Exhibit 10.69
TRIMBLE SOLECTRON
NAVIGATION FEDERAL SYSTEMS, INC.
LIMITED and
SOLECTRON CORPORATION
Supply Agreement
Dated Effective
August 13, 1999
▇▇▇▇▇▇▇ NAVIGATION SOLECTRON FEDERAL SYSTEM, INC.
LIMITED and
SOLECTRON CORPORATION
Supply Agreement
TABLE OF CONTENTS
AGREEMENT ..................................................................1
1. DEFINITIONS ..........................................................1
2. PURCHASE AND SALE OF PRODUCTS ........................................5
3. EXCLUSIVITY ..........................................................5
4. PRODUCTION FILES .....................................................6
5. PRODUCTION CAPABILITY ................................................7
6. PRODUCTION SUPPORT TEAMS ............................................11
7. FORECASTS ...........................................................12
8. PURCHASE ORDERS .....................................................12
9. DELIVERY. ...........................................................14
10. LABELING AND PACKAGING ...........................................15
11. ACCEPTANCE OR REJECTION ..........................................16
12. PRICING, PAYMENT, AND COST REDUCTION .............................17
13. RECORDS, AUDITS AND REPORTS ......................................18
14. PROTOTYPE SERVICES ...............................................20
15. QUALITY ASSURANCE ................................................20
16. REGULATORY COMPLIANCE ............................................20
17. PRODUCT WARRANTY; EPIDEMIC FAILURE ...............................21
18. WARRANTY CLAIMS AND REPAIR .......................................22
19. PARTS SUPPLY .....................................................23
20. PROPERTY FURNISHED TO SOLECTRON BY TRIMBLE .......................24
21. INTELLECTUAL PROPERTY OWNERSHIP ..................................25
22. CONFIDENTIALITY ..................................................28
23. INTELLECTUAL PROPERTY INDEMNIFICATION ............................29
24. LIMITATION OF LIABILITY ..........................................31
25. INSURANCE ........................................................31
26. TERM OF THEAGREEMENT .............................................31
27. TERMINATION ......................................................31
28. REPRESENTATIONS ..................................................34
29. GENERAL ..........................................................34
Exhibits ............................................................Appended
i
LIST OF EXHIBITS
Exhibit 1.2 - Ancillary Technology [not submitted in filing]
Exhibit 1.20 - Products [not submitted in filing]
Exhibit 1.33 - Weighted Average Actual Price Description
[not submitted in filing]
Exhibit 5.6 - Manufacturing Support Services
Exhibit 5.8 - Protected Employees [not submitted in filing]
Exhibit 8.2 - Order Flexibility, Forecast and Lead Time
[not submitted in filing]
Exhibit 12.1 - Pricing Model [not submitted in filing]
Exhibit 13.3 - Monthly Operational Reporting [not submitted in
filing]
Exhibits 14 - Prototypes [not submitted in filing]
Exhibit 15.1 - Quality Improvement and Corrective Action Plans
[not submitted in filing]
ii
SUPPLY AGREEMENT
THIS SUPPLY AGREEMENT is made and entered into effective August 13,
1999 ("Effective Date"), by and between Solectron Federal System, Inc., a
Delaware corporation, Solectron Corporation, a Delaware corporation (jointly and
severally "Solectron"), and ▇▇▇▇▇▇▇ Navigation Limited, a California corporation
("Trimble") (each a "Party" and collectively the "Parties").
RECITALS
▇. ▇▇▇▇▇▇▇ is and has been engaged in the business, among others, of the
development, manufacture, marketing and sale of various global positioning
system products for various markets worldwide.
B. Solectron is and has been engaged in the business, among others, of
manufacturing its customers' products on a contract basis.
C. The Parties intend by this Agreement to provide for Solectron to
manufacture certain of ▇▇▇▇▇▇▇'▇ products.
NOW, THEREFORE, the Parties, intending to be legally bound, agree as follows:
Agreement
1. DEFINITIONS
In addition to the definitions appearing elsewhere in this Agreement, the
following words and phrases shall have the meanings indicated:
1.1. "Affiliates" shall mean those corporations or other entities which
directly or indirectly own or control either Party to this Agreement
and their respective Subsidiaries.
1.2. "Ancillary Technology" shall mean all test programs, tooling,
fixtures, and other items provided to Solectron by Trimble as
described on Exhibit 1.2.
1.3. "Create" when used with reference to Proprietary Information means to
conceive, make, develop, reduce to practice, author, or
otherwise materially and substantially contribute to the existence
of such Proprietary Information, such that the Proprietary
Information that results can be fairly and reasonably attributed
in whole or in material part to such contribution. Other forms of the
word "Create" (e.g., Created, Creation, etc.) shall have
substantially the same meaning as required by the context.
Proprietary Information that is "Created Jointly" shall apply to
all Proprietary Information that (i) qualifies for patent
protection in any jurisdiction under which jurisdiction's laws
the signature or cooperation or identification of more than one
Party or their respective employee(s), agent(s) or contractor(s),
as an inventor, is appropriate or required, or must or should be
sought or made in connection with any related application, to obtain
such protection, or (ii) was Created in whole or in material part by
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employee(s), agent(s) or contractor(s) of both Parties acting in
concert or cooperation.
1.4. "Delivery Leadtime" shall mean the number of days between the date
a purchase order is delivered by Trimble to Solectron and the date the
relevant Product is delivered to the appropriate delivery location.
1.5. "Derivative" shall mean (i) for copyrightable or copyrighted
material, any translation, abridgment, revision or other form in
which an existing work may be recast, transformed or adapted;
(ii) for patentable or patented material, any improvement thereon;
and (iii) for material which is protected by or is a Trade Secret or
is otherwise Proprietary Information, any new material derived from
such existing Trade Secret material or Proprietary Information,
including but not limited to new material which may be protected by
copyright, patent or Trade Secret. 2.2.
1.6. "Design Specification" shall mean all or any part of a description
of a Product's physical, functional or technical elements, attributes,
requirements or performance, related to or used in its design,
manufacture, testing, operation and repair, whether in human,
machine-readable or other form. Without limiting the foregoing, a
"Design Specification" may include, without limitation, bills of
materials; schematic diagrams, approved vendor lists, parts,
general and special fabrication and assembly drawings and
procedures; computer aided design and manufacturing files;
unique material specification control drawings; manufacturing
materials and chemistry; test procedures, software and equipment;
component and other source control drawings; quality plans including
source inspection procedures, yield targets and process audit
plans; mechanical models; standard assemblies; estimated
process flows and times; assembly fixtures and special tools
and drawings.
1.7. "Disclose" shall mean to use, deliver, communicate or provide, or
to use or benefit in any way or form including, by way of example and
without limitation, in writing; electronically; in machine readable
form; by demonstration; in tangible form; by access to plans,
diagrams or equipment; or orally. Other forms of the word "Disclose"
(e.g., Disclosure, Discloses, etc.) shall have substantially
the same meaning as required by the context.
1.8. "Disclosing Party" shall mean a Party hereto that discloses its
Proprietary Information to the other Party.
1.9. "Dispose" shall mean to practice, make, have made, use, license, grant
rights to sublicense, lease, sell, Disclose, assign, encumber,
dispose or otherwise exercise an incident of ownership. Other
forms of the word "Dispose" (e.g., Disposition, Disposal, etc.)
shall have substantially the same meaning as required by the
context.
1.10. "Effective Date" shall mean the date of execution of this
Agreement as first above written.
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1.11. "Exclusivity Termination Trigger" shall mean the occurrence of
an event described in paragraph 3.2.
1.12. "Flexibility Parameters" shall have the meaning described in
Exhibit 8.2.
1.13. "Incorporate" shall mean shall mean include as a constituent part.
Other forms of the word "Incorporate" (e.g., Incorporated, etc.)
shall have substantially the same meaning as required by the context.
1.14. "Invention" shall mean any invention, discovery, process, art, method
(including mathematical algorithms), machine, manufacture,
composition of matter, or improvement thereof, whether or not
patented or patentable, to the extent that it is or is qualified to
be the subject of an intellectual property right or intellectual
property protection under the laws of any applicable jurisdiction
under any applicable legal theory, including but not limited
to rights or protections under patent, trade secret, or copyright
laws or principles.
1.15. "Made Known" shall mean made known, received, developed,
possessed or communicated, at any time before or after the
Effective Date. "Rightfully Made Known" shall mean Made Known
without, and "Wrongfully Made Known" shall mean Made Known with,
any violation of any legally protectable and/or enforceable
express or implied right, title, duty or obligation of the
owner of such Proprietary Information or third Parties from, by or
through whom such knowledge passed.
1.16. "Manufacturing Specifications" shall mean ▇▇▇▇▇▇▇'▇ written
specifications regarding the processes for the manufacture of
the Products provided to Solectron, including, without
limitation, the [*] and [*]. In cases where the specific processes
are not covered by these specifications, industry standard
specifications shall apply (e.g., IPC, ANSI/IPC).
1.17. "Manufacturing Standards" shall mean information that describes the
processes, procedures and requirements specifically related to
the manufacture of any Product. Without limiting the foregoing, a
"Manufacturing Standard" may include assembly machine programs;
reflow profiles; assembly aids; process flows; standard assembly
instructions; process control plan; overall process
definition; work instructions; process and machine capabilities;
design review report; first article inspection reports; and Quality
Improvement Plan.
1.18. "Owning Party" shall mean a Party to the extent that such Party has
an ownership interest in any Proprietary Information.
1.19. "Part" shall mean any materials, parts or components used in the
Products.
1.20. "Product" shall mean any of those products identified in Exhibit
1.20 attached to this Agreement.
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
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1.21. "Production File" shall mean the definitive manufacturing
specifications for each Product and shall include the most recently
effective Design Specification and Manufacturing Standards.
1.22. "Proprietary Information" shall mean information or material
relating to the existing or prospective business of Solectron,
Trimble or third parties or to this Agreement, any information
contained therein or Created therefrom, and any Derivatives thereof,
including, by way of example and without limitation, technical,
and/or business information such as processes, methods, techniques,
systems, subroutines, source code, object code, documentation,
diagrams and flow charts, analyses (including computer
simulations), results, reports and information of all kinds
Disclosed in writing by the Disclosing Party to the Receiving
Party to permit the Parties to perform their obligations under this
Agreement. "Proprietary Information" shall also include Inventions,
Works and Trade Secrets. Proprietary Information shall not
include any information or material to the extent that the Receiving
Party proves by a preponderance of the evidence that such information
or material has been or becomes:
1.22.1. Rightfully Made Known to the Receiving Party without
obligation of confidence; or
1.22.2. Rightfully Made Known to third Parties who are neither
under obligation of confidence nor who treat such
Proprietary Information confidentially
1.23. "Proprietary Rights" shall mean, in any country, (i) the right to
file patent applications and any rights under patent applications;
(ii) rights under a grant of letters patent or any similar form of
statutory protection for inventions, such as utility model
protection and industrial design protection; (iii) rights under
copyright, trade secret, mask work or trademark law; and (iv) any
other protectable intellectual property rights.
1.24. "Prototype" shall mean a pre-production or pilot prototype,
engineering or design sample, or production verification prototype.
1.25. "Purchase Order" shall mean a Trimble purchase order issued to
Solectron pursuant to the provisions of this Agreement.
1.26. "Receiving Party" shall mean a Party hereto that receives
Proprietary Information of the other Party hereto.
1.27. "Term" shall mean the period of time that begins on the Effective
Date and ends upon Termination.
1.28. "Termination" means the time at which this Agreement terminates as
provided or referenced in paragraph 26.
1.29. "Trade Secret" shall mean information Made Known to either
Party, that is maintained by a Party in reasonable confidence
such that it is not generally known and used in the Party's industry,
and which gives or may give the Party a competitive, technical or
other business advantage over the other Party, or third parties,
who do not possess, know or use it.
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1.30. "Trimble Proprietary Component" shall mean any component which
Solectron cannot purchase without ▇▇▇▇▇▇▇'▇ express authorization.
1.31. "Trimble Designated Distributor" shall mean a person or entity
identified by Trimble to Solectron as an authorized Trimble
distributor.
1.32. "Trimble Vendor" shall mean any producer or supplier of all or any
portion of a Product that has been identified by Trimble on ▇▇▇▇▇▇▇'▇
approved vendor list (or "AVL") for such Product as the source of
certain Parts to be used by Solectron in the manufacture of such
Product.
1.33. "WAAP" shall mean Weighted Average Actual Price determined as
specified in Exhibit 1.33.
1.34. "Work" shall mean a work of authorship protectable under the
copyright laws of an applicable jurisdiction, or a mask work
protectable under the semiconductor chip protection laws of any
applicable jurisdiction.
2. PURCHASE AND SALE OF PRODUCTS
During the Term and subject to the provisions of this Agreement, Solectron
shall manufacture and deliver or provide to Trimble, and Trimble shall
purchase from Solectron, Products, and such other goods and services as
this Agreement requires or as the Parties may otherwise mutually
agree in writing.
3. EXCLUSIVITY
3.1. Products
During the Initial Term, Trimble shall purchase from Solectron
all ▇▇▇▇▇▇▇'▇ requirements for Products except as otherwise
expressly provided in this Agreement. After the Initial Term,
or after an Exclusivity Termination Notice, Trimble shall only
be obligated to purchase from Solectron such of the Products
and in such quantities as Trimble may determine in its sole
discretion. Nothing in this Agreement shall be construed or
deemed to require Trimble to order any particular quantity of
any Product, nor constitute any warranty or representation by
Trimble in that regard.
Nothing in this Agreement shall require Trimble to purchase
any Product from Solectron to the extent such requirement
would violate, prevent or frustrate the purpose or benefit of
any extraordinary Trimble contract or business relationship
that may arise after the Effective Date, including those
requiring local manufacturing, or those which arise in
connection with any business acquisition or change of control.
3.2. Exclusivity Termination Triggers
In addition to any other rights or remedies available to
Trimble, the following events shall constitute Exclusivity
Termination Triggers:
3.2.1. [*]
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
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3.2.2. [*]
3.2.3. [*]
3.2.4. [*]
3.3 Exclusivity Termination Process
In the event of an Exclusivity Termination Trigger, Trimble
shall provide written notice thereof to Solectron, and within
three (3) business days thereafter the Parties' most senior
business executives then available who have decisional
authority over this Agreement shall meet and confer regarding
such Exclusivity Termination Trigger and the consequences
thereof. If within five (5) business days after such notice
the Parties have not mutually agreed upon a resolution of the
circumstances that constitute or relate to the Exclusivity
Termination Trigger, Trimble may deliver to Solectron an
Exclusivity Termination Notice. Such Exclusivity Termination
Notice shall have the effect described elsewhere in this
Agreement.
4. PRODUCTION FILES
4.1. Design Specifications
Within a reasonable time following the Effective Date, Trimble
shall furnish to Solectron any Design Specifications,
Manufacturing Specification and any Manufacturing Standard, in
the form historically used by Trimble to produce each Product.
Solectron acknowledges that, although Trimble will furnish the
Design Specifications, Manufacturing Specification and any
Manufacturing Standard in the form historically used by
Trimble to produce each Product, Trimble makes and has made no
representations or warranties with respect to Solectron's
ability to produce Products or achieve any particular results
from its use of such Design Specifications, Manufacturing
Specifications and any Manufacturing Standards furnished by
Trimble.
4.2. Manufacturing Standards
Solectron at its expense shall review each Design
Specification and Manufacturing Standard submitted by Trimble
promptly upon receipt and, consult with Trimble and visit the
facilities of Trimble and its subcontractors as necessary or
advisable for the purposes of this paragraph 4. Promptly
thereafter, and from time to time during the Term, Solectron
shall advise and make recommendations to Trimble regarding all
relevant matters that may affect each Design Specification and
Manufacturing Standard as such matters may relate to
Solectron's
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
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preparation of preliminary or final Manufacturing Standards,
or changes thereto, including but not limited to sourcing and
qualifying components, cost analysis, and Product
modifications for unit cost reduction. Trimble may, at its
option, participate in all such Solectron activities.
For each Product, Solectron shall submit to Trimble
preliminary Manufacturing Standards that comply with the
relevant Design Specification and Manufacturing Specifications
within a reasonable time after Trimble delivers its Design
Specification to Solectron.
As soon as practicable after Solectron delivers the
preliminary manufacturing procedures to Trimble, Trimble and
Solectron shall review them jointly. Solectron shall deliver
proposed final Manufacturing Standards to Trimble within one
(1) week after ▇▇▇▇▇▇▇'▇ approval of the preliminary
Manufacturing Standards and, upon ▇▇▇▇▇▇▇'▇ approval of the
proposed final Manufacturing Standards, such Manufacturing
Standards shall be deemed established as to the relevant
Product.
4.3. Production File
Solectron shall maintain, for each Product, a Production File
that (i) includes the Design Specifications and final
Manufacturing Standards; and (ii) complies with all relevant
provisions of this Agreement, including the Manufacturing
Specifications. Solectron shall promptly identify to Trimble
any Production File information that Solectron considers
Solectron's Proprietary Information.
4.4. Production Prior to Acceptance of Production Files
Prior to ▇▇▇▇▇▇▇'▇ written approval of Solectron's proposed
Manufacturing Standards, Solectron shall continue to produce
the Products in accordance with ▇▇▇▇▇▇▇'▇ historic processes
prior the Effective Date, provided that to the extent that
Trimble has not furnished information regarding its historic
processes for producing any such Products, Solectron shall
employ methods of production that conform to generally
recognized best practices.
5. PRODUCTION CAPABILITY
5.1. Capacity
During the Term and as otherwise provided in this Agreement,
Solectron shall maintain the labor, materials and facilities
necessary to produce and deliver to Trimble all Products,
services, activities and other things required of Solectron
under this Agreement. The Parties will amend Exhibit 1.20
("Products") to appropriately manage end-of-life, inactive or
discontinued Products.
5.2. Materials
Solectron shall provide or acquire all Parts necessary to
perform Solectron's obligations under this Agreement from the
applicable Trimble Vendor(s). Trimble may instruct Solectron
to change specific Parts or procedures for the manufacture or
assembly of any Product(s) by
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following the change procedure described in Paragraph 5.4,
subject to reasonable adjustment of price and delivery
schedule equitably attributable to such change.
▇▇▇▇▇▇▇'▇ liability for such Parts shall be limited to the
provisions of Exhibit 8.2.
5.3. Product Manufacture
Solectron shall manufacture, assemble and test each Product in
accordance with its Production File at a Solectron facility
that has been approved by Trimble in writing. Solectron will
not change the location of manufacture, including without
limitation different facilities or different production lines
within the same facility, without ▇▇▇▇▇▇▇'▇ prior written
approval.
Solectron shall not subcontract or delegate any portion of the
manufacture, assembly or testing of the Products to third
parties without ▇▇▇▇▇▇▇'▇ express written approval, which may
be granted or withheld by Trimble in its sole discretion.
Solectron shall not, without ▇▇▇▇▇▇▇'▇ prior written approval,
include electronic components in the Products which have a
date code which is older than [*] from the date such component
is first delivered to Solectron, provided however, that for
any such Parts with a date code older than [*] from the date
such component is first delivered to Solectron, Solectron
shall perform such solderability and other tests as may be
required by the Manufacturing Specifications or best
commercial practice. Solectron shall keep documentation
sufficient to verify its compliance with this Paragraph 5.3
and shall promptly provide such documentation to Trimble upon
request.
5.4. Production File Changes
5.4.1. Initiated by Trimble
From time to time during the Term, Trimble may issue a
preliminary change notice ("Preliminary Change Notice") to
Solectron that states one or more changes to a Production File
or the Manufacturing Specifications.
▇▇▇▇▇▇▇'▇ Preliminary Change Notice shall specify whether
▇▇▇▇▇▇▇'▇ requested change is a Class 1 ECN or Class 2 ECN. A
"Class 1 ECN" is an engineering change that must be
implemented within Twenty Four (24) hours after receipt of
notice and before additional Products are delivered to
Trimble. A "Class 2 ECN" is an engineering change that may be
implemented at a mutually agreeable time.
Solectron shall, [*] within the time specified in the
Preliminary Change Notice but generally not more than two (2)
business days from ▇▇▇▇▇▇▇'▇ issuance of the Preliminary
Change Notice, provide information regarding factors that may
affect implementation, and costs associated with
implementation (one-time and on-going), of the changes
described in the Preliminary Change Notice.
If, after receiving Solectron's response, Trimble wishes to
implement the changes described in the Preliminary Change
Notice, Trimble shall issue
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SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
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a final engineering change notice ("ECN") or final
manufacturing change Notice ("MCN") to Solectron.
5.4.2. Initiated by Solectron
If Solectron wishes to initiate a change to a Production File
or the Manufacturing Specifications, Solectron shall furnish
to Trimble a proposed change notice ("Proposed Change Notice")
together with information regarding factors that may affect
implementation, and cost associated with implementation
(one-time and on-going). Solectron shall supplement the
Proposed Change Notice with such additional information as
Trimble may reasonably request at any time ("Supplemental
Information"). Trimble shall not be deemed to have completed
its assessment, and shall be under no obligation to respond to
a Proposed Change Notice, until Trimble has received and
analyzed the Proposed Change Notice, the Supplemental
Information, and such other information regarding the
business, financial and technical particulars as Trimble may
in its sole discretion deem necessary or advisable. Trimble
may decline any Proposed Change Notice in ▇▇▇▇▇▇▇'▇ absolute
discretion. If Trimble wishes to implement an engineering
change as described in Solectron's Proposed Change Notice,
Trimble shall issue a Final ECN or Final MCN to Solectron.
For change requests initiated by Solectron, Solectron will be
responsible for [*] to such materials, locations or processes
that are requested by Solectron, except as the Parties may
otherwise expressly agree in writing.
5.4.3. Final ECN/MCN
A Final ECN or final MCN shall be incorporated into the
Production File for the applicable Product(s) on the specified
implementation date. Solectron shall not change or modify the
processes for the Products as provided in the Production File
without a Final ECN or final MCN from Trimble.
5.4.4. Charges
For purposes of this paragraph 5.4, any cost identified by
Solectron as a "cost associated with implementation" shall not
include, and Trimble shall not be liable for, [*]
5.5.5. Allocations
Solectron warrants and agrees that with respect to any
allocations of components, materials, labor or production
capacity made in connection with orders placed by Trimble
under this Agreement due to any shortage or unavailability,
Trimble will receive from Solectron allocations thereof that
are at least as favorable as any allocation provided to any
other Solectron customer.
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
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5.6. Manufacturing Support
Each Party shall perform its manufacturing support services as
described in Exhibit 5.6.
5.7. Solectron Relationship with Trimble Vendors
Solectron shall manage Solectron's relationships with Trimble
Vendors in a manner that will enhance long-term relationships
with such vendors and produce benefits for both Solectron and
Trimble. [*]
Without limiting the foregoing, Solectron shall, at a minimum,
comply with the following obligations to ensure good component
material management for the Products:
5.7.1. Ensure component level failure analysis is performed by the
Trimble Vendors,
5.7.2. Expedite component returns, failure analysis and corrective
actions regarding defective components with Trimble
Vendors and promptly communicate this information to
Trimble,
5.7.3. Work with Trimble Vendors to reduce leadtimes and WAAPs,
5.7.4. Address poor component yields with Trimble Vendors and promptly
provide analysis and corrective plans regarding same to
Trimble,
5.7.5. Provide regular performance feedback to Trimble Vendors, with a
copy to Trimble,
5.7.6. Provide Trimble with copies of all Trimble Vendors newsletters
via e-mail,
5.7.7. Permit Trimble to participate in discussions with Trimble
Vendors regarding issues related to Parts WAAP and
availability, and to Solectron's performance of this Agreement,
5.7.8. Initiate and maintain vendor qualification, performance and
corrective action programs with the Trimble Vendors,
5.7.9. Assist Trimble as Trimble may reasonably request with ▇▇▇▇▇▇▇'▇
vendor conference, and
5.7.10.Provide to Trimble any information relating to Part quality,
technology trends, and such other information that Solectron
may have and Trimble may reasonably require to maintain a
competitive position in its markets.
Solectron shall provide each of the Trimble Vendors with
non-binding, forward looking, rolling forecasts for each of
the Parts and shall update such forecasts on a monthly basis,
or more frequently as necessary to support ▇▇▇▇▇▇▇'▇ business
needs. Such forecasts shall [*]
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SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
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[*]
5.8. Production Personnel
Solectron acknowledges that certain Solectron personnel whose
names appear on the attached Exhibit 5.8 were Trimble
employees before the Effective Date, possess certain [*] or
other technical or engineering skills and experience that have
been and will continue to be required in the production of the
Products. Solectron agrees that it shall [*]
5.9. Production Floor Scrap
Solectron shall bear all costs for Scrap within a [*]. Above
the [*], (i) Trimble shall reimburse Solectron the [*] for all
Parts or Products Scrap that the Parties reasonably determine
is caused by ▇▇▇▇▇▇▇'▇ Product design; and (ii) Solectron
shall bear all cost for all Parts or Products Scrap caused by
Solectron's manufacture of the Products.
"Scrap" means Parts or Products that are or may become
unusable in the manufacturing process. "Scrap Rate" is
calculated by dividing the materials WAAP of all Scrap created
in each quarter by the total materials WAAP in that quarter
and expressing the result as a percentage.
5.10. Discrepant Materials
As provided in the Asset Purchase Agreement, Solectron will
purchase Discrepant Materials from Trimble at [*]. Trimble
will sell only those Discrepant Materials produced in the one
(1) year prior to the Effective Date. Solectron may repair or
rework the Discrepant Materials to meet the applicable
Product's Production File and supply the repaired or reworked
Discrepant Materials to Trimble as Products under this
Agreement. Solectron shall bear the cost of all Scrap in the
Discrepant Materials. If (i) the price paid by Solectron for
the Discrepant Material totals more than [*]; or (ii) despite
its best efforts, Solectron is unable to repair or rework more
than [*] of the Discrepant Materials to meet the applicable
Product's Production File; the Parties will meet and discuss
an equitable resolution. "Discrepant Materials" means work in
progress that fails to meet the applicable Product's
Production File.
6. PRODUCTION SUPPORT TEAMS
On or before the Effective Date Solectron shall establish a team of
skilled and experienced employees ("Production Support Team") which
shall be the primary Product and technical interface with the other
Party and serve as the focal point for the identification and
resolution of any problems that may surface during the
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course of this Agreement. Solectron shall consult with Trimble and
comply with ▇▇▇▇▇▇▇'▇ reasonable requests regarding the Solectron
personnel that Solectron designates or intends to designate as
Solectron's Production Support Team, including the opportunity to
interview and reject proposed Production Support Team candidates prior
to Solectron assigning them to the Production Support Team. Production
Support Teams shall not have the authority to amend or modify the terms
of this Agreement. The Production Support Teams shall meet
periodically, electronically, telephonically or otherwise as reasonably
agreed by the Parties, and at least quarterly for a general review of
the Parties' performance under the relationship and to establish any
corrective action plans necessary to meet performance criteria set
forth in this Agreement.
Solectron's Production Support Team shall include two (2) Customer
Focus Teams, aligned on a product- or business unit basis as Trimble
may reasonably request, which shall be responsible for providing
support in the following areas: (i) Trimble Vendor management; (ii)
inventory control; (iii) engineering services; (iv) master scheduling;
(v) document control; (vi) quality assurance; and (vii) customized
reporting.
In addition to the obligations described above, Solectron's Production
Support Team shall be able to (i) respond to normal inquiries within [*],
(ii) provide an initial response for urgent requests within [*],
and (iii) comply with the order acknowledgment and RMA procedures set
forth elsewhere in this Agreement.
7. FORECASTS
Within three (3) business days after the Effective Date, Trimble shall
deliver to Solectron a non-binding, forward looking, [*] rolling
forecast ("Forecast") for orders of the Products, and update such
Forecast from time to time during the Term, but no less frequently than
[*]. Each Forecast shall state ▇▇▇▇▇▇▇'▇ anticipated orders for each
Product during the Forecast period: [*]
8. PURCHASE ORDERS
8.1. Submission; Content
From time to time during the Term, Trimble may deliver
Purchase Orders to Solectron in writing, via telefax or
electronically, via procedures to be mutually agreed or in the
same manner as specified in this Agreement for the delivery of
notices. Such Purchase Orders shall include the following
information ("Basic Information"), as and if applicable, and
such other information as may be relevant to such Purchase
Orders:
8.1.1. Deliverables (which shall include Trimble part number(s));
8.1.2. Quantities of each deliverable;
8.1.3. Unit and total prices then in effect;
8.1.4. Delivery date(s) within the applicable Product Delivery
Leadtime;
8.1.5. Delivery location(s);
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8.1.6. Product notes (including, but not limited to, radio frequency
or other configuration information); and
8.1.7. Any special packaging or shipping requirements.
Any terms, conditions or information appearing on or
accompanying any of ▇▇▇▇▇▇▇'▇ or Solectron's purchase orders
or acknowledgments or related correspondence, other than the
Basic Information, shall be of no effect unless (i) expressly
permitted under this Agreement, or (ii) Trimble and Solectron
expressly agree otherwise in a separate, signed writing.
8.2. Delivery Leadtimes
Delivery Leadtimes for each Product shall be determined by the
Product's applicable delivery category specified on, and
subject to change as provided in, the attached Exhibit 8.2.
8.3. Confirmation
8.3.1. [*]
8.3.2. [*]
8.3.3. [*]
8.4. Order Acceptance.
A Purchase Order in the form described in Paragraph 8 above,
which complies with the terms of this Agreement, (a "Complying
Order") shall be deemed accepted by Solectron upon receipt
regardless of whether or not confirmed or acknowledged by
Solectron as provided in paragraph 8.3. Solectron shall not be
obligated to accept a purchase order that is not a Complying
Order, nor shall Solectron be obligated to accept a purchase
order which states quantities in excess of those Forecast and
Flexibility
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Parameters (any of the foregoing a "Non-Complying Order"), and
such a Non-Complying Order shall not be deemed accepted by
Solectron unless Solectron expressly accepts it in writing. If
Solectron determines that any purchase order is a
Non-Complying Order, Solectron shall notify Trimble as
described in Paragraph 8.3 above, and the Parties shall use
their mutual reasonably diligent efforts to cause the Purchase
Order to be a Complying Order, at which time it shall be
deemed accepted by Solectron and Solectron shall so confirm to
Trimble in writing.
8.5. Purchase Order Changes
8.5.1. Trimble shall be entitled to cancel any Purchase Order in
whole or in part, or change all or any part of the Basic
Information applicable to any Purchase Order, by
delivering notice thereof to Solectron in the same manner
as a Purchase Order may be delivered, and Solectron shall
comply with any such change or cancellation. Any such change
or cancellation shall be without liability to Trimble if it is
within the Flexibility Parameters and, if it is not, such
change or cancellation shall be subject to any relevant
liability as described in Exhibit 8.2.
8.5.2. For increases or decreases in quantities ordered which
fall outside of the parameters set forth in Exhibit 8.2,
Solectron agrees to use best efforts to accommodate ▇▇▇▇▇▇▇'▇
requested changes.
8.6. First Month Orders
For the thirty (30) days following the Effective Date, the
forecasting and ordering procedures specified in Paragraphs 7
and 8 shall not apply to the ordering, production or delivery
of the Products. Instead, during that thirty (30) day period,
Solectron shall complete the production of Products in process
as of the Effective Date in accordance with a schedule to be
provided by Trimble to Solectron at the Effective Date,
provided that such schedule generally provides for
manufacturing times for the Products substantially in
accordance with the Delivery Leadtimes specified on Exhibit
8.2. During such thirty (30) day period, Trimble will supply
forecasts on a daily basis.
8.7. Solectron and Trimble agree to discuss at a mutually agreeable date
the terms and conditions, if any, under which the Parties may agree
to implement a kanban or demand-pull form of delivery system for the
Products.
9. DELIVERY.
9.1. Beginning at the Effective Date and until such time as required by
a Delivery Plan ("Delivery Interim Period"), Solectron shall deliver
Products to Trimble on time to the same extent that ▇▇▇▇▇▇▇'▇
manufacturing function has internally delivered Products within
Trimble on time, or earlier, during the six (6) month period
preceding the Effective Date. During the Delivery Interim
Period, Solectron shall use its best efforts to deliver Products on
time as required to meet ▇▇▇▇▇▇▇'▇ business needs, consistent
with the condition of the Trimble manufacturing function
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transferred to Solectron under that certain Asset Purchase Agreement
between Trimble and Solectron dated [date].
Within Forty Five (45) days following the Effective Date,
Solectron shall furnish to Trimble, for ▇▇▇▇▇▇▇'▇ review and
approval, a proposed plan to achieve on time delivery of all
Products ("Delivery Plan"). Beginning at the time specified in
the Delivery Plan, but in no event later than March 31, 2000,
Solectron will deliver all Products to Trimble on time.
For purposes of this Agreement, a Product shall be deemed
delivered "on time" if it conforms to the relevant warranty
and acceptance criteria, was produced in conformity with the
applicable Production File, and is delivered to the required
delivery location or common carrier, as applicable, on or not
more than three (3) days before the delivery date specified in
the applicable Purchase Order.
9.2. If a delivery is not on time, or if Solectron reasonably expects
to make a delivery that is not on time, Solectron shall promptly
notify Trimble, and unless the delay is caused by Trimble, shall at
no additional cost to Trimble employ accelerated measures such
as material expediting fees, premium transportation costs, or
labor diversion or overtime required to meet the specified
delivery date or minimize the lateness of deliveries.
9.3. For deliveries to Trimble within [*] of Solectron's Milpitas,
California facility, Solectron shall deliver Products to
▇▇▇▇▇▇▇'▇ delivery location specified in an Order, [*] choosing.
9.4. For all other deliveries, Solectron shall deliver Products [*]
choosing addressed to the delivery location specified in the
relevant order, and shall insure against normal transportation
risks. The cost of shipment and insurance shall be added to the amount
payable by Trimble.
9.5. Title and risk of loss to all Products shall pass to Trimble upon
delivery to the common carrier at Solectron's shipping dock.
10. LABELING AND PACKAGING
10.1. Trimble shall provide to Solectron all necessary specifications,
identification and artwork for the labeling of the Products and
packaging under the applicable label.
10.2. Solectron shall package and label all Products as specified by
Trimble in the Design Specification, without additional cost to
Trimble. Where Trimble does not specify packaging and shipping
requirements in the Design specification, Solectron shall package
and ship Products to Trimble in a manner which (i) follows ▇▇▇▇▇▇▇'▇
written instructions, (ii) follows good commercial practice, (iii)
is acceptable to common carriers for shipment, and (iv) is
adequate to ensure safe arrival. Solectron shall ▇▇▇▇ the
outside of each shipment container with the applicable Trimble
part numbers and necessary handling and lifting information. Each
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shipment shall be accompanied by a packing slip and source inspection
acceptance report which will include ▇▇▇▇▇▇▇'▇ part numbers,
purchase order and the quantity shipped. Solectron further agrees
to label the Products consistent for United States custom
requirements for country of manufacture as well as to provide
revision code and manufacturing date code labeling for the Products
in the location and format specified by Trimble.
10.3. If Trimble requests additional marking or labeling information on,
or packaging for, the Products which is not specified in the Design
Specifications and which results in a change in the cost of
materials or production, Trimble and Solectron shall negotiate an
equitable price adjustment in good faith.
10.4. Solectron shall not pack different Products or different
configurations of the same Products in the same shipment container.
11. ACCEPTANCE OR REJECTION
11.1. Source Inspections.
Upon prior notice to Solectron, Trimble or its authorized
representative(s) may conduct source inspections of the
Products at Solectron's facility at which Products are being
manufactured, during Solectron's normal business hours. Such
inspections shall be based upon [*] and such other standards
as Trimble may reasonably elect. The Parties shall mutually
agree upon the timing of such inspections, which shall be
conducted in a manner that does not interfere with Solectron's
operations. Solectron shall provide sufficient facilities for
persons conducting such source inspections. If any Product
fails the test procedure set forth in the Manufacturing
Standards, Trimble may reject the entire lot of any such
Products, and Solectron shall promptly take all steps
necessary to correct such failures.
Immediately upon any rejection resulting from a source
inspection, Solectron shall identify the cause of the failure
and shall promptly take all reasonable steps to correct any
such failure as described in the Manufacturing Specifications.
11.2. Incoming Inspections.
Trimble may inspect all Products within [*] after its
receipt of such Product ("Rejection Period") and may reject
any Product that fails to meet the Design Specifications or
Manufacturing Standards.
Trimble may also reject any quantity of goods shipped by
Solectron in excess of those ordered, or which are delivered
more than [*] before the scheduled delivery date. However,
such overshipments or early shipments, to the extent accepted,
shall be subject to all of the terms and provisions contained
in this Agreement.
If Trimble rejects any Products, Trimble shall notify
Solectron in writing or follow the RMA procedure described in
Paragraph 18.3 within the
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Rejection Period. Solectron shall promptly credit ▇▇▇▇▇▇▇'▇
account for all Products rejected by Trimble and returned to
Solectron.
11.3. General.
Solectron shall (i) provide Corrective Action Reports as
specified in Exhibit 15.1 unless otherwise specified by
Trimble in the Design Specifications or Quality Plan for the
applicable Products, and (ii) record date codes, serial
numbers, electronic serial numbers ("ESN numbers") and
corrective action for all Products rejected by Trimble.
Notwithstanding anything to the contrary contained in this
Agreement, inspection or failure to inspect the Products upon
Delivery shall not affect ▇▇▇▇▇▇▇'▇ rights under the warranty
provisions of this Agreement.
12. PRICING, PAYMENT, AND COST REDUCTION
12.1. Prices
12.1.1. The initial unit prices to be paid by Trimble for Product(s)
are set forth in Exhibit 1.20 attached to this Agreement.
12.1.2. During the term of this Agreement, adjustments to the
unit prices for the Products will be made on an ongoing
basis in accordance with the provisions of Exhibit 12.1.
12.1.3. Except as otherwise provided in this Agreement, unit price
includes all charges for the Product(s), any related
deliverable items and services, and packaging.
12.1.4. The WAAP stated by Solectron to Trimble during the Term
for any Part supplied or to be supplied by Solectron to
Trimble (i) fairly and accurately represents the price
paid by Solectron for such Part, and (ii) is determined under
the Method stated in Exhibit 1.33.
12.1.5. Solectron's Method of calculating the WAAP of any Part
(i) is the method regularly and consistently employed
by Solectron for internal financial reporting
purposes, and (ii) includes all elements, and does not
omit elements, necessary to make any statement of WAAP
accurate and not misleading.
12.1.6. Prices are partially based on the Parties' estimate
that Solectron's annual revenue from Trimble, [*]. If,
upon the first anniversary of the Effective Date, [*],
the parties will in good faith discuss an equitable
resolution. Solectron will use its best efforts to
reduce or otherwise control its costs and re-deploy
its manufacturing assets prior to any such
negotiations.
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12.2. Payment
Trimble shall pay for all Products received by Trimble [*]
Except as provided above:
12.2.1. Trimble shall use commercially reasonable efforts to pay for
all other Products received by Trimble between [*] and
12.2.2. Trimble shall use commercially reasonable efforts to pay for
all Products received by Trimble [*]
When reasonably practicable, payment will be made by
electronic transmittal Electronic Data Interchange ("EDI") or
equivalent. Solectron agrees to support Trimble in
implementing the required EDI process. Payment shall not
constitute acceptance of the Products by Trimble.
12.3. Taxes
Where the law permits, Solectron shall treat Trimble as exempt
from applicable state and/or local sales tax for Product(s)
purchased pursuant to this Agreement. Where required by state
or local law, Trimble shall provide Solectron with a valid
reseller's exemption certificate for each taxing jurisdiction
to which Solectron ships Product(s). When Trimble purchases
Products for internal use pursuant to this Agreement, Trimble
shall notify Solectron and shall pay any applicable sales tax
to Solectron.
13. RECORDS, AUDITS AND REPORTS
13.1. Solectron shall keep complete, correct and accurate books of
account containing all records that are required according to
Solectron's business processes and policies. In order to allow
Trimble to determine the accuracy of the prices charged to
Trimble under this Agreement and to verify the efforts of
Solectron to reduce such prices.
Solectron shall within three (3) business days after ▇▇▇▇▇▇▇'▇
request made at any time and from time to time provide to Trimble:
13.1.1. A report that identifies, by part number, quantity and such
other attributes as are relevant, all finished goods, work
in progress, Parts and other items held or ordered by
Solectron (i) for which Trimble is or may become liable
to pay Solectron under any provision of this Agreement,
and (ii) in addition to the foregoing, those that Solectron
intends to use in producing Products.
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13.1.2. Access to the following types of information with
respect to Solectron's performance of its obligations under
this Agreement: component WAAPs; component business awards
where such awards are specified by Trimble; labor time
standards; yield data at board test and final test; rework
and scrap rates; supplier performance ratings; lot
tracking/status information; factory cycle-time; component
lead times; freight costs; inventory visibility; ECN
tracking and effectiveness; and summaries of shipments and
▇▇▇▇▇▇▇▇.
13.1.3. For the verification of component pricing, Solectron shall
provide Trimble Weighted Average Actual Price (WAAP) data for
components, at the Trimble part number level. Trimble,
at its request, may verify Solectron's process for
calculating the WAAP by reviewing data relating to
receipt and disbursement of a reasonably
representative sample of Parts whose pricing does not
fall under a Solectron non-disclosure agreement with
any supplier, or when the supplier waives any related
non-disclosure obligation. If a supplier waives a
non-disclosure obligation, Solectron shall take no
action to discourage or prevent Part price disclosure
to Trimble. For new assemblies containing new
components with no WAAP in Solectron's MRP system,
Solectron shall provide Trimble a burdened component
price in order to comply with existing non-disclosure
provisions that prohibit Solectron from sharing actual
purchase price. Such burdened price will be for
reference only, and contain a Solectron-proprietary
adjustment which shall not be included in any Part
pricing for costed bills of materials for new
products, assemblies or Parts.
13.1.4. All WAAP information disclosed between the Parties shall be
deemed Confidential Information. Trimble shall not reveal
WAAP data to component suppliers, distributors, other
contract manufacturers, or any other third parties, either
directly or indirectly. The Parties acknowledge that improper
disclosure of WAAP data to suppliers could result in
irreparable damage to procurement leverage; therefore, each
Party agrees to take prompt corrective action for any
improper disclosure and to take disciplinary action where
appropriate.
13.1.5. The most current Production File for the Product(s).
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13.2. Solectron shall, on or before the fifth (5th) day of each
calendar month during the Term, deliver to Trimble a Monthly
Report as described in the attached Exhibit 13.3.
13.3. Solectron shall permit ▇▇▇▇▇▇▇'▇ customers reasonable inspection
and access to data regarding quality, yield data at board test
and final test, rework and scrap rates, lot tracking/status
information, summaries of shipments, and such other non-financial
manufacturing information as ▇▇▇▇▇▇▇'▇ customers may reasonably
require to confirm ▇▇▇▇▇▇▇'▇ compliance with such customers'
reasonable manufacturing requirements.
14. PROTOTYPE SERVICES
From time to time during the Term, Trimble may desire Solectron's help
in building Prototypes. In these instances, Trimble shall notify
Solectron of its desire, shall furnish to Solectron preliminary design
information and the Parties shall cooperate as described in Exhibit 14.
15. QUALITY ASSURANCE
15.1. Quality Improvement Plan
In addition to the Quality Plans that are part of each
Production File, Solectron shall establish, maintain and
manage a Quality Improvement Plan for each Product that is
consistent with (i) the provisions of Exhibit 15.1, and (ii)
standard industry practices, to ensure that the overall
reliability, quality and performance objectives stated in the
relevant Production File is achieved.
15.2. ISO9000 Certification
Solectron shall manufacture the Product(s) at a facility that
maintains ISO 9000 certification.
15.3. QS9000 Compliance
Solectron shall obtain as soon as reasonably practicable (but
in no case longer than twelve (12) months following the
Effective Date) and maintain throughout the Term QS9000
compliance at its Product production facility. Solectron will
investigate QS9000 certification and advise Trimble if and
when Solectron can achieve QS9000 certification.
15.4. Other Requirements
From time to time during the Term, Trimble may request that
Solectron obtain such other certifications and meet such other
manufacturing, security, facility and other requirements as
Trimble may specify.
16. REGULATORY COMPLIANCE
Solectron represents and warrants that its manufacturing facilities
will comply, its manufacturing processes will be conducted in
accordance, and its performance under this Agreement shall comply, with
all applicable federal, state and local statutes, laws and regulations.
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17. PRODUCT WARRANTY; EPIDEMIC FAILURE
17.1. Performance Warranty.
Solectron warrants to Trimble that Product(s) furnished by
Solectron to Trimble under this Agreement, and their
production, (a) shall conform to the Production File, (b)
shall conform to the Manufacturing Specifications, and (c)
shall be free from defects in material and workmanship
furnished by or through Solectron under normal use and
operation for either (i) the period specified on Exhibit 1.20,
or (ii) if no period is specified on Exhibit 1.20, the lesser
of (A) [*] from the date of delivery by Solectron to
Trimble, or (B) [*] from the date of delivery of the
Product to the end user, or (iii) such other period as the
Parties may expressly agree in writing.
17.2. Epidemic Failure
Except as may otherwise be provided in a Production File, in
the event that, at any time within [*] after Delivery, more
than [*] of any given Product sold and delivered to Trimble
within any [*] period fails to operate properly as the result
of improper Solectron workmanship, then an Epidemic Failure
shall be deemed to have occurred. Upon notice by Trimble to
Solectron of any Epidemic Failure, Solectron shall promptly
develop a plan to eliminate the problem in all continuing
production and to correct the problem in all affected units of
Product previously sold and delivered to Trimble during said
[*] time period. Solectron shall submit such plan to Trimble
for ▇▇▇▇▇▇▇'▇ acceptance. Upon receiving ▇▇▇▇▇▇▇'▇ approval of
such plan, Solectron shall implement the corrective action at
its expense. If such plan is not acceptable to Trimble, then
Trimble can require Solectron to repair or replace, at
▇▇▇▇▇▇▇'▇ option, the affected Product at Solectron's cost.
The parties agree to use reasonable efforts to complete the
repair or replacement of the affected Product within [*] after
written notice of such Epidemic Failure is provided to
Solectron. For epidemic failures that are affecting current
production, Solectron shall identify the problem and develop a
plan to solve it within [*] of ▇▇▇▇▇▇▇'▇ notice.
In the event of an epidemic failure due to a common cause
which is neither (A) otherwise covered by the previous
paragraph; nor (B) due to (i) a Trimble Product design, (ii)
Trimble-supplied test design, or (iii) a Trimble Proprietary
Component; the Parties will use reasonable efforts to
determine, address and resolve such failure and its
consequences.
In the event any failure described in this paragraph 17.2
arises from defects in materials supplied to Solectron by any
third party, Solectron shall share, assign or pass through to
Trimble any related concession from or claim against the
relevant supplier.
17.3. Warranty Exclusions
The warranties set forth in this article shall not apply to
any claims, problems or defects which are the result of
designs specified in the Design Specifications, normal wear
and tear, mishandling, misuse,
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neglect or improper testing or repair by other than Solectron
or its authorized representative. These warranties shall
survive inspection, acceptance and payment.
THE WARRANTIES CONTAINED IN THIS ARTICLE ARE IN LIEU OF, AND
SOLECTRON EXPRESSLY DISCLAIMS AND TRIMBLE 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.
18. WARRANTY CLAIMS AND REPAIR
18.1. Trimble shall promptly notify Solectron of any breach or
alleged breach of the warranties contained in Paragraph 17.
Solectron and Trimble or ▇▇▇▇▇▇▇'▇ customers shall follow the
RMA procedure described in Paragraph 18.3 below to return to
Solectron Product(s) that are defective or that need repair
or replacement. Solectron, at Solectron's expense and at
▇▇▇▇▇▇▇'▇ option, shall either replace or repair Products
which are or become defective during the warranty period and
Deliver the Products to the location designated by Trimble
within [*] after Solectron's receipt of the rejected
Product(s).
18.2. In connection with warranty repair or replacement, Solectron
shall:
18.2.1. Use repair/rework processes that are part of the
Production File or otherwise approved by Trimble in
writing;
18.2.2. Record and report to Trimble, in writing, date codes,
serial numbers, and corrective action for all
Product(s) returned for repair or replacement;
18.2.3. Furnish Corrective Action Reports as required by Exhibit
15.1;
18.2.4. Update Product(s) to the latest engineering change level;
18.2.5. Pay all shipping costs associated with Products returned
for repairs during the warranty period;
18.2.6. Repair or rework any given Product not more than [*]
times;
18.2.7. Retest Products as specified in the Manufacturing
Standards prior to a redelivery;
18.2.8. Return repaired, reworked or replacement Products in
separate shipments from ▇▇▇▇▇▇▇'▇ scheduled Product
orders; and
18.2.9. Provide statistics to Trimble on no problem found
(or "NPF") returns on a quarterly basis.
18.3. RMA Procedure
To return a Product to Solectron as provided by Paragraphs 11
and 18, Trimble shall, request a Return Material Authorization
("RMA") number from Solectron. Solectron shall provide the RMA
number in writing to Trimble within [*] after receipt of any
request.
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After receipt of the written RMA number, Trimble shall return
to Solectron the rejected or defective Product, freight
collect and properly insured, in its original shipping carton
(if available) with the RMA number displayed on the outside of
the carton.
Solectron shall, at ▇▇▇▇▇▇▇'▇ request, provide Trimble with
pre-issued RMA numbers.
18.4. In-Field Warranty Repair
Trimble in the exercise of its sound business judgment may
from time to time determine that warranty repair of certain
Products or for certain customers should be undertaken at or
near the customer's place of business. In such event, Trimble
shall notify Solectron of such determination and the Parties
shall thereupon immediately cooperate with each other to (i)
determine whether the affected Product's condition constitutes
a breach of any Solectron warranty and (ii) undertake such
repair. If the affected Product's condition constitutes a
breach of any Solectron warranty, Solectron shall either
undertake such repair, or reimburse Trimble for its reasonable
cost of such repair.
19. PARTS SUPPLY
19.1. By Solectron
Solectron shall, upon ▇▇▇▇▇▇▇'▇ request made at any time and
from time to time, sell to Trimble:
19.1.1. During the Term of this Agreement, all finished goods,
work in progress, Parts and other items held or ordered
by Solectron (i) for which Trimble is or may become
liable to pay Solectron under any provision of this
Agreement; and (ii) in addition to the foregoing, those
that Solectron intends to use in producing Products.
The prices for any items shall not exceed what ▇▇▇▇▇▇▇'▇
liability would have been for the items as described
in Exhibit 8.2 if Trimble had canceled its orders for
Products.
19.1.2. During the Term of this Agreement, Parts Trimble may
reasonably require for all Products purchased by Trimble
from Solectron. Prices for the Products shall not
exceed Solectron's WAAP for procuring the Parts
plus the material markup specified in Exhibit 1.20.
Trimble acknowledges that prices for Parts shall be
subject to adjustment for increased costs in
procurement of materials and manufacturing after
cessation of production of the Product for which such
Parts are supplied.
19.2. Discontinued Parts.
In addition to its obligations under paragraph 19.1 above,
Solectron shall: (i) provide notice to Trimble at least twelve
(12) months prior to discontinuing the availability of any
Parts; (ii) inform Trimble of all last-time buy notifications
for Parts promptly upon Solectron's receipt of such
notifications; (iii) advise Trimble if a last-time buy is the
most economical procurement strategy for such Parts as to
which such a notification is
Page 23 of 39
received (especially custom Parts which may require tool
maintenance and set-up charges that far outweigh piece part
WAAPs); and (iv) assist Trimble as reasonably requested to
negotiate supply of any Parts subject to a last-time buy.
Trimble may then buy, and Solectron will supply, such
quantities as Trimble deems necessary to fulfill the remainder
of its Product support requirements (i.e., "last-time buy.")
If Trimble determines that a final buy is not financially
favorable due to the length of the remaining support period
for the Part(s), Solectron will assist Trimble in finding a
third party supplier that can continue to support the Part(s)
through manufacturing.
19.3. Restricted Materials and Last Time Buys.
Any Parts ordered or obtained by Solectron from or for Trimble
that are subject to restricted, limited or otherwise
problematic availability, including those that are subject to
last-time buy or limited allocation, shall be held and used by
Solectron exclusively to perform its obligations under this
Agreement.
19.4. By Trimble
Solectron shall purchase, and assist Trimble Dispose of, Parts
from ▇▇▇▇▇▇▇'▇ inventory existing at the Effective Date before
purchasing such Parts from other sources. Any such sales shall
be on commercially reasonable prices, terms and conditions.
20. PROPERTY FURNISHED TO SOLECTRON BY TRIMBLE
20.1. Trimble Property
Unless otherwise agreed in writing by Trimble, and
notwithstanding the provisions of paragraph 21, all designs,
specifications, drawings, special dies, molds, patterns, jigs,
fixtures and any other property furnished to Solectron by
Trimble, or specifically paid for by Trimble, for use in the
performance of this Agreement shall be and remain the sole
property of Trimble, shall be marked as Trimble directs to
evidence its ownership thereof, shall be subject to return to
Trimble or other disposition at any time upon ▇▇▇▇▇▇▇'▇
instruction, shall be used exclusively in the furnishing for
Trimble of goods and/or providing of services for Trimble and
shall, in the case of tangible property, be insured by
Solectron, at Solectron's expense, while in its custody or
control in an amount equal to the replacement cost thereof,
with loss payable to Trimble. Solectron shall furnish to
Trimble a copy of the policy or certificate of such insurance
upon demand. Solectron shall execute and deliver to Trimble
such other or further agreements relative to property
furnished by Trimble to Solectron as may be requested by
Trimble. With respect to such property, Solectron at its
expense shall (i) obtain any consumable material required for
its operation, (ii) perform all routine maintenance, and (iii)
perform all repairs necessitated by accident, misuse, abuse or
neglect. Trimble shall be responsible to perform or pay for
repairs due to reasonable wear and tear, provided that
Solectron first notifies Trimble of the need for such repairs
and cooperates with Trimble regarding the nature and source of
Page 24 of 39
such repairs. Solectron shall, upon ▇▇▇▇▇▇▇'▇ request, furnish
to Trimble a written report listing the Trimble property in
Solectron's possession.
As of the Effective Date, the property Trimble is furnishing
to Solectron under this Section 20.1 is listed on Exhibit 20.1
attached hereto.
20.2. Technology License
Trimble grants to Solectron revocable, non-exclusive,
non-transferable, royalty-free licenses to (i) possess, use
and have used the Ancillary Technology exclusively for
▇▇▇▇▇▇▇'▇ benefit; and (ii) purchase or license from Trimble
such of the Trimble Proprietary Components as is reasonably
necessary for Solectron to produce Products exclusively for
purchase by Trimble under this Agreement.
20.3. Trimble Trademark License
Subject to the terms and conditions of this Agreement, Trimble
hereby grants to Solectron a personal, non-exclusive,
non-sublicensable, non-transferable, royalty-free, license to
use during the Term such Trimble trademarks as may reasonably
relate to the Products ("Trimble Marks"), to the extent
reasonably required to perform Solectron's obligations under
this Agreement.
Solectron hereby acknowledges and recognizes ▇▇▇▇▇▇▇'▇
exclusive worldwide ownership of the Trimble Marks and agrees
not to take any action inconsistent with such ownership.
Solectron acknowledges that its use of the Trimble Marks
pursuant to this Agreement and any goodwill established
thereby shall inure to the sole benefit of Trimble.
Solectron shall support Trimble in policing the use of the
Trimble Marks and shall cooperate with Trimble in protecting
the Trimble Marks, including cooperating in becoming a
registered user of such Trimble Marks. Such cooperation by
Solectron shall be at the sole expense of Trimble. Solectron
shall promptly notify Trimble of any infringement of the
Trimble Marks that comes to Solectron's attention.
Solectron shall not attempt to register with any trademark
office, anywhere in the world, any trademark or other ▇▇▇▇
that is confusingly similar to any of the Trimble Marks or
that otherwise infringes or dilutes any of the Trimble Marks.
Solectron shall not modify any Product bearing a ▇▇▇▇▇▇▇ ▇▇▇▇
in such a manner as to detract from the favorable reputation
enjoyed by the Trimble Marks. Solectron shall not take or
permit to be taken any actions which would detract from the
goodwill or favorable reputation associated with the Trimble
Marks.
21. INTELLECTUAL PROPERTY OWNERSHIP
Except as expressly agreed by the Parties in this Agreement, or in a
formal written amendment to this Agreement signed by duly authorized
officers of each Party:
21.1. Ownership of Proprietary Information that is Created solely by
one Party.
Page 25 of 39
The "Owning Party" for purposes of this Agreement of all
Proprietary Information owned by a Party or Created solely by
a Party, whether before or after the Effective Date, shall be
determined as follows:
21.1.1. All Proprietary Information which is not a Derivative
of any Proprietary Information of the other Party shall
be the sole and exclusive property of, and be deemed the
Proprietary Information of, the Party who owned or
Created the Proprietary Information.
21.1.2. All Proprietary Information which is a Derivative of any
Proprietary Information of the other Party but which is
not a Derivative of any Proprietary Information of the
Party who so Creates, shall be Disclosed in writing to
the other Party by the Party who so Created, and shall be
deemed the Proprietary Information of the other Party.
21.1.3. All Proprietary Information which is a Derivative of any
Proprietary Information of the other Party, and which
is also a Derivative of any Proprietary Information
of the Party who so Creates, shall be Disclosed in
writing to the other Party by the Party who so
Created, and shall be the Parties' joint property.
21.2. Ownership of Proprietary Information that is Created Jointly by
the Parties.
The "Owning Party" for purposes of this Agreement of all
Proprietary Information Created Jointly by the Parties,
whether before or after the Effective Date, shall be
determined as follows:
21.2.1. All Proprietary Information Created Jointly by the
Parties which is a Derivative of any Proprietary
Information of one Party who so Creates, and which is
not a Derivative of any Proprietary Information of
the other Party who so Creates, shall be Disclosed in
writing to the Party from whose Proprietary Information
it is a Derivative or whose Proprietary Information it
incorporates, and shall be deemed the Proprietary
Information of such Party.
21.2.2. All Proprietary Information Created Jointly by the
Parties which is a Derivative of any Proprietary
Information of one Party who so Creates, and which is
also a Derivative of any Proprietary Information of
the other Party who so Creates, shall be Disclosed in
writing by each Party to the other, and shall be the
Parties' joint property.
21.2.3. All Proprietary Information Created Jointly by the
Parties which is not a Derivative of Proprietary
Information of either such Party, shall be Disclosed
in writing by each Party to the other, and shall be the
Parties' joint property.
21.3. Ownership of any other Proprietary Information.
Ownership, whether solely by any Party or jointly by the
Parties, and all related rights in, to and of, all Proprietary
Information that is Created under circumstances not specified
in Paragraph 21.1 or 21.2 above shall be agreed upon by the
Parties in good faith and, failing such agreement,
Page 26 of 39
shall be submitted to arbitration in accordance with the
provisions of Paragraph 28.4, provided, however, that the
arbitrators' determination shall not result in, nor require or
permit, the Disclosure or Disposition of a Party's Proprietary
Information. Subject to the foregoing, in reaching its
determination the arbitrator(s) shall take into account the
following factors in addition to any other factors the
arbitrator(s) deem relevant:
21.3.1. The extent to which the Proprietary Information is based
on or incorporates the Proprietary Information of a
Party; and
21.3.2. The extent of each Party's material contribution to the
Proprietary Information.
21.4. Effect of Joint Ownership on Disposition of Proprietary
Information.
Except as provided herein, either Party shall be free to
Dispose of any Proprietary Information that is such Party's
joint property, as determined under this Agreement,
independently of and without accounting to any other Party
therefor, subject always to the other Party's equal and
concurrent right to likewise so Dispose of such joint
property, provided always, that neither Party may Dispose of
such joint property to the extent that such Disposition would
result in or require Disclosure of the other Party's
Proprietary Information of which the joint property was a
Derivative or which is Incorporated in the joint property, if
any.
21.5. Effect of Joint Ownership on Patent and Copyright Prosecution and
Enforcement.
21.5.1. Either Party who jointly owns any Proprietary
Information, as determined under this Agreement, shall
cooperate with any other Party who jointly owns such
Proprietary Information (i) in filing and prosecuting
applications for patent and copyright protection of any
jointly owned Proprietary Information that is
reasonably subject to such protection in any
jurisdiction any such Party deems appropriate, and (ii)
in enforcing patent rights and copyrights in such
Proprietary Information against others in any
jurisdiction the requesting Party deems appropriate.
21.5.2. Notwithstanding Paragraph above, neither Party may file
or prosecute nor require any other Party to cooperate in
the filing or prosecution of an application for patent
protection or copyright, and neither Party may enforce
or require any other Party to cooperate in enforcing
patent rights and copyrights for patent protection or
copyright, to the extent that such filing,
prosecution, cooperation or enforcement would result
in or require public or otherwise damaging Disclosure
of any the other Party's Proprietary Information of
which the joint property is a Derivative or which is
Incorporated in the joint property, if any.
21.5.3. Any Party requesting cooperation under Paragraph
21.5.1 or Paragraph 21.5.2 above shall bear all expenses
associated therewith, except that the Parties who
jointly own any Proprietary Information, as determined
under this Agreement, shall equally bear the expense of
filing and prosecuting applications for patent
Page 27 of 39
protection in the United States of America of such jointly
owned Proprietary Information.
21.6. Limitation on Transfer of Proprietary Information. Except as
expressly provided herein, nothing in this Agreement shall
operate to create or transfer an ownership, license or other
proprietary interest in any Proprietary Information, nor require
the Disclosure by an Owning Party of any of its Proprietary
Information, nor restrict, inhibit or encumber any Owning
Party's right or ability to dispose of, use, distribute,
Disclose or disseminate in any way its own Proprietary
Information or to release or modify by further agreement the
obligations of the other Party or Others with respect to such
Owning Party's Proprietary Information.
22. CONFIDENTIALITY
22.1. A Receiving Party shall, with respect to an Owning
Party's Proprietary Information:
22.1.1. Restrict access thereto to such of its employees and
consultants who need to know it in order for the
Receiving Party to perform its obligations under this
Agreement and who agree to be bound by an obligation
of confidence no less protective of the Disclosing
Party's Proprietary Information than the provisions
of this Agreement;
22.1.2. Not use Proprietary Information disclosed to it
pursuant to this Agreement for any purposes other than
those expressly permitted by this Agreement; and
22.1.3. Not disclose Proprietary Information disclosed to it
pursuant to this Agreement to any third Party.
22.2. Each Receiving Party shall protect the Disclosing Party's
Proprietary Information using at least the same degree of
care it employs to avoid disclosure of its own Proprietary
Information of a similar nature, provided such degree of care
is not less than reasonable under the circumstances. The
obligations and restrictions provided in this Paragraph 22
shall survive expiration or termination of this Agreement.
22.3. A Disclosing Party's Proprietary Information and any tangible
or electronic medium on or by which it is or has been Disclosed
to, possessed, or reproduced by the Receiving Party, shall at
all times be the Disclosing Party's sole and exclusive property.
The Disclosing Party may at any time, by written notice,
revoke in whole or in part any permission given to the
Receiving Party under this Paragraph 22 to use, possess or
Disclose its Proprietary Information. Upon such revocation, or
upon any written request, the Receiving Party shall
immediately and unconditionally deliver to the Disclosing
Party all of the Disclosing Party's Proprietary Information and
any tangible or electronic medium on or by which it is or has
been Disclosed to, possessed, or reproduced by the Receiving
Party.
22.4. Except as otherwise provided in this Agreement, the Disclosure
of Proprietary Information shall not be construed as granting the
Receiving
Page 28 of 39
Party any rights with respect to the other Party's Proprietary
Information or any license under any patents, patent
applications, copyrights and/or other intellectual property
rights to which the Disclosing Party may then or
thereafter own or hold licensing rights.
22.5. Disclosure of any Proprietary Information by a Receiving Party
hereunder shall not be precluded if such Disclosure is (a)
in response to a valid and legally-enforceable order of a
court or other government body or any political subdivision
thereof; or (b) otherwise required by law, provided, however,
that the Receiving Party before making such Disclosure must
first (i) immediately upon receipt of such order notify the
Disclosing Party of such order; and (ii) make and cooperate
with the Disclosing Party in making, if available under
applicable law, a good faith effort to obtain a protective
order or other appropriate determination against or limiting
disclosure or use of the Proprietary Information.
22.6. Each Disclosing Party shall endeavor to affix or incorporate
in any tangible Proprietary Information it Discloses to the
Receiving Party an appropriate statement identifying the
information as the Disclosing Party's Proprietary Information,
such as "[Disclosing Party] Proprietary Information", or
"[Disclosing Party] Confidential Information", or words of like
meaning, clearly expressed. The Disclosing Party shall, after
Disclosing Proprietary Information other than in tangible form,
endeavor to: (i) promptly confirm the Disclosure, (ii) reduce
the Proprietary Information to writing and (iii) identify the
information as the Disclosing Party's Proprietary Information
in the manner described above. However, the Disclosing
Party's failure to so affix or incorporate or confirm
shall not affect such information's or material's character
as the Disclosing Party's Proprietary Information under
this Agreement.
23. INTELLECTUAL PROPERTY INDEMNIFICATION
23.1. By Solectron
Solectron shall defend, indemnify and hold harmless Trimble,
its Affiliates and its and their customers from and against
any costs, expenses, damages, judgments and liabilities of any
kind, including reasonable attorneys' fees and costs, arising
from or related to any claim, suit or other action against
Trimble, any of its Affiliates or its or their customers to
the extent such claim, suit or action is based upon an
assertion that (i) the Manufacturing Standards, Solectron's
Proprietary Information or any portion thereof, or (ii) the
Product(s) where such claim, suit or action relates to the
Manufacturing Standards or Solectron's Proprietary
Information; infringe any third party's copyright, trade
secrets, patent, trademark and/or trade name, and Solectron
shall pay the amount of the settlement or the costs, damages
and attorneys' fees and costs finally awarded by a court in
any such suit or action, provided that Trimble:
23.1.1. promptly gives Solectron notice of any such claim or
threatened or actual suit or action;
23.1.2. gives Solectron sole control of the defense and
settlement of such claim, suit or action and related
settlement negotiations; and
Page 29 of 39
23.1.3. cooperates in the defense of such claim, suit or action.
In the event that in any such suit or action an injunction is
entered prohibiting the purchase or sales of any Product(s) by
Trimble, any of its Affiliates or its or their customers,
Solectron, at its expense, shall (i) procure for Trimble, its
Affiliates and its and their customers the right to continue
to purchase, sell, market, use and have others sell, market
and use the Manufacturing Standards, Solectron's Proprietary
Information and/or the Product(s); or (ii) replace or modify
the Manufacturing Standards or Solectron's Proprietary
Information such that Solectron or Trimble may manufacture or
have manufactured Product(s) that are non-infringing while
still conforming to the applicable Production File(s).
23.2. By Trimble.
Trimble shall defend, indemnify and hold harmless Solectron
and its Affiliates from and against any costs, expenses,
damages, judgments and liabilities of any kind, including
reasonable attorneys' fees and costs, arising from or related
to any claim, suit or other action against Solectron or any of
its Affiliates to the extent such suit or claim is based upon
an assertion that the Product(s), ▇▇▇▇▇▇▇'▇ Proprietary
Information or any portion thereof infringe any third party's
copyright, trade secrets, patent, trademark and/or trade name,
and Trimble shall pay the amount of settlement or the costs,
damages and attorneys' fees and costs finally awarded by a
court in any such suit or action, provided that Solectron:
23.2.1. gives Trimble notice of any such claim or threatened or
actual suit or action;
23.2.2. gives Trimble sole control of the defense and settlement
of such suit, claim or action and related settlement
negotiations; and
23.2.3. cooperates in the defense and settlement negotiation of
such suit, claim or action.
Notwithstanding the preceding sentence, Trimble shall have no
obligation to Solectron regarding any such claim, suit or
action to the extent that such claim, suit or action is caused
by, arises from or is attributable to (i) any unauthorized
modification of the Trimble Proprietary Information by
Solectron; (ii) or Solectron's unauthorized modifications to
the Product(s).
23.3. General.
In performing its obligations under this Agreement, each Party
agrees that it will not knowingly infringe any patent,
copyright, mask work right or trade secret of any third party.
This Paragraph 23 shall survive the expiration or termination
of this Agreement in any manner whatsoever. This Paragraph 23
specifies the exclusive remedies of the parties for any
alleged infringement or misappropriation of any intellectual
property rights of any third party by the Manufacturing
Standards or Solectron Proprietary Information provided by
Solectron to pursuant to this Agreement and by the Design
Specification, Products, Trimble Proprietary Information or
Trimble Components provided by Trimble pursuant to this
Agreement.
Page 30 of 39
24. LIMITATION OF LIABILITY
EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, NEITHER PARTY SHALL BE
LIABLE TO THE OTHER, WHETHER IN CONTRACT OR IN TORT, FOR SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY KIND, INCLUDING,
WITHOUT LIMITATION, CLAIMS FOR LOST PROFITS OR LOSS OF GOODWILL, EVEN
IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, BY
REASON OF ANY BREACH OR DEFAULT UNDER THIS AGREEMENT. Regardless of the
foregoing, this paragraph shall not apply to either Party's breach of
the following paragraphs [*].
25. INSURANCE
Each Party shall, at its own expense, maintain comprehensive general
liability insurance (including product liability and broad form
contractual liability) for not less than [*] per occurrence, during
the term of this Agreement and for [*] thereafter. Such insurance
shall (i) be in a form and with a carrier or carriers reasonably
acceptable to Solectron and Trimble, (ii) list the other Party as an
additional named insured, and (iii) provide that such insurance may not
be canceled or altered so as to affect the interest of any of the
foregoing without at least thirty (30) days' prior written notice to
the other Party. Promptly following execution of this Agreement, each
Party shall deliver to the other Party satisfactory evidence of such
insurance coverage, or an equivalent self-insurance program.
26. TERM OF THE AGREEMENT
26.1. Initial Term. The Initial Term of this Agreement shall be three
(3) years, beginning on the Effective Date ("Initial Term").
26.2. Renewal Term. Trimble shall have two (2) options to extend the
Term for periods of one (1) year each ("Renewal Term") upon
written notice to Solectron given not less than ninety (90) days
before expiration of the then-current Term.
26.3. Extended Term. Provided that Trimble does not timely renew the
Term as provided in paragraph 25.2, the Term shall continue
after any scheduled expiration of the Initial Term or any
Renewal Term and until terminated by either Party on not less
than ninety (90) days advance written notice to the other
effective at or after such scheduled expiration.
27. TERMINATION
27.1. This Agreement shall terminate:
27.1.1. On expiration of the Term; or
27.1.2. As the parties may mutually and expressly agree in
writing at any time; or
27.1.3. As provided elsewhere in this Agreement; or
27.1.4. As may be decreed by final judgment or order of a court
of competent jurisdiction; or
[*]-CERTAIN INFORMATION AS INDICATED ON THIS PAGE HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMMISSION. CONFIDENTAL TREATEMENT HAS BEEN REQUESTED
WITH RESPCECT TO THE OMITTED PORTIONS.
Page 31 of 39
27.1.5. As otherwise provided by law.
27.2. This Agreement may be terminated:
27.2.1. For Cause.
27.2.1.1. By Trimble, in the event of Solectron's
material breach of this Agreement, which
within thirty (30) days of ▇▇▇▇▇▇▇'▇ written
notice thereof is neither (i) cured, nor (ii)
the subject of a mutually agreed plan to
cure, provided, however, that if a material
breach is not capable of being cured, Trimble may
terminate with immediate effect.
27.2.1.2. By Solectron, in the event of ▇▇▇▇▇▇▇'▇
material breach of this Agreement, which
within thirty (30) days of Solectron's written
notice thereof is neither (i) cured, nor (ii)
the subject of a mutually agreed plan to cure,
provided, however, that if a material breach is not
capable of being cured, Solectron may terminate
with immediate effect.
27.2.2. For ▇▇▇▇▇▇▇'▇ Convenience, without cause, upon not less
than ninety (90) days advance written notice to Solectron
effective at or after the end of the Initial Term,
regardless whether Trimble has renewed the Term as
provided in Paragraph 25.2.
27.3. Contents of Notice of Termination
When a Party is permitted or required to give written notice
of termination under Paragraph 26.2.1 above, such notice shall
state with reasonable particularity the nature of the breach,
the steps required to cure if such breach is by its nature
curable, and either (i) the Party's intent to terminate this
Agreement if a curable breach is not cured, or (ii) the
Party's election to immediately terminate the Agreement if the
breach is not curable.
27.4. Effect of Termination and Notice of Termination
27.4.1. Neither the expiration nor Termination of this
Agreement shall relieve either Party of any obligation
previously accrued, nor any obligation accruing or
arising thereafter under the following paragraphs of
this Agreement and any other paragraphs that by their
terms so provide: 1 ("Definitions"), 13
("Records, Audits and Reports"), 17 ("Product Warranty;
Epidemic Failure"), 18 ("Warranty Claims and Repair"), 19
("Parts Supply"), 21 ("Intellectual Property
Ownership"), 22 ("Confidentiality"), 23 ("Intellectual
Property Indemnity"), 26 ("Termination"), and 28
("General").
27.4.2. Upon any notice of termination given by either Party
for any reason, the exclusivity provided in Paragraph
3 of this Agreement with respect to the
manufacture of Products by Solectron for Trimble shall
immediately terminate.
27.4.3. Upon Solectron's termination of this Agreement as
provided in Paragraph 26.2.1.2, Solectron at ▇▇▇▇▇▇▇'▇
request shall continue
Page 32 of 39
to supply the Products to Trimble, subject to
commercially reasonable terms and conditions of sale,
for a period of twelve (12) months following such
termination.
27.4.4. Upon or after any notice of termination, any
Termination, or any Exclusivity Termination Notice, (i)
Solectron will identify to Trimble any Products, Parts,
finished goods, work in progress, components or other
material for which Trimble is or may become liable under
the terms of this Agreement to pay Solectron, and
(ii) Solectron at ▇▇▇▇▇▇▇'▇ request will sell and deliver
to Trimble those Parts and assemblies as required under
Exhibit 8.2 and such other items as Trimble may elect to
purchase, at the price determined under this Agreement.
27.4.5. Upon any Termination, Solectron shall complete the
production of any Products for which Solectron has
accepted a purchase order as of the effective date of
such Termination and deliver such completed Products
to Trimble within twenty (20) days of the effective date
of such Termination provided, however, that if
this Agreement was terminated by Trimble for Solectron's
default under Paragraph 26.2.1.1, Trimble may direct
Solectron to refrain from completing such production
and in such event Trimble shall be under no obligation,
under this Paragraph 26.4.5 or otherwise under this
Agreement, to pay Solectron for any such items or any
portions or components thereof. With respect to
purchase orders for components that will not be utilized
to manufacture Products as set forth above in this
Paragraph 26.4.5, Solectron shall not cancel any
purchase order accepted by its suppliers for the
purchase of Parts, without ▇▇▇▇▇▇▇'▇ prior written
authorization.
27.4.6. Upon any Termination or Exclusivity Termination Notice,
Trimble shall have a perpetual, non-exclusive,
royalty-free license to use and have used the
Production Files for Product-related purposes to the
extent such use is not otherwise permitted under the
terms of this Agreement. Regardless of the foregoing,
in no event will Trimble have a license to use or
disclose any Solectron Inventions or Trade Secrets.
27.4.7. Within fifteen (15) days after a notice of termination
is given by either Party to the other, or at least
thirty (30) days before any expiration of this
Agreement, Solectron shall provide Trimble with all
relevant information concerning its outstanding purchase
orders for Parts. Trimble may, on or before the effective
date of such termination or expiration, elect, at
▇▇▇▇▇▇▇'▇ sole discretion and in addition to any other
rights Trimble may have under this Agreement, none, any
one, or a combination of the following options:
27.4.7.1 To purchase from Solectron some or all Parts.
27.4.7.2. Direct Solectron to cancel, to the extent
possible, some or all of the outstanding purchase
orders for Parts; or
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27.4.7.3. Obtain from Solectron an assignment of
Solectron's rights and obligations under
the outstanding purchase orders Parts.
If Trimble instructs Solectron to cancel any
Solectron purchase order for Parts under Paragraph
26.4.7.2, (i) Solectron agrees to use reasonable
efforts to cancel such purchase order; (ii) Solectron
shall use reasonable efforts to negotiate an
equitable settlement with its suppliers concerning
Solectron's financial liability due to the
cancellation of such purchase order for Parts; and
(iii) if Solectron is unable to cancel any
outstanding purchase order for Parts, Trimble shall
be liable for Solectron's direct financial liability
for such purchase orders and/or their cancellation as
provided in Exhibit 8.2.
28. REPRESENTATIONS
28.1. Each Party represents to the other that: (i) it has all
requisite power and authority to enter into this Agreement
and to carry out the transactions contemplated hereby; (ii)
it has the rights, licenses, permits and power to perform all
obligations incurred by it under this Agreement; (iii) the
execution, delivery and performance of this Agreement are duly
authorized; (iv) this Agreement has been duly executed and
delivered by it and is a valid and binding obligation of it; and
(v) the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby do
not conflict with or violate its charter and by-laws, any
other contract or agreement to which it is a party, any
applicable law or any order or judgment of any court or
governmental authority. Solectron represents that all Product(s)
purchased and sold pursuant to this Agreement shall be (i) free
from any liens or encumbrances and (ii) manufactured, labeled,
packaged, sold and Delivered in accordance with all applicable
United States federal, state and local laws, orders,
regulations, codes and standards (whether or not specifically
referenced elsewhere in this Agreement).
28.2. Trimble represents and warrants to Solectron that Trimble and
its Affiliates have the right to manufacture and have
manufactured the Products.
29. GENERAL
29.1. Force Majeure.
Neither Party shall be liable to the other Party if the
performance of any of its obligations under this Agreement is
prevented or delayed because of causes beyond its reasonable
control including, without limitation, fire, strike, war,
insurrection, act of God, law, regulation and embargo of
government agency, riot, severe weather, restriction on the
use of power or any other cause beyond its reasonable control
and not due to such Party's own fault or negligence (an
"Excusable Delay"). A Party shall be excused from its
performance to the extent caused by such Excusable Delay;
provided that such Party (i) gives notice of the Excusable
Delay to
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the other Party promptly after its occurrence, (ii) uses its
reasonable efforts (including executing any disaster plan) to
overcome, mitigate and remove the cause of the event
preventing or delaying performance, (iii) continues the
performance of all its obligations under this Agreement that
are not prevented or delayed and (iv) upon cessation of the
Excusable Delay, promptly performs or completes performance of
the obligations which were prevented or delayed.
Notwithstanding the foregoing, if Solectron's performance is
delayed for more than five (5) days due to Excusable Delay,
Trimble shall have the right to temporarily and reasonably
procure from any other supplier Product(s) which Solectron is
unable to supply.
29.2. Assignment; Binding Effect.
Neither Party shall assign or transfer this Agreement or any
rights and obligations hereunder without the other Party's
prior written consent, which consent may be refused in such
Party's absolute discretion. This Agreement and the
transactions and other instruments provided for herein shall
be binding upon and inure to the benefit of the parties, their
legal representatives, successors, and permitted assignees.
29.3. Governing Law.
This Agreement shall be governed by and the legal relations
between the parties shall be determined in accordance with the
substantive laws of the State of California, without regard to
the conflicts of law principles of California.
29.4. Dispute Resolution.
Except for the right of either Party to apply to a court of
competent jurisdiction for a temporary restraining order, a
preliminary injunction, or other equitable relief pending
further action by the arbitrators, all claims or disputes
related to or arising from this Agreement or the commercial
relationship of the parties that are not resolved by
negotiation and mutual agreement shall be submitted to final
and binding arbitration before JAMS/ENDISPUTE, or its
successor, for arbitration in Santa ▇▇▇▇▇ County, California
pursuant to the United States Arbitration Act, 9 U.S.C. ss.1
et seq., unless the parties mutually agree otherwise. Either
Party may commence the arbitration process by filing a written
demand for arbitration with JAMS/ENDISPUTE, with a copy to the
other Party. The arbitration will be conducted in accordance
with the provisions of JAMS/ENDISPUTE's Streamlined
Arbitration Rules and Procedures in effect at the time of
filing of the demand for arbitration. Each Party will select
an arbitrator from JAMS/ENDISPUTE's panel of neutrals and
together the selected arbitrators shall mutually agree on a
third arbitrator. The parties covenant that they shall
participate in the arbitration in good faith, and that they
shall share equally in its costs, except for attorneys' fees
and expenses of witnesses which shall be borne by the Party
incurring the fees or producing the witness. The arbitration
award shall be in writing and shall specify the factual and
legal bases of such award. The arbitration award shall be
final and binding, and judgment thereon may be entered by any
court of competent jurisdiction. The parties agree that the
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arbitration award shall be treated confidentially, and the
parties shall not, except as otherwise required by law or
court order or to enable its entry or enforcement as a
judgment, disclose the arbitration award to any third Party,
excluding personnel in their Affiliates and their attorneys
and accountants with a need to know, provided that such
recipients agree to be bound by the same restrictions as are
contained in this Agreement. The arbitrator shall not have the
power to render an award of punitive, exemplary or treble
damages. To the extent of any conflict, the provisions of this
Agreement shall supersede and control any JAMS/ENDISPUTE
rules. The provisions of this Paragraph 28.4 may be enforced
by any court of competent jurisdiction, and the prevailing
Party in such enforcement action shall recover from the other
Party its costs, reasonable attorney fees and expenses, from
the other Party.
29.5. No Waiver.
Either Party's (i) waiver of any performance by the other,
(ii) waiver of any condition of this Agreement, or (iii)
consent to any breach of this Agreement by the other, shall
(a) be effective only if expressly set forth in a writing
signed by the Party alleged to have waived or consented, and
(b) not constitute or require an ongoing waiver of such
performance or condition, or consent to any previous,
different or subsequent breach, regardless of whether such
performance, condition or breach is similar, identical or
related, and regardless of the course of dealing which
develops or has developed between the Parties.
29.6. Compliance with U.S. Government Export Controls.
If either Party exports any Product or any Proprietary
Information, such Party shall comply with the United States
Export Administration Act as amended from time to time, with
the Export Administration Regulations promulgated from time to
time thereunder, all other export laws and regulations of the
United States and all amendments, modifications or additions
thereto, including all laws and regulations relating to
re-export.
Page 36 of 39
29.7. Notices.
All notices, requests and other communications permitted or
required to be given pursuant to this Agreement shall be in
writing and shall be personally delivered, or sent by
recognized delivery service or certified or registered mail
with return receipt requested and with all postage prepaid, to
the recipient Party at its address set forth below:
Trimble: Solectron:
▇▇▇▇▇▇▇ Navigation Limited Solectron Federal
Attention: Chief Manufacturing Officer Systems, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With Copy To: With Copy To:
Solectron Corporation
▇▇▇▇▇▇▇ Navigation Limited Attention: Corporate
Attention: General Counsel Urgent Notice Legal Department
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Each such notice shall be effective upon delivery or when
delivery is refused. Either Party may, by notice given in
compliance with the provisions of this Paragraph 28.7,
designate another address for receipt of notice.
29.8. Entire Agreement.
This Agreement, together with its exhibits, constitutes the
entire agreement of the Parties respecting its subject matter.
It supersedes all prior and contemporaneous communications and
understandings and agreements, written or oral, between the
parties relative to its subject matter and merges all
discussions between them, including, without limitation, the
Letter of Intent dated April 19, 1999 between the Parties.
Regardless of the above, the Parties acknowledge that they
have entered into (i) an Asset Purchase Agreement dated August
10,1999, for the sale of certain Trimble assets (the "Asset
Purchase Agreement") and (ii) a sublease dated August 10,
1999, for Solectron's rental of certain Trimble Sunnyvale
facilities (the "Sublease"). The parties agree that (a) this
Agreement will not supersede the Asset Purchase Agreement and
that the provisions of the Asset Purchase Agreement shall
exclusively govern the sales of the applicable assets; and (b)
this Agreement will not supersede the Sublease and that the
provisions of the Sublease shall exclusively govern the rental
of the applicable Trimble facilities. This Agreement may only
be amended by subsequent written agreement which is duly
executed by the parties.
29.9. Severability
If any provision of this Agreement is determined by any court
of competent jurisdiction or arbitrator to be invalid,
illegal, or unenforceable to any extent, that provision shall,
if possible, be construed as though more narrowly drawn, if a
narrower construction would avoid such
Page 37 of 39
invalidity, illegality, or unenforceability or, if that is not
possible, such provision shall, to the extent of such
invalidity, illegality, or unenforceability, be severed, and
the remaining provisions of this Agreement shall remain in
effect provided, however, that the court shall have authority
and jurisdiction to add to this Agreement a provision as
similar in terms and intended effect to such severed provision
as may be possible and be legal, valid, and enforceable. If,
as a result of the foregoing, a party's material benefits
under this Agreement that would have existed but for the
operation of the preceding sentence are materially impaired,
such party may at such party's election thereafter terminate
this Agreement on not less than three (3) months advance
written notice to the other party.
29.10. Effect of Title and Headings.
The title of this Agreement and the headings of its articles
are included solely for convenience and shall not govern,
limit or aid in the interpretation of any terms or provision
of this Agreement.
29.11. Construction
The Parties acknowledge and agree that both Parties have
participated in the drafting and negotiation of all provisions
of this Agreement, and each Party hereby waives and agrees not
to assert that any ambiguity should be construed for or
against either Party. Except as otherwise specified,
references in this Agreement to Paragraphs and Exhibits are to
Paragraphs of, and Exhibits attached to, this Agreement.
Except where the context clearly requires to the contrary,
"including" shall mean "including, without limitation".
29.12. Nature of Relationship
For the purposes of this Agreement, the Parties are deemed to
be independent contractors. It is expressly agreed that this
Agreement and the relationship between the parties hereby
established do not constitute a partnership, joint venture,
agency or contract of employment. Neither Party shall have the
authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be
binding on the other, except as authorized in writing by the
Party to be bound. Neither Party shall bind nor attempt to
bind the other to any contract or to the performance of any
obligation, nor represent to third parties that it has any
right to enter into any obligation on the other's behalf.
29.13. Publicity.
Neither Party shall make or issue any publicity, news release,
public announcement or communication of any sort with the
media, direct or indirect, written or oral, concerning this
Agreement or the transactions contemplated by this Agreement
without the prior written consent of the other Party, not to
be unreasonably withheld.
Page 38 of 39
WITH INTENT TO BE BOUND, Trimble and Solectron have executed this Agreement on
the dates indicated below.
Trimble: Solectron:
▇▇▇▇▇▇▇ NAVIGATION LIMITED SOLECTRON FEDERAL SYSTEMS, INC.
By: By:
Printed Name Printed Name
and Title: and Title:
Dated: Dated:
SOLECTRON CORPORATION
By:
Printed Name
and Title:
Dated:
Page 39 of 39
EXHIBIT 5.6
Manufacturing Support Services
1. MANUFACTURING SUPPORT SERVICES
During the Term, each Party at its sole expense shall perform its services
as described below.
2. ▇▇▇▇▇▇▇'▇ SERVICES
Except as expressly stated below, or elsewhere in this Agreement,
Trimble shall be responsible for product introduction and development
services, including without limitation:
2.1. Printed Circuit Board ("PCB") Assembly
In the PCB Assembly area, Trimble shall perform the following
manufacturing support services:
2.1.1. Creating fixtures and processes for product
introduction into manufacturing ("Product
Introduction");
2.1.2. Creating in-circuit testing ("ICT") programs, fixtures
and acceptance or approval standards;
2.1.3. Approving an X-ray program for testing Products;
2.1.4. Qualifying and validating the processes developed by
Solectron as described in paragraph 3.1 of this
Exhibit; and
2.1.5. Cooperating with Solectron to identify any improvements
to the above or other manufacturing processes.
2.2. PCB Testing and Box Build
In the PCB Testing and Box Build area, Trimble shall perform
the following manufacturing support services:
2.2.1. Creating Product Introduction hardware and software to
perform functional, strife and board tests;
2.2.2. Creating and validating repeatability and
reproducibility of Product Introduction tests;
2.2.3. Upgrading test station hardware equipment and software
as required;
2.2.4. Creating Product Introduction acceptance testing and
approval standards;
2.2.5. Creating Product Introduction fixtures and processes;
2.2.6. Performing reasonable operator training for the Product
Introduction materials created by Trimble in this
paragraph 2.2;
2.2.7. Scheduling shared equipment during the Transition
Period (as defined below);
2.2.8. Qualifying and validating the processes developed by
Solectron as described in paragraph 3.2 of this
Exhibit; and
2.2.9. Cooperating with Solectron to identify any improvements
to the above or other manufacturing processes.
3. SOLECTRON'S SERVICES
3.1. Printed Circuit Board ("PCB") Assembly
In the PCB Assembly area, Solectron shall perform the
following manufacturing support services:
3.1.1. Building additional or replacement assembly fixtures;
3.1.2. Developing different processes for securing Parts to
the PCB Assemblies;
3.1.3. Procuring, building and maintaining ICT test equipment;
3.1.4. Procuring, building and maintaining ICT software and
fixtures;
3.1.5. Procuring, building and maintaining flying probe test
equipment, software, and fixtures;
3.1.6. Procuring or developing X-ray software for ▇▇▇▇▇▇▇'▇
approval;
3.1.7. Maintaining approved X-ray software;
3.1.8. Procuring and maintaining stencils, other placement
equipment, and reflow software;
3.1.9. Tracking and reporting yield measurements as required
by this Agreement;
3.1.10. Maintaining and operating all equipment as
necessary to ensure that Products produced on the
equipment consistently meet or exceed the quality
and other requirements of this Agreement and good
commercial practices;
3.1.11. Coordinating Corrective Action Reports as required by
this Agreement; and
3.1.12. Cooperating with Trimble to identify and, upon
▇▇▇▇▇▇▇'▇ approval, implement any improvements to the
above or other manufacturing processes.
3.2. PCB Testing and Box Build
In the PCB Testing and Box Build area, Solectron shall perform
the following manufacturing support services:
3.2.1. Maintaining, including troubleshooting, calibrating,
and performing mechanical maintenance for assembly
fixtures and test stations;
3.2.2. Tracking and reporting yield measurements as required
by this Agreement;
3.2.3. Procuring such commercially-available equipment
(including MAPS Packages and assembly aids) as is
necessary to perform its obligations under this
Agreement;
3.2.4. Coordinating Corrective Action Reports as are required
by this Agreement;
3.2.5. Training new Solectron personnel in the use of the
equipment furnished by Trimble;
3.2.6. Creating design analysis reports as required by this
Agreement;
3.2.7. Maintaining and operating all equipment as necessary
to ensure that Products produced on the equipment
consistently meet or exceed the quality and other
requirements of this Agreement and good commercial
practices;
3.2.8. Procuring, installing and maintaining Strife testing
and ESS equipment as specified by Trimble in the
Manufacturing Standards; and
3.2.9. Cooperating with Trimble to identify and, upon
▇▇▇▇▇▇▇'▇ approval, implement any improvements to the
above or other manufacturing processes.
4. TRIMBLE ASSISTANCE DURING TRANSITION
During the first twelve (12) months following the Effective
Date ("Transition Period") Trimble shall provide to Solectron
such assistance as Trimble, in its business judgment,
determines is reasonable to assist Solectron in performing its
obligations described in paragraph 3 above.