PRODUCT AND COMPONENT AGREEMENT
This Product and Component Agreement (the "Agreement") is entered into by and
between CALEX Manufacturing Company, Inc. having offices at 0000 Xxxxxxxx
Xxxxx, Xxxxxxx XX 00000 ("CALEX") and Power-One, Inc. having offices at 000
Xxxxx Xxxxx, Xxxxxxxxx, XX 00000 ("POWER-ONE"), as of this second day of
April 1996 (the "Effective Date").
RECITALS
POWER-ONE is engaged in the design, manufacture, and sale of Power Conversion
Products, including AC-DC Power Supplies and DC-DC CONVERTERS, which are
incorporated in AC-DC Power Supplies or sold separately.
CALEX designs, manufactures and sells a family of DC-DC CONVERTERS and possesses
proprietary information pertaining to the design, manufacture, and application
of those devices.
POWER-ONE desires to purchase CALEX'S DC-DC CONVERTERS for its use and/or sale
to others. POWER-ONE also desires to obtain a license to manufacture these
devices.
CALEX is willing to sell its family of DC-DC converters and the components
contained in such devices and to license the manufacturing and design technology
and know-how for such devices to POWER-ONE on the terms set forth herein.
CALEX desires to purchase certain components and sub-assemblies from POWER-ONE
for use in CALEX'S manufacturing activities.
POWER-ONE is willing to sell such components and sub-assemblies to CALEX on the
terms set forth herein.
In consideration of the mutual covenants herein contained and intending to be
legally bound by the provisions of this Agreement, the parties agree as follows:
I. DEFINITIONS
For all purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires, the terms defined in this Article 1 have
the meanings assigned to them in this Article 1 and include the plural as well
as the singular. As used in this Agreement and the Addendums attached hereto,
the following definitions shall apply.
"DC-DC CONVERTER" means a PRODUCT that converts Direct Voltage (DC) into a
different Direct Voltage (DC) and which has an output power capacity of 60 Xxxxx
or less.
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1 CALEX POWER-ONE
"PRODUCTS" mean DC-DC CONVERTERS manufactured by CALEX at any time prior to
the fifth anniversary of the date of this Agreement, including, but not limited
to, those identified on Addendum A and MODIFIED STANDARD PRODUCTS; provided,
however, that PRODUCTS shall not include any products which are developed for a
specific customer and have unique characteristics and specifications that
require major product changes or require PCB (Printed Circuit Board) artwork or
case size changes.
"MODIFIED STANDARD PRODUCT" means any PRODUCT that is modified by Licensor
with either minor electrical or mechanical changes, but does not require PCB
(Printed Circuit Board) artwork or case size changes.
"COMPONENTS" mean those parts that are purchased from third parties or
manufactured by one of the parties to this Agreement for inclusion in the
devices it manufactures or for sale to the other party to this Agreement.
Such COMPONENTS shall generally include commercially available items and
items that are subject to CALEX' special requirements, selection or testing.
COMPONENTS shall not include any SUB-ASSEMBLIES, such as magnetics or cases.
CALEX COMPONENTS are COMPONENTS that are to be sold by CALEX hereunder;
POWER-ONE COMPONENTS are COMPONENTS that are to be sold by POWER-ONE
hereunder.
"SUB-ASSEMBLY" means a group of COMPONENTS that are assembled by either
party or by a third party. SUB-ASSEMBLIES are usually required in order to
manufacture a PRODUCT. POWER-ONE SUB-ASSEMBLIES are those to be sold by
POWER-ONE hereunder. CALEX SUB-ASSEMBLIES are those to be sold by CALEX
hereunder.
"MODELS" mean individual PRODUCTS that are part of a SERIES, but that
have different electrical specifications from other MODELS in the same SERIES.
"SERIES" mean a set of MODELS that are combined to form a group of PRODUCTS
that has similar characteristics in terms of electrical and physical
specifications.
"CORRECTION" means a change made in any PRODUCT to make the PRODUCTS
conform to the then current specifications applicable to that PRODUCT.
"SUBSIDIARY" means a corporation, company or other entity fifty percent
(50%) or more of whose control or outstanding voting shares or securities are,
now or hereafter, owned or controlled, directly or indirectly, by CALEX or
POWER-ONE.
"ORDER" means a POWER-ONE or CALEX purchase order or changes thereto, in
written or electronic format, for a PRODUCT or COMPONENT.
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2 CALEX POWER-ONE
II. TERM OF AGREEMENT
A. CALEX OBLIGATIONS. CALEX agrees to sell PRODUCTS, CALEX COMPONENTS,
AND SUB-ASSEMBLES to POWER-ONE on the terms and conditions set forth herein for
an initial term of five (5) years from the Effective Date; such term shall be
automatically renewed for successive one (1) year periods thereafter, unless
notice of termination is given by one party to the other at least one hundred
and eighty (180) days prior to the termination date of the initial term or of
any yearly renewal term, or unless earlier terminated under any other provision
of this Agreement.
B. POWER-ONE OBLIGATIONS. POWER-ONE agrees to sell POWER-ONE
COMPONENTS, AND SUB-ASSEMBLES to CALEX on the terms and conditions set forth
herein for an initial ten (10) years from the Effective Date; such term and
shall be automatically renewed for successive one (1) year periods thereafter,
unless notice of termination is given by one party to the other at least one
hundred and eighty (180) days prior to the termination date of the initial term
or of any yearly renewal term, or unless earlier terminated under any other
provision of this Agreement.
III. LICENSE
Contemporaneous with the execution of, and as a condition to the
effectiveness of, this Agreement, the parties are executing the license (the
"License") set forth in Addendum B.
IV. PRODUCT
A. ADDITIONAL PRODUCTS
CALEX agrees to develop one new SERIES for POWER-ONE within one year of
the Effective Date. The type shall be substantially similar to, and the
specifications shall be as good as, a Computer Products Incorporated NFC25
SERIES low density DC-DC CONVERTERS.
In addition, CALEX agrees to develop at least one new SERIES for
POWER-ONE, the type and specification to be negotiated by the parties, in each
of the second though fifth years of this Agreement; provided, however, if the
present owners of CALEX sell in the aggregate 51% or more of the equity interest
in CALEX in one or more transactions, this obligation shall cease on the third
anniversary of such sale.
CALEX agrees to develop two MODELS within one hundred and eighty (180)
days of the Effective Date. The type and specification is to be determined by
POWER-ONE.
Nothing contained in this Agreement shall prevent POWER-ONE or CALEX from
developing either through third parties or through the use of its own personnel,
or from acquiring from third parties, products, sub-assemblies, or components
similar to and
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3 CALEX POWER-ONE
competitive with the PRODUCTS, COMPONENTS, and SUB-ASSEMBLIES covered hereby.
Furthermore, nothing herein shall preclude POWER-ONE or CALEX from marketing
such developed or acquired products to others. Any such product, subassembly or
component manufactured by CALEX prior to the fifth anniversary of this Agreement
shall be included in PRODUCTS, CALEX COMPONENTS, or CALEX SUB-ASSEMBLIES.
B. LABELING
CALEX will supply all PRODUCTS with labels covering those items identified
on Addendum C. The artwork for the POWER-ONE logo will be supplied by POWER-ONE.
The type of label will be chosen on a case-by-case basis for each model, and
includes printing on a label to be affixed to the PRODUCT, or some type of
automated printing, or otherwise mutually agreed upon printing technique.
Subject to the foregoing limitations, POWER-ONE may require CALEX to affix,
and otherwise use POWER-ONE trademarks and type numbers on or in connection with
the PRODUCTS furnished. Moreover, CALEX will remove from all PRODUCTS, which are
so marked, any trademark or name owned or used by CALEX.
C. DISCONTINUATION OF PRODUCTION.
In the event that CALEX decides to discontinue any PRODUCT, it shall notify
POWER-ONE at least ninety (90) days before such discontinuance, and CALEX shall
continue to make COMPONENTS used in the original PRODUCT available under this
Agreement for at least one year from the date of such notice to POWER-ONE.
V. PRODUCT QUALIFICATION AND ACCEPTANCE
Preliminary qualification testing of selected initial production units of
the PRODUCTS manufactured by CALEX for POWER-ONE shall be conducted and
completed, per specification, before the first scheduled shipment of PRODUCTS to
POWER-ONE. During the term of this Agreement, POWER-ONE may elect to do on-going
quality and product verification testing of any PRODUCT.
VI. ORDERING AND SCHEDULING
A. AGREEMENT TERMS AND CONDITIONS APPLICABLE TO ORDERS. CALEX shall sell
such quantities of PRODUCTS and CALEX COMPONENTS as POWER-ONE shall from time to
time order as provided in this Agreement. POWER-ONE shall sell such quantities
of POWER-ONE COMPONENTS and POWER-ONE SUB-ASSEMBLES as CALEX shall from time to
time order as provided in this Agreement, subject to the limitation in Section
G, below. The ordering of PRODUCTS, COMPONENTS and SUB-ASSEMBLIES shall be by
means of individual ORDERS. This Agreement sets forth the terms and conditions
applicable to ORDERS from either party, and replaces in their
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4 CALEX POWER-ONE
entirety the pre- printed terms and conditions appearing on POWER-ONE forms and
on CALEX forms.
B. ORDER CONTENT, ACCEPTANCE, AND LEAD-TIMES. Each ORDER shall specify
quantities, prices, delivery schedules, destination, and other similar matters
necessary for the individual transaction to be adequately described. ORDERS and
related instructions which are consistent with the terms of this Agreement shall
be accepted by CALEX or POWER-ONE. CALEX or POWER-ONE, as the case may be, shall
acknowledge receipt of each ORDER within two (2) days after receipt and shall
deliver ordered units of PRODUCTS or COMPONENTS or SUB-ASSEMBLIES in accordance
with delivery schedules indicated on the ORDERS, provided such dates are in
accordance with the lead-times set forth below.
C. LEAD-TIMES. CALEX will provide all PRODUCTS with a lead time of three
to four weeks, unless a different lead time is agreed to in writing by- the
parties. Over the course of the Agreement, both parties will work together to
reduce the lead-times.
D. RESCHEDULING OF PRODUCT DELIVERIES. POWER-ONE has the right to
issue changes to ORDERS to increase or decrease quantities of PRODUCTS scheduled
for delivery in accordance with the following schedule:
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Days from Change Order to Quantity in Time Frame
Scheduled Delivery Date Permitted to be Changed
(Time Frame)
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30 Days or less No changes allowed
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31 Days or greater 100% variance*
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* 100% variance permitted as long as rescheduled within twelve months, or else
the CALEX COMPONENTS purchased for these PRODUCTS will be purchased by POWER-ONE
under the terms of COMPONENTS pricing.
E. LEAD-TIMES AND RESCHEDULING OF COMPONENTS DELIVERIES. POWER-ONE and
CALEX have the right to issue changes to ORDERS to increase or decrease
quantities of COMPONENTS ordered from the other party; however, both parties
will directly pass through lead-times, cancellation, and any other contractual
terms of its suppliers to the other party for the purchase of COMPONENTS to be
subsequently sold to the other party. Up to five (5) days may be added for
handling. Changes in lead-times will be given in writing to the other party
within ten (10) days. The parties shall use their best efforts to establish
lead-times for COMPONENTS manufactured by either party.
F. DELINQUENT SHIPMENT OF PRODUCT ORDERS. CALEX agrees to deliver exact
quantities as specified on ORDERS. CALEX agrees to deliver units to POWER-ONE'S
dock no sooner than three (3) business days prior to, and no later than
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5 CALEX POWER-ONE
one (1) business day after, the scheduled delivery date. Units delivered within
this time frame are considered "on time". Any purchase order delinquent more
than five (5) days, upon request by Power-One, shall be air shipped, per
POWER-ONE'S instructions, prepaid to POWER-ONE or its customer. CALEX to invoice
for normal surface charges and absorb the excess shipping charges.
G. POWER-ONE SUB-ASSEMBLIES. POWER-ONE shall fulfill any ORDER for
POWER-ONE SUB-ASSEMBLIES in its sole discretion, and shall have no obligation to
sell such SUB-ASSEMBLY to CALEX hereunder.
VII. COMPONENTS
A. CALEX COMPONENTS.
1. PURCHASING INFORMATION. All CALEX COMPONENTS may be purchased
either directly from CALEX under this Agreement or at POWER-ONE'S election from
CALEX'S suppliers.
2. RECOMMENDED COMPONENTS. CALEX shall recommend to POWER-ONE the
CALEX COMPONENTS and quantity thereof used per unit of PRODUCT, and shall
provide failure rates, where available, for POWER-ONE'S information in
establishing POWER-ONE inventory and stocking levels. CALEX shall furnish
consumption factors for supplies. CALEX shall promptly advise POWER-ONE of any
changes in CALEX'S recommendations.
3. CALEX'S AUTHORIZATION/NOTICE. CALEX grants POWER-ONE the right to
use CALEX-furnished information to purchase the COMPONENTS directly from any
suppliers thereof, as well as the right to have CALEX'S suppliers use any
CALEX-owned, paid for, or supplied tooling and test equipment on such supplier's
premises to supply such COMPONENTS to POWER-ONE. CALEX shall so notify its
suppliers. POWER-ONE shall also have the right at its cost to develop a second
source for all CALEX COMPONENTS and tooling. CALEX may have access to any
second-source developed by POWER-ONE for CALEX COMPONENTS, and POWER-ONE shall
so advise CALEX of any such second source..
B. POWER-ONE COMPONENTS. POWER-ONE COMPONENTS may be purchased directly
from POWER-ONE by CALEX, or at POWER-ONE'S election from POWER-ONE'S suppliers.
POWER-ONE COMPONENTS shall initially include those components listed on Addendum
K. At any time during the term of this Agreement POWER-ONE COMPONENTS shall
include approximately one hundred (100) items on which CALEX has expended the
greatest dollar volume for purchases for its own account during the preceding
six month period plus such additional COMPONENTS as are agreed upon by the
parties from time to time in writing. CALEX shall supply POWER-ONE from time to
time information about its purchases sufficient to identify the one hundred
(100) COMPONENTS.
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6 CALEX POWER-ONE
C. COMPONENTS SUPPLY AFTER CESSATION OF MANUFACTURING.
1. CESSATION. To the extent that COMPONENTS are reasonably
available from third parties, each party shall continue to purchase COMPONENTS
as necessary for it to fulfill its obligations to sell COMPONENTS to the other
under this Agreement. If at any time during the term of this Agreement, either
party intends to discontinue manufacturing a COMPONENT, it shall notify the
other party in writing at least 30 days prior to such discontinuance.
2. CONTINUING OBLIGATION TO SUPPLY. If either party gives notice of its
intent to cease making COMPONENTS as provided in Subparagraph 1 of this Article
VII(C) the party shall, within thirty (30) days after request from the other
party, furnish available manufacturing drawings, specifications and other
information for manufacturing such COMPONENTS, and in such event the party
grants the other party the nonexclusive right to make, use, and sell such
COMPONENTS and to purchase such COMPONENTS obtained from others.
VIII. PRICES/PAYMENT/PACKING
A. PRICES FOR PRODUCTS AND COMPONENTS. CALEX prices for PRODUCTS and
CALEX COMPONENTS are as provided in Addendum G. If POWER-ONE purchases CALEX
COMPONENTS from CALEX' vendors, the pricing will be negotiated by POWER-ONE and
CALEX vendors.
POWER-ONE prices for POWER-ONE COMPONENTS and SUB-ASSEMBLIES are as
provided in Addendum H.
Each party shall pay any amounts due to the other party hereunder in U.S.
dollars. The prices include all packing charges and are:
For CALEX -- The FOB shipping point shall be Concord, CA, USA.
For POWER-ONE -- The FOB shipment point shall be from Point of Shipment.
B. PRICE CHANGES. The prices set forth in Addendum G and H are firm
for three (3) months. The parties will have quarterly meetings to review and
adjust the prices per Addendum G and H, unless both parties agree not to meet.
All ORDERS not shipped prior to the effective date of any increase or decrease
shall be billed at the new prices.
C. SPECIAL PRICING. CALEX agrees that special discounts may be
negotiated for specific bid opportunities, as required, subject to mutual
written agreement of the parties.
D. PAYMENT TERMS.
1. Either party may submit its invoices to the other party only after
shipment of PRODUCTS, COMPONENTS or SUB-ASSEMBLIES.
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7 CALEX POWER-ONE
2. Invoices shall be payable within forty-five (45) days after receipt of
PRODUCTS, COMPONENTS or SUB-ASSEMBLIES, provided, however, that if any party is
delinquent in making its payment in any two consecutive months or any three
months within a twelve month period, future shipments to such party may at the
option of the other party be made COD.
3. The shipping party shall separately list freight charges on invoices
and have a copy of the freight bills, if other than UPS, available for review.
4. Each invoice shall specify Purchase Order number, part number,
quantity shipped and monetary amounts in U.S. dollars. Packaging slips shall
specify Purchase Order number, part number, revision level, unit of measure and
quantity shipped.
E. TAXES. The PRODUCTS, COMPONENTS and SUB-ASSEMBLES to be sold
hereunder are purchased for resale in the ordinary course of business and
therefore should be exempt from sales, use and other similar taxes. If the
PRODUCTS, SUB-ASSEMBLIES, or COMPONENTS become taxable, the buyer is responsible
for taxes. A party shall specify in the applicable ORDER that if any purchase is
not for resale and shall indemnify the seller from all taxes, penalties and
interest resulting from a failure to so specify or to pay any applicable tax.
F. PACKING. PRODUCTS and COMPONENTS shall be suitably packed and shipped
in accordance with the packing and shipping requirements of common carriers, and
in such manner as is reasonably calculated to protect against damage from
transportation, weather and other environmental conditions.
IX. FORECASTS
Each Party shall provide the other Party with the following forecasts of
its purchases of PRODUCTS, COMPONENTS and SUB-ASSEMBLES:
A. A twelve month general forecast delivered on each anniversary of
the Effective Date of this Agreement.
B. A rolling six-month forecast delivered on the first of each month
commencing April 1,1996.
X. DOCUMENTATION
A. ADDENDUM D. CALEX shall ship a complete set of the documents
identified on Addendum D within thirty (30) days of the Effective Date of this
Agreement. All such documents and revisions, whether written or oral, shall be
available to POWER-ONE, whether or not originally supplied. Whenever available
or can be made available, a computer file will be delivered in addition to the
hard-copy document.
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8 CALEX POWER-ONE
B. ADDITIONAL DOCUMENTS. Upon request, CALEX shall furnish POWER-ONE
with photo negatives and/or line art and/or electronic media as available, for
all photographs/drawings relating to the PRODUCTS.
C. UPDATES. CALEX shall provide changes to any materials supplied
pursuant to Paragraphs A and B above, as a result of:
(1) subsequent inclusion of any improvement or CORRECTION,
(2) changes in the specifications for any PRODUCT,
(3) any other change in a PRODUCT, and
(4) any other causes affecting the information supplied to POWER-ONE.
D. MEDIA. Upon POWER-ONE'S request, CALEX will furnish to POWER-ONE
on a continual basis, all media used by CALEX in promotion of the PRODUCTS.
CALEX grants POWER-ONE the non-exclusive right to reproduce, modify, translate,
and distribute such materials and the right to disclose the information
contained therein for its own purposes. CALEX shall provide camera ready copy
and/or electronic media as available for POWER-ONE.
XI. QUALITY ASSURANCE/TESTING
A. CALEX'S QUALITY ASSURANCE AND TESTING. CALEX shall document a quality
plan and perform quality assurance in accordance with Addendum E. The quality
plan shall conform to the requirements specified by ISO 9001, as appropriate. No
PRODUCTS shall be shipped by CALEX until they have been processed in accordance
with the tests, inspections and controls defined in Addendum E and can be
demonstrated to meet the requirements of this Agreement.
B. POWER-ONE OBSERVATION. CALEX'S manufacture and testing of PRODUCTS
to be delivered hereunder may be witnessed by POWER- ONE representatives at
CALEX'S premises at all reasonable times, and upon POWER-ONE'S request, CALEX
shall attempt to arrange for visits of POWER-ONE personnel to CALEX'S suppliers
of materials for the PRODUCTS. CALEX may be visited by customers, distributors,
or representatives of POWER-ONE from time to time on reasonable advance notice
and upon execution by such visitors of reasonable written promises of
confidentiality.
POWER-ONE may, from time to time, station employees in CALEX'S facility for
the purposes of monitoring CALEX'S performance, quality assurance, and
engineering in relation to this Agreement, provided such persons have signed
such written promises of
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9 CALEX POWER-ONE
confidentiality as CALEX may request. CALEX will use its best efforts to support
and accommodate POWER-ONE personnel while at CALEX.
C. PROBLEMS. In the event POWER-ONE determines that PRODUCTS or CALEX
COMPONENTS do not operate in accordance with the specifications or fail to meet
the quality/assurance testing described above, it shall notify CALEX. CALEX
shall promptly evaluate any defective PRODUCT or CALEX COMPONENT and shall
notify POWER-ONE of the result of its evaluation and its corrective action plan,
if needed, within ten (10) days after receipt of such notice from POWER-ONE.
In the event CALEX determines that POWER-ONE COMPONENTS or POWER-ONE SUB-
ASSEMBLIES do not operate in accordance with the specifications or fail to meet
the quality/assurance testing described above, it shall notify POWER-ONE.
POWER-ONE shall promptly evaluate any defective POWER-ONE COMPONENT or
SUBASSEMBLY and shall notify CALEX of the result of its evaluation and its
corrective action plan, if needed, within ten (10) days after receipt of such
notice from CALEX.
Any dispute regarding the specification or corrective action plan that are
not resolved by the parties shall be resolved in accordance with section 3.3 of
Addendum E.
XII. CONFIGURATION CONTROL
A. CHANGES BY CALEX.
1. CALEX shall not make or incorporate any change in any PRODUCT or
CALEX COMPONENT which negatively affects specifications, form, fit, function,
regulatory approvals, interface, interchangeability, reliability,
maintainability, or costs, without prior written approval of POWER-ONE.
2. Changes not negatively affecting specifications, form, fit,
function, regulatory approvals, interface, interchangeability, reliability,
maintainability, or costs of a PRODUCT or CALEX COMPONENT, may be made and
incorporated in the PRODUCT or CALEX COMPONENT, as the case may be, by CALEX at
CALEX'S expense provided CALEX gives prior written notice of such changes to
POWER-ONE and, as required, furnishes POWER-ONE with updated Test Programs and
documents related to such change. These changes include, but are not limited to
the procedures, processes, test parameters, or other material related to the
manufacture of the PRODUCT or COMPONENT.
3. CALEX shall, at its expense, provide POWER-ONE with a copy of
each Engineering Change Order (ECO) or like documentation issued by it during
the term of this Agreement with respect to operation of any PRODUCT. Such copy
shall be provided to POWER- ONE as soon as practicable, but no later than three
(3) days after issuance by CALEX.
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10 CALEX POWER-ONE
B. SPECIFICATION, ENGINEERING, AND OTHER CHANGES IN SPECIFICATION. The
specifications for the PRODUCTS, CALEX SUB-ASSEMBLES, and CALEX COMPONENTS may
be amended or otherwise changed from time-to-time by written agreement of CALEX
and POWER-ONE. Prior to any such change becoming effective, all PRODUCTS,
SUB-ASSEMBLES, and COMPONENTS shipped by CALEX to POWER-ONE shall continue to
conform to the existing Specifications, unless POWER-ONE shall otherwise
request. The specifications for the POWER-ONE PRODUCTS, COMPONENTS, OR
SUB-ASSEMBLES may be amended or otherwise changed from time-to-time by
POWER-ONE. POWER-ONE shall give CALEX 30 days notice of any such change. Prior
to any such change becoming effective, all COMPONENTS shipped by POWER-ONE to
CALEX shall continue to conform to the existing Specifications, unless CALEX
shall otherwise request.
C. POWER-ONE CHANGES. POWER-ONE may propose changes to the specifications
for any PRODUCT or CALEX COMPONENT, and in such event, CALEX shall consider the
feasibility of any such proposal. CALEX shall, within a reasonable period of
time, not to exceed fifteen (15) days after receipt of the POWER-ONE proposal,
furnish to POWER-ONE in writing its comments regarding such proposed changes,
including whether it is willing to implement the same, the price change, if any,
and the time schedule required for implementation.
D. CHANGE IN SOURCE OF COMPONENTS. CALEX and POWER-ONE shall each notify
the other party in advance of, and the reasons for, any change in the source
(including addition of new vendors) of purchased COMPONENTS.
E. CHANGE INDUCED PROBLEMS. In the event POWER-ONE determines, after any
engineering or any other change by CALEX, that any PRODUCT or CALEX COMPONENT
does not operate in accordance with the specifications or fails to meet the
quality/assurance testing described above, it shall notify CALEX. CALEX shall
promptly evaluate any defective PRODUCT or CALEX COMPONENT and shall notify
POWER-ONE of the result of its evaluation and its corrective action plan, if
needed, within ten (10) days after receipt of such notice from POWER-ONE. Any
dispute regarding the corrective action plan that are not resolved by the
parties shall be resolved in accordance with section 3.3 of Addendum E.
F. CHANGES IN COMPONENTS OR PRODUCTS. In the event that any change to a
PRODUCT or CALEX COMPONENT, that is approved by POWER-ONE, negatively affects
the interchangeability of such PRODUCT or COMPONENT, CALEX shall provide a
different part number for the new PRODUCT or COMPONENT. All PRODUCTS and
COMPONENTS thereafter delivered by CALEX shall be promptly identified to
POWER-ONE by date code AND lot code.
XIII. TERMINATION
A. TERMINATION FOR DEFAULT.
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11 CALEX POWER-ONE
1. BY POWER-ONE. In the event that CALEX fails to fulfill its obligations
under this Agreement or under the License in any material respect, POWER-ONE may
terminate its obligations under this Agreement, other than its obligation to pay
for PRODUCTS and CALEX COMPONENTS, upon sixty (60) days prior written notice;
provided, however, if during the period of such notice CALEX shall have remedied
such failure, POWER-ONE'S obligations under this Agreement shall continue in
full force and effect as it would have had such failure not occurred. Any such
termination shall not affect the License or CALEX'S obligation to furnish
PRODUCT and CALEX COMPONENTS thereafter.
2. BY CALEX. In the event that POWER-ONE fails to fulfill its obligations
under this Agreement or under the License in any material respect, CALEX may
terminate its obligations under this Agreement, other than its obligation to pay
for POWER-ONE COMPONENTS or SUB-ASSEMBLES, upon sixty (60) days prior written
notice; provided, however, if during the period of such notice POWER-ONE shall
have remedied such failure, CALEX'S obligations to so furnish PRODUCTS and CALEX
COMPONENTS under this Agreement shall continue in full force and effect as it
would have had such failure not occurred. Any such termination shall not affect
POWER-ONE'S obligation to furnish POWER-ONE COMPONENTS or SUB-ASSEMBLES
thereafter.
B. RIGHTS CUMULATIVE. The parties' rights set forth above are in addition
to and shall not limit or prejudice any other right or remedy available under
this Agreement, at law, or in equity, including its right to recover any money
amounts or require performance of any obligations due at the time of such
termination.
XIV. POWER-ONE SUPPORT
POWER-ONE will assist CALEX, on an on-going basis, in the following
categories:
Database programs for quality and management reports
SPC systems
Process and engineering systems
COMPONENTS/components procurement.
Such support shall be made available to CALEX at POWER-ONE headquarters and
will be available on a reasonable basis and a reasonable period of time.
POWER-ONE agrees to consider manufacturing PRODUCT for purchase by CALEX.
Since POWER-ONE is in a start-up mode for DC-DC CONVERTERS and the processes,
costs, and capacity is unknown, terms and conditions, including pricing, will be
negotiated at a later date if POWER-ONE determines, in its sole discretion, to
commence such manufacturing.
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12 CALEX POWER-ONE
XV. WARRANTIES
Neither party shall be obligated to warrant COMPONENTS manufactured by
others; provided that each party shall use its best efforts to pass on to the
other party warranties given by third parties with respect thereto. CALEX'S and
POWER-ONE'S warranties with respect to PRODUCT or COMPONENTS manufactured by it
are set forth on Addendums I and J respectively.
XVI. GENERAL PROVISIONS
A. GOVERNING LAW. This Agreement shall be construed, governed and
interpreted in accordance with the laws, but not the rules relating to the
choice of law, of the State of California.
B. CAPTIONS/HEADINGS. The captions and headings of the Articles, clauses
and paragraphs contained herein have been inserted for the convenience of the
parties and shall not be construed as a part of or modifying any provisions of
this Agreement.
C. NOTICE. All notices and other communications required or permitted
hereunder shall be in writing, shall be delivered in person, by telecopier or by
registered or certified mail, postage prepaid, to the parties as follows:
If to POWER-ONE:
POWER-ONE
000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxx. 00000
Attn: Xxxxx Xxxx
Telecopier: 000 000 0000
If to CALEX:
CALEX
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx. 00000
Attn: Xxxxx Xxxxxxx
Telecopier: 000 000 0000
or to such other address as either party may have furnished to the other in
writing in accordance herewith. Notices delivered in person shall be deemed
given when so delivered, notices given by telecopier shall be deemed delivered
upon receipt of confirmation, and notices delivered by mail shall be deemed
received three days after mailing.
D. FORCE MAJEURE. Neither POWER-ONE nor CALEX shall be liable to the
other for delays in the performance of or completion of this Agreement if notice
of
/s/SPC /s/ DJH
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13 CALEX POWER-ONE
such delay is provided and if such delay is caused by strikes, riots, wars,
government regulations, acts of God, fire, flood or other similar causes beyond
its control. Whenever any such occurrence is delaying or threatens to delay
either party's timely performance under this Agreement, that party shall
promptly give notice thereof, including all relevant information with respect
thereto, to the other party. None of the foregoing shall, however, excuse or
postpone any obligation of either party to pay money under this Agreement.
E. ASSIGNMENT AND BENEFITS. All of the terms and conditions of this
Agreement shall be binding upon, inure to the benefit of, and be enforceable by
the respective successors and permitted assigns of the parties hereto. Except as
specifically stated in this Agreement, neither this Agreement nor any of the
rights, interests or obligations of any party hereunder shall be assigned or
delegated by either party hereto without the prior written consent of the other.
Such consent shall not be withheld unreasonably. Any unauthorized assignment or
delegation shall be null and void. Notwithstanding the foregoing, either party
may assign or otherwise transfer its rights and obligations to its subsidiaries,
or successors in interest (whether by purchase of stock or assets, merger,
operation of law, or otherwise) of that portion of its business related to the
subject matter hereof.
F. WAIVER. The failure of either party to insist, in any one or more
instances, upon the performance of any of the terms, covenants or conditions of
this Agreement or to exercise any right hereunder, shall not be construed as a
waiver of the future performance of any such term, covenant or condition or the
future exercise of such right.
G. SEVERABILITY. The illegality, invalidity or unenforceability of any
part of this Agreement shall not affect the legality, validity or enforceability
of the remainder of this Agreement. If any part of this Agreement shall be found
to be illegal, invalid or unenforceable, this Agreement shall be given such
meaning as would make this Agreement legal, valid and enforceable in order to
give effect to the intent of the parties.
H. INDEPENDENT CONTRACTORS. It is agreed that the relationship between
the parties is that of independent contractors, and nothing contained in this
Agreement shall be construed or implied to create the relationship of partners,
joint ventures, agent and principal, employer and employee, or any relationship
other than that of independent contractors. At no time shall either party make
any commitments or incur any charges or expenses for or in the name of the other
party.
I. COUNTERPARTS. This Agreement may be executed in counterparts, any one
of which need not contain the signatures of more than one party, but all of
which, taken together, shall constitute one and the same agreement.
J. PUBLICITY. No party, except as may be required by law or federal
regulation, shall make any public announcements concerning the other party's
name in regards to the execution, existence or performance of this Agreement
without first submitting the text of such public announcement to the other party
and receiving the approval of the other party, which approval shall not be
unreasonably delayed or withheld.
/s/SPC /s/ DJH
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14 CALEX POWER-ONE
K. TRADEMARKS AND TRADE NAMES. Nothing contained in this Agreement shall
be construed as licensing either party to use any trademark or trade name owned
or used by the other party without the prior written consent of the other party.
When marketing the PRODUCTS, POWER-ONE shall have the right to use its own
trademarks or trade names.
L. RISK OF LOSS. Until such time as the deliverable items are in the
possession of the common carrier, all risk of loss shall be the manufacturer of
the PRODUCT or reseller of the COMPONENT.
M. COMPLIANCE WITH LAW. The parties shall comply with all applicable
laws, rules, regulations and orders of the United States and all jurisdictions
and any agency or court thereof in connection with this Agreement and the
transactions contemplated thereby.
N. AMENDMENTS AND MODIFICATIONS. No amendment or modification of this
Agreement shall be valid or binding upon the parties unless signed by their
respective authorized officers.
O. ADDENDA/ATTACHMENTS. The Addenda, attachments and other documents
referred to in this Agreement and all specifications, drawings and documents
referenced therein are hereby incorporated in and made part of this Agreement.
P. ENTIRE AGREEMENT. This Agreement, including the addenda, and the
License Agreement state the entire agreement between the parties with respect to
the subject matter hereof and shall supersede all previous proposals,
negotiations, representations, commitments, writings, agreements, and other
communications, both oral and written, between the parties.
Q. REPRESENTAITON BY COUNSEL. Interpretation. Each party acknowledges
that it has been represented by counsel in connection with this Agreement and
the transactions contemplated by this Agreement. Accordingly, any rule of law,
or any legal decision that would require interpretation of any claimed
ambiguities in this Agreement against the party that drafted it has no
application and is expressly waived. The provisions of this Agreement shall be
interpreted in a reasonable manner to effect the intent of the parties.
R. ARBITRATION OF DISPUTES.
1. PROCEDURE; . Except for actions seeking injunctive relief, which may be
brought before any state or federal court in California, any dispute arising out
of or relating to this Agreement (or any exhibit or schedule hereto) or the
breach, termination or validity hereof or thereof, shall be resolved in the
following manner:
a. the parties shall use all reasonable efforts to resolve the dispute
through direct discussions within 30 days of written notice that there
is such a dispute; or
/s/SPC /s/ DJH
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15 CALEX POWER-ONE
b. if no amicable settlement is reached as a result of the procedure
described in (a), the matter shall be finally settled by arbitration
conducted expeditiously by a single arbitrator in accordance with the
Rules for Non-Administered Arbitration of Business Disputes
promulgated by the CPR Institute for Dispute Resolution (formerly
Center for Public Resources). No arbitrator may serve who has had at
any time a material personal or financial relationship with any
participant to the dispute or any Affiliate of any such participant.
The place of arbitration shall be either Los Angeles or San Francisco,
California. This can be decided by a coin flip or any other random
means. The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. sections 1-16 and judgment upon the award of
the arbitrator may be entered by any court having jurisdiction
thereof. The arbitrator is not empowered to act as AMIABLE
COMPOSITEUR or to award damages in excess of compensatory damages and
each party hereto hereby waives any damages in excess of compensatory
damages. The arbitrator shall have the power to order equitable relief
as if sitting as a court of equity.
2. CONFIDENTIALITY; . The dispute resolution proceedings contemplated
by this provision shall be as confidential and private as permitted by law. To
that end, the parties shall not disclose the existence, content or results of
any proceedings conducted in accordance with this provision, and materials
submitted in connection with such proceedings shall not be admissible in any
other proceeding; provided, however, that this confidentiality provision shall
not prevent a petition to vacate or enforce an arbitral award, and shall not bar
disclosures required by law. The parties agree that any decision or award
resulting from proceedings in accordance with this dispute resolution provision
shall have no preclusive effect in any other matter involving third parties.
This Agreement has been duly signed by authorized representatives of
the parties and shall become effective as of the first date set forth above (the
"Effective Date").
CALEX Manufacturing Company, Inc. POWER-ONE, Inc.
By:/s/ S.P. Cuff By: /s/ Xxxxx X. Xxxx
---------------------------- --------------------------------
S.P. Cuff Xxxxx X. Xxxx
---------------------------- -----------------------------------
(Printed/typed name) (Printed/typed name)
,
Title: President Title: Vice President
----------------------- ----------------------------
/s/SPC /s/ DJH
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16 CALEX POWER-ONE
ADDENDUM TABLE OF CONTENTS
ADDENDUM A - PRODUCT SPECIFICATIONS AND LEAD TIMES
ADDENDUM B - TECHNOLOGY AND KNOW-HOW LICENSE
ADDENDUM C - LABEL INFORMATION
ADDENDUM D - DOCUMENTATION
ADDENDUM E - QUALITY PROVISIONS
ADDENDUM F - RETURN MATERIAL AUTHORIZATION PROCEDURE
ADDENDUM G - CALEX PRICING
ADDENDUM H - POWER-ONE PRICING
ADDENDUM I - WARRANTY FOR CALEX PRODUCT AND CALEX COMPONENTS MANUFACTURED BY
CALEX
ADDENDUM J - WARRANTY FOR POWER-ONE PRODUCT AND COMPONENTS MANUFACTURED BY
POWER-ONE
ADDENDUM K - LIST OF POWER-ONE COMPONENTS
/s/SPC /s/ DJH
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17 CALEX POWER-ONE
ADDENDUM A - PRODUCT SPECIFICATIONS AND LEAD TIMES
PRODUCTS AND PRODUCT DESCRIPTIONS:
PRODUCTS are those products as defined in the Agreement including those
contained in the current 1996 CALEX DC/DC Catalog. POWER-ONE will order
PRODUCTS using its own part numbering system. Lead times will be 4 weeks.
PRODUCT SPECIFICATIONS:
PRODUCTS are presented "as designed" and shall be qualified using the CALEX
datasheets. If any CALEX PRODUCT requires changes, including PC boards, to meet
published CALEX maximum and minimum specifications, CALEX will make those
changes at its expense. If any CALEX PRODUCT requires changes, including PC
boards, to meet its published CALEX typical specifications, CALEX will use its
best efforts to make those changes at its expense. POWER-ONE may, at its
discretion, change specifications and/or establish maximum and/or minimum
values, including changing specifications for output noise, turn-on overshoot,
and thermal cycling for the following CALEX PRODUCTS: NT, EC, WD, TC, LV, HP,
RM, UM, SD, and SIP SERIES; provided, however:
1. Mutually acceptable conditions under which measurements will be made must be
determined.
2. POWER-ONE at its cost will re-engineer and test such PRODUCTS, and CALEX
will implement the changes on a best efforts basis. If CALEX implements the
changes pursuant to POWER-ONE'S direction, CALEX shall have no liability if the
changed PRODUCT fails to meet the new specification. Minor PC board changes
(e.g., pad size) will be done by CALEX at its expense. Major PC board changes
requiring prototyping will be done by CALEX at POWER-ONE'S expense.
3. In any event, changes requested by POWER-ONE as to any specification will
not degrade any other current published specifications or require case changes.
MEASUREMENTS METHODS AND EQUIPMENT:
QUALIFICATION TESTING
All catalog datasheet parameters and the PRODUCT specifications referenced above
shall be tested for qualification and acceptance.
NOISE
The noise of all PRODUCTS will be measured on a mutually agreed upon set-up
using standard methods and equipment.
/s/SPC /s/ DJH
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18 CALEX POWER-ONE
TEMPERATURE CYCLING
Temperature cycling of future designs will be done by POWER-ONE in accordance
with MIL-STD-883 Method 1010. These tests will approve and/or improve
encapsulating methods and materials. POWER-ONE will test the existing
designs and best efforts will be made by CALEX, with assistance by POWER-ONE,
to improve encapsulation materials and methods to upgrade existing products
with the objective of no failures.
/s/SPC /s/ DJH
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19 CALEX POWER-ONE
ADDENDUM B
TECHNOLOGY AND KNOW-HOW LICENSE AGREEMENT
This Technology and Know-How License Agreement (this "Agreement") is
made as of April 2, 1996 (the "Effective Date"), by and between Calex
Manufacturing Company, Inc., a California corporation ("Licensor") and
Power-One, Inc. a California corporation ("Licensee").
RECITALS
WHEREAS, Licensor and Licensee have entered into that certain Product
and Component Agreement dated as of April 2, 1996 (the "Product and Component
Agreement"), pursuant to which Licensor has agreed to sell certain products and
components and to license certain technology related to such products and
components to Licensee, and licensee has agreed to sell certain components to
Licensor;
WHEREAS, as an inducement to Licensee to consummate the transactions
contemplated in the Product and Component Agreement, and in consideration of the
obligations of Licensee under this Agreement Licensor has agreed to grant to
Licensee a license to certain technology and know-how on the terms and
conditions contained herein, and Licensee desires Licensor to grant such
license.
NOW, THEREFORE, in consideration of the premises and mutual covenants
in this Agreement and the Product and Component Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows.
1. DEFINITIONS. The following terms, when used herein with initial capital
letters, shall have the respective meanings set forth in the is Article 1.
All terms used herein with initial capital letters but not defined herein
shall have the meanings ascribed to such terms in the Product and Component
Agreement.
1.1 AFFILIATE. The term "Affiliate" shall mean any person or entity
directly or indirectly controlling, controlled by, or under common control with,
the person or entity specified.
1.2 CONFIDENTIAL INFORMATION. The term "Confidential Information" shall
mean those elements of the Technology and Know-How and of all the technical
information, know-how, technology, formulae, compositions, samples, prototypes,
information, manuals, ideas, inventions, improvements, data, files, supplier and
customer identities and lists, accounting records, business and marketing plans,
and information and documentation and all copies and tangible embodiments
thereof (in whatever form or medium) that are not generally known by the public
in which either of the parties have
/s/SPC /s/ DJH
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2 CALEX POWER-ONE
rights; provided, however, that any of the foregoing shall not be considered
Confidential Information if it: (i) has entered into the public domain
through no wrongful act or breach of any obligation of confidentiality on the
receiving party's or any third party's part; (ii) was in the lawful knowledge
and possession of, or was independently developed by, the receiving party
prior to the time it was disclosed to, or learned by, the receiving party as
evidenced by written records kept in the ordinary course of business by the
receiving party or by written or other documentary proof of actual use by the
receiving party; (iii) was rightfully received from a third party not in
violation of any contractual, legal or fiduciary obligation by such third
party; or (iv) was approved for release by written authorization by the party
having rights in such information.
1.3 FIELD OF USE. The term "Field of Use" shall mean the business of
designing, manufacturing, distributing, selling, advertising, marketing and
promoting the Products.
1.4 IMPROVEMENTS. The term "Improvements" shall mean any improvement,
upgrade, enhancement, modification or update (Including error corrections) to,
and translations and derivative works of, the Technology and Know-How, other
than those which constitute, or are primarily useful to develop, make, market,
sell or use, New Generations.
1.5 KNOWLEDGE. The term "Knowledge" shall mean actual knowledge without
independent investigation.
1.6 MODELS. The term "Models" shall have the meaning given to it in the
Product and Component Agreement.
1.7 MODIFIED STANDARD PRODUCTS. The term "Modified Standards Products"
shall have the meaning given to it in the Product and Component Agreement.
1.8 NEW GENERATION. The term "New Generation" shall mean a new Series or
a Model thereof which differs from any existing Series or Model subject to this
Agreement by reason of a material improvement in the ratio of power output
capacity to case volume or by reason of a significant change to form, fit, or
function.
1.9 PRODUCTS. The term "Products" shall have the meaning given to it in
the Product and Component Agreement.
1.10 SERIES. The term "Series" shall have the meaning given to it in the
Product and Component Agreement.
1.11 TECHNOLOGY AND KNOW-HOW. The term "Technology and Know-How" shall
mean (i) the patents, if any, described on Schedule A, attached hereto and
incorporated herein, and all extensions, reissues, divisions, continuations and
continuations in part of same, (ii) all of Licensor's technology and know-how
necessary or reasonably useful for practicing the inventions taught by such
patents or necessary or reasonably useful for the manufacture, assembly,
operation or servicing of the Products, and (iii) all documents,
/s/SPC /s/ DJH
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3 CALEX POWER-ONE
drawings, plans, specifications, processes, trade secrets, parts/supplies lists,
manufacturing/assembly instructions, manuals, software and other material in
Licensor's possession necessary or reasonably useful for the manufacture,
assembly, operation or servicing of the Products.
1.12 TRAINING AND TECHNICAL SUPPORT. The term "Training and Technical
Support" shall mean training and technical support relating to the Technology
and Know-How and the implementation of the Technology and Know-How into the
Products (including, without limitation, the theory, operation, manufacturing,
process engineering, design processes and methodology, installation, and
application of the Products).
1.13 DC=DC CONVERTER. The term "DC-DC Converter" shall have the meaning
given to it in the Product and Component Agreement.
1.14 SUCCESSOR. The term "Successor" means, with respect to a party, a
person or entity which, by purchase, merger or otherwise succeeds to
substantially all of the business and assets of that party.
2. LICENSE.
2.1 GRANT TO LICENSEE.
2.1.1 GRANT OF TECHNOLOGY AND KNOW-HOW LICENSE. Subject to the terms and
conditions of this Agreement, Licensor hereby grants to Licensee a sole right
and license to use, copy, and create derivative works of, the Technology and
Know-How only for the Field of Use and to make, have made, use and sell devices,
methods and processes covered under any of the patents included in the
Technology and Know-How or otherwise covered by the Technology and Know-How:
only for the Field of Use, in any manner and by any means and under such name or
names as Licensee shall determine, throughout the world during the Term hereof.
Notwithstanding the foregoing, Licensor shall continue to have all rights in and
to the Technology and Know-How; provided that Licensor shall not license,
authorize or permit third parties other than Licensor's Affiliates or Successors
to use the Technology and Know-How for the Field of Use during the Term of this
Agreement.
2.1.2 SUBLICENSES. Licensee shall have the right to grant sublicenses in
and to the Technology and Know-How only to Licensee's Affiliates and Successes,
and to subcontractors, provided any such subcontractor shall only use such
sublicense in order to manufacture Products, Components, or Sub-assemblies
exclusively for Licensee:
3. FEES. As full and complete consideration for all rights granted by
Licensor and all representations, warranties and agreements of Licensor
hereunder Licensee agrees to pay to Licensor the sum of One Million Five Hundred
Thousand Dollars ($1,500,000), as follows:
/s/SPC /s/ DJH
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4 CALEX POWER-ONE
3.1 One Hundred Fifty Thousand Dollars ($150,000) payable on the Effective
Date; and
3.2 Two Hundred Fifty Thousand Dollars ($250,000) payable following the
Effective Date, but within three (3) days of delivery to Licensee of
substantially all of the documents identified in Addendum D of the Product and
Component Agreement ("First Payment");
3.3 Four Hundred Thousand Dollars ($400,000) payable upon the earlier of
(i) verification of performance to the specifications in Addendum A of the
Product and Component Agreement of a production lot of each Model delivered
for initial stocking; or (ii) six (6) months after the due date for payment
of the amount set forth in Section 3.2, provided, however, that Power-One
shall not be obligated to make the payment to this clause (ii) unless
Licensor using its good faith, best efforts to modify the Models to meet the
specifications in Addendum A of the Product and Component Agreement and
Licensor has not materially and unjustifiably delayed delivery of units.
3.4 Three Hundred Fifty Thousand Dollars ($350,000), payable on the first
anniversary of the due date of First Payment.
3.5 Three Hundred Fifty Thousand Dollars ($350,000), payable on the second
anniversary of the due date of First Payment.
Licensee acknowledges that it is aware of and has evaluated the nature of the
Technology and Know-How, that it deems it valuable to Licensee, that all or
material portions of it are not known to Licensee, that all or material
portions of it are not generally known to others, and that its disclosure to
Licensee, and the other services to be provided by Licensor hereunder, will
provide Licensee substantial business and competitive benefit. Licensee
acknowleges that the payments required hereunder are due and payable
irrespective of whether substantial portions of the Technology and Know-How
are or become known to others, so long as such knowledge by others does not
result from a breach of this Agreement by Licensor.
4. TRAINING, TECHNICAL AND MARKETING SUPPORT.
4.1 TRAINING AND TECHNICAL SUPPORT. Promptly following Licensee's
request, Licensor shall provide, on a commercially reasonable best efforts
basis, Training and Technical Support to employees of Licensee, or to any
manufacturers or distributors of Licensee, by telephone, or at Licensee's (or
Licensee's manufacturers' or distributors') facilities or upon Licensee's
request, at Licensor's facilities. During the first year of the Term,
Licensor shall provide at least three (3) full-time people at no additional
cost to Licensee. During each subsequent year of the Term, Licensor shall
provide the necessary support and training to fulfill all of its obligations
under this Agreement, at no additional cost to Licensee.
/s/SPC /s/ DJH
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5 CALEX POWER-ONE
4.2 MARKETING AND SALES SUPPORT. Licensor shall provide marketing and
sales support (including without limitation product line analysis, competitor
information, advertising and sales literature) relating to the Products to
Licensee. Where possible, Licensee shall offer to Licensor, marketing
information relating to the Products.
4.3 TRAVEL EXPENSES. If at Licensee's request Licensor is required to
provide training or technical support at a location greater than fifty (50)
miles from Licensor's headquarters, Licensee shall reimburse Licensor, in
accordance with Licensee's standard travel policy, for reasonable travel
expenses incurred by Licensor in providing such training or technical support,
provided that Licensor supplies Licensee with receipts or other satisfactory
evidence reflecting the expenses incurred.
5. PRODUCT PERFORMANCE. The Technology and Know-How is sufficient to permit
Licensee to manufacture Products (using similar processes as Licensor) that will
achieve the performance parameters set forth in Licensor's specifications for
such products.
6. REPRESENTATIONS AND WARRANTIES OF LICENSOR. Licensor hereby warrants and
represents that:
6.1 DUE AUTHORITY. Licensor has the full right, power and authority to
enter into this Agreement, and it is under no legal prohibition, restraint, or
restriction with respect thereto.
6.2 NO INFRINGEMENT. (i) To the best of Licensor's Knowledge and subject to
the provistions of the last paragraph of Section 3, Licensor is the sole and
exclusive owner of all right, title and interest in and to that protion of the
Technology and Know-How which is susceptible of exclusive ownership; (ii)
Licensor has the full right, power and authority to grant Licensee the right and
license granted hereunder, and (iii) To the best of Licensor's Knowlege,
Licensee's use of the Technology and Know-How in and in connection with the
Products and the manufacture, sale, marketing, advertisement, promotion,
distribution or other commercial exploitation of the Products as permitted by
this Agreement will not infringe upon or otherwise violate any patent or other
intellectual property rights of any person or entity.
7. INDEMNIFICATION
7.1 BY LICENSOR. Licensor shall indemnify, defend and hold Licensee
harmless from and against all liabilities, damages, judgements, penalties,
losses, costs, expenses (including without limitation court costs and
attorneys' fees), claims, demands, suits or other legal actions suffered by
Licensee or brought by any third party against Licensee or Licensor arising
out of or relating to any breach or alleged breach of Licensor's
representations, warranties or agreements made by Licensor in Article VI
hereof.
7.2 BY LICENSEE. Licensor shall indemnify, defend and hold Licensee
harmless from and against all liabilities, damages, judgements, penalties,
losses, costs, expenses
/s/SPC /s/ DJH
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6 CALEX POWER-ONE
(including without limitation court costs and attorneys' fees), claims, demands,
suits or other legal actions suffered by Licensor or brought by any third party
against Licensor or Licensee, but only to the extent that the same arises out of
or relates to any claim by any third party that any Improvement disclosed by
Licensee to Licensor pursuant to Section 8.1 infringes any patent, trade secret,
copyright or other intellectual property right of a third party.
8. IMPROVEMENTS, NEW GENERATION, AND UPDATED MATERIAL.
8.1 DISCLOSURE OF IMPROVEMENTS. Each party shall disclose to the other
party any Improvement created, developed, invented or made by, or for, such
party.
8.2 OWNERSHIP OF IMPROVEMENTS. Licensor and Licensee shall jointly own
any Improvement created, developed, invented or made by, or for, either party.
8.3 OWNERSHIP OF NEW GENERATIONS. Licensor shall not have any right,
title or interest in or to any New Generation created, developed, invented or
made by, or for, Licensee. Licensee shall be entitled to apply at its own
expense for patent or other intellectual property protection for any such New
Generation created, developed, invented or made by, or for, Licensee. Licensor
shall cooperate, at the prosecuting Licensee's expense, in any reasonable manner
in assisting Licensee in obtaining copyright or patent registrations for same in
the name of Licensee and in obtaining other forms of proprietary rights
protection for same.
8.4 UPDATED MATERIAL. Licensor shall promptly provide Licensee with all
documents, drawings, plans, specifications, processes, trade secrets,
parts/supplies lists, manufacturing/assembly instructions, manuals, software and
other material relating to the manufacture, assembly, operation or servicing of
the Products and which constitute Technology or Know-how, including without
limitation the documents referred to in Addendum D of the Product and Component
Agreement. In addition, each party shall provide the other with any revisions
or updates to such documents as well as all documentation relating primarily to
Improvements made by such Party.
9. REGISTRATION, MAINTENANCE AND ENFORCEMENT.
9.1 INTELLECTUAL PROPERTY RIGHTS PROTECTION.
9.1.1 REGISTRATION BY LICENSOR. Licensor shall, at Licensor's
expense, take all commercially reasonable actions to preserve its rights in and
to the Technology and Know-How and other materials or items furnished by
Licensor hereunder, but shall not be required to file for any patents.
/s/SPC /s/ DJH
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7 CALEX POWER-ONE
9.1.2 REGISTRATION BY LICENSEE. In the event Licensor does not agree
that a patent or copyright application be filed, then Licensee shall have
the right (but not the obligation) to seek patent or other intellectual
property protection for any of the Technology and Know-How in Licensor's
name. Any and all expenses incurred in connection with the foregoing shall be
borne by Licensee. Licensor shall furnish Licensee with all reasonably
requested information, assistance and documentation to assist Licensee in
obtaining such registrations including, without limitation, filing a joint
application in those jurisdictions where registration of a user or of a
license is permitted or required by law. Such registrations shall be deemed
to be included in the grants of license set forth in Section 2.1 hereof.
9.2 ENFORCEMENT OF THE TECHNOLOGY AND KNOW-HOW.
9.2.1 NOTIFICATION. In the event either party has Knowledge of any
products or processes that may infringe or misappropriate or in any way
adversely affect the other party's right in and to the Technology and
Know-How, the party having such Knowledge shall promptly notify the other
party of same.
9.2.2 ENTITLEMENT TO TAKE ACTION FOR TECHNOLOGY AND KNOW-HOW.
Licensor shall have the right (but not the obligation) to undertake any
demand, suit or other action on account of any actual or suspected
infringement or misapporpriation of the Technology and Know-How. Licensee
shall provide such materials, cooperation and assistance as may be reasonably
required to assist Licensor in such action.
9.2.3 LICENSEE'S RIGHTS. If Licensor elects not to take such action
pursuant to this Section 9.2, then upon written notice to Licensor, Licensee
shall have the right (but not the obligation) to take such action, solely
within its Field of Use. Licensor shall take all reasonable steps and shall
provide such materials, cooperation and assistance as may be reasonably
required to assist Licensee in such action.
9.2.4 ENTITLEMENT TO PROCEEDS. The party prosecuting any demand,
suit or other action as provided in this Section 9.2 shall bear all expenses,
legal or otherwise, thereof and shall be exclusively entitled to proceeds or
recoveries resulting therefrom.
9.3 INFRINGEMENT CLAIMS. Licensee shall give Licensor written notice as
promptly as practicable and in any case within ten (10) days of any claim or
assertion by any third party that the use of any part of the Technology and
Know-How by Licensee infringes any rights of any third party. Licensor shall
have the right at its sole cost to defend against any such claim of
infringement, and Licensee shall give all reasonable cooperation. If, as a
result of any actual or claimed infringement by the Technology and Know-How
of any third party rights an injunction is issued prohibiting Licensee from
using the Technology and Know-How as provided herein, and if there has
occured a related breach by Licensor of any representation made by it under
Section 6.2 hereof, and if the required notice and cooperation were given by
Licensee, Licensor shall, if Licensor has not
/s/SPC /s/ DJH
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8 CALEX POWER-ONE
defended such claims, reimburse Licensee for any reasonable costs incurred.
In such event Licensor shall also at its sole expense either procure the
right for Licensee to continue to use the Technology and Know-How as provided
herein or modify the Technology and Know-How so as to make it non-infringing
or provide alternative technology and know-how of substantially similar
utility. Licensor's inability to either procure the right for Licensee to
continue to use the Technology and Know-How as provided herein or to so
modify the Technology and Know-How or provide such alternative technology and
know-how within sixty (60) days of the issuance of an injunction prohibiting
Licensee from using the Technology and Know-How as provided herein is a
breach of this Agreement and the Licensee shall have all of its rights
arising out of such breach, including but not limited to those in Section 7.1
hereof.
10. TERM.
10.1 TERM. This Agreement shall commence on the Effective Date and remain
in full force and effect until the fifth anniversary of the Effective Date,
unless sooner terminated as hereinafter provided. Notwithstanding any
termination hereunder, if at such time there exists no uncured breach or default
on the part of Licensee under this Agreement, licensee shall have a fully-paid
exclusive license until the tenth (10) anniversary of the Effective Date., After
the tenth (10) anniversary the Licensee shall have a fully paid non-exclusive
worldwide perpetual license to use, copy, and create derivative works of, the
Technology and Know-How as it exists as of the date of termination only for the
Field of Use and to make, have made, use and sell devices, methods and processes
covered under any of the patents included in the Technology and Know-How or
otherwise covered by the Technology and Know-How, which have been issued as of
the date of termination only for the Field of Use. Notwithstanding the
foregoing, Licensor shall continue to have at all times all rights in and to the
Technology and Know-How; provided that Licensor shall not license, authorize or
permit third parties other than Licensor's Affiliates or Successors to use the
Technology and Know-How for the Field of Use during the Term of this Agreement.
10.2 TERMINATION FOR CONVENIENCE. Licensee, at its sole option, may
terminate any or all of its further obligations and rights under this
Agreement at any time. Termination of this Agreement shall not, however,
release Licensee from the obligation to make payment of all amounts provided
in Section 3 or from any obligation of confidentiality hereunder.
11. BREACH AND REMEDIES.
11.1 BREACH. In the event a party does not comply with any material
provision of this Agreement and the non-breaching party elects to give the
breaching party written notice of such noncompliance, then the breaching
party shall have sixty (60) days from the receipt of such notice to remedy
the breach, provided that in the case of an obligation to pay money, such
cure period shall be ten (10) days.
/s/SPC /s/ DJH
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9 CALEX POWER-ONE
11.2 REMEDIES.
11.2.1 EQUITABLE RELIEF AND MONETARY DAMAGES. Licensor acknowledges
that breach of this Agreement would cause immediate and irreparable harm to
Licensee for which money damages could not adequately compensate the other
party. Therefore, Licensee shall have the right to enforce this Agreement,
not only by an action or actions for damages, but also by an action or
actions for specific performance or injunctive or other equitable relief in
order to enforce or prevent any violations of the terms or conditions of this
Agreement, without proof of actual damages.
11.2.2 SCOPE OF REMEDIES. Under no circumstances other than the
unjustified failure by Licensee to pay when due the amounts required to be
paid under Section 3 may the relief granted to Licensor include the
rescission or termination of the license granted hereunder, and Licensor
hereby irrevocably waives any rights it may have, at law or in equity, to
obtain any termination or rescission in any other case.
11.2.3 ACCELERATION ON PAYMENT DEFAULT. Subject to the provisions of
section 3, if Licensee shall fail to make any payment required under Section 3
within the time required, as it may be extended by the cure provisions of
Section 11.1, all amounts required to be paid under Section 3 shall at once
become due and payable without notice.
11.3 ABRIBITRATION OF DISPUTES.
11.3.1 PROCEDURE. Except for actions seeking injunctive relief,
which may be brought before any state or federal court in California, any
dispute arising out of or relating to this Agreement (or any exhibit or
schedule hereto) or the breach, termination or validity hereof or thereof,
shall be resolved in the following manner:
a. the parties shall use all reasonable efforts to resolve the dispute
through direct discussions within 30 days of written notice that there
is such a dispute; or
b. if no amicable settlement is reached as a result of the procedure
described in (a), the matter shall be finally settled by an
arbitration conducted expeditiously by a single arbitrator in
accordance with the Rules for Non-Administered Arbitration of
Business Disputes promulgated by the CPR Institute for Dispute
Resolution (formerly Center for Public Resources). No arbitrator may
serve who has had at any time a material personal or financial
relationship with any participant to the dispute or any Affiliate of
any such participant. The place of arbitration shall be either Los
Angeles or San Francisco, California. This can be decided by a coin
flip or any other random means. The arbitration shall be governed by
the United States Arbitration Act. 9 U.S.C. sections 1-16 and
judgement upon the award of the arbitrator may be entered by any
court having jurisdiction thereof. The arbitrator is not empowered to
act AS AMIABLE COMPOSITEUR or
/s/SPC /s/ DJH
------ ---------
10 CALEX POWER-ONE
to award damages in excess of compensatory damages and each party
hereto hereby waives any damages in excess of compensatory damages.
The arbitrator shall have the power to order equitable relief as if
sitting as a court of equity.
11.3.2 CONFIDENTIALITY;. The dispute resolution proceedings
contemplated by this provision shall be as confidential and private as permitted
by law. To that end, the parties shall not disclose the existence, content or
results of any proceedings conducted in accordance with this provision, and
materials submitted in connection with such proceedings shall not be admissible
in any other proceeding; provided, however, that this confidentiality provision
shall not prevent a petition to vacate or enforce an arbitral award, and shall
not bar disclosures required by law. The parties agree that any decision or
award resulting from proceedings in accordance with this dispute resolution
provision shall have no preclusive effect in any other matter involving third
parties.
12. CONFIDENTIALITY.
12.1 CONFIDENTIALITY OBLIGATION. Each party acknowledges that during
the Term of this Agreement, it may have access to the other party's
Confidential Information. All Confidential Information of a party disclosed
under this Agreement shall remain the exclusive property of the disclosing
party, subject to any license expressly granted herein. Each party agrees:
(i) to take all reasonable measures necessary to protect the confidential
nature of Confidential Information of the other party disclosed to it by the
other party including notifying in writing its Affiliates and its and their
employees, agents, consultants, contractors, licensees, sublicensees, joint
venturers, distributors or anyone else with whom such party works to complete
the purposes of this Agreement, of the confidential nature of such
Confidential Information; (ii) except as provided in this Agreement or as
required by law or court order or as necessary to assert rights hereunder,
not to disclose to third parties or copy any Confidential Information of the
other party or allow any third party access to the Confidential Information
of the other party without first obtaining such party's written consent; and
(iii) not to use, or permit others to use, any Confidential Information of
the other party except under the licenses set forth herein or as may be
provided for in separate agreements with such other party. In addition, each
party agrees to use its best efforts and utmost diligence: (i) to safeguard
the Confidential Information of each other party disclosed to it and (ii) to
protect such Confidential Information against disclosure, misuse, espionage,
loss and theft.
12.2 COMPELLED DISCLOSURE. In the event that a party is required by law
or court order to disclose any Confidential Information of any other party, that
party shall: (i) notify such other party in writing as soon as possible, but in
no event less than ten (10) calender days prior to any such disclosure; (ii)
cooperate with such other party to preserve the confidentiality of such
Confidential Information consistent with applicable law; and (iii) use its best
efforts to limit any such disclosure to the minimum disclosure necessary to
comply with the law or court order.
/s/SPC /s/ DJH
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11 CALEX POWER-ONE
13. GENERAL.
13.1 SURVIVAL. Article 7 shall survive the termination of this
Agreement for any reason.
13.2 ENTIRE AGREEMENT. The Agreement and all Schedules attached hereto
and incorporated herein by this reference and the Product and Component
Agreement contain the entire agreement between the parties hereto with respect
to the subject matter hereof and supersede any previous understandings or
agreements, whether written or oral, in respect of such subject matter.
13.3 COMPLIANCE WITH LAWS. The parties shall comply with all applicable
laws, rules, regulations and orders of the United States and all jurisdictions
and any agency or court thereof in connection with this Agreement and the
transactions contemplated thereby.
13.4 BINDING AGREEMENT, ASSIGNMENT. All of the terms and conditions of
this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the respective successors and permitted assigns of the parties
hereto. Except as specifically stated in this Agreement, neither this Agreement
nor any of the rights, interests or obligations of any party hereunder shall be
assigned or delegated by either party hereto without the prior written consent
of the other. Such consent shall not be withheld unreasonably. Any
unauthorized assignment or delegation shall be null and void. Notwithstanding
the foregoing, either party may assign or otherwise transfer its rights and
obligations to its subsidiaries, or successors in interest (whether by purchase
of stock or assets, merger, operation of law, or otherwise) of that portion of
its business related to the subject matter hereof, but the transferring party
shall remain jointly and severally liable with the transferee for any payment
obligation hereunder. Licensee may grant sublicenses pursuant to Section 2.1.2
hereof, without the consent of Licensor.
13.5 AMENDMENT AND WAIVER. This Agreement may be amended or any
provision of this Agreement may be waived; provided that any such amendment or
waiver shall be effective only if such amendment or waiver is set forth in a
writing executed by both parties hereto. No course of dealing between persons
having any interest in this Agreement will be deemed effective to modify, amend
or discharge any part of this Agreement or any rights or obligations of any
person under or by reason of this Agreement. The failure of either party to
enforce any provision of this Agreement shall not be construed to be a waiver of
such provision or the right of such party thereafter to encore such provision or
any other provision of this Agreement.
/s/SPC /s/ DJH
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12 CALEX POWER-ONE
13.6 RELATIONSHIP OF PARTIES. Except as specifically provided herein, no
party shall act or represent or hold itself out as having authority to act as an
agent or partner of the other party, or in any way bind or commit the other
party to any obligations. Any such act will create a separate liability in the
party so acting to any and all third parties affected thereby. The rights,
duties, obligations and liabilities of the parties shall be several and not
joint or collective, and nothing contained in this Agreement shall be construed
as creating a partnership, joint venture, agency, trust or other association of
any kind, each party being individually responsible only for its obligations as
set forth in this Agreement.
13.7 SEVERABILITY. The illegality, invalidity or unenforceability of
any part of this Agreement shall not affect the legality, validity or
enforeceability of the remainder of this Agreement. If any part of this
Agreement shall be found to be illegal, invalid or unenforceable, this Agreement
shall be given such meaning as would make this Agreement legal, valid and
enforceable in order to give effect to the intent of the parties.
13.8 FURTHER ASSURANCES. Each of the parties agrees to execute and
deliver such other documents and to take all such other actions as any of the
other parties, its successors, assigns or other legal representatives may
reasonably request to effect the terms of this Agreement and the execution and
delivery of any and all affidavits, testimonies, declarations, oaths, samples,
exhibits, specimens and other documentation as may be reasonably required.
13.9 GOVERNING LAW. This Agreement shall be construed, governed and
interpreted in accordance with the laws, but not the rules relating to the
choice of law, of the State of California.
13.10 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing, shall be delivered in person, by
telecopier or by registered or certified mail, postage prepaid, to the parties
as follows:
If to Licensee:
Power-One
000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxx. 00000
Attn: Xxxxx Xxxx
Telecopier: 000 000 0000
If to Licensor:
Calex Manufacturing Company, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx. 00000
Attn: Xxxxx Xxxxxxx
Telecopier: 000 000 0000
/s/SPC /s/ DJH
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13 CALEX POWER-ONE
or to such other address as either party may have furnished to the other in
writing in accordance herewith. Notices delivered in person shall be deemed
given when so delivered, notices given by telecopier shall be deemed delivered
upon receipt of confirmation, and notices delivered by mail shall be deemed
received three days after mailing.
13.11 HEADING. The captions and headings of the Articles, clauses and
paragraphs contained herein have been inserted for the convenience of the
parties and shall not be construed as part of or modifying any provisions of
this Agreement.
13.12 COUNTERPARTS. This Agreement may be executed in counterparts, any
one of which need not contain the signatures of more than one party, but all of
which, taken together, shall constitute one and the same agreement.
13.13 REPRESENTATION BY COUNSEL; INTERPRETATION. Each party
acknowledges that it has been represented by counsel in connection with this
Agreement and the transactions contemplated by this Agreement. Accordingly, any
rule of law, or any legal decision that would require interpretation of any
claimed ambiguities in this Agreement against the party that drafted it has no
application and is expressly waived. The provisions of this Agreement, shall
be interpreted in a reasonable manner to effect the intent of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
CALEX Manufacturing Company, Inc. POWER-ONE, Inc.
BY: /s/ S.P. Cuff By: /s/ Xxxxx X. Xxxx
--------------------------- ---------------------------
Name: S.P. Cuff Name: Xxxxx X. Xxxx
-------------------------- --------------------------
Title: President Title: Vice President
------------------------- ---------------------------------
/s/SPC /s/ DJH
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14 CALEX POWER-ONE
SCHEDULE A
[Patent List]
No Patents are subject to this Agreement at this time, however any patent issued
to Licensor during the five years following the Effective Date covering Products
that are 60W or less or including any claim such that the patent is included in
the definition of Know-How and Technology will be subject to this Agreement and
the license granted herein.
/s/SPC /s/ DJH
------ ---------
15 CALEX POWER-ONE
ADDENDUM C-LABEL INFORMATION
In addition to POWER-ONE name & Logo (artwork to be supplied by POWER-ONE).
Power-One Series/Model
Date Code (Week/Year) 4 digits, e.g., 5296
Revision, e.g., B
Made in USA
/s/SPC /s/ DJH
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20 CALEX POWER-ONE
ADDENDUM D - DOCUMENTATION
All documents and revisions, whether written or oral, shall be available to
POWER-ONE, whether or not originally supplied. Whenever available or can be
made available, a computer file will be delivered in addition to the hard-copy
document.
A. TECHNICAL (IN GENERAL AND FOR EACH PRODUCT):
--------------------------------------------
PRODUCT Specifications
Engineering Specifications
Complete Magnetics Specifications
Engineering Drawings, Schematics, PCB Artwork/Layouts, and Parts Lists
Engineering Test Plans and Results
Manufacturing Test Plans and Results
PRODUCT Manuals
Design Reports and Design Data
Test Specifications and Procedures
Maintenance Instruction and Training Documents and Manuals
Manufacturing Plans
Manufacturing Drawings
Manufacturing Test Equipment Documents
Manufacturing Process Instructions
Assembly Tooling Document
Parts Tooling Documents
UL, CSA, EN, IEC, VDE, CE, FCC, and other applicable regulatory approval
documents, to the extent CALEX has in its sole discretion decided to pursue
such approvals
B. MARKETING LITERATURE
--------------------
ADVERTISING & PROMOTIONAL MATERIAL SHALL MINIMALLY CONSIST OF:
Data Sheets
Application Notes
Competitive information and comparisons
Presentation material
C. PURCHASING INFORMATION
----------------------
Sole-Source COMPONENTS
Unique or special COMPONENTS
Supplier Lists
Purchase Specifications
Supplier Quotation and Contract Documents
/s/SPC /s/ DJH
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21 CALEX POWER-ONE
ADDENDUM E - QUALITY PROVISIONS
1. GENERAL QUALITY APPROACH
POWER-ONE is seeking to procure from CALEX PRODUCTS which shall meet all
agreed to requirements, be substantially error free upon delivery to designated
destinations, can be delivered directly to end users without additional test,
and can be expected to show continuing improvement in inherent reliability
through analysis of failures and subsequent corrective action to avoid repeated
occurrences.
POWER-ONE believes that the use of statistical methods by CALEX is
essential to achieving the above objectives. This Addendum outlines a quality
approach based on these methods. Respective POWER-ONE and CALEX
accountabilities relating to product quality are outlined below.
POWER-ONE shall provide liaison through a representative who shall
represent POWER-ONE on all matters relating to quality, performance, or
suitability of PRODUCTS for delivery. The representative (who may be required
to sign an appropriate confidentiality agreement) may review all production,
inspection, and test data, as established in this Addendum and the Quality Plan,
prior to delivery.
A Quality Plan, per the attached outline, shall be jointly developed. The
plan shall document the policies, procedures, and processes to be utilized by
POWER-ONE and CALEX for implementation of these quality provisions and be made
part of the Agreement.
Any action on the part of POWER-ONE shall not relieve CALEX of its basic
quality responsibilities or its responsibilities set forth elsewhere in the
Agreement.
2. POWER-ONE SHALL BE RESPONSIBLE FOR THE FOLLOWING:
2.1 Coordinating CALEX'S plans and delivery to meet POWER-ONE Just-In-Time
requirements, to the extent the ordering and delivery policies of CALEX or
CALEX'S suppliers are consistent therewith.
2.2 Confirming the Quality Plan and the utilization of statistical methods by
CALEX to support continuous quality improvement in the PRODUCTS.
2.3 Interfacing with CALEX'S personnel in the areas of Engineering,
Manufacturing and Quality.
2.4 Providing data feedback for use by CALEX.
3. CALEX SHALL BE RESPONSIBLE FOR THE FOLLOWING:
3.1 Responding to reasonable corrective action requests.
/s/SPC /s/ DJH
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22 CALEX POWER-ONE
3.2 Providing access to CALEX's facility for POWER-ONE representatives to
witness any assembly or testing of PRODUCTS, perform statistical audits, or
complete any of the other tasks outlined in the Agreement, subject to a
requirement to execute a reasonable confidentiality agreement.
3.3 Performing failure analysis and providing data and corrective action
relating to the PRODUCTS to POWER-ONE as required withing 14 days.
If both parties cannot agree on the resolution of a problem that arises from a
customer problem, application, quality, reliability, or specification issue, the
parties agree to hire an independent consultant/arbitrator to review all data
and recommendations and make a judgement, which will be final and binding. The
parties will share equally in the cost of the arbitrator. If the parties cannot
agree on an independent consultant/arbitrator within thirty (30) days, either
party may apply to the American Arbitration Association for the appointment of
one.
3.4 Furnishing POWER-ONE
a) reports which provide POWER-ONE immediate notification of items such
as discovery by CALEX of any latent defect or latent failure tendency that could
affect a PRODUCT.
b) reports on quality performance including, but not limited to:
i. Supplier performance data, as available.
ii. In-process test and inspection yields and Pareto of defects
on a weekly basis.
iii. Status and impact of corrective action program.
iv. The results of life, environmental or extended testing, as
available.
v. Field reliability and failure Pareto on a monthly basis.
4. POWER-ONE AND CALEX JOINTLY PARTICIPATE IN THE FOLLOWING:
4.1 Organizing and implementing corrective action for problems submitted by
POWER-ONE and/or CALEX.
4.2 Developing the Quality Plan which shall define the policies, procedures,
and processes to be utilized in performing the obligation of the Agreement.
4.3 Reviewing and reaching agreement on the need for requalification as the
result of significant manufacturing changes which may impact quality, such as:
a. process changes
b. supplier manufacturing relocation
c. supplier substitution
/s/SPC /s/ DJH
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23 CALEX POWER-ONE
5. QUALITY, RELIABILITY, AND DELIVERY GOALS
Quality Goals:
1996 1997 198
Pretest 96% 97% 98%
Final Test 98% 98.5% 99%
Incoming Insp. 2000ppm 1000ppm 500ppm
Field Failures 1000ppm 600ppm 400ppm
Reliability, e.g., On-going Reliability Testing and Life Testing to be mutually
determined.
Delivery performance goals include 98% on-time by Q4 or 1996
6. QUALITY PLAN OUTLINE
The Quality Plan is a prerequisite for delivery of PRODUCTS to POWER-ONE,
therefore, all PRODUCTS delivered under the Agreement must be fully processed in
accordance with the Quality Plan.
Additions or changes to the Quality Plan shall be completed and agreed to by
POWER-ONE and CALEX quality management organizations, as needed for
administration of the Quality Plan. A formal review of the Quality Plan shall
be held on a schedule mutually agreed upon by POWER-ONE and CALEX.
CONTENTS
Process Flow chart with inspection and test gates
Manufacturing Processes and Testing Procedures
Incoming Inspection
Subassembly/Assembly Test
Final Test
Packaging
Statistical Methods in Inspection and Test Processes
Inspection
Manufacturing and Test Processes
Statistical Reports
Product Reliability plan
/s/SPC /s/ DJH
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24 CALEX POWER-ONE
ADDENDUM F - RETURN MATERIAL AUTHORIZATION PROCEDURE
CALEX will provide a written procedure within 30 days to POWER-ONE to
enable efficient return of product to CALEX.
/s/SPC /s/ DJH
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25 CALEX POWER-ONE
ADDENDUM G - CALEX PRICING
CALEX COMPONENT PRICING
Prior to the first anniversary of the Effective Date, CALEX COMPONENTS
purchased from third parties and sold by CALEX to POWER-ONE will be at the
price that the supplier charges CALEX, plus a 15% xxxx-up. After the first
anniversary date of the Effective Date, an additional 8% handling fee will be
added.
Pricing for CALEX COMPONENTS manufactured by CALEX and sold to POWER-ONE will be
based on the CALEX COMPONENTS' actual costs, plus 15% After the first
anniversary date of the Effective Date, an additional 8% handling fee will be
added.
Price for all CALEX COMPONENTS will be reviewed and adjusted so as to conform to
such pricing formula on a quarterly basis.
CALEX SUB-ASSEMBLIES PRICING
CALEX agrees to establish a price methodology for CALEX SUB-ASSEMBLIES similar
to that in the section below, "CALEX PRODUCT PRICING".
CALEX PRODUCT PRICING
It is understood that CALEX will sell PRODUCTS to POWER-ONE at a price that is
actual material and actual direct labor, plus 15%. After the first anniversary
of the Effective Date, an additional 8% handling fee will be added. Pricing for
CALEX PRODUCTS will be based on CALEX'S standard cost of material and labor, as
shown in the example below. Following each month, the pricing shall be adjusted
based on actual costs as shown in the example below. Within ten (10) days after
such determination, CALEX shall issue a credit or invoice for the difference
between standard and actual costs.
The price will be reviewed and adjusted on a quarterly basis based on the actual
costs on the last month of the prior quarter.
CALEX will sell PRODUCTS to POWER-ONE at a price that is derived using
incremental costs as defined below: This means that CALEX will charge POWER-ONE
for:
Material and Supplies
Direct Labor, Payroll Taxes and benefits
Plus 15%
CALEX will include the following manufacturing expenses as part of the actual
cost of goods:
Outside Prof. Serivces. = temporary employees, hired through a
contracting agency and used in direct manufacturing operations.
/s/SPC /s/ DJH
------ ---------
26 CALEX POWER-ONE
Freight/Shipping = costs to bring manufacturing materials and supplies
into CALEX.
Materials/Supplies = materials directly associated with the
manufacturing and shipment of product.
Product/Part Exp. = materials and components used directly in the
assembly of product, but without reference to quantity in a xxxx of
material.
CALEX will not charge POWER-ONE for anything else, including but not limited to:
Supervision
Rent & Utilities
G & A
Interest
Depreciation & Amortization
/s/SPC /s/ DJH
------ ---------
27 CALEX POWER-ONE
EXAMPLE:
Total Sales $475,314
Standard Cost of Goods
Standard Material 80,000
Standard Labor 80,000
Standard Overhead 50,000
Sales to Power-One 46,000
Standard Material 20,000
Standard Labor 20,000
15% 6,000
Calculation of Power-One
Total Standard Material & Labor 160,000
Power-One Standard Material & Labor 40,000
Power-One allocation % 25%
Calculation of Variance
Standard Cost of Goods Sold 212,223
Actual Labor/Overhead 141,314
Purchase Price Variance (33,847)
Material & Labor Variance (49,596)
Total (Actual) Cost of Goods Sold 270,094
Variance (Standard COGS vs Total/Actual 57,871
Less Actual Overhead -39,612
Plus Outside Prof. Services 7,661
Plus Freight/Shipping 5,114
Plus Materials/Supplies 1,801
Plus Product/Part Expense 1,806
Total Variance 34,641
Calculation of Power-One
Total Variance 34,641
Power-One allocation % 25%
Power-One Cost Adjustment 8,660
15% 1,299
/s/SPC /s/ DJH
------ ---------
28 CALEX POWER-ONE
Additional Invoice for Cost Adjustment 9,959
Calculation of Power-One
Original Billing during the Month 46,000
Additional Invoice for Cost Adjustment 9,959
Total Power-One Billing $55,959
/s/SPC /s/ DJH
------ ---------
29 CALEX POWER-ONE
ADDENDUM H - POWER-ONE PRICING
Prior to the first anniversary of the Effective Date, POWER-ONE COMPONENTS
purchased from third parties and sold by POWER-ONE to CALEX will be at the price
that the supplier charges POWER-ONE, plus a 20% xxxx-up. After the first
anniversary of the Effective Date, an additional 8% handling fee will be added.
Pricing for POWER-ONE COMPONENTS manufactured by POWER-ONE and sold to CALEX
will be based on the POWER-ONE COMPONENTS' actual costs, plus 20%. After the
first anniversary of the Effective Date, an additional 8% handling fee will be
added.
Prices for all POWER-ONE COMPONENTS will be reviewed and adjusted in compliance
with the foregoing method on a quarterly basis.
Prices for POWER-ONE SUB-ASSEMBLIES will be determined from time-to-time and
shall be furnished to CALEX upon its request.
/s/SPC /s/ DJH
------ ---------
30 CALEX POWER-ONE
ADDENDUM I - WARRANTY FOR CALEX PRODUCTS AND CALEX COMPONENTS MANUFACTURED BY
CALEX.
All CALEX PRODUCTS are warranted against defects in workmanship, materials and
construction under normal use. The warranty does not apply to any CALEX
products subject to misuse, neglect, accident, improper installation or
misapplication. The liability for defective components shall be limited to the
obligations of the original manufacturer's warranty covering these components.
EXCEPT FOR THOSE EXPRESSLY SET FORTH IN THIS SECTION, CALEX HEREBY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY PRODUCT OR
COMPONENT, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTY OF MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE. CALEX WILL NOT BE LIABLE FOR ANY DAMAGE,
LOSS, COST OR EXPENSE FOR BREACH OF WARRANTY, EXCEPT AS AND TO THE EXTENT
EXPRESSLY SET FORTH IN THIS SECTION, AND BUYER AGREES THAT CALEX'S WARRANTY
LIABILITY, AND BUYER'S EXCLUSIVE REMEDY, ARE EXPRESSLY LIMITED TO THE REPAIR OR
REPLACEMENT OF PRODUCTS PURSUANT TO THE WARRANTY SET FORTH IN THIS SECTION.
BUYER HEREBY EXPRESSLY WAIVES ALL CLAIMS FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL,
EXEMPLARY OR PUNITIVE DAMAGES ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT, THE PRODUCTS OR COMPONENTS, INCLUDING (BUT NOT LIMITED TO) ANY SUCH
DAMAGES ARISING BY BREACH OF WARRANTY, FAILURE OR DELAY IN MANUFACTURE OR
DELIVERY OF PRODUCTS, OR IN USE OR PERFORMANCE OF PRODUCTS.
The period of time for any warranty will be the then current POWER-ONE warranty
time period, not to exceed 5 years from the shipment date.
For service under this warranty buyer must advise the factory promptly of all
pertinent details. An RMA (Returned Material Authorization) number must be
assigned by the factory prior to the return of any material and must be
referenced on all paperwork accompanying the returned material.
/s/SPC /s/ DJH
------ ---------
31 CALEX POWER-ONE
ADDENDUM J - WARRANTY FOR POWER-ONE PRODUCT AND COMPONENTS AND SUB-ASSEMBLIES
MANUFACTURED BY POWER-ONE
POWER-ONE LIMITED WARRANTY
PRODUCT SHALL BE WARRANTED AGAINST DEFECTS IN MATERIALS AND WORKMANSHIP FOR A
PERIOD OF TWO (2) YEARS FROM DATE OF SHIPMENT. EXCEPT FOR THOSE EXPRESSLY SET
FORTH IN THIS SECTION, SELLER HEREBY DISCLAIMS ALL REPRESENTATIONS AND
WARRANTIES, EXPRESS OR IMPLIED, AS TO THE PRODUCT, INCLUDING BUT NOT LIMITED TO
ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
SELLER WILL NOT BE LIABLE FOR ANY DAMAGE, LOSS, COST OR EXPENSE FOR BREACH OF
WARRANTY, EXCEPT AS AND TO THE EXTENT EXPRESSLY SET FORTH IN THIS SECTION, AND
BUYER AGREES THAT SELLER'S WARRANTY LIABILITY, AND BUYER'S EXCLUSIVE REMEDY, ARE
EXPRESSLY LIMITED TO THE REPAIR OR REPLACEMENT OF PRODUCTS PURSUANT TO THE
WARRANTY SET FORTH IN THIS SECTION. BUYER HEREBY EXPRESSLY WAIVES ALL CLAIMS
FOR CONSEQUENTIAL, INCIDENTAL, OR SPECIAL DAMAGES ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS AGREEMENT, INCLUDING (BUT NOT LIMITED TO) ANY SUCH DAMAGES
ARISING BY BREACH OF WARRANTY, FAILURE OR DELAY IN MANUFACTURE OR DELIVERY OF
PRODUCTS, OR IN USE OR PERFORMANCE OF PRODUCTS.
This warranty is honored at Camarillo, California, provided the defective
product is returned freight pre-paid. Seller will charge for the handling and
service of products returned in error or out of warranty. For service under this
warranty buyer must advise the factory promptly of all pertinent details. An
RMA (Returned Material Authorization) number must be assigned by the factory
prior to the return of any material and must be referenced on all paperwork
accompanying the returned material.
The liability for defective components shall be limited to the obligations of
the original manufacturer's warranty covering these components.
/s/SPC /s/ DJH
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32 CALEX POWER-ONE
ADDENDUM K - LIST OF POWER-ONE COMPONENTS
CALEX PART NUMBER DESCRIPTION POWER-ONE
EQUIVALENT
CAPACITORS
1 C5423-02 68UF, 10V TBD
2 C5430-09 4.7UF, 16V TBD
3 C5440-03 15UF, 25V TBD
4 C5443-01 10F, 25V TBD
5 C5453-01 10UF, 35V TBD
6 C5520-24 1000UF, 10V TBD
7 C5583-42 56UF, 50V TBD
8 C3025-100-335 3.3UF, 100V TBD
9 CT7227-10-476 47UF, 10V TBD
10 CT7227-20-226 22UF, 20V TBD
TRANSISTORS
11 Q0352-46 MJE341/344 TBD
12 Q0353-12 IRF630 TBD
13 Q0353-13 IRF540 TBD
14 Q0353-23 IRF640 TBD
IC'S
15 IC-UCC3805N UCC3805N TBD
16 IC0421-40 TL431CLP TBD
17 IC0422-37 CNY17-1 TBD
18 IC0422-57 S19110DJ TBD
19 IC0422-656 MC34060AP TBD
20 ICSM-MIC1427CM MIC1427CM TBD
21 ICSM-MOC205 MOC205 TBD
22 ICSM-S19111DY S19111DY TBD
23 ICSM-S19112DY S19112DY TBD
24 ICSM-TL431CD TL431CD TBD
DIODES
25 D220-04 MBR 1045 TBD
26 D2200-08 MURI620CT TBD
27 D220-12 MUR820 TBD
28 D2700-001 IN5306,2.2mA TBD
29 D2800-01 SA5.0 TBD
30 D2800-02 SA15 TBD
31 D2800-11 SA150 TBD
32 D2900-16 MBR2045CT, SCHOTTKY TBD
33 DD-AK-B6660T MBRD660CT TBD
/s/SPC /s/ DJH
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33 CALEX POWER-ONE
CORES & BOBBINS
34 W0970-62 B65542-B-TI, 148FID TBD
35 W0970-76 RM8, B65812-B1 XXX
00 X0000-00 XX0XX XXX
37 W0990-101 RM8/1-3C81, NO HOLE TBD
38 W0990-109 1408PL00-3C81, CORE TBD
39 W0990-110 1408PA100-3C81, CORE XXX
00 X0000-000 XX0XXXXX-XX00 XX HOLE TBD
41 W0990-129 P14/8/1-3C85-A0160 NO HOLE TBD
42 W0990-81 B64290-K0037-X TOROID TBD
43 W0990-94 58120-A2-17 125 PERM TBD
/s/SPC /s/ DJH
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34 CALEX POWER-ONE
