Exhibit 10.19
MATERIAL LIABILITY AGREEMENT No. CL-090209
The following Material Liability Agreement (MLA) between Suntron
Corporation (Seller) and Ciralight Global, Inc. (Buyer) details individual
company responsibilities related to all Purchase Orders and Forecast sent to and
accepted by Seller. The term of this MLA is for one (1) year from the date of
signature with the understanding that a completed corporate contract
(Manufacturing Purchase Agreement, (MPA), is intended by the parties to be
executed prior to expiration. Extensions of this MLA beyond the expiration date
require mutual approval by Buyer and Seller for the term of the extension,
excepting that Buyer's obligations under this MLA shall continue beyond its
expiration for all purchases made during its term.
1. General
a. Buyer agrees to identify all purchase orders and forecast data
released to Seller with reference to this Material Liability
Agreement and the No. identified above.
b. Buyer shall be liable for all material ordered, and verifiable
commitments to suppliers, up to individual components, minimum
order quantities (MOQ's) and Non cancelable, Non returnable
(NCNR) components, agreed to in writing, related to the full
period of the accepted purchase order or Buyer approved forecast.
Seller shall make commercially reasonable efforts to mitigate
Buyer's liability by returning unneeded material to the supply
chain.
c. All shipments by Seller to Buyer will be FOB Seller's place of
U.S. Production (dock) for domestic shipments, or Seller's San
Diego-based freight forwarder for Seller's Mexican Plant
shipments.
d. Buyer requires Seller to order printed circuit board fabs on a
quarterly basis in order to minimize scrap related to possible
Buyer engineering changes, (if applicable) Buyer and Seller may
agree, on a case-by-case basis, to other volumes and time
periods, which will be agreed to in writing.
e. Within seven (7) working days after notification by Buyer of an
Engineering Change, Seller will evaluate the cost impact, and
provide Buyer with information related to the cost impact, and
gain final written approval from Buyer before implementing the
change. Upon Buyer's written approval any obsolete material
created by the engineering change will be invoiced to Buyer.
f. Seller will identify to Buyer, by the 10th day of each month the
system defined unconsumed material liability, where the buyer has
a liability to purchase such items as described in 1 .b above.
Buyer agrees to and shall purchase any and all material on-hand
at Seller having zero demand requirements, as defined in 1 f.
Zero demand is defined as having no demand for the next 6 months.
g. Payment terms shall be net 30 days from the date of invoice from
Seller, without any offset.
2. Cancellation / Agreement Expiration
a. In the event that Buyer cancels a portion of or all of the demand
defined by a Purchase Order or Forecast, Seller will use
commercially reasonable efforts to minimize Buyer's material
liability by attempting to return on-hand material that is still
in acceptable industry packing and cancel all compliant on-order
material requirements.
b. Buyer's liability will be substantiated through orders,
forecasts, or other documentation from Buyer directing or
requiring that the material be purchased.
c. Buyer shall be liable and accepts liability for any and all
material not in industry packaging or otherwise un-returnable to
the supplier.
d. Buyer shall be liable and accepts liability for all MOQ's and
NCNR material on-hand or on-order.
e. Buyer is liable for any and all reasonable restocking charges and
return freight related to return of on-hand material or costs
related to order cancellations.
f. Buyer is responsible for all finished goods in Seller's inventory
at the quoted price per part number. WIP status will be reviewed
and liability will be defined by mutual agreement at the standard
cost defined in the quote plus any applied portion of the labor
and OH costs as defined in the quote model.
g. Seller will define Buyer's material liability within 30 days of
cancellation notice.
h. Buyer agrees to reimburse Seller the standard cost of the stocked
and Work in Process (WIP)material plus ten (10) % material markup
to cover Seller's acquisition, inventory management, picking and
packaging costs. Seller shall provide sufficient proof of efforts
to use excess material elsewhere and demonstrate that all push
outs and cancellations were promptly executed upon..
i. Buyer agrees to complete all audits and reconciliation of
material within 30 days of material liability notification by
Seller.
j. Buyer agrees to pay Seller net 30 days from date of invoice for
all invoices without any offset
SUNTRON CORPORATION CIRALIGHT GLOBAL, INC.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxx Xxxxx
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Name: Xxxxx X. Xxxxx Name: Xxxx Xxxxx
Date: 4/02/09 Date: 9/3/09
Title: VP Global Suppply Title: CFO/COO
