Asic Agreement

THIS AGREEMENT is made the 31st day of ___________January___________ 1997 ("Effective Date") by and between _____ IRE Secure Solutions, Inc.____ having a principal place of business is at ___100 Conifer Hill Drive, Suite 513, Danvers, Massachusetts 01923___ (hereinafter referred to as the "BUYER"), and Analog Devices, Inc. having a principal place of business at Three Technology Way, Norwood, Massachusetts 02062-1906 (hereinafter referred to as the "SELLER").


WHEREAS


A. The BUYER (has designed/or requires to be designed) an application or series of applications for a custom integrated circuit.


B. The BUYER wishes the applications (or part thereof) to be incorporated by SELLER into a custom integrated circuit.


C. The BUYER and the SELLER desire to mutually cooperate in a program to develop a custom integrated circuit in accordance with the terms and provisions of this Agreement.


1. DEFINITIONS


The terms below shall have the following meanings:


(a) The term "Custom Product" shall mean a custom integrated circuit manufactured, assembled or otherwise fabricated or obtained by SELLER. Custom Products are either "Prototypes" or "Production Units" as defined below.


(b) The term "Prototype" shall mean a Custom Product fabricated and delivered to BUYER by SELLER pursuant to Paragraph 2. Statement of Work.


(c) The term "Production Unit" shall mean a Custom Product other than a Prototype produced by SELLER during the Production Period.


2. STATEMENT OF WORK


SELLER shall develop a Prototype in accordance with Schedule 1 incorporating the design specifications set forth in Schedule 2 (the "Work").


3. TERM OF AGREEMENT


This Agreement shall have a term consisting of a Development Period followed by a Production Period.


(a) Development Period - The Development Period shall commence on the Effective Date and end on the Development Completion Date as defined in Paragraph 7.


(b) Production Period - The Production Period shall commence on the Development Completion Date and continue as long as the SELLER manufactures the product for sale.


4. TIMETABLE


The parties acknowledge that design problems associated with a custom integrated circuit and other delays may affect the timetable of delivery of a Prototype as set forth in Schedule 1. In such event, changes to the timetable in Schedule 1 shall be mutually agreed by both parties.


5. BUYER AND SELLER COOPERATION


The BUYER and SELLER, without cost to the other, shall each provide the other upon request, such assistance as is reasonable and necessary for the completion of the Work.


6. DEVELOPMENT CHARGES


BUYER shall pay SELLER'S nonrecurring engineering expenses ("NRE") set forth as the development charges in Schedule 3.


7. PROTOTYPE ACCEPTANCE


(a) The parties shall mutually agree to a Prototype Acceptance Specification and Test Procedure which shall be reduced to writing and incorporated herein as Schedule 4. In the event the parties do not or cannot agree to such Specification and Test Procedure, then the design specifications set forth in Schedule 2 shall be deemed the criteria for Prototype acceptance under this Paragraph 7.


(b) Within forty-five (45) days of delivery of the Prototypes to BUYER, BUYER shall inspect and test such Prototypes. Representatives of SELLER may be present at BUYER'S facility to observe such inspection and test procedure. If any Prototype is nonconforming, BUYER shall advise the SELLER in writing, specifying the nonconformance and return to SELLER the nonconforming Prototype. Prototypes not otherwise identified as nonconforming within forty-five (45) days after delivery to BUYER shall be deemed accepted by BUYER and the Work will be deemed completed by SELLER.


(c) SELLER shall use reasonable efforts to replace all nonconforming Prototypes within one hundred eighty (180) days of SELLER'S receipt of such Prototypes. If SELLER, using reasonable efforts, is unable to supply the BUYER with at least 10 Prototypes which are acceptable or deemed to be acceptable, this Agreement shall forthwith terminate and SELLER shall refund to BUYER all sums paid to SELLER hereunder for the remaining uncompleted Work.


(d) The Development Completion Date will be the date on which ten (10) Prototypes in the aggregate are accepted or deemed to be accepted by BUYER.


8. DEVELOPMENT WARRANTY EXCLUSION


The BUYER agrees that it will not sell or otherwise make available the Prototypes to any third party without the consent of the SELLER which shall not be unreasonably withheld. SELLER GIVES OR MAKES NO WARRANTY, REPRESENTATIONS OR UNDERTAKING, EXPRESS OR IMPLIED, WITH


1/30/97 1 2 RESPECT TO THE PROTOTYPES, SELLER HEREBY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE. ALL STATUTORY OR IMPLIED WARRANTIES ARE HEREBY EXCLUDED SO FAR AS IS POSSIBLE BY LAW.


9. CHANCES TO DESIGN SPECIFICATION


During the term of this Agreement, either party may request a change to the design specifications set forth in Schedule 2 provided such change is agreed to in writing between the parties and the Schedules are amended to reflect any changes in the cost or time schedule of the Work and/or Custom Product. If the parties cannot agree, this Agreement shall continue unless either party terminates this Agreement for convenience by giving notice to the other party.


10. SALE OF PRODUCTION UNITS


(a) SELLER'S or SELLER'S assignee's standard terms of sale in effect on the date SELLER or its assignee accepts BUYER'S purchase order shall be the exclusive terms of purchase and sale of the Production Units, as supplemented by this Agreement. In the event of a conflict between a term of this Agreement and SELLER'S or its assignee's terms of sale then the terms of this Agreement shall prevail notwithstanding any conflicting term. SELLER'S (or its assignee's) standard terms of sale are attached hereto as Schedule 5.


(b) All orders for Production Units require a minimum lead time of ninety (90) days.


(c) BUYER'S FOB price and firm/fixed quantity commitment to purchase Production Units shall be in accordance with Schedule 6.


11. PRODUCT WITHDRAWAL


SELLER reserves the right to discontinue the manufacture of any Custom Product or of any process related thereto. In such event, SELLER shall notify the BUYER in writing giving a minimum of two (2) year's notice for the last delivery of such Custom Product. BUYER shall have the right to place a final order within one (1) year of SELLER'S notification of SELLER'S election to discontinue the Custom Product. In the event SELLER discontinues manufacture of the Custom Product, SELLER shall give BUYER the right to use the current mask set to contract with the existing foundry to purchase the Custom Product directly, subject to mutually agreeable terms.


12. PRODUCTION UNIT TEST SPECIFICATION


Within thirty (30) days after the Development Completion Date the parties shall agree upon and reduce to writing a Production Test Specification to be incorporated in this Agreement as Schedule 7. Such specification shall be the testing criteria performed by SELLER for Custom Products during the Production Period. In the event the parties fail to reach agreement upon a Production Unit Test Specification, such failure shall not be deemed a breach of this Agreement and the design specification set forth in Schedule 2 shall be deemed the criteria for Production Unit acceptance under this Paragraph 12.


13. WARRANTY OF PRODUCTION UNITS


SELLER warrants that each Production Unit will be free of defects in materials and workmanship and perform according to the design specification set forth in Schedule 2 for a period of one (1) year from the date the Production Unit is first shipped by SELLER to BUYER. SELLER shall have no further warranty or service obligation. SELLER'S sole liability and responsibility under the warranty is to repair, replace, or at its option, to refund the purchase price of any Production Unit which is returned by BUYER and which SELLER determines does n ...