EXHIBIT 10.30
MASTER MANUFACTURING AND PURCHASE AGREEMENT
U.S. ASSEMBLIES NEW ENGLAND, INC.
AND
OpenROUTE, INC.
TABLE OF CONTENTS
NUMBER SUBJECT PAGE
------ ------- ----
1. Product Purchase Prices 3
2. OpenROUTE Purchase Orders 4
3. Payment Terms 5
4. Warranties, Remedies and Limitation 5
of Liability
5. Inspection 7
6. Ownership of Product 7
7. Primary Contact Person 7
8. Rescheduling and Cancellation 7
9. Non-recurring Engineering Charges 8
10. Changes To The Products 8
11. Inventory Indemnification 9
12. Term and Termination 10
13. Trademarks 11
14. Proprietary Data 11
15. Change of Manufacturing Site 12
16. General 12
17. Signature Page 15
MASTER MANUFACTURING AND PURCHASE AGREEMENT
U.S. ASSEMBLIES NEW ENGLAND, INC.
and
OpenROUTE NETWORKS, INC.
Agreement entered into this 1st day of August, 1998, by and between U.S.
Assemblies New England with principal offices at 000 Xxxxxxxxxxxx Xxxxx,
Xxxxxxx, XX 00000-0000 hereinafter referred to as "U.S. Assemblies", and
OpenROUTE Networks, Inc. with principal offices at Nine Technology Drive,
Westborough, MA 01581-1799, hereinafter referred to as "OpenROUTE". U.S.
Assemblies agrees to manufacture the products described on attached Schedule 1
("Product Pricing Schedule") and sell the finished Products exclusively to
OpenROUTE. OpenROUTE agrees to purchase the finished Products from U.S.
Assemblies. The manufacture, sale and purchase of the finished Products will be
governed by the terms and conditions of this Agreement. Additional products may
be added to this Agreement from time to time. The terms of this Agreement will
cover any and all product manufactured by U.S. Assemblies for OpenROUTE.
This Agreement consists of the attached following General Terms & Conditions and
the following Schedules (as applicable):
--Schedule l-Product Pricing Schedule(Including quantity
commitments)
1.0 PRODUCT PURCHASE PRICES.
1.1 Purchase prices ("Purchase Prices")for the Products are set forth
on Schedule 1. Pricing for products that are not final and/or are
not listed on Schedule 1 will be quoted on a regular basis to
OpenROUTE and must be agreed to by both parties. Purchase Prices
exclude all freight charges, are FOB U.S. Assemblies' Plant of
manufacture and are net of all taxes, duties, and all other
charges.
1.2 Purchase Prices will be reviewed by U.S. Assemblies and OpenROUTE
on an annual basis, commencing on the anniversary date of this
agreement. Any OpenROUTE products that have a significant change
in order quantity (greater than 150% of current order quantities,
or less than 50% of current order quantities) will be reviewed on
quarterly basis, commencing with start of the next fiscal quarter
after the initial date of this Agreement.
1.3 Only in the event of any industry-wide or sole source shortages of
components affecting price or delivery schedules, will OpenROUTE
agree to negotiate with U.S. Assemblies equitable adjustments to
the Purchase Prices and delivery schedules, otherwise prices are
fixed for the quarter, or the year as the case may be. Upon mutual
agreement of the revised pricing, the new pricing will apply to
units shipped after the inventory of materials purchased at the
lower cost has been consumed.
2.0 OPENROUTE PURCHASE ORDERS.
2.1 Materials will be purchased and products will be manufactured and
shipped according to a mutually agreed to schedule. Once agreed
to, purchase of material as well as manufacture and shipment of
Products will be in accordance with OpenROUTE Purchase Orders
("Purchase Order(s)"). OpenROUTE will issue U.S. Assemblies
Purchase Orders for a minimum of a rolling ninety (90) day period,
and rolling forecasts for monthly production requirements for nine
(9) months after the ninety (90) days of Purchase Orders. Purchase
Orders will state the material to be purchased, the quantity of
Products to be manufactured and shipped during the period covered
by the Purchase Order, as well as OpenROUTE`s required delivery
date, and agreed to unit price. U.S. Assemblies will be measured
for on time deliveries and therefore must deliver Product to
OpenROUTE on the required delivery date, or within a window of
five (5) days early, zero (0) days late. Purchase Orders will be
confirmed in writing by U.S. Assemblies within 5 days of receipt.
2.2 OpenROUTE shall issue U.S. Assemblies purchase orders for a
rolling 90 day period, and rolling forecasts for the nine
(9)months supply of products after the 90 days of purchase orders.
Purchase orders may be issued each month and the rolling forecast
will be updated each month, or as mutually agreed to between both
parties, but in no event will it be less then once per quarter.
OpenROUTE forecasts of Product purchases beyond ninety (90)days
(or some other mutually agreed period) are for planning purposes
only, and are not firm.
2.3 U.S. Assemblies will deliver products on the required due date as
stated on purchase orders. Any change to the purchase order
delivery date requires the written approval of both parties as per
section 8.1 of this agreement.
2.3 U.S. Assemblies will purchase only that material required to
manufacture Products according to the quantity and delivery
schedules set forth in Purchase Orders issued by OpenROUTE during
the term of this Agreement. U.S. Assemblies will purchase material
for the Products according to OpenROUTE's Approved Vendor List
("AVL"). With OpenROUTE's prior written consent, U.S. Assemblies
may purchase material in excess of Purchase Order requirements,
such as long lead time components or components which can be
purchased in volume at a lower price. These instances will be
discussed and agreed to in writing by the parties prior to any
actual purchase.
3.0 PAYMENT TERMS.
3.1 Payment terms are net thirty (30)days. The invoice date shall be
no earlier than the ship date, or a date as mutually agreed to in
writing. Should OpenROUTE fail to make payment to standard terms,
and mutually agreed upon payment expectations become unresolved,
U.S. Assemblies may; (1) cease shipments to OpenROUTE immediately;
and/or (2) make some or all future shipments C.O.D.
-2-
4.0 WARRANTIES, REMEDIES, LIMITATION OF LIABILITY.
4.1 U.S. Assemblies warrants to OpenROUTE that each Product shall be
free from defects in workmanship for eighteen (18) months from the
Product ship date (the "Product Warranty"). Components and other
material shall be warranted on a pass-thru basis from the
component/material supplier to OpenROUTE.
4.1.1 The materials portion of the Product Warranty shall not
apply to (i)OpenROUTE consigned or supplied materials, (ii)
Product that is abused, damaged, altered or misused other
than by U.S. Assemblies, or (iii)Product damaged by
external causes not directly contributed to by U.S.
Assemblies.
4.1.2 Products shall be considered free from defects in
workmanship if they are manufactured in accordance with
U.S. Assemblies' manufacturing workmanship standards (IPC
610B, class II), conform to the Product specifications, and
successfully complete any mutually agreed upon Product
Acceptance Tests
4.2 ALL CLAIMS FOR BREACH OF WARRANTY MUST BE RECEIVED BY U.S.
ASSEMBLIES NO LATER THAN THIRTY (30) DAYS AFTER THE EXPIRATION OF
THE WARRANTY PERIOD FOR THE PRODUCT.
4.2.1 THE PRODUCT WARRANTY IS THE ONLY WARRANTY GIVEN BY U.S.
ASSEMBLIES. U.S. ASSEMBLIES MAKES, AND OPENROUTE 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 OPENROUTE SUPPLIED MATERIALS, ARE EXPRESSLY
DISCLAIMED AND EXCLUDED HEREFROM.
4.2.2 UNLESS EXPRESSLY AGREED TO BY U.S. ASSEMBLIES IN WRITING,
U.S. ASSEMBLIES MAKES NO WARRANTY THAT THE PRODUCTS WILL
(i) MEET ANY SPECIFICATION NOT MADE KNOWN TO AND AGREED TO
BY U.S. ASSEMBLIES, 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. U.S. ASSEMBLIES ASSUMES NO
RESPONSIBILITY FOR OBTAINING SUCH APPROVALS OR
CERTIFICATIONS, OR MEETING SUCH SPECIFICATIONS.
4.3 OpenROUTE's exclusive remedy for any breach of the Product
Warranty shall be, at U.S. Assemblies' option, repair by U.S.
Assemblies at a facility of its choice, replacement of the
-3-
defective Product with a functionally equivalent product, or
return of the Purchase Price. In the case of repair, all repairs
will be made and product will be returned to OpenROUTE within ten
(10) days of receipt by U.S. Assemblies.
4.4 U.S. Assemblies warranty obligations will cease upon the earlier
of the agreed upon warranty period or upon U.S. Assemblies'
fulfillment of OpenROUTE's request to return any OpenROUTE-owned
test equipment and fixtures.
4.5 OpenROUTE warrants to U.S. Assemblies that any documentation or
other data which it provides U.S. Assemblies to manufacture the
Products is accurate and complete, unless OpenROUTE informs U.S.
Assemblies otherwise.
4.6 U.S. Assemblies will repair and/or upgrade Products which are
outside the warranty period on mutually agreed prices and terms
and conditions to be negotiated by the parties on a per product
basis.
5.0 INSPECTION.
5.1 OpenROUTE is required to inspect each shipment of Products and
give U.S. Assemblies written notice of any defects or count or
other discrepancies within fifteen (15) days of receipt. If
OpenROUTE does not inspect Products within fifteen (15)days, the
Products will be considered accepted by OpenROUTE; any Product
defects reported after fifteen (15) days will be covered by the
warranty provisions of this Agreement. OpenROUTE will follow U.S.
Assemblies' RMA procedure for return of Products.
6.0 OWNERSHIP OF PRODUCT
6.1 OpenROUTE shall retain sole and exclusive ownership rights to the
product(s) manufactured by U.S. Assemblies and shall have the
exclusive right to market and manufacture, or have product
manufactured by third parties at its discretion.
7.0 PRIMARY CONTACT PERSON
7.1 Each party shall assign one individual to act as primary contact
person for business and one person to act as primary contact
person for technical interactions between OpenROUTE and U.S.
Assemblies.
8.0 RESCHEDULING AND CANCELLATION.
8.1 OpenROUTE may reschedule Products previously released for
production at no charge, one time only, for a period of no more
than ninety (90) days from the original scheduled date, for the
listed quantities and upon the following terms:
-4-
RESCHEDULE
DAYS' NOTICE % OF PRODUCTS ON ORDER
0-30 0%
31-60 25%
61-90 75%
91+ 100%
8.2 OpenROUTE may cancel product at any time subject to the terms of
Clause 11.0 Inventory Indemnification as agreed to by the parties.
8.3 Any schedule increases requested by OpenROUTE will be subject to
component availability.
9.0 NON-RECURRING ENGINEERING CHARGES.
9.1 On a first time build of new products, U.S. Assemblies will not
charge OpenROUTE for NRE costs associated with pick and place
machine programming, original documentation packages and solder
paste stencils. In subsequent engineering revisions requiring a
new solder stencil, the cost will be charged to OpenROUTE, after a
formal quotation is provided. In no instance will machine
programming or documentation charges be passed on to OpenROUTE.
All other NRE charges, such as test fixtures and programs, etc.
will be quoted and charged to OpenROUTE per standard terms and
conditions.
10.0 CHANGES TO THE PRODUCTS.
10.1 U.S. Assemblies will not make any changes to the Products without
OpenROUTE's prior written authorization. U.S. Assemblies will make
OpenROUTE requested engineering changes ("EC") to the Products as
required by the OpenROUTE EC. An EC request will include
sufficient information for evaluation of its feasibility and cost
impact. U.S. Assemblies will respond to EC requests in writing and
provide cost and other relevant data within a time period that is
reasonable considering the magnitude of the EC.
10.2 OpenROUTE may from time to time change the specifications for the
Products or the work required of U.S. Assemblies hereunder and
U.S. Assemblies agrees to implement the change per OpenROUTE's
requested schedule, including a stop work order. In the event a
stop work order is issued, OpenROUTE agrees to resolve the stop
work order within 30 days from the issue date. If changes result
in a change in U.S. Assemblies' costs or in the time for
performance, a price adjustment will be made. Any adjustment must
be in writing and U.S. Assemblies shall not be required to
implement such change until the Parties have mutually agreed upon
the price. In the event of a change necessitated by safety
requirements, or law, U.S. Assemblies agrees to implement said
change as soon as possible.
-5-
10.3 U.S. Assemblies agrees not to make any changes in its processes or
manufacturing standards which would effect form, fit or function
of the Product, without first obtaining written agreement from
OpenROUTE
10.4 U.S. Assemblies agrees to provide OpenROUTE with two hundred and
seventy (270) days' notice in the event they will no longer be
able or willing to produce product for OpenROUTE, and will allow
OpenROUTE the opportunity to place a last time buy of product.
11.0 INVENTORY INDEMNIFICATION.
11.1 Upon cancellation of a Purchase Order, or upon expiration of this
Agreement or termination of this Agreement for any reason,
OpenROUTE shall be responsible for:
(i) all finished Products scheduled for shipment within thirty
(30)days immediately following U.S. Assemblies' receipt of
the cancellation or termination notice (the "Notice"); and
all additional finished goods as mutually agreed to in
writing;
(ii) all work-in-process at receipt of the Notice, (and at
OpenROUTE's request, U.S. Assemblies agrees to complete all
work-in-process); and
(iii) all components, subassemblies and other material purchased
to fill a Purchase Order or authorized to be purchased by
OpenROUTE 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 Products, minimum buy quantities, and
reel quantities. Items (i)-(iii) are referred to as the
"Termination Inventory". In calculating the quantity of
finished Products under (i) above, Products rescheduled for
manufacture and shipment during the thirty (30) days
immediately prior to receipt of the Notice may be counted
by U.S. Assemblies.
11.2 U.S. Assemblies will make every reasonable effort to use the
Termination Inventory on other current programs at the Plant where
the Products are manufactured, will make every reasonable effort
to cancel all outstanding material-orders with vendors, and will
attempt to return piece parts to vendors. OpenROUTE will, upon
mutual agreement, be responsible for verified costs, charges and
fees, including price differentials, actually incurred by U.S.
Assemblies to cancel or return any portion of the Termination
Inventory to vendors and, the cost to modify the Products for
other programs.
11.3 Within thirty (30) days from termination or cancellation, U.S.
Assemblies will invoice, and OpenROUTE 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 U.S.
Assemblies' purchase price, including a xxxx-up for material
-6-
handling equal to U.S. Assemblies then current overhead rate for
materials handling. Details of the then current overhead rate will
be provided to OpenROUTE, however, in no event will such overhead
rate exceed six percent (6%). U.S. Assemblies will provide
OpenROUTE with evidence of purchase price upon request. U.S.
Assemblies will ensure all piece parts are marked and packaged
properly. (ii)for WIP, at a reasonable pro rata percentage of the
finished Product purchase price as mutually agreed.
12.0 TERM AND TERMINATION.
12.1 The term of this Agreement shall be three (3) years from the
Effective Date and, unless terminated as provided for below, will
be automatically renewed for one (1) year periods for as long as
U.S. Assemblies retains manufacturing responsibilities for the
Products.
12.2 This Agreement may be terminated by either party upon the
occurrence of any one or more of the following events: (1)failure
by either party to perform any of its material performance
obligations under this Agreement and to cure such failure within
thirty (30) days after receipt of written notice describing the
failure in sufficient detail, or if the failure cannot be
completely cured within thirty (30) days, failure to make
substantial progress towards a cure within the thirty (30) day
period; or (2) entering into or filing of a petition, arrangement
or proceeding seeking: an order for relief under the bankruptcy
laws of the United States or similar laws of any other
jurisdiction; a receivership for any of its assets; a composition
with or assignment for the benefit of its creditors; a
readjustment or debt; or its dissolution or liquidation.
12.3 OpenROUTE reserves the right to terminate this agreement at any
time for convenience upon one hundred and eighty (180) days notice
subject to the terms of Clause 11.0 Inventory Indemnification.
13.0 TRADEMARKS AND PUBLIC ANNOUNCEMENTS
13.1 This Agreement shall not include any license or right for either
party to use any trademark or trade name used or claimed by the
other (including but not limited to the name "OpenROUTE" or "U.S.
Assemblies"), (the "Trademarks") or coined words or combinations
containing the name or parts thereof in the business name of the
other or of any Affiliate or the other in connection with the
business of any of them. Neither party shall contest the right of
the other to the exclusive use of any Trademark. All uses of
Trademarks by each party in connection with the products or the
packaging thereof shall be in strict compliance with any
conventions of the other concerning the same.
13.2 Neither party shall publicly disclose the existence of this
Agreement or use the other's name in any public announcement or
literature, without the written consent of the other party, and
-7-
neither party shall disclose the specific terms and conditions of
this Agreement except by written agreement between the parties or
as required by law or court order.
14.0 PROPRIETARY DATA
14.1 Any confidential or proprietary data and/or trade secret
information disclosed by one party to the other orally or in
writing shall not be used by the other except as may be required
to manufacture the products sold hereunder, nor shall either party
disclose any of the other's proprietary or confidential data or
trade secret information to any one without the other's prior
written consent, unless such data or information was already known
to the general public in tangible, demonstrable form or the other
already had lawful knowledge of same in tangible demonstrable form
or later lawfully acquires same from another source in tangible,
demonstrable, unrestricted form. All such confidential or
proprietary data shall be so labeled by each party.
15.0 CHANGE IN MANUFACTURING SITE
15.1 With OpenROUTE's written approval, U.S. Assemblies may change the
manufacturing site. U.S. Assemblies agrees to provide OpenROUTE
with thirty (30)days' written notice in the event of a change of
manufacturing site.
16.0 GENERAL.
16.1 This Agreement and its attachments make up the entire agreement
between the parties regarding the Products. This Agreement
supersedes all prior oral and written agreements and
understandings between the parties relating to the Products, and
may only be amended or modified in writing signed by an authorized
representative of each party. The terms and conditions of any
Purchase Order, Acknowledgment, Schedule, or other form or
document of OpenROUTE or U.S. Assemblies shall not apply.
16.2 Unless otherwise agreed, OpenROUTE shall be (i) the exporter of
record for any Products and/or Product documentation exported from
the United States, and shall comply with all applicable U.S.
export control statutes and regulations, and (ii) the importer of
record for all Products exported from the U.S. and later imported
and returned to OpenROUTE or to U.S. Assemblies. U.S. Assemblies
will cooperate with OpenROUTE in obtaining any export or import
licenses for the Products.
OpenROUTE hereby certifies that it will not knowingly export,
directly or indirectly, any U.S. origin technical data or software
acquired from U.S. Assemblies or any direct product of that
technical data or software, to any country listed below, for which
the United States Government requires an export license or other
approval, without obtaining such approval from the United States
Government. Those countries include Albania, Armenia,
Azerbaijan, Belarus, Bulgaria, Cambodia, Cuba, Estonia, Georgia,
Iran, Iraq, Xxxxxxxxxx, Xxxxxxxxxx, Xxxx, Xxxxxx, Libya,
Lithuania, Moldova, Mongolia, North Korea, People's Republic
of China, Romania, Russia, Tajikistan, Turkmenistan, Ukraine,
Uzbekistan and Vietnam.
-8-
U.S. ASSEMBLIES will xxxx any and all export documentation with
the following language when exporting on behalf of OpenROUTE:
"These commodities, technology or software were exported from the
United States in accordance with the Export Administration
Regulations. Diversion contrary to U.S. Law is prohibited."
16.3 Exceptfor the Products or portions of the Products which are the
other party's design, each party is responsible for their portion
of the design of the Products. Upon demand, that party will
promptly defend, indemnify and hold the other party, its officers,
directors, employees, agents, successors and assigns, harmless
from and against every kind of cost, expense or loss (including
attorneys' fees and legal costs)directly relating to any claim or
threatened claim: (a) that any Product or portion of a 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
any Product or portion of a Product. The immediately preceding
sentence will apply whether the claim is based upon contract, tort
or any other legal theory.
16.4 Each party's liability for any Product claim shall not exceed the
purchase price of the Products for which the claim is made.
IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR A THIRD
PARTY FOR ANY SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES,
WHETHER BASED UPON CONTRACT, TORT, OR ANY OTHER LEGAL THEORY (INCLUDING
WITHOUT LIMITATION LOST PROFITS AND OPPORTUNITY).
16.5 This Agreement is intended solely for the benefit of the executing
parties and their permitted successors and assigns. No other
person or entity shall have any rights under or in connection with
this Agreement.
16.6 Neither party may sell, transfer or assign any right, duty or
obligation granted or imposed upon it under this Agreement without
the prior written consent of the other party.
16.7 The parties agree that transmission of data by EDI (electronic
data interchange) will not occur until a separate agreement
governing such transmissions is executed. Upon execution, such EDI
agreement will become an attachment to this Agreement.
16.8 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 likely cause a delay
-9-
of more than ninety (90) days, the party against whom this section
is invoked shall have the right to terminate the affected
installments under any Purchase Order. If OpenROUTE is the party
claiming the force majeure event, OpenROUTE shall be liable for
Inventory Indemnification per Clause 11 of this Agreement, This
force majeure provision may not be invoked for failure or
inability to make a payment under this Agreement.
16.9 OpenROUTE is the only entity authorized to purchase Product
hereunder and U.S. Assemblies is the only entity authorized to
manufacture hereunder. The individuals executing this Agreement
certify they have the legal authority to bind that entity. Any
affiliates, subsidiaries, and permitted assigns ("Assignees")of
OpenROUTE which OpenROUTE wishes to purchase Product hereunder
must execute a copy of this Agreement and OpenROUTE warrants that
any and all obligations and debts of the Assignees will be
discharged in a timely fashion.
16.10 This Agreement and performance by U.S. Assemblies and OpenROUTE
under it shall be governed by the laws of the Commonwealth of
Massachusetts, Both parties pledge their full cooperation and good
faith to settle any differences under this Agreement in a
reasonable, business-like and commercial manner. However, in the
event any difference can not be so settled, both parties submit to
the personal jurisdiction and venue of the Commonwealth of
Massachusetts, for the limited purpose of litigating such
differences.
IN WITNESS WHEREOF, each party represents that it has caused this Agreement to
be executed on its behalf on the date first above written (Effective Date) by a
representative empowered to bind that party with respect to the undertakings and
obligations contained herein.
U.S. ASSEMBLIES NEW ENGLAND, INC. OPENROUTE NETWORKS, INC.
BY:_____________________________ BY:_____________________________
NAME PRINTED:___________________ NAME PRINTED:___________________
TITLE:__________________________ TITLE:__________________________
-10-
SCHEDULE 1
PRODUCT PRICING
SEE ATTACHMENT
