CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
Exhibit 10.1
LETTER OF AGREEMENT
This Letter of Agreement ("LOA") is between ParTech Inc. having offices at 0000
Xxxxxx Xxxxxxxx, Xxx Xxxxxxxx, Xxx Xxxx 00000, ("ParTech") and SANMINA-SCI
Corporation and its subsidiaries and affiliates (collectively "SSCI"), having a
business address at 0000 X. 0xx Xxxxxx, Xxx Xxxx, XX 00000, and its SSCI
facility located in Penang, Malaysia with an address at 202 Lorong Persuahaan
maju 0, Xxxxx Xxxxxx Xxxxxxxxxx Xxxx, 00000 Xxxxx. All SSCI notices related to
this LOA shall be sent to the ParTech address above, and ParTech notices shall
be sent to the Penang Malaysia address.
ParTech and SSCI are presently attempting to establish a business relationship
under which ParTech may, among other things, have SSCI procure components and
manufacture, assemble, test, inspect, configure and ship the products listed
within Attachment A ("Products"). Assuming mutual resolution of technical and
business issues, the parties intend to sign a Manufacturing Services Agreement
("Agreement") on or about February 1, 2003.
This LOA is for the purpose of authorizing SSCI to begin work immediately in
lieu of the fully negotiated Agreement. This LOA implies no commitment to enter
the Agreement. Both parties acknowledge the execution of an Agreement is
contingent upon the mutual consent of the parties and that should the Agreement
not be executed, the express terms of this LOA shall be the sole governing
document. This LOA shall be effective (the "Effective Date") as of the last
signatory date of acceptance, and shall continue in full force until it is
terminated or rendered null and void pursuant to this LOA or upon execution of
the Agreement.
ParTech authorizes SSCI to procure the quantity and type of components in
support of the requirements in Attachment A. ParTech shall issue Purchase Orders
for the purpose of SSCI manufacturing and shipping Products pursuant to this
LOA. Products shall be delivered to ParTech as per delivery dates on Purchase
Orders in accordance with component and manufacturing lead times. SSCI shall
accept Purchase Orders with delivery dates in accordance with component and
manufacturing lead times, and SSCI shall confirm receipt and acceptance of
Purchase Orders within five (5) business days of receipt. In the event SSCI is
unable to meet the delivery schedule set forth in a Purchase Order where
delivery schedule is not within component and manufacturing lead times, the
parties shall negotiate in good faith to resolve or revise the delivery
schedule. ParTech will issue SSCI a rolling 12 months forecast that will be
updated monthly for the procurement of long lead-time ("LLT") components. All
LLT components require ParTech's authorization prior to procurement by SSCI.
Purchase Orders and LLT Authorizations by ParTech are considered subject to
ParTech's inventory responsibilities, in the event of PO cancellations,
push-outs, or terminations herein. ParTech upsides or delivery pull-ins beyond
those agreed that result in material expedite shipping charges (whether vendor
or SSCI), shall be paid by ParTech. Delayed shipments as a direct result of
SSCI's actions or inactions that require expedite costs shall be at SSCI's
expense.
The prices in Attachment A shall be utilized for invoicing. SSCI invoices shall
be paid in U.S. Dollars net ** days from the date of invoice, which, for shipped
units, shall not be issued prior to the date the Products are shipped **,
Incoterms 2000, SSCI's dock. No setoffs or offsets are allowed.
SSCI's workmanship warranty period is for ** from the date of Product
manufacture. Defective warranty returns shall be repaired, replaced, or purchase
price of unit returned, at SSCI's option. In addition SSCI will pass on to
ParTech all vendor component warranties to the extent that they are transferable
but will not independently warrant components. SSCI shall, at its cost, repair
units returned within the warranty period with defective components not
warranted by SSCI without labor costs to ParTech, ParTech (or the component
vendor) being responsible for component costs. Notwithstanding the
aforementioned, defective returns by ParTech that, upon testing and inspection
by SSCI, are deemed to be "No Defective Found" or "NDF" shall be subject to a
mutually agreed SSCI labor charge paid by ParTech as well as all NDF associated
shipping cost. ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE, AND ALL IMPLIED WARRANTIES OF TITLE FOR ANY CONSIGNED OR PARTECH
SUPPLIED MATERIALS, ARE EXPRESSLY DISCLAIMED AND EXCLUDED HEREFROM.
ParTech may terminate this LOA upon ** days written notice to SSCI. Upon
termination for any reason (including breach by SSCI), ParTech shall be
responsible for all materials; provided, however, that ParTech's maximum
liability shall not exceed: (1) for materials, the quantity and type of
components acquired by SSCI in support of this LOA or other written
authorization plus a reasonable cost of capital and material handling charge;
(2) for labor, ParTech's authorization to complete and ship Products at the
purchase price in effect at the date of termination, a pro
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rata percentage of the finished Product purchase price for WIP and the full
purchase price for any finished Product; (3) SSCI's documented cost to perform
ParTech authorized non-recurring engineering or associated program duties; and
(4) SSCI's reasonable and documented actual expenses incurred prior to
termination.
In the event of termination for any reason, SSCI shall use reasonable commercial
efforts to minimize ParTech's liability by canceling all agreements it has
entered into and managing material, labor and overhead cost to a minimum. SSCI
will deliver to ParTech all product components, documentation and other property
owned by ParTech or which ParTech has paid for under this LOA.
Neither party shall make a claim against, or be liable to the other party or its
affiliates or agents for any damages, including (without limitation) loss of
profits or injury to business reputation, resulting from the continuation or
abandonment of negotiations, including the consequences thereof. IN NO EVENT
SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY INDIRECT, CONSEQUENTIAL,
INCIDENTAL OR SPECIAL DAMAGES, OR ANY DAMAGES WHATSOEVER RESULTING FROM LOSS OF
USE, DATA OR PROFITS, EVEN IF SUCH OTHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGES; provided, however, that this Section shall not
prevent a party from incurring the liabilities set forth herein.
Except as provided in the immediately succeeding paragraph, ParTech is
responsible for the design of the Products. ParTech will promptly defend,
indemnify and hold SSCI harmless from and against every kind of cost, expense or
loss (including attorneys' fees and legal costs) directly relating to any claim
or threatened claim: (a) that any Product or portion of a Product violates the
intellectual property rights of a third party (foreign or domestic); (b) that
the Product has a design defect; or (c) arising from or related to the
distribution, sale or use of any Product or portion of a Product.
SSCI will promptly defend, indemnify and hold ParTech harmless from and against
every kind of cost, expense or loss (including attorneys' fees and legal costs)
directly relating to any claim or threatened claim: (a) that any manufacturing
process used to manufacture ParTech's Products violates the intellectual
property rights of a third party (foreign or domestic); or (b) that SSCI's
manufacturing process is defective.
This LOA and its attachments make up the entire agreement between the parties
for the manufacture and sale of Attachment A Products and supersede any verbal
or written prior discussions. The parties expressly reject any pre-printed terms
and conditions found on any Purchase Order, Acknowledgment or any other form or
document used by the parties in the performance of this LOA. Only a writing
executed by authorized representatives of the parties may amend this LOA. Either
party without the other party's prior written consent will not assign this LOA.
ParTech shall be the exporter of record for and shall comply with all applicable
export control statutes and regulations.
The parties shall attempt to resolve any disputes arising out of this LOA in a
business-like manner through good faith negotiations and escalation to the
appropriate Corporate Executives for resolution prior to seeking legal
resolution. In the event the parties cannot resolve a dispute, either party may
give to the other notice requiring the matter to be settled by arbitration. Such
dispute shall be settled in accordance with the rules of the American
Arbitration Association, as amended herein, and arbitration shall take place at
a location in the United States, which affords both parties approximately equal
travel expenses. The conflict will be decided by a single arbitrator with
experience in the matter of conflict if the parties so agree, otherwise, the
conflict will be decided by three (3) arbitrators with experience in the matter
of conflict, one arbitrator to be chosen by ParTech, one arbitrator to be chosen
by SSCI and a third arbitrator to be chosen by the first two. All arbitrators
must be chosen within forty-five (45) days of the dispute being submitted to
arbitration. After selection of the arbitrators, the parties shall have
forty-five (45) days to complete discovery. Arbitration must commence within ten
(10) days after the discovery period. Arbitration will not exceed thirty (30)
days and the award is final.
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LOA EFFECTIVE DATE: 11/22/02
ACCEPTED AND AGREED TO: ACCEPTED AND AGREED TO:
SSCI CORPORATION PARTECH
By: /s/ Y.Y. Lim By: /s/ Xxxxxxx X.Xxxxxxxx
-------------------- ----------------------
Name: Y.Y. Lim Name: Xxxxxxx X. Xxxxxxxx
Title: VP Operations Title: VP Operations
Date: 11/22/02 Date: 11/21/02
Attachment A---Product Pricing
Attachment B---Confidentiality Agreement
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CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
ATTACHMENT A
------------
PRODUCT PRICING
[LOGO]
SANMINA -- SCI
Quote Date: 10/30/2002 Revision 01
Prepared by: Fablan Ong
x00 00000000 (South Asia Pacific Regional Office,
Singapore)
Plant: Malaysia
Customer: Par Tech
Contact: Xxxx Xxxxxxxx/Xxxx Xxxxxx
Product: **
Assembly ** **
Description ** **
New Pricing New Pricing
FOB Point Malayasia Malayasia
Annual Volume ** **
Direct Material Cost **(1) **
Labor Cost ** **
Total Markups & Profit ** **
** Warranty ** **
Price (**) ** **
Note
(1) **
--------------------------
Datatech 11/20/2002
--------------------------
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ATTACHMENT B
------------
NON-DISCLOSURE AGREEMENT
The purpose of this Agreement is to set forth the terms and conditions under
which the parties shall provide directly or indirectly, verbally or in writing
or electronically, including but not limited to, pricing, financial, purchasing,
technical data, products and business operations information which either party
considers confidential ("Information") to the other party, which is either (a)
of a type that a party in Recipient's position should reasonably deem
confidential and/or proprietary or (b) if in documentary or other tangible form,
is clearly and conspicuously marked as "Confidential" or some similar marking
or, if disclosed orally, identified as confidential at the time of disclosure
and confirmed in writing as confidential within thirty (30) days of the initial
disclosure. In consideration of the mutual covenants contained herein, the
parties agree as follows:
1. The Recipient shall hold all Information in strictest confidence.
Recipient shall release such Information only to its employees requiring such
Information during the course of business between the parties. Each employee
must agree to be bound by this Agreement and Recipient's confidentiality
policies. Disclosure of Information to persons other than Recipient's employees
requires the Disclosing Party's prior written consent. Recipient shall take all
necessary precautions to maintain the confidentiality of such Information, but
such efforts shall be no less than that employed by Recipient to protect its own
confidential information. All Information disclosed to Recipient shall be and
remain the sole property of the Disclosing Party. Upon the Disclosing Party's
request, Recipient agrees to return the Information and any copies thereof
and/or data which contains the Information and not to retain any copies of the
Information.
2. ALL INFORMATION DISCLOSED HEREUNDER IS DISCLOSED ON AN AS-IS BASIS
WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, INCLUDING AS TO THE
INFORMATION'S ACCURACY OR COMPLETENESS. ALL WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR USE ARE EXPRESSLY DISCLAIMED AND EXCLUDED
HEREFROM.
3. Nothing contained herein shall in any way restrict or impair
Recipient's right to use or disclose any Information which: (a) was in the
public domain at the time of disclosure or becomes part of the public domain
through no fault of Recipient; (b) was already in Recipient's possession; (c)
was independently developed; or (d) was received from a third party without the
obligation of confidentiality.
4. This Agreement contains the entire agreement between the parties
regarding the Information. This Agreement supersedes all prior oral and written
agreements and understandings between the parties relating to the Information,
and may only be amended or modified in a writing signed by an authorized
representative of each party.
5. Both parties agree that any violation or threatened violation of this
Agreement may cause irreparable injury to the other party, and the disclosing
party shall be entitled to seek injunctive relief in addition to all available
legal remedies.
6. Both parties agree that they will not, without the prior written
consent of the other party, transmit the Information received from the other
party to any country outside of the United States of America.
7. The obligations of confidentiality upon the Recipient to guard the
Disclosing Party's confidential Information shall survive the completion or
termination of the Agreement to which Attachment B is a part of.
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