EXHIBIT 10.9
Confidential Materials omitted and filed separately with the Securities and
Exchange Commissions, Asterisks denote omissions.
AGREEMENT FOR ELECTRONIC MANUFACTURING SERVICES
This Agreement between Luminex Corporation, a Delaware corporation
with principal offices at 00000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxx 00000
(hereinafter "Luminex"), and Sanmina Corporation, having a place of business at
0000 Xxxxxxx 00 Xxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 (hereinafter "Sanmina") is
entered into effective as of January 1, 2000 (the "Effective Date"). Sanmina
shall perform manufacturing services for Luminex under the terms and conditions
set forth herein.
NOW THEREFORE, for and in consideration of the covenants, conditions, and
undertakings hereinafter set forth, it is agreed by and between the parties as
follows:
I. Term
This Agreement shall be in effect for four (4) years from the
Effective Date of this Agreement. Unless either party gives the other party
written notice of its intent not to renew this Agreement at least ninety (90)
days prior to the expiration of the current term, the Agreement shall renew
under the then current terms for successive one (1) year terms.
II. Scope of Work Performed
A. Luminex wishes Sanmina to manufacture on behalf of Luminex a
range of products, assemblies, and/or subassemblies, hereafter
called the "Products," identified in and at the prices in Exhibit
A, as amended in writing from time to time by mutual agreement.
Sanmina and Luminex shall mutually agree upon a delivery schedule
for the Products per Section IV of this Agreement.
B. Luminex shall be liable for material(s), components, or parts
that Sanmina procures or otherwise contracts for in order to
manufacture the products that Luminex wishes to buy from Sanmina
on a turnkey basis (hereinafter the "Material" or "Materials").
This liability shall be determined by defining the process that
incurs this liability and describing the situations or
circumstances under which Luminex is liable for Material that
Sanmina has procured per Section IV of this Agreement.
III. Pricing
The prices for the Products shown in Exhibit A shall remain fixed for
six (6) months after the Effective Date, thereafter to be reviewed by the
Parties on a semiannual basis. Sanmina agrees that there shall be no increase in
Build Time not due to an ECO (defined below) or a change request from Luminex.
"Build Time" means the amount of time Sanmina requires to assemble and test the
Materials into a finished Product. Notwithstanding the foregoing, the following
exceptions allow prices to be increased or decreased:
1. ECO - Engineering Change Order (referred to in Section IV.G.) or
change request; or
2. Material variations on the market price of components that are the
basis of the Purchase Order. This will be reviewed and mutually agreed
to quarterly unless abnormal ["abnormal" defined as greater ten
percent (10%) variation in Sanmina's cost of Material(s)] changes are
experienced in material costs; or
3. If the monthly volume of Products ordered by Luminex under this
Agreement meets or exceeds [**] units per month for [**]
consecutive months (the "Established Level"), then the
____________
[**] Indicates that material has been omitted and confidential treatment
requested therefor. All such material has been filed separately with the
Commission pursuant to Rule 406.
Materials Xxxx-up and Profit Gross-up percentages stated in Exhibit A
will be reviewed and agreed upon at lower or higher percentages,
respectively. These new percentages will be applied to all subsequent
shipments. Notwithstanding the foregoing, if the monthly volume of
Products ordered by Luminex under this Agreement drops below the
Established Level then in effect, then the percentages will be
reviewed and agreed upon to lower (Gross-up) or higher (Xxxx-up)
percentages, not to exceed the original percentages set out herein as
of the Effective Date; or
IV. Forecasting and Ordering
A. Sanmina shall purchase Materials for the Products in accordance
with an Approved Vendor List ("AVL"), as provided by Luminex to
Sanmina from time to time. In the event Sanmina cannot purchase
Materials from an approved vendor for any reason, including
unavailability or commercial unfeasibility of the purchase of such
Materials, Sanmina may purchase such Materials from an alternate
vendor with the prior written consent of Luminex.
B. General Planning and Procurement Process
1. On the date this Agreement is executed and the first business
day of each calendar month thereafter, Luminex shall provide
Sanmina with monthly, rolling purchase orders covering a minimum
period of three (3) months ("Purchase Order").
2. On the same dates, Luminex shall provide Sanmina with an
additional monthly, rolling nine (9) month forecast ("Forecast")
covering the nine (9) months immediately following the Purchase
Order period. Forecast does not incur any liability for either
Sanmina or Luminex except that of any long lead-time Materials
for which the forecast would cause procurement activity, and,
even in such a situation such liability for Luminex would be
limited per Section IV.C.
3. Sanmina will take the Purchase Orders and Forecast referred to
in Subsections 1 and 2 above and generate a Master Production
Schedule ("MPS") for a twelve (12) month period using the
process described in Subsection 4 below.
4. The MPS will define the master plan on which Sanmina will base
its procurement, internal capacity projections, and commitments:
(a) Sanmina will use the Purchase Orders referred to in
Subsection 1 above to generate the first three (3) months of
the MPS.
(b) Sanmina will use the Forecast referred to in Subsection 2
above to generate the following nine (9) months of the MPS.
5. Sanmina will release (launch) orders to suppliers of Materials
sometime prior to the anticipated date that the Material is
needed. When these orders are launched will depend on the Vendor
Lead Time that Sanmina will determine from time to time and
maintain as a parameter of Sanmina's manufacturing or materials
planning systems.
6. Sanmina, through its MRP System will also issue an instruction
("MRP Signal") to its procurement group to buy the Material in
order to meet the delivery schedule as specified in the
respective Purchase Order.
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7. When Sanmina places an order with its suppliers per the sections
above, Sanmina will order Materials in various quantities (defined
in periods-worth-of-supply) that are defined by the Material's ABC
Classification. This classification as well as the expected
distribution or characteristics of various classes of Materials,
and, the periods-worth-of-supply (Periods-of-Supply) that will be
bought for each class of Material is shown on Exhibit C.
8. In addition to ordering Materials for various periods-of-supply and
in order to obtain volume discounts, Sanmina will order Materials
according to various minimum-buy quantities, tape and reel
quantities, and multiples of packaging quantities in accordance
with the Excess Materials provisions of Subsection IV.D.5.
C. Liabilities for Materials
1. For the purposes of Sections C, D, and E of Article IV,
"Materials" means without the cost of the Materials Xxxx-up and is
at Sanmina's cost. Also, for the purposes of Sections C, D, and E
of Article IV, Luminex's liability for Materials under these
section is separate and exclusive of any liability for Materials
used in completed Products purchased from Sanmina by Luminex per
the Product Pricing of Exhibit A.
2. Luminex's financial liability for Materials that Sanmina has
procured under this Agreement under valid Forecasts and/or
Purchase Orders and separate and exclusive of any liability for
Materials used in completed Products purchased from Sanmina by
Luminex per the Product Pricing of Exhibit A ("Materials
Liability"), is limited to the following:
(a) Materials that Sanmina, having ordered per the guidelines in
Section IV.B. above, cannot cancel prior to its receipt. This
includes Materials that may not be cancelable by virtue of
having insufficient time between the MRP signal to cancel and
the expected or real receipt date at Sanmina. If the receipt
of Material cannot be stopped but the Materials can be
returned, they will be covered under Subsection (b) below or
Section IV.C.2.; and
(b) Materials that Sanmina, having ordered per the guidelines
above, cannot return to the suppliers that the Materials came
from, or other 3/rd/ party, and where Sanmina has made
reasonable efforts to return the Materials. Prior to being
included in Luminex's liability, Luminex shall be given the
option to try to arrange a return for Sanmina; and
(c) Material which Luminex and Sanmina agree that the return of
such Materials is not required.
3. Luminex shall also be liable to Sanmina for other Material-related
costs separate and exclusive of any liability for Materials used
in completed Products purchased from Sanmina by Luminex per the
Product Pricing of Exhibit A. ("Other Material Costs"), which
shall include:
(a) Instances in which Sanmina is able to return Materials with
reasonable re-stocking or other fees, those fees shall become
part of Luminex's Total Liability in place of the costs of
those Materials and markups; and
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(b) Associated reasonable expenses related to purchasing,
ordering, manufacturing (labor and overhead), shipping,
storing, and eliminating such Materials that Sanmina
purchases or orders to fulfill a Purchase Order and/or the
Forecast on behalf of Luminex to manufacture the Products
shall constitute a part of Luminex's Total Liability, such
amount not to exceed the current Materials Xxxx-up; and
(c) If necessary and with Luminex's prior, written consent,
Sanmina shall purchase any necessary tools to fulfill the
Purchase Order and Forecast. Such tools shall be deemed a
part of Luminex's Total Liability. All such tooling purchased
by Sanmina shall remain Luminex's sole property, and Sanmina
shall return such tooling (normal wear and tear excepted) to
Luminex upon request, the completion of the relevant order,
or the termination of the Agreement. Such tooling may only be
used by Sanmina to fulfill its obligations hereunder to
Luminex.
4. Except as otherwise provided herein, Luminex's total financial
liability for Materials and separate and exclusive of any
liability for Materials used in completed Products purchased from
Sanmina by Luminex per the Product Pricing of Exhibit A ("Total
Liability"), shall be the sum of: (i) Materials Liability plus the
agreed upon Materials Xxxx-up per Exhibit A, and (ii) Other
Material Costs. Sanmina shall use commercially reasonable efforts
to minimize the Total Liability consistent with meeting the
production requirements of this Agreement.
D. Excess Material
1. "Excess Material" and "Excess Materials" mean Materials greater
than the quantity needed to fulfill all outstanding or open
Purchase Orders submitted to Sanmina by Luminex hereunder.
2. Sanmina agrees to provide Luminex with monthly progress Excess
Reserve Detail Reports which shall detail any Excess Materials.
Luminex agrees to review and notify Sanmina, in writing, within
thirty (30) days of any issues regarding the composition of the
Excess Materials, in response to the Excess Reserve Detail Report.
Sanmina agrees to use commercially reasonable efforts to reduce
the amount of Excess Material(s) consistent with meeting the
production requirements of this Agreement.
3. If, at any time at which the total dollar amount of Excess
Materials exceeds twenty-five thousand dollars ($25,000.00), the
Parties will, within thirty (30) days, conduct a review of the
composition of Excess Materials and alternative means of reducing
the level of such Excess Materials; e.g., by returns, sales, etc..
If, after such review, Luminex's responsibility for Excess
Materials would still exceed twenty-five thousand dollars
($25,000.00), then Luminex will, within fourteen (14) days, either
(1) issue a Purchase Order for the delivery of that portion over
twenty-five thousand dollars ($25,000.00), or (2) issue sufficient
top level Purchase Orders to result in the consumption of said
Excess Materials.
4. Upon termination of this agreement by notice per Section X.A.,
Luminex agrees to purchase Excess and Unallocated Material it is
responsible for creating through MRP driven demand for forecast,
production, and minimum buy requirements per the provisions of
Section IV. Within thirty (30) days of notification of
termination, Luminex will provide Sanmina with the address where
Excess Material is to be shipped, or arrange for pick-up by third
party purchasers from Sanmina's facility.
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5. In order to simplify and expedite the process of placing orders
with vendors, where minimum buys are required, and the minimum buy
order would create an Excess Material condition, this Agreement
authorizes Sanmina to make those purchases under the following
guidelines:
(a) Sanmina may make purchases for line items which total extended
excess cost to Sanmina does not exceed five hundred dollars
($500.00); and
(b) In the event a line item increases Excess Materials by five
hundred dollars ($500.00) or more, Sanmina shall notify
Luminex in writing within one (1) week. Luminex will, within
one (1) week, provide written authorization to place the
order.
E. Unallocated Materials
1. "Unallocated Material" and "Unallocated Materials" are defined as
Material or Materials for which there are no open or outstanding
Purchase Orders. Unallocated Material is identified on Excess
Reserve Detail Reports as those items having zero (0) demand.
2. Sanmina agrees to include in the aforementioned monthly Excess
Reserve Detail Reports details of any Unallocated Materials.
Luminex agrees to review and notify Sanmina, in writing, within
thirty (30) days of any issues regarding the composition of
Unallocated Material, in response to the Excess Reserve Detail
Report. After such review, Luminex will, within fourteen (14)
days, either (1) issue a Purchase Order for the delivery of
Unallocated Material, or (2) issue sufficient top level Purchase
Orders to result in the consumption of said Unallocated Material.
F. Reschedules
1. Luminex may reschedule delivery dates of Products subject to the
matrix set forth on Exhibit D.
2. For a decrease in quantity of Products to be delivered on a
specific delivery date, Sanmina and Luminex shall mutually agree
upon a date to deliver the undelivered Products.
3. For an increase in quantity of Products to be delivered on a
specific delivery date, Sanmina, on a best efforts basis, will
attempt to accommodate such increase.
4. If any change in the delivery dates of any results in additional
expenses to Sanmina to store such Products or to acquire
additional Materials, such additional expenses as are reasonably
incurred and documented shall be deemed part of Luminex's Total
Liability with Luminex's prior approval.
G. Revisions
In the event Luminex requests an engineering change to a product,
Sanmina shall notify Luminex of any impact on the cost and/or scheduled
delivery of such Products within five (5) business days of the receipt of
Luminex's request in reasonable detail with supporting documentation.
Sanmina will use its best efforts to reduce the impact the costs of any
change order. Unless Luminex consents to the amended notification from
Sanmina, the requested
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engineering change shall be deemed canceled and Luminex will be notified in
writing. Any increases in the cost of the Products resulting from such
Engineering Change Order ("ECO") shall be deemed a part of Luminex's Total
Liability. Similarly, any Materials made obsolete or excess as a result of
such an ECO shall be deemed part of Luminex's Total Liability.
H. Cancellations
Luminex may cancel any Purchase Order by notifying Sanmina in writing at
least thirty (30) days prior to the delivery date of such order. Within
thirty (30) days of such cancellation, Sanmina shall provide Luminex with
the amount of the Total Liability under Section IV related to such canceled
Purchase Order. To the extent practical, any Materials resulting from a
cancellation shall be used to fulfill other Purchase Orders. If a
sufficient amount of purchases is not forecasted to consume such materials
within the next sixty (60) day period, with respect to the Excess Materials
Luminex shall pay such cancellation amount to Sanmina on a net-30 day
basis. After receipt of such cancellation amount, Sanmina shall deliver to
Luminex, at Luminex's expense, any remaining Materials purchased but unused
as a result of such cancellation, or scrap Materials, at the sole
discretion of Luminex.
V. Delivery
A. Delivery of all items under this Agreement shall be delivered F.O.B.
Sanmina's Plant located at the address specified in Exhibit A to the
common carrier specified from time to time by Luminex ("Delivery
Point"). Upon delivery to the common carrier, risk of loss and title
shall pass to Luminex. Sanmina will provide insurance for the value of
the Material (with any deductible to be approved by Luminex) until
delivery to the common carrier, and shall name Luminex as an additional
insured on such policies and furnish Luminex with certificates of
same..
B. Sanmina shall use its best efforts to deliver the Products to the
Delivery Point on the agreed upon delivery dates. If Products pursuant
to a Purchase Order are more than thirty (30) days late, then Luminex
shall have the option to cancel that Purchase Order. If Products
pursuant to any Purchase Order are more than forty-five (45) days late,
Sanmina shall be in breach of this Agreement and Luminex shall have the
option to terminate this Agreement. If Luminex terminates this
Agreement for Sanmina's failure to timely deliver the Products, Luminex
shall be liable for the Materials per Section IV.
C. Sanmina shall transport the Products using the common carrier and such
shipment terms as are designated by Luminex from time to time to
Luminex's address or to an address specified in writing by Luminex. All
freight, insurance, and other shipping expenses from the delivery point
shall be borne by Luminex. When special packaging is requested or, in
the opinion of Sanmina is required under the circumstances, the
additional expenses related to such special packaging shall also be
borne by Luminex if agreed to in advance by Luminex.
VI. Payment and Invoicing
Payment terms will be net-30 (thirty) days from invoice date, provided it
is not earlier than the ship date. Sanmina will provide Luminex with a credit
limit adequate to equal or exceed six (6) months of projected shipments of the
Products to Luminex. In the event that Luminex exceeds this credit limit or has
undisputed outstanding invoices for more than sixty (60) days and such credit
limit remains exceeded or such invoices remain outstanding, as applicable, ten
(10) days after Luminex has received notice thereof, Sanmina may stop shipments
of Products to Luminex until Luminex makes sufficient payment to
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bring its account consistent with terms outlined above. Sanmina may reduce the
credit limit with sixty (60) days prior written notice to Luminex, provided,
that Luminex may terminate this Agreement on thirty (30) days prior written
notice if such credit limit is reduced by more than ten percent (10%).
VII. Warranty
A. Sanmina warrants that each Product shall at the time of delivery be
new and free and clear of all liens and encumbrances. Sanmina warrants
that the Products shall be free from any defects in workmanship for a
period of one (1) year from the date of manufacture except to the
extent that such defects are caused by components purchased from
third-party vendors but not Sanmina-owned companies ("Vendor
Components"). Warranty on components is limited to the warranty
provided by the component manufacturer. Sanmina, to the extent
permitted, hereby agrees to assign to Luminex any unexpired warranties
for such Vendor Components provided by third-party vendors or passed
on by such third-party vendors from the original manufacturers until
the expiration of such warranties. Sanmina shall execute any documents
necessary to assign such warranties to Luminex. As Luminex's remedy
under Sanmina's warranty, Sanmina will, at no charge, rework, repair,
and retest any such Products returned to Sanmina and found to contain
defects in workmanship, provided, however, in the event such Product
cannot be repaired or replaced within thirty (30) days of return by
Luminex, Luminex may elect a refund of the purchase price for the
applicable Product. Sanmina will return defective Vendor Components to
third party vendors for warranty replacement or repair from the
original manufacturers. All reasonable transportation and expenses
arising from shipping the non-conforming Products to and the
replacement Products from the shipping location shall be paid by
Sanmina to the extent the Products are defective due to Sanmina's
workmanship. However, if a Product returned to Sanmina for replacement
proves to be not defective, Luminex shall reimburse Sanmina for all
transportation expenses incurred by Sanmina in connection with the
shipment of such Products to Sanmina and its return by Sanmina.
Warranty coverage does not include failures due to Luminex design
errors, the supply or selection by Luminex of improper or defective
parts or materials used by Luminex, damages caused by Luminex's
misuse, unauthorized repair, or negligence. Sanmina does not assume
any liability for low-cost, expendable items such as lamps and fuses.
Sanmina reserves the right to inspect the Products, Materials, and
Vendor Components and verify that they are defective or non-
conforming.
B. The performance of any repair or replacement by Sanmina does not
extend the warranty period for any Products beyond the period
applicable to the Products originally delivered; provided, however,
that the warranty period shall extend for a period of time equal to
the time elapsed from notice to Sanmina of a warranty claim until
redelivery of the repaired or reworked product.
C. EXCEPT FOR THE ABOVE EXPRESS WARRANTIES, SANMINA MAKES AND LUMINEX
RECEIVES NO WARRANTIES OR CONDITIONS ON, THE PRODUCTS, EXPRESS,
IMPLIED, STATUTORY, OR OTHERWISE, AND SANMINA SPECIFICALLY DISCLAIMS
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
VIII. General Indemnity
A. Sanmina shall defend, indemnify and save harmless Luminex from any
liability or claim (including, without limitation, the costs and
reasonable attorney's fee in connection therewith) to the extent such
liability or claim is based upon an allegation that, by reason of
processes
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used by Sanmina or otherwise, a Product infringes, under the
applicable law of the United States, Canada or any other country to
which Sanmina or Luminex may have delivered the allegedly infringing
Product, any Intellectual Property of a third party. Luminex shall
promptly notify Sanmina of any such claim or proceeding brought
against it and grant Sanmina the right of defense in any such claim or
proceeding, and Luminex shall provide all information and reasonable
assistance, all at Sanmina's expense, in the defense of such a claim
or proceeding.
B. Sanmina's obligation to indemnify Luminex under this Article shall not
apply to any liability for such infringement based solely upon a
Product being manufactured in compliance with Luminex's specific
design requirements, or the application of a Product by Luminex in an
unintended manner. Each party shall indemnify the other party against,
and hold it harmless from any loss, cost, liability, or expense
(including court costs and the reasonable fees of attorneys and other
professionals) to the extent that such loss, cost, liability, or
expense arises out of, or in connection with, in whole or in part, (A)
infringements of any patent, trademark, copyright, or other
intellectual property of another party by the other party or (B) any
gross negligence or willful misconduct by the other party, its
employees or agents and subcontractors, including but not limited to
any such act or omission that causes: (i) any bodily injury, sickness,
disease, or death; (ii) any injury or destruction to tangible or
intangible property of the injured party or any loss of use resulting
therefrom; or (iii) any violation of any statute, ordinance, or
regulation.
IX. Quality, Inspection, and Reporting
A. Luminex will have the right at reasonable times, upon reasonable
advance notice, to visit Sanmina's plant to inspect the work performed
on the Products, the Materials, and the Vendor Components. Such
inspection shall not relieve Sanmina of any of its obligations under
the Agreement or Purchase Orders. Sanmina shall provide Luminex with
all mutually agreed upon quality reports at agreed upon intervals.
Sanmina reserves the right to restrict Luminex's access to the plant
or any area within it as necessary to protect confidential information
of Sanmina or its other Customers.
B. If Luminex demands inspection of the Products prior to the delivery of
such Products as a condition of acceptance of such Products, Luminex
must inspect the Products within five business (5) days of a
transmission of written notice by facsimile or other electronic or
telephonic delivery system from Sanmina informing Luminex that the
Products are ready to be shipped. If Luminex does not inspect the
Products within such five-business-day period, Luminex shall be deemed
to have waived its right to inspect the Products as a condition of
acceptance of such Products. This does not disallow rejection of the
Products after incoming inspection if such inspection determines that
the shipment does not meet the agreed to specifications.
C. Luminex and Sanmina will implement a joint quality improvement program
that will develop and implement a continuous quality improvement.
D. Luminex and Sanmina will agree on what reports and other items (such
as reports on component part inventory, products shipped and copies of
invoices) will be prepared by Sanmina and delivered to Luminex.
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X. Termination
A. Either party may, without penalty, terminate this Agreement upon thirty
(30) days written notice to the other party in either one of the
following events:
1. The other party materially breaches this Agreement and such breach
remains uncured for thirty (30) days following written notice of
breach by the non-breaching party; or
2. The other party becomes involved in any voluntary or involuntary
bankruptcy or other insolvency petition or proceeding for the
benefit of its creditors, and such petition, assignment or
proceeding is not dismissed within sixty (60) days after it was
filed.
B. Luminex may, without penalty, terminate this Agreement upon thirty (30)
days written notice to Sanmina in the event Sanmina has not met, or is
reasonably expected not to be able to meet, Luminex's requirements for
Products for a period in excess of sixty (60) days.
C. Luminex may, without penalty, terminate this Agreement upon one hundred
twenty (120) days written notice to Sanmina.
D. Upon termination, Sanmina shall provide Luminex with an invoice of
Luminex's Total Liabilities per Section IV. In addition, Luminex shall
be liable for work-in-progress and any outstanding charges per Section
IV. Upon termination, Luminex shall pay all undisputed invoice charges
on a net thirty (30) days basis.
XI. Limitation of Liability
IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL, OR INCIDENTAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY, ARISING IN ANY WAY OUT OF THIS AGREEMENT. THIS LIMITATION WILL APPLY
EVEN IF A PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED
HEREIN.
XII. Miscellaneous
A. Notices. Any notice or report required or permitted to be given or made
under this Agreement by either party shall be in writing and delivered
to the other party at its address indicated below (or to such other
address as a party may specify by notice hereunder) by courier or by
registered or certified airmail, postage prepaid, or by facsimile;
provided, however, that all facsimile notices shall be promptly
confirmed, in writing, by registered or certified airmail, postage
prepaid. All notices shall be effective as of the date received by the
addressee.
Sanmina address:
Sanmina Corporation
0000 Xxxxxxx 00 Xxxxx
Xxxxxxxxxxxx, XX 00000
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Luminex address:
Luminex Corporation
00000 Xxxxxxxxxx Xxxx.
Xxxxxx, XX 00000
B. Confidential Information. "Confidential Information" shall mean all
confidential documentation and information provided to the other
party under this Agreement and all information previously supplied
by Luminex to Sanmina regarding the Luminex 100 or Luminex
technology or intellectual property. All Confidential Information
shall remain the property of its owner. The parties grant to each
other a nontransferable and nonexclusive right to use Confidential
Information, solely in the performance of this Agreement and, unless
prior consent in writing is obtained or disclosure is required by
law (in which case the disclosing party shall provide the other
party advance notice and an opportunity to prevent disclosure of
such Confidential Information), such Confidential Information shall
not be disclosed, except for any part thereof that is known to be
free of any obligation to keep it in confidence or that becomes
generally known to the public through acts not attributable to the
party under an obligation to keep the Confidential Information
confidential.
C. Intellectual Property. Except as expressly provided in this
Agreement, nothing in this Agreement is to be construed as granting
to Sanmina a license or any other intellectual property right to
utilize any information (including Confidential Information)
received from Luminex or under any patent or other intellectual
property right, and Sanmina recognizes that Luminex is the owner of
all such rights, including all goodwill relating thereto.
D. Governing Law. This Agreement will be governed by and interpreted
under the laws of the State of Texas, without reference to conflict
of laws principles.
E. Jurisdiction. For any dispute arising out of this Agreement, the
parties consent to personal and exclusive jurisdiction of and venue
in the state and federal courts within Xxxxxx County, Texas.
F. Entire Agreement; Enforcement of Rights. This Agreement sets forth
the entire agreement and understanding of the parties relating to
the subject matter herein and therein and merges all prior
discussions between them. No modification of or amendment to this
Agreement, nor any waiver of any rights under this Agreement, will
be effective unless in writing and signed by a duly authorized
representative of the party to be charged. The failure by either
party to enforce any rights thereunder will not be construed as a
waiver of any rights of such party.
G. Severability. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future state or
federal laws or rules and regulations promulgated thereunder
effective during the term hereof, such provision shall be fully
severable, and this Agreement shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never
comprised a part hereof, and the remaining provisions hereof shall
remain in full force and effective and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance
herefrom. Furthermore, the parties hereto agree to negotiate in good
faith to modify and amend this Agreement so as to effect the
original intent of the parties as closely as possible with respect
to those provisions which were held to be illegal, invalid, or
unenforceable.
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H. Assignment. The rights and liabilities of the parties hereto will
bind and incur to the benefit of their successors, executors or
administrators; provided, that this Agreement may not be assigned by
either party hereto without the prior written consent of the other
party, which shall not be unreasonably withheld. Any assignment or
any attempted assignment without such written consent shall be void
and of no effect. For purposes hereof, any transaction or series of
related transactions (whether by sale of stock, issuance of new
stock, merger or otherwise) that results in the transfer of
ownership of 50% or more of the capital stock of Sanmina shall be
deemed to be an assignment.
I. Force Majeure. Neither party will be liable to the other for any
default thereunder if such default is caused by an event beyond such
party's control, including without limitation acts or failures to
act of the other party, strikes or labor disputes, component
shortages, unavailability of transportation, floods, fires,
governmental requirements and acts of God (a "Force Majeure Event").
In the event of threatened or actual non-performance as a result of
any of the above causes, the non-performing party will exercise
reasonable efforts to avoid and cure such non-performance. Should a
Force Majeure Event prevent a party's performance thereunder for a
period in excess of forty-five (45) days, then the other party may
elect to terminate this Agreement by written notice thereof.
J. Allocation. In the event of Force Majeure or any other shortfall in
Sanmina's manufacturing capacity, Sanmina will allocate to Luminex
Products capacity allocation no less favorable than that offered to
any other Sanmina customer.
K. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original and all of
which together will constitute one instrument.
L. Non-Exclusive. This Agreement is not exclusive and, subject to the
obligations of this agreement, including but not limited to
confidentiality and the intellectual property rights of each party,
Luminex shall be free to have other parties manufacture products for
Luminex, and Sanmina shall be free to manufacture products for other
purchasers.
M. Advice of Counsel. Sanmina and Luminex have each consulted counsel
of their choice regarding this Agreement, and each acknowledges and
agrees that this Agreement shall not be deemed to have been drafted
by one party or another and will be construed accordingly.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement.
SANMINA CORPORATION LUMINEX CORPORATION
By: /s/ Xxxx Xxxxxxx By: /s/ Van X. Xxxxxxxx
-------------------------- ---------------------------------
Name: Xxxx Xxxxxxx Name: Van X. Xxxxxxxx
------------------------ -------------------------------
Title: Director of Operations Title: Vice President of Instruments
----------------------- ------------------------------
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Exhibit A
PRODUCT PRICING
Products Covered: Luminex 100 and Various Subassemblies
Pricing for Products on a per unit basis:
_________________________________________________________________________________________________________
Cost of Materials Cost of Materials to Sanmina
---------------------------------------------------------------------------------------------------------
Materials Xxxx-up Cost of Materials multiplied by [**]% (the "Materials Xxxx-up")
---------------------------------------------------------------------------------------------------------
Labor Build Time multiplied by $[**]
---------------------------------------------------------------------------------------------------------
Subtotal Sum of Cost of Materials, Materials Xxxx-up and Labor
---------------------------------------------------------------------------------------------------------
Total Subtotal [**] (the "Profit Gross-up")
---------------------------------------------------------------------------------------------------------
The parties agree that the Product Pricing per this exhibit shall be reviewed
quarterly
-----------
[**] Indicates that material has been omitted and confidential treatment
requested therefor. All such material has been filed separately with the
Commission pursuant to Rule 406.
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EXHIBIT B
ABC CLASSIFICATIONS, DESCRIPTIONS AND PERIODS-OF-SUPPLY
--------------------------------------------------------------------------------------------------------
Expected Periods Worth of Supply
Class Expected Percentage of Total to be Bought with Each
Percentage of Value (Gross Order (if necessary to
Total Materials Requirements) meet the scheduled
requirements)
-------------------------------------------------------------------------------------------------------
A 3% 80% 1 Month
-------------------------------------------------------------------------------------------------------
B 17% 17% 3 Months
-------------------------------------------------------------------------------------------------------
C 80% 3% 6 Months
-------------------------------------------------------------------------------------------------------
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EXHIBIT C
RESCHEDULES
---------------------------------------------------------------------------------------------------------
Notice Prior to Original Delivery Date (or Current Delivery Percentage of Original Quantity that
Date if valid for more than 30 days calendar days) can be Rescheduled
---------------------------------------------------------------------------------------------------------
0 to 30 days 10%
---------------------------------------------------------------------------------------------------------
31 to 60 days 45%
---------------------------------------------------------------------------------------------------------
61 to 90 days 90%
---------------------------------------------------------------------------------------------------------
Beyond 90 Days 100%
---------------------------------------------------------------------------------------------------------
As an example, if Luminex notifies Sanmina in writing between thirty-one (31)
and sixty (60) days prior to the scheduled delivery date of the Products,
Luminex may reschedule a maximum of forty-five percent (45%) of the total amount
of the Products to be delivered on such date.
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