1
EXHIBIT 10.19
Standard Manufacturing Agreement
Solectron Confidential
STANDARD MANUFACTURING AGREEMENT
Solectron de Mexico ("Solectron") whose principal place of business is located
at Prol. Xxxxx Xxxxxx Sur 2915 Km. 6.5 Xxxxxxxxxx xx Xxxxxx, Xxxxxxx 00000
XXXXXX and Novatel Wireless Inc. ("Customer") whose principal place of business
is located at Suite 110, 0000 Xxxxx Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx, X.X.X.
00000, in their desire to formulate a strategic business relationship and to
define their expectations regarding this relationship, hereby agree as follows:
1.0 PRECEDENCE:
1.1 This Agreement is intended by Solectron and Customer (the "Parties") to
operate as a basic set of operating conditions regarding their respective
business relationship. Product specific requirements along with specific
business terms and conditions will be mutually agreed to and documented
by an addendum to this Agreement.
1.2 It is the intent of the Parties that this Agreement, including the
Non-Disclosure Agreement between the Parties referenced herein, and its
addenda set forth the entire agreement and understanding of the Parties
relating to the subject matter herein and merges all prior discussions
and arrangements between them, and shall prevail over the terms and
conditions of any purchase order, acknowledgment form or other
instrument.
1.3 This Agreement may be executed in one or more counterparts, each of which
will be deemed the original, but all of which will constitute but one and
the same document. The Parties agree this Agreement, including the
Non-Disclosure Agreement, and its addenda may not be modified except in
writing signed by both Parties.
2.0 TERM
2.1 This Agreement shall commence on the effective date, August 8, 2000, and
shall continue for an initial term of one (1) year. This Agreement shall
automatically be renewed for successive one (1) year increments unless
either Party requests in writing, at least ninety (90) days prior to the
anniversary date, that this Agreement not be so renewed.
1 of 14
2
Standard Manufacturing Agreement
Solectron Confidential
3.0 PRODUCT FORECAST AND PURCHASE ORDERS
3.1 It is agreed that Customer will provide Solectron, on a monthly basis, a
rolling twelve (12) month forward-looking, non-binding Product Forecast.
This section, as appropriate, may be modified in an addendum to reflect
specific Product requirements. Such Product Forecasts do not represent
any commitment by Customer to purchase any Products. Solectron may use
such Product Forecasts for internal material planning requirements only.
3.2 Customer agrees to provide Solectron with Purchase Orders for finished
Products twelve (12) weeks in advance of delivery (or as otherwise
provided by an addendum). Such Purchase Orders will be deemed immediately
accepted by Solectron provided the Purchase Orders do not deviate more
than ten percent (10%) from the Product Forecasts.
3.3 Upon the basis of the Purchase Orders and Product Forecasts referred to
in Sections 3.1 and 3.2, Solectron shall develop and deliver to Customer
a master production schedule ("MPS") for a twelve month period as
follows:
(a) the MPS will define the master plan upon which Solectron will base
it's procurement activities, internal capacity projections and
commitments to Customer hereunder;
(b) Solectron will use the Product Forecasts and Purchase Orders referred
to in Sections 3.1 and 3.2 to generate the three months of the MPS; and
(c) Solectron will use the Product Forecasts referred to in Section 3.1
to generate the following nine months of the MPS.
The current Solectron MPS will be provided to the Customer the first
working day of every month during the term of this Agreement.
3.4 Solectron will place orders to suppliers of components within a
reasonable period prior to the anticipated date that the same are needed.
On the first working day of each month, Solectron will provide to
Customer the current lead-times by part number for all parts used in the
Customer assemblies. For turnkey parts, Solectron will be the primary
contact for all aspects of supplier evaluation, selection, process
qualification, contract negotiation, cost reduction, performance
management, cycle time/flexibility improvement, quality problem
resolution, quarterly supplier reviews, and MRP/PO execution. Any such
component supplier shall be made aware that the ultimate end-user of any
such components is Customer and Customer shall be made aware of the
identity of any such component supplier.
3.5 Solectron will provide a report containing quantity and financial
exposure of components to be utilized for Customer. The turnkey
components procured by
2 of 14
3
Standard Manufacturing Agreement
Solectron Confidential
Solectron, will not be shown to Customer in detail in order to honor the
relationship between suppliers, and other customers but Customer shall be
provided with any reasonably necessary information with regard to such
turnkey components or their suppliers.
3.6 Those components with on hand inventory greater than 2 months of the
Customer Product Forecast will be considered excess inventory. The caring
charge for excess inventory will be 2% on a monthly basis, upon
notification to and verification by Customer. Customer shall pay charges
net 30 ( thirty) days.
3.7 Any Customer initiated reschedule or cancellation that results in
unconsumed inventory after ninety (90) days will result in a 2% carrying
charge on the inventory balance after ninety (90) days. Upon Customer
request, Solectron shall undertake reasonable efforts to cancel all
applicable component Purchase Orders and reduce component inventory
through return for credit programs or allocate components for alternate
programs to minimize charges to Customer. If a reschedule results in an
inventory balance after 90 days, Customer and Solectron will pursue
alternatives for inventory disposition, including sale of components,
purchase of components by Customer or other commercially available
disposition techniques.
3.8 Within one hundred twenty (120) days after expiration or any termination
of this Agreement, Customer may purchase from Solectron such quantity of
the Products as the Customer deems necessary for its future requirements
by placing non-cancelable orders with Solectron with delivery dates to be
mutually agreed upon by the Parties.
4.0 MATERIAL PROCUREMENT
4.1 In order to meet Customer's Purchase Order and Product Forecast
requirements and additional agreed upon flexibility requirements,
Solectron is authorized to purchase materials and make commitments to
suppliers using standard purchasing practices including, but not limited
to, acquisition of material recognizing ABC order policy from Solectron,
and Solectron's supplier imposed minimum order quantities. Such materials
should not exceed those reasonably necessary to meet the Purchase Order
and Product Forecast requirements under Section 3 of this Agreement or
any addendum relating thereto. Customer recognizes its financial
responsibility for the material purchased by Solectron on behalf of
Customer.
4.2 In the event where the Customer cancels any Purchase Orders, the Customer
and Solectron agree to the following cancellation terms:
3 of 14
4
Standard Manufacturing Agreement
Solectron Confidential
# DAYS FROM THE
DAY OF NOTICE CUSTOMER CANCELLATION LIABILITY:
------------- --------------------------------
0 - 30 days The Customer is liable for 100% of the purchase price of
Products scheduled to be delivered within 0-30 days of
the date of cancellation.
31 - 60 days The Customer is liable for the actual cost of all
materials in Solectron's inventory and/or on-order which
have published lead times of 31-60 days and which are
related to the Products, as well as any Customer-unique
materials in Solectron's inventory.
61+ days The Customer may cancel any orders scheduled greater
than sixty (60) days from the date of cancellation
without liability except for custom inventory approved
by the Customer.
Cancellation liability shall not apply to orders which are rescheduled by
Customer and Solectron, or which are otherwise subject to cancellation
charges. Furthermore, any liability is subject to Solectron's efforts to
minimize such charges to the Customer pursuant to Sections 3.7 and 4.3 of
this Agreement. Additionally, in determining actual cost to Solectron of
components, Solectron shall provide any information reasonably requested
by Customer in this regard.
4.3 Solectron shall undertake reasonable commercial efforts to cancel all
applicable component Purchase Orders and reduce component inventory
through return for credit programs or allocate components for alternate
programs if applicable. It is the goal of both Customer and Solectron to
implement VMI programs wherever possible to achieve the cost and
lead-time objectives.
5.0 PRICE REVIEWS
5.1 Solectron and Customer will meet every three (3) months during the term
of this Agreement to review pricing and determine whether any price
increase or decrease is required. Any price change shall apply only to
Purchase Orders issued after the effective date of such price change. If
changes in the market break a guard band of two percent (2%) over or
under the negotiated quarterly price, the cost review shall take place
immediately.
5.2 The Customer is responsible for (a) any expediting charges reasonably
necessary because of a change in Customer requirements not conforming to
mutually agreeable flexibility terms; and (b) any reasonable overtime or
downtime charges incurred as a result of delays in the normal production
or interruption in the workflow process which is caused by (1) Customer's
material changes in the Product Specifications; or (2) Customer's failure
to provide sufficient quantities
4 of 14
5
Standard Manufacturing Agreement
Solectron Confidential
or a reasonable quality level of consigned material where applicable to
sustain the production schedule.
5.3 The price of Products to the Customer may be increased by Solectron if
Solectron can demonstrate that the market price of fuels, materials, raw
materials, equipment, labor and other production costs, increase beyond
normal variations in pricing and (b) the Parties agree to the increase
after good faith negotiation.
5.4 Solectron agrees to seek ways to reduce the cost of manufacturing
Products by methods such as elimination of components, obtaining
alternate sources of materials, negotiation of preferred terms with
component suppliers, redefinition of Product Specifications, and improved
assembly or test methods. On a Quarterly basis, Solectron agrees to
target cost reductions of the standard cost of the xxxx of materials
spent, for all Customer Products manufactured at Solectron. Upon
implementation of cost reductions initiated by Solectron, Solectron will
receive one-hundred percent (100%) of the demonstrated cost reduction for
the first quarter after which such cost reductions are initiated; fifty
percent (50%) for the second quarter after which such cost reductions are
initiated; and after which time the Customer will receive one hundred
percent (100%) of the demonstrated cost reductions. The Customer will
receive one hundred percent (100%) of demonstrated cost reductions
initiated by the Customer immediately upon implementation, and in
consideration of the on hand inventory and on order inventory that can
not be affected by the cost reduction. In those cases where the Customer
requires an immediate implementation, the Customer will buy down the
purchase price variance on control parts for on hand inventory and on
order inventory that can not be affected by the cost reduction.
5.5 Every quarter, Solectron will send a report to Customer demonstrating to
Customer items that were bought over or under the standard price for such
items with a previous authorization from Customer. The Customer is
obligated to pay any added variance through a Purchase Order upon receipt
and after review of the report, but any additional cost shall be netted
against any favorable variances to Customer which have arisen during the
same quarter.
6.0 DELIVERY
6.1 Time is of the essence with regard to the delivery of Products by
Solectron. Therefore, Solectron will target 100% on time delivery,
defined as shipment of Product by Solectron within a window of three (3)
days early and zero days late (of acknowledged date).
6.2 The FOB point is ex factory.
6.3 Upon learning of any potential delivery delays, Solectron will notify
Customer as to the cause and extent of such delay.
5 of 14
6
Standard Manufacturing Agreement
Solectron Confidential
6.4 If Solectron fails to make deliveries at the specified time and such
failure is caused by Solectron, Solectron will, at no additional cost to
Customer, employ accelerated measures such as material expediting fees,
premium transportation costs, or labor overtime required to meet the
specified delivery schedule or minimize the lateness of deliveries.
6.5 Should Customer require Solectron to undertake export activity on behalf
of Customer, Customer agrees to submit requested export information to
Solectron pursuant to Solectron Guidelines for Customer-Driven Export
Shipments as provided in the addenda. If this activity affects the
original agreed-upon price for the Products, it will be necessary to
review the pricing, and such pricing may be changed upon the mutual
consent of both Parties.
6.6 In the event Customer shall require decreased quantities of the Products
from those originally scheduled for delivery at a specific date,
Solectron and Customer, each acting reasonably and in good faith, shall
agree upon a rescheduled delivery date for the decreased quantities of
the Products within forth-five (45) days of the original delivery date.
6.7 For any Purchase Order issued in accordance to this Agreement, Customer
may (i) increase the quantity of Products or (ii) reschedule the quantity
of Products and their shipment date as provided in the table below:
Maximum Allowable Variance From Purchase Order Quantities/Shipment Dates
# of days before Allowable Maximum Maximum
Shipment Date Quantity Reschedule Reschedule
on Purchase Order Increases Quantity Period
----------------- --------- -------- ------
0-30 10% 0 0
30-60 50% 75% 45 days
61 + 100% 100% unlimited
However, should Customer require additional flexibility with regard to
rescheduling of Product delivery or Product quantity increases, Customer
and Solectron shall use their best efforts to agree upon a revised
delivery schedule or increased purchase quantity acceptable to both
Parties. Any pricing surcharge for such additional flexibility shall in
no case exceed 2% of the aggregate purchase price of the rescheduled or
increased quantity of Products, notwithstanding any additional costs
relating to storage, processing or handling.
6.8 If the Customer changes the delivery dates of the Products by a period
exceeding ninety (90) days in the aggregate, and if such change results
in additional expenses to Solectron to store such Products, such
additional reasonable expenses shall be borne by Customer. However, any
such expenses shall not exceed two
6 of 14
7
Standard Manufacturing Agreement
Solectron Confidential
percent (2%) per month of the aggregate purchase price of any such
Products so stored.
7.0 PAYMENT TERMS
7.1 Solectron and Customer agree to payment terms of Net 30 days from the
date of invoice.
7.2 Currency will be in U.S. Dollars unless specifically negotiated and
reflected in the addenda.
7.3 Until the purchase price and all other charges payable to Solectron have
been received in full, Solectron retains and Customer grants to Solectron
a security interest in the Products delivered to Customer and any
proceeds therefrom.
8.0 QUALITY
8.1 Solectron shall manufacture the Products in accordance with any quality
requirements, standards and expectations as mutually agreed to and
reflected in the addenda or any amendment hereto.
8.2 Customer has the right at all reasonable times, upon reasonable advance
written notice, to visit Solectron's facilities to inspect the work being
performed on the Products pursuant hereto, provided such inspection shall
not unduly affect Solectron's operations and provided Customer and its
representatives shall be on Solectron's facilities at Customer's sole
risk. Inspection of the work by Customer shall not relieve Solectron of
any of its obligations under the Agreement or any Purchase Orders.
Solectron shall provide Customer with all mutually agreed upon quality
reports at agreed upon intervals. Solectron reserves the right to limit
Customer's access to its facilities or any specified area to protect
confidential information of Solectron or its other customers or third
parties.
8.3 Customer and Solectron working jointly will implement a joint quality
improvement program to improve quality and to reduce costs for Products.
8.4 Solectron shall manufacture the Customer's Products in accordance to an
industry workmanship standard, agreed to by both Parties. Unless
otherwise specified by the Customer, Solectron will manufacture the
Customer's Products as per ANSI/IPC-A-610 Revision B "Acceptability Of
Electronic Assemblies", Class 2 "Dedicated Service Electronic Products".
8.5 If Products manufactured by Solectron are tested using equipment and
fixtures supplied by the Customer, Solectron will be responsible to
ensure that the equipment and fixtures have been calibrated and
maintained at a regular interval
7 of 14
8
Standard Manufacturing Agreement
Solectron Confidential
as recommended by the manufacturer, and that the equipment and fixtures
are in proper operating condition. Calibration of equipment is to be
performed by qualified, licensed individuals and with equipment traceable
to National Standards. Any charges relating to calibration shall be borne
by Customer.
8.6 Solectron is responsible for assuring that the Products are delivered to
Customer only after the Products successfully complete the specified
inspection and test processes. If the Products are being tested using
equipment, fixtures, and/or software provided by the Customer, Solectron
is not responsible for product functionality beyond that assured by the
Customer provided test processes. Product testing is to be performed in
accordance to product specifications and test procedures, which will be
mutually agreed upon by Solectron and Customer.
8.7 Solectron is responsible to provide the following reports for each
shipment of Products:
(a) Defects per Million ("DPM") or Parts per Million ("PPM") for
in-circuit test when performed;
(b) DPM or PPM for each functional test performed;
(c) Statistical control charts for each of the key processes as
identified by Customer from time to time, as agreed to by Solectron, such
agreement not to be unreasonably withheld, and
(d) Details concerning all test failures and their root causes.
8.8 Solectron shall maintain a data acquisition system for all test data
collected and will provide such data to Customer upon Customer's
reasonable request. Solectron shall also provide data and information
reasonably requested by Customer regarding material procurement
activities, works-in-progress, process yields, and the like.
9.0 ENGINEERING CHANGES
9.1 Customer may require, by written demand, that Solectron incorporate
engineering changes into the Products. Such demand shall include a
description of the proposed engineering change sufficient to permit
Solectron to evaluate its feasibility and cost. Solectron's evaluation
shall be in writing and shall state the costs and time of implementation
and the impact on the delivery schedule and pricing of the Products.
However, Solectron will not be obligated to proceed with the engineering
change until the Parties have agreed upon the changes to the Product
Specifications, delivery schedule and Product pricing and upon the
implementation costs to be borne by the Customer including, without
limitation, the cost of inventory and special inventory on-hand and
on-order that becomes
8 of 14
9
Standard Manufacturing Agreement
Solectron Confidential
obsolete. Both Parties shall use their best efforts to resolve any such
outstanding issues.
9.2 Solectron agrees not to undertake significant process changes, design
changes, or process step discontinuance affecting electrical performance
and/or mechanical form and fit without prior written notification and
concurrence of the Customer.
10.0 INVENTORY MANAGEMENT
10.1 Solectron agrees to purchase components according to the Customer
approved vendor list (AVL) including any sourcing plans as provided by
the addenda.
10.2 All customer tooling/equipment furnished to Solectron or paid for by
Customer in connection with this Agreement shall:
a) Be clearly marked and remain the personal property of Customer.
b) Be kept free of liens and encumbrances.
c) Unless otherwise agreed, Customer is responsible for the general
maintenance of Customer tooling/equipment.
Solectron shall hold Customer property at its own risk and shall not
modify the property without the written permission of Customer. Upon
Customer's request, Solectron shall redeliver the property to Customer in
the same condition as originally received by Solectron with the exception
of reasonable wear and tear. In the event the property is lost, damaged
or destroyed, Solectron's liability for the property is limited to the
book value of the property.
11.0 CONFIDENTIAL INFORMATION
11.1 Solectron and Customer agree to execute, as part of this Agreement, a
Nondisclosure Agreement for the reciprocal protection of confidential
information.
11.2 Subject to the terms of the Nondisclosure Agreement and the proprietary
rights of the parties, Solectron and Customer agree to exchange, at least
semi-annually, relevant process development information and business
plans to include market trends, process technologies, product
requirements, new product developments, available capacity and other
information to support technology advancements by both Solectron and
Customer. Such Confidential Information shall be utilized only for
purposes of carrying out the terms and conditions of this Agreement, and
shall be used for no other purpose. Specifically, and without limitation,
Solectron agrees not to used any Confidential Information of Customer in
the manufacturer
9 of 14
10
Standard Manufacturing Agreement
Solectron Confidential
of products for any other customer of Solectron, without the prior
express written consent of Customer.
12.0 WARRANTY
12.1 Solectron warrants for a period of one (1) year from the date of
manufacture of the Products, that (i) the Products will conform to the
specifications applicable to such Product at the time of its manufacture,
which are furnished in writing by Customer; (ii) such Products will be of
good material (supplied by Solectron) and workmanship and free from
defects for which Solectron is responsible in the manufacture; (iii) such
Products will be free and clear of all liens and encumbrances and that
Solectron will convey good and marketable title to such Products.
Warranties on any components purchased from third-party vendors ("Vendor
Components") are limited to the warranties provided by the component
manufacturers or Vendors. Solectron will use reasonable commercial
efforts to make all warranties of its component suppliers assignable to
Customer. Solectron shall pass on any unexpired assignable warranties for
any such Vendor Components to Customer until the expiration of such
warranties or up to a maximum of one year from the date of manufacture of
the Products by Solectron, whichever period is lesser. In the event that
any Products manufactured shall not be in conformity with the foregoing
warranties, Solectron shall, at Solectron's option, either credit
Customer for any such nonconformity (not to exceed the purchase price
paid by Customer for such Products), or, at Solectron's expense, replace,
repair or correct such Products. The foregoing constitutes Customer's
sole remedies against Solectron for breach of warranty claims.
12.2 Solectron shall have no responsibility or obligation to Customer under
warranty claims with respect to Products that have been subjected to
abuse, misuse, accident, alteration, neglect or unauthorized repair.
THE WARRANTIES CONTAINED IN THIS SECTION ARE IN LIEU OF, AND SOLECTRON
EXPRESSLY DISCLAIMS AND CUSTOMER WAIVES ALL OTHER REPRESENTATIONS AND
WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR ARISING BY COURSE OF DEALING
OR PERFORMANCE, CUSTOM, USAGE IN THE TRADE OR OTHERWISE, INCLUDING
WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE AND
FITNESS FOR A PARTICULAR USE.
13.0 TERMINATION
13.1 If either Party fails to meet one or more of the material terms and
conditions stated in either this Agreement or the addenda, Solectron and
Customer agree to negotiate in good faith to resolve such default. If the
defaulting Party fails to cure such default or submit an acceptable
written plan to resolve such default within thirty (30) days following
notice of default, the nondefaulting Party shall have the
10 of 14
11
Standard Manufacturing Agreement
Solectron Confidential
right to terminate this Agreement by furnishing the defaulting Party with
thirty (30) days written notice of termination.
13.2 This Agreement shall immediately terminate should either Party; (i)
become insolvent; (ii) enter into or file a petition, arraignment or
proceeding seeking an order for relief under the bankruptcy laws of its
respective jurisdiction; (iii) enter into a receivership of any of its
assets or; (iv) enter into a dissolution of liquidation of its assets or
an assignment for the benefit of its creditors.
13.3 Either Solectron or Customer may terminate this Agreement without cause
by giving one hundred eighty (180) days advance written notice to the
other Party.
13.4 Upon termination, Customer shall have the right to receive all related
stock, work-in-progress, and finished Products.
14.0 DISPUTE RESOLUTION
14.1 In the spirit of continued cooperation, the Parties intend to and hereby
establish the following dispute resolution procedure to be utilized in
the unlikely event any controversy should arise out of or concerning the
performance of this Agreement.
14.2 It is the intent of the Parties that any dispute be resolved informally
and promptly through good faith negotiation between Solectron and
Customer. Either Party may initiate negotiation proceedings by written
notice to the other Party setting forth the particulars of the dispute.
The Parties agree to meet in good faith to jointly define the scope and a
method to remedy the dispute. If these proceedings are not productive of
a resolution, then senior management of Solectron and Customer are
authorized to and will meet personally to confer in a bona fide attempt
to resolve the matter.
14.3 Should any disputes remain existent between the Parties after completion
of the two-step resolution process set forth above, then the Parties
shall promptly submit any dispute to mediation with an independent
mediator. In the event mediation is not successful in resolving the
dispute, the Parties agree to submit the dispute to binding arbitration
as provided by their respective jurisdiction.
15.0 LIMITATION OF LIABILITY
IN NO EVENT, WHETHER AS A RESULT OF BREACH OF CONTRACT, WARRANTY, OR TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY, PRODUCT LIABILITY, OR
OTHERWISE, SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY DAMAGES OF ANY KIND WHETHER OR NOT
EITHER PARTY WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGE.
16.0 INDEMNITY
11 of 14
12
Standard Manufacturing Agreement
Solectron Confidential
16.1 Solectron will, at its expense, defend, indemnify and hold harmless
Customer and its officers, employees and agents from and against any and
all losses, costs, liabilities and expenses (including reasonable
attorneys fees) arising out of any action brought against Customer or any
of its customers based on (i) a claim that Solectron's manufacturing
process for the Products infringes the intellectual property rights of
any third party, (ii) a claim that Products manufactured by Solectron
that fail to conform to Customer's specifications, whether due to defects
or engineering changes by Solectron, infringe the intellectual property
rights of any third party, to the extent that such claim would have been
obviated if such products were manufactured according to Customer's
specifications, (iii) any negligence or willful misconduct in the
manufacture of Products (except to the extent such damages result from a
defect in the specification submitted and/or instructed by Customer) by
Solectron, its employees, agents and subcontractors, including but not
limited to any such act or omission that contributes to: (a) bodily
injury, sickness, disease or death; (b) any injury or destruction to
tangible or intangible property of the injured party or any loss of use
resulting therefrom; or (c) any violation of any statute, ordinance or
regulation.
16.2 Customer will, at its expense, defend, indemnify and hold harmless
Solectron and its officers, employees and agents from and against any and
all losses, costs, liabilities and expenses (including reasonable
attorneys fees) arising out of any action brought against Solectron based
on a claim that the Products manufactured in compliance with Customer's
specifications infringe the intellectual property rights of a third
party.
16.3 The indemnification obligations specified above arise only if the
indemnified Party: (i) gives the indemnifying Party prompt notice of any
such claims; (ii) permits the indemnifying Party to direct the defense
and the settlement of such claims.
17.0 GENERAL
17.1 Each Party to this Agreement will maintain insurance to protect itself
from claims (i) by the Party's employees, agents and subcontractors under
Worker's Compensation and Disability Acts, (ii) for damages because of
injury to or destruction of tangible property resulting out of any
negligent act, omission or willful misconduct of the Party or the Party's
employees or subcontractors, (iii) for damages because of bodily injury,
sickness, disease or death of its employees or any other person arising
out of any negligent act, omission, or willful misconduct of the Party or
the Party's employees, agents or subcontractors.
17.2 Neither Party shall delegate, assign or transfer its rights or
obligations under this
12 of 14
13
Standard Manufacturing Agreement
Solectron Confidential
Agreement, whether in whole or part, without the written consent of the
other Party. A Change of Control, meaning a direct or indirect change in
the ownership or control of the shares of either Party, whether by
merger, sale, acquisition or otherwise, shall not be considered an
assignment of this Agreement. Failure by either Party to enforce any
provision of this Agreement shall not be deemed to be a continuing waiver
or a waiver of any other default or other term and condition. The rights
and liabilities of the Parties hereto will bind and inure to the benefit
of their respective successors.
17.3 Neither Party shall be liable for any failure or delay in its performance
under this Agreement due to acts of God, acts of civil or military
authority, fires, floods, earthquakes, riots, wars or any other cause
beyond the reasonable control of the delayed Party provided that the
delayed Party: (i) gives the other Party written notice of such cause
within fifteen (15) days of the discovery of the event; and (ii) uses its
reasonable efforts to remedy such delay in its performance.
17.4 This Agreement shall be governed by, and construed in accordance with the
laws of the State of California, excluding its conflict of laws
provisions. In any action to enforce this Agreement, the prevailing Party
shall be awarded all court costs and reasonable attorney fees incurred.
17.5 Solectron agrees to promptly inform Customer if it becomes aware of any
material threat to the uninterrupted production and delivery of the
Products that may develop from time to time from any cause whatsoever,
regardless of whether the cause is attributable to events internal or
external to Solectron.
17.6 During the Term of this Agreement and in perpetuity thereafter, Solectron
shall not have the right, without the prior written consent of Customer,
to manufacture, anywhere in the world, products based on Customer designs
and/or other Customer intellectual property, other than the manufacture
of products pursuant to this Agreement or based on Customer designs
and/or other Customer intellectual property in respect of which title to
or the right to use has been legally acquired by Solectron or by a third
party which engages Solectron for the purposes of manufacturing such
products.
17.7 Any required notices hereunder will be given in writing to the addresses
set forth below, or at such other address as either Party may substitute
by written notice to the other in the manner contemplated herein, and
will be deemed to be received when hand-delivered or delivered by
facsimile:
If to Solectron:
13 of 14
14
Standard Manufacturing Agreement
Solectron Confidential
Facsimile: 000 000-0000 Attention: Xxxxxxx Raha
If to Customer:
Novatel Wireless, Inc.
Suite 110, 0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX
X.X.X. 00000
Facsimile: ____________ Attention: Vice President, Manufacturing
Agreed:
Solectron Corporation Novatel Wireless Inc.
By: /s/ XXXXXXXXX XXXXX By: /s/ XXXX XXXXXXXX
------------------------- ---------------------------------
Name: Xxxxxxxxx Xxxxx Name: Xxxx Xxxxxxxx
----------------------- -------------------------------
Title: GM Title:
---------------------- ------------------------------
Date: 8/08/2000 Date: August 4, 2000
---------------------- ------------------------------
14 of 14
