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EXHIBIT NO. 10(d)
REPAIR SERVICES AGREEMENT
This Repair Services Agreement, and all exhibits and attachments hereto (the
"Agreement"), is entered into by and between Sun Microsystems, Inc., with a
principal office at 000 Xxx Xxxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 ("Sun"), and
Pinnacle Data Systems, Inc., with a principal office at 0000 Xxxx Xxxx, Xxxxx
Xxxx, Xxxx 00000 ("Repair Vendor").
1. SCOPE. This Agreement establishes the terms and conditions under which
Repair Vendor will provide, in the United States (the "Territory") and
on a non-exclusive basis, certain hardware repair services to Sun, and
is composed of (1) this Agreement; (2) Exhibit A, Statement of Work and
all exhibits attached thereto; and (3) Exhibit B, Project Specific
Terms.
2. DEFINITIONS.
2.1 "CONSIGNED INVENTORY" means Hardware used for the maintenance
and service of the Hardware delivered to Repair Vendor for
performance of Services and which Sun elects to consign to
Repair Vendor where deemed necessary by Sun in its sole
discretion. Consigned Inventory may be stocked at Repair
Vendor's facilities, the Sun Regional Stocking location and/or
any other Sun-designated site, as Sun directs.
2.2 "HARDWARE" means all hardware products listed in the SOW, as
amended by Sun, or in any Purchase Order issued by Sun, or any
other products delivered to Repair Vendor for purposes of the
provision of Services, as well as any materials, parts,
components or sub-assemblies thereof.
2.3 "NOTICE" means the formal notification required to be given as
specified in this Agreement in accordance with Section 16.7.
2.4 "REPAIRED OR REPLACEMENT HARDWARE" means (a) Hardware that is
repaired to full functionality by Repair Vendor ("Repaired
Hardware"); or (b) Hardware provided by Repair Vendor in
replacement of defective Hardware that is of new or of a like
new condition and of the same model and part number, but not
necessarily the same serial number, as the defective Hardware
originally shipped to Repair Vendor ("Replacement Hardware").
2.5 "SERVICES" means all Hardware maintenance, repair and/or other
services, set forth in the SOW and to be performed by Repair
Vendor under this Agreement.
2.6 "SERVICE MATERIALS" means those service related materials
(including tools, documentation, special test equipment,
manuals, and diagnostics) necessary for the maintenance,
repair and service of the Hardware that will be provided to
Repair Vendor by Sun in accordance with the terms set forth in
this Agreement.
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2.7 "SERVICE ORDER" or "PURCHASE ORDER" means a specific request
for Services, however denominated, in written or electronic
form, issued by Sun to Repair Vendor for specified Hardware.
2.8 "STATEMENT OF WORK" or "SOW" means the statement of work (as
it may be amended from time to time by Sun) attached to this
Agreement as Exhibit A.
2.9 "TRAINING MATERIALS" means all course materials, teacher
guides/lesson plans, student guides and information, and
training equipment that may be provided to Repair Vendor in
accordance with the terms set forth in this Agreement.
3. REPAIR VENDOR OBLIGATIONS.
3.1 HARDWARE REPAIR. Repair Vendor will perform the Services in
the Territory in accordance with the terms and conditions of
this Agreement. Services will conform to the scope of work
described in the SOW and corresponding Purchase Orders issued
by Sun. Repair Vendor will perform Services as an independent
contractor and in a professional and workmanlike manner,
consistent with Sun and industry standards and conforming to
applicable product specifications as defined in the SOW.
3.2 TIMELY DELIVERY OF SERVICES. Repair Vendor acknowledges and
agrees that time is that the full and timely provision of all
Services is a material condition of this Agreement. In
addition to any other remedies, Sun shall be under no
obligation to make payment under an existing Purchase Order
for Repair Vendor's failure to timely provide Services or to
achieve a milestone meeting the requirements of the SOW.
3.3 CHANGES IN SCOPE OF SERVICES. Repair Vendor agrees that it
will, upon the request of Sun, negotiate in good faith to
amend this Agreement to incorporate additional provisions
herein or to change the provisions hereof.
3.4 PERSONNEL. Repair Vendor will secure all personnel required to
perform Services pursuant to this Agreement. Repair Vendor
will use trained and qualified service personnel, as defined
by Sun from time to time, and employ adequate safety
precautions in performing its obligations hereunder. If Sun
determines that the presence or utilization of any personnel
is detrimental to the performance of Services, Repair Vendor
will replace such personnel with properly qualified personnel
as soon as is reasonably practical. In the event customers of
Sun so require, Repair Vendor will consent to, and have its
personnel submit to, a "Sunscreen" or similar background
check. If Sun customers require compliance with other
conditions prior to the provision of Services, Repair Vendor
will in good faith attempt to accommodate such customers'
requests. The parties agree that Repair Vendor is an
independent contractor and in no event will any personnel
hired by Repair Vendor be considered an employee or agent of
Sun. Nothing herein will be construed to grant to Repair
Vendor any right or authority to create any obligation,
express or implied, on behalf of Sun, or to bind Sun in any
manner whatsoever.
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3.5 SUN INFORMATION AND MATERIALS. Repair Vendor acknowledges and
agrees that Service Materials and Training Materials
(collectively "Sun Information and Materials") are proprietary
and Sun owns all right, title and interest, including
copyrights or other intellectual property rights, in and to
Sun Information and Materials and any and all ideas, concepts,
expertise, programs, systems, methodologies, data or other
materials embodied in, underlying or reduced to practice
therein. Repair Vendor agrees that Sun Information and
Materials shall be used solely for the purposes of performing
Services.
3.6 INDEMNITY AND INSURANCE. Repair Vendor agrees to defend,
indemnify and hold harmless Sun, its affiliates, directors,
officers, employees and agents from and against any and all
claims, demands, judgments and awards and expenses related
thereto (including court costs and reasonable fees of
attorneys and other professionals) brought or threatened by
any third parties, including Sun customers, arising out of
Repair Vendor's failure to comply with this Agreement or SOW,
including the warranties stated in Section 12, or arising out
of or resulting from the performance of Services, delivery of
Repaired or Replacement Hardware, or other conduct of Repair
Vendor's subcontractors, agents or employees. Sun will have no
authority to settle any claim without the prior written
consent of Repair Vendor if Repair Vendor will have any
obligation thereunder. Sun expressly reserves the right to
retain separate counsel to participate in the defense or
settlement of such claims.
3.7 INSURANCE.
3.7.1 MINIMUM INSURANCE REQUIRED. During the term of this
Agreement, Repair Vendor will obtain and maintain at
its own expense liability insurance with financially
reputable insurers (rated no lower than A-, X (i.e.,
A minus, 10) by A.M. Best) licensed to do business in
all jurisdictions where Services are performed. Such
insurance must be sufficient to protect Sun from any
claims described in Section 3.6, above, and in any
event no less than the policies and limits set forth
below. Repair Vendor will pay the premiums therefor,
and deliver to Sun, upon request, proof of such
insurance. Said insurance coverage may be modified or
terminated only upon thirty (30) days Notice to Sun.
3.7.1.1 Workers' compensation as required under any
workers' compensation or similar law in the
jurisdiction where Services are performed, with
an employer's liability limit of not less than
one million dollars ($1,000,000.00) per
occurrence/annual aggregate;
3.7.1.2 Commercial general liability, including
coverage for contractual liability and
products/completed operations liability, with a
limit of not less than five million dollars
($3,000,000.00) combined single limit per
occurrence for bodily injury, personal injury
and property damage liability;
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3.7.1.3 Business auto insurance covering the ownership,
maintenance or use of any owned, non-owned
hired automobile with a limit of not less than
one million dollars ($1,000,000.00) per
occurrence/annual aggregate for bodily injury,
including death and property damage liability;
3.7.1.4 "All Risks" property insurance, providing
coverage on a replacement cost basis, covering
(a) equipment owned, leased or used by Repair
Vendor to perform work or provide Services and
any Hardware, or (b) other property in the
care, custody or control of Repair Vendor which
is owned by Sun, including materials or
Hardware in transit to and from Sun's
facilities; and
3.7.1.5 Professional liability/errors and omissions
insurance, with a limit of not less than one
million dollars ($1,000,000.00) per occurrence.
3.7.2 CERTIFICATES OF INSURANCE. Repair Vendor will provide
Sun with certificates of insurance showing that the
foregoing insurance policies are in full force and
effect upon Sun's request. Any approval by Sun of any
insurance policies will not relieve Repair Vendor of
any responsibility hereunder, including claims in
excess of limits and coverages described above. Each
liability insurance policy obtained by Repair Vendor
will name Sun as an "additional insured" except for
the policy described in Section 3.7.1.1. Repair
Vendor will maintain professional liability/errors
and omissions insurance for a period of three (3)
years after expiration or termination of this
Agreement if coverage is provided on a claims made
basis. All other liability insurance policies denoted
above must be written on an occurrence form. Each
policy will expressly provide that it will not be
subject to cancellation or material change without at
least thirty (30) days prior Notice to Sun.
3.7.3 LIMITATIONS. Nothing contained in this Section 3.7
limits Repair Vendor's liability to Sun to the limits
of insurance certified or carried.
3.8 PERFORMANCE. Levels of service, quality and satisfaction will
be measured by Sun with the use of surveys and/or audits
performed either by Sun personnel or an independent company
engaged by Sun for such purpose. Repair Vendor agrees to
provide, in a format acceptable to Sun, any and all reports
and other information requested by Sun and to cooperate with
any surveys and/or audits which Sun may request.
3.9 CERTIFICATION. Repair Vendor will undertake any reasonable
action Sun may request in furtherance of Sun's retaining or
obtaining ISO 9001 or other certification, including
participating in the audit process and conducting equipment
calibration testing consistent with Sun quality standards.
3.10 LOCAL ACCOUNTABILITY/QUALITY ASSURANCE. In the event that
Services are not delivered in a manner consistent with the
provisions of this Agreement, the SOW
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or Sun's quality standards or other requirements, Sun will
issue to Repair Vendor a supplier corrective action or other
similar request ("SCAR"). Repair Vendor will consult with Sun
to develop within five (5) calendar days of receipt of a SCAR
an action plan to remedy the situation, including dates of
final redemption. Pending redemption of the deficiencies noted
in the SCAR, Sun reserves the right to withhold or xxxxx
payment of any outstanding Purchase Orders and to provide
Services itself or through a third party if Sun reasonably
determines that such interim action is required; whereupon,
Repair Vendor will promptly deliver to Sun any Hardware and
any related parts or components in connection with any work in
progress and otherwise cooperate fully with such interim
action. If the situation is not corrected within a total of
thirty (30) calendar days after receipt of the SCAR, or within
a length of time agreed to by Sun, Sun may, in addition to any
other available remedies, implement any corrective action Sun
deems necessary in its sole discretion without liability for
Services performed during the remediation period or in
furtherance of outstanding Purchase Orders, including
directing Repair Vendor to take additional corrective action,
removal or reassignment of Repair Vendor personnel,
terminating Repair Vendor's provision of further Services
within specific accounts and/or the geographic location
affected, and/or termination of this Agreement for material
breach. If replacement personnel are required, Repair Vendor
will bear all costs associated with replacing and training
such personnel.
4. SUN OBLIGATIONS AND RESPONSIBILITIES.
4.1 TRAINING. Sun will provide the training set forth in the SOW,
if any. Sun, at its sole discretion, may supply necessary
Training Materials to Repair Vendor from time to time.
4.2 SERVICE MATERIALS AND EQUIPMENT. Sun may in its sole
discretion loan to Repair Vendor, for the duration of this
Agreement, the equipment or other Service Materials set forth
in the SOW, subject to the terms of Sun's standard equipment
and/or Service Materials loan agreement. Repair Vendor will at
no charge make provisions for and effect moving of this
equipment and/or Service Materials to Repair Vendor's
facilities, and will be responsible for the maintenance
thereof. All equipment or other Service Materials must be used
solely for the purposes of performing Services.
4.3 TRAINING MATERIALS AND OTHER MATERIALS. Sun will provide to
Repair Vendor, for the duration of this Agreement and at no
charge, all Training Materials and other Sun information
deemed necessary by Sun for Repair Vendor to perform Services
set forth in the applicable SOW. If Services require the use
of any Sun software and/or accompanying documentation, Sun
will provide Repair Vendor a license to such software pursuant
to Sun's standard object code license, which Repair Vendor
agrees to be bound thereby. All Training Materials,
information and software must be used solely for the purpose
of performing Services.
5. CONSIGNMENT TERMS.
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5.1 CONSIGNED INVENTORY. Sun may provide Consigned Inventory to
Repair Vendor on a consignment basis as Sun deems necessary
for Repair Vendor to perform Services and as set forth in the
SOW. The terms of this Section 5 shall apply in the event Sun
elects to consign Consigned Inventory to Repair Vendor.
Consigned Inventory may only be used for the purpose of
performing Services and may not, except as otherwise provided
herein, be transferred, sold, pledged or encumbered without
Sun's prior written consent. Consigned Inventory will be
segregated from other Hardware or other equipment, materials,
or supplies of Repair Vendor and will be accompanied with a
notice stating: "All products of Sun Microsystems, Inc. stored
here belong to Sun and are in the possession of (Repair
Vendor's name) on consignment only."
5.2 TITLE. Sun will retain title to all material consigned to
Repair Vendor, and Repair Vendor will immediately return such
materials to Sun upon request at Repair Vendor's expense and
risk of loss. Repair Vendor will sign any documents which Sun
requests to evidence the ownership of Consigned Inventory by
Sun, including financing and continuation statements, and will
file or authorize the filing of the same with the appropriate
governmental authorities. Repair Vendor will not remove
proprietary rights notices or other Sun logos or identifiers
attached to Consigned Inventory. Repair Vendor will take no
action to vest or assert title or ownership to Consigned
Inventory in Repair Vendor.
5.3 INSURANCE. Repair Vendor will be responsible for, and insure
against, any loss of or damage to Consigned Inventory, from
time of pick-up from Sun until it is returned to Sun, and will
reimburse Sun for any such loss or damage. Repair Vendor shall
insure the Consigned Inventory at a coverage level acceptable
to Sun, but no less than original cost-to-Sun value, for any
and all perils, with Sun named as an additional insured.
Repair Vendor will pay the premiums therefor, and deliver to
Sun, upon request, proof of such insurance prior to delivery
of Consigned Inventory to Repair Vendor. Said insurance
coverage may be modified or terminated only upon thirty (30)
days Notice to Sun.
5.4 USE OF CONSIGNED INVENTORY. In the event any Consigned
Inventory is used in delivering Repaired or Replacement
Hardware to Sun, Repair Vendor shall so notify Sun in writing
no later than five (5) business days after such use, or such
other period of time as specified in the SOW, by providing
Notice of the type and extent of Consigned Inventory used, its
part number and serial number, the purposes for which it was
used, and any other information Sun reasonably requests. Sun
will deduct from payment of Repair Vendor invoices the prices
charged by Sun in its sole discretion for the Consigned
Inventory so used by Repair Vendor.
5.5 REPORTING; AUDIT RIGHTS. Repair Vendor shall keep accurate
books and records of account containing complete information
concerning all Consigned Inventory received, stored, and used
in the performance of Services, and Sun shall have access to
such records during normal business hours upon request. Repair
Vendor shall submit to Sun periodic statements detailing the
foregoing in accordance with the SOW. Sun may carry out during
normal business hours an audit of Repair
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Vendor's facilities to ensure compliance with this Agreement.
Repair Vendor shall promptly pay Sun for any discrepancies
revealed by the audit. If the audit reveals a discrepancy of
greater than ten percent (10%), Repair Vendor shall in
addition pay all costs and expenses associated with the audit.
5.6 DISCLAIMER OF WARRANTIES. ALL HARDWARE IS PROVIDED TO REPAIR
VENDOR "AS IS" AND SUN DISCLAIMS ALL EXPRESS OR IMPLIED
WARRANTIES, INCLUDING ANY WARRANTIES OF MERCHANT-ABILITY,
FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.
6. OTHER RIGHTS AND OBLIGATIONS.
6.1 COORDINATION AND MEETINGS. Each party shall designate one (1)
individual as a "Repair Vendor Contact." The Repair Vendor
Contacts shall be responsible for generally overseeing the
performance of the parties' respective obligations under the
Agreement and for resolving any issues which arise between the
parties, as set forth in the SOW.
6.2 EMPLOYEE BENEFITS. Repair Vendor is solely responsible for
payment of wages, salaries, fringe benefits and other
compensation of, or claimed by, its own employees including
contributions to any employee benefit, medical or savings
plan, and is responsible for all payroll taxes including the
withholding and payment of all federal, state, and local
income taxes, FICA, and unemployment taxes. Repair Vendor is
also solely responsible for compliance with applicable
workers' compensation coverages for its own employees. Repair
Vendor agrees to indemnify and defend Sun from all claims by
any person, government, or agency directly relating to this
Section 6.2, including any penalties and interest which may be
assessed for breach of this provision
6.3 COMPLIANCE WITH LAWS AND REGULATIONS. The parties must comply
with all applicable local, municipal, state, federal and
governmental laws, orders, codes and regulations in the
performance of this Agreement. Each party must obtain and keep
current at its own expense all governmental permits,
certificates and licenses ordinarily required to be obtained
and kept by each party and necessary for each party to perform
under this Agreement.
7. COMMERCIAL TERMS.
7.1 PURCHASE ORDERS. Sun will be liable under this Agreement only
for those purchases of Services set forth in a written
Purchase Order submitted to Repair Vendor by Sun. This
Agreement does not constitute a Purchase Order or any other
form of commitment to purchase Services, nor does it imply a
commitment to, or an expectation that Sun will, issue any
minimum number of Purchase Orders. Repair Vendor will use its
best efforts promptly to accept and perform any Purchase Order
issued by Sun under this Agreement. If Repair Vendor rejects
any Purchase Order, Repair Vendor will do so promptly and
state its reasons therefor
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in writing to Sun. All correspondence from Repair Vendor,
including all invoices, must reference this Agreement and the
applicable Purchase Order number.
7.2 PAYMENT FOR SERVICE. In consideration for Services provided
(other than for Services for Hardware within the Repair
Warranty Period), Sun will pay Repair Vendor in accordance
with the applicable Purchase Orders and/or Exhibit B rates.
Prices for Services may not be increased for a period of at
least one (1) year after the Effective Date; thereafter,
Repair Vendor may increase prices for Services only upon
ninety (90) days advance written notice and upon written
justification therefor. Sun is under no obligation to accept
such increased prices. Payments will be made within thirty
(30) days after receipt of Repair Vendor's invoices and are
considered made by Sun on the date of mailing as evidenced by
postmark. Any out-of-pocket expenses (e.g. travel) incurred by
Repair Vendor in connection with providing Services will be
the sole responsibility of Repair Vendor, unless otherwise
approved in writing by Sun prior to Repair Vendor incurring
such expenses. Sun will only pay for actual expenses incurred
by Repair Vendor's employees at fair and reasonable rates.
7.3 BILLING. Repair Vendor will submit an invoice on a weekly or
other mutually agreeable basis detailing the amount of
billable time expended, a description of work performed
together with receipts or other documentation supporting
reimbursable expenses previously approved by Sun, and provide
such other information and/or support documentation as Sun may
reasonably request. For time and materials Purchase Orders,
Repair Vendor will make available for Sun's review upon Sun's
reasonable request time cards for each employee of Repair
Vendor performing Services hereunder, showing the amounts of
billable time expended.
7.4 PAYMENT OF EMPLOYEES. Repair Vendor will promptly pay its
employees for all work performed. If Repair Vendor does not
pay its employees on a current basis for work performed under
this Agreement, such nonpayment will entitle Sun, in addition
to all other remedies, to withhold all further payments to
Repair Vendor under the applicable Purchase Order and, at
Sun's option, to contract directly with such employee(s) to
complete Services.
7.5 TAXES. Repair Vendor will be responsible for the payment of
any and all taxes due as a result of the performance of
Services or the payment thereof. Repair Vendor acknowledges
and agrees that it is solely the responsibility of Repair
Vendor to report as income all compensation received hereunder
and Repair Vendor will indemnify and hold Sun harmless from
and against all claims, damages, losses, and reasonable
expenses of attorneys and other professionals relating to any
obligation to pay any sales, service, value-added, or
withholding taxes, social security, unemployment or disability
insurance or similar charges or impounds, including any
interest or penalties thereof, in connection with any payments
made to Repair Vendor hereunder.
8. RELATIONSHIP.
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8.1 INDEPENDENT CONTRACTOR. Repair Vendor must conduct all of its
business in its own name and in such a manner as it may see
fit. Repair Vendor is not granted any exclusive rights of any
nature whatsoever by this Agreement. This Agreement is not
intended to create a relationship such as a partnership,
franchise, joint venture, agency, master/servant or employment
relationship. Neither party may act in a manner which
expresses or implies a relationship other than that of an
independent contractor, nor bind the other party. Repair
Vendor will not be entitled to receive any employee benefits
provided to Sun employees.
8.2 NON-CIRCUMVENTION. Absent Sun's prior written consent, Repair
Vendor will not, during the term of this Agreement and for a
period of twelve (12) months thereafter, accept, promote or
solicit orders for the provision of hardware maintenance or
repair for or on behalf of any third party Sun hardware
service provider and/or any provider of any support programs
which competes with support programs offered by Sun for Sun
products. Repair Vendor acknowledges and agrees that the
obligations of this Section 8.2 are fair and reasonable under
the commercial circumstances of this Agreement and that this
Agreement fairly and adequately compensates Repair Vendor in
consideration of such obligations.
9. TRADEMARKS AND WORKS.
9.1 TRADEMARKS AND PUBLICITY. "Sun Trademarks" means all names,
marks, logos, designs, trade dress and other brand
designations used by Sun and its related companies, in
connection with products and services. Repair Vendor may refer
to Services by the associated Sun Trademarks only upon Sun's
prior written consent and provided that such reference is not
misleading and complies with the then current Sun Trademark
and Logo Policies. Repair Vendor will not remove, alter, or
add to any Sun Trademarks, nor will it co-logo products and
services. Repair Vendor is granted no right, title or license
to, or interest in, any Sun Trademarks. Repair Vendor
acknowledges Sun's rights in Sun Trademarks and agrees that
any use of Sun Trademarks by Repair Vendor will inure to the
sole benefit of Sun. Repair Vendor agrees not to (a) challenge
Sun's ownership or use of, (b) register, or (c) infringe any
Sun Trademarks, nor will Repair Vendor incorporate any Sun
Trademarks into Repair Vendor's trademarks, service marks,
company names, internet addresses, domain names, or any other
similar designations. If Repair Vendor acquires any rights in
any Sun Trademarks by operation of law or otherwise, it will
immediately at no expense to Sun, assign such rights to Sun
along with any associated goodwill, applications, and/or
registrations. Repair Vendor will not use any program logo
applicable to "Repair Vendors" without the prior written
consent of Sun. Repair Vendor may not refer to Sun or its
products or services in any form of publicity or release
without Sun's prior written approval.
9.2 WORKS. All right, title and interest in and to all
modifications, enhancements, derivative works of or
improvements to any Service Materials, Training Materials,
Hardware, Consigned Inventory, Confidential information,
loaned equipment, software or other Sun product conceived or
reduced to practice by Repair Vendor during and in the course
of performing Services (collectively,
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"Works") shall be assigned to Sun at no cost and/or shall be
considered "works made for hire" under the United States
Copyright Act or other equivalent or similar law, to the
fullest extent permitted under applicable law. If any Work
created hereunder shall not be deemed to constitute a work
made for hire, and/or in the event that Repair Vendor should,
by operation of law or otherwise, be deemed to retain any
rights in a Work, Repair Vendor will assign all right, title
and interest in any such Work to Sun. Repair Vendor agrees to
cooperate with Sun and to execute all documents reasonably
necessary for Sun to secure intellectual property protection
for such Works, in Sun's name, in all countries and
jurisdictions. Repair Vendor represents and warrants that it
has agreements in place with its employees or will put the
same in place before the effective date of this Agreement
sufficient to enable it to comply in all respects with its
obligations under this Section 9.2. Repair Vendor further
represents that it will use regular employees whenever
possible to create Works hereunder so that they qualify as
"works made for hire" under the United States Copyright Act or
equivalent or similar law.
10. CONFIDENTIAL INFORMATION. If Sun desires that information provided to
Repair Vendor under this Agreement be held in confidence, Sun will
identify the information as "Confidential" or "Proprietary". Repair
Vendor may not disclose confidential or proprietary information and may
use it only for the purposes specifically contemplated in this
Agreement. Sun will treat tangible business and financial information
of Repair Vendor that has been previously identified as confidential,
with the same degree of care as it does its own similar information.
The foregoing obligations do not apply to information which Repair
Vendor can demonstrate with documentary evidence: (a) is or becomes
known by recipient without an obligation to maintain its
confidentiality; (b) is or becomes generally known to the public
through no act or omission of recipient, (c) is independently developed
by recipient without use of confidential or proprietary information, or
(d) that is ordered to be made public or disclosed by a court of
competent jurisdiction. This Section 10 will not affect any other
confidential disclosure agreement between the parties. All customer
identities and customer information, the terms of this Agreement,
Consigned Inventory, Service Materials, Training Materials and any
other support materials, documentation and software are deemed Sun
Confidential Information and Repair Vendor will use such Confidential
Information only for purposes specifically contemplated by this
Agreement. It is understood and agreed that in the event of a breach of
this Section 10, damages will not be an adequate remedy and Sun will be
entitled to injunctive relief to restrain any such breach, threatened
or actual, without the necessity of posting a bond or other security.
11. AIRCRAFT SERVICE AND NUCLEAR APPLICATIONS. Repair Vendor acknowledges
that Consigned Inventory, Hardware, Service Materials, Training
Materials or other Sun products (collectively, "Sun Materials") are not
designed, to be used in support of, or intended for use in on-line
control of aircraft, air traffic, aircraft navigation or aircraft
communications; or in the design, construction, operation or
maintenance of any nuclear facility. SUN DISCLAIMS ANY EXPRESS OR
IMPLIED WARRANTY OF FITNESS FOR SUCH USES. Repair Vendor will inform
Sun immediately if it discovers facts leading Repair Vendor to
reasonably believe that Sun Materials are being used in contravention
of this Section 11, and will
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immediately cease performing Services in connection with Sun Materials
being used for such purposes until further Notice from Sun.
12. WARRANTIES; DISCLAIMERS. Repair Vendor represents and warrants that (a)
all Services will be performed in a professional and workmanlike
manner, consistent with general industry standards; (b) all Repaired or
Replacement Hardware will perform in accordance with applicable product
specifications as defined in the SOW and shall be free from defects in
material and workmanship (the "Repair Warranty") for the period of time
set forth in the Statement of Work, if any, but in any event no less
than a period equal to thirteen (13) months from receipt by Sun of such
Repaired or Replacement Hardware (the "Repair Warranty Period"); and
(c) any hardware, software, equipment, parts, components or
subassemblies used by Repair Vendor in the performance of Services that
are not directly provided by Sun will not infringe or violate any
patent, copyright, trade secret, contract, or other proprietary or
intellectual property rights of any third party, and that Repair Vendor
has full and complete authority to use, and incorporate into Repaired
or Replacement Hardware, such hardware, software, equipment, parts,
components or sub-assemblies in performing the Services. Repair Vendor
shall pass through to Sun all applicable manufacturer's warranties and
accept warranty returns from Sun and administer such returns on Sun's
behalf. ALL OTHER EXPRESS OR IMPLIED CONDITIONS, REPRESENTATIONS AND
WARRANTIES, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT, ARE DISCLAIMED BY BOTH
PARTIES, EXCEPT TO THE EXTENT THAT SUCH DISCLAIMERS ARE HELD TO BE
LEGALLY INVALID.
13. LIMITATION OF LIABILITY. EXCEPT FOR OBLIGATIONS UNDER SECTIONS 3.6-3.7
(INDEMNITY AND INSURANCE), SECTIN 9.2 (WORKS), AND SECTION 10
(CONFIDENTIAL INFORMATION), AND/OR BREACH OF SECTION 11 (AIRCRAFT
SERVICE AND NUCLEAR APPLICATIONS) AND ANY APPLICABLE SOFTWARE LICENSE,
AND TO THE EXTENT NOT PHOHIBITED BY APPLICABLE LAW:
13.1 NEITHER PARTY WILL BE LIABLE FOR ANY INDIRECT, PUNITIVE,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGE IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT (INCLUDING LOSS OF BUSINESS,
REVENUE, PROFITS, USE, DATA OR OTHER ECONOMIC ADVANTAGE),
HOWEVER IT ARISES, WHETHER FOR BREACH OR IN TORT, EVEN IF THAT
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE; AND
13.2 LIABILITY FOR DAMAGES WILL BE SO LIMITED AND EXCLUDED, EVEN IF
ANY EXCLUSIVE REMEDY PROVIDED FOR IN THIS AGREEMENT FAILS OF
ITS ESSENTIAL PURPOSE.
14. TERM AND TERMINATION.
12
14.1 TERM. This Agreement commences as of the date indicated in the
signature block below and will continue in full force and
effect for one (1) year, unless sooner terminated as provided
herein. This Agreement will be automatically renewed on a
yearly basis thereafter, unless Sun gives notice of
termination at least sixty (60) days prior to any year's
expiration date or unless sooner terminated in accordance with
the provisions of this Agreement.
14.2 TERMINATION. Either party may terminate this Agreement: (a)
with or without cause, and for any or no reason, upon one
hundred eighty (180) days Notice to the other party; (b)
immediately, by Notice upon material breach by the other
party, if such breach cannot be remedied; (c) by Notice, if
the other party fails to cure any remedial material breach of
this Agreement within thirty (30) days of receipt of Notice of
such breach; and (iv) immediately, by Notice, if the other
party becomes insolvent, makes a general assignment for the
benefit of creditors, files a voluntary petition of
bankruptcy, suffers or permits the appointment of a receiver
for its business or assets, becomes subject to any proceeding
under any bankruptcy law, whether domestic or foreign, or has
wound up or liquidated its business voluntarily or otherwise.
Further, in the event of the direct or indirect taking over or
assumption of control of Repair Vendor or of substantially all
of its assets by any government, governmental agency or third
party, Sun may terminate this Agreement immediately upon
Notice to Repair Vendor. Within thirty (30) days after the
effective date of termination, Repair Vendor will return to
Sun, at Repair Vendor's expense, all Consigned Inventory,
Service Materials, Training Materials, any Sun Confidential or
Proprietary Information and all other items of Sun.
14.3 EFFECT OF TERMINATION. The following Sections survive
termination of this Agreement: 3.5, 3.6, 3.7, 5.2, 5.5, 5.6,
6.2, 7.5, 8, 9, 10, 12, 13, 14.3, 15 and 16. Repair Vendor
will continue to perform Services for any Purchase Orders
outstanding as of the effective date of termination unless Sun
directs otherwise in its sole discretion. Repair Vendor agrees
that it will have no right to damages or indemnification of
any nature due to any expiration or termination of this
Agreement, including commercial severance pay, loss of future
profits, payment for goodwill generated or in connection with
other commitments made with respect to the business
contemplated by this Agreement or other similar matters.
15. IMPORT AND EXPORT LAWS. All products, Hardware, spare parts, software,
services, technical data and other materials delivered by Sun under
this Agreement are subject to U.S. export control laws and may be
subject to export or import regulations in other countries, are for use
in the Territory only, and may not be exported without Sun's prior
written consent. If consent is given, Repair Vendor will comply
strictly with all such laws and regulations and acknowledges that it
has the responsibility to obtain such licenses to export, re-export,
transfer, whether directly or indirectly, or import as may be required
after delivery to Repair Vendor.
16. GENERAL PROVISIONS.
13
16.1 ENTIRE AGREEMENT. This Agreement contains the terms and
conditions which apply to all purchases of Services made
pursuant to this Agreement, notwithstanding any terms or
conditions contained in any acknowledgement or other business
forms transmitted by Repair Vendor. It supersedes all prior or
contemporaneous oral or written communications, proposals,
conditions, representations and warranties and prevails over
any conflicting or additional terms of any quote, order,
acknowledgement, or other communication between the parties
relating to its subject matter during the term of this
Agreement. All Repair Vendor acknowledgements and transmittals
must reference this Agreement and Sun's applicable Purchase
Orders. No modification to this Agreement will be binding,
unless in writing and signed by an authorized representative
of each party.
16.2 EXHIBITS. The current version of each Exhibit is hereby
incorporated by reference as part of this Agreement. Exhibits
may be modified only upon written consent of both parties.
16.3 ATTORNEYS' FEES. In the event that any dispute arises between
the parties hereto with regard to any of the provisions of
this Agreement or the performance of any of the terms and
conditions hereof, the prevailing party in any such dispute
will be entitled to recover costs and expenses associated with
resolving such dispute, including reasonable attorneys' fees.
16.4 WAIVER OR DELAY. Any express waiver or failure to exercise
promptly any right under this Agreement will not create a
continuing waiver or any expectation of non-enforcement.
16.5 GOVERNMENT CONTRACTS. With respect to any Services performed
in connection with a government contract or subcontract,
Repair Vendor agrees to be bound by all those provisions of
such contract or subcontract which Sun is required to pass on
to its subcontractors, and such provisions are hereby
incorporated by reference.
16.6 ASSIGNMENT. Repair Vendor shall not assign, subcontract or
otherwise transfer any of its rights or obligations under this
Agreement, either in whole or in part, without the prior
written consent of Sun. Any assignment, subcontract or
delegation by Repair Vendor without such consent will be null
and void, and will give Sun the right immediately to terminate
this Agreement without liability for Services performed after
such termination. If Sun consents to Repair Vendor
subcontracting any obligations of this Agreement, Repair
Vendor will remain primarily responsible for said obligations.
The rights and liabilities of the parties hereto will be
binding upon and inure to the parties' permitted successors
and assigns.
16.7 NOTICES. All Notices required under this Agreement must be in
writing and delivered either in person or by a means evidenced
by delivery receipt to the address specified below. Such
Notice will be effective upon receipt.
Sun: Repair Vendor:
14
Commodity Team Manager VP & Chief Operating Officer
Sun Microsystems, Inc. Pinnacle Data Systems, Inc.
MS BRM03-192 0000 Xxxx Xxxx
000 Xxxxxxxx Xxxx. Xxxxxxxxx, Xxxx 00000
Xxxxxxxxxx, Xxxxxxxx 00000
cc: General Counsel, Enterprise Services
Each party shall inform the other in writing of any change in
the foregoing address information.
16.8 SEVERABILITY. If any provision, or part thereof, in an
Agreement, is held to be invalid, void, or illegal, it shall
be severed from the Agreement, and shall not affect, impair,
or invalidate any other provision, or part thereof, and it
shall be replaced by a provision which comes closest to such
severed provision, or part thereof, in language and intent,
without being invalid, void, or illegal.
16.9 MEANING OF CERTAIN WORDS. The terms "includes" and "including"
will not be construed to imply any limitation. Unless
otherwise stated, any reference contained in this Agreement to
a Section refers to the provision of this Agreement and
includes any subsections or sub-subsections. Wherever the
context may require, any pronouns used in this Agreement will
include the corresponding masculine, feminine, or neuter
forms, and the singular form of nouns or pronouns, including
all defined terms, will include the plural and visa versa.
16.10 HEADINGS; ORDER OF PRECEDENCE. Section titles and captions
contained in this Agreement are for reference only and in no
way define, limit, extend or describe the scope of this
Agreement or the intent of any of its provisions. If any
inconsistencies or conflicts arise between the provisions of
this Agreement, the SOW or any of its attached exhibits,
Exhibit B, and/or a Purchase Order, the following order of
precedence shall apply in order of priority: (1) Exhibit B,
Project Specific Terms; (2) the Agreement, (3) the SOW and
attached exhibits, and (4) any Purchase Order.
16.11 GOVERNING LAW; ENFORCEMENT. Any action related to this
Agreement will be governed by California law and controlling
U.S. federal law. No choice of law rules of any jurisdiction,
nor the United Nations Convention on the International Sale of
Goods, will apply. The parties hereby acknowledge and agree
that the exclusive forums for any actions brought arising from
or related to this Agreement shall be the United States
District Court for the Northern District of California and the
state courts of the State of California for the County of
Santa Xxxxx, and exclusively submit to, and waive any
objection against, the personal jurisdiction of same.
16.12 COUNTERPARTS. This Agreement may be executed in counterparts
and via facsimile, with original signatures to follow.
--------------------------------------------------------------------------------
THIS AGREEMENT IS EFFECTIVE AS OF ____/____/____.
(MM/DD/YY)
15
THE PARTIES HAVE READ THIS AGREEMENT AND AGREE TO BE BOUND THEREBY.
AGREED:
SUN MICROSYSTEMS, INC.: PINNACLE DATA SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxx 3/22/99 By: /s/ X.X. Xxxx 7/9/99
--------------------------------------------- -----------------------------------------
DATE (MM/DD/YY) DATE (MM/DD/YY)
Print: Xxxxxx X. Xxxxx Print: X.X. Xxxx
------------------------------------------ -------------------------------------
Enterprise Services - NAFO BD+O
Title: Director-Supply Chain Management Title: COO / Vice President
------------------------------------------ -------------------------------------
----------------------------------------------------------------------------------------------------------
16
EXHIBIT A TO REPAIR SERVICES AGREEMENT: STATEMENT OF WORK
SUN
microsystems
NAFO ENTERPRISE SERVICES
SUPPLY CHAIN MANAGEMENT GROUP DATE_______________REVISION___________
17
TABLE OF CONTENTS
1.0 SERVICES TO BE PROVIDED BY AND OBLIGATIONS OF SUPPLIER
1.1 RESERVED
1.2 SUPPLIER'S REPAIR FACILITIES
2.0 ENTERPRISE SERVICES OFFICES AND DISTRIBUTION CENTERS
3.0 REPAIR SERVICES, INVENTORY AND WAREHOUSE REQUIREMENTS
3.1 RESERVED
3.2 GENERAL REQUIREMENTS
3.2.3 RESERVED
3.2.7 RESERVED
3.2.9 DOCK TO STOCK
3.2.11 RESERVED
3.2.20 RESERVED
3.3 RECEIVING
3.4 SHIPPING
3.5 RECEIVING INSPECTION
4.0 ISO CERTIFICATION
4.0.1 RETENTION OF CERTIFICATION
4.0.2 TESTING
4.1 SECURITY
4.2 TRAINING
5.0 REPORTING
6.0 INVENTORY MANAGEMENT
7.0 NOTICES
8.0 NON-DISCLOSURE
8.1 DENIED RESTRICTED PARTIES LIST (DRPL)
9.0 MATERIALS (SPARES), LOGISTICS AND TRANSPORTATION PROCEDURE
9.1 RESERVED
9.2 PACKING SLIP
9.2.1 SPARES RETURNS
9.2.2 SPARES TAMPERING
9.2.3 FINAL RECONCILIATION AND RETURN OF SPARES AND EQUIPMENT
9.2.4 RESERVED
9.2.5 STOCKING LEVELS
9.2.5.1 CHANGES IN DISTRIBUTION
9.2.6 SPARES PURGES
9.2.7 PROCEDURES AND ESCALATIONS
9.2.8 RESERVED
9.2.8A PROGRAM MANAGEMENT
9.2.8.5 COORDINATION OF PROGRAM INFORMATION
9.2.8.6 FOCAL POINTS
9.2.8.7 QUARTERLY MANAGEMENT REVIEW
9.2.8.8 QUALITY OR QUALITY ASSURANCE REVIEWS
9.2.8.9 QUALITY REPAIR AND INSPECTION DATE
9.3 CONSIGNED INVENTORY
10.0 PERFORMANCE STANDARDS
10.1 PERFORMANCE CRITERIA
10.2 RESERVED
10.2.1 RESERVED
10.2.2 RESERVED
10.2.3 RESERVED
101.3.1 NONCOMPLIANCE WITH SUPPLIER CONVETIVE ACTION REPORTS
10.2.4 NO TROUBLE FOUND (NTF)
18
10.2.4.1 PHYSICAL INVENTORY
10.2.5 PERFORMANCE REVIEW
11.0 HARDWARE TECHNICAL DATA PACKAGE (TDP) REQUIREMENTS (IF REQUIRED)
12.0 RESERVED
13.0 APPLICABLE DOCUMENTS
13.1 REQUIREMENTS
13.1.1 GENERAL REQUIREMENTS
13.1.2 SPECIFIC REQUIREMENTS
13.1.2.1 MATERIAL
13.1.2.2 ELECTROSTATIC DISCHARGE PROTECTION
13.1.2.3 RESERVED
14.0 ENGINEERING CHANGE CLASSES
14.1 CLASS I AND CLASS II CHANGES:
14.1.1 CLASS I ENGINEERING CHANGES
14.1.2 CLASS II ENGINEERING CHANGES
15.0 RESERVED
16.0 PREPARATION FOR DELIVERY
16.1 PRESERVATION AND PACKAGING
16.2 RESERVED
17.0 RESERVED
18.0 RESERVED
19.0 RESERVED
20.0 TOLERANCE FOR UNIT ENVIRONMENT
20.1 ENVIRONMENTAL PROTECTION CONSIDERATIONS & POLLUTION PREVENTION
INITIATIVES
21.0 RECYCLING OF USED HARDWARE
22.0 REPORTS
23.0 BINDER OF EVIDENCE
24.0 MAJOR INITIATIVES AND GOALS
SIGNATURE PAGE
EXHIBITS, ATTACHMENTS AND DOCUMENT LISTING
19
THIS STATEMENT OF WORK ("SOW") IS ISSUED UNDER, AND SUBJECT TO THE TERMS AND
CONDITIONS OF THE LOCAL STRATEGIC PROVIDER AGREEMENT (THE "AGREEMENT") BY AND
BETWEEN XXX (SUPPLIER) AND SUN MICROSYSTEMS ENTERPRISE SERVICES HAVING AN
EFFECTIVE DATE OF _________________, 199X. THIS SOW DEFINES THE RELATIONSHIP
BETWEEN THE PARTIES WITH RESPECT TO SUPPLIER PROVISION OF SERVICES INCLUDING
REPAIR OF HARDWARE AND OTHER SUPPORT SERVICES AS FROM TIME TO TIME REQUESTED BY
ENTERPRISE SERVICES. ENTERPRISE SERVICES'S GOAL IS TO RECEIVE PRODUCT 100% ON
TIME AND THAT SUCH PRODUCT MEETS THE QUALITY REQUIREMENTS DEFINED IN THIS
EXHIBIT A.
DEFINITIONS. Capitalized terms that are not defined herein shall have
the same meaning as the identical capitalized terms in the Agreement.
"BOM" OR "XXXX OF MATERIAL" means a list of parts, components and/or
sub-assemblies used to manufacture Hardware.
"DC" OR "DISTRIBUTION CENTER" means any third party facility designated
by Sun, as set forth in Exhibit Al and/or from time to time,
responsible for storing and processing Hardware on Sun's behalf.
"INCOMING HARDWARE" means Hardware Sun has delivered to Repair Vendor
for the purpose of performing Services thereto.
"NTF" OR "NO TROUBLE FOUND" means Incoming Hardware that passes Repair
Vendor's standard test process as previously approved by Sun and is
mutually determined to be without defect or fault.
"PRIORITY RESPONSE TIMES" means the return time requirements Sun
specifies for Sun's receipt of Repaired or Replacement Hardware.
"Priority 1" means 2-4 hour repair or replacement, as directed by Sun,
with shipment via Next Flight Out ("NFO"); "Priority 2" means 1-5 day
repair or replacement and NFO, as directed by Sun; and "Rapid
Replenishment" means manual replenishment.
"PRODUCT SPECIFICATIONS" means the written performance representations,
mechanical dimensions and descriptions, electrical and timing
requirements, component information, configuration information, and all
other documentation relating to Hardware that Sun will provide to
Repair Vendor as Sun deems necessary for the provision of Services.
"RMA" OR "RETURN MATERIAL AUTHORIZATION" means the formal authorization
from Repair Vendor under which Sun ships Incoming Hardware to Repair
Vendor.
"RSL" OR "REGIONAL STOCKING LOCATION" means Sun or third party
facilities designated by Sun in Exhibit Al and/or from time to time,
responsible for storing and processing Hardware on Sun's behalf.
"SUN OFFICE" means any of the Sun facilities set forth in Exhibit A 1.
20
1.0 SERVICES TO BE PROVIDED BY AND OBLIGATIONS OF SUPPLIER
1.0.1 Supplier agrees to provide inventory receiving activities for new buy and
defective parts, routing of material to proper warehouse locations, providing
test and repair services and to cycle count inventory.
1.0.2 Supplier will store material in secure and environmentally stable
conditions and ship parts to designated field stocking locations, Field
Engineers and customers as directed by Enterprise Services.
Reserved
1.2 Supplier's Repair Facilities:
------------------------------
------------------------------
------------------------------
Contact: _______________________
Phone: (____)___________________
Fax: (____)______________________
2.0 ENTERPRISE SERVICES OFFICES AND DISTRIBUTION CENTERS
TYPE A
BILLING ADDRESS: SHIPPING/RECEIVING ADDRESS:
Enterprise Services Microsystems, Inc. DHL (Enterprise Services Microsystems, Inc. Logistic Center)
Account Payable Dept. c/o Miami Free Zone
P. O. Box 7550 0000 Xxxxx Xxxx 000xx Xxxxxx
Xxxxxxxx Xxxx, XX 00000 Xxxxx, XX 00000
Xxxx Xxxxxx
Ph. (000) 000-0000
Fax: (000) 000-0000
TYPE A
BILLING ADDRESS: SHIPPING/RECEIVING ADDRESS:
Enterprise Services Microsystems, Inc. Enterprise Services NAAFO Logistics
Accounts Payable Dept. c/o USCO Distribution Services
P. O. Box 7550 30805 Xxxxxxx Street
Mountain View, CA 94039 Xxxxxxx, XX 00000
Ph: (000) 000-0000
Fax: (000) 000-0000
TYPE A
BILLING ADDRESS: SHIPPING/RECEIVING ADDRESS:
Enterprise Services Microsystems, Inc. Enterprise Services NAAFO Logistics
Accounts Payable Dept. c/o USCO Distribution Services
P. O. Box 7550 20 Industrial Avenue
Mountain View, CA 94039 Xxxxxxxxxx, XX 00000
Ph: (000) 000-0000
Fax: (000) 000-0000
3.0 REPAIR SERVICES, INVENTORY AND WAREHOUSE REQUIREMENTS
3.1 Reserved
3.1.1 Supplier shall ship, pursuant to Enterprise Services' prior written
instructions, approved Enterprise Services material to Enterprise Services
designated supply location.
3.1.2 In those cases where directed by Enterprise Services Buyer Planner,
Supplier shall provide on-site scrap of approved material. Material in this
category shall be disposed of in a secured environment and a Certificate of
Destruction will be maintained. If material is to be sold for reclamation
purposes all Enterprise Services labels and Enterprise Services identification
will be removed from the material. (Reference QMS Doc 910-3987-xx On-Site Scrap
Process - Vendor Site).
3.1.3 In all cases, whenever material is scrapped, a Proof of Disposal
Certificate will be required and maintained on-site by Supplier.
3.2 General Requirements
21
3.2.1 At a minimum, Supplier shall maintain fully equipped and staffed
facilities specified in this SOW a level sufficient to meet the agreed
performance targets as stated throughout Exhibit A.
3.2.2 At a minimum, Supplier shall provide Enterprise Services with a monthly
reports on the state of your business, which will include, but; not limited to
the reports listed in section 22.0 of Exhibit A.
3.2.3 Reserved
3.2.4 Supplier agrees to ship repaired or replacement product to Enterprise
Services within the same day as notified provided the shipment can meet the last
shipment of the day. Product may be supplied from an exchange pool of product
meeting the product specification provided by Enterprise Services. All such
product shall be supplied in good operating condition free from defect.
Shipments will be made directly to Enterprise Services supported Distribution
Centers, remote stocking locations (RSL's), Field Engineers or customers.
3.2.5 Enterprise Services requires 100% on time delivery performance. A SCAR
Supplier Corrective Action Report may be issued by Enterprise Services, an
authorized TPRS or DC, if Supplier's performance for a location drops below 95%.
Supplier will respond to any SCAR initiated by Enterprise Services, a DC or a
TPRS through Supplier's corrective action process, which shall include an action
plan within five (5) working days or as otherwise specified in the SCAR.
3.2.6 For a period of not less than five (5) years after Enterprise Services
receives notification of EOSL, (the "Service Period") Supplier agrees, at
Enterprise Services's option, to provide Repair Services as outlined in Section
1 to Enterprise Services, Enterprise Services authorized TPRS's and DC's during
the Service Period.
3.2.7 Reserved
3.2.8 Product will be shipped to Enterprise Services in a configuration defined
by the Product Specifications, Workmanship Standards, Quality Standards and Xxxx
of Materials (BOM's) and AVL.
3.2.9 Repaired or replacement product will be upgraded by Supplier to the then
current Product revision level or to a revision level as documented and agreed
upon by Enterprise Services and Supplier.
3.2.10 Supplier is responsible for attaining Dock to Stock status of product
within 120 days of first shipment by meeting 99.8% defect free product. Supplier
shall be responsible for all costs associated with Source Inspection 120 days
after first shipment.
3.2.11 Reserved
3.2.12 Supplier will utilize the order processing screen in transaction system
of record daily, to ensure all orders print and meet transportation cut-off
times.
3.2.13 Supplier shall resolve discrepant shipping/receiving line items with RSL
network, Distribution Centers and other repair suppliers.
3.2.14 Supplier will process Time and Material orders (T&M) to meet customer
requirements (1, 5, 15, & 75 day) at 98% on time performance. Supplier will
provide T&M actuals to Enterprise Services including request date ship date and
on time performance.
3.2.15 Supplier agrees to store material in an environment between 60 degrees F
- 80 degrees F and kept free from excessive dust, moisture and dirt. Any
Enterprise Services spare parts that cannot be stored on shelves or racks must
be stored on pallets or skids. At no time will parts be stored directly on the
floor, unless shipped by Enterprise Services on casters or wheels.
3.2.16 All facilities shall provide adequate fire protection systems to meet or
exceed local code.
3.2.17 Supplier shall provide, 7 days a week, 24 hours a day coverage for P1
(Priority One) support. Standard office hours of coverage are 7am EST to 8pm EST
and pager coverage from 8pm EST to 7am EST.
3.2.18 Supplier will provide a warranty for all repairs of Enterprise Services
parts for 12 months. All parts returned to Supplier for repair that were
previously repaired by Supplier within this data range will be repaired at no
charge to Enterprise Services.
3.2.19 Supplier shall support material routing and adequate warehouse storage
for purges and excess material.
3.2.20 Reserved.
22
3.2.21 Supplier will capture all repair data as products move through their
test/repair processes and make this data available for the Enterprise Service
Quality AUTOLOAD database.
3.2.22 Supplier will be solely responsible for procurement of all components,
sub-assemblies and consumable items to support the test and repair of Enterprise
Services parts. Supplier will also be solely responsible for those items and/or
subassemblies requiring paint or touch-up. In the event Enterprise Services is
involved in part support Supplier agrees to follow the terms described in SOW
Section 9.3 Consigned Inventory.
3.2.23 Supplier shall be responsible for all diagnostic equipment provided by
Enterprise Services, in support of product repair, in a bailment arrangement.
3.3 Receiving
3.3.1 Supplier shall perform defective receipt transactions within 24 hours of
dock date from distribution centers, RSL's, Field Engineers and customers and
provide proper routing of material to appropriate stocking locations per
Enterprise Services guidelines as follows.
Results expected: 95% received within 24 hours of dock date.
Maintain 99.75% defective receiving transaction accuracy.
3.3.2 Material that cannot be systemically received, is identified as a
non-Enterprise Services part or is physically damaged will be moved to a
discrepant area. A request for support to Enterprise Services will be made
within 24 hrs of identifying the part as a discrepant utilizing the "RIR" e-mail
alias.
3.3.3 Supplier shall perform new buy receiving (PO Receiving) transactions and
route material to Finished Goods same day as dock date. Results expected: 98%
received and put away within 24 hours.
3.4 Shipping
3.4.1 Supplier will maintain and report Shipping Accuracy. Results expected:
99.98% shipment accuracy.
3.4.2 Supplier will reserve or, manually allocate, parts for specific orders, as
directed by the Order Entry Customer Desk for committed priority orders - P1,
P2, NFO, Rapid Replenishments. Definitions: P1 = Priority One; P2 = Priority
Two, NFO = Next Flight Out; Rapid Replenishments = Manual replenishments).
3.4.3 Supplier will provide shipment detail to Customer Desk for all emergency
orders, e.g., Next Flight Out, Courier shipments, within one hour of shipment.
3.4.4 Supplier will process and fulfill Customer Orders and replenishment
orders. Domestic and International Customer Orders and replenishment orders will
be performed the same day as dispatched via Enterprise Services order process
system.
Results expected: 99.98% fill rate and 99.98% transaction accuracy.
Manual backup methods for both International and U.S. will be in place.
Transportation Routing Guides outlined in SOW Section 9.2.8 will be
followed.
3.4.5 In cases where product will be repaired external to the Supplier facility,
Supplier shall be responsible for acquiring RMA information prior to shipment of
material and will maintain shipping paperwork to ensure proper on-hand inventory
balances.
3.5 Receiving Inspection
3.5.1 Supplier will capture vendor quality data (repair information and incoming
receiving data DMT info) by next business and publish report as requested by
Enterprise Services.
3.5.2 Supplier will receive, route and test per agreed upon test processes
specific products requiring Receiving Inspection. The Receiving Inspection
process will capture predetermined data and will be reported to Enterprise
Services via e-mail or other electronic means for input to the NAFO quality
system.
4.0 ISO CERTIFICATION
4.0.1 Retention of Certification. In order for Enterprise Services to retain ISO
9001 certification, Supplier agrees to use its best efforts to deliver all
designated services in accordance with the specifications detailed in Exhibit A.
In addition, Supplier will participate, when required, in the ISO audit process,
unless, Supplier has obtained ISO certification.
23
4.0.2 Testing. Every six (6) months Supplier will conduct, and supply reports
verifying, equipment calibration testing consistent with the test equipment
manufacturer's specifications. Such testing will cover all equipment used for
measurement or adjustment purposes, including, but not limited to, voltage
meters, digital voltage meters, time domain reflectometers, ESD pads/straps,
oscilloscopes, LAN analyzers and power analyzers.
4.1 Security
4.1.1 Supplier will observe Enterprise Services Security Management policies
attached and made part of this Exhibit.
4.2 Training
4.2.1 Supplier will maintain training records for all employees in all work
areas.
4.2.2 Supplier will retain and archive records including but not limited to
Binder of Evidence requirements in section 23.0 of Exhibit A and per Enterprise
Services Record Retention Matrix.
4.2.3 Supplier shall provide Performance Metric weekly to Enterprise Services
adhering to the metric template.
5.0 REPORTING
5.1 Supplier shall be able to generate and provide status to Enterprise Services
any or all of the following upon request:
- Repair capacity by Product families, reported monthly
- Repair volume by part number for both in and out of warranty,
reported monthly
- Product shipment volumes by part number, reported monthly
- Turn around time data which includes, but is not limited to,
defective units received, part numbers, serial numbers, date shipped
by location reported monthly;
- Number of units shipped by part number reported weekly
- Turn around time exception data that includes list of late shipments
and their causes
- On hand inventories status by inventory category and part number
5.2 Additional reports, the format of which will be mutually agreed upon, may be
required if Suppliers' performance falls below 95% performance on delivery or
quality.
5.3 Supplier shall maintain shipping and receiving reports which are related to
repairs external to Supplier operation. These reports will be used to establish
Vendor On Time (VOT), Fill Rates and Quality reports maintained and reported by
Supplier.
6.0 INVENTORY MANAGEMENT
6.1 Supplier shall follow adequate procedures for the proper control of
Enterprise Services inventory. Record keeping shall include, but not be limited
to, the maintenance of accurate, updated records of the Enterprise Services
inventory and the use of an inventory tracking system that measures physical
inventories, cycle counting by dash number, and other adjustments to maintain
accuracy.
6.2 Cycle count results shall be reported by Supplier to Enterprise Services
within two (2) working days after Enterprise Services's initial request.
6.3 Supplier shall be responsible for all Product inventory variances. If
Supplier is unable to reconcile any inventory variance for Products in
Supplier's possession, Supplier shall be liable for the unaccounted inventory
and will: (i) provide Enterprise Services a like unit or, (ii) upon Enterprise
Services's agreement, give Enterprise Services full credit for Enterprise
Services's replacement cost of the missing item within thirty (30) days after
discovery of the variance.
6.4 Supplier shall be responsible for all diagnostic equipment provided by
Enterprise Services, in support of product repair, in a bailment arrangement. If
Supplier is unable to reconcile any variance in such equipment and/or material,
Supplier shall be liable for the unaccounted equipment and will provide
Enterprise Services a full credit for Enterprise Services's replacement cost of
the missing item within thirty (30) days after discovery of the variance.
6.4.1 Supplier shall use its best efforts to provide Enterprise Services with a
list of all its requirements for equipment unique to Enterprise Services's
Products ninety (90) days prior to initiating Product repair support.
7.0 NOTICES
Any required notices or changes as outlined in this SOW shall be sent in writing
to Enterprise Services in accordance with section 16.10 of the Enterprise
Services Support Provider Agreement and also:
24
Enterprise Services
c/o SunMicrosystems
000 Xxxxxxxx Xxxx. X/X XXXX00-000
Xxxxxxxxxx, XX 00000
Attention: Commodity Team Manager
8.0 NON-DISCLOSURE
8.1 DENIED RESTRICTED PARTIES LIST (DRPL) SUPPLIER WILL USE ENTERPRISE SERVICE'S
PUBLISHED DRPL LIST ONLY FOR SUN MICROSYSTEM SHIPMENTS AND NOT SUPPLIER'S
SHIPMENTS.
9.0 MATERIALS (SPARES), LOGISTICS AND TRANSPORTATION PROCEDURES.
9.1 Reserved
9.2 Packing Slip. Supplier will supply one (1) copy of a packing slip, or other
comparable document, for each delivery of product. The packing slip will
evidence Supplier shipment of such spares when signed by an authorized receiving
representative.
9.2.1 Spares Returns. Supplier will implement and maintain procedures for the
return of spares.
9.2.2 Spares Tampering. Supplier agrees not to tamper with the spares provided.
Tampering is defined as any action that would affect the form, fit or function
of the spares component. If tampering occurs, Supplier will be charged for all
spares affected.
9.2.3 Final Reconciliation and Return of Spares and Equipment. Upon the
termination of the Exhibit A Support Provider Agreement and or the SOW, or the
termination of any support where Sun Microsystems owned inventories are located,
Supplier will provide to Enterprise Services a final reconciliation inventory
report. Supplier will return to Enterprise Services all inventories and
equipment according to the directions from Enterprise Services.
9.2.4 Reserved
9.2.5 Stocking Level. Enterprise Services will seek to maintain spares at its
RSL consistent with Enterprise Services inventory availability and first call
completion goals. Enterprise Services will, at its sole discretion, set all
target stocking levels. Supplier agrees to use their experience to help set
total and local levels of stocks of spares.
9.2.5.1 Changes in Distribution. Supplier acknowledges that Enterprise Services
is, or may in the future be, party to an agreement whereby a third party is
responsible for distribution of spares, or whereby Supplier and/or Enterprise
Services assumes a greater role in the distribution of spares. In that event,
Enterprise Services reserves the right, at no additional cost, to amend the
terms of this SOW, as necessary.
9.2.6 Spares Purges. Enterprise Services may require Supplier to return spares
due to revision level changes, or other changes deemed necessary by Enterprise
Services. Supplier will be responsible for the return of these materials, as
directed by Enterprise Services. The Enterprise Services Commodity Team Manager
will coordinate such returns with Supplier.
9.2.7 Procedures and Escalations. Supplier and Enterprise Services will ensure
that the appropriate individuals, departments, and service delivery contractors
within the United States and Canada are aware of and adhere to the appropriate
Enterprise Services policies and procedures regarding spares and other
inventory.
9.2.8 Reserved
9.2.8.1 Per Enterprise Services Routing Guide, Supplier will select the best
method of outbound transportation mode to meet service delivery requirements.
Prepare shipping waybills, via PC software or manual documents, as available per
carrier programs. Ensure proper Enterprise Services G/L codes appear on
waybills. See attached Attachment C to this SOW (Enterprise Services
Transportation Routing Guide).
9.2.8.1.1 Supplier will provide space and resources needed to support carrier
equipment to maintain efficient electronic shipping alternatives. Shipping
software systems (i.e. Clippership) may be used, if available at Supplier.
Supplier will maintain and supply Return Packets as required for shipments.
Supplier will escalate any carrier problems to Enterprise Services Traffic
Department. Supplier will accurately enter all shipment information into
designated system. Data should include pieces, weight, carrier and waybill
number. All hard copy waybills will be maintained in files.
25
9.2.8.2 Supplier will maintain Export records for all International shipments
for US Commerce Dept. audit purposes. Frequency and location will be determined
by Enterprise Services Export Management. Supplier shall create and process all
international paperwork as required by Enterprise Services Traffic and
established export Policies and procedures.
9.2.8.3 Supplier will notify Enterprise Services Traffic Department of all
damaged inbound receipts within one (1) day. Receiving department should make
note on signed waybill of any visible physical damage, if any.
9.2.8.3.1 Supplier will be responsible for any additional costs incurred due to
mis-ships confirmed as the result of Supplier error. Rebates for same will occur
on agreed upon frequency.
9.2.8.4 Program Management. Supplier and Enterprise Services will provide, for
the duration of this SOW, central contact(s) to perform various tasks in
connection with this SOW.
9.2.8.5 Coordination of Program Information. The central contacts for both
organizations will coordinate the timely exchange of all program information,
including but not limited to:
Business plans (e.g. work load projections)
Exchange of product data
Metrics and survey results
Personnel changes
9.2.8.6 Focal Points. The central contacts will function as focal points for
on-going negotiations covering:
Problem resolution
Non-Enterprise Services products
9.2.8.7 Quarterly Management Review. The central contacts will conduct quarterly
management reviews. Supplier shall provide meeting minutes. Minutes to be
provided 2 days after meeting is complete.
9.2.8.8 Quality or Quality Assurance Reviews. Supply Operations and Quality will
conduct local quality reviews or quality assurance reviews as necessary or if
required. Supplier shall provide meeting minutes. Minutes to be provided 2 days
after meeting is complete.
9.2.8.9 Quality Repair and Inspection Data. Supplier will provide Quality Repair
and Inspection Data per the Enterprise Services documented Data Collection
Processes. This information will also include Defective Field
Return data. Documents referenced:
NAFO Repair Data Collection
Repair Data (QAI) Autoload
Supplier Self Surveillance
DTS Process
DTS Sampling
Inspection Data (QA2) Autoload
Quality Data Specs
9.3 Consigned Inventory. Enterprise Services may from time to time provide
consigned material to Supplier as Enterprise Services deems necessary and at
Enterprise Services discretion pursuant to the Consignment Agreement. Supplier
is required to sign a Consignment Agreement herein attached as Attachment A -
Consignment Agreement prior to any material exchanging locations.
10.0 PERFORMANCE STANDARDS
10.1 Performance Criteria. The following performance criteria will be used
to track Supplier performance:
10.2 Reserved
10.2.1 Reserved
10.2.2 Reserved
10.2.3 Reserved
10.2.3.1 Noncompliance with Supplier Corrective Action Reports. ("SCAR").
Enterprise Services reserves the right, at its sole discretion, to engage third
party service providers to meet Enterprise Services's contractual obligations
should Supplier fail to provide satisfactory remedial action, to Enterprise
Services's and/or the Support Customer's satisfaction, within five (5) days from
the issuance of a SCAR.
26
10.2.4 No Trouble Found (NTF). Supplier shall perform NTF testing on all
products following established test procedures and processes along with the
Enterprise Services NTF Matrix Attachment C to this SOW. Supplier will notify
Enterprise Services on specific part numbers that have an NTF rate of less than
twenty-five percent (25%) of the total spares returned for that specific part
number.
10.2.4.1 Physical Inventory
10.2.4.2 All Date Entry functions will be completed the same day as the physical
movement of material. Perform daily audits on all data entry transactions and
maintain a daily Transaction Audit Log.
10.2.4.3 Supplier shall perform inventory Cycle Counts per Enterprise Services
procedure and schedule.
RESULTS EXPECTED: Maintain First Pass cycle count line item accuracy at a
monthly "mean average performance" of 98%. Process Performance to remain within
3 sigma control variation of the MAP for the year. Maintain 99.9% net dollar
accuracy and 99.0% ABS (Absolute) dollar accuracy based on commutative cycle
count and other physical count adjustments for the entire year. Note: 3 sigma
control formula = MAP for each week, weighted by # of line items counted square
root of above times 3.
10.2.4.4 Supplier shall perform Physical Inventory per Enterprise Services API
( ) and CC (Cycle Count) defined programs.
10.2.5 Performance Review. The report criteria listed in Section 23.0 will be
measured and reported by Supplier as stated therein. Enterprise Services will
monitor Supplier progress on the action items identified. In the event that
performance has not been remedied within forty-five (45) days from issuance of
the SCAR, Enterprise Services, reserves the right, after reasonable
consultation with Supplier, to implement all corrective action it deems
necessary including, without limitation, the reassignment of the account and/or
termination of the Agreement for material breach. Enterprise Services will
monitor Supplier progress on the action items identified. In the event that
performance has not been remedied within forty-five (45) days from issuance of
the SCAR, Enterprise Services, reserves the right, after reasonable consultation
with Supplier, to implement all corrective action it deems necessary including,
without limitation, the reassignment of the account and/or termination of the
Agreement for material breach.
11.0 HARDWARE TECHNICAL DATA PACKAGE (TDP) REQUIREMENTS (IF REQUIRED)
Supplier shall provide the following technical information and drawings to be
included in Enterprise Services Technical Data Package:
Technical Data Package Requirements
Engineering Drawings and Associated Lists
12.0 RESERVED
13.0 APPLICABLE DOCUMENTS
Enterprise Services will make available to the contractor all relevant
Enterprise Services documentation upon request. The contractor is responsible
for acquiring the applicable military, federal and industry standards if needed.
13.1 Requirements
13.1.1 General Requirements
13.1.2 Specific Requirements
13.1.2.1 Material
13.1.2.2 Electrostatic Discharge Protection. Supplier will ensure all equipment
that contains components susceptible to damage by static electricity shall be
identified and marked with appropriate warning/caution notes. Supplier will
ensure that all ESD testing equipment (wrist strap testers, surface testers,
constant monitoring stations) are functioning properly and are certified on a
regular basis. Supplier shall take all precautions against ESD in all areas
throughout the repair process where product is not in its final packaging.
13.1.2.3 Reserved
14.0 ENGINEERING CHANGE CLASSES
All engineering changes shall be categorized by the contractor as Class I or
Class II as defined in the following paragraphs.
27
14.1 Class I and Class II Changes
14.1.1 Class I Engineering Changes. An engineering change shall be classified
Class I when one or more of the following is affected:
a. Form, Fit, Function or Interchangeability
b. Safety
c. Cost or Schedule to Enterprise Services
14.1.2 Class I Engineering Changes. An engineering change shall be classified
Class I when it does not fail within the definition of a Class I engineering
change.
15.0 RESERVED
16.0 PREPARATION FOR DELIVERY
16.1 Preservation and Packaging. Unless otherwise specified in the contract or
order, the items shipped shall be shipped in accordance with good commercial
practices.
16.2 Reserved
17.0 RESERVED
18.0 RESERVED
19.0 RESERVED
20.0 TOLERANCE FOR UNIT ENVIRONMENT
20.1 Environmental Protection Considerations and Pollution Prevention
Initiatives. Enterprise Services is committed to the reduction of waste and
pollutants at the source of generation and encourages the use of nonpolluting
technologies. Supplier shall have an active pollution prevention program that
conforms to a manufacturing standard such as NAS 411: Hazardous Management
Program, National Aeronautical Industries Association, or equivalent. Preference
shall be given to companies who demonstrate a commitment to an effective
pollution prevention program including the elimination of the 17 Hazardous
Chemicals as identified by the Environmental Protection Agency (EPA) and O-Zone
depicting substances in the manufacture, operation, repair, and maintenance:
along with other programs such as Energy Star Program and Paper Minimization.
21.0 RECYCLING OF USED HARDWARE
All proposed Enterprise Services hardware shall consist of materials that can
be, at the end of their useful life, disposed of in an environmentally prudent
and safe manner. The plastics and metals shall be easily separable and
recyclable as raw materials
or as parts in the manufacture of new equipment.
22.0 REPORTS
=========================================================================================================================
REPORT DESCRIPTION: DUE DATE: SEND TO:
=========================================================================================================================
Attachment D Status and Metric Report Monthly 1st Fiscal Friday CTM and Supplier PM
Attachment A-1 - Product Listing Quarterly Last Friday CTM and Supplier PM
Quarterly Report Including Financials Quarterly Last Friday CTM and Supplier PM
(NOTE: ALL REPORTS WITH THE EXCEPTION OF FINANCIALS MUST BE BASED ON SUN
MICROSYSTEM'S FISCAL MONTHS)
23.0 BINDER OF EVEDENCE.
Supplier will be required to maintain a Binder of Evidence. This binder of
evidence will include, but not limited to the following:
Receiving Transactions Summary Log
Shipping Transactions Summary Log
Export Documentation Log
Fill Order Requests Summary Log
Scrap Log and Certificates of
Destruction Minutes Conference Calls and Meetings
Minutes Management Review/Scorecard
28
ISO Certification Audits
Training and Records
RFQ Submittals - Accepted and Rejected
Pricing History by Part Number
24.0 MAJOR INITIATIVES AND GOALS
On Time Deliveries 100%
Quality 99.9%
T & M orders on time 98%
Turnkey on all products 100%
Dock to Stock within 120 days after first shipment 100%
Autoload Certified and Implemented -------
2+2=2 Implemented -------
Product received new within 24 hours 98%
Product received defective within 24 hours 95%
Defect Free Transaction 99.75%
Fill Rate 99.98%
Fill Rate Accuracy 99.98%
Cycle Count Accuracy MAP (Mean Avg Performance) 98%
Cycle Count Accuracy Net Dollar 99.9%
Cycle Count Accuracy Absolute Dollar 99%
TAT (Turn Around Time) 5 Days
Inventory MOH (Months On Hand) based on output 0.25 Months
Finished Goods Not To Exceed based on demand 2 Weeks
All reports on time -------
EXHIBITS, ATTACHMENTS AND DOCUMENT LISTINGS:
Exhibit A-1 Hardware Products-Listing of Part Numbers and Listing Cost
(RV Quarterly Update)
Attachment B SCAR Process
Attachment C Enterprise Services Routing Transportation Guide
Attachment D Monthly Status and Metric Template
Attachment E Enterprise Services Record Retention Matrix
Document 1 Reserved
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END OF STATEMENT OF WORK DOCUMENT
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29
SIGNATURE PAGE
THE PARTIES HAVE READ AND AGREE TO THE BOUND HEREBY
EFFECTIVE AS OF: ______/_______/________
ENTERPRISE SERVICES, INC. SUPPLIER
BY: /s/ Xxxxxx X. Xxxxx BY: /s/ X.X. Xxxx
---------------------------------------- -------------------------------------
PRINT: Xxxxxx Xxxxx PRINT: X.X. Xxxx
------------------------------------ ---------------------------------
Enterprise Services - NAFO BD+O
TITLE: Director-Supply Chain Management TITLE: COO Vice President
------------------------------------ ---------------------------------
DATE: 3/22/99 DATE: 7/9/99
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END OF DOCUMENT
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