business operations.

18.6                           Survival; Support After Termination. Sections 1, 9.2, 10, 11, 13, 14,
15, 16, 18 and 20, all end user licenses and Cisco’s right to distribute
Product shall survive termination or expiration of this MPA for a period of
[*]. Supplier shall continue to provide support in accordance with Section 10
at Supplier’s then standard rates offered to any other customer for the
Products for a period of [*]. Termination shall be in addition to all other
rights and remedies.

 

 

Page 13
of 30

 

19.                               COMPLIANCE WITH LAWS; IMPORT/EXPORT

 

19.1                           Compliance with Laws. 
Supplier warrants it has complied and shall comply with all applicable
laws, regulations and ordinances in effect at the time of manufacture of each
of the Products. Upon Cisco’s reasonable request, Supplier agrees to provide
reasonable assistance to Cisco and Cisco CMs to facilitate compliance with such
laws.

 

19.2                           Import and Export. 
Supplier shall provide Cisco with information and assistance as may be
reasonably required in connection with executing import, export, sales, and
trade programs, including but not limited to, manufacturer’s affidavits,
harmonized tariff schedule, export control classification number, qualification
information (e.g. origin), and U.S. Federal Communications Commission’s
identifier when applicable.

 

19.3                           Compliance with Environmental Laws. Supplier shall comply with all
applicable environmental federal, state and local laws, regulations and
ordinances, including but not limited to the laws and regulations of the United
States, relating to this MPA and the Products provided hereunder. In the event
that Supplier’s performance of its obligations under this MPA requires the
delivery to or handling by Cisco or Cisco CMs of hazardous materials as
specified in the U.S. Department of Transportation, Title 49 or OSHA
standards or regulations, Supplier will promptly notify in writing Cisco or
Cisco CMs and upon request will provide Cisco or Cisco CMs with material safety
data sheets and other documentation reasonably necessary for compliance with
applicable laws and regulations. Notwithstanding the foregoing, Supplier shall
be fully responsible under this MPA for any liability resulting from its
actions in supplying or transporting hazardous materials or otherwise failing
to comply with environmental laws and regulations.

 

20.0                        GENERAL

 

20.1                           Assignment.  Either
party  may not assign or transfer this
MPA, in whole or in part without the prior written consent of the other party.
Any attempt to assign or transfer without such consent is void. For purposes of
this Section 20.1, any transfer by
sale, merger or other working combination of ownership of or control over more
than [*] of the voting securities or
control of Supplier shall constitute an assignment.

 

20.2                           Notices.  All notices
shall be personally delivered, delivered by telecopy, delivered by a major
commercial rapid delivery courier service or mailed by certified or registered
mail, return receipt requested, to either party as provided below or such other
address as such party may provide by notice pursuant to this Section. Notice
shall be effective upon the earlier of (i) receipt or
(ii) twenty-four (24) hours after submission by any such method.

 

	
  Cisco Systems, Inc.

  	
   

  	
  “Supplier”

  
	
  170 West Tasman Drive

  	
   

  	
  2975 Stender Way

  
	
  San Jose, CA 95134

  	
   

  	
  Santa Clara, CA 95054

  
	
   

  	
   

  	
   

  
	
  Attn: V.P.,
  Manufacturing

  	
   

  	
  Attn:  V.P. Worldwide Sales

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  with a copy to:

  
	
  Cisco Systems, Inc.

  	
   

  	
  “Supplier”

  
	
  170 West Tasman Drive

  	
   

  	
  2975 Stender Way

  
	
  San Jose, CA 95134

  	
   

  	
  Santa Clara, CA 95054

  
	
   

  	
   

  	
   

  
	
  Attn: General Counsel

  	
   

  	
  Attn: General Counsel

  
	
  Fax: (408) 526-7019

  	
   

  	
  Fax: (408) 492-8454

  

 

 

Page 14
of 30

 

20.3                           Controlling Law and Jurisdiction. 
This MPA and all action related hereto shall be governed, controlled,
interpreted, and enforced by and under the laws of the State of California and
the United States, without regard to the conflict of laws provisions thereof.
Unless waived by Cisco, the exclusive jurisdiction and venue of any action with
respect to the subject matter of this MPA shall be the state courts of the
State of California for the County of Santa Clara or the United States District
Court for the Northern District of California and each of the parties hereto
submits itself to the exclusive jurisdiction and venue of such courts for the
purpose of any such action. The parties hereby agree to expressly exclude
application of the United Nations Convention on Contracts for the International
Sale of Goods.

 

20.4                             Waivers and Amendments.  No failure or delay by either party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial waiver have effect on any other right,
power or privilege.  This MPA may not be
altered or amended except by a written document signed by duly authorized
representatives of the parties.

 

20.5                           Severability. 
If any provision of this MPA is found unenforceable or invalid under any
applicable law or judicial or administrative decision, only that provision will
be affected. This MPA shall remain in effect and such unenforceable or invalid
provision shall be modified or interpreted so as to best accomplish its
objective.

 

20.6                           Relationship of the Parties. 
The parties acknowledge that they are independent contractors and no other
relationship, including partnership, joint venture, employment, franchise,
master/servant or principal/agent is intended by this MPA.   Neither party shall have the right to bind
or obligate the other.

 

20.7                           Force Majeure. 
Neither of the parties shall be considered in default of performance
under this MPA to the extent that performance of such obligations is delayed or
prevented by fire, flood, earthquake or similar natural disasters, riot, war,
terrorism or civil strife, or any other event beyond the reasonable control of
such party. Notwithstanding the foregoing, in the event Supplier fails to
deliver Products due to such causes, Cisco may either:

 

•                                          Terminate this MPA in whole or in part after
thirty (30) days prior written notice where Supplier fails to deliver for
thirty (30) days due to the force majeure event; and/or

 

•                                          Suspend this MPA in whole or in part for the duration
of the delaying cause, and, at Cisco’ option, buy the Products elsewhere and
deduct from or apply to any commitment to Supplier the quantity so purchased.
Supplier shall resume performance under this MPA immediately after the delaying
cause ceases and, at Cisco’ option, extend the then current term period for a
period equivalent to the length of time the excused delay continued.

 

20.8                           Dispute Resolution. 
The parties shall use their best efforts to amicably resolve any
disputes arising from the activities undertaken in the course of performing or
fulfilling this MPA, including but not limited to utilization of the dispute
escalation path as set forth in Exhibit H.

 

 

Page 15
of 30

 

20.9                           Third Party
Beneficiaries.  Unless expressly provided, no provisions of
this MPA are intended or shall be construed to confer upon or give to any person
or entity other than Cisco, Supplier and Cisco CMs any rights, remedies or
other benefits under or by reason of this MPA.

 

20.10                     Entire Agreement. 
Together with any non-disclosure agreement, this MPA and its exhibits
contain the entire understanding of the parties with respect to the subject
matter hereof and supersedes all prior agreements relating thereto, written or
oral, between the parties.

20.11                     Signatures and Counterparts. This
MPA will be valid upon the initial exchange of signatures by facsimile from
both parties.

 

 

The parties shall, however, ensure that a fully
executed original hereof is provided to each party.   Each such fully executed original shall together constitute one
and the same instrument.

 

IN WITNESS WHEREOF, the parties hereto have executed this MPA by persons
duly authorized as of the date and year first above written.

 

 

	
  SUPPLIER:

  	
   

  	
  CISCO SYSTEMS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By

  	
  William Franciscovich

  	
   

  	
  By

  	
  Linda Park

  
	
  (print)

  	
   

  	
  (print)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ WILLIAM
  FRANCISCOVICH

  	
   

  	
  /s/ LINDA PARK

  
	
  (signature)

  	
   

  	
  (signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title

  	
  V.P. Worldwide Sales

  	
   

  	
  Title

  	
  VP of Commodity
  Management

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
  5/7/03

  	
   

  	
  Date

  	
  6/17/03

  
										

 

 

Page 16
of 30

 

 

EXHIBIT A

 

Product Schedule

As of Effective Date of MPA

 

 

	
  Supplier

  Part #

  	
  Cisco

  Part #

  	
  Supplier

  Spec. #

  	
  Cisco

  Spec. #

  	
  Description

  	
  Price

  	
  Warranty

  	
  NCNR

  	
  Sole

  Source

  	
  Required

  Test

  	
  Non-Standard

  T&C

  	
  Additional

  Costs

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

1.                                       CONFLICT WITH MPA

 

The terms and conditions of the MPA shall govern this
Product Schedules unless specific alternative terms are set forth above.  In the event of any conflict or
inconsistency between this Product Schedule and the MPA, the terms in this
Product Schedule will apply.

 

 

Page 17
of 30

 

EXHIBIT A

 

Product Schedule

Executed After Effective Date of MPA

 

 

	
  Supplier

  Part #

  	
  Cisco

  Part #

  	
  Supplier

  Spec. #

  	
  Cisco

  Spec. #

  	
  Description

  	
  Price

  	
  Warranty

  	
  NCNR

  	
  Sole

  Source

  	
  Required

  Test

  	
  Non-Standard

  T&C

  	
  Additional

  Costs

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

1.                                       CONFLICT WITH MPA

 

The terms and conditions of the MPA shall govern this
Product Schedules unless specific alternative terms are set forth above.  In the event of any conflict or
inconsistency between this Product Schedule and the MPA, the terms in this
Product Schedule will apply.

 

2.                                       SIGNATURES AND COUNTERPARTS

 

This Product Schedule will be
valid upon the initial exchange of signatures by facsimile from all
parties.  The parties shall, however,
ensure that a fully executed original hereof is provided to each party.

 

The parties hereto have executed this Product Schedule intending it to
be incorporated into Exhibit A of the MPA with an Effective Date of __________.

 

	
  Supplier

  	
   

  	
   

  	
  Cisco
  Systems, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cisco
  Systems International B.V.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  	
   

  
									

 

 

Page 18
of 30

 

 

EXHIBIT B

 

BUSINESS REVIEWS

 

A.                                    Quarterly Business Reviews (“QBR”)

 

1.                                       Target Business Level of Attendees: Account Manager level.

2.                                       Frequency: Once per quarter, if practicable, at a time and
location to be mutually agreed upon. The location may be a teleconference.

3.                                       Focus:            The quarterly business reviews will, at a
minimum, cover the following topics:

 

(i)                                     Product quality;

(ii)                                  Review and discussion of supplier
performance criteria including those set forth in the Cisco “Scorecard”;

(iii)                               Discussion of price reductions and/or key
factors relating to the pricing model;

(iv)                              Lead Time updates per product, with a
focus on improvements needed or offered;

(v)                                 The most current Rolling Forecasts and
future outlook;

(vi)                              Support issues, if any;

(vii)                           New Product opportunities and Cisco
requirements, if relevant; and

(viii)                        Cisco’ product roadmap reviews, if
relevant.

 

B.                                    Semi-Annual Business Reviews (“SBR”).

 

1.                                       Target Business Level of Attendees: 
Account management and where possible, senior management level.

2.                                       Frequency:  Twice
annually, if practicable, at a time and location to be mutually agreed upon.

3.                                       Focus:            The semi-annual business reviews will, at
a minimum, cover the following topics:

 

(i)                                     Status and strategic direction of the
business relationship, including any open issues;

(ii)                                  Products which may be added to the MPA;

(iii)                               Product roadmaps of any party;

(iv)                              Pricing review; discussions of price
reductions and key factors relating to the pricing model; and

(v)                                 Forecast outlook.

 

 

Page 19
of 30

 

EXHIBIT
C 

 

FAILURE ANALYSIS PROCEDURE

 

 

Cisco will return failed Products to Supplier for failure analysis to
resolve observed problems found while used in Cisco products.

 

Supplier is responsible for performing failure analysis on all returned
Products suspected of being defective. 
Analysis work shall be performed in a manner necessary to fully
determine the root cause for each failure and to identify corrective actions to
prevent reoccurrence.

 

Cisco will classify failure analysis requests into two categories —
urgent and normal.  Urgent requests are
made when the component failure impacts Cisco’s ability to ship products or
when the failure impacts the performance of Cisco equipment installed at a
customer location.  All other requests
shall be within the normal category.

 

Supplier will use its best efforts to respond to, identify root cause
and implement correction for all failure analysis requests in a timely
manner.  Supplier failure analysis
responsiveness will be measured using the following standard criteria:

 

 

	
  Failure Analysis Type

  	
   

  	
  Normal

  	
   

  	
  Urgent

  	
   

  	
  Deliverables

  
	
  Initial response

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  Functional status

  If fail, outline of analysis steps and timeline

  If pass, return parts to Cisco via overnight carrier

  
	
  Preliminary

  failure analysis

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  Preliminary identification of root cause

  Recommendations for containment of problem

  
	
  Completed

  failure analysis

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  Completed failure analysis summary

  If appropriate, corrective action plan and timeline

  
	
  Update

  schedule

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  Progress report on work completed

  Projection on next actions

  Updated timelines

  

 

 

Page 20
of 30

 

EXHIBIT D

 

PRODUCT
CHANGE NOTIFICATION

 

Cisco
Component Engineering must have prior written notification for all changes to product
or process characteristics which could potentially result in non-compliance to
Cisco physical, mechanical, optical and/or electrical requirements. The types
of changes, which require advance notification, if they could potentially
result in non-compliance to Cisco requirements, include, but are not be limited
to:

 

•                  Design changes

•                  Layout changes

•                  Changes to dimensions of any layer

•                  Die shrinks or revision

•                  Material change (e.g. plating, UBM, Resin, base metal, dopants)

•                  Change in internal sub-component design, manufacture, part number or
sourcing

•                  Manufacturing Process & Procedure change (e.g. wafer fab, assembly
or test)

•                  Manufacturing site (e.g. wafer fab, assembly, test facility change)

•                  Product from new, “identical” equipment with known impact to
reliability (i.e. Epitaxial systems, deposition/etching tools, burn-in system
and so forth)

•                  Changes to burn-in or reliability screen processes for component and
constituent sub-components

•                  Form, Fit or Function change

•                  Part numbering convention

•                  EOL/Product Discontinuation

 

This PCN requirement will
apply to Cisco-specified as well as supplier-specified part numbers.

 

Notification
for any of the above changes must be provided a minimum of [*] prior
to changed part or component delivery to allow time for analysis. The [*] advance
notice may be given in the form of a Horizon Report. Samples of the new device,
formal written PCN, and data supporting continued compliance to Cisco
requirements for the proposed PCN must be provided a minimum of [*] prior
to changed part or component delivery to allow time for qualification and
review. The Cisco qualification time will not and cannot begin until all
requested samples of the new component arrive at the affected Cisco Business
Units. In the case of an End-of-Life announcement or Discontinuance Notice, a
formal written EOL PCN or Discontinuance Notice must be provided [*] in
advance of the Last Time Buy Date.

 

Supporting data and
qualification data must be submitted with the Part Change Notification to Cisco
Component Engineering.

 

 

Page
21
of 30

 

The
supporting data and qualification data must include the following information
at a minimum:

 

•                  Effected supplier part numbers (current and new) and effected Cisco
part numbers

•                  Reason for change

•                  Description of change including any modifications to test, burn-in, or
reliability processes used for assembled component and sub-components if any

•                  Traceability information for changed part or component

•                  Specification or datasheet update

•                  Supplier PCN tracking number

•                  Samples Availability date

•                  PCN Effective Date of shipment of changed part or component

•                  Last Time Buy Date of the unchanged or obsolete product

•                  Fit-Form-Function changes between changed and unchanged part or
component

•                  Applicable test/qualification reports (per Cisco 1st and 2nd level
component qualification requirements) and anticipated date for
completion of final qualification data

 

The above
information may be provided in the form shown in the PCN Template shown in
Figure 1 in Section 5.0.

 

Cisco requires suppliers to
assign new ordering part numbers for the following types of changes: Form, Fit
or Function change, Die shrinks or revisions, Part numbering convention change,
Design change, Layout changes, changes to lead-free plating including and not
limited to BGA packages.

 

All change
notices must be emailed to: component-pcn@cisco.com, and all change
notices must be approved by Cisco GCSM Component Engineering department.

 

 

Page 22
of 30

 

 

EXHIBIT E

 

RESCHEDULES
AND CANCELLATIONS

 

The following terms shall apply to
Cisco’s direct orders of Products from Supplier.

 

1.                                        Reschedules. Upon notice to Supplier, Cisco may reschedule all or a
portion of a purchase order for the Products at no charge as follows:

 

Number of Days

From Original

Delivery Date

 

[*]                                                                                                                                                                                 Unlimited reschedules, providing that
delivery is within [*] from original scheduled delivery date,

[*]                                                                                                                                                                                 Unlimited reschedules

 

2.                                      Cancellation.  Cisco may
cancel all or a portion of a purchase order as follows:

 

2.1                                 Standard Product

 

                                                Cisco may cancel in writing some
or all of any Purchase Order for Standard Products [*] prior to the ship date that is
necessary for Supplier to meet the original Delivery Date (i.e. when the
Product has been Pack Listed) [*]. “Standard Products”, for the purposes of this MPA,
shall mean Products for which Supplier has other customers, in addition to
Cisco.

 

2.2                                 Semi-Custom Products

 

2.2.1                        If, [*] prior to the applicable original Delivery
Date, Cisco needs to cancel all or a portion of a purchase order that is for
semi-custom Product or is classified as NCNR as defined in Section 2.5 of the
MPA, Cisco shall pay cancellation charges as provided below:

 

	
  No. of Days before Original
  Delivery Date

  	
   

  	
  Cancellation Charges for
  Semi-Custom Products

  
	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  

 

2.3                                 Custom (“NCNR”) Purchase Orders

 

2.3.1.                   Any purchase orders agreed to as NCNR may not be cancelled or returned
by Cisco, unless otherwise agreed to by the parties.

 

 

Page 23
of 30

 

2.4                                 CAM Cancellations

 

2.4.1.                     Cisco shall be liable to Supplier for any
cancellations of CAM Products as follows:

 

	
  No. of Days before Original
  Delivery Date

  	
   

  	
  Cancellation Charge

  
	
  [*]

  	
   

  	
  [*] of cancelled Product
  value

  
	
  [*]

  	
   

  	
  [*] of cancelled Product
  value

  
	
  [*]

  	
   

  	
  [*] of cancelled Product
  value

  
	
  [*]

  	
   

  	
  [*] of cancelled Product
  value

  
	
  Greater than production
  order lead-time

  	
   

  	
  None

  

 

2.5                                 At-Risk Production (CAM)

 

2.5.1                        At-Risk ramp
material may be started after Cisco verification sign-off. Cisco must complete
Supplier’s “Risk Material Start Authorization Form”.  “At-Risk” means that Cisco accepts all financial responsibilities
for the Supplier’s material committed to meet Cisco orders.  Should Cisco decide to scrap material during
this phase, for any reason other than Supplier related process or manufacturing
issues, Cisco will pay Supplier on a prorated basis for amount of process
completed at the time of Supplier’s written cancellation.  Cancellation charges are as follows for
at-risk ramp parts:

 

At-Risk Product cancellation
based on the originally scheduled delivery date, with two scenarios,
1) cancellation fee as a percentage of Cisco cost (as specified in current
Schedule A) for Custom CAM products, and 2) cancellation fee as
percentage of Cisco cost for Standard CAM products:

 

	
  Scenario

  	
   

  	
  At-Risk Custom CAM

  Products

  	
   

  	
  At-Risk Standard CAM

  Products

  	
   

  
	
  After
  Tapeout

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Prior
  to wafer start

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  After
  wafers have started & prior to metalization

  	
   

  	
  [*] cancellation
  fee

  	
   

  	
  [*]

  	
   

  
	
  After
  wafers have started metalization

  	
   

  	
  [*] cancellation
  fee

  	
   

  	
  [*]

  	
   

  
	
  after
  test/assembly start

  	
   

  	
  [*] cancellation

  	
   

  	
  [*]

  	
   

  

 

 

Page 24
of 30

 

EXHIBIT F

 

[*]

 

 

 

 

 

 

Page 25
of 30

 

 

ATTACHMENT
A

 

[*]

 

 

 

 

 

Page 26
of 30

 

ATTACHMENT B

 

[*]

 

 

 

 

Page 27
of 30

 

EXHIBIT G

 

CISCO AUTHORIZED CONTRACT
MANUFACTURERS

 

Cisco hereby identifies
the following authorized CMs who may purchase Supplier Products on behalf of
Cisco.  Cisco may withdraw each such
authorization on [*] advance written notice to Supplier, provided that (i) any
remedy Cisco may be entitled to or seek resulting from any shipments to any
such withdrawn CM shall be between Cisco and the CM; (ii) in the event of
such a withdrawal, Cisco may, at their election, cancel any open orders and pay
any applicable cancellation charges or accept delivery of and pay for any
Products then being manufactured by Supplier for the affected CM for the
benefit of Cisco.  Further, Cisco may
expand unilaterally this list of authorized CMs upon written notice to Supplier.

 

 

[*]

 

 

 

Page 28
of 30

 

EXHIBIT H

 

CONTRACT DISPUTE ESCALATION

 

	
  Level

  	
   

  	
  Cisco

  	
   

  	
  Supplier

  	
   

  	
  Maximum period of time at attempted

  resolution before escalation to next level

  
	
  1

  	
   

  	
  Commodity Manager

  	
   

  	
  Account Manager

  	
   

  	
  10 business days or as
  otherwise mutually agreed

  
	
  2

  	
   

  	
  Director, Global Supply Management

  	
   

  	
  Business Unit General
  Manager

  	
   

  	
  10 business days or as
  otherwise mutually agreed

  
	
  3

  	
   

  	
  VP Global Supply Management

  	
   

  	
  Group President

  	
   

  	
  10 business days or as
  otherwise mutually agreed

  
	
  4

  	
   

  	
  Senior VP Manufacturing

  	
   

  	
  CEO

  	
   

  	
  10 business days or as
  otherwise mutually agreed

  

 

 

 

Page 29
of 30

 

Exhibit I

 

[*]

 

 

 

 

 

Page 30
of 30

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]