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EXHIBIT 10.14
MANUFACTURING SERVICES AGREEMENT
NO. C970305
THIS AGREEMENT is made by and between Solectron Texas, L.P. located at 00000
Xxxxxxxx Xxxxxxxxx, Xxxxxx, XX 00000 ("SLRTX") and Power Computing Corporation
("Power") located at 0000 Xxxxxxxxxx Xxxxxxx 00, Xxxxxx Xxxxx, Xxxxx Xxxx, XX
00000, this 19th day of March, 1997 ("Effective Date").
This Agreement [including individual Statement(s) of Work (defined below)
issued hereunder] and its Attachments constitute the final written expression
of all the terms of our agreement and is a complete and exclusive statement of
those terms. It supersedes all prior agreements, understandings and
negotiations concerning the matters specified herein. Any addition to or
modification of the terms of this Agreement must be in writing and signed by an
authorized representative of the party required to perform under such addition
or modification.
ATTACHMENTS: A. Consigned Material
B. Passive Commodity Substitution Approval
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the date first written above.
AGREED:
POWER COMPUTING CORPORATION SOLECTRON TEXAS, L.P.
By: /s/ By: /s/
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(Signature) (Signature)
Name: Xxx Xxxxxxxxx Name: Xxx Xxxxxx
------------------------- --------------------------------------
(Typed) (Typed)
Title: V.P. Operations Title: President, Solectron Texas, Inc.,
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General Partner
Date: 3/20/97 Date: 3/20/97
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Notices Address: Notices Address:
Power Computing Corporation Solectron Texas
Attn: Legal Department Attn: Mgr., Legal and Business Services
0000 X. XX 00, Xxxxx 000 X.X. Xxx 000000, M/S 0000
Xxxxx Xxxx, Xxxxx 00000-0000 Xxxxxx, XX 00000-0000
12455 Research, Xxxxxx, Xxxxx 00000
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MANUFACTURING SERVICES AGREEMENT
Power desires to have SLRTX manufacture certain products that will be described
in Statement(s) of Work issued from time-to-time. SLRTX desires to manufacture
such Products for Power.
It is Power's and SLRTX' objective that products be manufactured in accordance
with the Power's Specifications (defined below). The parties' mutual goals
include the availability of quality products when and in the quantities needed
and based on SLRTX Workmanship and Quality Standards. Furthermore, Power and
SLRTX will jointly strive to achieve value pricing consistent with prudent
practices to balance low cost, available services and material availability.
Subject to agreement by both parties on individual Statements of Work the
following terms will govern transactions indicated therein:
1. DEFINITIONS
PRODUCT(S) - the items of finished hardware shipped by SLRTX to Power
hereunder.
STATEMENT(S) OF WORK - documents agreed to in writing by both parties,
which describe the work to be performed, the pricing for such work,
the Specifications and any supplemental terms that additionally apply
to such work. SLRTX' quotation(s) against which Power's orders are
submitted and accepted will be included in the Statement(s) of Work.
This Agreement may include multiple Statements of Work. Where Power
may consign material, the terms of Attachment A are hereby
incorporated.
SPECIFICATIONS - That portion of each Statement of Work that provides
objective, physical specifications for work to be performed. SLRTX
will purchase and assemble material according to such specifications.
The Passive Commodity Substitution Approval Form attached hereto and
incorporated herein shall be considered part of Power's
specifications.
2. TERM
This Agreement shall be effective on the Effective Date and shall
remain in force for one (1) year. Upon such anniversary this Agreement
will automatically continue unless terminated as provided for in this
Agreement.
3. PURCHASE ORDERS
Power will provide purchase orders (which may be written, verbal or
electronic) for Product in accordance with each individual Statement
of Work. SLRTX will manufacture Product after acceptance of purchase
orders placed by Power and make shipments in accordance with the terms
herein. SLRTX' acceptance or refusal of purchase orders will be within
a
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reasonable period not to exceed two weeks. No term or condition on any
purchase order will add to or modify this Agreement.
In addition, Power will provide copies of applicable tax exemption
certificates for the applicable Ship-to locations. Each purchase
order will include complete "Sold to," "Invoice to" and "Ship to"
addresses; quantity, description and price for each item; this
Agreement number; and desired ship date, in accordance with the
Statement of Work. Verbal orders will be confirmed in writing within
three (3) days.
4. PRICING
The prices for the Product and non-recurring items (e.g., services for
special, development or other activities listed in the Statement of
Work, tooling and test fixtures) shall be as set forth in the
Statement of Work. Prices are exclusive of all taxes, duties, customs
or similar charges and are subject to an increase equal in amount to
any charge SLRTX may be required to collect or pay upon shipment of
the Product.
The parties agree to review pricing, lead time and quality once every
quarter. Prices for Products will be monitored regularly and
adjustments may be made upon written notice to Power to compensate for
fluctuations in material or other direct costs, yield or changes in
quantity requirements. A complete BOM review will be made quarterly
and adjustments to the unit price to reflect any cost changes will be
made. In the interim, only component prices which change by five
percent (5%) or more will be reviewed immediately and unit prices
adjusted accordingly. Such price changes will not affect purchase
orders in SLRTX' then current backlog and scheduled to ship within 30
days of the date notice is given of a price increase.
Prices are based on a quantity of Products to be ordered and accepted
in accordance with the Statement of Work. Prices do not include
amounts for any royalty payments for patents that Products may
infringe.
The parties agree to diligently pursue cost improvement opportunities
for each and every element of price to reduce the cost of the
Products, including recommending design or process changes, or new
sources which may result in an overall cost reduction of the Products.
Any cost reduction realized as a result of SLRTX recommended changes
will be shared equally between SLRTX and Power. All Power recommended
changes which result in cost reductions will be passed on to Power one
hundred percent (100%).
5. RELEASES; SHIPMENTS
Within thirty (30) days after the Effective Date of this Agreement,
Power will provide purchase order(s) covering Product requirements for
a four (4) month period beginning with the date the initial unit is
scheduled for shipment. After issuing the initial purchase order(s),
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Power will provide additional purchase order(s) on a once-a-month
basis so as to maintain between ninety (90) and one hundred twenty
(120) days of Product requirements on order. This shall be the agreed
lead time.
Additionally, within thirty (30) days after the Effective Date of this
Agreement, Power will provide a six (6) month forecast of Product
requirements. Power will also use reasonable efforts to provide SLRTX
with a forecast covering the balance of a twelve month period not
covered by purchase orders. On a monthly basis thereafter, Power will
update the six (6) month forecast and will update the twelve month
forecast as feasible.
Forecast information shall be for planning purposes only and shall not
represent Power's commitment to purchase any or all of such Product.
However, Power acknowledges that SLRTX will need to purchase (i)
material that has a lead time outside of the purchase order backlog,
(ii) minimum order quantities (MOQ), and/or (iii) unique or custom
material, to support Power's requirements. Some of these purchases may
include noncancelable/nonreturnable terms. In connection with
procuring such material, SLRTX will advise Power in writing of long
lead, MOQ, or unique/custom purchase requirements and Power will
confirm in writing its authorization for SLRTX to procure such
material. Long lead component detail, including parts and dollar
exposure, will be provided to Power at least on a monthly basis. Power
will purchase such material from SLRTX at the earlier of (a) the time
this Agreement or a Statement of Work terminates or expires, or (b) or
in accordance with Section 8, Excess Inventory, below.
Power is responsible for the following items, as appropriately
invoiced by SLRTX, that accrue in the course of performance of this
Agreement: (a) approved inventory purchased or manufactured, (b)
charges or costs for which SLRTX may be liable or which SLRTX may have
reasonably incurred in connection with ECN's, (c) charges associated
with a reschedule, and (d) Cancellation Charges.
6. RESCHEDULING OF SHIPMENTS
Subject to the provisions of this Section 6, Power may reschedule
individual shipments of Product(s) (increases and decreases) according
to the following schedule:
DAYS PRIOR TO SCHEDULED ALLOWABLE ALLOWABLE
DELIVERY DATE INCREASE DECREASE
1-30 0% 0%
31-60 25% 25%
61-90 50% 50%
Beyond 90 100% 100%
SLRTX will use reasonable efforts to accommodate such requests on a
case-by-case basis. In the event that buffer inventory is required to
meet these requirements, Power will bear all
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costs associated with carrying such inventory. Upon request by Power,
SLRTX will provide an estimate of such costs for Power to review. Such
reschedules may be subject to additional charges, such as material and
labor premiums, and will be contingent upon availability of material,
personnel and capacity resources. SLRTX will provide estimates of all
charges associated with a reschedule and such charges shall be
reviewed and approved by Power prior to the reschedule being executed.
Any rescheduled item may be invoiced at the price in effect at the
time of shipment.
In the event Power reschedules a shipment to a date more than ninety
(90) days beyond the originally acknowledged ship date, such
reschedule constitutes a cancellation of that portion of the order and
the applicable cancellation charges will apply. Reschedules that
result from failure to pay for earlier shipments will be subject to
additional charges.
7. CANCELLATION OF SHIPMENTS
Power's requests to cancel shipments of Products will be reviewed
individually by SLRTX. If charges ("Cancellation Charges") apply to
such cancellations, they will be assessed as follows:
(a) for Products scheduled to ship within 30 days, Cancellation
Charges shall be 100% of the price of the Products being canceled;
(b) for Products scheduled to ship within 31-90 days, Cancellation
Charges may include SLRTX' costs for material, work-in-process, and
finished goods for such canceled shipments, third party supplier
restocking or cancellation fees, and mutually agreed SLRTX material
handling or other indirect costs.
(c) for Products scheduled to ship beyond 90 days, Cancellation
Charges will be limited to long lead or custom components, and a
maximum of one MOQ lot.
Charges will be based on the date written notice of a cancellation is
received at SLRTX and SLRTX will use all commercially reasonable
efforts to mitigate Power's liability for such charges, including
canceling, restocking, reselling, or re-using material in other
products.
Where cancellation of a previously rescheduled shipment has occurred,
the cancellation charge may be computed as if the previously requested
reschedule had instead been a request for cancellation.
Orders for tooling, test equipment or non-recurring services are firm
and not cancelable.
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8. EXCESS INVENTORY
If Power cancels or reschedules purchase orders, or changes its
forecast, or implements an ECN (such actions shall collectively be
referred to as a "Material Event"), which results in excess material
inventory (including long lead material, MOQ's, and unique/custom
material), then if that excess material inventory is not fully
consumed prior to the end of the month following the Material Event,
SLRTX may request and Power agrees to pay SLRTX a carrying charge on
the inventory of two and one-half percent (2 1/2%) per month. Power
agrees to pay such carrying charge on such excess material until it is
fully consumed; provided, however, that if the excess material
inventory is not consumed by the end of the third month following the
month of the Material Event, SLRTX may request and Power shall
purchase such inventory from SLRTX and SLRTX will continue, at Power's
option, to hold such inventory on Power's behalf subject to agreed
carrying charges, or SLRTX will deliver the material to Power's
designated location at Power's expense. SLRTX will use all
commercially reasonable efforts to minimize the excess material
inventory.
9. TERMS AND METHOD OF PAYMENT
Terms of payment are net fifteen (15) days from date of invoice,
subject to continuing credit approval. On or before the Effective Date
of this Agreement, Power agrees to provide SLRTX a copy of its most
recent financial statements. Thereafter, Power will provide updated
financial statements on a quarterly basis within forty-five (45) days
following the end of each fiscal quarter of Power. If Power fails to
make timely payments, satisfy credit arrangements, or provide
financial information as required in this Xxxxxxx 0, XXXXX may
withhold shipment of Products until Power makes other arrangements
satisfactory to SLRTX. In the event alternative arrangements are not
made, SLRTX may defer or cancel the shipment(s), terminate this
Agreement, and/or exercise any and all other legal rights and
remedies, and Power agrees to compensate SLRTX in accordance with
Sections 5, 6, 7, 8 and 13 of this Agreement. In the event that Power
becomes a publicly traded company, then Power's obligation to provide
financial information under this Section 9 shall cease.
Charges for tooling, test equipment and non-recurring services may be
invoiced upon SLRTX' commitment to obtain such items.
10. DELIVERY, TITLE & INSPECTION
Prices are FOB SLRTX' point of shipment. Power may specify the carrier
by so indicating on the face of its purchase order. Shipments will be
shipped freight collect or third party billing, as agreed. SLRTX
understands that Power desires that all shipments ordered within
agreed lead times (as defined in Section 5) be made on the requested
ship date. SLRTX will use all commercially reasonable efforts to ship
Products on the requested ship date. SLRTX will advise Power of
potential delays, their cause and the actions taken by SLRTX to
resolve. Except for consigned material, title will pass to Power upon
SLRTX' tender of delivery at SLRTX' dock. Power shall have a
reasonable time to inspect the Products. Power will notify SLRTX in
writing of particular deficiencies during the inspection period which
shall be the
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fifteen (15) day period immediately following receipt. Failure to give
notice or particularize the deficiencies will constitute Power's
acceptance.
11. TOOLING AND EQUIPMENT
SLRTX will acquire or develop certain non-recurring engineering
tooling and/or fixtures (the "NRE Tooling") in connection with the
manufacture of the Products. Power will issue purchase orders for such
NRE Tooling prior to SLRTX acquiring or developing the NRE Tooling.
Power will be responsible for consigning certain functional test
equipment (hereinafter "Equipment") to SLRTX solely for the purpose of
performing functional test and repair on the Products. All other test
and equipment responsibilities will be set forth in the Statement of
Work or as otherwise agreed by the parties.
SLRTX agrees to exercise reasonable care in the use and custody of the
Equipment and shall use such Equipment only in performing its
obligations under this Agreement. SLRTX further agrees to perform
regular preventative maintenance, which excludes replacement of parts
for which Power will be billed, at no charge. SLRTX will undertake
repair of the Equipment, when necessary, at a reasonable charge to
Power. Power will be responsible for replacing Equipment that is
non-repairable or requires an upgrade due to ECN's. SLRTX will provide
Power with necessary cost and back-up information to verify any
non-repairable condition.
SLRTX agrees that all NRE tooling and Equipment are the property of
Power and SLRTX will not mortgage, pledge, assign or borrow against
such property or otherwise create or attempt to create a security
interest in the NRE Tooling and Equipment.
Upon payment of all undisputed amounts owing to SLRTX under this
Agreement, SLRTX agrees to return to Power, or assign per Power's
written direction, any or all NRE Tooling and Equipment upon
termination or expiration of this Agreement, or upon receipt of
written request from
12. QUALITY
SLRTX shall manufacture and perform workmanship inspection and agreed
test procedures on Products in accordance with the Specification and
SLRTX' Workmanship and Quality Standards. Upon request by Power, SLRTX
will provide statistical process control data on critical processes,
and yield and failure analysis reports in agreed formats and time
frames. It is the parties' goal that Products be defect free, and each
party will work to develop programs and processes intended to achieve
an acceptable level of defect free Products.
Products shall be subject to Power's inspection and test, either at
Power's premises or, upon request, at SLRTX' premises. Power's
remedies for defective Product are set forth in Section
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17. SLRTX shall perform 1% AQL on workmanship inspection. If defects
are found during such inspection, additional screening and testing
will be performed.
Power may perform source inspections at SLRTX' facilities, subject to
agreed times, processes and procedures.
SLRTX agrees to review and participate in Power's dock-to-stock
certification program, as mutually agreed on, including but not
limited to statistical process control practices and reporting.
13. TERMINATION
In the event either party becomes insolvent or generally is unable to
pay its debts as they become due, the other party may immediately
cancel individual Statement(s) of Work, or cancel this Agreement in
its entirety upon written notice.
In the event of any other breach of this Agreement, the aggrieved
party shall give the other party written notice to cure the breach
within thirty (30) days. The aggrieved party may cancel this Agreement
if the breach is not cured within thirty (30) days of receipt of such
notice.
Either party may terminate this Agreement or any individual Statement
of Work without cause by giving 90 days written notice to the other
party. In the event of termination without cause, SLRTX will continue
shipment of all orders accepted prior to the date of notice and Power
will remain obligated to accept and pay for such deliveries at the
current pricing.
Upon termination of this Agreement or Individual Statement of Work,
Power agrees to reimburse SLRTX for all inventory purchased or
manufactured and all charges or costs for which SLRTX may be liable or
which SLRTX may have reasonably incurred in the course of performance
of this Agreement or an individual Statement of Work, Cancellation
Charges or charges associated with a reschedule.
14. CHANGES
The parties recognize that changes to Products may be suggested from
time to time. Changes will be proposed in writing. If by Power, SLRTX
will promptly investigate the impact of the change and advise Power.
SLRTX-proposed changes will be described in writing and will include
the impact to current pricing and schedule. Changes will only be
implemented upon receipt by SLRTX of Power's request to proceed with
the change. Such request will be Power's acceptance of the indicated
adjustment in the price or shipping schedule or both, and any costs to
SLRTX for any material (and any cancellation or restocking fees) which
is rendered excess due to the change. In the event Power requests that
a change be implemented prior to SLRTX' evaluation of pricing and
schedule impact, SLRTX will use reasonable
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efforts to perform as directed and Power will be liable for all costs
associated with such implementation.
15. WARRANTIES BY SLRTX
THE FOLLOWING WARRANTIES FOR EQUIPMENT ARE IN LIEU OF ALL CONDITIONS
OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY
IMPLIED CONDITIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. SLRTX warrants that at the time of delivery of
Products, SLRTX has clear title to the Products that is manufactured
by SLRTX with material supplied by SLRTX.. SLRTX warrants the Products
against faulty workmanship and material supplied by SLRTX for a period
of fifteen (15) months after the date of shipment. Such warranties are
granted for failures that do not result from (a) design flaws or
design parameters exceeding or violating component specifications; (b)
external or environmental factors; (c) handling, processing, or
manufacture of assemblies after shipment from SLRTX; (d) repair,
attempted repair, or alteration other than by SLRTX; or (e)
electrostatic discharge damage (not caused by SLRTX). Such warranties
will not apply to specific components or assemblies (except to the
extent that such assemblies exhibit faulty workmanship) for which
Power has not provided functional tests to diagnose failures.
SLRTX makes NO WARRANTY as to software which is supplied on an "AS IS"
basis. Likewise, SLRTX makes NO WARRANTY as to prototypes,
pre-production units, or units shipped at Power's request with less
than the testing provided for in the work order for production units.
SLRTX' warranties, as set forth above, are the only warranties made by
SLRTX and shall not be enlarged, diminished or affected by, and no
obligation or liability shall arise or grow out of, SLRTX' rendering
of technical, programming, or other advice or services in connection
with the Products.
16. WARRANTIES BY POWER; LICENSES
Power warrants that it is the owner of all proprietary rights in the
information provided to SLRTX in order to manufacture the Products,
and that it has the unqualified right to make available to SLRTX
material and other information, including drawings, designs and
specifications. Additionally, Power warrants and represents that it is
the owner of software provided to SLRTX hereunder and/or has the right
to supply the software. Power hereby grants to SLRTX a license to use
and reproduce the software, and any other documentation or information
provided to SLRTX for the purposes contemplated by this Agreement.
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17. POWER'S REMEDIES
SLRTX' ENTIRE LIABILITY AND POWER'S SOLE AND EXCLUSIVE REMEDY for
breach of warranty contained in this Agreement shall be at SLRTX'
option to repair, replace (with new or equivalent to new parts) or
credit Power's account for any Products found to be defective in
workmanship during the warranty period. Power's remedy is contingent
on (a) prompt written notification of the defect; (b) the cause not
being the result of misuse, accident, neglect, alteration, improper
testing, storage, installation or negligence on the part of the Power;
and (c) return of the Products to SLRTX' manufacturing location with
incoming shipment and in-transit loss or damage at Power's risk and
expense. In the event that Products exhibit an unreasonably high DOA
or initial inspection defect rate, SLRTX will pay for shipping expense
both ways. Returned Products must be marked with SLRTX' Returned
Material Authorization (RMA) number. An RMA number will be assigned
upon notice to SLRTX' that Products will be returned. Such repair,
replacement or credit shall constitute fulfillment of all liability
of SLRTX to Power.
Power agrees to pay a screening fee and other associated fees for
assemblies submitted for warranty work that are not packed
appropriately, do not duplicate the alleged failure when tested by
SLRTX or are to be tested against a later version test software
than was used at the time of manufacture.
18. DISCLAIMER OF DAMAGES
NEITHER PARTY SHALL BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, LOSS OF USE
OR DATA OR INTERRUPTION OF BUSINESS, WHETHER THE ALLEGED DAMAGES ARE
LABELED IN TORT, CONTRACT OR INDEMNITY, EVEN IF THE OTHER PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
Without prejudice to the foregoing, if it should be held by a court of
competent jurisdiction, in relation to any claim, that the preceding
paragraph is for any reason ineffective, the parties agree that any
costs, expenses and/or damages held to be payable for any claim under
this Agreement shall in no event exceed the direct cost of remedying
the breach, if applicable, or the individual purchase order value for
each occurrence, whichever is the lesser.
SLRTX is performing work per specifications provided by Power.
Therefore, SLRTX shall not be liable for the technical adequacy or
design of the product(s); nor shall SLRTX be liable for the safety or
regulatory compliance of the Product(s), including but not limited to
ensuring that the Products meet applicable government or responsible
agency regulations. Power agrees to indemnify and save SLRTX harmless
from and against all losses, expenses or damages arising out of any
claim resulting from SLRTX' compliance with Power's Specifications.
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Actions, however asserted, shall be commenced within two years from
the date the cause of action accrues; provided, however, an action for
nonpayment may be commenced at any time within four years from the
date the cause of action accrues.
19. PROPRIETARY DATA; INFRINGEMENT
Any confidential information exchanged by the parties shall be
governed by the terms of that certain Nondisclosure Agreement No.
592412, or any renewal or replacement thereof which is signed by both
parties.
Power will defend at its expense, any action or claim brought against
SLRTX or its subsidiaries alleging that Products provided by SLRTX
under this Agreement infringe any patent, copyright, trademark or any
other proprietary right, and Power will pay all costs and damages
(including attorney's fees) incurred by SLRTX or its subsidiaries in
such actions that are attributable to such actions or claims; provided
that Power is promptly informed in writing and furnished a copy of
each alleged infringement and is given authority, information, and
assistance (at Power's expense) necessary to defend or settle such
claim.
Except for any licenses 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, whether by estoppel, implication or
otherwise.
20. INDEPENDENT CONTRACTOR; COMPETITION
Each of the parties hereto shall conduct the work to be performed
hereunder as an independent contractor and not as an agent or employee
of the other party. Subject to the terms and conditions of this
Agreement, each party shall choose the means to be employed and the
manner of carrying out its obligations hereunder.
Nothing in this Agreement shall limit the right of SLRTX to
manufacture products or provide services for other customers which may
be competitive with those that are the subject of this Agreement
Neither party shall be required to disclose planning information to
the other.
21. REGULATORY APPROVAL
Power is responsible for the Product's compliance with all applicable
UL, CSA, FCC, and other approvals, standards and regulations. Power
will notify SLRTX in advance of designating SLRTX' manufacturing
location as the manufacturing location for the purposes of such
approvals. SLRTX will cooperate with public and private regulatory
organizations to allow periodic inspections at mutually acceptable
times to maintain such approvals.
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Should the Products or changes fail to meet the applicable approvals,
standards or regulations, SLRTX may cease production until Power and
SLRTX agree to required changes and applicable qualifications are met,
without being in breach of this Agreement. Power is responsible for
obtaining required approvals relative to any changes and will be
responsible for all costs attributable to such requirements.
22. EXPORT; FORCE MAJEURE
Each party agrees that it will not knowingly (a) export or re-export,
directly or indirectly, any technical data (as defined by the U.S.
Export Administration Regulations), including software received from
the other under this Agreement, (b) disclose such technical data for
use in, or (c) export or re-export, directly or indirectly, any direct
product of such technical data, including software, to any destination
to which such export or re-export is restricted or prohibited by U.S.
Or non-U.S. law without obtaining prior authorization from U.S.
Department of Commerce and other competent government authorities to
the extent required by those laws. This clause shall survive
termination or cancellation of this Agreement.
SLRTX is not liable, either wholly or in part for nonperformance or a
delay in performance due to force majeure or contingencies or causes
beyond the reasonable control of SLRTX including but not limited to
shortage of labor, fuel, raw material or machinery or technical; or
yield failures where SLRTX has exercised ordinary care in the
prevention thereof. Production and deliveries may be allocated by
SLRTX in any reasonable manner in the event of product shortage.
23. NOTICE
All notices required by this Agreement shall be in writing and
delivered postage prepaid to the places indicated under the
signatures.
24. PERSONAL INJURY INDEMNIFICATION
Each party agrees to indemnify and hold the other harmless against any
loss, cost or expense, including reasonable attorneys' fees, finally
awarded against the other in connection with a claim by a third party
for personal injury or property damage, to the extent that such damage
is caused by a negligent act or omission by the indemnifying party or
its agents. Each indemnitor's obligations hereunder shall be
conditioned upon receiving a prompt notice of each such claim from the
indemnitee and the sole authority to defend, and the indemnitee shall
cooperate and provide reasonable assistance to the indemnitor in
defense of the claim. Each party agrees to carry commercial liability,
property damage, and automobile liability coverage, including
contractual endorsement and products hazard coverage in reasonable
amounts.
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25. WAIVER; SEVERABILITY; APPLICABLE LAW; ASSIGNMENTS
Failure of either party to enforce any term or condition of this
Agreement will not be deemed to be a waiver of such term or condition.
If any provision of this Agreement is held to be invalid, the other
provisions will not be affected.
This Agreement shall be governed by the laws of the State of Texas for
contracts made and to be performed in that State.
Neither party shall assign any of its rights or privileges hereunder
without the prior written consent of the other party, unless such
assignment is incident to the sale or transfer of substantially all
assets of the business unit of the assigning party to which this
Agreement relates. Any other attempted assignment or transfer of any
of the rights, duties, or obligations herein shall be void unless
consent is given in which case this Agreement shall be binding upon
and inure to the benefit of the assigns.
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ATTACHMENT A
AGREEMENT NO. C970305
CONSIGNED MATERIAL
Where the Statement of Work provides for Power to furnish consigned material to
SLRTX the following terms are additionally incorporated into the Agreement.
A. TITLE
Title to all consigned material shall remain with Power. Liability for loss or
damage to consigned material, in excess of a one percent (1%) allowance for
shrinkage, will pass to SLRTX after SLRTX has signed for receipt from the
carrier of such consigned material. Liability for loss or damage to consigned
material, including finished Products produced from the consigned material,
will pass back to Power upon SLRTX' tender of such consigned material or
finished Product to a carrier for shipment to Power.
B. WARRANTIES BY POWER
Power warrants that at the time of delivery of consigned material Power has
free and dear title to the consigned material. Power warrants the consigned
material against faulty workmanship and materials, that it meets applicable
specifications and that any tooling and test equipment that is part of the
consigned material performs the functions on which SLRTX will rely to
manufacture the Product.
C. SLRTX' REMEDIES
Power shall have the option to replace or repair defective consigned material.
Power shall reimburse SLRTX for labor costs and other increased costs due to
production breaks caused by defective consigned material. Power shall also pay
appropriate reschedule or cancellation fees or other increased costs if Power's
failure to provide consigned material interrupts SLRTX' production schedule.
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ATTACHMENT B
AGREEMENT NO. C970305
PASSIVE COMMODITY SUBSTITUTION APPROVAL FORM
POWER COMPUTING CORPORATION
This form sets forth the conditions under which Solectron Texas may substitute
certain components for those specified on Power's BOM and sourced through
Power's approved vendor list (AVL). Power's signature will constitute its
express authorization for any substitutions made by Solectron Texas in
accordance with the criteria and conditions listed below.
RESISTORS: Substitution is approved for these components using the following
criteria:
o Equal/Better than Tolerance (i.e., 5% when AVL specs 10%)
o Equal/Better than Power Rating (i.e., 1/4 watt when AVL specs 1/8 watt)
CONDITIONS:
1. Applies to carbon film, metal film, and surface mount resistors only.
2. Wire wound resistors must meet AVL, no exceptions.
3. In all cases, resistance values must meet AVL specifications.
4. The temperature coefficient (PPM/DEG C) will be "equal to" or "better
than".
5. Substitution can be done provided form, fit, and function meet original
specification.
INDUCTORS: Substitution is approved for these components using the following
criteria:
o Equal/Better than Tolerance (i.e., 10% when AVL specs 20%)
CONDITIONS:
1. Surface mount shall be of the same size and pitch as specified.
2. The temperature coefficient (PPM/DEG C) will be "equal to" or "better
than".
3. Q Value must be "equal to" unless AVL reads Q=XX or greater.
4. Substitution can be done provided form, fit, and function meet original
specification.
All substitutions are limited to Solectron Texas Strategic, Preferred+, and
Preferred suppliers, and Power approved suppliers.
CAPACITORS: Substitution is approved for these components using the following
criteria:
o Equal/Better than Tolerance (i.e., 10% when AVL specs 20%)
o Equal/Better than Voltage (i.e., 20 volt when AVL specs 1 volt)
o Equal/Better than Dielectric (i.e., NPO in place of X7R or X5U and X7R
in place of Z5U.)
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CONDITIONS:
1. Tantalum or electrolytic capacitors shall be replaced by the same type.
2. Surface mount shall be of the same size and pitch as specified.
3. Reel and Ammo pack radial/axial lead components with a smaller case size
is acceptable.
4. The temperature coefficient (PPM/DEG C) will be "equal to" or "better
than".
5. The type of film will remain the same. (i.e. polyester can not be
substituted for polycarbonate, and polycarbonate can not be substituted
for polysulfone, etc.)
6. The type of construction will remain the same (i.e. WRAP and fill cannot
be substituted for hermetically sealed, etc.)
7. Substitution can be done provided form, fit, and function meet original
specification.
POWER APPROVES THESE SUBSTITUTIONS WITH THE AUTHORIZED SIGNATURE BELOW:
POWER COMPUTING CORPORATION
By: Signature: /s/
----------------------------------------------
Name: J.R. Hindmarch
Title: V.P. Operations
Date: 3/25/97
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