Document:

EX-10.5

 

Exhibit
10.5

PURCHASE AGREEMENT

     This Purchase Agreement (“Agreement”) is made and entered into effective as of
October 7, 2005 (“Effective Date”) by and between Voltaire Ltd., an Israeli corporation, with its
principal place of business at 9 Hamenofim Street, Herzeliya 46725, Israel (“Purchaser”), and
Mellanox Technologies Ltd., an Israeli corporation, with its principal place of business
at Hermon Building, Yokneam, Israel 20692 (“Mellanox”).

     1. Definitions. As used in this Agreement, these terms shall have the following
definitions:

     1.1 “Accepted Order” means an Order as to which Mellanox has issued its Acknowledgment
accepting the Order as set forth in Section 2.3.

     1.2 “Confidential Information” means any confidential or proprietary information of either
party, including any source code, tools, designs, schematics, plans or any other information
relating to any product, research project, work in process, future development, scientific,
engineering, manufacturing, marketing or business plan, or financial or personnel matter relating
to the disclosing party, its present or future products, sales, suppliers, customers, employees,
investors or business, and identified by the disclosing party as propriety or confidential, whether
in oral form, or in written, graphic or electronic form. Without limiting the foregoing, all
Product Specifications and pricing information regarding the Products shall be deemed the
Confidential Information of Mellanox (or of Purchaser to the extent provided by Purchaser)
regardless of any marking requirement or failure to identify such information as confidential or
proprietary at the time of disclosure.

     1.3 “Custom Product” means a Product that is customized by Mellanox to meet particular
Purchaser specifications and requirements.

     1.4 “Delivery Date” means the date specified in an Accepted Order for the delivery of Product
by Mellanox.

     1.5 “Documentation” means the end user technical documentation provided by Mellanox on its
secure document distribution website and all other documents, written or electronic, provided or
made available by Mellanox, with respect to the Product.

     1.6 “Eligible Purchaser” means Purchaser’s subsidiaries and affiliates and, as may be mutually
agreed in writing by Mellanox and Purchaser, Purchaser’s contractors and other third parties.

     1.7 “Epidemic Failure” means Products that experience one or more of the following: (a) a
similar confirmed defect of the same root cause at a rate of five percent (5%) and at least 25
units in any 90 day rolling period, of the Products delivered under this Agreement, provided the
Products have been released to general availability by Mellanox (b) recalls, or (c) safety defects.

     1.8 “Lead Time” means the time between the date an Order is received and the delivery of the
Products thereunder. [Note: the lead time sets the minimum general delivery period obligation and
is not connected to a specific order. Therefore the reference to “Delivery Date” is not suitable]

     1.9 “Order” means a written purchase order issued to Mellanox by Purchaser or by an Eligible
Purchaser for any of the Products.

 

 

     1.10 “Product” means the product(s) purchasable by Purchaser hereunder, as set forth on
Exhibit A, including any software incorporated therein and all related Documentation and other
deliverables provided pursuant to this Agreement.

     1.11 “Product Specifications” means the applicable technical and functional specifications for
the Products as evidenced in the Documentation, and any other requirements which may be agreed to
by the parties.

     1.12 “Technical Information” means Mellanox’s manufacturing information and technology
necessary to produce and provide support for the Products, including: (i) specifications, software,
source codes, schematics, designs, drawings or other materials pertinent to the most current
revision level of manufacturing of Product; (ii) copies of all inspection, manufacturing, test and
quality control procedures and any other work processes; (iii) jig, fixture and tooling designs;
(iv) supplier history files; (v) support documentation; and (vi) any additional technical
information or materials that may be agreed to by the parties.

     1.13 “Technical Support Services” means support provided by Mellanox’s Field / Factory
Applications personnel relative to the operation, proper use and functionality of Products.

     2. Forecasts And Orders

     2.1 Forecasts, Inventory Reports. On a quarterly basis, Purchaser will provide Mellanox with
a non-binding twelve (12) month rolling forecast of its estimated requirements for each Product
(“Forecasts”). Forecasts shall constitute good faith estimates of Purchaser’s anticipated
requirements for Products for the applicable time period.

     2.2 Orders. Purchaser shall issue Orders for the Products pursuant to Mellanox’s standard
Lead Times set for the in Exhibit A hereto (“Standard Lead Time”). Mellanox may change such
Standard Lead Times in its sole discretion upon a 30-day written notice to Purchaser, such change
shall apply only to Orders received following the lapse of such notice period, provided that
quantities ordered during the notice period are consistent with the then current forecast,
historical run rates and past purchases. Purchaser may at anytime request quantities in addition
to the then current forecast and Mellanox will use commercially reasonable efforts to meet
Purchasers request. Each Order shall include: (a) Purchaser’s Order number; (b) identification of
Products ordered by Purchaser and corresponding Mellanox part number; (c) requested delivery date;
(d) shipping instructions, including preferred carrier and shipping destination (complete address);
(e) price of Products ordered; (f) billing location (complete address); (g) Purchaser’s tax status
(exempt or non-exempt) and (h) special agreed on requirements and specifications or a reference to
them. Mellanox shall not be obligated to accept any Order from Purchaser in an amount of less than
Two Hundred Dollars ($200).

          Mellanox agrees that all Eligible Purchasers may purchase Products pursuant to the terms of
this Agreement, provided that: (i) nothing herein makes Purchaser liable or otherwise responsible
for any purchases or obligations of any Eligible Purchaser; (ii) purchases by any such Eligible
Purchaser are for the production of Purchaser’s assemblies or are otherwise related to the support
of Purchaser’s products; (iii) as may reasonably be requested by Mellanox, Purchaser will provide
reasonable confirmation that such purchases by any Eligible Purchaser are intended for Purchaser’s
products; and (iv) such Eligible Purchaser agrees (in a writing delivered to Mellanox) to be

 

 

bound by all of Purchaser’s obligations hereunder with respect to the Order sent by such Eligible
Purchaser.

     2.3 Order Acceptance. Mellanox’s standard order acceptance process is to acknowledge
acceptance or propose modifications to orders within three (3) business days of receipt. Any such
order acknowledgement accepting an Order will set forth Mellanox delivery dates, consistent with
the Standard Lead Time and per Section 2.2 Acceptance of an Order by Mellanox to Purchaser means
that the terms of the Order have been agreed and Mellanox accepts the Order and the terms of such
Order, though only to the extent consistent with the terms of this Agreement. Provided that
Purchaser is then in material compliance with this Agreement, Mellanox will use its reasonable best
efforts to accept all Orders placed that are consistent with the Standard Lead Times and
Purchasers’ forecasts and its reasonable commercial efforts to accept Orders that are outside such
Standard Lead Times or forecasts. Any terms or conditions of any Order that are in addition to or
are inconsistent with the terms of this Agreement (other than terms relating to pricing, payment
terms and delivery dates) will be deemed stricken from such Order, notwithstanding any
acknowledgment or acceptance of such Order by Mellanox, and are hereby rejected.

     2.4 Rescheduling, Reconfiguration and Cancellation. Except as stated herein, Purchaser may
not cancel, reschedule or reconfigure an Order without Mellanox’s prior written consent on a
case-by-case basis. Purchaser may only reschedule, cancel or reconfigure an Order as follows:
(i) for all Standard Semiconductor, HCA Card and Customized HCA Card Products no cancellations or
reschedules without the prior written consent of Mellanox, except as set forth in Exhibit
B; and (ii) for Custom Products that were already manufactured and cannot be sold by Mellanox
to other parties, evaluation board Products, risk units, and units from the first three wafer lots
of production, other Products that are still in test phase or have not otherwise been authorized by
Mellanox for general availability, or units expedited to meet requirements inside of Standard Lead
Time, no cancellations or reschedules are permitted, all provided that the Accepted Order clearly
designated such Products as non-cancelable items and Purchaser expressly agrees in writing to such
designation. With respect to units expedited to meet requirements inside of Lead Time or that
otherwise require Mellanox to incur additional production charges, subject to Mellanox’s agreement
to undertake such activity, in addition to any payment required to be made by Purchaser under
Exhibit B in the event of a rescheduling, reconfiguration or cancellation, Purchaser will also pay
such additional production or expediting charges that are pre-approved in writing by Purchaser.

     2.5 Product Changes.

          (a) Initiated by Mellanox. Mellanox will notify Purchaser in writing of any proposed changes
and modifications in specification, construction, or design that may have any effect on form, fit
or function, or any other material change of any Product or Product component (an “Engineering
Change”) and will use commercially reasonable efforts to provide such information at least one
hundred and twenty (120) days prior to the first commercial use of any Product involving an
Engineering Change, in accordance with Mellanox’s standard product change notification procedures
as set forth in Exhibit E. Unless Purchaser expressly agrees otherwise, all Orders with a Delivery
Date that is earlier than 120 days from the date of receipt by Purchaser of a notice of an
Engineering Change shall be for Products that do not contain such Engineering change. In the event
that any Engineering Change has an adverse effect on the performance of Purchaser’s products that
incorporate the changed Products Mellanox shall work with Purchaser to reasonably assist the
Purchaser to overcome such adverse effect.

 

 

          (b) Requested by Purchaser. Engineering Changes to Products requested by Purchaser will be
implemented by Mellanox only upon mutual written agreement.

     2.6 Product Discontinuation. Unless otherwise agreed, Mellanox may discontinue the
manufacture or supply of any Product (a “Discontinued Product”), provided that it first gives
written notice to Purchaser in no event less than six (6) months in advance of the last date the
Discontinued Product can be ordered (the “Notice Period”). After receipt of notice of
discontinuance, during the Notice Period, Purchaser may Purchase from Mellanox such commercially
reasonable quantity of the Discontinued Product as Purchaser may reasonably deem necessary for its
future requirements. Mellanox will continue to provide Discontinued Product to Purchaser and to
facilitate transition to by Purchaser to new products for a period not to exceed nine (9) months
following Purchaser’s receipt of notice of discontinuance. If requested by Purchaser and mutually
agreed by Mellanox, Mellanox shall grant Purchaser a royalty bearing license to continue the
production of such products in order to be able to fulfill its existing commitments to its
customers. The aforesaid shall not affect Mellanox’s responsibilities under Section 5 as related to
warranty obligations, and under Section 6 as related to spare parts availability or technical
support.

     3. Delivery.

     3.1 Risk of Loss and Title. Delivery of all Products shall be made ex works (INCOTERMS 2000)
Mellanox distribution facilities for the applicable Product (the “Distribution Point”). Risk of
loss for the Products shall pass to Purchaser following delivery at the Distribution Point.
Purchaser shall be responsible for paying all transportation charges and, if it chooses to obtain
insurance, for insurance charges and such charges will be separately listed in the applicable
invoice and are not included in the list price for the Products. Title to the Products will pass
to Purchaser upon delivery at the Distribution Point, provided that at no time will title to any
software incorporated in the Product pass to Purchaser; software is licensed, not sold, to
Purchaser as set forth below.

     3.2 Delivery. Mellanox shall deliver the Products to Purchaser in accordance with the
Accepted Order with regard to the requested delivery date, delivery address, carrier and means of
transportation or routing. Mellanox may ship partial orders provided the partial order shipped
includes at least 80% of the quantity scheduled for delivery. Any partial shipment of the
aforementioned variance is subject to the prior written approval of Purchaser. If Purchaser fails
to provide shipping instructions, Mellanox will make the selection of carrier on a commercially
reasonable basis. Purchaser shall also pay for storage charges if Mellanox holds Products at
Purchaser’s request pending instruction or rescheduled delivery. In no event shall the carrier be
deemed to be an agent of Mellanox. Mellanox reserves the right to require payment in advance, or
delay or cancel any shipment or order, by reason of Purchaser’s creditworthiness or should
Purchaser have failed to fulfill any obligation, including payment obligations, when due. The
Products shall be deemed accepted upon delivery if the Products delivered are the Products that
were ordered for such delivery and in the quantities so ordered.

          (a) If Mellanox cannot comply with a delivery commitment, Mellanox will promptly notify
Purchaser of a revised delivery date and Purchaser may, without derogating from any remedy
available under law or this Agreement: (i) cancel without charge Products that were not delivered
by the commitment Delivery Date and which remain not yet delivered however only provided Purchaser
can demonstrate that it has been materially harmed by the delay in such delivery, including but not
limited to documentation from its customers of order cancellation for the Products; or (ii) require
Mellanox to deliver Products using priority freight delivery at Mellanox’s reasonable expense for
the incremental freight charges

 

 

          (b) If Mellanox makes any shipment that is in excess of the quantity specified in the Order,
Purchaser may return excess Products to Mellanox, at Mellanox’s reasonable expense.

          (c) Mellanox shall pack Products so as to protect them from loss or damage, in conformance
with good commercial practice, government regulations, and other applicable requirements accepted
by Mellanox. Each delivery of Products to Purchaser shall include a packing list that contains at
least: (i) the Order number; (ii) the Purchaser part number; (iii) the quantity shipped; and (iv)
the date of shipment.

     4. Quality.

     4.1 ISO 9001. Mellanox represents and warrants that the applicable manufacturers and
shipping agents currently retained and will be retained by Mellanox as of the Effective Date are
and will be ISO 9001 compliant. Mellanox intends to become ISO compliant in the future.

     4.2 Technical Audits. With reasonable advance written notice, not more than once a year, and
in compliance with Mellanox’s security and safety requirements, Purchaser and/or a designated
representative acceptable to Mellanox in its sole discretion may inspect Mellanox’s production
facilities. Mellanox will inform its subcontractors of Purchaser’s right to inspect their
facilities and will use reasonable efforts to secure such rights, each party to bear its own costs
and expenses in the performance of any such Purchaser requested inspection. Any Purchaser
inspection of Mellanox’s subcontractors’ and Mellanox’s facilities will be accompanied by an
authorized representative of Mellanox and all information observed or obtained as part of such
inspection shall be subject to the non-disclosure agreement between Mellanox and Purchaser.

     5. Limited Warranties.

     5.1 Limited Product Warranty. Mellanox warrants that the Product(s), for a period of twelve
(12) months from the time of shipment, will be free from material defects in design, materials and
workmanship and will conform in all material respects to the Product Specification(s) at the time
of delivery. Purchaser may notify Mellanox in writing of any material non-conformance of either
of the two foregoing limited warranties during the warranty period. Mellanox reserves the right to
examine promptly any allegedly non-conforming Product and perform a failure analysis to determine
if the alleged non-conformance is a result of defective materials or workmanship (in which case the
remedies set forth herein shall apply), or does not exist or was caused by improper use or
installation or damage in transit, or while in the control of Purchaser (in which case Purchaser
shall have no right to any remedies hereunder. Following receipt of Purchaser’s written
notification of non-conformance, Mellanox and Purchaser shall promptly correspond to exchange all
relevant data reasonably necessary to determine the root cause of the alleged non-conformance and
cooperate in good faith to establish a corrective action plan, provided that such correspondence
shall not delay in any way Mellanox’s obligations for repair or replacement within the periods
stated in this Section 5.1. If Mellanox determines that the non-conforming Product was
non-conforming as a result of defective design, materials or workmanship, Mellanox will promptly
issue a return material authorization (“RMA”) for the non-conforming Products and Purchaser will
return the non-conforming unit or units to Mellanox’s designated facility in accordance with the
instructions set forth in the RMA. Following the issuance of the RMA, Mellanox shall, at
Mellanox’s option either (i) repair or replace any non-conforming Products within 21 days from the
date the non-conforming products are received at Mellanox’s repair facility; or (ii) if such repair
or replacement is not feasible, credit Purchaser for the amount paid for any non-conforming
Products. Any such repair or replacement provided to Purchaser will not extend the

 

 

original warranty for the products in question. The warranties set forth in this Section 5.1
will not apply to any Product to defects that are the result of an improper installation (unless
performed by Mellanox or at its instructions), misuse or abuse.

     5.2 Sole Remedy. The foregoing sets forth Mellanox’s sole and exclusive obligation and
Purchaser’s sole and exclusive remedy for any breach of the foregoing warranty,. Purchaser shall
bear all risk of loss or damage to Products returned while in transit. In the event no defect or
breach of warranty is discovered by Mellanox upon receipt of any returned item, the item will be
returned to Purchaser at Purchaser’s expense and Purchaser will reimburse Mellanox for the
transportation charges, labor, and the reasonable associated charges incurred in testing the
allegedly defective item.

     5.3 Exceptions. Evaluation board Products, risk units and Product units from the first three
wafer lots are sold “AS IS,” without any warranty of any kind, all provided that the Accepted Order
clearly designated such Products as Products for which no warranty is provided and Purchaser
expressly agrees in writing to such designation.

     5.4 Software Warranty. With respect to Software included in the Product and related
Documentation, Mellanox warrants and represents to Purchaser:

          (a) That Mellanox has, as of date of delivery, sufficient license rights in and to the
Software and Documentation to grant Purchaser a license to the Software; and

          (b) That to Mellanox’s knowledge following use of commercially available virus checking
software, such Software will not (i) contain lock out devices or have any virus, disabling device,
time bomb, Trojan horse, back door or any other harmful component, (ii) replicate, transmit or
activate itself without control of a person operating the computing equipment on which it resides,
(iii) alter, damage or erase any data or other computer programs without control of a person
operating the computing equipment on which it resides or (iv) contain any code, key, node lock,
time out or other function whether implemented by electronic, mechanical or means which restricts
or may restrict use or access to programs or data based on residency on a specific hardware
configuration, frequency or duration of use, or other limiting criteria.

     5.5 Epidemic Failure Warranty. In addition to the warranties specified above, Mellanox
warrants all Products against Epidemic Failure. If a Product exhibits an Epidemic Failure, Mellanox
will provide Purchaser, not later than five (5) business days following discovery of the Epidemic
Failure (or other timeframe as mutually agreed upon), a root cause analysis and corrective action
plan. Purchaser will make available information and assistance reasonably required to enable
Mellanox to conduct its root cause analysis and provide its corrective action report. Once
Purchaser approves the report, Mellanox will incorporate the corrective action in appropriate
future Products.

          If an Epidemic Failure occurs, Mellanox may elect, at its sole discretion, to (i) have all
applicable Products returned to Mellanox for repair or replacement; (ii) have the Products
repaired or replaced in the field, if requested by Purchaser; (iii) credit Purchaser for the
Products. If Purchaser chooses to perform a field repair, Mellanox will provide the appropriate
replacement Products, parts or upgrades free of charge to Purchaser. Such Products, parts or
upgrades will have the highest shipping priority.

     5.6 Disclaimer of Warranties. THE WARRANTY AND REMEDIES SET FORTH ABOVE ARE EXCLUSIVE AND ARE
IN LIEU OF ALL OTHER WARRANTIES, EXPRESS,

 

 

IMPLIED, OR STATUTORY, AND, EXCEPT AS OTHERWISE STATED IN THIS AGREEMENT, MELLANOX HEREBY
EXPRESSLY DISCLAIMS ALL SUCH WARRANTIES INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, TITLE AND NON-INFRINGEMENT OF THIRD PARTY RIGHTS TO THE FULLEST EXTENT
PERMITTED BY LAW.

     6. Technical Support.

     6.1 Support. Mellanox shall provide to Purchaser the Technical Support set forth on Exhibit C
hereto.

     6.2 With respect to Products that are out of warranty, replacement prices for Products
outside of the warranty period shall be the same as the price for a new Product unit per Exhibit A

     6.3 Mellanox’s obligations to provide the aforesaid support and replacement services with
respect to a Product shall continue throughout the term of this Agreement or for a period of five
(5) years after the last Delivery of such Product under this Agreement, whichever is longer, and
Mellanox shall accordingly maintain the capability to supply and shall provide replacement Products
and Product spare parts.

     6.4 Outside of the standard warranty period, Mellanox reserves the right to offer, at
Mellanox’s option, either of the following: (i) Last-time-buy(Per section 2.6); (ii) A
substantially similar product(Form-Fit-Function compatible) or (iii) Grant Purchaser a royalty
bearing license to continue the manufacturing of such products, however only to comply with
existing obligations.

     7. Payment.

     7.1 Price. The prices (including any applicable volume discounts, if any) for the Products
shall be the prices and volume discounts (if any) listed on Exhibit A of this Agreement; provided
that Mellanox may generally increase any purchase price upon a 30-day prior written notice to
Purchaser. If Mellanox does increase a purchase price, the new price will apply only to those
Orders placed after 30 days from the receipt of the written notice by Purchaser, provided that
quantities ordered during the notice period are consistent with the then current forecast,
historical run rates and past purchases. Any reduced prices that are put into effect by Mellanox,
shall automatically apply to all Orders issued by Purchaser after the effective date of such new
prices and to all Products scheduled but unshipped against open Orders. Mellanox and Purchaser
agree to discuss prices in good faith every six (6) months. All prices set forth on Exhibit A are
exclusive of taxes, shipping and insurance charges, which shall be the sole and exclusive
responsibility of Purchase (other than taxes based on the net income of Mellanox), provided that
they are separately designated on the invoice issued by Mellanox. All payments due hereunder shall
be in U.S. Dollars.

     7.2 Payment Terms. Mellanox shall invoice Purchaser for the purchase price of the Products
upon shipment of the Products. All such invoices shall be due and payable within * ( * ) days
after receipt by Purchaser. Mellanox reserves the right to require cash on delivery, subject to a
negotiated discount on early payment. Neither party may offset or withhold any payments due from
him to the other party.

 

*    Omitted
pursuant to confidential treatment request. The confidential portion
has been filed separately with the SEC.

 

 

     8. Confidentiality.

     8.1 Confidentiality Obligations. Each party acknowledges that in the course of the
performance of this Agreement, it may obtain the Confidential Information of the other party. The
receiving party shall, at all times both during the term of this Agreement and thereafter, keep in
confidence and trust all of the disclosing party’s Confidential Information received by it. The
receiving party shall not use the Confidential Information of the disclosing party other than as
necessary to perform its obligations or exercise its rights under this Agreement. The receiving
party shall take all steps to prevent unauthorized disclosure or use of the disclosing party’s
Confidential Information and to prevent it from falling into the public domain or into the
possession of unauthorized persons and will protect the confidentiality of the Confidential
Information with the same degree of care as the receiving party uses for its own similar
information, but not less than reasonable care. The receiving party shall not disclose
Confidential Information of the disclosing party to any person or entity other than its officers,
employees and consultants who need access to such Confidential Information in order to effect the
intent of this Agreement and who have entered into written confidentiality agreements with the
receiving party that protects the Confidential Information of the disclosing party. Each party
shall be responsible for any breach of confidentiality by its respective officer, employees and
consultants. The receiving party shall immediately give notice to the disclosing party of any
unauthorized use or disclosure of disclosing party’s Confidential Information. The receiving party
agrees to assist the disclosing party in remedying such unauthorized use or disclosure of its
Confidential Information.

     The foregoing confidentiality obligations will not apply to any information that (a) is
rightfully known by the receiving party without restriction prior to disclosure, (b) was developed
by the receiving party prior to disclosure or is subsequently developed independently and without
reference to the disclosure, (c) is or becomes publicly available through no fault of the receiving
party, (d) is rightfully received from a third party with no duty of confidentiality, (e) is
disclosed by the receiving party with the discloser’s written approval or (f) is disclosed under
operation of law (but only to the extent and for the purposes of such legal requirement).

     9. Ownership.

     9.1 Intellectual Property Rights. Purchaser acknowledges and agrees that as between the
parties all Intellectual Property Rights (as defined below) in and to the Products, all components
thereof, and all enhancements, modifications and derivatives relating thereto, shall be and remain
the exclusive property of Mellanox, excluding any third party software or components that Mellanox
may incorporate within the Products sold hereunder. For the avoidance of doubt, all Intellectual
Property Rights in any product of Purchaser into which a Product is incorporated or in conjunction
with a Product is sold, all components thereof, and all enhancements, modifications and derivatives
relating thereto shall be and remain the exclusive property of Purchaser. Any and all registered
and unregistered intellectual property rights contained in and/or used in the course of
manufacturing and developing the Product, including but not limited to patent rights, design
rights, semiconductor or mask work rights, copyrights (including software), trademark rights,
know-how, technical information, trade secrets and research, manufacturing and business methods
whether now known or hereafter recognized in any jurisdiction (collectively “Intellectual Property
Rights”), shall remain the exclusive property of Mellanox and, where applicable, its licensors.
Except for the right expressly stated in this Agreement, the delivery and sale of the Products to
Purchaser (a) does not convey to Purchaser or any third party any Intellectual Property Rights in
or to the Products or any components of the Products, and (b) does not grant to Purchaser or any
third party any license under any patents or patent applications of Purchaser. Purchaser shall
not, and shall not permit any third party to, disassemble or analyze the

 

 

physical construction of any Products (or any component thereof) for any purpose. Purchaser
agrees not to remove or destroy any copyright, logo, trademark, trade name, proprietary markings or
confidentiality legends placed upon or contained within the Products, its containers or any related
materials or documentation.

     9.2 Private Labeling. With respect to Custom Products only, if Purchaser requests to produce
Purchaser private label versions of Custom Products, Mellanox will ensure that such Custom Products
contains Purchaser marks, serial number format and packaging as specified by Purchaser and conforms
to Purchaser specifications for external appearance. Mellanox will fulfill such request, as long
as there is no material change in form or dimensions of the Custom Products, Purchaser commits to
purchase at least mutually acceptable volumes of such private labeled Products, and no commercially
unreasonable action is required.

     9.3 Software License Grants. Any software or firmware incorporated in the Products is
licensed, not sold, to Purchaser. Subject to the terms and conditions of this Agreement, Mellanox
grants Purchaser a non-exclusive, non-transferable, royalty-free, worldwide, perpetual license to
execute any software or firmware that may be incorporated in the Products solely in accordance with
the applicable documentation and solely as incorporated in the Products and for the use, support,
reproduction (in the case of software), display, offer and sale of the Products. All other rights
are reserved. In addition, Mellanox hereby grants Purchaser and Voltaire, Inc., a license to its
software drivers pursuant to the terms of the License Agreement attached hereto as Exhibit D.

     9.4 Use of Copyrighted Information. The software may not be modified in any way except upon
the written permission of Mellanox. Mellanox reserves the right to revoke such authorization at
any time, and any such use shall be discontinued immediately upon written notice from Mellanox.
Any copy of the software or any accompanying documentation or portion thereof must include the
copyright notice above and this permission notice.

     9.5 Documentation License. Subject to the terms and conditions of this Agreement, Mellanox
hereby grants Purchaser a non-exclusive, non-transferable, worldwide license to reproduce and
distribute the Documentation in connection with distribution or sale of Products in Purchaser’s
name all Documentation and other information, other than Confidential Information, furnished by
Mellanox under this Agreement.

     9.6 Trademarks. Mellanox Technologies and all other trademarks, service marks, trade names,
and logos of Mellanox are owned by Mellanox, and may not be used in connection with any product or
service that is not Mellanox’s without prior written consent of Mellanox. Mellanox may not use any
of Purchaser’s trademarks, service marks, trade names, and logos without Purchaser’s prior written
consent.

     9.7 Limitation of Use. Purchaser will have the right and authority worldwide to market and
sell the Products (including sub-license the Software incorporate therein), whether on a stand
alone basis or as an integrated with another product or system, provided that certain Products
which are designated as such in Exhibit A, may not be sold on a stand alone basis.

     10. Intellectual Property Indemnification

     10.1 IP Indemnity. Mellanox agrees to defend Purchaser, Eligible Purchasers, and their
officers, directors, employees, agents and representatives (“Indemnitees”) against any damages,
losses,

 

 

costs and expenses, relating to any third party claim, demand, suit or cause of action, to the
extent that it is based upon a claim that the Product supplied by Mellanox infringes any patent or
copyright or any other intellectual property right, or misappropriates any trade secret, of such
third party, and Mellanox agrees to pay any damages and costs, including any reasonable attorneys’
fees, awarded by a court against Purchaser as a result of such third party claim. The foregoing
indemnity is conditioned upon Purchaser providing Mellanox notification in writing of such claim
and providing further that Mellanox shall have the exclusive right to control the defense of such
claim (with Purchaser having a right to participate at the defense or settlement at its own
expense), provided that in the event that Mellanox does not assume the defense or settlement of the
claim within a reasonable time (in any case not to exceed 15 days) following receipt of such
notification, Purchaser shall be entitled to handle such defense and/or settlement independently
and Mellanox shall indemnify Purchaser for all costs and expenses involved. Purchaser shall not
settle or compromise any claim, lawsuit or proceeding without Mellanox’s prior written approval
unless Mellanox has failed to defend and indemnify as required hereunder or is unable to defend and
indemnify Purchaser. Mellanox may not settle or otherwise consent to an adverse judgment in any
such claim, demand, action or other proceeding, that diminishes the rights or interests of
Purchaser without the prior express written consent of Purchaser, which consent shall not be
unreasonably conditioned, withheld or delayed. Purchaser shall reasonably cooperate with Mellanox
and its legal representatives in the investigation of any claim, demand, action or other proceeding
covered by this indemnity. In the case of a claim of infringement Mellanox, at its sole option and
expense, shall either (i) procure for Purchaser the right to continue to use and sell the Product,
or (ii) replace or modify the Product and so that it becomes non-infringing, provided that such
modification or replacement conforms in all material respects to the requirements of this
Agreement.

     10.2 Limitations on Indemnity. Mellanox shall have no liability for any claim of infringement
or misappropriation based on or arising from (i) any modification of the Products by Purchaser or
any third party where such modifications is not specifically authorized by Mellanox in writing and
is the sole cause for the infringement claim; (ii) the use of a superseded version of the Product
if Mellanox provided a free replacement for the superseded Product and the replacement does not
infringe, provided that no excuse shall apply to superseded versions sold by Purchaser prior to the
provision of the replacement; and (iii) the combination or use of the Products or with materials
not furnished by Mellanox, including any Purchaser product, to the extent such infringement would
have been avoided if the Product were not so combined.

     10.3 Sole Remedy. The indemnity set forth in this Section 10 sets forth Purchaser’s sole and
exclusive remedy and Mellanox’s sole and exclusive liability for any claims against Purchaser of
intellectual property infringement by the Products.

     11. Limitations of Liability

     11.1 Limitation of Damages. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR TO
ANYONE CLAIMING THROUGH OR UNDER THE OTHER PARTY, FOR ANY LOST PROFITS, LOST SAVINGS, PRODUCT
DOWNTIME, OR LOST DATA OR FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL OR INDIRECT DAMAGES OF ANY
KIND ARISING FROM OR RELATING TO THE PRODUCTS OR THIS AGREEMENT, EVEN IF THE FIRST PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE TOTAL CUMULATIVE LIABILITY OF EITHER PARTY TO THE
OTHER PARTY FOR ANY CLAIMS OR CAUSES OF ACTION ARISING FROM OR RELATING TO THE PRODUCTS OR THIS
AGREEMENT, WHETHER IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, SHALL NOT EXCEED THE
AGGREGATE AMOUNT PAID AND PAYABLE TO

 

 

MELLANOX DURING THE TWELVE (12) MONTHS PRECEDING THE CLAIM. Purchaser acknowledges and
agrees that Mellanox’s pricing and the other terms of this Agreement are predicated on the
limitations of Mellanox’s liability set forth above and acknowledges that Mellanox would not enter
into this Agreement without such limitations.

     11.2 The limitation of damages set forth in Section 11.1 shall not apply to the parties’
liability under Section 8, a breach of license restrictions by Purchaser and to amounts payable
under Section 10.

     12. Escrow

     12.1 Escrow Agreement. Within ninety (90) days after the Effective Date of this Agreement,
Mellanox shall deposit with an escrow agent reasonably acceptable to Purchaser (the “Escrow
Agent”), at Purchaser’s expense, a full and complete copy of all Technical Information as well as
the names and addresses of Mellanox’s sources for parts not manufactured by Mellanox, including the
appropriate part numbers for commercially available equivalents of electronic parts (the “Escrow
Materials”), to be held in trust by the Escrow Agent for the benefit of Purchaser in accordance
with the terms of the Escrow Agreement as shall be agreed by the parties with the Escrow Agent,
which shall include, without limitation, the terms stated in this Section 12 (the “Escrow
Agreement”). Mellanox shall update the Escrow Materials held by the Escrow Agent from time to time
in its reasonable judgment and upon the introduction of any material change to the Technical
Information, but no less often than once annually.

     12.2 Release Conditions. The Escrow Materials shall be released from the escrow and delivered
to Purchaser immediately upon Purchaser’s undisputed notification to the Escrow Agent that a
Trigger Event has occurred. A Trigger Event shall mean: (i) bankruptcy, liquidation, dissolution
or receivership are initiated by or against Mellanox, its parent corporation or any other entity
that owns the Intellectual Property Rights in the Products, and not terminated or cancelled within
thirty (30) days (it is the duty of Mellanox to notify Purchaser promptly of the occurrence of any
such event), or (ii) a Force Majeure situation affecting Mellanox, that does not have a similar
effect on Purchaser, remains unresolved for thirty (30) consecutive days, or (iii) if at any time
after Mellanox has been acquired by a third party, is merged into a third party, or sells all or
substantially all of its assets to a third party, the failure to deliver when ordered at least
eighty percent (80%) of the scheduled and agreed-upon delivery quantities of conforming Product for
three (3) consecutive months or any six (6) months out of any rolling twelve (12) month period,
provided that in the instance of any such breach, the breach has not been cured within thirty (30)
days following receipt of notice;

To constitute a Trigger Event, an event must (a) materially affect the ability of Mellanox to
perform its obligations under this Agreement; or (b) cause Mellanox to discontinue supplying
Purchaser with Products and services under this Agreement (other than as a result of a breach by
Purchaser). A Force Majeure Trigger Event will only exist if the parties mutually agree that
Purchaser will be able to overcome the effects of the Force Majeure event more quickly and
effectively than Supplier can. If a Trigger Event relates only to a certain part of the Products
or services, the Escrow Materials to be released shall apply only to that specific part.

     12.3 Release Rights. Upon the release of the Escrow Materials in accordance with Section
12.2, and subject to the terms and conditions of this Agreement, Purchaser shall be granted a non-

 

 

exclusive, non-transferable (except pursuant to a permitted assignment of this Agreement in
compliance with Section 14.12), worldwide, royalty-bearing license for no more than eighteen (18)
months, unless at the end of that 18-month period the conditions having caused the original release
from escrow have persisted, to support, reproduce (in the case of software), offer, sell, import,
and manufacture the Products either on its own or through contractors on its behalf. The royalty
payable to Mellanox for Products obtained by Purchaser through use of the Escrow Materials shall be
equal to 40% for HCA Card Products and 50% for Silicon Products of the price paid by Purchaser for
Products at the time of the Trigger Event. If at any time Mellanox can demonstrate that the
conditions leading to the release from escrow are no longer in existence and Mellanox has the
ability (directly or through a third party reasonably acceptable to Purchaser) to perform its
obligations under the Agreement, then the release rights shall expire, Purchaser shall return the
Escrow Materials into escrow, and Mellanox shall resume its supply and support obligations pursuant
to the terms and conditions of this Agreement.

     13. Termination.

     13.1 Term of Agreement. This Agreement shall be effective upon the Effective Date and shall
remain in force for a period of two (2) years (the “Initial Period”), unless terminated earlier as
provided below. Following the Initial Period, the Agreement shall automatically renew for
additional one-year periods unless one party notifies the other within 90 days prior to expiration
that it does not intend to renew.

     13.2 Termination for Cause. This Agreement may be terminated by a party for cause effective
upon written notice (which notice shall describe the alleged breach in reasonable detail) to the
other if the other party violates any covenant, agreement, representation or warranty contained
herein in any material respect or defaults or fails to perform any of its obligations or agreements
hereunder in any material respect, which violation, default or failure is not cured within thirty
(30) days after notice thereof from the non-defaulting party stating its intention to terminate
this Agreement by reason thereof.

     13.3 Survival. Sections 1, 5, 6, 7, 8.1, 9, 10, 11, 12, 13 and 14 of this Agreement shall
survive termination or expiration of this Agreement.

     13.4 Effects of Termination. Upon any termination or expiration of this Agreement:

          (a) Termination by Mellanox shall have no effect on Orders issued prior to the effective date
of termination. Any Order delivered after the effective date of termination shall be subject to
all terms of this Agreement, provided that in the event of termination by Mellanox for non-payment
by Purchaser, Mellanox shall be entitled to request from Purchaser reasonable financial assurance
for meeting its payment obligations under such Orders.

          (b) Mellanox shall have no further obligation to accept any Order sent by Purchaser following
termination.

          (c) Notwithstanding any termination of this Agreement, all licenses granted to customers for
use of the Software will survive termination in accordance with the terms of the applicable license
agreement. Further, termination or expiration shall not affect Purchaser’s right to market and sell
Products already purchased by it or purchasable under outstanding Orders.

 

 

          (d) Termination shall not affect warranty and support obligations of Mellanox with respect to
Products already delivered or that are to be delivered pursuant to outstanding Orders, and such
warranty and support obligations shall continue beyond the term of this Agreement in accordance
with their terms.

     13.5 Return of Materials Upon Termination. On or before ten (10) days after the termination
of this Agreement, each party shall deliver to the other party all Confidential Information and
other property of the other party, except to the extent required for the performance of provisions
of this Agreement or for exercise of rights that survive its termination or for support by
Purchaser of delivered Products. In lieu of returning Confidential Information of the other party,
a party may destroy the other party’s Confidential Information and certify destruction within ten
(10) days after the termination of this Agreement. Notwithstanding the foregoing, either party may
request a return or destruction of its Confidential Information at any time upon written notice.

     14. General Provisions.

     14.1 Notice. Any notice provided for or permitted under this Agreement will be treated as
having been given when (a) delivered personally, (b) sent by confirmed telex or telecopy, (c) sent
by commercial overnight courier with written verification of receipt, or (d) mailed postage prepaid
by certified or registered mail, return receipt requested, to the party to be notified, at the
address first set forth above, or at such other place of which the other party has been notified in
accordance with the provisions of this Section 14. Such notice will be treated as having been
received upon the earlier of actual receipt or five (5) days after posting.

     14.2 Force Majeure. Neither party shall be liable to the other in any way whatsoever for any
failure or delay in performance of any of the obligations under this Agreement, arising out of any
event or circumstance beyond the reasonable control of such Party and without such Party’s fault or
negligence (including war, rebellion, civil commotion, acts of terror, general strikes, general
lock-outs or industrial disputes; fire, explosion, earthquake, acts of God, flood, drought or bad
weather; or the requisitioning or other unforeseeable act or order by any government department,
council or other constituted body) (a “Delaying Cause”). A Delaying Cause does not include delays
in transportation prior to delivery, shortages of material (except industry-wide shortage), delays
by manufacturers or subcontractors (except for causes beyond such party’s reasonable control and
without its fault or negligence) or economic consideration or inefficiencies.

          Any party whose performance is affected by a Delaying Cause will notify the other party
promptly upon commencement of a Delaying Cause and will provide its best estimate of the expected
duration of such occurrence. Any party whose performance is affected by a Delaying Cause will
exercise reasonable diligence to overcome and effect cessation of the Delaying Cause and to
mitigate effects thereof. Performance of the parties’ respective obligations to purchase and sell
Product will be suspended to the extent affected by, and for the duration of, a Delaying Cause, and
during pendency of a Delaying Cause affecting Mellanox’s ability to make timely Delivery. If,
however, Mellanox’s performance is delayed for reasons set forth above for a cumulative period of
ninety (90) days or more, Purchaser, notwithstanding any other provisions of this Agreement to the
contrary, may terminate this Agreement and/or any Order issued hereunder by notice to Mellanox,
without liability.

     14.3 Publicity. Neither party shall make any public announcement, except as the parties may
mutually agree, as to the existence and details of the matters set forth in this Agreement (other
than to

 

 

employees, consultants, shareholders or as required by such parties’ disclosure obligations
under the securities laws or regulations of the United States or any state thereof).

     14.4 Waiver. No term or provision hereof will be considered waived by either party, and no
breach excused by either party, unless such waiver or consent is in writing signed on behalf of the
party against whom the waiver is asserted. No consent by either party to, or waiver of, a breach
by either party, whether express or implied, will constitute consent to, waiver of, or excuse of
any other, different, or subsequent breach by either party.

     14.5 Allocation of Risk. The sections on limitation of liability and limitation of warranties
allocate the risks of this Agreement between the parties. This allocation is reflected in the
pricing of the Products and is an essential element of the basis of the bargain between the
parties.

     14.6 Severability. If any part of this Agreement is found invalid or unenforceable, such part
will be amended to achieve as nearly as possible the same economic effect as the original provision
and the remainder of this Agreement will remain in full force.

     14.7 Compliance with Law. Both Parties warrant that they will comply with all applicable laws
in their performance under this Agreement. Without limiting the foregoing, the parties agree that
they will not export or re-export (directly or indirectly) any Products or documentation or other
technical data therefore, in whole or in part, in violation of any applicable federal, state or
local law, rules or regulations.

     14.8 Certification of Origin. Upon Purchaser’s request, Mellanox shall provide Purchaser with
an appropriate certification stating the country of origin for Products sufficient to satisfy the
requirements of (i) the customs authorities of the country of receipt and (ii) any applicable
export licensing regulations, including those of the United States. Mellanox shall ensure that all
Products are marked (or the Products’ container is marked if there is no room on the Products
themselves or unless exempted from marking) with the country of origin. Mellanox shall ensure
compliance in marking the Products with the requirements of the customs authorities of the country
of receipt.

     14.9 Construction. The official text of this Agreement shall be in the English language, and
any interpretation or construction of this Agreement shall be based solely on the English-language
text. As used in this Agreement, the words “include” and “including,” and variations thereof, will
be deemed to be followed by the words “without limitation” and “discretion” means sole discretion.
This Agreement reflects the wording accepted by the parties and no rule of construction shall apply
against either party. In the event of any conflict between the terms and conditions of the body of
this Agreement and any Exhibit attached hereto, the terms and conditions of the body of the
Agreement shall govern and prevail unless expressly specified otherwise in the relevant portion of
the applicable Exhibit.

     14.10 Choice of Law and Jurisdiction. This Agreement will be governed by and construed in
accordance with the laws of the State of Israel as applied to agreements entered into and to be
performed entirely within Israel between Israeli residents. The parties agree that the United
Nations Convention on Contracts for the International Sale of Goods (1980) is specifically excluded
from application to this Agreement. All disputes arising hereunder shall be exclusively adjudicated
in the competent court in the Tel Aviv-Jaffa district.

 

 

     14.11 Amendment. Except as expressly set forth herein, this Agreement may be amended or
supplemented only by a writing that is signed by both parties.

     14.12 Assignment. Neither party assign its rights or delegate its obligations hereunder,
either in whole or in part, whether by operation of law or otherwise, without the prior written
consent of the other party, except that either party may assign this Agreement in conjunction with
a merger, acquisition, reorganization, change of control, or the sale of all or a substantial part
of its business utilizing this Agreement. Any attempted assignment or delegation without such
prior written consent will be null and void. The rights and liabilities of the parties under this
Agreement will bind and inure to the benefit of the parties’ respective successors and permitted
assigns.

     14.13 Relationship of the Parties. The parties to this Agreement are independent contractors.
There is no relationship of agency, partnership, joint venture, employment, or franchise between
the parties. Neither party has the authority to bind the other party or to incur any obligation on
its behalf.

     14.14 Counterparts. This Agreement may be executed simultaneously in two or more
counterparts, each of which will be considered an original, but all of which together will
constitute one and the same instrument.

     14.15 Entire Agreement. This Agreement, including all Exhibits to this Agreement, constitutes
the entire agreement between the parties relating to this subject matter and supersedes all prior
or simultaneous representations, discussions, negotiations, and agreements, whether written or
oral.

IN WITNESS WHEREOF, the parties have caused this Agreement to be as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MELLANOX:	 	 	 	VOLTAIRE LTD.:
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Michael Gray
	 	 	 	By:
	 	/s/ Koby Segal	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Authorized Signatory
	 	 	 	 	 	Authorized Signatory	 	 	 	 	 	 
	 

	 	Title: CFO
	 	 	 	 	 	Title: G. M. Israel	 	 	 	 	 	 
	Date: 11-4-05	 	 	 	Date: 9 October 2005

 

 

EXHIBIT A

Products, Prices And Volume Discounts, Lead times

 

 

EXHIBIT B

Flexibility Agreement:

Days prior to the scheduled date of shipment:

Upsides:

For either product type, Mellanox will use commercially reasonable efforts to achieve the following
upside capability.

	 	 	 	 	 
	* Days

	 	*
	 	 
	 
	 	 	 	 
	* Days

	 	*	 	 
	 
	 	 	 	 
	* Days

	 	*	 	 
	 
	 	 	 	 
	In addition, Mellanox will use commercially reasonable efforts to satisfy any upside request.
	 
	 	 	 	 
	HCA Cards:

	 	Reschedules
	 	Cancellation Charges
	 
	 	 	 	 
	* Days

	 	No Reschedules
	 	No Cancellations
	 
	 	 	 	 
	* Days

	 	* out * Days
	 	Purchaser will pay for material in Mellanox’s pipeline that can’t be reasonably redirected
or sold to other customers within in * days
	 
	 	 	 	 
	* days +

	 	N/A
	 	Purchaser will pay for long lead time material that can’t be reasonably redirected or sold
to other Mellanox customers within in * days
	 
	 	 	 	 
	Silicon Products:

	 	Reschedules
	 	Cancellation Charges
	 
	 	 	 	 
	* Days

	 	No Reschedules
	 	No Cancellations
	 
	 	 	 	 
	* Days

	 	* out * Days
	 	* of the purchase price for Products canceled that can’t be reasonably redirected or
sold to other Mellanox customers within * days
	 
	 	 	 	 
	* Days

	 	* out * Days
	 	* of the purchase price for Products canceled that can’t be reasonably redirected or
sold to other Mellanox customers within * days
	 
	 	 	 	 
	* Days +

	 	Unlimited
	 	None

For either Product Type, (i) Orders can not be rescheduled and then canceled; (ii) The cancellation
liability is not reduced if an order is rescheduled; (iii) Orders can be rescheduled a maximum of 1
time per the guidelines above

 

*    Omitted
pursuant to confidential treatment request. The confidential portion
has been filed separately with the SEC.

 

 

EXHIBIT C

Technical Support

     Mellanox shall provide Technical Support to Purchaser as reasonably required to address
ongoing needs and foster new business development.

     Designated Technical Support Contact. Mellanox shall designate at least one “Designated
Support Contact” and at least one “Alternate” to receive Escalations from Purchaser, and shall
provide Purchaser with written notice of the names of and contact information for such individuals.

Designated Technical Support Contact:

Erez Cohen

Mellanox Technologies Ltd.

Mail: erezc@mellanox.co.il

Tel : + 972 - 4 - 9097200 ext 378

Cell : + 972 - 54 - 5468801

Fax : + 972 - 4 - 9593245

www.mellanox.com

     Alternate;

Nimrod Gindi

Mellanox Technologies Ltd.

mail : nimrodg@mellanox.co.il

Tel : +972-4-9097200 ext 366

Fax : +972-4-9593245

Cellular : +972-54-5940201 (Israel)

Cellular : +1-408-750-4801 (USA)

POB 586, Yokneam, 20692, Israel

 

 

Exhibit E

Product Change Notification (PCN)

Introduction

Mellanox’s PCN procedure objective is to allow changes required to improve its products while, at
the same time, maintain service stability and availability throughout the product life cycle. The
PCN procedure ensures that all parties affected are informed of planned changes and it provides
them with a record of changes.

The customer will be notified 30-120 days in advance, depending on the type of change.

     The PCN will be distributed to all Mellanox customers, which are currently using the product.

Other documents such as characterization and qualification reports will be provided upon customer
request.

Product Change Levels

Level 1 — Customer approval required prior to shipment

Major changes that affect the form, fit, or function of the end product. These changes may or may
not exceed the current product specification, but have significant known impact on the customer’s
application or customer’s manufacturing process.

Notification —  ( Commercially reasonable efforts — 120 days prior to change.

Initial customer feedback is required within 14 days.

Samples availability — 60 days prior to the change.

Level 2  — Notification only

Changes that have minor effect on the form, fit and function of a product.

These changes will not exceed current product specification but may have some impact on a
customer’s manufacturing process. These types of changes are not expected to require any validation
activity by the customer.

Notification — 30 days prior to change.

Level 3 — No notification

Changes that do not affect the form, fit or function of a product and that have no customer impact.EX-10.6

 

Exhibit 10.6

LETTER OF AGREEMENT

This Letter of Agreement (“LOA”) is made and entered into as of this 12th day of October, 2004,
between Voltaire LTD., an Israeli corporation having its principal place of business at 9 Hamenofim
Herzeliva Pituach, Israel 46725, (“Customer”) and Sanmina-SCI Corporation and its wholly owned
subsidiaries and affiliates, (collectively “Sanmina-SCI”), a Delaware corporation having its
principal place of business at 2700 North First Street, San Jose, California 95134.

Customer and Sanmina-SCI are presently attempting to establish a business relationship as described
in Attachment B under which Customer may, among other things, have Sanmina-SCI procure components,
parts and raw material (collectively “Components”) and manufacture, assemble, test, inspect,
configure and ship the products listed within Attachment A (“Products”) at the prices set forth
therein (“Prices”). Prices are based on shipment “ex works” from Sanmina-SCI’s facility of
manufacture and do not include export licensing of the Product or payment of broker’s fees, duties,
tariffs or other similar charges, taxes (other than those based on the net income of Sanmina-SCI)
or setup, tooling or NRE charges.

This LOA is for the purpose of authorizing Sanmina-SCI to begin work immediately in lieu of the
fully negotiated Agreement. This LOA implies no commitment to enter the Agreement. Both parties
acknowledge that the execution of an Agreement is contingent upon the mutual consent of the parties
and that should the Agreement not be executed, the terms of this LOA shall be the sole governing
document.

Customer shall issue Purchase Orders for the Product and may provide Sanmina-SCI with a forecast
for future requirements of the Product (“Forecast”). Purchase orders will cover a minimum of 90
days. Customer authorizes Sanmina-SCI to procure the quantity and type of Components in support of
the quantities set forth in the Purchase Order and Forecast in accordance with its standard
material ordering policies available at www.sanmina-sci.com (“Policies”), and agrees to be
financially responsible for all Components ordered in accordance with the Policies. Customer’s
Purchase Orders and related documents issued pursuant to this LOA will serve as Customer’s
authorization to Sanmina-SCI to complete and ship the Products. Sanmina-SCI will obtain Customer
approval prior to purchase of any excess components resulting from any minimum buy quantities, tape
and reel quantities, and multiples of packaging quantities required by the Vendor.

The prices in Attachment A shall be utilized for invoicing. Sanmina-SCI invoices shall be paid in
U.S. Dollars net * (*) days from the date of invoice which, for shipped units, shall not be issued
prior to the date on which the Products are shipped ”ex works” Sanmina-SCI’s dock (Incoterms 2000).

Sanmina-SCI’s warranty period is for * from the date of manufacture and is limited to correction of
defects in Sanmina-SCI workmanship only. Sanmina-SCI will pass on to Customer all manufacturers’
component warranties to the extent that they are transferable, but will not independently warrant
components. ALL WARRANTIES OF MERCHANTABILITY, NONINFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE
OR USE, AND ALL IMPLIED WARRANTIES OF TITLE FOR ANY CONSIGNED OR CUSTOMER SUPPLIED MATERIALS, ARE
EXPRESSLY DISCLAIMED AND EXCLUDED HEREFROM. THE SOLE REMEDY UNDER THIS WARRANTY SHALL BE THE
REPAIR, REPLACEMENT OR CREDIT FOR DEFECTIVE PRODUCTS AS STATED ABOVE.

Customer may terminate this LOA or cancel an order hereunder upon written notice to Sanmina-SCI.
Orders within 30 days are considered firm and non-cancelable. Reschedules in excess of 90 days
shall be treated as a cancellation. Customer may only reschedule an order one time. Upon
termination or cancellation for any reason by Customer, Customer shall be responsible for all
Components, WIP and finished Product ordered within lead-time to support the Customer’s Purchase
Orders and/or Forecast; provided, however, that Customer’s maximum liability shall not exceed: (1)
for Components, the quantity and type of Components

 

			
	*	 	Omitted pursuant to a confidential treatment request. The confidential portion has been filed
separately with the SEC.

 

 

acquired by Sanmina-SCI in support of Customer’s Purchase Order or Forecast as set forth in
this LOA, plus a 10% margin on such Components; (2) for WIP, the cost of Components calculated in
accordance with (1) plus a pro rata charge for labor based on the stage of the WIP; and (3)
for finished Product, the full purchase price. In addition, Customer shall be responsible for (a)
Sanmina-SCI’s documented cost to perform Customer authorized non-recurring engineering or
associated program duties; and (b) Sanmina-SCI’s actual expenses incurred either prior to
termination or as an unavoidable consequence of termination, not to exceed the value of the
outstanding purchase orders.

In the event of termination for any reason, Sanmina-SCI shall use reasonable commercial efforts to
minimize Customer’s liability by canceling all agreements it has entered into and managing
Component, labor and overhead cost to a minimum. Provided that the Customer has no outstanding
receivable, Sanmina-SCI will deliver to Customer all product Components, documentation and other
property owned by Customer or which Customer has paid for under this LOA.

Neither party shall make a claim against, or be liable to the other party or its affiliates or
agents for any damages, including (without limitation) loss of profits or injury to business
reputation, resulting from the continuation or abandonment of negotiations, including the
consequences thereof. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT,
CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, OR ANY DAMAGES WHATSOEVER RESULTING FROM LOSS OF USE,
DATA OR PROFITS, EVEN IF SUCH OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES;
provided, however, that this Section shall not prevent a party from incurring any
indemnification-related liabilities set forth herein. THE LIMITATION SET FORTH IN THIS SECTION
SHALL APPLY WHERE THE DAMAGES ARISE OUT OF OR RELATE TO THIS AGREEMENT. For the purpose of this
Section, both lost profits and damages resulting from value added to the Product by CUSTOMER shall
be considered consequential damages. IN NO EVENT SHALL SANMINA-SCI’S LIABILITY FOR A PRODUCT
(WHETHER ASSERTED AS A TORT CLAIM OR CONTRACT CLAIM) EXCEED THE AMOUNTS PAID TO SANMINA-SCI FOR
SUCH PRODUCT HEREUNDER. IN NO EVENT WILL SANMINA-SCI BE LIABLE FOR COSTS OF PROCUREMENT OF
SUBSTITUTE GOODS BY CUSTOMER. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

Sanmina-SCI shall obtain and maintain in full force and effect during the term of this Agreement
(i) commercial general liability insurance (including contractual liability coverage) with coverage
limits of not less than One Million Dollars ($1,000,000) per occurrence, naming Voltaire Ltd/Inc as
an additional insured thereunder, and (iii) worker’s compensation insurance as required by law.
Upon request, Sanmina-SCI shall provide to Voltaire a certificate of insurance evidencing the
insurance coverages required under this Section.

Sanmina-SCI’s Indemnification. Sanmina-SCI shall indemnify, defend, and hold Customer and
Customer’s affiliates, shareholders, directors, officers, employees, contractors, agents and other
representatives (the “Customer-Indemnified Parties”) harmless from all demands, claims, actions,
causes of action, proceedings, suits, assessments, losses, damages, liabilities, settlements,
judgments, fines, penalties, interest, costs and expenses (including fees and disbursements of
counsel) of every kind (each a “Claim,” and, collectively “Claims”) (i) based upon personal injury
or death or injury to property to the extent any of the foregoing is proximately caused either by
the negligent or willful acts or omissions of Sanmina-SCI or its officers, employees,
subcontractors or agents and/or (ii) arising from or relating to any actual or alleged infringement
or misappropriation of any patent, trademark, mask work, copyright, trade secret or any actual or
alleged violation of any other intellectual property rights arising from or in connection with
Sanmina-SCI’s manufacturing processes.

Customer’s Indemnification. Customer shall indemnify, defend, and hold Sanmina-SCI and
Sanmina-SCI’s affiliates, shareholders, directors, officers, employees, contractors, agents and
other representatives (the “Sanmina-SCI -Indemnified Parties”) harmless from all Claims (i) based
upon personal injury or death or

 

 

injury to property to the extent any of the foregoing is proximately caused either by a
defective Product, by the negligent or willful acts or omissions of Customer or its officers,
employees, subcontractors or agents and/or (ii) arising from or relating to any actual or alleged
infringement or misappropriation of any patent, trademark, mask work, copyright, trade secret or
any actual or alleged violation of any other intellectual property rights arising from or in
connection with the Products, except to the extent such that the infringement exists as a result of
use by Customer of Sanmina-SCI’s manufacturing processes,

This LOA and its attachments make up the entire agreement between the parties and supersede prior
discussions, except for any related written agreements concerning confidentiality. Both parties
expressly reject any pre-printed terms and conditions of any Purchase Order, Acknowledgment or any
other form or document of either party. The terms hereof may be amended only by a writing executed
by authorized representatives of both parties. This LOA will not be assigned by either party
without the other party’s prior written consent. Customer shall be the exporter of record for and
shall comply with all applicable export control statutes and regulations. The parties acknowledge
and agree that the state or federal courts of Santa Clara County, California (and the Northern
District of California) shall have exclusive jurisdiction and venue to adjudicate any and all
disputes arising out of or in connection with this Agreement.

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	ACCEPTED AND AGREED TO:	 	 	 	ACCEPTED AND AGREED TO:	 	 
	SANMINA-SCI CORPORATION	 	 	 	CUSTOMER	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ David Marlen
	 	 	 	By:
	 	/s/ Koby Segal	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name: David Marlen	 	 	 	Name: Koby Segal	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title: VP/PLT MGR	 	 	 	Title: G.M. Israel	 	 

 

 

Attachment A

Pricing

The pricing listed in the table below is effective for PO’s accepted prior to November 1, 2004.

	 	 	 	 	 	 	 
	 	 	 	 	VOLTAIRE	 	VOLTAIRE
	PRODUCT	 	SSCI PN	 	PN	 	COST
	Jade 20L – VL01
	 	1001211-GH-003 – VL01
	 	605A10004
	 	$*
	Jade 20L- VL02
	 	1001211-GH-003-VL02
	 	501S10004
	 	$*
	Jet
	 	1001370-GH-001
	 	501S12320
	 	$*
	LarimarSPS / UnMan
	 	1001590-GH-0102
	 	501S30010
	 	$*
	LarimarDPS / UnMan
	 	1001590-GH-0202
	 	501S30011
	 	$*
	LarimarSPS / Man
	 	1001590-GH-0302
	 	501S30020
	 	$*
	Larimar DPS / Man
	 	1001590-GH-0402
	 	501S30021
	 	$*
	Larimar 12X SPS / UnMan
	 	TBD
	 	TBD
	 	*
	Larima 12X DPS / UnMan
	 	TBD
	 	TBD
	 	*
	Larimar 12X SPS / Man
	 	TBD
	 	TBD
	 	*
	Larimar 12X DPS / Man
	 	TBD
	 	TBD
	 	*
	PrPMC
	 	TBD
	 	TBD
	 	*
	PCI-Express HCA
	 	TBD
	 	TBD
	 	*

NOTE: Pricing for the “Managed” versions of the Larimar product includes $* for the Artesyn CCA.
Melanox BGA E-1242 is increasing from $* to $*. Revised assembly price will be reflected when
current inventory is consumed.

 

			
	*	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the SEC.

 

 

Attachment B

Business Model

Subsequent to the execution of this agreement;

	 	1)	 	Sanmina-SCI will license at * the existing InifiniBand designs to Voltaire,
granting Voltaire the rights to use, enhance, and/or modify the designs.
	 
	 	2)	 	Sanmina-SCI shall provide Voltaire the designs ( * and * ) that are incomplete
in their current state.
	 
	 	3)	 	In consideration for items 1 and 2 above, and as long as Sanmina-SCI continues to
meet reasonable commercial standards for product cost, quality and manufacturing
lead-time delivery, Voltaire will exclusively use Sanmina-SCI for manufacturing
Voltaire’s InfiniBand products listed in attachment A, and any derivatives thereof., for
a period of no less than two (2) years from the effective Date of this LOA (the “Initial
Term”). Except as noted below in 4), if for any reasonVoltaire were to manufacture
InfiniBand designs listed in attachment A, or any derivatives thereof, itself, or have a
third party manufacture the InfiniBand designs listed in attachment A, or any derivatives
thereof, Voltaire shall compensate Sanmina-SCI a reasonable royalty fee for the right to
manufacture or have manufactured the InfiniBand designs listed in attachment A, or any
derivatives thereof., the terms of which will be agreed by the two parties.
	 
	 	4)	 	In event Sanmina-SCI were to provide written notice to Voltaire of its intent to
terminate this LOA (or the planned subsequent Manufacturing Services Agreement) prior to
the end of the Initial Term, then notwithstanding anything written in Section 3) above, a
no cost license will be granted to Voltaire, except if such Sanmina-SCI initiated
termination notice is the result of a material breach by Voltaire which remained uncured
after thirty (30) days from the date of written notice.
	 
	 	5)	 	Voltaire shall be responsible for all sustaining activities for the licensed
products.

Sanmina-SCI will provide EMS fulfillment services to include:

Reports – Shipment, Product Status, OTD

Data – Quality, Test Yield, Pareto, Defects

Material – Supplier Management (Quality, Service and Delivery Reporting) and AVL Integrity

Engineering – Test Support, ECO Management

Data Interchange with OEM’s

Open Model Pricing on:

Material Cost Drivers (Top 70% of BOM)

Labor Cost

Manufacturing Value Add (MVA)

Customer will be responsible for the following:

Sustaining Engineering Activity

ECO Implementation

Documentation Rev Control

Additional Test Equipment / Enhancements

Forecast

Inventory Liability

Establishment of acceptable credit terms for fulfilling Customers liability as stated in this agreement

 

			
	*	 	Omitted pursuant to a confidential treatment request. The confidential portion has been filed separately with the SEC.

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