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Exhibit 10.10
Contractor Manufacturing Agreement
Xxxxxxx
Xxxx Xxxxx Xxxxxxxxxxxxxx
Xxxxxxx Xxxx, XX 00000
and
SCI Technology, Inc.
Augusta, Maine
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TABLE OF CONTENTS
SECTION
I. Definitions
II. Manufacture and Supply
III. Purchase Orders
IV. Purchase Period
V. Business Reviews
VI. Pricing
VII. Delivery
VIII. Quality and Inspection
IX Payment
X. Warranty
XI. Manufacturing or Product Changes
XII. Indemnity and Hold Harmless
XIII. Limitation of Liability
XIV. Confidentiality
XV. No Implied License
XVI. Marking Trademarks and Trade Secrets
XVII Country of Origin and Duty Drawback
XVIII. Termination for Cause
XIX. Inventory Indemnification
XX. General
Exhibit A. Products
Exhibit B. Product Pricing and Lead Time
Exhibit C. Product Specifications
Exhibit D. Approved Vendor List and Supplied Specifications
Exhibit E. Reschedule and Cancellation Notice Period
Exhibit F. Products Packaging, Storage and Handling
Exhibit G. Supplier Quality Assurance Provisions
Exhibit H. Product Reliability Requirements
Exhibit I. RMA Process for Returns to Seller
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This Contractor Manufacturing Agreement (the "Agreement") is made and entered
into as of the __ day of _______) 1997 (the "Effective Date") by and between
Next Level Communications (the "Buyer") and SCI Technology, Inc. (the "Seller").
RECITALS
WHEREAS, Buyer wishes to purchase Products (as hereinafter defined) from the
Seller, and Seller wishes to manufacture and sell Products to the Buyer, NOW,
THEREFORE, in consideration of the premises and the covenants herein contained,
Buyer and Seller hereby agree as follows:
AGREEMENT
I. DEFINITIONS. For the purpose of this Agreement, the following terms shall
have the following meanings:
A. "Confidential Information" means any and all data and other
information which is provided by the Buyer to the Seller hereunder
which is (i) clearly marked as confidential or proprietary when
disclosed in tangible form, or (ii) when disclosed orally or visually,
identified as confidential or proprietary at the time of disclosure
and reduced to a writing marked as confidential or proprietary and
submitted to the other party within thirty (30) calendar days after
such disclosure.
B. "Days" shall mean business days.
C. "Products" shall mean the products identified in Exhibit A attached
hereto,
D. "Purchase Order" shall mean Buyers written purchase order form.
E. "Party" means the Buyer or the Seller, as applicable; and "Parties" means
both the Buyer and the Seller.
II. MANUFACTURE AND SUPPLY
A. Upon receipt of Purchase Orders from the Buyer, the Seller agrees to
manufacture and sell Products specified in the Purchase Orders, and Buyer
agrees to purchase such manufactured Products from the Seller, subject to
the terms and conditions set forth in this Agreement.
B. The terms and conditions contained in this Agreement exclusively govern
the purchase and sale of the Products, pricing and lead-times for such
purchases and sales, and the applicable specifications for the Products.
Exhibit B describes the Product pricing and Purchase Order lead-times,
and Exhibit C describes the
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applicable specifications for the Products.
1. The terms and conditions of any Purchase Order, acknowledgment,
schedule or other form or document of Buyer or Seller shall not
apply.
C. Seller shall:
1. Provide all labor, material, tooling, facilities and other resources
necessary and/or appropriate for the timely and satisfactory
completion and delivery of the Products;
2. Commit and utilize sufficient and qualified personnel to support the
requirements hereof,
3. Provide sufficient resources for testing the Products to ensure
compliance with the specifications set forth in Exhibit C;
4. Provide Buyer with reasonably detailed written progress reports as
reasonably requested by Buyer;
5. Notify Buyer within three (3) business days of any factor,
occurrence or event coming to its attention that may adversely
affect Suppliers ability to meet any of its obligations hereunder or
that is likely to occasion any material delay in delivery of any of
the deliverables due hereunder. For example, but not by way of
limitation, such notice shall be given in the event of any loss or
reassignment of key personnel, threat of strike, or major material
equipment failure;
6. Be responsible for material procurement, attrition and vendor
management, except as otherwise set out herein.
D. This Agreement does not specify a quantity of Products to be purchased by
Buyer nor does this Agreement obligate Buyer to purchase any quantity of
Products. All such quantities will be specified on Buyer's Purchase Orders
as further discussed in Section III.
E. Seller agrees that all Products are exclusively developed and designed by
Buyer for Buyer's exclusive purchase and use only. Seller agrees not to
sell, lease, or otherwise dispose of the Products to any individual or
entity other than the Buyer.
F. Seller shall procure all materials used in manufacturing Products
utilizing Buyers approved vendor list and supplied specifications, as
amended from time to time by Buyer. Exhibit D provides the current
approved vendor list and supplied
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specifications. Under no circumstances shall Seller procure such materials
from sources other than those specified on Exhibit D without first
obtaining written approval from Buyer.
G. Seller shall provide Buyer with competitive customer service available to
insure Buyers ability to meet all customer demand for product and cost
competitiveness.
III. PURCHASE ORDERS
A. Buyer will order Products by issuing Purchase Orders. Each Purchase Order
will specify items such as: Products, quantity, delivery schedule,
destination, and total price of the Purchase Order.
B. Seller shall have five (5) days after receipt to reject the Purchase
Order. By not rejecting the Purchase Order within five (5) days, Seller
will have accepted the Purchase Order. Seller shall not reject any
Purchase Order unless its terms are inconsistent with the terms of this
Agreement.
C. If Buyers Purchase Order specifies export before passage of title, Seller
shall prepare all export-import documentation and furnish a copy to Buyer.
Seller will not be responsible for shipping delays resulting from a
requirement to obtain export licenses or determinations.
D. Seller will purchase material to manufacture Buyer's Products according to
the quantity and delivery schedules set forth in Purchase Orders in effect
from time to time during the term of this Agreement. In the event Purchase
Orders do not cover long lead time material, or if Seller can purchase
material in volume at a lower price, Buyer will issue a separate Purchase
Order to cover such material.
IV. PURCHASE PERIOD
A. Buyer may issue Purchase Orders to Seller as long as this Agreement is in
effect. This Agreement shall remain in effect for a period of three (3)
years (the "Purchase Period") starting from the Effective Date, unless
terminated sooner under the provisions of Section XVIII.
B. The Parties may extend the Purchase Period by one (1) additional year by
providing a written notice to the Seller sixty (60) days prior to the end
of the Purchase Period.
V. BUSINESS REVIEWS
A. The Parties shall, each at their own expense, meet quarterly to review
performance
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and the transacted business, and to identify and resolve those issues which have
arisen since the last business review meeting.
B. Should conflicts arise between Seller and an approved vendor of the
Buyer which cannot be resolved between the Seller and the vendor and
which could impact quality, cost or delivery of Products, Buyer is to
be notified immediately by Seller, at which time, Buyer will intervene
to resolve the conflict.
1. If Buyer cannot resolve the conflict between the Seller and
the vendor, Buyer has one hundred and eighty (180) days to
designate a new vendor to replace the original vendor. Seller
agrees to accept any such newly designated vendor of the Buyer
and to work with such vendor to deliver the Products.
VI. PRICING
A. Exhibit B sets forth the pricing and lead-times for the Products. The
pricing and lead-times shall remain fixed for a period of one (1) year
(the "Pricing Period"), except for: (a) component/material cost
variances resulting from sole source or industry wide conditions which
are outside Sellers control, or (b) changes in design, materials or
requirements made by Buyer ("Excusable Price Changes"), with the first
Pricing Period commencing on the Effective Date. Sixty (60) days prior
to the end of the then current Pricing Period, Seller and Buyer shall
meet to review the pricing and lead-times for the next Pricing Period.
If Buyer and Seller reach an agreement to modify the pricing and
lead-times, a new Exhibit B shall be prepared for the next Pricing
Period and shall be added to this Agreement. If Buyer and Seller fail
to reach agreement on pricing and lead-times for the next Pricing
Period, then this Agreement shall remain in effect for a period of one
(1) year following the end of the then-current Pricing Period, during
which pricing and lead times shall remain unchanged except for
Excusable Price Changes (if any). At the end of such one (1) year
period, this Agreement shall terminate unless the Parties mutually
agree to extend this Agreement.
B. The pricing in Exhibit B shall include all charges such as packaging,
packing, custom duties imposed before passage of title, and all taxes
except freight, duty, and applicable federal, state and local sales or
use taxes. Buyer shall be liable to Seller for such taxes actually paid
by the Seller only if Buyer has failed to comply with statutory resale
tax certificate requirements.
C. Termination of this Agreement (other than termination for cause in
accordance with Section XVIII) shall not affect any outstanding
Purchase Orders, which Seller shall fulfill in accordance with the
terms hereof. This Agreement will apply to all Products purchased
following termination of this Agreement.
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VII. DELIVERY
A. Buyers Purchase Orders shall state the delivery dates for Products.
TIME AND RATE OF DELIVERY ARE OF THE ESSENCE OF ALL PURCHASES MADE
UNDER THIS AGREEMENT. The minimum agreed period between Buyer issuance
of a Purchase Order and the scheduled delivery date shall be as stated
in Exhibit B. All deliveries shall be F.O.B. ship point.
1. If Seller fails or is about to fail to meet a delivery date
stated in a Purchase Order, and such failure is the sole fault
of Seller, then Seller shall promptly notify Buyer, and Buyer
reserves the right to (a) direct Seller, at Seller's expense,
for the extra cost thereof, to use any expedited
transportation methods available to deliver the Products as
quickly as possible.
2. For each Purchase Order, Seller shall deliver on the delivery
date stated in the Purchase Order the full number of Products
ordered in each Purchase Order by Buyer. If Seller is unable
to deliver the full number of Products ordered, and such
failure is the sole fault of Seller, Seller shall notify Buyer
promptly, and Buyer may, at its sole option, (i) consent to
such partial delivery or (ii) reschedule all or a portion of
the order without charge.
B. Buyer will only pay for quantities of Product ordered by Buyer except
as otherwise agreed. Buyer may, at its option, purchase any quantity of
over shipped Products. Any portion of the over shipment not purchased
will be returned to Seller at Seller's risk, freight collect. Seller
will credit Buyer with the amount of outbound freight attributable to
such returned over shipments.
C. Buyer shall have the right to cancel all or part of Purchase Orders and
cancel or reschedule purchase and delivery of any Products purchased
pursuant to the canceled Purchase Order. Exhibit E provides the
required notice periods and the percentage of Products that the Buyer
can cancel or reschedule for each notice period.
D. Buyer shall use its best efforts to forecast its intended purchases for
a twelve (12) month period on a monthly basis. Such forecast is for
Seller's convenience only, and shall not create any liability for Buyer
or obligation to purchase Products.
E. Buyer will measure Seller's performance against commitments, for the
purpose of establishing Seller's rate of timely delivery and lead-time
improvement against Buyer's requirements. Timely delivery shall mean
delivery of scheduled quantities no more than three (3) days early or
three (3) days late. Seller shall deliver the exact quantity of
Products scheduled. If Seller delivers less than the scheduled
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requirement, Seller shall correct the shortage within a two (2) day
period.
F. Seller shall package, store, and handle Products manufactured for, and
for delivery to, Buyer in accordance with the requirements and
procedures set forth in Exhibit F. Seller shall be responsible for any
loss or damage to Products due to Sellers failure to properly package,
store, or handle the Products in accordance with the terms of Exhibit F
or otherwise good commercial practice. Seller shall bear the risk of
loss during transportation with respect to any Products rejected by
Buyer, acting in good faith, upon delivery by Buyer to the carrier.
G. Title and risk of loss shall pass to Buyer upon Seller's delivery to
the common or contract carrier at Seller's facility.
H. Seller shall provide all information under its control which is
necessary or useful for Buyer to obtain any export or import licenses
required for Buyer to ship or receive Products, including, but not
limited to, U.S. customs certificates of delivery, affidavits of
origin, and U.S. Federal Communications Commissions identifier, if
applicable. Each Party shall comply with all applicable export control
laws and regulations.
VIII. QUALITY AND INSPECTION
A. Seller shall comply with all provisions of this Agreement, including
but not limited to the obligations set forth in Exhibit G relating to
Sellers Quality Assurance Requirements, and Exhibit H relating to
On-Going Reliability Requirements. The Products manufactured by the
Seller for the Buyer shall meet or exceed all quality and reliability
standards set forth in Exhibits G and H. Buyer is required to inspect
each shipment of Products and give Seller written notice of any defects
or count or other discrepancies within fifteen (15) calendar days of
receipt. If Buyer does not inspect Products within fifteen (15)
calendar days, the Products will be considered accepted by Buyer; any
Product defects reported after fifteen (15) calendar days will be
covered by the warranty provisions of this Agreement.
B. Buyer, or its designee if the designated delivery site for Products is
other than the Buyer's site, may inspect Products at their destination.
A Product shall be deemed nonconforming if it fails to comply in any
way with applicable Buyer's specifications as set forth in Exhibit C,
the quality requirements as set forth in Exhibit G, or the reliability
requirements as set forth in Exhibit H.
1. All Products will be subject to final inspection and
acceptance. However, any Product which is defective upon
removal from its original packaging and initial checkout
("Dead-on-Arrival" or "DOA"), whether discovered by Buyer or
its customer, will be treated as though discovered during
Buyer's
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acceptance process.
C. Seller shall notify Buyer in writing of any discrepancy or defect in
workmanship or manufacturing process discovered by Seller which could
have a detrimental effect on previously shipped Products which have
reached Buyers customer base. In conjunction therewith, Buyer and
Seller agree to negotiate in good faith an appropriate course of action
which may include an obligation for Seller to:
1. Repair or replace Product at Buyer's or its customers' sites;
2. Sort all affected material located at Buyer's or Seller's
product, repair facilities; and/or
3. Reimburse Buyer for its reasonable costs, if Buyer agrees to
perform the repair or replacement contemplated in subsection
C1 above, on Sellers behalf.
D. Exhibit I sets forth the procedures for returning Products rejected by
Buyer, its designee, or its customer to the Seller.
E. Seller authorizes Buyer to perform source inspection and process
control audits at Seller's manufacturing facilities, but this shall in
no way relieve Seller of its obligation to deliver conforming Products
or waive Buyers right of rejection at the destination of the Products.
IX. PAYMENT
A. Buyer shall issue payment net thirty (30) calendar days from Seller's
invoice date, the invoice date will be no earlier than the ship date.
Payments are not subject to off-set or setoff. Acceptance of a partial
payment will not be a waiver of the right to be paid the remainder due.
B. Amounts owed to Buyer due to rejection of Products or discrepancies on
paid invoices will be,
1. Fully credited by Seller.
After repair or replacement of rejected Products, Seller will
re-invoice Buyer for the amount credited when reshipped.
X. WARRANTY
A. Seller warrants for [ * ] from date of acceptance of Products by
Buyer that all
* Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portion.
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Products:
1. Shall be free from defects in manufacturing process, material
and workmanship,
2. Shall conform to the requirements of this Agreement, the
specifications set forth in Exhibit C, the quality
requirements set forth in Exhibit G, and the reliability
requirements set forth in Exhibit H,
B. Seller warrants it has the right to manufacture and convey the Products
and that the Products are free of all liens and encumbrances.
C. Seller shall correct defects in Products. At Seller's option, Seller
shall repair or replace all defective Products within five (5) days of
receipt of such Products. Seller shall bear all warranty costs such as
labor, material, inspection and shipping to and from Buyers facilities.
The foregoing represents Buyer's sole and exclusive remedy for breach
of the Product warranty.
D. These warranties shall survive any inspection, delivery, or termination
of this Agreement, and shall run to Buyer.
E. The materials portion of the warranty shall not apply to (i) Buyer
consigned or supplied materials, (ii) Product that is abused, damaged,
altered or misused other than by Seller, or (iii) Product damaged by
external causes not directly contributed to by Seller.
Product shall be considered free from defects in workmanship if they
are manufactured in accordance with Sellers manufacturing workmanship
standards, conform to the Product specifications, and successfully
complete any mutually agreed upon Product Acceptance Tests. Buyer may
perform acceptance testing which measures a different array of
performance criteria but the parties agree that the mutually agreed
upon Product Acceptance Test will be the measurement standard to
determine if the Product meets specifications.
ALL CLAIMS FOR BREACH OF WARRANTY MUST BE RECEIVED BY SELLER NO LATER
THAN [ * ] AFTER THE EXPIRATION OF THE WARRANTY PERIOD FOR THE
MATERIAL.
THE PRODUCT WARRANTY IS THE ONLY WARRANTY GIVEN BY SELLER. SELLER
MAKES, AND BUYER RECEIVES, NO OTHER WARRANTY EITHER EXPRESSED OR
IMPLIED. ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE, AND ALL IMPLIED WARRANTIES OF TITLE FOR ANY CONSIGNED
OR BUYER SUPPLIED
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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MATERIALS, ARE EXPRESSLY DISCLAIMED AND EXCLUDED HEREFROM.
UNLESS EXPRESSLY AGREED TO BY SELLER IN WRITING, SELLER MAKES NO WARRANTY
THAT THE PRODUCTS WILL (i) MEET ANY SPECIFICATION NOT MADE KNOWN TO AND
AGREED TO BY SELLER, OR (ii) RECEIVE THE APPROVAL OF OR BE CERTIFIED BY
UNDERWRITERS LABORATORY, ANY FEDERAL, STATE, LOCAL OR FOREIGN GOVERNMENT
AGENCY (INCLUDING WITHOUT LIMITATION THE FEDERAL COMMUNICATIONS
COMMISSION) OR ANY OTHER PERSON OR ENTITY. SELLER ASSUMES NO
RESPONSIBILITY FOR OBTAINING SUCH APPROVALS OR CERTIFICATIONS, OR MEETING
SUCH SPECIFICATIONS.
Seller's warranty obligations will cease upon the earlier of the agreed
upon warranty period or upon Seller's fulfillment of Buyer's request to
return any Buyer-owned test equipment and fixtures.
Buyer warrants to Seller that any documentation or other data which it
provides Seller to manufacture the Material is accurate and complete,
unless Buyer informs Seller otherwise.
SCI will repair Products which are outside the warranty period on mutually
agreed prices and terms and conditions.
XI. MANUFACTURING OR PRODUCT CHANGES
A. Seller shall not implement any changes that may effect form, fit,
function, or design of the Products, including without limitation, changes
in performance, interchangeability, interconnectability, appearance,
reliability or compatibility of Products, or any changes to the place of
manufacture, or packing and packaging of Products, without the prior
written consent of Buyer.
B. Buyer and Seller envision that the specifications, quality assurance, and
reliability procedures may be amended from time to time by Buyer during
the course of the development effort and desire to provide a process
whereby the specifications can evolve in accordance with the changing
needs and desires of Buyer and its customers. Any amendment to the
specifications and procedures will be valid and binding only if affected
by a change order approved as set forth below.
1. Buyer may initiate a proposed change order by delivering to Seller a
written request for Seller to prepare information for submission to
Buyer detailing the likely effects of the proposed change order.
Such writing shall specify the requested change and cross-reference
the portion of the specifications which is proposed to be amended.
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a) Upon receipt of such written request by Buyer, Seller shall,
within seven (7) days, prepare a good faith estimate of the
effort and adjustments required to complete the proposed
change order for Buyer's review. Such estimate shall be
limited to those adjustments that Seller reasonably requires
to implement the requested change and shall contain any change
to the applicable delivery date and/or to the amounts due,
including any change in price as a result of such change
order. Seller will not be required to implement such change
order until the Parties have mutually agreed upon the price.
2. Seller may propose a change order to Buyer by delivering to Buyer a
written request with no less than [ * ] notice for "major
change orders" (defined as changes to Products affecting form, fit
or function) and no less than [ * ] notice of all other
change orders (defined as "minor change orders"). Such notice should
include a description of the proposed change, good faith estimate of
the effort and adjustments required to complete the proposed change
order, and any change to the applicable delivery date and/or to the
amounts due, including any change in price as a result of such
change order. Written approval from Buyer must be received by Seller
prior to implementation of such changes, and will be referenced as
revisions to this Agreement.
XII. INDEMNITY AND HOLD HARMLESS
A. Intellectual Property Indemnification.
1. Seller shall defend, at its expense, any claim against Buyer
alleging that the manufacturing process of the Products, or any part
thereof, infringe any patent, copyright, trademark, trade secret,
mask work, or other intellectual property interest in any country
and shall pay all costs and damages awarded, including any
settlement amounts, if Seller is notified promptly of such a claim.
2. In addition to the Seller's other obligations, if an injunction
against Buyer's or Buyer's customer's use, sale, lease, license, or
other distribution of the Products or any part thereof results from
such a claim, or if Buyer reasonably believes such a claim is
likely, Seller shall at its expense upon the Buyer's request, at
Seller's option, replace or modify the manufacturing process of the
Products so that the Products become non-infringing but functionally
equivalent.
3. Buyer is responsible for the design of the Product. Upon Seller's
demand, Buyer will promptly defend, indemnify and hold Seller, its
officers, directors,
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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employees, agents, successors and assigns, harmless from and against
every kind of cost, expense or loss (including attorneys' fees and
legal costs) relating to any claim or threatened claim: (a) that any
Product or portion of the Product violates the intellectual property
rights of a third party (foreign or domestic); (b) that the Product
has a design defect; or (c) arising from or related to the
distribution, sale or use of the Product or portion of the Product.
The immediately preceding sentence will apply whether the claim is
based upon contract, tort or any other legal theory.
B. Seller shall defend, indemnify, and hold Buyer, its officers, directors,
agents and employees harmless from and against any and all claims, losses,
expenses (including reasonable attorneys' fees), demands, or judgments
("Claims") which result from or arise out of-
1. The presence of the Seller or equipment or tools used by Seller in
the performance of this Agreement on the property of Buyer or its
customers; or
2. The acts, errors, omissions, or negligence of Seller while on the
property of Buyer or its customers, regardless of whether the loss,
damage or injury resulting from same occurs after the Seller has
left such property; or
3. The use by Seller of Buyer's equipment, tools, or facilities
("Equipment").
XIII. LIMITATION OF LIABILITY
A. Seller's liability for any Product claim shall not exceed the purchase
price of the Product for which the claim is made. Except as otherwise
provided in this Agreement, neither party shall be liable for special,
indirect, incidental, or consequential damages. The foregoing limitation
shall not limit Seller's or Buyer's liability for:
1. Any costs, expenses, and damages arising out of or in connection
with claims brought by third parties;
2. Seller's or Buyer's unauthorized disclosure of the other Party's
Confidential Information; or
3. Any indemnification, including intellectual property
indemnification, owed to Buyer by Seller, or owed to Seller by Buyer
in connection with this Agreement.
XIV. CONFIDENTIALITY
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A. Seller and Buyer understand and agree that the specifications, drawings,
blueprints, data, pricing, purchasing information, and other business
information relating to the Products and otherwise made available to the
receiving Party hereunder, constitute Confidential Information, title to
which shall remain in the disclosing Party.
B. Neither Party shall disclose the Confidential Information of the other to
any third party except to its employees who have a legitimate need to know
or to subcontractors that have agreed to be bound by the provisions of
this Section XIV. This duty of nondisclosure shall last for a period
ending the later of termination of this Agreement and [ * ]
after the disclosure of such Confidential Information. The receiving Party
shall further protect the Confidential Information of the disclosing Party
to the same extent as it protects its own information of a similar type,
but in no event with less than reasonable care.
C. The receiving Party shall have no obligation to preserve the
confidentiality of any information which (1) is in the public domain at
the time of disclosure to the receiving Party hereunder, (2) becomes
publicly available through no fault of the receiving Party, and without
breach of this Agreement, (3) is already in the lawful possession of the
receiving Party without restriction prior to disclosure to the receiving
Party hereunder, (4) is required to be disclosed by the receiving party
pursuant to the order of a court of competent jurisdiction, provided that
the receiving Party previously notifies the disclosing Party to permit the
taking of appropriate protective measures.
D. Without the other Party's prior written consent, Seller or Buyer shall not
in any manner disclose, advertise or publish the existence or terms of
transactions under this Agreement.
E. At the disclosing Party's request, the receiving Party shall promptly
return to the disclosing Party all Confidential Information including all
copies.
F. Both Parties agrees that breach of this Section XIV would cause
irreparable harm, for which monetary damages would not be an adequate
remedy, and that the disclosing Party shall therefore be entitled to
injunctive relief to prevent any such breach, in addition to any other
remedies available.
XV. NO IMPLIED LICENSE
A. The parties understand that neither the terms and conditions of this
Agreement nor the acts of either party arising out of this Agreement may
be considered in any way as an express or implied license to the Seller
for any of the Buyer's present or future patents, copyrights, trademarks,
trade secrets or other proprietary rights.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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Without limiting the generality of the foregoing, Seller shall not utilize
any of Buyer's Confidential Information to design, develop, manufacture,
market or sell any other product or service.
XVI. MARKING, COPYRIGHT, TRADEMARKS AND TRADE SECRETS
A. Seller agrees to properly xxxx each Product with Buyer's trademark,
copyright or other proprietary rights notice, as directed by Buyer, to
indicate Buyer's intellectual property rights in such Products.
B. Seller grants Buyer the right to reproduce any materials supplied to Buyer
under this Agreement, and to distribute such materials in conjunction with
the marketing and support of the Products.
C. With respect to product that contains software and/or firmware owned by
Buyer, Buyer grants the Seller a nontransferable, nonexclusive license to
reproduce and install software and/or firmware in products manufactured by
the Seller for Buyer. Seller shall have no other rights with respect to
software and/or firmware provided by the Buyer, and agrees not to sell,
lease, or otherwise dispose of the software and/or firmware supplied by
the Buyer. For software and/or firmware not owned by Buyer, Seller hereby
grants to Buyer a perpetual, nontransferable, nonexclusive license to use,
reproduce, modify and to market, distribute, and sublicense the use of the
Buyers sale, loan, or other disposition or distribution of the product.
XVII. COUNTRY OF ORIGIN AND DUTY DRAWBACK
A. Upon delivery of Products and at Buyer's option, Seller shall furnish
Buyer with a signed certificate for delivered Products. The signed
certificate should identify the country or countries in which the Products
were manufactured, the quantity of the delivered Products, and the Buyer's
and Seller's part numbers for the delivered Products.
B. For each delivery during each fiscal quarter, Seller shall provide such
required certificates, unless otherwise agreed in writing by both parties.
XVIII. TERMINATION FOR CAUSE
A. The occurrence of any of the following constitutes a breach hereof and is
cause for Buyer's termination of this Agreement and/or its Purchase
Orders.
1. Buyer may cancel the related Purchase Order if Seller consistently
fails to deliver Products in accordance with the applicable Purchase
Order delivery schedule, and the fault lies solely with Seller.
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2. Buyer may cancel the related Purchase Order if, Products
consistently do not conform to the applicable specifications, and
the fault lies solely with Seller.
3. Seller consistently fails to perform any material provision of this
Agreement or Buyer's Purchase Orders.
4. Seller assigns this Agreement or any obligation or right under it,
Seller transfers a majority interest in the Seller to a third party,
or Seller merges with a third party that is not a parent or
subsidiary company of the Seller at the Effective Date.
5. Seller becomes insolvent or makes an assignment for the benefit of
creditors or a receiver, or similar officer is appointed to take
charge of all or part of Seller's assets.
B. Seller must cure any of the above breaches and notify Buyer of such cure
within twenty (20) days from receipt of a notice to cure from Buyer. If
Seller fails to so cure, Buyer may terminate this Agreement and/or any
Purchase Orders under it by giving Seller written notice.
C. The provisions of Sections X, XII, XIV, and XVII of this Agreement shall
survive termination or expiration of this Agreement.
D. The occurrence of any of the following constitutes a breach hereof and is
cause for Seller's termination of this Agreement and/or its Purchase
Orders.
1. Buyer assigns this Agreement, or any obligation or right under it,
Buyer transfers a majority interest in the Buyer to a third party,
or Buyer merges with a third party that is not a parent or
subsidiary company of the Seller at the Effective Date.
2. Buyer becomes insolvent or makes an assignment for the benefit of
creditors, or a receiver or similar officer is appointed to take
charge of all or part of Buyer's assets.
3. Buyer consistently fails to perform any material provision of this
Agreement.
4. Buyer fails to make payment.
Buyer must cure any of the above breaches and notify Seller of such cure
within [ * ] from receipt of a notice to cure from Seller,
except that in the case of number 4, Buyer shall have [ * ] to
remedy such breach. If Buyer fails to so cure, Seller may terminate this
Agreement and/or any Purchase Orders under it by giving Buyer written
notice.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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XIX. INVENTORY INDEMNIFICATION
Upon cancellation or quantity reduction of a Purchase Order, or upon
expiration of this Agreement or termination of this Agreement for any
reason, Buyer shall be responsible for:
(i) all finished Product scheduled for shipment within the thirty (30)
days immediately following Seller's receipt of the cancellation or
termination notice (the "Notice");
(ii) all work-in-process at receipt of the Notice; and
(iii) all components, subassemblies and other material purchased to fill a
Purchase Order or authorized to be purchased by Buyer which are on
hand or on order at receipt of the Notice. Without limitation this
includes Piece Part Inventory made obsolete or excessive due to
changes to the specifications or Product, minimum buy quantities,
and reel quantities. Items (i)-(iii) are referred to as the
"Termination Inventory". In calculating the quantity of finished
Product under (i) above, Material rescheduled for manufacture and
shipment during the forty-five (45) days immediately prior to
receipt of the Notice may be counted by Seller.
Seller will make every reasonable effort to use the Termination Inventory
on other current programs at the Plant where the Product is manufactured,
will cancel all outstanding material orders with vendors, and will attempt
to return piece parts to vendors. Buyer will be responsible for costs,
charges and fees actually incurred by Seller to cancel or return any
portion of the Termination Inventory to vendors and, upon mutual
agreement, the cost to modify the Product for other programs.
Within [ * ] from termination or cancellation, Seller will
invoice, and Buyer will purchase, the Termination Inventory remaining
after vendor cancellations and returns and after other program use, as
follows: (i) for Piece Part Inventory and authorized long lead time
components, at Seller's standard cost, plus a reasonable handling charge;
(ii) for WIP, at a reasonable pro rata percentage of the finished Product
purchase price; and (iii) for finished Product, at the purchase price in
effect at termination or cancellation. Buyer will be responsible for any
negative price differentials between the price Seller paid for the Piece
Part Inventory and authorized long lead time components and the price at
which Seller was able to return and/or utilize the items on other
programs. Seller will credit Buyer for any positive price differentials.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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XIX. GENERAL
A. Non-assignability. Seller or Buyer, without prior written consent of the
other Party may not assign any rights or obligations hereunder in whole or
in part to any third party. Notwithstanding the foregoing, a permitted
successor in interest of the Seller acquires all rights and obligations
hereunder in whole or in part.
B. Waiver. Any failure of either Party to enforce, at any time or any period
of time, any of the provision of this Agreement shall not be construed as
a waiver of such provisions or of the right of such Party thereafter to
enforce each and every such provision.
C. Relationship. Seller is an independent contractor and not an agent or
employee of Buyer. Without limiting the foregoing, Seller is not
authorized to represent or make any commitments on behalf of Buyer and
Buyer expressly disclaims any liability thereof.
D. Import and Export Laws. All Products and technical data delivered under
this Agreement are subject to U.S. export control laws and may be subject
to export or import regulations in other countries. The parties agree to
comply strictly with all such laws and regulations.
E. Notice. Any notice given under this Agreement shall be written or sent by
facsimile, or e-mail. Written notice shall be sent by registered mail or
certified mail, postage prepaid, return receipt requested. Any facsimile
notice must be followed within three (3) days by written notice. All
notices shall be effective when first received at the following addresses:
If to Seller: If to Buyer:
SCI Technology Incorporated Next Level Communications
000 Xxxxx Xxxxxx Xxxxx 0000 Xxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000-0000 Xxxxxxx Xxxx, XX 00000
ATTN: Xxxxxxx Xxxxx, Vice President ATTN: Director of Materials
F. Arbitration. All disputes, controversies or differences which may arise
between the Parties, out of or in relation to or in connection with this
Agreement or the breach thereof, other than an action for breach of
Section XIV, shall be finally settled by arbitration pursuant to the
Commercial Arbitration Rules of the American Arbitration Association in a
location that allows approximately equal travel expenses, by which each
Party hereto agrees to be bound. The dispute, controversy or difference
will be decided by a single arbitrator if the Parties so agree, with
experience in the subject matter, otherwise the dispute will be decided by
three (3) arbitrators with
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portion.
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experience in the dispute. One arbitrator to be chosen by Buyer; one
arbitrator to be chosen by Seller, and the third arbitrator to be chosen
by the first two arbitrators. All arbitrators must be chosen within sixty
(60) calendar days of the dispute being submitted to arbitration. After
selection of the arbitrators, the parties have forty-five (45) calendar
days to complete discovery. Arbitration must commence within ten (10)
calendar days after the discovery period. Arbitration will not exceed
thirty (30) calendar days and the award is final. The arbitrator(s) award
may include direct damages against either party but under no circumstances
will the arbitrator(s) be authorized to nor shall they award punitive
damages or multiple damages against either party. The arbitrators will
award to the prevailing party hereto, if any, as determined by the
arbitrators, all of its reasonable costs and fees, including without
limitation administrative fees, arbitrator fees, travel expenses,
out-of-pocket expenses, such as copying and telephone, facsimile, witness
fees and attorneys' fees.
G. Governing Law. This Agreement shall be governed as to all matters
including validity, construction and performance, by and under the laws of
State of California, USA, without regard to its rules governing conflict
of laws.
H. Separability. Except as otherwise specified in this Agreement, all rights
and remedies conferred by this Agreement, by any other instrument, or by
law are cumulative and may be exercised singularly or concurrently. The
Parties hereto agree that, in the event of one or more of the provisions
hereof being subsequently declared invalid or unenforceable by court or
administrative decision, such invalidity or unenforceability of any of the
provisions shall not in any way affect the validity or enforceability of
any other provisions hereof except those which the invalidated or
unenforceable provisions comprise an integral part of or are otherwise
clearly inseparable from such other provisions.
I. Entire Agreement and Amendment. This Agreement sets forth the entire
agreement and understanding between the Parties as to the subject matter
of this Agreement. Neither of the Parties shall be bound by any
conditions, definitions, warranties, or representations with respect to
the subject matter of this Agreement, other than expressly provided in
this Agreement or any written amendment duly executed on or subsequent to
the date hereof by the duly authorized representatives of the Parties in
which the Parties agree to be bound thereby.
J. Force Majeure. Neither party shall be liable for damages and costs to the
other party arising out of delays or failures to perform under this
Agreement if such delays or failures result from causes beyond the
reasonable control of a party, and are not caused by an act or omission of
such party. Notice of any such delays or failures and explanation of their
causes must be given to the other party within five (5) days of the
occurrence. As soon as it is reasonably apparent that the occurrence will
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likely cause a delay of more than ninety (90) calendar days, the party
against whom this section is invoked shall have the right to terminate the
affected installments under any Purchase Order. If Buyer is the party
claiming the force majeure event, Buyer shall be liable for any applicable
cancellation charges and be responsible for termination obligations, both
as provided for in this Agreement. This force majeure provision may not be
invoked for failure or inability to make a payment under this Agreement.
H. Assignees. Buyer is the only entity authorized to purchase Material
hereunder and the individual executing this Agreement certifies they have
the legal authority to bind the Buyer. Any affiliates, subsidiaries, and
permitted assigns ("Assignees") of Buyer which Buyer wishes to purchase
Material hereunder must execute a copy of this Agreement and Buyer
warrants that any and all obligations and debts of the Assignees will be
discharged in a timely fashion. Buyer shall be liable for performance of
the Assignees hereunder including, without limitation, payment of all
monies.
IN WITNESS WHEREOF, the authorized representative of the parties have executed
this Agreement under seal.
SCI Technology. Inc. Next Level Communications
(Seller) (Buyer)
/s/ [Illegible] /s/ [Illegible]
------------------------------ ---------------------------------
(By, Signature & Name) (By, Signature & Name)
Vice President VP/CFO
------------------------------ ---------------------------------
(Title) (Title)
2/13/98 2/16/98
------------------------------ ---------------------------------
(Date) (Date)
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