1
EXHIBIT 10.16
MANUFACTURING AGREEMENT
AGREEMENT #: C-06259
EFFECTIVE DATE: 4/13/98
EXPIRATION DATE: 4/16/99
CNDA#: 95182
This Agreement is entered this ("Effective Date") by and between Intel Flash
Products Division, with a place of business at 0000 Xxxxxxx Xxxx Xxxx, Xxxxxx,
Xxxxxxxxxx ("Intel") and XeTel Corporation, with place of business at 0000 Xxxxx
Xxxxx Xx., Xxxxxx, Xxxxx ("Supplier"), singularly or collectively referred to as
a Party or the Parties.
RECITALS
o WHEREAS, Intel is an international manufacturer of microprocesser and
Flash memory components, modules and systems.
o WHEREAS, Supplier is a provider of contract manufacturing and
integration services; and
o WHEREAS, Intel desires to engage the services of Supplier;
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises made herein and other
good and valuable consideration, the Parties agree as follows:
1.0 ADDENDA
The following Addenda are attached hereto and incorporated herein by
reference.
"A" Product/Manufacturing Specifications, Pricing
"B" Quality Requirements, Performance Standards
"C" Negotiated Changes
2.0 DEFINITIONS
2.1 "Release" means an Intel purchase order authorizing Supplier to ship a
definite quantity of items according to a specified schedule.
2.2 "Product(s)" means Flash Memory cards released by Intel and
manufactured by Supplier in accordance with this agreement.
2.3 "Specifications" means the Intel proprietary product specifications,
manufacturing procedures, schematics, documentation, software, and
other materials provided by Intel to Supplier to enable Supplier to
manufacture Product(s) for Intel.
2.4 "Forecast" means the quantity of Product(s) Intel reasonably expects to
release; however, Intel will not be obligated to accept or pay for such
quantities not committed by an issued Release.
2.5 "Gross Unit Variance (GUV)" equals absolute sum of unit inventory
difference (physical v. book) divided by total book quantity.
1 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
2
2.6 "Gross Dollar Variance (GDV)" equals absolute sum of U.S. dollar
inventory difference (physical v. book) divided by total U.S. dollar
book value.
2.7 "Net Dollar Variance (NDV)" equals sum of net U.S. dollar inventory
differences (physical v. book) divided by total U.S. dollar book value.
2.8 "Defects per Million (DPM)" equals the number of defective units,
divided by the total number of samples, multiplied by one million.
2.9 "Product Documentation" means any portion of documentation for Intel
software or hardware Product(s) in printed or electronic form
identified in a Release and provided to Supplier to Intel.
2.10 "Software" means the software identified in a Release and provided to
Supplier by Intel in object code form expressly for the purpose of
duplication.
2.11 "Material Overhead (MOH)" is the fee that Intel pays supplier to manage
turnkey material as set forth in Addendum A.
2.12 "Labor Overhead (LOH)" is the fee that Intel pays supplier to assemble
product set forth in Addendum A.
2.13 "Build Schedule" shall mean a weekly schedule issued by Intel
indicating five (5) business days of Product requirements.
2.14 "Premises" refers to the area in which lines are used to manufacture
Intel Products reside.
3.0 MANUFACTURING AND INTEGRATION SPECIFICATIONS
3.1 Supplier shall manufacture and/or integrate Product(s) in accordance
with Intel Release and the Specifications set forth in Addendum A.
3.3 Supplier shall not modify or deviate from the Specifications for
Product(s) without prior written approval from Intel. Intel may modify
the specifications at Intel's discretion. Supplier shall implement such
modifications in Supplier's manufacturing process within a reasonable
time following receipt of notification of the change from Intel.
Supplier shall implement safety or regulatory changes to work in
process immediately following receipt of notification of the change
from Intel.
3.4 Intel may furnish additional Product(s) specific documentation upon
introduction of new Product(s) to the manufacturing line and may make
changes in such documentation, at any time, for any reason. Supplier
will acknowledge such additional documentation or change in existing
documentation with cost and schedule impact within forty-eight (48)
hours after receipt of notification.
3.5 Supplier shall cooperate with Intel to provide configuration control
and traceability systems for Product(s) supplied hereunder.
3.6 Supplier will maintain a process satisfactory to meet or exceed Intel's
documentation and quality requirements set forth in Addendum B.
2 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
3
4.0 LIMITED LICENSE
4.1 Intel grants to Supplier a restricted, non-exclusive, non-transferable,
royalty-free license to copy and use the Specifications only to
manufacture Product(s) for Intel in accordance with the terms and
conditions of this Agreement, and for no other purpose.
4.2 No rights or licenses are granted by Intel to Supplier, expressly or by
implication, estoppel or otherwise, with respect to any proprietary
information or patent, copyright, trade secret or other intellectual
property right owned or controlled by Intel, except as expressly
provided in the Agreement and its Amendments. No express or implied
license to Intel's Flash Memory products, system bus, processor, or
microprocessor-level intellectual property or manufacturing process
technology is granted.
4.4 Intel grants to Supplier a non-exclusive, non-transferable,
royalty-free license to, i) reproduce Product Documentation in either
original or modified form solely for Intel at Intel's direction; ii)
distribute Product Documentation exclusively to locations identified by
Intel and at Intel's written direction.
4.5 The license grant does not include the right to permit Supplier's
customers, agents, distributors, or any third party to reproduce
Software or Product Documentation without prior written approval from
Intel.
4.6 Supplier shall reproduce all copyright notices wherever they appear in
the Software or Product Documentation.
4.7 Supplier warrants that it will not reverse engineer or copy Intel
designs without the written authorization of Intel.
5.0 PRICING, INVOICING AND PAYMENT
5.1 Prices for Product(s) are set forth in Addendum A, in U.S. Dollars and
are based on an average lot size of 1200 units.
5.2 Additional charges such as taxes, freight, duties and insurance shall
be stated separately on Supplier's invoice in U.S. Dollars. Such
additional charges will not be reimbursed without Intel's prior written
approval.
5.3 Intel and Supplier agree to review and adjust material and conversion
pricing set forth in Addendum A not less than once per calendar
quarter. Material and conversion pricing for New Product Introductions
(NPI) or Product(s) undergoing Engineering Change Orders (ECO) which
change the Xxxx of Materials (BOM) may be updated within the quarter.
5.4 Intel and Supplier agree to review and adjust material overhead prices
set forth in Addendum A not less than once per six (6) months. Without
limiting the foregoing, either Party may request re-negotiation of
material, material overhead or conversion prices based upon changes in
suppliers, materials' costs, designs, technology, forecasted volumes
and/or market conditions. Upon receipt of such request, the Parties
will re-negotiate prices in good faith. Pricing changes shall be
incorporated in this document
5.5 Supplier shall, submit original invoices, which shall include the
purchase agreement number, purchase order number (including line item
release), part number including applicable revision level, packing slip
number, complete xxxx-to address, description of Product(s),
quantities, unit price and extended totals. Payment shall not
constitute acceptance.
3 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
4
5.6 Additional charges, such as but not limited to Non-Recurring
Engineering ("NRE") charges will not be reimbursed without Intel's
prior written approval.
5.7 Supplier warrants to Intel that the price charged (for material cost,
MOH, and conversion)) Intel for Product(s) shall be Supplier's lowest
net price charged any customer for like products and/or services. If
Supplier sells similar products and/or services covered by this
Agreement to other customers at prices less than those set forth
herein, Supplier shall adjust to the lower price any unshipped Intel
Product(s) and all future Releases for Intel Product(s). Intel reserves
the right to inspect and audit Supplier's records to ensure compliance
with this requirement. Upon Supplier's written demand, such audit may
be performed by an independent third party at Intel's expense.
5.8 Intel shall make payments to Supplier forty-five (45) days from the
later of the receipt of Product(s) or the date of receipt of a properly
executed invoice.
6.0 DELIVERY, RELEASES, FLEXIBILITY, AND SCHEDULING
6.1 On a monthly basis, in accordance with the Intel WW calendar, Intel
shall provide the Supplier with a new 26-week forward-looking build
plan schedule for finished good requirements. When a new build plan
schedule is submitted by Intel to the Supplier, the Supplier shall
provide Intel with a Response To Forecast (RTF) within the response
time specified below in paragraph 6.2. If/when RTF is approved by
Intel, this RTF becomes the active build plan schedule and is assumed
to be capacity and materials feasible.
On a weekly basis, Intel shall conduct a build plan review meeting with
the Supplier. During this meeting, the Supplier shall provide
information regarding; commits to the build plan schedule, prior weeks'
output data, and quantity of consigned Intel Flash component inventory
in raw material, WIP, and/or finished goods.
On a weekly basis, Supplier shall provide Intel with Supplier's actual
consumption of consigned Intel Flash Memory components for production,
loss, and yield, as well as quantity of finished goods shipments.
BUILD PLAN FLEXIBILITY
Supplier shall provide Intel with two of flexibility options for
altering the most current build plan schedule: volume flexibility and
product mix flexibility.
Volume Flexibility: Intel may provide the Supplier with an Exception
request to an active build plan schedule. Through an Exception, Intel
may request the Supplier to either increase or decrease the volume
builds by 25% for each week starting from, and including, the 6th
business day from the date the Exception request is submitted. Also,
through an Exception request, Intel may request the Supplier to either
increase or decrease the volume builds by 50% for each week starting
from the 6th week from the date of the Exception request.
When an Exception is approved by Supplier, this Exception becomes the
active build plan Rev and is assumed to be capacity and materials
feasible.
Product Mix Flexibility: Intel may request revisions to the
distribution or mix of the product line items specified on an active
build plan schedule or build plan Rev. Starting from and including the
6th business day from the date of the Exception, Intel may request that
the mix of line items being manufactured are revised within the limits
of capacity and materials availability.
4 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
5
All Forecasts are for planning purposes only and are not commitments to
purchase. As such, all Forecasts are subject to change and are not
commitment(s). Supplier understands that Intel's demand is dependent on
market and other factors beyond Intel's control. This may result in
demand being reduced or eliminated.
6.2 Supplier will provide confirmation of receipt of Intel Releases and
feasibility of exception requests as follows:
Type of Request Response Time
--------------- -------------
Weekly Production Updates 24 hours local time after receipt by Supplier
Upside Flexibility Requests 48 hours local time after receipt by Supplier
NPI-Beta/Pilot Requests 48 hours local time after receipt by Supplier
Standard Price Quotes 5 business days local time after receipt by Supplier
6.4 Supplier acknowledges that time is of the essence of this Agreement,
and Supplier agrees to maintain one-hundred percent (100%) on-time
delivery. "On-time delivery" means that a delivery occurs during the
period five (5) business days before the delivery dates identified in
Intel's Release. Supplier agrees to comply with the delivery lead times
set forth in Addendum B. Supplier shall monitor and report weekly
delivery and shipping performance as required in Addendum A. Intel may
return nonconforming, early, or excess shipments at Supplier's risk and
expense.
6.5 Supplier shall promptly notify Intel in writing if Supplier is unable
to make any scheduled delivery. Such notice shall state the reasons
for the delay and a corrective action plan to alleviate impact of the
delay to Intel. At a minimum, Supplier shall use best efforts to remedy
delays and to complete shipment of Product(s) in a timely manner,
including without limitation, expedited delivery and use of additional
temporary personnel at no additional charge to Intel.
6.6 Intel may reschedule any Release in whole or in part at any time.
Supplier will use best efforts to comply with Intel's rescheduling
requests. Intel may push out a Release one time to a maximum of 60
days. Intel will pay a storage fee of 1%/ month on any Materials for
these delayed Releases that cannot be used for other Releases or used
for other customers. A second push out of a Release or a push out
beyond 60 days will be handled as a canceled release per section 6.7.
6.7 Intel may cancel all or any part of any Release at any time. Supplier
shall stop work immediately upon receipt of such notice. Intel shall
not incur charges for materials which can be used for other Intel
Product(s) or Supplier's customers. Regardless of material lead time,
Intel's payment obligations shall not exceed the following: Intel will
assume all Purchase Orders for components related to the release which
are non cancelable and cannot be used for another Intel release or
supplier product. Intel will maintain the right to sell to Supplier
products purchased through such assumed Purchase Orders, at Intel's
cost, for use in future releases.
6.8 Upon payment of Supplier's claim, Intel shall be entitled to all work
and materials paid for. Before assuming payment obligation under this
section, Intel may inspect Supplier's inventory and audit all relevant
documents prior to paying Supplier's invoice.
7.0 TERM AND TERMINATION
7.1 The term of this Agreement shall begin on the Effective Date and
continue for one (1) calendar year. This Agreement shall automatically
renew for successive one (1) calendar year terms.
7.2 At Intel's option, Product(s) may be scheduled for delivery up to six
(6) months following expiration of this Agreement.
5 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
6
7.3 Not withstanding the above, Intel may terminate this Agreement in whole
or in part at any time and for any reason upon giving) written notice
to Supplier. If said notice is provided ninety days in advance of
cancellation, Intel's obligation shall not exceed Supplier's total cost
for the materials canceled. If notice is provided less than ninety
days in advance of cancellation date, Intel's obligation shall not
exceed Supplier's total cost for the materials canceled, plus
reasonable administrative and labor costs as stated in paragraph(s) 6.7
and 6.8 above.
7.4 In the event of termination on the part of either Intel or Supplier,
Supplier will return consigned equipment (identified in Addendum D) and
materials at Intel's expense.
8.0 ACCEPTANCE AND WARRANTY
8.1 All Product(s) are subject to Intel's inspection and test before final
acceptance at Intel's premises. If any inspection or test is made on
Supplier's premises, Supplier shall provide Intel's inspectors with
reasonable facilities and assistance at no additional charge. Neither
inspection nor acceptance by Intel shall constitute a waiver of any
defect or nonconformity.
8.2 Intel shall have the right to reject any Product(s) found to be
defective or non-conforming in material, workmanship, and/or processes
or which fails to conform with the Specifications set forth in Addendum
A. Supplier shall promptly replace or correct such Product(s) at no
additional charge to Intel. In addition, at Intel's request, Supplier
will provide root cause analysis and corrective action plans for
rejected Product(s).
8.3 Supplier warrants that all Product(s) furnished hereunder shall be
merchantable, free from defects in workmanship and material, and shall
conform to the specifications set forth in Addendum A. During a period
of one (1) year after Intel's acceptance of Product(s), at Intel's
option, Supplier shall promptly repair or replace the Product(s) or
refund the purchase price and cost of shipment of all non-conforming
Product(s)' at no cost to Intel and will pay Intel the cost of
recalling or replacing any non-conforming Product(s) already shipped by
Intel and in the field. Supplier will pay all costs of transportation
of defective Product(s) by Intel to the facility, and return of
repaired or replacement Product(s) by Supplier to Intel. Supplier shall
bear the risk of loss of such Product(s) while in transit. Cost of
recall shall include all costs associated with the following;
identifying and locating all defective parts, notifying all affected
Intel customers of said defective parts, replacement of said defective
parts, cost of shipping both defective parts back to Intel for
replacement and shipping of replacement parts to Intel's customers, as
well as any support services required to accomplish these tasks.
8.4 Supplier shall use best efforts to maintain one-hundred percent (100%)
quality acceptance levels as measured by Intel in accordance with the
quality specifications set forth in Addendum B. Supplier shall be
responsible for any expenses that result because Supplier does not meet
all quality specifications set forth herein. Such expenses may include,
but are not limited to (i) the cost of recalling per 8.3 above,
correcting, or replacing defective units in the field; (ii) shipping
additional Product(s) at Supplier's expense and risk, (iii) increasing
inspection, and (iv) providing personnel at Intel's site to assist in
problem resolution or rework of material. Supplier agrees to exercise
reasonable efforts to pull in the next scheduled shipment to fill
Product(s) void caused by any shipment rejected by Intel.
8.5 As used in this Section, the term "Epidemic Failure" means a specific
product failure affecting five percent (5%) or more of a specific
Product(s) weekly shipment or release, whichever is smaller, under
warranty, which is a direct result of a defect in Suppliers material
and workmanship. In the event of an Epidemic Failure, Supplier shall
perform root cause analysis of the failure and cooperate with Intel to
implement remedial actions necessary to correct the failure mode.
Furthermore, without limiting its obligations pursuant to the warranty
provisions set forth above, Supplier shall reimburse Intel for any and
all standard freight and labor charges incidental to the
6 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
7
Epidemic Failure, including, without limitation, the cost of recalling
as per 8.3 above, or replacing the affected Product already shipped by
Intel to Intel's distribution channel and to end customers.
8.6 Supplier shall have no liability or responsibility under section 8.5
above for any loss or damage to the extent that any such Epidemic
Failure claims are the result of (i) Supplier's compliance with Intel's
supplied Specifications, (ii) the negligence of Intel, (iii)
modification or alteration of the Product(s) by a party other than
Supplier, and (iv) defects in Intel supplied components.
8.7 Intel or it's customers may inspect work performed by Supplier and
Supplier's suppliers during normal business hours, including work
performed in Supplier facilities or facilities of Supplier's suppliers
upon 24 hours written notice. If any inspection is made by Intel upon
Supplier's facilities of the facilities of Supplier's supplier,
Supplier shall assist ensure reasonable facilities are available for
the safe and efficient completion of the inspection at no charge.
9.0 RETURN OF DEFECTIVE MATERIALS
9.1 Supplier shall issue a credit memo with a Return Material Authorization
("RMA") tracking number for one-hundred percent (100%) of the purchase
order price for non-conforming Product(s) returned by Intel for
functional and non-functional defects. Credit shall be given against
Releases. Intel reserves the right of inspection to determine root
cause.
9.2 Supplier shall pay freight charges for the return of non-conforming
Product(s) sent from Intel's facility to Supplier and to return
non-conforming Product(s) to Intel's designated facility.
9.3 For return of non-conforming Product(s) which Supplier demonstrates to
Intel to be conforming, Intel shall pay round trip freight and other
specific costs associated with said Product(s) returned to Intel's
designated facility.
10.0 PACKING AND SHIPMENT
10.1 All Items shall be FOB Austin, Texas or as otherwise specified in the
Release. All Items shall be prepared for shipment in a manner which (i)
follows good commercial practice; (ii) is acceptable to common carriers
for shipment at the lowest rate; (iii) is adequate to ensure safe
arrival; and (iv) meets Intel packaging requirements as specified in
provided documents. Supplier shall xxxx all containers with necessary
lifting, handling and shipping information, purchase order number,
date of shipment and the names of the Buyer and Supplier. Buyer shall
notify Supplier of. the method of shipment and expected delivery date.
If no instructions are given, Supplier shall select the most cost
effective carrier, given the time constraints known to Supplier.
Supplier shall ship only the quantity of Items specified in the
Release. Buyer may return at Supplier's expense any Items in excess of
the quantity stated in the Release.
11.0 INVENTORY CONTROL
11.1 Supplier will track and account for all inventory within Supplier's
facility.
11.2 Intel reserves the right to determine what materials will be consigned
to Supplier and what materials will be purchased by Supplier (`turnkey'
materials) for use in Intel Product(s).
11.3 In the event Intel directs Supplier to purchase turnkey materials,
Supplier agrees to put forth reasonable efforts in negotiating
competitive turnkey material prices for Intel Product(s).
11.4 Supplier shall be solely responsible for all costs associated with
purchasing turnkey materials for Intel Product(s), including but not
limited to, risk of loss and inventory variance. Intel agrees to
compensate Supplier for purchasing services via the overhead rate
defined in Addendum A.
7 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
8
11.5 Materials consigned to Supplier by Intel are subject to Section 20.0,
Consignment Provisions. Consigned materials will be classified in
categories by Intel Finance based on item value.
11.6 Intel may consign materials to Supplier classified as "High Value Units
(HVU)", including but not limited to Flash memory components. Supplier
agrees to implement and maintain appropriate security and accounting
procedures. Supplier also agrees to allow Intel Security and/or Intel
Risk Assessment to perform audits to ensure compliance.
11.7 Intel may consign materials to Supplier that are not classified HVU,
but still require heightened security. Supplier agrees to treat items
identified as such.
11.8 Supplier agrees to audit consigned inventory per the category specific
cycle counting schedules as below:
Category Count Frequency Count Sample Requirements
-------- --------------- -----------------------------------------
HVU Weekly 100% every week
non-HVU Quarterly Minimum 25% per month and 90% per quarter
11.9 Supplier shall adhere to the following cycle count minimum variance
guidelines for consigned inventories:
Category GUV
-------- ---
HVU 0.5%
non-HVU 3.0%
11.10 Supplier shall contact Intel immediately if reconciliation variance
occurs with HVU and non-HVU material. Supplier shall report weekly
cycle count results to Intel within one (1) working day from the end of
the cycle count. Supplier's report shall include
investigation/corrective action status for any measured variances
outside the guidelines herein.
11.11 Supplier bears all risk of loss for Intel consigned inventory and shall
reimburse Intel, at Intel's request, for the best customer price of
Intel consigned inventory variances in excess of the guidelines herein.
Supplier is responsible for all variances on turnkey material.
11.12 Supplier shall generally not hold finished goods inventory for greater
than eight (8) hours. If Supplier holds finished goods inventory for
any time greater than eight (8) hours, the finished goods shall be
located in a secured area and controlled as consigned materials.
Supplier agrees to take necessary security measures to assure all
finished goods are protected from theft or damage.
11.13 Supplier shall maintain a documented and effective material disposition
and control process. This will include a quarantine area to segregate
discrepant material and finished goods. For HVU consigned materials and
finished goods, the quarantine area shall meet HVU security
requirements. Intel will review and disposition consigned materials.
12.0 NEW DEVELOPMENTS
12.1 All services performed by Supplier under this Agreement are exclusively
for Intel. Supplier will assign and hereby does assign to Intel all
right, title and interest to those things developed for Intel,
henceforth known as "Intellectual Property Improvements" or "IPI",
including, but not limited to inventions, designs, trademarks,
discoveries, formulas, processes, plans, specifications,
8 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
9
guidelines, graphics, drawings, films, videotapes, slides, scripts,
software programs, software documentation, training materials,
illustrations, ideas, copyrightable works, trade secrets or other ideas
and materials made or conceived regarding improvements to Intel
specified manufacturing or assembly processes or Product(s) by
Supplier, its employees, subcontractors, consultants or agents, during
the term of and arising out of services performed under this Agreement,
which were not in existence before this agreement, or for which Intel
has not paid a Non-Recurring Engineering charge or tooling charge.
Upon Intel's request, Supplier shall execute an assignment of copyright
and any other relevant intellectual property rights to Intel covering
any copyrightable deliverables accepted by Intel hereunder. Supplier
shall treat all IPI as Intel Confidential Information under Section 15
below, and shall use all IPI only for manufacturing Product(s) under
this Agreement.
12.2 Supplier shall assist Intel, at Intel's expense, in obtaining,
registering, perfecting and enforcing all patents, trademarks, mask
work rights or copyrights necessary to protect Intel's interest in the
items assigned to Intel pursuant to the foregoing paragraph. This
includes the disclosure of all pertinent information, the execution of
applications, specifications, oaths and assignments and any other
papers by Supplier necessary to ensure said protection for Intel.
12.3 All documentation developed by Supplier and connected with Supplier's
services to Intel hereunder or associated with deliverables assigned to
Intel pursuant to the foregoing, shall be the exclusive property of
Intel. Upon Intel's request, Supplier shall make all such documentation
available to Intel.
12.4 Supplier agrees to allow Intel and Supplier to jointly escort Intel
customers and/or suppliers through Supplier facilities.
13.0 OWNERSHIP AND BAILMENT RESPONSIBILITIES
13.1 Any specifications, drawings, schematics, technical information, data,
tools, dies, patterns, masks, gauges, test equipment and other
materials furnished or paid for by Intel shall (i) be kept
confidential, (ii) remain or become Intel's property, (iii) be used by
Supplier exclusively for Intel's orders, (iv) be clearly marked as
Intel's property and segregated when not in use, (v) be kept in good
working condition at Supplier's expense except for pre-approved
extraordinary calibration costs, and (vi) be shipped to Intel promptly
on demand. Supplier shall insure Intel's property and be liable for
loss or damage while in Supplier's possession or control, ordinary wear
and tear excepted.
13.2 Consigned Materials. Supplier's use of materials consigned by Intel to
Supplier shall be governed by the terms and conditions of the
Consignment Provisions set forth in Section 20.0.
13.3 Bailment of Equipment. Supplier's use of equipment supplied by Intel
shall be governed by the terms and conditions of the Loan of Equipment
and Bailment Provisions set forth in Addendum D.
14.0 INSURANCE
14.1 General Liability. Without limiting or qualifying Supplier's
liabilities, obligations or indemnities otherwise assumed by Supplier
pursuant to this Agreement, Supplier shall maintain, at its sole cost
and expense, Commercial General Liability and Automobile Liability
Insurance with limits of liability not less than $10,000,000.00 per
occurrence and including liability coverage for bodily injury or
property damage (i) assumed in a contract or agreement pertaining to
Supplier's business and (ii) arising out of Supplier's Product,
services or work. Supplier's insurance shall be primary, and any
applicable insurance maintained by Intel shall be excess and
non-contributing. The above coverages shall name Intel as additional
insured, and shall contain a severability of interest clause.
9 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
10
14.2 Fire and Casualty Insurance. Supplier shall secure, pay for, and at all
times during the terms hereof maintain, insurance providing coverage
upon Supplier's premises, any loaned equipment, materials, components,
consigned inventory and work in process in an amount equal to the
guaranteed replacement costs thereof, and insuring against theft, fire
and other risks normally covered by standard all-risk property
insurance. Supplier shall bear the cost of any deductible or
co-insurance and, in the event of a loss, Supplier shall reimburse
Intel for such deductible or co-insurance. Supplier shall provide Intel
with a certificate of insurance showing Intel as loss payee or
equivalent with provision for no less than thirty (30) days written
notice to Intel of insurance termination or material changes in
coverage.
14.3 Employer's Liability. Supplier shall also maintain statutory Workers'
Compensation coverage, including a Broad Form All States Endorsement in
the amount required by law, and Employers' Liability Insurance in the
amount of $1,000,000.00 per occurrence. Such insurance shall include an
insurer's waiver of subrogation in favor of Intel.
14.4 Certificate of Insurance. Supplier shall provide Intel with properly
executed Certificate(s) of Insurance prior to commencement of any
operation hereunder and shall notify Intel, no less than 30 days in
advance, of any reduction or cancellation of the above coverages.
14.5 Insurance Inspections
Supplier shall permit Intel to perform reasonable insurance and safety
inspections on and around Supplier's manufacturing facilities. Supplier
agrees to implement, at no cost to Intel, reasonable recommendations of
safety and fire inspectors consistent with local laws and Supplier's
company procedures to eliminate the risk of fire or hazard to
personnel, equipment, materials and work in process. Intel shall
conduct such inspections so as to minimize disruptions and schedule
impacts to Supplier.
14.6 All insurance required hereunder shall be written by reputable
companies acceptable to Intel.
15.0 CONFIDENTIALITY AND PUBLICITY
15.1 During the course of this Agreement, Supplier may be provided access to
Intel's confidential information and materials. Supplier agrees to
maintain such information in accordance with the terms of this
Agreement and any applicable separate nondisclosure agreement between
Intel and Supplier. At a minimum, Supplier agrees to maintain such
information in confidence, to take all reasonable precautions to
prevent unauthorized disclosure, and to use such information only
within the scope of this Agreement until the information becomes
publicly available through no fault of Supplier. Supplier represents
that no information disclosed by Supplier to Intel, in any form
whatsoever, is the confidential information of any corporation,
individual or association not a party to this Agreement.
15.2 Supplier agrees to maintain all specifications, equipment, tooling
costs/pricing, materials, drawings, schematics, technical information
and all related materials, reports, Forecasts, or documentation
furnished by Intel or generated by Supplier, (including IPI), during
performance of this Agreement, in confidence. Supplier agrees to use
such specifications, drawings, schematics, technical information and
other material only for performance of this Agreement. If Supplier's
employees or representatives are granted access by Intel to any of
Intel's computer networks or systems, Supplier shall treat all of
Intel's data and information accessed from such systems in the same
manner other described herein. In addition, Supplier, its employees
and representatives shall not use or disclose for any purpose any
aspect or portion of third party data or information which it may
encounter by virtue of access to Intel's computer networks. Supplier
shall not place any Intel confidential information on any unsecured
network such as the "Internet."
10 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
11
15.3 The parties agree that neither will disclose the existence of this
Agreement, nor any of the details, to any third party without the
specific written consent of the other. If disclosure of this Agreement
or any of the terms hereof is required by applicable law, rule or
regulation, or is compelled by a court or governmental agency,
authority or body: (i) the parties shall use all legitimate and legal
means available to minimize the disclosure to third parties of the
content of the Agreement, including without limitation seeking a
confidential treatment request or protective order; (ii) the disclosing
party shall inform the other party at least ten business days (i.e.,
not a Saturday, Sunday or a day on which banks are not open for
business in the geographic area in which the non-disclosing party's
principal office is located) in advance of the disclosure; and (iii)
the disclosing party shall give the other party a reasonable adequate
opportunity to review and comment upon the disclosure, and any request
for confidential treatment or a protective order pertaining thereto,
prior to making such disclosure.
15.4 During the course of an agreement between Supplier and Intel, Intel may
have or may be provided access to other confidential information and
materials of the Supplier. Intel agrees to protect such information in
accordance with the terms of a Confidential Non-Disclosure Agreement
("CNDA") between the Parties.
15.5 The obligations stated in this Section (15) shall survive the
expiration or termination of this Agreement.
16.0 LIMITATION OF LIABILITY
INTEL WILL NOT BE LIABLE UNDER THIS AGREEMENT FOR ANY INCIDENTAL,
CONSEQUENTIAL, OR SPECIAL DAMAGES INCLUDING, BUT NOT LIMITED TO, LOSS
OF PROFITS, BUSINESS INTERRUPTIONS, OR LOSS OF USE, IRRESPECTIVE OF
WHETHER INTEL HAS ADVANCE NOTICE OF THE POSSIBILITY OF ANY SUCH
DAMAGES.
17.0 INDEMNIFICATION
17.1 Supplier agrees to protect, defend, indemnify and hold Intel harmless
from and against any and all claims, liabilities, demands, penalties,
forfeitures, suits, judgments and the associated costs and reasonable
expenses (including attorney's fees), which Intel may hereafter incur,
become responsible for or pay out as a result of death, personal
injury, or bodily injury to any person, destruction or damage to any
property, non-compliance with applicable labor and employment laws,
contamination of or adverse effects on the environment and any clean up
costs in connection therewith, or any violation of governmental law,
regulation, or orders, caused, in whole or in part, by (a) Supplier's
breach of any term or provision of this Agreement, (b) any negligent or
willful acts, errors or omissions by Supplier, its employees, officers,
agents, representatives or sub-contractors in the performance of this
Agreement, or (c) Product(s) manufactured by Supplier's or services
provided by Supplier not according to specifications.
17.2 Intel agrees to protect, defend, indemnify and hold Supplier harmless
from and against any and all costs and expenses (including attorney's
fees) which Supplier may hereafter incur, become responsible for or pay
out as a result of death, personal injury and bodily injury proximately
caused by the negligence or willful acts or omissions by Intel or its
employees.
18.0 HAZARDOUS MATERIALS
18.1 If Product(s) or services provided hereunder include hazardous
materials as defined by relevant local, state, and national law,
Supplier represents and warrants that Supplier and its personnel
providing services to Intel understand the nature of and hazards
associated with the design and/or service of Product(s) including
handling, transportation, and use of such hazardous materials, as
applicable to Supplier. Supplier assumes all liability resulting from
Supplier's actions
11 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
12
in connection with (i) providing such hazardous materials to Intel, or
(ii) the use of such hazardous materials in providing services to
Intel.
18.2 Upon request from Intel, Supplier shall provide Intel with material
safety data sheets and any other documentation reasonably necessary to
enable Intel to comply with applicable laws and regulations.
18.3 Supplier hereby certifies that Product(s) supplied to Intel do not
contain and are not manufactured with any ozone depleting substances,
as those terms are defined by law.
19.0 CUSTOMS CLEARANCE AND EXPORT
19.1 Upon Intel's request, Supplier shall promptly provide Intel with a
statement of origin for all Product(s) and with applicable customs
documentation for Product(s) wholly or partially manufactured outside
of the country of import.
19.2 In the event Product or any technical information is exported from the
United States or exported/re-exported from a foreign destination by
Supplier, Supplier shall insure that the distribution and
export/re-export of product is in compliance with all laws,
regulations, orders, or other restrictions of the U.S. Export
Administration Regulations. Supplier agrees that neither it nor any of
its subsidiaries will export/re-export any technical data, process,
product, or service, directly or indirectly to any country for which
the United States government or any agencies thereof requires an export
license or other government approval without first obtaining such
license or approval.
20.0 CONSIGNMENT PROVISIONS
20.1 CONSIGNED INVENTORY IDENTIFICATION AND USE
Supplier shall segregate and conspicuously xxxx materials, tools, and
equipment consigned to Supplier by Intel pursuant to this Agreement
(hereinafter referred to as "Consigned Inventory") as Intel property,
and shall use such materials exclusively for the performance of
services in accordance with this Agreement.
20.2 SECURITY INTEREST
Supplier shall keep the Consigned Inventory free from liens or
encumbrances of any kind. Intel retains a security interest in the
Consigned Inventory, and any proceeds or after-acquired property
pursuant to the Uniform Commercial Code. Supplier agrees to cooperate
with Intel in signing and filing any financing statements or other
documents which Intel may deem necessary to protect and perfect its
title and security interest in the Consigned Inventory as provided
herein. Intel may notify other creditors of Supplier who have filed
financing statements covering Intel's inventory that Intel claims title
to the Consigned Inventory.
20.3 RECORD KEEPING, INSPECTION AND AUDIT OF CONSIGNED INVENTORY
20.3.1 Supplier shall account for 100% of any inventory within Supplier's
facility. Supplier shall perform scheduled physical cycle counts of all
such inventory according to mutually agreeable procedures. Intel
reserves the right to observe and audit cycle counts. Supplier shall
provide, within one (1) working day, results of the cycle counts. In
addition, Supplier shall provide, within one (1) working day,
appropriate records of all receipts, shipments, and returns in such
consigned inventory. Supplier shall immediately notify Intel of any
quantity or part number variance detected in the cycle count.
12 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
13
20.3.2 Intel reserves the right to audit Supplier's accounting procedures at
Supplier's facility with 24 hours notice. In the event of a discrepancy
between the records of Supplier and the records of Intel regarding the
Consigned Inventory, the records of Intel shall be presumed correct and
Supplier shall be responsible for any shortages in the Consigned
Inventory unless Supplier objects in writing with substantiating
documentation. Intel shall have the right to inspect and audit the
Consigned Inventory at all reasonable times.
20.3.3 Supplier agrees to implement and adhere to the following loss control
measures:
a) Receipt Verification - All Consigned Inventory shall be verified for
part number and quantity accuracy. Upon verification, the Consigned
Inventory shall be immediately moved by Supplier to a secured area such
as a locked cage. Supplier shall immediately notify Intel of receipt of
consigned inventory and verify part number and count accuracy. In the
event of a variant, Intel is to be notified immediately and such
variants must be confirmed by Intel. In the event of a discrepancy
between the records of the Supplier and the records of Intel regarding
the consigned inventory, the records of Intel shall be presumed
correct. The Supplier shall be responsible for any shortages in the
consigned inventory unless Supplier can produce substantiating
documentation that proves otherwise.
b) Proper Segregation - Consigned Inventory shall be segregated from the
materials of other Supplier customers at all times, and must be placed
in a secured area. In addition, all Intel consigned inventory that has
been identified for use in Intel prototype products shall be kept
segregated from consigned inventory for Intel production products.
c) Limited Access - Access to the secured area shall be limited to
authorized Supplier and escorted Intel employees.
d) Secured Area Owners - For each shift, one (1) Supplier employee shall
be designated as responsible for the accuracy of the inventory at the
secured area.
e) Security Incident Report Forms - Security Incident Report Forms shall
be used to explain the circumstances around any missing Consigned
Inventory. The form shall require a description of the missing
Consigned Inventory and Supplier's corrective actions taken to minimize
reoccurrence. A copy of all completed Security Incident Report forms
shall be provided to Intel immediately upon Suppliers knowledge of
missing Consigned Inventory.
f) Issuing a Work Order - Consigned Inventory shall be moved from the
Consigned Inventory secured area to the floor only when needed for a
work order. The issuance of a work order to cover for Consigned
Inventory lost on the production floor is not allowed unless a proper
Security Incident Report form has been completed.
g) Damaged materials - Any damaged material shall be properly segregated
from undamaged material quarantined for review and disposition by
Intel.
h) Rework - Product(s) returned for rework shall be considered HVU
consigned material, and thereby Supplier shall control as such.
20.4 RISK OF LOSS AND INSURANCE
Supplier shall bear the risk of loss or damage for all Consigned
Inventory, including but not limited to "line scrap" above the
attrition rate in addendum A, if such loss occurs as a result of
Supplier's manufacturing process, and is not related to defects in
materials as supplied by Intel. Supplier shall keep the Consigned
Inventory insured against theft, fire and other risks normally covered
by standard all-risk property insurance, in the amount of the
replacement value. Supplier shall bear the cost of any deductible, and
in the event of a loss, Supplier shall reimburse Intel for such
13 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
14
deductible. Supplier shall provide Intel with a certificate of
insurance showing Intel as an additional insured, with provision for no
less than thirty (30) days written notice to Intel of insurance
termination or material changes in coverage. Supplier shall immediately
notify Intel in writing of a material variance, loss or damage, and
shall pay Intel the material replacement cost at best customer pricing.
Payment terms are net sixty (60) days from Supplier's receipt of
notification.
21.0 SUPPLIER'S FACILITIES
Supplier agrees to perform all services under this Agreement at the
following facility or facilities:
Supplier's Facility Address(es):
XeTel Corporation
0000 Xxxxx Xxxxx Xx.
Xxxxxx, Xxxxx
Intel shall be permitted to inspect and approve any such facility to
evaluate security and safety policies prior to Supplier beginning
performance under this Agreement. Supplier shall not utilize other
facilities to manufacture Product(s) without prior written permission
from Intel.
14 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
15
21.3 FLEXIBILITY
Based on Forecasts provided by Intel, Supplier shall notify Intel when
capacity available to Intel drops below 150% of forecasted volumes.
22.0 GENERAL
22.1 Contingencies. The Supplier shall be responsible for its failure to
perform due to causes beyond its reasonable control such as acts of
God, fire, theft, war, riot, embargoes or acts of civil or military
authorities. If delivery is to be delayed by such contingencies,
Supplier shall immediately notify Intel in writing and Intel may either
(i) extend time of performance, or (ii) terminate the uncompleted
portion of the order at no cost to Intel.
22.2 Assignment. Intel may assign or delegate its rights and obligations, or
any part thereof under this Agreement to any or all of its wholly-owned
subsidiaries. Supplier may not assign or factor any rights in nor
delegate any obligations under this Agreement or any portion thereof
without the written consent of Intel.
22.3 Compliance With Laws. Supplier shall comply with all national, state
and local laws and regulations governing the manufacture,
transportation or sale of Product(s) or the performance of services in
the course of this Agreement.
22.4 Governing Law. This Agreement shall be construed and interpreted
according to the substantive laws of the State of Delaware, U.S.A.,
excluding its choice of law provisions.
22.5 SPECIFIC PERFORMANCE. Notwithstanding anything else contained in this
Agreement, Supplier hereto agree that failure to perform certain
obligations undertaken in connection with this Agreement would cause
irreparable damage, and that monetary damages would not provide an
adequate remedy in such event. Supplier further agrees that failure to
deliver against accepted Purchase Orders, or to deliver confirmed
supply or pricing, are such obligations. Accordingly, it is agreed
that, in addition to any other remedy to which the Supplier may be
entitled, at law or in equity, Intel shall be entitled to injunctive
relief to prevent breaches of the provisions of this Agreement, and an
order of specific performance to compel performance of such obligations
in any action instituted in any court of the United States or any state
thereof having subject matter jurisdiction. Such injunctive relief
shall extend until such time as Intel has established a new supplier to
perform the scope of work as set forth in this contract.
22.6 Independent Contractor. Supplier hereto is an independent contractor.
Supplier does not have the authority to act for and/or bind Intel in
any way, or to represent that Supplier is authorized to act on the
behalf of Intel. Nothing herein will be construed as forming a
partnership or agency between the Parties.
15 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
16
22.7 Notices and Requests. All notices and requests required under this
Agreement will be in writing, will reference this Agreement and will be
deemed given upon delivery if personally delivered or upon receipt if
sent by registered or certified mail, postage prepaid, return receipt
requested, to the persons and addresses listed below, which persons and
addresses may be modified upon subsequent written notice:
NOTICE TO INTEL: NOTICE TO SUPPLIER:
Intel Corporation XeTel Corporation
0000 Xxxxxxx Xxxx Xxxx 0000 Xxxxx Xxxxx Xx.
Xxxxxx, Xx. 00000 Austin, Texas
Attention: Purchasing Dept. Attention: Legal Department
Copy to: Xxxxxx Xxxxxxx Copy to: Xxxx Xxxxxxx
22.8 Inspections and Audits. Intel may, for a period of (one) year following
termination of the Agreement, audit Supplier's relevant records to
verify performance by Supplier of its obligations hereunder, including
pricing. Intel will hold the audited records in confidence and will not
disclose any information derived therefrom to any other person or
organization without the prior written consent of Supplier. Audits will
be conducted not more than twice each calendar year. Audit costs will
be borne by Intel, unless audit uncovers a material performance
deviation by Supplier, in which case audit costs will by borne by
Supplier.
22.9 Merger, Modification and Waiver. This document (including its
attachments) is the entire understanding between Intel and Supplier
with respect to the subject matter hereof and merges all prior and
contemporaneous agreements, dealings and negotiations. No modification,
alteration or amendment shall be effective unless made in writing and
signed by duly authorized representatives of both parties. No waiver
of any breach hereof shall be held to be a waiver of any other or
subsequent breach. All Releases issued to Supplier by Intel during the
term of this Agreement shall be governed only by the terms and
conditions of this Agreement notwithstanding any preprinted terms and
conditions on Supplier's acknowledgment or Intel's Release.
22.10 Severability. If any provision of this Agreement is determined to be
invalid, illegal, or unenforceable, such determination shall not affect
the validity of the remaining provisions.
LEGAL OK
--------
/s/ [ILLEGIBLE] 4/16/98
INTEL CORPORATION SUPPLIER
/s/ [ILLEGIBLE] /s/ W.A. PETEN
----------------------------------- --------------------------------------
Signature Signature
W.A. Peten
----------------------------------- --------------------------------------
Printed Name Printed Name
Vice President
----------------------------------- --------------------------------------
Title Title
4/27/98
----------------------------------- --------------------------------------
Date Date
16 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
17
ADDENDUM "A"
PRODUCT SPECIFICATIONS AND
PRICE SCHEDULE
PRODUCT PRICING
Intel agrees to pay Supplier a price per unit of Product shipped (less the price
of any component other than Flash Memory components that are consigned) as
described below. Prices listed below are subject to change only after
negotiation and mutual agreement between Intel and the Supplier.
The cost of consigned Materials, lost or scrapped by Supplier due to their
assembly manufacturing process, in excess of 0.5%, will be credited to Intel at
"Best Customer" pricing.
PART SUPPLIER INTEL POUCH/ JEWEL UNIT
DESCRIPTION PART NUMBER PART NUMBER ASSEMBLY TEST TUBE MTRL MTRL COST MOH PRICE
----------- ----------- ----------- -------- ---- --------- --------- ----- -----
MiC 2MB 605141-005 $2.56 $0.39 $3.56 $0.43 $6.94
$2.56 $0.39 $3.79 $0.45 $7.19
MiC 4MB 605144-005 $3.31 $0.59 $4.29 $0.51 $8.70
$3.31 $0.59 $4.53 $0.54 $8.97
MiC 8MB 605749-001 $3.31 $0.78 $4.29 $0.51 $8.89
$3.31 $0.78 $4.53 $0.54 $9.16
VS 2MB 605334-002 IMC002FLSC $3.42 $0.55 $6.64 n/a $0.80 $11.41
VS 4MB 605336-002 IMC004FLSC $3.46 $0.56 $6.64 n/a $0.80 $11.46
VS 6MB 605723-001 IMC006FLSC $4.04 $0.57 $7.10 n/a $0.85 $12.56
VS 8MB 605729-002 IMC008FLSC $3.70 $0.59 $7.12 n/a $0.85 $12.26
VS 16MB 605730-002 IMC016FLSC $3.88 $0.65 $7.08 n/a $0.85 $12.46
X0 0XX 605214-005 IMC002FLSA $3.76 $0.54 $11.50 n/a $1.38 $17.18
X0 0XX 605217-003 IMC004FLSA $4.17 $0.59 $13.08 n/a $1.57 $19.41
S2 10MB 605387-002 IMC010FLSA $5.52 $0.63 $16.15 n/a $1.94 $24.24
S2 20MB 605389-002 IMC020FLSA $7.10 $0.65 $16.05 n/a $1.93 $25.73
S2+ 4MB 604578-006 IMC004FLSP $5.76 $0.68 $23.89 n/a $2.87 $33.20
S2+ 8MB 604852-004 IMC008FLSP $5.89 $0.70 $23.91 n/a $2.87 $33.37
S2+ 16MB 604850-006 IMC016FLSP $6.06 $0.71 $23.93 n/a $2.87 $33.57
S2+ 20MB 604579-005 IMC020FLSP $6.22 $0.73 $23.97 n/a $2.88 $33.80
00
XXXXXXXX "X"
QUALITY REQUIREMENTS, PERFORMANCE STANDARDS
Supplier will use the following documents as the primary criteria for Product
acceptance:
o IPC-A-610B II
o Intel Workmanship Standards (DOC # 99-0007-001)
o Intel Spec #XX-XXX; QA Requirements - Pre-weld
o Intel Spec #XX-XXX; QA Requirements - Post-weld
o Intel Spec #XX-XXX; QA Requirements - Packout
o ANSI/ASQCZ1.4 Sampling Procedures and Tables for Inspection by
Attributes
o PCMCIA Stress Test and Mechanical Requirements
o Various other Intel supplied Specifications as listed in the BOMs.
AOQL:
Intel will accept 2500 outgoing DPM; functional, mechanical, and visual on all
new products shipped during the first 30 days of prototype through production
volumes. After the first 30 days have passed, Buyer will accept a maximum of 500
outgoing DPM on subsequent shipments.
Intel will accept 1000 DPM SMT assembly defects (in accordance with above
specified documents) measured at final inspection prior to encasement of
assembly in cover set; provided said defects do not result in functional
failures when subjected to PCMCIA thermal and mechanical stresses.
Intel may elect to impose third party Source Inspection at Supplier's expense;
if at any time the DPM levels rise above the Intel accepted limits specified
above for more than three consecutive assembly lots of single or mixed product;
or, an "Epidemic Failure" occurs as described in paragraph 8.5. Intel and
Supplier shall agree on Qualified Source Inspection provider, within 72 hours of
imposition of this clause.
FUNCTIONAL TEST:
The Supplier will implement the Functional Test plan/Program provided by Intel
for the specific line item products. Intel will reserve the right to modify the
test procedure/program at the Supplier's location if necessary to meet DPM goals
at no additional cost to Intel.
All product that has been subjected to rework or repair during any phase of the
assembly operation, will receive a complete functional test to ensure
acceptability; even if it was subjected to functional test prior to the rework.
QUALITY REPORTS:
Supplier is to provide Intel with "First Pass" and "Final" yield reports
reflecting all inspection and test results; including Pareto analysis of top
three major defects. Reports are to be submitted at weekly intervals unless
waived in writing by Intel. The Supplier is to provide process control data
to Intel on request.
Intel and the Supplier are to meet quarterly to discuss quality/performance
issues and conduct routine audits of process and WIP.
TURNKEY MATERIAL:
Supplier will use Intel's Approved Manufacturers List (AML) for procurement of
all components and mechanical piece parts. Requests for deviations from the AML
are to be submitted in writing by the Supplier to Intel for written
authorization.
18 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
19
CHANGE REQUEST:
All product is to be assembled and encased only at the approved facility. Any
proposed change in location of manufacturing assembly/test facility must be
approved in writing by the Intel. Any process changes anticipated by the
Supplier to the production flow or process must be communicated in writing and
approved by Intel prior to implementation. Any changes that are implemented
prior to Intel's approval may result in product that is considered defective by
Intel and be returned for rework, testing, or credit.
GENERAL:
The Supplier is to generate controlled specification documents for the assembly
of each separate line item product identified in this document or future
addenda.
Supplier is required to maintain IS09002 certification throughout the duration
of this agreement.
19 INTEL CONFIDENTIAL
FOR REVIEW, INTEL RESERVES THE RIGHT TO FURTHER MODIFY
