{"id":42512,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/manufacturing-contract-va-linux-systems-inc-and-synnex.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"manufacturing-contract-va-linux-systems-inc-and-synnex","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/operations\/manufacturing-contract-va-linux-systems-inc-and-synnex.html","title":{"rendered":"Manufacturing Contract &#8211; VA Linux Systems Inc. and Synnex Information Technologies Inc."},"content":{"rendered":"<pre>\n                       VA RESEARCH MANUFACTURING CONTRACT\n\nThis Manufacturing Agreement (\"Agreement\") is entered into this 5\/27 day of\n1999 by and between VA Linux Systems Inc., having its place of business at 1380\nBordeaux Drive, Sunnyvale, CA 94089. (\"VA Linux Systems\") and SYNNEX\nInformation Technologies, Inc., having its place of business at 3797 Spinnaker\nCourt, Fremont, CA 94538.\n\n1.0       WORK, LICENSE\n\nSynnex agrees to use reasonable commercial efforts to perform the work\n(hereinafter \"Work\") pursuant to Blanket Purchase Orders or changes thereto\nissued by VA Research and accepted by Synnex. Synnex acknowledges that time is\nof the essence in the performance of Work\".\n\nWork shall mean to procure components, materials, equipment and other supplies\nand to manufacture, assemble, and test products (hereinafter \"Products\")\npursuant to detailed written specifications for each such Product which are\nprovided by VA Research and accepted by Synnex and to deliver such Products. For\neach Product or revision thereof, written specifications shall include but are\nnot limited to bill of materials, schematics, assembly drawings, process\ndocumentation, test specifications, current revision number, and approved\nvendor list (hereinafter \"Specifications\") as attached hereto.\n\nSynnex is granted by VA Research a non-exclusive license during the term of this\nAgreement to use all of VA Research's patents, trade secrets and other\nintellectual property required to perform Synnex' obligations under this\nAgreement.\n\n2.0       FORECASTS, ORDERS, MATERIAL PROCUREMENT\n\n2.1       FORECASTS\n\nSee Addendum A\n\n2.2.      ORDERS\n\nSee Addendum A\n\nThe parties agree that the terms and conditions contained in this Agreement or\nAddendum A shall prevail over any terms and conditions of any Blanket Purchase\nOrder, acknowledgement form or other instrument.\n\n2.3       MATERIAL PROCUREMENT.    VA Research's accepted Blanket Purchase\nOrders will constitute authorization for Synnex to procure, using standard\npurchasing practices, the components, materials and supplies necessary for the\nmanufacture of Products (\"Inventory\") covered by such Blanket Purchase Orders.\n\nSee Addendum A\n\n3.0       SHIPMENTS, SCHEDULE CHANGE, CANCELLATION\n\n3.1       SHIPMENTS.     All Products delivered pursuant to the terms of this\nAgreement shall be suitably packed for shipment in accordance with VA\nResearch's Specifications, marked for shipment to VA Research's destination\nspecified in the applicable Daily Release Order and delivered to a carrier or\nforwarding agent. Shipment will be F.O.B. Synnex' facility at which time risk\nof loss and title will pass to VA Research. All freight, insurance and other\nshipping expenses, as well as any special packing expenses not included in the\noriginal price quotation for the Products will be paid by VA Research.\n\n3.2       QUANTITY INCREASES AND SHIPMENT SCHEDULE CHANGES\n\nSee Addendum A\n\n3.3       CANCELLATION.\n\nVA will not cancel any Daily Release Orders. For cancellation of Blank Purchase\nOrders, Synnex will use reasonable commercial efforts to return unused\ninventory to its vendors and to cancel pending orders for such inventory.\nSynnex will also use reasonable commercial efforts to sell any excess inventory\ncaused by the cancellation through its \n\n\n \n\n\n\ndistribution channel to minimize the loss. *\n\n4.0 ENGINEERING CHANGES\n\nVA Research may request, in writing, that Synnex incorporate engineering changes\ninto the Product. Such request will include a description of the proposed\nengineering change sufficient to permit Synnex to evaluate its feasibility and\ncost. Synnex' evaluation shall be in writing and shall state the costs and time\nof implementation and the impact on the delivery schedule and pricing of the\nProduct. *\n\n5.0 TOOLING, NON-RECURRING EXPENSES, SOFTWARE\n\n* All software which VA Research provides to Synnex is and shall remain\nthe property of VA Research. VA Research grants Synnex a limited license during\nthe term of the agreement to copy, modify and use such software as required to\nperform Synnex' obligations under this Agreement. All modifications to such VA\nResearch software shall be the exclusive property of either VA Research or VA\nResearch's vendor, as the case may be. Synnex shall reasonably assist VA\nResearch to secure such proprietary rights to such modifications at VA's\nexpense. All software developed by Synnex to support the process tooling or\notherwise shall be and remain the property of Synnex.\n\n6.0 PRODUCT ACCEPTANCE AND WARRANTIES\n\n6.1 PRODUCT ACCEPTANCE. The Products delivered by Synnex will be inspected and\ntested as required by VA Research within * of receipt. If Products are found to\nbe defective in material or workmanship, VA Research has the right to reject\nsuch Products during said period. Products not rejected during said period will\nbe deemed accepted. VA Research has the right to reject such Products during\nsaid period by notifying Synnex in writing at the address provided above,\nattention President. VA Research may return defective Products, freight collect,\nafter obtaining a return material authorization number from Synnex to be\ndisplayed on the shipping container and completing a failure report. Rejected\nProducts will be promptly repaired or replaced, at Synnex' option, and returned\nfreight pre-paid. If the Product is source inspected by VA Research prior to\nshipment, VA Research will inspect goods within * of its request date.\n\n6.2 EXPRESS LIMITED WARRANTY. Synnex warrants that the Products will conform to\nVA Research's applicable Specifications and will be free from defects in\nworkmanship for a period of * from the date of shipment. Synnex shall warrant\nthe materials to the same extent that the manufacturer warrants the materials to\nSynnex. This express limited warranty does not apply to (a) materials consigned\nor supplied by VA Research or Synnex; (b) defects resulting from VA Research's\nSpecifications or the design of the Products; (c) any other defects not caused\nby Synnex; or (d) Product that has been abused, damaged, altered or misused (not\nused as in accordance to the product specification) by any person or entity\nafter title passes to VA Research. With respect to first articles, prototypes,\npre-production units, test units or other similar Products, Synnex makes no\nrepresentations or warranties whatsoever. Notwithstanding anything else in this\nAgreement, Synnex assumes no liability for or obligation related to the\nperformance, accuracy, specifications, failure to meet specifications or defects\nof or due to tooling, designs or instructions produced or supplied by VA\nResearch and VA Research shall be liable for costs or expenses incurred by\nSynnex related thereto. Upon any failure of a Product to comply with the above\nwarranty, Synnex' sole obligation, and VA Research's sole remedy, is for Synnex,\nat its option, to promptly repair or replace such unit and return it to VA\nResearch freight collect. VA Research shall return Products covered by the\nwarranty freight pre-paid after completing a failure report and obtaining a\nreturn material authorization number from Synnex to be displayed on the shipping\ncontainer.\n\nSEE ADDENDUM A\n\nSYNNEX MAKES NO OTHER WARRANTIES OR CONDITIONS ON THE PRODUCTS, EXPRESS,\nIMPLIED, STATUTORY, OR IN ANY OTHER PROVISION OF THIS AGREEMENT OR COMMUNICATION\nWITH VA RESEARCH, AND SYNNEX SPECIFICALLY DISCLAIMS ANY IMPLIED WARRANTY OR\nCONDITION OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.\n\n\n* Confidential treatment has been requested by the Registrant as to certain\n  portions of this exhibit. The omitted portions have been separately filed\n  with the Commission.\n\n\n7.0  PAYMENT TERMS, ADDITIONAL COSTS AND PRICE CHANGES\n\n7.1  PRICE AND PAYMENT TERMS. The price for Products to be manufactured will be\n     set from time to time for reference purposes through Blanket Purchase\n     Orders issued by VA Research and accepted by Synnex. The actual sale price\n     of all Products shall be established through Daily Release Orders provided\n     by VA Research and accepted by Synnex. All prices quoted are exclusive of\n     federal, state and local excise, sales, use and similar taxes, and any\n     duties, and VA Research shall be responsible for all such items. Payment\n     for any Products, services or other prior agreed costs to be paid by VA\n     Research hereunder is due in * from the date of invoice and shall be made\n     in lawful U.S. currency.\n\n     SEE ADDENDUM A\n\n8.1  TERM. The term of this Agreement shall commence on the date hereof above\n     and shall continue for one (1) year thereafter until terminated as provided\n     in Section 8.2 or 10.9. After the expiration of the initial term hereunder\n     (unless this Agreement has been terminated) this Agreement shall be\n     automatically renewed for separate but successive one-year terms.\n\n8.2  TERMINATION. This Agreement may be terminated by either party for any\nreason upon one hundred twenty (120) days written notice to the VA Research.\nTermination of this Agreement for any reason shall not affect the obligations of\neither party that exist as of the date of termination. Notwithstanding\ntermination or expiration of this Agreement, Sections 6.2, 8.0, 9.0, and 10.0\nshall survive said termination or expiration.\n\n9.0  LIABILITY LIMITATION\n\n9.1  PATENTS, COPYRIGHTS, TRADE SECRETS, OTHER PROPRIETARY RIGHTS. VA Research\n     shall defend, indemnify and hold harmless Synnex from all claims, costs,\n     damages, judgments and attorneys' fees resulting from or arising out of any\n     alleged and\/or actual infringement or other violation of any patents,\n     patent rights, trademarks, trademark rights, copyrights, trade secrets,\n     proprietary rights and processes or other such rights related to the\n     Products. Synnex shall promptly notify VA Research in writing of the\n     initiation of any such claims.\n\nTHE FOREGOING STATES THE ENTIRE LIABILITY OF THE PARTIES TO EACH OTHER\nCONCERNING INFRINGEMENT OF PATENT, COPYRIGHT, TRADE SECRET OR OTHER INTELLECTUAL\nPROPERTY RIGHTS.\n\n9.2  PRODUCT LIABILITY. VA Research agrees that, if notified promptly in writing\n     and given sole control of the defense and all related settlement\n     negotiations, it will defend Synnex from any claim or action and will\n     indemnify and hold Synnex harmless from any loss, damage or injury,\n     including death, which arises from any alleged defect of any Products. VA\n     Research shall add Synnex as an additional insured under VA Research's\n     product liability polices for any Products.\n\n9.3  NO OTHER LIABILITY. EXCEPT FOR THE EXPRESS WARRANTIES CREATED UNDER THIS\nAGREEMENT AND EXCEPT AS SET FORTH OTHERWISE IN THIS AGREEMENT, IN NO EVENT SHALL\nEITHER PARTY BE LIABLE TO THE OTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL\nOR PUNITIVE DAMAGES OF ANY KIND OR NATURE ARISING OUT OF THIS AGREEMENT OR THE\nSALE OF PRODUCTS, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT,\nTORT (INCLUDING THE POSSIBILITY OF NEGLIGENCE OR STRICT LIABILITY), OR\nOTHERWISE, EVEN IF THE PARTY HAS BEEN WARNED OF THE POSSIBILITY OF ANY SUCH LOSS\nOR DAMAGE, AND EVEN IF ANY OF THE LIMITED REMEDIES IN THIS AGREEMENT FAIL IN\nTHEIR ESSENTIAL PURPOSE.\n\n10.0 MISCELLANEOUS     \n\n10.1 CONFIDENTIALITY. All written information and data exchanged between the\nparties for the purpose of enabling Synnex to manufacture and deliver Products\nunder this Agreement that is marked \"Confidential\" or the like, shall be subject\nto the NDA agreement between VA Research and Synnex attached hereto as Addendum\nB.\n\n10.2 ENTIRE AGREEMENT. This Agreement, including all Addendums thereto,\nconstitutes the entire agreement between the Parties with respect to the\ntransactions contemplated hereby and supersedes all prior agreements and\n\n\n* Confidential treatment has been requested by the Registrant as to certain\n  portions of this exhibit. The omitted portions have been separately filed\n  with the Commission.\n\n\nunderstandings between the parties relating to such transactions. VA Research\nshall hold the existence and terms of this Agreement confidential, unless it\nobtains Synnex' express written consent otherwise. In all respects, this\nAgreement shall govern, and any other documents including, without limitation,\npreprinted terms and conditions on VA Research's Blanket Purchase Orders and\nDaily Release Orders shall be of no effect.\n\n10.3  Amendments. This Agreement may be amended only by written consent of both\nparties.\n\n10.4 Independent Contractor. Neither party shall, for any purpose, be deemed to\nbe an agent of the other party and the relationship between the parties shall\nonly be that of independent contractors. Neither party shall have any right or\nauthority to assume or create any obligations or to make any representations or\nwarranties on behalf of any other party, whether express or implied, or to bind\nthe other party in any respect whatsoever.\n\n10.5 Expenses. In the event a dispute between the parties hereunder with\nrespect to this Agreement must be resolved by litigation or other proceeding or\na party must engage an attorney to enforce its right hereunder, the prevailing\nparty shall be entitled to receive reimbursement for all associated reasonable\ncosts and expenses (including, without limitation, attorneys fees') from the\nother party.\n\n10.6 Security Interest. Until the purchase price and all other charges payable\nto Synnex hereunder have been received in full. Synnex hereby retains and VA\nResearch hereby grants to Synnex a security interest in the Products delivered\nto VA Research and any proceeds therefrom. VA Research agrees to promptly\nexecute any documents requested by Synnex to perfect and protect such security\ninterest. In the event of a default by VA Research, Synnex may exercise any or\nall remedies provided under the Uniform Commercial Code or similar statutes or\nlaws enacted in the jurisdiction within which Synnex seeks to enforce its\nrights under this Agreement.\n\n10.7 Governing Law. This Agreement shall be governed by and construed under the\nlaws of the State of California, excluding its choice of law principles. The\nparties consent to the exclusive jurisdiction of the state and Federal courts\nin Santa Clara County, California.\n\n10.8 Successors, Assignment. This Agreement shall be binding upon and inure to\nthe benefit of the parties hereto and their respective successors, assigns and\nlegal representatives. Neither party shall have the right to assign or\notherwise transfer its rights or obligations under this Agreement except with\nthe prior written consent of the other party, not to be unreasonably withheld.\n\n10.9 Force Majeure. In the event that either party is prevented from performing\nor is unable to perform any of its obligations under this Agreement (other than\na payment obligation) due to any Act of God, fire, casualty, flood, earthquake,\nwar, strike, lockout, epidemic, destruction of production facilities, riot,\ninsurrection, material unavailability, or any other cause beyond the reasonable\ncontrol of the party invoking this section, and if such party shall have used\nits commercially reasonable efforts to mitigate its effects, such party shall\ngive prompt written notice to the other party, its performance shall be\nexcused, and the time for the performance shall be extended for the period of\ndelay or inability to perform due to such occurrences. Regardless of the excuse\nof Force Majeure, if such party is not able to perform within ninety (90) days\nafter such event, the other party may terminate the Agreement. Termination of\nthis Agreement shall not affect the obligations of either party which exist as\nof the date of termination.\n\nACCEPTED AND AGREED TO:\n\nVA RESEARCH:                               SYNNEX INFORMATION TECHNOLOGIES,INC.:\n\n\/s\/ Daniel R. Shore      5-27-99           \/s\/ Chih-Kai Cheng        5-27-99  \n-----------------------------------        -------------------------------------\nBy: Daniel R. Shore                        By: Chih-Kai Cheng  \n    -------------------------------            ---------------------------------\nTitle: V.P. of Operations                  Title: V.P. System Integration  \n       ----------------------------               ------------------------------\n\n                                   ADDENDUM A\n\n                 TO VA RESEARCH MANUFACTURING CONTRACT BETWEEN\n             VA RESEARCH AND SYNNEX INFORMATION TECHNOLOGIES, INC.\n\nTHIS ADDENDUM WILL SUPERCEDE THE MANUFACTURING CONTRACT IN THOSE AREAS WHERE \nSPECIFIED.\n\n1.   VA Research shall provide to Synnex the following:\n\n     A.   A * Blanket Purchase Order (\"Blanket Purchase Order\") for Base\n          Configuration Units, broken down by expected monthly volume. In\n          addition to this Blanket Purchase Order, VA Research will supply a *\n          non-binding \"sub-forecast\" reflecting the anticipated configuration\n          detail by month.\n\n     B.   * \n\n     C.   Daily Release Orders for the specific configurations to be shipped\n          against the Blanket Purchase Order with all shipping information, and\n          detail of how it will be shipped\n\n               1.   Ship to Address\n               2.   Freight Forwarder\n               3.   Unique Shipping Instructions\n               4.   Configuration of Items to be shipped\n\n            * All daily shipping information will be supplied by Synnex to VA\n            Research for tracking purposes, this includes sales order numbers,\n            serial numbers shipped, and shipper tracking numbers. Tracking\n            information is to be maintained by the shipping companies.\n\n     D.   If VA Research decides to consign any material, VA Research will\n          supply the same Purchase Order and Forecast information to those\n          suppliers which they will manage.\n\n     E.   VA Research will be allowed to reschedule orders placed by Blanket\n          Purchase Order per the following schedule:\n\n\n       Maximum Allowable VA Research variance From Blanket Purchase Order\n       ------------------------------------------------------------------\n                              Quantities\/Shipment\n                              -------------------\n\n\n\n\n\n# of days before              Allowable      Maximum        Maximum\nShipment Date                 Quantity       Reschedule     Reschedule\non Blanket Purchase Order     Increases      Quantity       Period\n-------------------------     ---------      ----------     ----------\n                                                   \n        *                         *%             *%          * \n        *                         *%             *%          * \n\n\n* Confidential treatment has been requested by the Registrant as to certain\n  portions of this exhibit. The omitted portions have been separately filed with\n  the Commission.\n\n     Reasonable commercial efforts by Synnex will be made to support any upside\n     requirements within this schedule or outside of this schedule.\n\nII.  Synnex will provide the following services:\n\n     A. Procure all material necessary to support the * Blanket Purchase Order\n        for Base Configuration Units, and the material needed to support the\n        forecasted configurations. All material shall be purchased from an\n        \"Approved Vendor List\" (AVL) which is supplied by VA Research. Should\n        Synnex need to purchase material from a source which is not on the AVL,\n        Synnex will inform VA Research and seek written approval to deviate.\n\n        1. All material is to be procured based on Blanket Purchase Orders and\n           Daily Release Orders received from VA Research. Any material which\n           Synnex deems necessary to purchase outside of Blanket Purchase Order\n           coverage will be identified as such to VA Research and purchased\n           only upon approval of VA Research in writing.\n\n        2. All returned inventory by Synnex shall be within a reasonable amount\n           of time after such inventory receipt and notification of a VA\n           Research reschedule or cancellation. Synnex shall keep accurate\n           records containing such necessary information so that VA Research\n           may either contact such vendor or manufacture.\n\n     B. Upon receipt of the Daily 850 EDI Release Orders Synnex will notify VA\n        Research of acceptance of the Daily Release Order via 855 EDI, or\n        information regarding inability to meet the Daily Release Order, as the\n        case may be. This notification will be given within one (1) business\n        day of receiving the Daily Release Orders. This information will\n        include any material or manufacturing constraints in meeting the\n        requested shipment date. At this time Synnex will inform VA Research of\n        the expected ship date for the specific configurations provided in the\n        Daily Release Order. *\n\n     C. It shall be specified by VA Research in the Daily Release Order which\n        Freight Forwarder will be used, and all costs for freight will be paid\n        by VA Research directly to the Shipper. * This avoids the need for\n        additional EDI transactions at the back-end of the process. VA and\n        Synnex will work together in the next phase to see whether an EDI or\n        other automated means that can suffice to meet the same requirements\n        specified by VA. \n\n* Confidential treatment has been requested by the Registrant as to certain\n  portions of this exhibit. The omitted portions have been separately filed with\n  the Commission.\n\nD.   Warranty:\n\nIf a Product comes back to Synnex within the * warranty period there will\nbe no cost to VA Research to repair and\/or replace Product based on material or\nworkmanship failures as set forth in Section 6.2. Return freight will be paid\nby Synnex. Synnex reserves the right to accept or reject such returns as under\nwarranty based on the condition of the system and the failure analysis of the\nunit. VA Research agrees they will not take a credit until Synnex agrees that\nit is a warranty repair. If the product was deemed to not be a valid warranty\nreturn, VA Research will reimburse Synnex for the return freight.\n\nOutside of the * warranty period, systems will be returned by the end customer\nto VA Research for failure analysis. VA Research will replace the defective\ncomponent and send the defective part back to Synnex to return to the supplier.\nAny replaced parts will be sent to VA Research for restocking in their Field\nReturn Unit (FRU) inventory. There will not be any credit taken by VA Research\nfor these parts unless a reciprocal credit is first given to Synnex by the\nsupplier.\n\nE.   Penalty Clause:\n\nIf Synnex is late because of something which is within Synnex control, (assuming\nthe order was within all schedule lead-times) and it results in a late shipment\n(i.e., shipment outside the * cycle time provided below), Synnex will pay the\ndifference between the standard freight charge (for delivery to that end\ncustomer) and air freight to ship to that end customer. This will not apply to\ntest fall outs, or design related causes, or any other causes beyond the control\nof Synnex.\n\nF.   Cycle Time &amp; Capacity:\n\nThe agreed to cycle time for shipment of product is * from accepted receipt of\nDaily Release Order for a configured product to the date that Synnex places the\nProduct on its dock for shipment. Initial daily output capacity is established\nfor *. Should an already accepted Daily Release Order configuration change, the\ncycle time will be reset to day one.\n\nOnce the process and capacity has been established, VA Research and Synnex will\nset up jointly agreed to cycle time and daily capacities for various activities\nand standard costs associated with same. Some of these activities may include;\n\nRequest for expedited cycle time\nPartial orders or back order situation\nOvertime requests\n\nThese cycle times and capacity requirements will be reviewed monthly.\n\nG.   Cost Review:\n\n* Confidential treatment has been requested by the Registrant as to certain\n  portions of this exhibit. The omitted portions have been separately filed with\n  the Commission.\n\n          VA Research and Synnex agree to review costing information * in an\n          open book manner as a basis for discussion on cost reduction efforts\n          and implementation. Synnex agrees to provide evidence of actual\n          invoice prices paid for materials used in the manufacture of VA\n          Research products. If material costs have changed since the prior cost\n          review, a new price list will be provided to VA Research which takes\n          into account the changes in material cost.*\n\n          H. Payment Terms:\n\n          Synnex shall invoice VA Research * for all order releases shipped\n          against the blanket purchase order since the last invoicing period.\n          Terms shall be *.\n\nIII. Pricing:\n\n     - Synnex agrees to extend to VA Research the * quoted price structure of:\n\n       - *\n\n       - *\n\n       - *\n\n       VA Research will contract with Synnex to purchase approximately *\n       during the * timeframe and will be at a run rate of *. *\n\n* Confidential treatment has been requested by the Registrant as to certain\n  portions of this exhibit. The omitted portions have been separately filed with\n  the Commission.\n\n                         MUTUAL NONDISCLOSURE AGREEMENT\n\n     THIS MUTUAL NONDISCLOSURE AGREEMENT is made and entered into as of 5-14,\n1999, between VA RESEARCH, INC. and Synnex Information Technologies Inc.\n\n     1. Purpose. The parties wish to explore a business opportunity of mutual\ninterest and in connection with this opportunity, each party may disclose to the\nother certain confidential technical and business information which the\ndisclosing party desires the receiving party to treat as confidential.\n\n     2. \"Confidential Information\" means any information disclosed by either\nparty to the other, either directly or indirectly in writing, orally or by\ninspection of tangible objects, including without limitation information\nrelating to any business strategies or arrangements, systems architecture,\nsoftware technology, intellectual property, proprietary information, technical\ndata, trade secrets or know-how, including but not limited to, research,\nproducts, services, customer lists and customers, engineering and hardware\nconfiguration information, or other business information. Confidential\ninformation may also include information disclosed to a disclosing party by\nthird parties. Information communicated orally shall be considered Confidential\nInformation if such information is designated as being confidential or\nproprietary within a reasonable time after the initial disclosure. Confidential\nInformation shall not, however, include any information which (i) was publicly\nknown and made generally available in the public domain prior to the time of\ndisclosure by the disclosing party; (ii) becomes publicly known and made\ngenerally available after disclosure by the disclosing party to the receiving\nparty through no action or inaction of the receiving party; (iii) is already in\nthe possession of the receiving party at the time of disclosure, without\nconfidentiality restrictions, by the disclosing party as shown by the receiving\nparty's files and records immediately prior to the time of disclosure; (iv) is\nobtained by the receiving party from a third party without a breach of such\nthird party's obligations of confidentiality; or (v) is independently developed\nby the receiving party without use of or reference to the disclosing party's\nConfidential Information, as shown by documents and other competent evidence in\nthe receiving party's possession.\n\n     3. Non-use and Non-disclosure. Each party agrees not to use any\nConfidential Information of the other party for any purpose except to evaluate\nand engage in discussions concerning a potential business relationship between\nthe parties. Each party agrees not to disclose any Confidential Information of\nthe other party to third parties or to such party's employees, except to those\nemployees of the receiving party who are required to have the information in\norder to evaluate or engage in discussions concerning the contemplated business\nrelationship. Neither party shall reverse engineer, disassemble or decompile any\nprototypes, software or other tangible objects which embody the other party's\nConfidential Information and which are provided to the party hereunder. In the\nevent that either party or their respective directors, officers, employees,\nconsultants or agents are requested or required by legal process to disclose any\nof the Confidential Information of the other party, the party required to make\nsuch disclosure shall give prompt notice so that the other party may seek a\nprotective order or other appropriate relief. In the event that such protective\norder is not obtained, the party required to make such disclosure shall disclose\nonly that portion of the Confidential Information which its counsel advises that\nit is legally required to disclose.\n\n     4. Maintenance of Confidentiality. Each party agrees that it shall take\nreasonable measures to protect the secrecy of and avoid disclosure and\nunauthorized use of the Confidential Information of the other party. Without\nlimiting the foregoing, each party shall take at least those measures that it\ntakes to protect its own most highly confidential information and shall ensure\nthat its employees who have access to Confidential Information of the other\nparty have signed a non-use and non-disclosure agreement in content similar to\nthe provisions hereof, prior to any disclosure of Confidential Information to\nsuch employees. Neither party shall make any copies of the Confidential\nInformation of the other party unless the same are previously approved in   \n\nwriting by the other party. Each party shall reproduce the other party's\nproprietary rights notices on any such approved copies, in the same manner in\nwhich such notices were set forth in or on the original.\n\n     5. No Obligation.  Nothing herein shall obligate either party to proceed\nwith any transaction between them, and each party reserves the right, in its\nsole discretion, to terminate the discussions contemplated by this Agreement\nconcerning the business opportunity.\n\n     6. No Warranty.  ALL CONFIDENTIAL INFORMATION IS PROVIDED \"AS IS\". EACH\nPARTY MAKES NO WARRANTIES, EXPRESS, IMPLIED OR OTHERWISE, REGARDING ITS\nACCURACY, COMPLETENESS OR PERFORMANCE.\n\n     7. Return of Materials.  All documents and other tangible objects\ncontaining or representing Confidential Information which have been disclosed\nby either party to the other party, and all copies thereof which are in the\npossession of the other party, shall be and remain the property of the\ndisclosing party and shall be promptly returned to the disclosing party upon\nthe disclosing party's written request.\n\n     8. No License.  Nothing in this Agreement is intended to grant any rights\nto either party under any patent, mask work right or copyright of the other\nparty, nor shall this Agreement grant any party any rights in or to the\nConfidential Information of the other party except as expressly set forth\nherein. Should the evaluation of the Confidential Information and the\ndiscussions between the parties not result in a business relationship, the each\nparty agrees not to file or participate in the filing of, in the United States\nor in any other country, patent applications that make reference to patent\napplications of the other party which may be disclosed as Confidential\nInformation hereunder without the prior express written consent of the other\nparty.\n\n     9. Term.  The obligations of each receiving party hereunder shall survive\nuntil such time as all Confidential Information of the other party disclosed\nhereunder becomes publicly known and made generally available through no action\nor inaction of the receiving party.\n\n    10. Remedies. Each party agrees that any violation or threatened\nviolation of this Agreement may cause irreparable injury to the other party,\nentitling the other party to seek injunctive relief in addition to all legal\nremedies.\n\n    11.  Miscellaneous.  This Agreement shall bind and insure to the benefit of\nthe parties hereto and their successors and assigns. This Agreement shall be\ngoverned by the laws of the State of California, without reference to conflict\nof laws principles. This document contains the entire agreement between the\nparties with respect to the subject matter hereof, and neither party shall have\nany obligation, express or implied by law, with respect to trade secret or\nproprietary information of the other party except as set forth herein. Any\nfailure to enforce any provision of this Agreement shall not constitute a\nwaiver thereof or of any other provision. This Agreement may not be amended,\nnor any obligation waived, except by a writing signed by both parties hereto.\n\n\nVA RESEARCH, INC.             SYNNEX INFORMATION TECHNOLOGIES INC.\n\nBy: \/s\/ Daniel R. Shore       By: \/s\/ Chih-Kai Cheng\n    -------------------           -----------------------------\n\nName: Daniel R. Shore         Name: Chih-Kai Cheng\n      -----------------            ----------------------------\n\nTitle: VP of Operations       Title: V.P.\n       ----------------              --------------------------\n\n\n                    VA Linux Systems Manufacturing Agreement\n                                  Amendment 1\n\n\n     This Amendment 1 (\"Amendment\") to the Synnex Manufacturing Agreement and\nAddendum dated May 27, 1999 (\"Agreement\") effective as of the date executed\nbelow between VA Linux Systems, Inc. having its place of business at 1380\nBordeaux Drive, Sunnyvale, CA 94089 (\"VA Linux\") and SYNNEX Information\nTechnologies, Inc., having its place of business at 3797 Spinnaker Court,\nFremont, CA 94538 (\"Synnex\") shall amend the Agreement. All other terms to the\nAgreement shall remain in effect unless expressly amended herein in this\nAmendment. All terms unless defined herein shall have the same meaning as the\nAgreement.\n\n     Whereas, Synnex desires to perform additional Work and Customized Work for\nVA Linux;\n\n     Whereas, VA Linux desires to request and appoint Synnex to perform certain\nCustomized Work and Work for VA Linux;\n\n   \n     Whereas, Synnex desires to participate and invest in the Series B Preferred\nStock issued by VA Linux for the purchase of no less than $1.8 million U.S. \nDollars payable upon and in accordance to such Series B Preferred Stock Purchase\nAgreement;\n    \n\n     In consideration of the mutual premises and for valuable consideration, the\nparties make the following agreements:\n\n1.   Paragraph 1.1 shall be added: Any Work performed by Synnex shall include\n     certain custom systems integration services required by VA Linux from time\n     to time (\"Custom Work\"). This \"Custom Work\" will include custom systems\n     integration and manufacture of Products and components that are not listed\n     on the agreed upon \"VA\/Synnex product and pricing matrix\". Such Custom Work\n     provided by Synnex shall include production labor, capacity, materials\n     procurement, management and logistics and shipping services related to\n     certain custom systems integration services. The parties shall agree upon\n     the price of such Custom Work which shall include as factors to such price:\n     *. Such price shall be prior agreed upon by the parties. The parties agree,\n     however, that the hourly labor and overhead shop rate charged by Synnex for\n     such Custom Work shall be * per hour.\n\n2.   Paragraph 2.3 shall be amended to add that materials procured to\n     manufacture Products (as defined in Section 2 here) shall be purchased and\n     invoiced by Synnex to VA Linux at * for such materials. VA Linux shall have\n     a right upon request to Synnex to audit bi-monthly such costs. Materials\n     shall be purchased to manufacture Products in the following manner in such\n     categories:\n\n     *\n\nVA LINUX SERIES B CONTRACT AMENDMENT FINAL\n\n* Confidential treatment has been requested by the Registrant as to certain\n  portions of this exhibit. The omitted portions have been separately filed with\n  the Commission.\n\n              * \n\n3.   Paragraph 2.2.1 shall be added: The parties agree and acknowledge the\n     following:\n\n          *\n          \n4.   Paragraph 7.1 shall be added: Synnex agrees that the labor, overhead, and\n     margin for profit for each Product manufactured except for \"Custom Work\"\n     and accepted in accordance to the Agreement shall be as follows:\n\n          (i)    Synnex labor and overhead shall be * US per system unit, and\n                 profit shall be * for server products; and\n\n          (ii)   Synnex labor and overhead shall be * US per system unit, and\n                 profit shall be * for desktop products with minimum order of\n                 * or more of one configuration; provided, however, that\n                 for custom configured desktop products, Synnex labor and\n                 overhead shall be * per system unit, and profit shall be *;\n\n          (iii)  Synnex shall use reasonable commercial efforts to purchase all\n                 materials necessary for the manufacture of the Products at best\n                 commercial prices. Synnex agrees that any price quote shall\n                 reflect the best commercial prices available for the \n                 components.\n\n5.   Paragraph 7.2 shall be added: Synnex shall be appointed as reseller for VA\n     Linux on the conditions and terms set forth in this Amendment:\n\n       (i)    Synnex shall have the limited right to resell solely in the U.S.\n              VA Linux 2U Levi rackmount chassis, power supply, and backplane\n              components with factory installed non-Linux operating systems\n              (\"VA Linux Reseller Product\"). A non-Linux operating system must\n              be factory installed and shipped on any server system built upon\n              \"VA Linux Reseller Product\" components and sold under the Synnex\n              or Mitac brand names.\n\n       (ii)   Synnex shall have the right to resell VA Linux Reseller\n              Product under the Synnex and at Synnex's option under the Mitac\n              brand names. Provided, Synnex shall hold VA Linux harmless and\n              indemnify VA Linux for any liabilities including but not limited\n              to intellectual property claims, damages and attorneys fees so\n              long as such liability did not arise due to any material fault by\n              VA Linux. Synnex shall further agree to properly place VA Linux\n              trade mark, copyright or such other notices on the VA Linux\n              Reseller Product and shall not remove the same. Synnex shall be\n              solely responsible for customer support, warranty or claims\n              arising out of VA Linux Reseller Product except for claims arising\n              out of any material fault of VA Linux.\n\n       (iii)  Synnex shall pay to VA Linux the following agreed upon payments\n              within * of invoice by Synnex for any VA Linux Reseller Product \n              sold by Synnex. Synnex shall pay to VA Linux as follows:\n\n              (a)   Year 1: * of gross price of all server systems sold that\n                    are built upon \"VA Reseller Product\" components.\n\n* Confidential treatment has been requested by the Registrant as to certain\n  portions of this exhibit. The omitted portions have been separately filed with\n  the Commission.\n\n                                       2\n\n           (b)  Year 2: * of gross price of all server systems sold that are\n                built upon \"VA Reseller Product\" components.\n\n    (iv)   Synnex shall, upon request by VA Linux, audit Synnex reseller records\n           relating to VA Linux Reseller Product. Synnex shall provide monthly\n           reports and no later than (15) days of the last date of the previous\n           month, to VA Linux stating number of such products sold, price,\n           purchaser and such information customarily provided by any reseller\n           to the seller of products. VA Linux shall have the right to audit\n           Synnex records relating to VA Linux Reseller Products. Any difference\n           of such audit finding of * or greater of the report made by Synnex\n           and such auditor shall require Synnex to pay such audit, Synnex to\n           pay VA Linux within five (5) business days the difference if Synnex\n           has underpaid by * of such report and penalty interest shall be *\n           per annum for such difference.\n\n    (v)    The term of this provision, and solely this Reseller provision, shall\n           be for * from the date of execution of this Amendment. This provision\n           may be renewed upon mutual agreement; provided VA Linux may terminate\n           this provision at any time upon any breach by Synnex or upon thirty\n           (30) days notice by the parties to each other.\n\n6. Section 11 shall be added: VA Linux shall sublease from Synnex and shall\njointly occupy a certain leasehold on the following terms:\n\n    (i)    The leasehold shall be approximately 7,000-sq. ft. of custom systems\n           integration space located in [Bay Area] California. Synnex shall\n           reserve approximately 3,000 sq. ft. of such lease for the occupation\n           by VA Operations Management and Engineering personnel.\n\n    (ii)   The parties each shall agree upon the location and the assignment of\n           office and cubicle space for each respective personnel.\n\n    (iii)  VA Linux shall pay to Synnex or such Landlord the following gross\n           rental payments:\n\n           (a) First year - *\n\n           (b) * per month for second year\n\n   \n           (c) The leasehold period for any lease executed by VA Linux in this\n               provision shall be no more than a 2 lease with an option on\n               2 additional years.\n    \n\n           (d) Gross rental payments shall include: utilities (1,000 amps),\n               12-hour security, tax, access to fork lift, and such other\n               equipment. All VA Linux equipment used within VA Linux tenant\n               space including phone systems, monthly phone bill, any insurance,\n               office equipment shall be the sole responsibility of VA Linux.\n\n    (iv)   The parties shall mutually agree upon and execute a sublease prior to\n           occupancy by either party.\n\n    (v)    Tenant improvement: Synnex will reasonably work with VA Linux to\n           accommodate its needs. All tenant improvement costs of * or less will\n           be amortized into the leasing period and shall be payable monthly in\n           addition to the gross rental payments. The parties forecast that such\n           estimated cost shall be between * for the power, networking, tiles,\n           etc. Tenant improvements exceeding * shall be payable by VA Linux\n           upon completion of the work.\n\n    (vi)   The parties have agreed that the anticipated move-in date to be no\n           later than the end of October 1999.\n\n\nVA Linux Systems                            Synnex Information Technologies Inc.\n\n\nBy: \/s\/ Daniel R. Shore                     By: \/s\/ Chich-Kai Cheng\n   -------------------------                   -------------------------\n\nTitle: VP of Operations                     Title: Senior V.P.\n      ----------------------                      ----------------------\n\nDate: 10-25-99                              Date: Oct  22, 1999 \n     -----------------------                     -----------------------\n\n* Confidential treatment has been requested by the Registrant as to certain\n  portions of this exhibit. The omitted portions have been separately filed with\n  the Commission.\n\n\n                                        3\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8996,9207],"corporate_contracts_industries":[9508,9507],"corporate_contracts_types":[9613,9620],"class_list":["post-42512","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-synnex-information-technologies-inc","corporate_contracts_companies-va-linux-systems-inc","corporate_contracts_industries-technology__hardware","corporate_contracts_industries-technology__equipment","corporate_contracts_types-operations","corporate_contracts_types-operations__services"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/42512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=42512"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=42512"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=42512"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=42512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}