EXHIBIT 10.8
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS. OMITTED INFORMATION HAS BEEN REPLACED BY [*].
MANUFACTURING SERVICE AGREEMENT
SANMINA-SCI CORPORATION
("SANMINA-SCI")
and
LSI LOGIC STORAGE SYSTEMS, INC.
("SSI")
SANMINA-SCI agrees to manufacture the products described on Attachment A
("Products and Pricing") and sell the finished Products to SSI. SSI agrees to
purchase the finished Products from SANMINA-SCI. The manufacture, sale, and
purchase of the finished Products will be governed by the terms and conditions
of this Agreement, which may be amended from time-to-time by written mutual
agreement.
This agreement consists of the attached General Terms and Conditions and
the following Attachments
-- Attachment A -- Product and Pricing
-- Attachment B -- Demand Pull Kanban Plan
-- Attachment C -- Consigned Capital Equipment Agreement
-- Attachment D -- Product Specifications
-- Attachment E -- Quality Plan Procedure
-- Attachment F -- QBR Form Amend Attachment A
EFFECTIVE DATE: NOVEMBER 3, 2003
SANMINA-SCI: SSI:
By: /s/ XXXXXXX X. XXXXX By: /s/ XXXX X. XXXXXX
--------------------------------------------- ---------------------------------------------
Signature Signature
Xxxxxxx X. Xxxxx Xxxx X. Xxxxxx
--------------------------------------------- ---------------------------------------------
Typed or Printed Name Typed or Printed Name
Title: VP of Business Development Title: Director of Supply Chain Management
------------------------------------------- ---------------------------------------------
Date: Dec/10/2003 Date: 11/17/03
------------------------------------------- ---------------------------------------------
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MANUFACTURING SERVICE AGREEMENT
TABLE OF CONTENTS
i. Recitals
ii. Definitions
1. Term of Agreement
2. Products and Pricing
3. Purchase Orders
4. Scheduling
5. Strategic Inventory
6. Shipment Authorization
7. Transportation Costs
8. Continuous Improvement
9. Terms of Payment and Record Keeping
10. Engineering Change Notices
11. Administration of Contract
12. SANMINA-SCI Product Warranty
13. Proprietary Information and Confidentiality
14. Termination for Convenience
15. Termination for Cause
16. Force Majeure
17. Intellectual Property and Indemnification
18. Quality Assurance Audits and Product Acceptance
19. Product Liability (Certificate of Insurance Request)
20. Independent Contractor; "Consigned" Items and/or Bailment
21. Notice
22. Severability
23. Titles and Attachments
24. Governing Law
25. Miscellaneous Part Purchases
26. Entire Agreement
27. Export/Import
28. Sale of Product to SSI Directed Third Party Customers
ATTACHMENTS
A Product and Pricing Exhibit
B Demand Pull Kanban Plan
C Consigned Capital Equipment Agreement
D Product Specifications
E Quality Plan Procedure
F QBR Form Amend Attachment A
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GENERAL TERMS AND CONDITIONS
This Manufacturing and Purchase Agreement (the "Agreement") is entered into
and executed as of the Effective Date stated between LSI Logic Storage Systems,
Inc. (SSI) whose principal place of business is 0000 X. Xxxx Xxxx, Xxxxxxx,
Xxxxxx, 00000 ("SSI"), and SANMINA-SCI Corporation whose principal place of
business is 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx, 00000, and its wholly
owned subsidiaries (collectively "SANMINA-SCI"). The terms and conditions
contained herein apply to the manufacture of computer Products and the related
material procurement, inventory, test and packaging, thereof.
RECITALS
WHEREAS, SSI desires to have SANMINA-SCI procure components, manufacture,
assemble, test and ship certain Product pursuant to one or more Purchase Orders
issued by SSI in accordance with this Agreement; and
WHEREAS, SANMINA-SCI desires to procure components, manufacture, assemble,
test and ship such Product for SSI hereunder;
NOW, THEREFORE, SSI and SANMINA-SCI, intending to be legally bound, hereby
agree as follows:
DEFINITIONS
The following terms, in singular and/or plural forms of the same term as
and wherever used herein, shall have the meanings set forth in this section.
"Components" shall mean parts, materials, and supplies procured for,
included in or required for each Product. Product Components will be procured
from SSI's approved vendor list (AVL), and/or SSI consignment.
"Days" shall mean Calendar days, provided that if a deadline falls on a
Saturday, Sunday or holiday, it shall be extended until the following regular
business day.
"Excess Material" shall mean SSI authorized Components on hand that no
longer have a SSI open Purchase Order, or a current forecast for use within the
pursuant [*], nor are useable on SANMINA-SCI production of other customers'
products.
"Intellectual Property Rights" shall mean any rights under patent,
semi-conductor chip protection, copyright, trade secret, trademark, or similar
laws which would restrict the manufacture, assembly, or distribution of the
Product(s) or the subsequent use, sale, or repair of the Products as purchased
by SSI from SANMINA-SCI hereunder.
"Long Lead Time" shall mean Components that require [*] or longer for
vendor delivery. Long Lead Time Components shall not be ordered without written
authorization from SSI.
"Material" shall mean Components, which are collectively used to produce
the Product(s).
"Obsolete Material" shall mean non-cancelable or non-returnable (NCNR)
materials that can no longer be used on SSI's Product and are not useable on
SANMINA-SCI production for other customers.
"Minimum Order Quantity (MOQ)" shall mean the mutually agreed vendor order
quantity used by SANMINA-SCI to establish the Product's Component base price,
and vendor minimum order quantities for a single delivery.
"Non-Cancelable and/or Non-Returnable (NCNR)" shall mean those Components
when ordered that cannot be canceled ([*]), or once received may not be returned
for credit unless defective (example: reels). SSI prior written approval is
required before SANMINA-SCI procurement of NCNR Components.
"Product" shall mean the Product identified by SSI's part number and/or
assembly identification name specified in its Purchase Order as described in
SSI's Specifications including any and all modification, changes and
improvements made to such Product during the term of this Agreement.
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"Specifications" shall mean the Product manufacturing number and
description and all required manufacturing drawings, instructions, and testing
procedures that are required for SANMINA-SCI to manufacture a conforming
Product.
"Product Acceptance Test" shall mean the Product tests performed at various
manufacturing stages, including a final test applied to the finished Product to
determine if the Product conforms to SSI's Specifications, Quality Plan
Procedures, and manufacturing workmanship standards. Products passing all the
Product Acceptance Tests shall be shipped to SSI as conforming and carry
SANMINA-SCI's Product Warranty, as set forth in this Agreement. The Product
Acceptance Tests shall be the criteria utilized by the parties to determine if
shipped and warranted SSI Product(s) are conforming or non-conforming.
"Original Delivery Schedule" shall mean for the purpose of reschedules and
SSI liability, SSI's issued and accepted forecasts and/or purchase order as set
forth in this Agreement.
1. TERM OF AGREEMENT
The initial term of this Agreement shall be [*] from the Effective Date,
and shall be automatically renewed for [*] periods, unless terminated by a party
with [*] written notice to the other party, or as otherwise provided under this
Agreement.
Both Parties agree that the terms and conditions contained in this
Agreement shall have precedence over any pre-printed terms and conditions
included on purchase orders, invoices, acknowledgements, or any other forms and
documents used by the Parties in the performance of this Agreement.
2. PRODUCTS AND PRICING
Products covered by this Agreement and applicable Product prices are listed
by part number in Attachment A. From time-to-time, additional Products may be
incorporated into or removed from this Agreement by written revision to
Attachment A, as mutually agreed. The initial prices reflected in Attachment A
are the baseline for this Agreement. Price reductions will be implemented as
addressed in Section 8, Continuous Improvement. Product Pricing will be reviewed
on a quarterly basis, and adjustments upward or downward will become effective
as mutually agreed. SANMINA-SCI will notify SSI of any industry-wide or sole
source shortages of components affecting price or delivery schedules.
SSI Purchase Prices are based upon minimum quarterly quantities of Product
purchases, and if through no fault of SANMINA-SCI, SSI purchases significantly
less than the minimum forecasted quantities during a quarter, the Purchase
prices may be adjusted by an amount not-to-exceed SANMINA-SCI's documented and
verified additional costs to manufacture the lesser number of purchased
Products. Any such action will be reviewed and mutually agreed to during the
Parties' Quarterly Business Review ("QBR") at the end of each quarter.
3. PURCHASE ORDERS
SSI will issue purchase orders to SANMINA-SCI for each assembly, or by
family of Products, as listed in Attachment A by individual part number.
Purchase orders will normally be issued no later than [*] prior to the start of
each quarter for the forecasted production quantities of the next quarter.
Purchase Orders may be issued in hard copy, fax, or e-mail form, as mutually
agreed. SANMINA-SCI will notify SSI in written format, normally within [*] but
not exceeding [*] of receipt of such purchase orders, of SANMINA-SCI's
acceptance or rejection of the issued purchase order. SANMINA-SCI's failure to
respond within the stated time period will be deemed as SANMINA-SCI's acceptance
of the SSI Purchase Order.
SSI's [*] forecast updated not less than [*], except as provided for in
Section 4 Scheduling, are for planning purposes only and are not considered firm
or binding.
The Parties agree that Attachment A will be amended by revision each QBR to
reflect the mutually agreed Products and pricing based upon the current forecast
quantities. Attachment F will be used by the Parties to amend by revision
Attachment A. The Parties' "Contract Administrators" stated in Section 12 will
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amend by revision Attachment A by affixing their signatures and date upon
Attachment F (Attachment A-R#). Each Party will retain one original signed copy
of the revised version of Attachment A for their Agreement file.
4. SCHEDULING
SSI will send to SANMINA-SCI, not less than [*], an updated [*] forecast
for each of the Products as listed in Attachment A, including future new
Products to Attachment A. For each Product, the rolling forecast will be divided
into weekly requirements. SANMINA-SCI will utilize the forecast as authorization
to purchase Components and manufacture per the forecast with adjustments up or
down as may be necessary to meet the kanban requirements, shown in Attachment B
(Demand Pull Kanban Plan). SANMINA-SCI will normally advise SSI of any support
issue within [*], but not more than [*], of receipt of the forecast.
SANMINA-SCI will accommodate a [*] increase over the current month's
scheduled build quantity, per assembly, with no additional evaluation of detail
part availability, manpower or manufacturing capacity normally required.
Finished Product will normally be available within [*] of such request. However,
increases in the current [*] schedule exceeding [*] will require SANMINA-SCI to
review material and manpower prior to advising SSI if such increase can be
accomplished. SANMINA-SCI will accommodate a [*] percent increase (subject to
customer approval of any unavoidable material expedite costs) in Purchase Order
deliveries over the Original Delivery Schedule within [*] [*], and the best
reasonably available increase thereafter based on SANMINA-SCI capacity. In cases
where SSI's requirements exceed the kanban, the work-in-process and normal
component availability, equitable adjustments will be made by SSI for any agreed
upon expediting costs that are incurred by SANMINA-SCI.
In the event that SSI must delay scheduled production from SANMINA-SCI due
to reduced production requirements or other reasons, SSI agrees to accept the
Product that is held in kanban and current work-in-process. SSI's production
liability is normally limited to [*] worth of production, as well as agreed upon
HUB quantities and/or kanban quantities based on the most current accepted
forecast except as described in more detail in Section 5 below. SSI may
reschedule delivery of a Product up to [*] from the original scheduled delivery
date. All rescheduled Product shipments during the [*] original delivery window
must be rescheduled for delivery within the following [*] after the reschedule
request by SSI. Upon mutual agreement, SSI may request a continued shipment
delay that may be subject to monthly inventory storage and handling fee that is
compatible with the current interest rates allowed by law. The parties will make
every effort to limit the other party's obligation for excess or obsolete
material by maintaining accuracy of the [*] forecast, [*] kanbans, and by
responding to changes through adjustments to procurement and production
schedules in a timely manner.
5. STRATEGIC INVENTORY
It is recognized that the forecast supplied by SSI for [*] is speculative
and is subject to change. Therefore, except for long lead-time, Minimum Order
Quantities. (MOQs) and NCNR Components as defined under Definitions, SANMINA-SCI
will place purchase orders in support of SSI accepted Purchase Orders and the
forecast per the AVL lead times in a manner to minimize inventory liabilities
for SSI and are cancelable and returnable to vendor at no cost to Sanmina-SCI.
The first [*] of the forecast will be considered firm requirements subject to
cancellation charges. In the event of a cancellation or reschedule of the [*]
firm requirements, SSI will be responsible, to the extent of the cancellation or
reschedule, (unless the Component is usable by one of Sanmina-SCI's other
customers) for the cost of Sanmina-SCI NCNR orders with AVL vendors, on hand
non-returnable Components, work-in-process material and kanban quantities on
hand per attachment B. Finished goods and work in process will be purchased at
the resale price and Components at the quoted standard cost. If Sanmina-SCI is
unable to return or reallocate material or negotiate adjustments in supplier
schedules or other similar means, Sanmina-SCI shall immediately notify SSI in
writing of the situation and SSI will issue a Purchase Order to Sanmina-SCI for
parts that become Excess Material [*] unless otherwise agreed.
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Some of SSI's part numbers may have standard procurement lead-times of over
[*], and therefore, should be considered strategic inventory. SSI authorizes
SANMINA-SCI to place up to [*] of these long lead time parts on order with
vendors in accordance with the provided forecast. SANMINA-SCI is similarly
authorized to reorder those long lead-time items as the lead-time frame is
encountered and inventory levels become exhausted. These lead-times will be
supported by documentation (included with Xxxx of Material accompanying each
periodic re-price) from SANMINA-SCI and SANMINA-SCI's vendor at the time a
lead-time is changed by SSI. In the event that components have lead-times in
excess of [*] (components on allocation), SANMINA-SCI will inform SSI of such
and will not place such long-term orders until it has obtained prior written
approval from SSI. Scheduled deliveries affected by delayed SSI authorizations
for SANMINA-SCI to purchase such strategic inventory on SSI's behalf shall not
be viewed as a SANMINA-SCI delivery or inventory management breach. SANMINA-SCI
will endeavor to negotiate with the SSI vendors providing strategic inventory to
allow for rescheduling and cancellation under certain conditions. Should such
vendors decline to offer the ability to reschedule or cancel strategic inventory
without penalty, SSI will be informed and SSI will approve such terms prior to
placement of orders by SANMINA-SCI.
AVL listed NCNR Components will be disclosed by SANMINA-SCI and agreed upon
by SSI within [*] of execution of this Agreement, and revised [*] as needed
thereafter.
SANMINA-SCI will maintain and manage the on order positions for strategic
inventory Components. SANMINA-SCI's liability will be to reasonably manage these
Components, which includes reschedule in and out of material as required and as
accepted by suppliers, given the SSI inputs and market conditions. In the event
that SSI's rescheduling of Product deliveries beyond the originally scheduled
due date create additional liabilities, SSI will be informed and will approve
such charges before SANMINA-SCI formalizes the reschedule with the supplier.
SANMINA-SCI and SSI will regularly review its NCNR terms with SSI AVL
vendors (including long lead-time Components), non-returnable Components on
hand, levels of work in process material (and direct out-of-pocket labor costs
previously incurred in manufacturing the work in progress), and kanban
quantities on hand, with the goal toward continual reductions in these items,
including possible renegotiation of contracts with vendors when circumstances
permit it.
If SSI is required by this Agreement to pay for costs billed by third party
supplier associated with non-cancelable orders (including long lead-time,
non-cancelable, and non-returnable orders) and non-returnable items on hand, SSI
will first have the option of purchasing the items from the third party,
assuming the contract with the third party supplier, or otherwise dealing
directly with the supplier to determine ways in which SSI could encourage the
supplier to reduce lead-times, non-cancelable restrictions, and non-returnable
restrictions (example: SSI may have options with other SSI divisions not
available to SANMINA-SCI).
6. SHIPMENT AUTHORIZATION
All Shipments of Product will be Ex-Works, Incoterms 2000 from SANMINA-SCI
Plant of manufacture, except for SANMINA-SCI consigned Kanban inventory
shipments, which shall be FCA, Incoterms 2000 to SSI's designated Kanban
destination. Title and risk of consigned Kanban inventory shall pass upon SSI
issuing a Kanban pull notice to SANMINA-SCI. SANMINA-SCI shipments slated for
such direct delivery or originating from an established Kanban will not occur
until SSI issues firm instructions for each Product shipment. Both Parties agree
that delayed Product deliveries awaiting SSI shipping instructions shall not be
deemed as a SANMINA-SCI late delivery. SSI will provide SANMINA-SCI with as much
visibility as possible by providing a [*] direct shipping forecast, to be
updated [*], with shipment releases provided [*]. Purchase Orders for delivery
to a normal SSI delivery location or warehouse will be shipped as required to
meet the mutually agreed upon SSI Purchase Order delivery date or as needed to
fulfill Kanban levels as agreed.
SSI may adjust up or down the quantities of Products that it orders
SANMINA-SCI to ship from either Supplier Managed Inventory ("SMI") (local SSI
site) or SANMINA-SCI Kanban (stored at SANMINA-SCI inventory locations). SSI
quantity adjustments shall be reflected in the daily pull notices or in the
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shipment releases to SANMINA-SCI, respectively. To accommodate unplanned
requirements, a FAX can be utilized to initiate an adjustment; however, this
must be followed with written notification within [*].
At the time of each shipment, SANMINA-SCI will provide, by shipment, a list
of serial numbers for all units shipped in addition to the required shipper
information identifying the customer, carrier, tracking number and ship date. If
at any time SANMINA-SCI has in its possession finished goods or other inventory
that has been purchased by SSI, it will keep such items in separately located
space or cage accessible to SSI and limited to authorized SANMINA-SCI personnel,
with the contents labeled as "Property of SSI".
7. TRANSPORTATION COSTS
The costs of transportation for shipment of Products, except Product
Warranty repaired SANMINA-SCI returns (Section 13), will be the responsibility
of SSI. SSI will provide SANMINA-SCI with the approved carriers to be used for
such transportation. These carvers will xxxx freight costs directly to SSI.
SANMINA-SCI shall package and pack the Products as instructed by SSI, which will
provide reasonable protection against damage during shipment, handling, and
storage, and will enable SSI or SSI's customer to easily identify the contents
of the package.
In the event of SANMINA-SCI's inability to deliver Product for shipment,
that is solely SANMINA-SCI's fault, SANMINA-SCI shall pay the additional freight
costs associated with expedite delivery of the Products.
8. CONTINUOUS IMPROVEMENT
SANMINA-SCI agrees to make reasonable commercial efforts to provide SSI
with cost reductions and cost savings suggestions. These cost reductions and
savings will be focused around (but not limited to) (1) better pricing for an
alternate source part, (2) manufacturing and test improvements, (3) process
improvements, and (4) volume increase. Cost savings realized from any of the
above action items, net of any unavoidable cost increases incurred by
SANMINA-SCI, will be passed on to SSI as part of the periodic pricing updates,
unless otherwise agreed, and will be incorporated into Attachment A by revision.
The Parties agree that the mutual goal is to reduce Product cost.
Adjustments (increases and decreases) may need to be made due to Component price
fluctuations. All Component price changes will be reflected in the QBR
Attachment A Pricing for the pursuant quarter. In the event commodity prices
increase, SANMINA-SCI will notify SSI of the AVL increased price and discuss
alternate sources and/or request written authorization to purchase such
components at the increased price. Such SSI authorization should include a
revised delivery schedule of Product (if any). Such authorization will remain
valid until the next QBR to establish Product Pricing for the next quarter.
SSI and SANMINA-SCI will formally review the current Quarter's AVL net
variances in market conditions and pricing and Product cost driver Components
during a Quarterly Price Review or more frequently if needed. It is understood
that the sole purpose of the SANMINA-SCI Quarterly materials' net variance
report is to evaluate and validate any applicable Product price adjustments
(decreases or increases) for the pursuant Quarter's Products manufacture and
sale.
On new Product, SANMINA-SCI will endeavor to achieve a net cost reduction
by the end of the first [*] period of continuous operation. This cost reduction
will be determined by recognizing the adjusted cost basis after [*] of
continuous operation, where the adjusted cost basis is the quoted cost, plus or
minus adjustments for on-going costs (not to include one-time start-up costs).
9. TERMS OF PAYMENT AND RECORD KEEPING
Payment terms are net [*] after date of invoice. Payment shall be made in
U.S. Dollars. Offsets and setoffs by either party are not allowed except in
accordance General Accepted Accounting Practices ("GAAP"). In the event SSI has
any undisputed outstanding invoice for more than [*], SANMINA-SCI shall notify
SSI on the [*] day that SSI may be placed on ship hold until SSI makes a
sufficient payment to
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bring its account within the credit limit provided. Disputed invoices without
resolution within the [*] payment terms are due and payable immediately upon
resolution of the disputed invoice.
When SSI makes payments, checks must reference SANMINA-SCI's invoice
number. Invoice disputes must be reported to SANMINA-SCI in a timely manner,
normally no later than the invoice due date. SANMINA-SCI and SSI will work
together to resolve such invoice disputes in a business-like manner by providing
reasonable documentation to reach timely resolution. SANMINA-SCI's acceptance of
SSI's partial payment on the undisputed portion of an invoice does not relieve
SSI of its responsibility for invoice payment in full upon dispute resolution.
SANMINA-SCI shall maintain complete and accurate records of all amounts billed
and payments made by SSI hereunder in accordance with GAAP. These records will
be made available to SSI upon request. SANMINA-SCI will retain such records for
a minimum of [*] from the date of final payment for all Products covered under
this Agreement.
10. ENGINEERING CHANGE NOTICES
SSI shall have the right to make changes to any orders or Product
Specifications at any time, such as Component substitution, Component addition,
Component deletion, Component repositioning, or any other change in
Specifications. SSI shall issue to SANMINA-SCI an Engineering Change Notice
(ECN) as notice of such changes, along with an ECN Notification form that shall
be acknowledged in writing by SANMINA-SCI. Whenever possible, SSI will issue a
preliminary change information notice to facilitate identification assessing the
cost, schedule, inventory and scrap material impacts prior to defining the
implementation plan. SANMINA-SCI is under no obligation to implement ECN
revisions until the terms, conditions, excess disposition and pricing have been
mutually agreed upon by the Parties.
SANMINA-SCI will evaluate the ECN and submit rework costs, material
liability, delivery delays and appropriate justification documentation.
SANMINA-SCI will normally respond to SSI within [*] of receipt but not more than
[*] of receipt on Engineering Changes (ECs), unless otherwise mutually agreed
due to the magnitude of the EC. In the event such changes result in additional
lower/higher actual costs or time for performance, SSI or SANMINA-SCI shall make
equitable adjustments in the purchase price and/or delivery schedule, as is
appropriate. SANMINA-SCI shall not make any type of EC without written consent
from SSI. After SSI authorization of an EC, SANMINA-SCI will provide SSI with
weekly written notice of the ECs implemented.
SANMINA-SCI shall schedule its procurement for and manufacturing of
Products in such a manner that, in the event of Component or printed circuit
board obsolescence, SSI's liability for such material shall not normally exceed
the SANMINA-SCI's total lead-time (including supplier lead-time, standard
surface transit time) and reasonable SANMINA-SCI processing time for placing
orders, receiving, stocking and kitting for individual unique components in
addition to the SANMINA-SCI manufacturing lead-time, MOQs, residual NCNR, any
SSI approved buffer inventories (all of which are updated quarterly as part of
the QBR). SSI must give written approval on lead-times in excess of [*]. Such
approval is deemed to occur in absence of written confirmation by SSI, if SSI
issues a Purchase Order using SANMINA-SCI quotations and lead times. SSI agrees
to provide SANMINA-SCI information and associated mitigating direction, whenever
possible, in advance of ECs, in order to minimize excess or obsolete material
exposure.
SANMINA-SCI will purchase Components only from vendors specified, approved
and qualified by SSI (AVL). SANMINA-SCI shall notify SSI in advance of any
proposed change and the reason for the proposed change in the source (including
the addition of new vendors) of purchased Components associated with cost
improvement, long-lead times, or Component obsolescence notification, and SSI
shall have the right to approve or reject such proposed source change. Should
such SANMINA-SCI proposed AVL change be required to meet or maintain SSI cost,
quality or delivery objectives, SSI approval will not be unreasonably withheld.
11. ADMINISTRATION OF CONTRACT
Both SSI and SANMINA-SCI shall assign an individual, hereinafter referred
to as "Contract Administrator," to administer this Agreement throughout its
term. The Director of Supply Chain Manage-
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ment or designee shall be such Contract Administrator on behalf of SSI and may
be contacted via phone at [*] or EMAIL ([*]). The corresponding SANMINA-SCI
Contract Administrator shall be the Strategic Account Manager, who may be
contacted at [*] or EMAIL at ([*]). All matters related to the performance of
this Agreement shall be administered through these individuals, their designees,
or their management. Either party may change the Contract Administrator by
notifying the other party of such change.
All directions, documentation, notifications, forecasts, kanban limits and
changes of any kind, as well as any other activity necessary for the execution
of this Agreement, must be authorized by the SSI Contract Administrator prior to
execution by SANMINA-SCI. To facilitate the monitoring of the program
SANMINA-SCI is required to report key information weekly, subject to mutual
agreement as to the level of detail. Such key weekly information includes, but
is not limited to, new build information on shipments, new units built and FGI
at SANMINA-SCI, returned material information on quantity received, quantity
repaired, and failure data, and process information on first pass test yields,
pareto analysis of failures and any resultant corrective action with
verifications, and. SSI will provide SANMINA-SCI with kanban inventory level.
12. SANMINA-SCI PRODUCT WARRANTY
All Products manufactured by SANMINA-SCI for SSI are warranted for a period
of [*] from the date of manufacture. SANMINA-SCI warrants to SSI all Products
manufactured will conform to the Product Specifications provided by SSI and to
be free of defects in workmanship. SANMINA-SCI does not warrant AVL materials
beyond the vendor warranty received by SANMINA-SCI at the time of Component
procurement. Such warranty does not cover failures caused by design
incompatibility. The date of manufacture will be determined by the date code
contained within the serial number of the assembly. Warranty claims will be
handled by SSI's Customer Care Warranty department and will be coordinated with
the SANMINA-SCI repair center by mutual agreement.
SANMINA-SCI's liability for Product Warranty Claims shall be at
SANMINA-SCI's option, to repair the defective unit, to replace the defective
unit, or to refund the Product Purchase Price. All Warranty Products repaired or
replaced under this Product Warranty shall be covered for the remaining Product
Warranty period, or for [*], whichever expires last.
12.1 Non-Conforming New Product Shipments Received by SSI or SSI's
Customer. SSI or its Customer may inspect and test upon receipt New Product
shipments for conformance to Product Specifications and Product Acceptance
Tests. Non-conforming Product is to be returned to SANMINA-SCI within [*] of
SANMINA-SCI Product manufacturing date. All non-conforming new Product shipments
shall be returned at SANMINA-SCI's expense upon SSI receiving RMA and shipping
instructions from SANMINA-SCI. SANMINA-SCI upon receipt will inspect the
non-conforming Products and notify SSI of its corrective action to bring the New
Products into conformance. SANMINA-SCI will issue SSI a New Product return
credit on non-conforming returned New Products. Upon non-conforming New Products
being repaired as or replaced with a conforming New Product, SANMINA-SCI will
normally return and invoice SSI for the now conforming New Products as part of
the next open P.O./KanBan shipment. Any Product returned for repair more than
two (2) times as New Product shipments will be held for disposal and mutual
resolution.
12.2 SANMINA-SCI Authorized Product Defective Battery Replacement by
SSI. SANMINA-SCI's warranty will not be voided if, on a new build product
failure, battery replacement on new build or field return product or field
return product, SSI runs the product through SSI's internal failure analysis
group or other rework center(s) for confirmation of failure, testing or repair
presuming that SSI does not impact damage on the product during the
investigation, replacement and/or repair.
12.3 Warranty Product In-Field Returns. In-Field Warranty returns must be
returned following SANMINA-SCI's RMA procedures. All such returns will be
shipped to SANMINA-SCI at SSI's expense. Upon completing the failure inspection
and the corrective action to be performed, SANMINA-SCI will notify SSI as to any
cost that may be associated with the replacement of components. Upon repair or
replacement of the In-Field Return, SANMINA-SCI will pay the shipping charge to
return the now conforming Warranty
9
Product. Non-Warranty In-Field returns will be accepted by SANMINA-SCI on a
case-by-case basis for an agreed in advance Product repair charge. All shipping
costs will be the responsibility of SSI and will be included in the Non-Warranty
Repair Invoice to SSI. Non-Warranty Repaired Products shall carry a [*] limited
in scope warranty on workmanship and component repairs performed by SANMINA-SCI
on the failed unit.
Due to the nature of SSI's customers, it is necessary to replace a
suspected failure with a known good (refurbished) unit prior to receipt of the
suspect failure. This replacement unit will come from a pool of returned and
repaired units inventoried by SSI. In order to keep this pool as small as
possible, SANMINA-SCI agrees that its preferred remedy will be to repair or
replace all defective units returned to SANMINA-SCI under warranty within [*] of
receipt by SANMINA-SCI. SSI shall monitor and ensure such returns are processed
promptly to support the desired turnaround time and to permit earliest possible
identification of discrepancies in support of faster preventive actions where
warranted.
The materials portion of the Product Warranty shall not apply to (i) SSI
consigned or supplied materials, (ii) Product that is abused, damaged, altered
or misused other than by SANMINA-SCI, or (iii) Product damaged by external
causes not directly contributed to by SANMINA-SCI.
Products shall be considered free from defects in workmanship if they are
manufactured in accordance with SANMINA-SCI's manufacturing workmanship
standards, conform to the Product Specifications, and successfully complete the
Product Acceptance Tests, except that no acceptance, payment or inspection of
the Product shall release SANMINA-SCI of its responsibility for any
nonconformity. SSI may perform acceptance testing which measures a different
array of performance criteria but the parties agree that the mutually agreed
upon Product Acceptance Test will be the measurement standard to determine if
the Product conforms to SSI specifications.
ALL CLAIMS FOR BREACH OF PRODUCT WARRANTY MUST BE RECEIVED BY SANMINA-SCI
NO LATER THAN [*] AFTER THE EXPIRATION OF THE WARRANTY PERIOD FOR THE PRODUCT.
THE PRODUCT WARRANTY IS THE ONLY WARRANTY GIVEN BY SANMINA-SCI. SANMINA-SCI
MAKES, AND SSI RECEIVES, NO OTHER WARRANTY EITHER EXPRESSED OR IMPLIED. ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, AND
ALL IMPLIED WARRANTIES OF TITLE FOR ANY CONSIGNED OR SSI SUPPLIED MATERIALS, ARE
EXPRESSLY DISCLAIMED AND EXCLUDED HEREFROM.
UNLESS EXPRESSLY AGREED TO BY SANMINA-SCI IN WRITING, SANMINA-SCI MAKES NO
WARRANTY THAT THE PRODUCTS WILL (i) MEET ANY SPECIFICATION NOT MADE KNOWN TO AND
AGREED TO BY SANMINA-SCI, OR (ii) RECEIVE THE APPROVAL OF OR BE CERTIFIED BY
UNDERWRITERS LABORATORY, ANY FEDERAL, STATE, LOCAL OR FOREIGN GOVERNMENT AGENCY
(INCLUDING WITHOUT LIMITATION THE FEDERAL COMMUNICATIONS COMMISSION) OR ANY
OTHER PERSON OR ENTITY. SANMINA-SCI ASSUMES NO RESPONSIBILITY FOR OBTAINING SUCH
APPROVALS OR CERTIFICATIONS, OR MEETING SUCH SPECIFICATIONS.
SANMINA-SCI's warranty obligations will cease upon the earlier of the
agreed upon warranty period or upon SANMINA-SCI's fulfillment of SSI's request
to return any SSI-owned test equipment and fixtures.
SSI warrants to SANMINA-SCI that any documentation or other data it
provides to SANMINA-SCI to manufacture the Products is accurate and complete,
unless SSI informs SANMINA-SCI otherwise.
Upon SSI request and for mutually agreed terms, conditions, delivery and
prices, SANMINA-SCI may repair Products that are outside the warranty period for
a period of up to [*] after the Product Warranty expires.
12.4 Epidemic Failure and Resolution. Epidemic Failure shall be defined as
a SANMINA-SCI warranted SSI Product (same part number) failure rate of [*] or
greater traceable to the same or closely
10
related workmanship root cause failure mode on a population of at least [*] in
the field, and quantities [*] population will be handled by the parties on a
case-by-case basis. SSI agrees to immediately notify SANMINA-SCI of any
suspected Epidemic Product Failures.
The Parties shall work together in a business-like manner during a
suspected Epidemic Failure situation to: (i) determine whether the failures
constitute an Epidemic Failure as defined above; (ii) determine whether and to
the extent SANMINA-SCI has responsibility for the corrective action; and (ii)
develop a mutually agreed cost effective corrective action plan.
To the extent SANMINA-SCI has workmanship liability for the warranty
Product's failures, SANMINA-SCI shall implement the agreed corrective action
plan at its own cost and expense, and reimburse SSI for its commercially
reasonable direct (out of pocket) costs associated with in field engineering
costs, provided that SANMINA-SCI has agreed and/or approved the reasonableness
of such costs in advance.
To the extent the Epidemic Failures are caused by an unwarranted component
supplied by a third party, liability for the Epidemic Failure shall reside with
SSI. Notwithstanding the aforementioned, SANMINA-SCI shall cooperate with SSI on
a commercially reasonable basis to identify AVL component vendors' warranties
extended to SANMINA-SCI that are less than SSI's workmanship Product warranty.
13. PROPRIETARY INFORMATION AND CONFIDENTIALITY
Under the terms and conditions of this Agreement, each party will disclose
(the "Disclosing Party") to the other party (the "Receiving Party") certain
information that the Disclosing Party regards as proprietary. Such information
may include, but is not limited to, information of the Disclosing Party relating
to products, manufacturing processes, business strategies and plans, customer
lists, research and development programs, and such other information relating to
the Disclosing Party and its subsidiaries and affiliates ("Confidential
Information"). Confidential Information may be furnished in any tangible or
intangible form including, but not limited to, writings, drawings, computer
tapes and other electronic media, samples, and verbal communications. Any
Confidential Information furnished in tangible form shall be conspicuously
marked as such. In addition, verbally disclosed Confidential Information will be
identified at the time of disclosure, and the Disclosing Party will send a
written record within 30 days of such verbal disclosure to the Receiving Party.
Each party agrees that for a period of [*] from the date of disclosure it
shall not disclose Confidential Information received from the Disclosing Party
to any third party nor use such Confidential Information for any purpose other
than to evaluate its interest in the mutual business described above. The
Receiving Party shall use the same degree of care in maintaining the
confidentiality of the Confidential Information as it uses with respect to its
own information that is regarded as confidential and/or proprietary by such
party, but in any case shall at least use reasonable care. Each party agrees
that it will restrict the access of all Confidential Information to only those
of its employees and consultants who have need to be informed of the
Confidential Information for the purposes for which the Confidential Information
is provided.
The obligations of confidentiality and limitations of use shall continue
for the period stated herein. However, neither party shall be liable for any
disclosure of Confidential Information if the same information: (i) is in the
public domain at the time of disclosure or later comes within the public domain,
except through the acts or omissions of the Receiving Party; (ii) is known to
the Receiving Party at the time of its disclosure; (iii) is approved for release
by written authorization of the Disclosing Party; (iv) becomes known to the
Receiving Party from a source other than the Disclosing Party without breach of
an obligation of confidentiality; (v) is disclosed to one or more third parties
by the Disclosing Party without restriction; (vi) is independently developed by
employees or representatives of the Receiving Party without access to or use of
the Confidential Information; or (vii) is subject to disclosure in accordance
with a court order.
Each party agrees that it will make no copies of any Confidential
Information received from the other party, except as those required in
performance of the receiving party's obligations under this Agreement or having
first obtained the written authorization for such copies from the Disclosing
Party. Upon request by the
11
Disclosing Party, all items of Confidential Information shall be returned to the
Disclosing Party, or destroyed, with the Receiving Party certifying the
destruction thereof.
All right, title, and interest in and to the Confidential Information shall
be and remain that of the Disclosing Party. No right or license and no
authorization or consent (other than the consent expressly set forth in this
Agreement) is granted hereunder, and the Receiving Party agrees to be so limited
with respect to all Confidential Information received hereunder.
14. TERMINATION FOR CONVENIENCE
SSI reserves the right to terminate any purchase order or any part thereof
for the sole convenience of SSI. In the event of such termination, SANMINA-SCI
shall immediately stop all work there under, and shall immediately notify
suppliers to cease such work, unless SSI has stated its intention to assume such
supply contracts. SANMINA-SCI shall be paid for Product held in kanban per
Attachment B and work-in-process inventory prior to SANMINA-SCI's receipt of the
notification of termination plus termination Component inventory as set forth in
Sections 4 and 5 (schedule push-out or order cancellation liability).
SANMINA-SCI shall not be paid for any related work done after receipt of notice
of termination, unless agreed by the Parties. SSI agrees to accept all inventory
as indicated above, which is not useable by SANMINA-SCI elsewhere, returnable or
otherwise disposed of, and will provide Purchase Orders(s) and direct
SANMINA-SCI as to the shipping address within [*] of settlement. SSI may also
assume supply contracts or otherwise deal directly with suppliers as more fully
described in Sections 4 and 5 above, so long as such actions do not create
additional costs for SANMINA-SCI.
15. TERMINATION FOR CAUSE
Either party may terminate this Agreement for cause in the event of any
default by the other party of any material provision of this Agreement, provided
that the party claiming default shall grant to the breaching party a period of
[*] to cure, or present an acceptable plan of action to cure such claimed
defaults which have been properly notified in writing. If such claim has not
been cured, nor the plan of action to cure implemented by the breaching party,
the non-breaching party may cancel any purchase orders or portions of purchase
orders affected by the breach. However, in the event of a breach by SSI that
gives rise to such termination for cause, SANMINA-SCI will issue to SSI a
detailed termination liability report within [*] of SANMINA-SCI's receipt of
such termination notice. SSI will issue payment to SANMINA-SCI within [*] of the
parties' agreement on such liabilities.
16. FORCE MAJEURE
SSI or SANMINA-SCI will immediately notify the other party should they
experience a Force Majeure event. Force Majeure is defined as causes beyond a
party's control including but not limited to: government action or failure of
the government to act where such action is required, strike or labor trouble,
fire, flood, or earthquake. In the event that the party affected by the Force
Majeure, can not supply the other party with an acceptable plan of action to
cure such an event within [*], then the non-breaching party may terminate this
Agreement subject to the parties working in a business-like manner to resolve
outstanding liabilities of performance incurred prior to the Force Majeure
event. Force Majeure may not be claimed by either party for inability to pay
monies owed under this Agreement.
17. INTELLECTUAL PROPERTY AND INDEMNIFICATION
Each party shall indemnify and defend the other party against any and all
claims, suits, losses, expenses, and liabilities, for bodily injury, personal
injury, death, and property damage asserted or brought or asserted by any person
or entity arising out of the design, installation or use of any Product(s)
manufactured by SANMINA-SCI. Both parties shall carry and maintain liability
insurance coverage to satisfactorily cover its obligations under this Agreement.
SSI agrees to defend at its expense any suit brought against SANMINA-SCI
based upon a claim that the SSI design used by SANMINA-SCI to manufacture the
Product(s) under this Agreement infringes on a
12
patent, copyright, trade secret and other proprietary right, foreign or
domestic, and to pay the amount of any settlement or the costs (including
attorney fees and expenses) and damages finally awarded provided that
SANMINA-SCI promptly notifies SSI and provides SSI with reasonable assistance in
the defense of any such action.
SANMINA-SCI, at its own expense, shall indemnify and defend SSI, and shall
pay any damages, agreed upon settlement amounts, or necessary costs (including
attorney fees and expenses) finally awarded with respect to all proceedings or
claims against SANMINA-SCI for the infringement of any Intellectual Property
Rights resulting from SANMINA-SCI's manufacture and assembly processes where
such use necessarily and solely causes the infringement. SANMINA-SCI shall not
have any liability hereunder based on (1) required compliance by SANMINA-SCI
with Specifications originating or furnished by SSI (or the combination of the
Product Units with other apparatus not included in the deliveries to SSI), if
such compliance (or combination) necessarily and solely gives rise to such
proceedings or claims; (2) infringement or alleged infringement caused solely by
SSI Components; (3) SSI's failure to provide prompt notice to SANMINA-SCI of any
such proceeding or claim and copies of all communications, notices, and/or other
actions relating to such claim; or (4) infringement resulting from modifications
or alterations made after shipment by SANMINA-SCI.
Except for Infringement, either party's maximum liability under, arising
from, or in connection with this Agreement, whether arising in contract, tort,
or any other legal theory, shall be limited to the price paid for the Product(s)
giving rise to the claim.
IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER, OR TO ANY THIRD
PARTY, FOR ANY LOST PROFITS, LOST SAVINGS, INCIDENTAL, SPECIAL, PUNITIVE, OR
CONSEQUENTIAL DAMAGES.
Except for any licenses and immunities that are expressly granted by this
Agreement, nothing in this Agreement or any course of dealing between the
parties will be deemed to create a license from either party to the other of any
Intellectual Property Right, whether by estoppel, implication, or otherwise.
18. QUALITY ASSURANCE AUDITS AND PRODUCT ACCEPTANCE
Upon reasonable notification and during regular business hours, SSI may
audit all processes associated with the production of the Product at
SANMINA-SCI. Any audit or inspection by SSI shall not relieve SANMINA-SCI of the
requirement to effectively control processes and perform its own inspections of
the Products manufactured for SSI. SANMINA-SCI shall perform, as a minimum, the
following types of Quality inspections in accordance with the mutually agreed to
Quality Plan Procedure, Attachment E
- Incoming Material Inspection
- In Process Inspection
- Final Inspection
SANMINA-SCI shall record the results of inspections and first pass yield
data from all tests and shall provide to SSI upon request, reports of Product
yields and causes for rejection or test failure. Results shall be capable of
being reported by component, by inspection or test point, and by SSI Product
part number. Where frequency of failure requires initiation of corrective
action, SSI shall be informed of the actions taken and of the subsequent
verification of the corrections taken.
In addition to other remedies specified herein, Product that falls out of
SSI's new build process for recurring warrantable issues will be returned to
SANMINA-SCI for failure analysis and corrective action (FA/CA) on a ship/debit
memorandum under an SANMINA-SCI provided RMA number. SSI will identify to and
charge back SANMINA-SCI for the Invoiced Product price at the time of the
return. Once FA/CA is complete per Attachment E Quality Plan Procedure,
SANMINA-SCI may repair the rejected Product and return it as part of the next
delivery scheduled against any open purchase order as part of any kanban
release. The Parties agree returned Product that SSI requests FA/CA be completed
prior to SANMINA-SCI commencement of repair shall be exempt from the normal
turnaround time objectives.
13
SANMINA-SCI understands that particular SSI customer requirements may
modify existing Quality programs. SSI understands that depending on the scope of
such modification, pricing may have to be adjusted for increased or decreased
cost. SANMINA-SCI shall purchase material according to SSI's approved vendor's
list (AVL) and will not be allowed to make part substitutions without prior
written approval from SSI. SSI shall (at SSI discretion) perform incoming
inspection and/or acceptance test upon receipt of Products shipped by
SANMINA-SCI. Products not inspected or tested by SSI upon receipt shall be
covered under the Product Warranty. All non-conforming warranty Product returns,
must be returned in accordance to SANMINA-SCI's Return Material Authorization
(RMA) procedures as stated in this Agreement.
19. PRODUCT LIABILITY (CERTIFICATE OF INSURANCE REQUEST)
SANMINA-SCI agrees to maintain general liability insurance appropriate with
the scope of this Agreement. A Certificate of Insurance shall be provided as
evidence of such insurance, upon written request by SSI. Written request should
be sent to SANMINA-SCI Corporation, Attn: Insurance Management Department, 0000
Xxxxx 0xx Xxxxxx, Xxx Xxxx, XX 00000.
20. INDEPENDENT CONTRACTOR; "CONSIGNED" ITEMS AND/OR BAILMENT
Each party hereto shall be deemed to be an independent contractor with
respect to the performance of its obligations and duties hereunder. Nothing in
this Agreement or the arrangement for which it is written shall constitute or
create a joint venture, partnership, agency or any other similar arrangement
between the parties.
This Agreement makes reference in several locations to "consigned"
equipment or "consigned" inventory, which is purchased by SSI and provided to
SANMINA-SCI exclusively for assembling goods for SSI. The parties agree and
acknowledge that these items are not "consigned" in the strict legal sense as a
means for financing inventory to third parties. Instead, all references to items
that are "consigned" to SANMINA-SCI by SSI in this Agreement or any related
purchase order or other documents are intended to mean that a legal bailment has
been established. No ownership or security interest of any kind in any such
bailment is granted to SANMINA-SCI or its creditors. SANMINA-SCI will maintain
separate bins and clear labeling to keep SSI inventory separate from other
items, and will take precautions to ensure its creditors do not mistake SSI
Bailment's as property of SANMINA-SCI.
21. NOTICE
Any notice required or permitted under this Agreement, unless otherwise
expressly permitted hereunder, shall be in writing and shall be deemed to have
been fully given and/or delivered (i) when personally delivered, (ii) when sent
by fax, (iii) one business day after the business day of deposit prepaid with a
national overnight xxxxxx, or (iv) five business days after the business day of
deposit prepaid with the United States Mail. Notices must be addressed to:
LSI Logic Storage Systems, Inc. SANMINA-SCI Corporation
0000 X. Xxxx Xxxx 000 Xxxxx Xx.
Xxxxxxx, Xxxxxx 00000 Xxxxx, XX 00000
ATTN: Supply Chain Management ATTN: Sales Department/LSI Logic SSI
Account Mgr.
22. SEVERABILITY
Any provision of this Agreement which is invalid, prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such invalidity,
prohibition or unenforceability in any such jurisdiction shall not invalidate or
render unenforceable such provisions in any other jurisdiction.
14
23. TITLES AND ATTACHMENTS
Titles or captions of sections contained in this Agreement have been
inserted only as a matter of convenience and in no way define, limit, extend,
describe or otherwise affect the scope of meaning of this Agreement or the
intent of any provisions hereof. The Attachments are considered to be a part of
this Agreement and may be revised from time to time as mutually agreed.
24. GOVERNING LAW
In the event the parties cannot resolve a dispute, the parties acknowledge
and agree that the state courts of Santa Xxxxx County,
California and the
federal courts located in the Northern District of the State of
California shall
have exclusive jurisdiction and venue to adjudicate any and all disputes arising
out of or in connection with this Agreement. This Agreement shall be construed
in accordance with the substantive laws of the State of
California (excluding
its conflicts of laws principles.
25. MISCELLANEOUS PART PURCHASES
On occasion SSI will require SANMINA-SCI to provide Component parts for RMA
repair, conversions, or others uses. In addition, SANMINA-SCI may require SSI to
provide component parts for kit shortages. The related transfers of SANMINA-SCI
inventory, assuming such material is available without affecting other
obligations, will be done at the SANMINA-SCI quoted standard cost including
reasonable handling and packaging costs but without margin.
26. ENTIRE AGREEMENT
This Agreement, including any Attachments, schedules and tables that have
been specifically referred to herein and/or the most current revision of such
that have been initialed by the parties, constitutes the entire Agreement
between the parties with respect to the subject matter hereof. This Agreement
supersedes all prior discussions, understandings and agreements with respect to
such subject matter.
27. EXPORT/IMPORT
Both parties hereby certify that they will not knowingly export, directly
or indirectly, any U.S. origin technical data or software, to any country for
which the U.S. Government requires an export license or other approval, without
obtaining such approval from the U.S. Government.
28. SALE OF PRODUCT TO SSI DIRECTED THIRD PARTY CUSTOMERS
28.1 SANMINA-SCI agrees to consider direct business relationships with SSI
directed third parties that are primarily performing a higher-level assembly
work for SSI. Notwithstanding the aforementioned, such SSI directed third
parties must enter into a satisfactory contractual relationship with SANMINA-SCI
and be approved by SANMINA-SCI as credit worthy. In the event the third party
directed is not approved by SANMINA-SCI as credit worthy, or fails to execute a
satisfactory contractual agreement with SANMINA-SCI, SANMINA-SCI is under no
obligation to enter into a direct business relationship with such third party
directed customers.
28.2 SSI agrees to participate in an escalation process that may be
initiated by either the third party directed or SANMINA-SCI in the event a
dispute occurs during the course of this relationship that cannot otherwise be
amicably resolved between the parties without additional mediation on the part
of SSI.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the last duly authorized officer's signature (the "Effective
Date") affixed on page one of this Agreement.
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ATTACHMENT A -- FOUNTAIN, CO. FACILITY
PRODUCT AND PRICING EXHIBIT
[*]
ATTACHMENT B
DEMAND PULL KANBAN PLAN
[*]
ATTACHMENT C
CONSIGNED CAPITAL EQUIPMENT AGREEMENT
SSI shall consign to SANMINA-SCI equipment to be listed as shown in the
sample following this Attachment C. SSI shall retain title to and all rights and
interest in the consigned equipment. SSI will provide Sanmina-SCI with SSI
labels that clearly identify its consigned equipment as the property of SSI and
asset tags as required by SSI for identifying SSI capital equipment. These tags
and/or labels will not be removed, covered, or defaced by SANMINA-SCI for any
reason. Notwithstanding the fact that some of the consigned equipment may be
installed or attached to SANMINA-SCI's facility, it shall at all times be deemed
to be the personal property of SSI and not a fixture or other part of the
realty. SANMINA-SCI shall, to whatever extent may be necessary to protect SSI
title to and interest in the consigned equipment, obtain such waivers or consent
from its lessors, landlords, lenders or others, as may be required to release
any interest such lessors, landlords, lenders or others may have or acquire by
reason of SANMINA-SCI's installation, use or possession of the consigned
equipment. SANMINA-SCI shall also execute any UCC- 1 or similar financing
statement reasonably requested by SSI to provide public notice of SSI's
ownership of the consigned equipment.
SANMINA-SCI may use the consigned equipment solely for the purpose of
manufacturing SSI Products and for no other purposes whatsoever.
SANMINA-SCI shall bear the risk of loss and/or damage for the consigned
equipment at all times, from the time of its delivery to SANMINA-SCI's facility
(or sale to SSI as shipped in-place at SANMINA-SCI) to the time of its return to
SSI.
SANMINA-SCI shall be solely responsible for installing the consigned
equipment in its facility, calibrating and maintaining the calibration per the
equipment manufacturer's calibration procedures provided, or as otherwise
defined in SANMINA-SCI's procedures which shall not be less stringent than the
manufacturer's procedures. SSI will issue a Purchase Order and pay for any
required calibration [*] upon request and receipt of an invoice for the service.
SANMINA-SCI shall perform all minor remedial and preventative maintenance
thereon in accordance with the manufacturer's instructions and/or directions.
Minor or preventative maintenance shall be defined to be at a cost of [*]. SSI
shall maintain responsibility for major maintenance or replacement that needs to
be performed on all consigned equipment.
In addition, SSI will supply spare parts for the consigned equipment for
the use of SANMINA-SCI in repair of equipment. In the event that the SSI
consigned equipment needs major repair ([*]), SSI will have the option to repair
or replace the equipment. SSI shall have the right at any time to inspect the
consigned equipment. SSI shall be responsible for providing sufficient
production capacity for such consigned equipment, inclusive of reserve to offset
expected down time and to service contractual flexibility requirements, based on
current forecasts.
SANMINA-SCI shall return the consigned equipment to SSI at SSI expense,
upon the earlier of the termination of the Manufacturing Agreement or SSI
request therefore, in the same condition as it was at the time it was consigned
by SSI to SANMINA-SCI, less reasonable wear and tear. Nothing herein shall be
construed as an obligation on the part of SSI to continue to consign the
equipment to SANMINA-SCI for any length of time, and SSI may request the return
of the consigned equipment at any time. SSI realizes the services performed
utilizing the consigned equipment would no longer be performed should the
equipment be removed.
ATTACHMENT D -- FOUNTAIN, CO FACILITY
PRODUCT SPECIFICATION
ATTACHMENT E -- FOUNTAIN, CO FACILITY
QUALITY PLAN PROCEDURE
[*]
